Case: Divisional Forest Officer Vs. Bishwanath Tea Co. Ltd

Ass. 92 : LR 1970 Ass 183) a writ petition was filed challenging the revision of rates of royalty for two different periods. Rejecting this petition as not maintainable, a Division Bench of the High Court held that the complaint of the petitioner is that there is violation of his rights under the contract and that such violation of contractual obligation cannot be remedied by a writ petition. That exactly is the position in the case before us. Therefore, the High Court was in error in entertaining the writ petition and it should have been dismissed at the threshold. 10. In substance, this was a suit for refund of a royalty alleged to be unauthorisedly recovered and that could hardly be entertained in exercise of the writ jurisdiction of the High Court. 11. As the High Court has also disposed of the case on merits after overruling the preliminary objection, it is but meet that we may examine the case on merits and that itself would demonstrably show the dangerous course adopted by the High Court in examining rights and obligations claimed under the contract without proper or adequate material or evidence to reach a conclusion, more so when the petition raised disputed questions of facts which needed investigation. 12. Respondent I had entered into a lease dated September 27, 1932 with the Secretary of State for India. Part II of the lease describes the land leased to the respondent. The description is as under :N.C. Tengalbasti Village in Sootea Mauza in the Tezpur Sadar Sub-Division of Darrang District. Block No. 1 Field No. 2-1804 B. 4 K-12L Block No. 2 Field No. 3-1544 B. 2 K-13L Total - 1107.26 Acres on 3349 B. 2K-5L This land was taken on lease for cultivation and raising tea-garden. Under the relevant Clause 2 extracted above, the lessee was to pay timber valuation on full rate for all timber sold or removed for sale and on all timber removed for use unconnected with exploitation of the grant during the period of lease or renewed lease. From this negative covenant in the indenture of lease, the respondent says that where timber is cut and felled and removed for a purpose or use connected with exploitation of grant during the period of lease or renewed lease, royalty shall not be payable. Assuming the respondent is right in its construction of Clause 2 of the indenture of lease, in order to obtain relief, namely, to cut and remove timber from the leased area for purpose connected with the exploitation of the grant, it must show that the timber is being felled and cut from an area covered by the lease in which Clause 2 finds its place and that such timber is being removed for a purpose connected with the exploitation of the grant. To be more specific, following facts will have to be proved for obtaining relief :(i) The area covered by the grant. (ii) Felling of the trees from the area covered by the grant. (iii) Use to which the felled timber was to be put to. (iv) Such use will have to be one connected with the exploitation of the grant. (v) What is meant by the exploitation of the grant ? Could these facts be assumed without evidence ? Was the High Court justified in observing that it was not called upon to decide complicated question of facts ? Some averments in the petition were disputed. The appellant contended that Clause 2 of the indenture of lease only means that if there is some use of timber which is being felled and removed from the area covered by the grant for the purpose connected with the exploitation of that very grant, then and only then the relief can be claimed under Clause 2. The High Court found as a fact that the timber was sought to be removed for the purpose of constructing quarters for the workmen employed in Partabghur Garden is not situated in Tezalpatty Village. At any rate, Partabghur Garden where the houses for the workmen were to be constructed was situated outside the area covered by the grant, as also outside the Revenue Division in which the leased area is located. The High Court got over this difficulty by observing that the grant being in favour of an incorporated company, it can cut and remove timber from leased area for use at any place which is owned, managed or controlled by the company and it is immaterial whether one is directly connected with the other or not. If the timber is being felled from the area of one grant to be used at some other place where the company is carrying on its operation, the benefit of the removal of timber without payment of royalty would be available to the company anywhere in the world. To stretch this logic a little further, it would mean that if the respondent (company) is to set up a tea-garden outside India, it can as well cut and remove timber from N.C. Tezalpatty Grant 1 in Assam to the place outside India without the obligation to pay royalty. The fallacy underlying the approach of the High Court becomes self-evident. It is immaterial that the grantee was the company. The specific provision is that the grant is for a purpose of cultivation and raising tea-garden and that from the area covered by the grant, if timber is felled for purpose connected with the grant itself, namely, cultivation and raising tea garden in that area, then alone the benefit of removal of timber without payment of royalty can be availed of. It is admitted that Partabghur Tea Garden is outside the area covered by the grant, in fact in an altogether different division. In such a situation upon a true construction of Clause 2, Part IV of indenture of lease, the respondent-company was not entitled to remove timber without payment of royalty. Therefore, even on merits, the High Court was in error in granting relief.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]5. Unquestionably, the rights and obligations between the parties to this appeal are governed by the terms of the lease dated September 27, 1932. Specifically, the respondent who was a petitioner in the High Court claimed the right to relief under Clause 2 of Part IV of the indenture of lease which reads as under :A bare perusal of Clause 2 of Part IV of the indenture of lease extracted hereinbefore and the proviso to Rule 37 would at a glance show that the proviso enables a grantee to take benefit of it by fulfilling certain conditions namely by paying a reduced valuation representing only the profit which it is likely to derive from the use of timber for purposes connected with the exploitation of the grant. It is thus an enabling provision and the grantor of the lease may permit this option to be enjoyed by the grantee. But whether that has been done or not is always a question of fact. If the pre-condition is satisfied, the benefit can be taken. That again is a matter to be worked out by the parties to the indenture of lease. In fact, Clause 2 of the indenture of lease would show that the respondent grantee paid Rs. 12472/7 being timber valuation at reduced rates. The respondent having made the payment, whereupon the grantor of the lease agreed that the grantee will have to pay timber valuation at full rates on all timber sold or removed for sale and on all timber removed for use unconnected with exploitation of the grant during the period of his lease or renewed lease but the grantee will not have to pay royalty for timber felled and removed for purpose connected with the grant. It thus can be demonstrably established that the respondent was trying to enforce through the writ petition the right to remove timber without the liability to pay royalty not under the proviso to Rule 37 which was merely an enabling provision, but the specific term of lease agreed to between the parties. Proviso to Rule 37 may not be incorporated in an indenture of lease. If incorporated after fulfilling pre-condition it becomes a term of lease. The High Court, in our opinion, therefore, was in error in posing a question to itself as to whether the applicant (respondent herein) was entitled to the enforcement of legal right under the proviso to Rule 37 of the Settlement Rules. The camouflage successfully worked, but once this cloak is removed, it unmistakably transpires that the respondent was trying to claim benefit of Clause 2 of the lease having fulfilled its pre-condition and obtaining the inclusion of its latter part in the contract of lease. The question, therefore, really is whether such contractual obligation can be enforced by the writ jurisdiction ? How dangerous it is, can be demonstrably established in this case8. It is undoubtedly true that High Court can entertain in its extraordinary jurisdiction a petition to issue any of the prerogative writs for any other purpose. But such writ can be issued where there is executive action unsupported by law or even in respect of a corporation there is a denial of equality before law or equal protection of law. The Corporation can also file a writ petition for enforcement of a right under a statute. As pointed out earlier, the respondent (company) was merely trying to enforce a contractual obligation. To clear the ground let it be stated that obligation to pay royalty for timber cut and felled and removed is prescribed by the relevant regulation. The validity of regulations is not challenged. Therefore, the demand for royalty is unsupported by law. What the respondent claims is an exception that in view of a certain term in the indenture of lease, to wit, Clause 2, the appellant is not entitled to demand and collect royalty from the respondent. This is nothing but enforcement of a term of a contract of lease. Hence, the question whether such contractual obligation can be enforced by the High Court in its writ jurisdiction. The High Court found as a fact that the timber was sought to be removed for the purpose of constructing quarters for the workmen employed in Partabghur Garden is not situated in Tezalpatty Village. At any rate, Partabghur Garden where the houses for the workmen were to be constructed was situated outside the area covered by the grant, as also outside the Revenue Division in which the leased area is located. The High Court got over this difficulty by observing that the grant being in favour of an incorporated company, it can cut and remove timber from leased area for use at any place which is owned, managed or controlled by the company and it is immaterial whether one is directly connected with the other or not. If the timber is being felled from the area of one grant to be used at some other place where the company is carrying on its operation, the benefit of the removal of timber without payment of royalty would be available to the company anywhere in the world. To stretch this logic a little further, it would mean that if the respondent (company) is to set up a tea-garden outside India, it can as well cut and remove timber from N.C. Tezalpatty Grant 1 in Assam to the place outside India without the obligation to pay royalty. The fallacy underlying the approach of the High Court becomes self-evident. It is immaterial that the grantee was the company. The specific provision is that the grant is for a purpose of cultivation and raising tea-garden and that from the area covered by the grant, if timber is felled for purpose connected with the grant itself, namely, cultivation and raising tea garden in that area, then alone the benefit of removal of timber without payment of royalty can be availed of. It is admitted that Partabghur Tea Garden is outside the area covered by the grant, in fact in an altogether different division. In such a situation upon a true construction of Clause 2, Part IV of indenture of lease, the respondent-company was not entitled to remove timber without payment of royalty. Therefore, even on merits, the High Court was in error in granting reliefTrue it is that if the timber is felled and removed for purpose connected with the exploitation of the grant, there would be no liability to pay the royalty. Such a positive right is claimed from a negative covenant in the lease. Clause 2 provides that the lessee had paid timber valuation at the reduced rate at Rs. 12472/7 on February 24, 1932 and March 3,1932.Thelessee according to the respondent would be liable to pay timber valuation at full rates on all timber sold or removed for sale, on all timber removed for use unconnected with exploitation of the grant during the period of the lease or renewed lease.Theimplication of the negative covenant would be that if timber is removed from the leased area connected with the exploitation of grant, there would be no liability to pay royalty on such timberaverments in the petition would show that the respondent claimed the right to remove timber without the obligation to pay royalty as flowing from the grant evidenced by the leaseThis camouflage of contending that the levy of royalty was not supported by law and that this was an unreasonable restriction on the fundamental right to carry on trade successfully persuaded the High Court to entertain the petitionShorn of all embellishment the relief claimed by the respondent was referable to nothing else but the term of the lease viz. Clause 2, Part IV. Maybe, that this term is a mere reproduction of proviso to Rule 37 of Assam Land and Revenue and Local Rates Regulations, but that by itself is not sufficient to contend that what the respondent was doing was enforcing a statutory provision.