Letters Patent Appeal No.875 OF 2000 ******* Against the judgment and order dated 9th May, 2000, Passed in CWJC no. 9906 of 1996. ******* DEEPAK KUMAR LAL--------------Appellant Versus THE STATE OF BIHAR & ORS----Respondents ******* For Appellant : Mr. Gyanand Roy For the State : Mr. Baidya Nath Thakur ******* P R E S E N T THE HON'BLE MR. JUSTICE BARIN GHOSH THE HON'BLE MR. JUSTICE C.M.PRASAD Barin Ghosh & C.M. Prasad, JJ. Under a written agreement, entered by and between the parties, the appellant obtained a right of felling, conversion, collection, extraction, removal, transport and all other acts to be performed in relation to exploitation of bamboos from the areas specified in Schedule-A to the said agreement and delineated in Schedule-C 2 thereto subject to the terms and conditions contained therein. The agreement provided that the terms and conditions inter se the parties in relation to exploitation of bamboos flowing from the said agreement shall be for the period between 15th October, 1977, to 30th June, 1985. The agreement estimated that the annual yield would be twelve thousand metric tons and royalty thereon shall be paid at the rate of Rs.82.55 per metric ton. The agreement further provided that the minimum annual royalty would be Rs.9,90,000/- for the first cutting cycle, i.e., for the first four years. The agreement stated that the terms relating to minimum royalty and rates of payment of royalty would be subject to review at the end of each cutting cycle of four years on the basis of market rate of that time and that the rate so decided will 3 be binding on the lessee. The first cycle of four years came to an end on 30th June, 1981 and royalty payable up to that period, was paid by the appellant. The appellant stopped exploiting from 01st July, 1981, and, ultimately, surrendered the right of exploitation under the said agreement on 03rd of March, 1982. The rate of royalty was raised to Rs.153/- per metric ton from 01st July, 1981. By a notice dated 20th August, 1983, the Government decided to take back possession of the area which was permitted to be exploited by the appellant and held out that it would auction the area for the remaining period of the grant and loss, if any, of the Government would be recovered from the appellant by initiating certificate proceedings. Soon thereafter a certificate was issued demanding Rs.10,55,700/- from the appellant. The appellant went back to the 4 Certificate Officer and convinced him that the claim being a claim for damages recourse to certificate proceeding could not be taken for recovery thereof. In the appeal preferred by the Government, the appellate authority held that the certificate was perfect and the same was enforceable. The said order compelled the appellant to approach this Court by way of a writ petition. The writ petition having been dismissed by the judgment and order under appeal, the appellant is before us. 2. The learned Judge, who dealt with the writ petition, noticed the agreement between the parties as also the Division Bench judgment of this court in the case of Budha Singh Vrs. State of Bihar ; AIR 1981 Patna 149, but felt that, in the facts and circumstances of the case, the claim, as was lodged, did not require detail calculation. 5 3. In Budha Singh (Supra), this Court has pronounced that since a claim for compensation is not a liquidated demand on money, and since compensation is required to be adjudicated, enforcement of unadjudicated claim for compensation through certificate proceeding is not maintainable. 4. In the instant case, the claim was not for agreed minimum guaranteed royalty. The claim was founded on loss allegedly sustained by the Government for failure on the part of the appellant to exploit bamboo in terms of the agreement for the remaining period of the agreement. That being the position, the Government was seeking to recover through certificate proceeding an unadjudicated claim for compensation, which is not permissible in law. 5. The writ court proceeded to hold that the claim is of minimum guaranteed 6 royalty. The minimum guaranteed royalty at the rate of Rs.82.55 per metric ton was Rs.9,90,600/- for first cutting cycle on the total quantity of twelve thousand metric tons. If the total quantity remained the same for the second cutting cycle but the royalty is enhanced to Rs.153/-, then the minimum royalty would be in excess of Rs.18 lacs. Furthermore, the agreement itself made it clear that the terms relating to minimum royalty and demand thereof shall be subject to review which, in the instant case, had not been done. The conclusion, therefore, would be that the step taken by the State to recover unadjudicated compensation through a certificate proceeding is not permissible in law. 6. The appeal is, accordingly, allowed. The judgment and order under appeal is set aside and at the same time the writ petition 7 is allowed by quashing the order of the appellate authority. (Barin Ghosh, J.) (Chandra Mohan Prasad, J.) Patna High Court, The 15th September, 2008. AAhmad/(NAFR).