IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA. R.F.A. No. 209 of 1995. Reserved on : 20.9.2010. Decided on: 15.12.2010. ___________________________________________________________ Bal Raj Sood … Appellant. Versus State of H.P. and others. … Respondents. ___________________________________________________________ Coram: Hon’ble Mr. Justice R.B. Misra, Judge. Hon’ble Mr. Justice V.K. Sharma, Judge. Whether approved for reporting?1 Yes. For the appellant. : Mr. Ajay Kumar and Mr. Raman Sethi, Advocates. For respondents No. 1 to 5. : Mr. Rajinder Dogra, Addl. A.G. For respondent No.6. : Mr. Vir Bahadur Verma, Advocate. __________________________________________________________ Justice V.K. Sharma, Judge. The present regular first appeal has arisen out of the judgment and decree dated 20.9.1995 rendered by a learned Single Judge of this Court, whereby the suit for recovery of Rs. 12,41,612.98 filed by the appellant herein as plaintiff against the respondents herein being the defendants, was dismissed and the counter-claim set up by defendants No. 1 to 5 was decreed to the extent of Rs. 5,17,204.59 with interest at the rate of 15% per annum from 1.10.1984 till the date of payment with proportionate costs. 1 Whether reporters of the local papers may be allowed to see the judgment? 2 2. Factual matrix of the case as emerges out of the pleadings on behalf of the parties as also noticed by the learned Single Judge may be stated thus. 3. The plaintiff was working as a Forest Lessee within Himachal Pradesh. He purchased Lot No. 13/81-83- Upper Ravi in an open auction held at Bhadroya on 27.2.1981 for a sum of Rs. 17,63,000/- and executed an agreement (Ex. PW-1/A). He was liable to complete the work on or before 31.3.1983, which was further extended upto 31.3.1984 and abut 26,433 scants of timber were stacked at the road head at Kharamukh, Baga and Dunali. The case set up by the plaintiff is that due to disturbed conditions in Punjab he was not expecting good price from the sale of timber at Pathankot in Punjab and also due to shortage of funds to transport the timber and pay the Government dues, he made representation dated 27.3.1984 (Ex.PW-1/B) requesting that either the period of royalty amount be extended upto 31.3.1985 or the Himachal Pradesh State Forest Corporation (hereinafter called as ‘the Corporation’) i.e. defendant No.6, may be asked to sell the timber at its depot at Bhadroya on commission basis and out of the sale proceeds the royalty and other amounts due to the Government may be paid and the balance amount may be released to him. The then Forest Minister forwarded the representation to the Managing Director of the Corporation, who accepted the prayer of the plaintiff that the timber be sold through the Corporation and on 29.3.1984 wrote a letter (Ex. PW-1/C) to the Director (North) of the Corporation to take further action in the matter. The then Chief Conservator 3 of Forests, defendant No.3 wrote a letter (Ex.PW-1/D) to the Secretary (Forests) to the Government of Himachal Pradesh on 31.3.1984 that formal orders in favour of the lessee may be passed in view of the noting of the Forest Minister. Copy of the letter was endorsed to the Managing Director of the Corporation for remitting the sale consideration after deducting its commission to the Divisional Forest Officer, Upper Ravi against the dues of the lot. He was also requested to take over the timber from the representative of the Department at Kharamukh, Baga and Dunali depots for which directions were issued to the Divisional Forest Officer, Upper Ravi vide a separate endorsement to him. 4. It was further averred by the plaintiff that by letter dated 26.5.1984 (Ex.PW-1/F), the Divisional Forest Officer, Upper Ravi Division, defendant No.5 asked the plaintiff to be present at the time of handing over the timber to the Corporation. Thereafter on 16.7.1984, the Secretary (Forests) to the Government of Himachal Pradesh wrote letter (Ex. PW-1/G) to the Chief Conservator of Forests, defendant No.3 accepting his proposal contained in letter dated 31.3.1984. As per the decision the time for payment of Government dues was extended upto 31.3.1985 on levy of 15% penal interest. He was asked to take immediate action in the matter and issue directions accordingly. Copies of the letter were endorsed to the conservator of Forests as well as to the Divisional Forest Officer for issuance of export permit of timber when the Divisional Manager of the Corporation would approach him in the matter. 4 5. It was further pleaded in the plaint that timber was to be exported through the Multi-Purpose Tax Barrier, Tunuhatti. In view of the above decision of the Government under which the sales tax and other duties were to be recovered from the sale proceeds, the plaintiff approached the District Excise and Taxation Officer, who issued instructions on 9.8.1994 to the Incharge, Multi-Purpose Barrier, Tunuhatti to allow the trucks carrying the timber to cross the barrier without payment of sales tax. On 7.8.1994 itself the plaintiff wrote letter (Ex. PW-1/K) to the Divisional Manager of the Corporation for grant of permit to export the timber and copy of the said letter was sent to the Conservator of Forests and the Divisional Forest Officer. The Divisional Manager of the Corporation wrote letter (Ex. PW-1/L) to the Divisional Forest Officer on 11.8.1984 to issue the export permits for transportation of timber to the depot of the Corporation at Bhadroya but the Divisional Forest Officer took the stand that once the timber was handed over to the Corporation by the lessee, it is for the Corporation to issue export permit and issuance of export permit by the Department would violate the provisions of clauses 18 and 19 of the agreement deed. The plaintiff further averred that thereafter he was made to run from pillar to post but none of the Officers of the Department or the Corporation helped him by issuing export permit. He personally met the Conservator of Forests, who sent a telegram dated 13.8.1984 (Ex. PW-1/N) to the Corporation but without any result. He also met the Chief Conservator of Forests at Shimla on 17.8.1984 and handed over a letter 5 (Ex. PW-1/O) to him requesting that export permit may be granted immediately, who gave directions to defendant No.5 vide letter dated 18.8.1984 (Ex. PW-1/P). 6. Even despite that, the Divisional Forest Officer took ten days time and issued export permit on 28.8.1984. The plaintiff immediately started transportation and export of timber to Bhadroya but the quantity of timber was so much that the whole of it could not be transported till the night of 2.9.1984, when the water level in the river Ravi rose and timber stacked at Dunali was washed away in the flood. The plaintiff has given the detail of washed away timber as under:- Size Number Rate per scant Total amount Kail 12’x10”x5” 2725 Rs. 300/- Rs. 8,17,500/- 10’x10”x5” 2758 Rs. 251/- Rs. 6,87,238/- 4’to8’ 24 Rs. 80/- Rs. 1,920/- BGMG Pharu 541 Rs. 100/- Rs. 54,100/- Hakri & Poles 22 Rs. 40/- Rs. 830/- Rs.15,61,338/- Deodar 12’x10”x5” 2 Rs. 300/- Rs. 600/- 10’x10”x5” 25 Rs. 200/- Rs. 7,500/- 4’x8’ 8 Rs. 100/- Rs. 800/- Rs. 8,900/- Grand Total Rs.15,70,238/- 7. In order to calculate the loss, the plaintiff has relied upon the prevailing prices of the timber in the month of September, 1984. According to the plaintiff, the loss of timber in the floods was due to the negligence of the defendants as they were not diligent in their duties. Had the export permit been issued earlier to 28.8.1984 i.e. latest by 6 7.8.1984 when the Divisional Forest Officer granted permission for export of timber without payment of sales tax, the loss would have been avoided. The case of the plaintiff is that he has suffered a loss of Rs.15,70,238/- on account of negligent acts of omission and commission of the defendants, as such, they are jointly and severally liable to make it good. The plaintiff has averred that he owed a sum of Rs. 22,58,569.84 on 30.9.1984 out of which a sum of Rs. 16,00,086.03 has been paid to defendant No.1 by the Corporation and another sum of Rs. 1,76,300/- is lying as security with defendant No.5. After adjusting these amounts the loss suffered by the plaintiff as on 30.9.1984 is Rs. 10,68,054.19 which the defendants are liable to pay to him with interest at the rate of 15% per annum from 30.9.1984 till the date of filing of suit i.e. Rs. 1,73,558.79. Hence, the suit for recovery was filed in the sum of Rs. 12,41,612.98. The plaintiff had also served notice under Section 80 C.P.C. on the defendants and thereafter filed the present suit. 8. The suit was contested by defendants No. 1 to 5 by filing a joint written statement and by defendant No.6 which filed a separate written statement. 9. It was admitted on behalf of defendants No. 1 to 5 that the plaintiff had purchased Lot No. 13/81-83 Upper Ravi for Rs. 17,63,000/- in an open auction held at Bhadroya in February, 1981 for which agreement was executed by the parties. According to them as per lists of balance timber supplied by the plaintiff, duly signed by him and verified by the forest officials, in all 26403 scants of timber were lying at places known as Dunali, Baga, Rakh and Kalsuin. Two lists 7 of timber and copy of export permit are brought on record as Exts. D-3 to D-5. In the correspondence exchanged between the plaintiff and defendants 3 to 6, as mentioned in paragraphs 3 to 6 of the plaint, it is not denied that on the request of the plaintiff the timber was to be handed over to the Corporation for selling it at Bhadroya and the consideration amount was to be deposited with the Forest Department for adjustment of their dues, the date of payment of which was extended upto 31.3.1985 on levy of 15% penal interest. But it is specifically stated that as regards the danger of the timber being flooded away due to rise in water in River Ravi, the plaintiff was suitably informed by the Divisional Forest Officer, Bharmaur vide his telegram dated 2.7.1984 (Ex. DW-2/A), a copy whereof (Ex.DW-2/B) was also sent by post for confirmation advising him to remove the timber from the bank of the river immediately, as the water was touching the timber. The plaintiff was again informed by the Range Officer, Chhatrari vide letter dated 29.8.1984 (Ex.D-1), which was personally received by the plaintiff, that water of Ravi river was increasing day by day and he should remove the timber to a safer place. According to the defendants 1 to 5 the timber continued to be in the custody of the plaintiff and it was his sole responsibility and in his own interest to stack it at a safer place. 10. It was averred that as per instructions contained in letter dated 31.3.1984 (Ex. PW-1/D), the timber was to be handed over to the Corporation, where it was stacked by the plaintiff, for which request was made to the 8 Director (North Zone) and Divisional Manager of the Corporation by Divisional Forest Officer, Upper Ravi vide his endorsement dated 25.4.1984 (Ex.DW-1/A). A list of balance timber and detail of balance dues recoverable from the plaintiff was also supplied by the Divisional Forest Officer, Bharmaur to the Divisional Manager of the Corporation vide his memo dated 2.8.1984 (Ex.DW-2/D). The Divisional Manager of the Corporation did write to the Divisional Forest Officer, Upper Ravi for issuance of export permit vide letter dated 11.8.1984 (PW-1/L) on the plea that he was not competent to issue such permits in respect of timber belonging to a forest lessee. In reply the Divisional Forest Officer, Upper Ravi vide his letter dated 12.8.1984 (Ex.PW-1/M) informed the Divisional Manager, Chamba that issuance of export permit by him would be in violation of clauses 18 and 19 of the agreement deed and also would not be in consonance with the instructions issued by the Chief Conservator of Forests. It is also admitted that telegram dated 13.8.1984 was issued by the Conservator of Forests, Chamba to the Managing Director of the Corporation with copies to others, for taking over the timber at the indicated stations. A letter dated 14.8.1984 (Ex.DW- 1/B) was also written by the Conservator of Forests, Chamba to the Chief Conservator of Forests for taking up the matter with the Managing Director of the Corporation, as according to the plaintiff, the Divisional Manager, Chamba had refused to take over the timber on the plea that he did not have any instruction from the Corporation Head Quarters. Finally the matter was taken up by the Chief 9 Conservator of Forests with the Secretary (Forests) to the Government of Himachal Pradesh and the Conservator of Forests, Chamba was directed vide his letter dated 18.8.1984 (Ex.PW-1/P) to direct the Divisional Forest Officer, Upper Ravi to issue necessary permit for transportation of timber by the plaintiff upto Bhadroya. 11. It was denied that there was any delay in issuing the export permit by the Divisional Forest Officer, Upper Ravi. The endorsement dated 18.8.1984 (Ex.PW- 1/P) was received by Conservator of Forests, Chamba on 22.8.1984, which he had further sent to the Divisional Forest Officer, Upper Ravi on 27.8.1984, who had issued the export permit promptly on 28.8.1984. It was the plaintiff who had not taken due interest to export the timber expeditiously even on receipt of export permit. On 30.8.1984 he had exported only 1231 scants through 7 challans. No timber was exported by him on 29.8.1984, 31.8.1984 to 3.9.1984, which shows the lack of concern and diligence on the part of the plaintiff to export the timber even after issuance of the export permit on 28.8.1984. 12. It was further pleaded that the plaintiff did not take any step for keeping the timber at a safer place despite repeated requests by the defendants, as such, the responsibility of washing away of timber squarely rests upon him. The plaintiff himself was responsible for the loss he has suffered by ignoring the advice given to him for removing the timber to a safer place. According to defendants 1 to 5 as per the detail of timber received at Bhadroya, as given by Depot Officer, Bhadroya in his letter dated 17.12.1985 10 (Ex.DW-2/E), the variation worked to be 5581 scants as under:- (i) Total scants allowed export : 26403 (ii) Timber received at Bhadroya : 20317 (iii) Difference : 6086 (iv) Timber which was not exported : 505 by the plaintiff and still lying at Bagga. (v) Variation : 5581 13. From these figures it is revealed that the detail of timber washed away i.e. 6105 is absolutely wrong and exaggerated. He has preferred his claim on the basis of number of scants shown by him in the list submitted by him for export minus that received at Bhadroya that is to say 26403-20317 = 6086 scants, whereas 505 scants were still lying at Bagga which were subsequently auctioned on 13.2.1986 by the Divisional Forest Officer, Bharmaur. According to defendants No. 1 to 5, in fact the plaintiff has made his claim in order to escape from his own liability to the tune of Rs. 9,44,435.18, which he owed to the State of Himachal Pradesh. 14. However, it was denied that there was unusual delay in issuing the export permit. Furthermore, the plaintiff took no step to retrieve the flooded timber. He did not care to send reply to Divisional Forest Officer, Bharmaur, who had reminded him vide his letter dated 12.9.1984 (Ex.DW- 2/F) to intimate him the timber retrieved by him. The indifferent attitude of the plaintiff proves that no timber, as alleged by him, was washed away in the river on 2.9.1984. 11 15. The following counter-claim for Rs. 9,44,435.18 along with interest at the rate of 15% per annum was set up on behalf of defendants No. 1 to 5:- (1) On 30.9.1984 the plaintiff owed. : Rs. 22,58,569.84 (2) On 27.3.1986 sale consideration : Rs. 14,93,182.85 adjusted in the books of the Government. (3) By adjustment of part of security : Rs. 1,01,904.53 amount lying in deposit of Post Office Savings Bank. (4) By adjustment of remaining : Rs. 1,12,277.87 amount of security lying in deposit with the bank. (5) Sale consideration of 505 scants : Rs. 34,000.00 lying at Bagga which were sold in public auction on 13.2.1986. Total amount of adjustment : Rs. 24,62,032.16 Total liability upto 15.4.1986 : Rs. 34,06,467.34 Hence, the counter claim of : Rs. 9,44,435.18. Defendants No. 1 to 5 also claimed interest at the rate of 15% per annum on the amount of their counter claim. 16. Defendant No.6 raised legal objections regarding cause of action, mis-joinder of parties and the claim being false and vexatious entitling the replying defendant to compensatory costs. 17. On merits, the stand on behalf of defendant No.6 was that it was not to take over the timber at Kharamukh and Dunali as alleged by the plaintiff. It was further averred that in pursuance of letter dated 7.8.1984, Divisional Manager, Chamba vide his letter dated 11.8.1984 asked the Divisional Forest Officer, Upper Ravi to take action and thereafter the matter was taken up by the Conservator of Forests, Chamba to whom the Managing Director and Director (North) of the Corporation telegraphically informed on 18.8.1984 that the Corporation 12 will take over the said timber at Bhadroya Depot. The Divisional Manager, Chamba also wrote letter dated 11.8.1984 to the Divisional Forest Officer, Bharmaur for issuance of export permit. The timber lying at Dunali was in the custody of the plaintiff, who was to transport it to Bhadroya at his own risk. Moreover, the plaintiff had never informed the Corporation that the timber had been washed away in floods. However, the plaintiff was fully aware of the rainy season and it was in his own interest to stack the timber above the flood level. The entire timber which was delivered by the plaintiff at Bhadroya, was sold at Bhadroya Depot and the account position thereof is as under:- Total Sale Value of the timber : 18,89,840.00 Rebate allowed : 79,087.46 Net Sale Value : 18,10,752.54 Interest recovered : 705.86 _____________ Total : 18,11,458.40 Less Recovery : 3,18,275.55 _______________ Net Amount payable : 14,93,182.85 Advance recovery : 1,63,899.00 Interest on advance : 3,394.75 Labour charges : 11,511.80 Handling charges : 1,39,470.00 _______________ 3,18,275.55 ______________ 18. Replications refuting the respective stands on behalf of the defendants and re-iterating the averments set up in the plaint were filed. 19. On the above pleadings, the following issues were settled:- (1) Whether the plaintiff lost timber worth Rs. 15,70,238/- or any other amount in the floods due to the negligence of the defendants or any one of them? OPP 13 (2) Whether the plaintiff is entitled to recover Rs. 12,41,612.98 from the defendants or any one of them? OPP (3) Whether a sum of Rs. 9,44,435.18 is recoverable from the plaintiff by the Forest Department, Government of Himachal Pradesh? OPD (4) Whether defendant No.6 is entitled to recover special costs from the plaintiff? OPD-6. (5) Relief. 20. After the parties led evidence and were heard by the learned Single Judge whereas the suit of the plaintiff was dismissed, the counter-claim set up by defendants No. 1 to 5 was partly allowed as already noticed, by holding issues No. 1, 2 and 4 in the negative and issue No.3 partly in affirmative. 21. We have heard the learned counsel/learned Additional Advocate General for the parties and perused the record. 22. The contentions raised on behalf of the plaintiff are mainly two fold. Firstly that the timber was washed away during the night intervening 1 / 2 .9.1984 solely due to the negligence on the part of the defendants and secondly that whereas as per letter dated 17.12.1985 (Ex.DW-2/E), the timber belonging to the plaintiff had fetched sale proceeds worth Rs. 16,40,279.64, only a sum of Rs. 14,93,182.85 was accounted for by the defendants. Both these submissions have been vehemently refuted on behalf of the defendants being factually incorrect. 23. Admittedly, the plaintiff had failed to meet the dead-lines stipulated under Lease Deed/Instrument of Lease dated 27.2.1981/7.8.1981 (Ex. PW-1/A), whereby the work in 14 question was allotted to him. It was in such circumstances that application dated 27.3.1984 (Ex. PW-1/B) was moved by him to the Forest Minister, Himachal Pradesh, Shimla with the following prayer:- “It is, therefore, prayed that either the period of payment of the royalty amount be extended upto 31st March, 1985, or the Himachal Pradesh State Forest Corporation be kindly asked to sell the timber in its Depot at Badroha on reasonable commission basis and after deducting the royalty amount due to the Government may release the balance amount to me.” 24. The request made by the plaintiff, as above, was granted vide letter (Ex. PW-1/D) as conveyed to the plaintiff vide copy of letter (Ex.PW-1/C). Consequently, the follow up action was initiated in the matter. Since two Government Departments and a Government Corporation, namely the Forest and Excise & Taxation Departments and Forest Corporation, were involved, the final decision with regard to grant of export permit in favour of the plaintiff could be taken only on 28.8.1984. However, unfortunately a part of the timber (6105 scants, according to the plaintiff, but actually 6086 scants) was washed away in the floods during the night intervening 1 / 2.9.1984 for which the parties are laying blame on each other. However, the learned Single Judge by returning a finding on issue No. 1 in the negative has held that the defendants or any one of them cannot be held to be negligent in the matter. 15 25. On an appraisal of the materials on record we are unable to persuade ourselves to have a contrary view for the reasons to be recorded hereinafter. 26. Admittedly, the work was allotted in favour of the plaintiff vide Lease Deed/Instrument of Lease (Ex.PW- 1/A) in February/August, 1981. Even as per his own version the plaintiff had worked on the Lot and by March, 1984 about 28,000 scants of timber were lying at the road-head at Kharamukh, Bagga and Dunali. Thus, it could be reasonably inferred that he was well aware about the topography of the area, vagaries of the weather, location of the site where the timber was stacked by the side of river Ravi and its flooding in rainy season as by that time three rainy seasons had already occurred during 1981, 1982 and 1983. It was his responsibility to ensure safety of the timber stacked by the side of river Ravi as it was his property except that he had to pay royalty to the Government. 27. According to the plaintiff himself, he was liable to complete the entire work on or before 31.3.1983. However, undisputedly, it was not done and the time was extended upto 31.3.1984. However, even thereafter he could not perform his part of the contract entered into between the parties vide Lease Deed (Ex. PW-1/A). It was in such circumstances that he had made the above prayer to the Forest Minister vide application (Ex.PW-1/B) which was granted. 28. It is manifest that export permit Ex.D3 was issued on 28.8.1984. On the very next day on 29.8.1984, the Range Officer wrote letter Ex.D1 to the plaintiff to 16 remove the timber to a safe place due to rise of water level in the river Ravi. Thereafter, Divisional Forest Officer, Bharmaur sent telegram dated 2.7.1984 (copies Ex. DW-2/C and Ex. DW-2/A) to the plaintiff cautioning him that the timber of the Lot in question was stacked below danger level and since the water level in the river Ravi was rising rapidly, the timber be shifted to a safe place above danger level and that the matter was urgent. This fact is also evident from letter dated 12.9.1984 (Ex. DW-2/F) written by the Divisional Forest Officer, Bharmaur to the Range Officer, Chhatrari a copy of which was endorsed to the plaintiff. However, even despite that the plaintiff did not bother