Divisional Forest Officer Vs.
Bishwanath Tea Co. Ltd. [1981] INSC 107 (5 May 1981)
DESAI, D.A.
DESAI, D.A.
MISRA, R.B. (J)
CITATION: 1981 AIR 1368 1981 SCR (3) 238 1981
SCC (3) 238 1981 SCALE (1)771
CITATOR INFO :
D 1983 SC 937 (12) RF 1989 SC1076 (21)
ACT:
Constitution of India, 1950, Article
226-Contractual obligations cannot be enforced by the writ jurisdiction-A
company, being a juristic Person is not entitled to any of the freedoms
guaranteed under Article 19-Assam Land and Revenue Regulation-Settlement Rule
37,-Scope of- Interpretation of clause 2 Part IV of Indenture lease.
HEADNOTE:
Respondent Tea Company took on lease land
N.C. Tezalpatty No. 1 from the then Government. The lease was to be exploited
for cultivation and raising tea garden, and was subject to conditions set out
therein and generally to Assam Land and Revenue Regulation and the rules made
thereunder.
The respondent company sought permission from
the appellant to cut 7,000 cubic feet of timber from Grant N.C. Tezalpatty No.
1 for utilising the same for building of staff and labourers' house as per
clause 2 of Part IV of the lease dated 27-9-1932 and Rule 37 of the Assam Land
and Revenue Regulations. Since the timber was required by the company for use
in Partabghur and Dekorai tea estates which were outside Tezalpatty No. 1. the
appellant demanded full royalty on timber cut, felled and removed. The company
paid an amount of Rs. 7069.37 Paise under protest and later filed a petition
under Article 226 of the Constitution in the Assam High Court, praying for
refund of the amount and for a mandamus directing the appellant for issuing
permits without insisting on payment of royalty whenever timber was to be cut
from the leased area for the purposes connected with the exploitation of the
grant.
The preliminary objection raised by the
appellant that since the right claimed by the respondent flowed from the
contract of lease such contractual right can only be enforced in civil court
and therefore cannot be gone into under Article 226 was rejected by the Assam
High Court. On merits, the High Court further held that as the grant of N.C.
Tezalpatty No. 1 was in favour of the respondent, the company was entitled to
cut, fell and remove timber from that grant area for its use covered either by
the same area or in other tea gardens which are outside the grant. The High
Court made the rule nisi absolute and hence the appeal by special leave.
Allowing the appeal, the Court
HELD: 1. The Writ Petition on the allegation
of infringement of fundamental right under Article 19(1)(g) of the
Constitution, at the instance of respondent company alone was not maintainable
for the reasons that: (a) a juristic person such as a corporation is not
entitled to any of the freedoms guaranteed by Article 19 and here the
respondent is a company incorporated under the Companies Act; (b) Article
19(1)(g) guaranteed the fundamental freedom to a 663 citizen and the respondent
being a company is not a citizen and (c) the shareholders of a company alone
can complain of infringement of their fundamental rights. [669 E-H, 670 A-C]
Tata Engineering and Locomotive Co. v. State of Bihar, [1950] S.C.R. 869, State
Trading Corporation of India Ltd. v. The Commercial Tax Officer,
Vishakhapatnam, [1964] 4 S.C.R. 99 and Benuott Coleman and Co. and other v.
Union of India and others, [1973] 2 S.C.R. 757, followed.
2:1.It is undoubtedly true that the 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 where
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. Here, the relief claimed by the respondent was preferable to nothing
else but the terms of lease, namely, clause 2 Part IV. The fact that this term
is a mere reproduction of proviso to Rule 37 of Assam Land and Revenue Local
Rate Regulation but that by itself is not sufficient to contend that what the
respondent was doing was enforcing a statutory provision. The validity of
regulations is not challenged. Therefore, the demand for royalty is supported
by law. [670 C-F] 2:2. Ordinarily, where a breach of contract is complained of,
a party complaining of such breach may sue for specific performance of the
contract, if the contract is capable of being specifically performed, or the
party may sue for damages. Such a suit would ordinarily be cognizable by the
Civil Court. The High Court in its extraordinary jurisdiction would not
ordinarily entertain a petition either for specific performance or for
recovering damages. A right to relief flowing from a contract has to be claimed
in a civil court where a suit for specific performance of contract or for
damages could be filed. Here, 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. [670 F-G, 671 A- G, 672 A] Har
Shankar and Ors. etc. v. The Deputy Excise and Taxation Commissioner and ors.,
[1975] 3 S.C.R. 254, applied.
Woodcrafts Assam v. Chief Conservator of
Forests, Assam, AIR 1971 Assam p. 92, approved.
3:1. 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. 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. [673 G-H., 674 A] 3:2. In order to obtain relief, namely to cut and
remove timber from lease area for purpose connected with exploitation, of the
grant the company must show that the timber is being felled and cut from an
area covered by the lease in 664 which clause 2 finds its place and that such
timber is being removed for a purpose connected with the exploitation of 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 and (v) meaning of the exploitation of the grant, when controverted these
aspects will have to be proved by relevance. And that was the situation when
return was filed by the present appellant in the High Court. [672 G-H, 673 A-D]
CIVIL APPELLATE JURISDICTION: Civil Appeal
No. 218 of 1970.
Appeal by special leave from the judgment and
order dated the 10th September, 1968 of the Assam and Nagaland High Court in
Civil Rule No. 56 of 1967.
S.K Nandy for the Appellant.
S.N. Chowdhary for the Respondent.
The Judgment of the Court was delivered by
DESAI, J. This appeal by special leave arises out of a writ petition filed by
the respondent Bishwanath Tea Co.
Ltd., in the Assam and Nagaland High Court
questioning the action of the appellant, the Divisional Forest Officer, Darrang
Division, of recovering Rs. 7069.37 p. as royalty for cutting and felling trees
from Tezalpatty grant No. 1 held under lease dated September 27, 1932, and for
a mandamus directing the appellant to issue permits without insisting upon
payment of royalty for the trees cut and felled from the area under lease.
Respondent Bishwanath Tea Co. Ltd. ('Company'
for short) took on lease land admeasuring 1107.26 acres from the Government.
The lease was executed between the Company and the Secretary of the State for
India. The lease in the first instance was for a period of 15 years commencing from
April 1, 1932. The lease was to be exploited for cultivation and raising tea
garden. The lease was subject to conditions set out therein and generally to
Assam Land and Revenue Regulation and the rules made thereunder. On February
15, 1966, manager of the Company approached the appellant seeking permission to
cut 7000 cubic feet of timber from Grant N.C. Tezalpatty No. 1 of Nagshankar
Mouza, for utilising the same for building of staff and labourer's houses. By
the reply dated April 4, 1966, the appellant noted that the timber was to be
665 cut for constructing houses in Partabghur and Dekorai Tea Estates and that
it was necessary to ascertain whether any of the aforementioned two Tea estates
was situated within the grant evidenced by lease of N.C. Tezalpatty No. 1. It
was made clear that if it was not so, full royalty will be payable by the
company for cutting, felling and removing timber. The manager by his letter
dated April 23, 1966, informed the appellant that as the lessee is Bishwanath
Tea Co. Ltd, it can cut and fell timber from any of its leased area to be
utilised for its purposes in any other division.
Therefore, the manager suggested that the
permit must be issued without insisting on payment of royalty. The appellant by
his letter dated May 12, 1966, informed the manager that as the timber was
required for use in Partabghur and Dekorai tea estates which were not within
N.C. Tezalpatty Grant No. 1 of Nagshankar Mouza from which timber was to be
felled and cut, full royalty will be payable on timber so cut and removed
because it was to be utilised for the purpose unconnected with the grant. For
this assertion the appellant relied upon a portion of clause (2) of Part IV of
the lease deed dated September 27, 1932.
Correspondence further ensued between the
parties and ultimately the respondent company paid an amount of Rs.
7069.37 p. as and by way of royalty under
protest and then filed a petition under Article 226 of the Constitution in the
High Court alleging that upon a true construction of the relevant clause of the
grant as also proviso to Rule 37 of the Settlement Rules as the timber was
required for the purpose connected with the exploitation of the grant, the
company as lessee was entitled to cut and remove timber without payment of
royalty and, therefore, the recovery of royalty being unsupported by law, the
appellant was liable to refund the same. The company also prayed for a mandamus
directing the present appellant who was respondent in the High Court for
issuing permits without insisting on payment of royalty whenever timber was to
be cut from the leased area for the purposes connected with the exploitation of
the grant.
The appellant filed his return to the rule
issued by the High Court. A preliminary objection was raised that the right
claimed by the respondent flowed from the contract of lease and such
contractual rights and obligations can only be enforced in civil court. It was
contended that apart from the fact that interpretation of the contract of lease
is generally not undertaken by the High Court in exercise of its extraordinary
jurisdiction under Article 226, it was further contended that even if
interpretation of the relevant clause of the lease as alleged on behalf the
respondent finds favour with 666 the court, yet facts will have to be
investigated before any refund could be ordered or a blanket injunction could
be granted for all times to come against the appellant from performing his
duty, namely, of granting permit and recovering royalty.
The High Court overruled the preliminary
objection observing that the court was not called upon to decide any
complicated question of fact and the question for decision before the Court was
whether the company was entitled to enforcement of its legal right under the
proviso to rule 37 of Settlement Rules. The Court further observed that even
though part of the proviso to rule 37 of the Settlement Rules was incorporated
in the lease itself, nonetheless what the Court had to consider was the
interpretation of a statutory rule and that is the function of the Court under
Article 226. On merits the High Court held that as the grant N.C. Tezalpatty
No. I was in favour of M/s. Bishwanath Tea Co. Ltd., the company was entitled
to cut and fell timber from N.C. Tezalpatty grant area for its use in other tea
gardens, namely, Partabghur and Dekorai and even if the latter two gardens were
outside N.C. Tezalpatty Grant No. 1, yet they being under the ownership and
management of the company, felling of trees from the area of one grant for
utilisation at other places would fall within the second part of the proviso to
rule 37 in that the felling and removal of timber was for use not unconnected
with the exploitation of the grant and, therefore, the company was entitled to
fell and remove timber in the aforesaid situation without payment of royalty.
In accordance with this finding the High Court made the rule absolute, directed
refund of the amount paid under protest and issued a mandamus directing the
appellant to issue permits to the respondent company without payment of royalty
for removal of timber from Tezalpatty Grant No. 1 for use in tea garden of
Dekorai division for exploitation of tea plantation. Hence this appeal by
special leave.
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:
"2. The lessee shall pay to the lessor
as provided by rules for the time being in force under the Assam Land and
Revenue Regulation for all timber (if any) on the 667 demised lands cut down,
removed or utilised by the lessee during the period of the lease.
Timber valuation at reduced rates estimated
at Rs. 12472.7 (Rupees Twelve thousand four hundred and seventy-two and annas
seven only) was credited into the treasury by Challan Nos. 43 dated the 24.2.32
The lessee shall be liable 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." According to the respondent, it would be entitled to remove timber
cut and felled from the leased area without liability to pay royalty for its
own use irrespective of the fact whether such timber was to be used outside the
leased area, because such use would be in connection with the exploitation of
the grant and there is such a reservation in the grant evidenced by the lease.
True 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 24-2-32 The lessee 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. The implication 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
timber.
The respondent claimed to remove timber
without the liability to pay royalty in exercise of the right reserved under
Cl. 2 thus interpreted. In para 5 of the Writ Petition filed by the respondent
in the High Court, a reference has been made to the aforementioned term in the
lease deed. It was further stated that the respondent paid the royalty under
protest which it was not liable to pay as the timber was urgently required for
the purpose of the business of the Company in connection with the grant. These
averments 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 lease. Anticipating a possible contention about the
jurisdiction of the High Court to entertain 668 a writ petition for enforcement
of contractual obligation, the respondent contended that the levy of royalty
had no authority of law and that this was an unreasonable restriction on the
fundamental right of the respondent to carry on its trade. This 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 petition.
Shorn of all embellishment the relief claimed
by the respondent was preferable to nothing else but the term of the lease viz.
Cl. 2 Part IV. Maybe, that this term is a mere reproduction of proviso to Rule
37 of Assam and 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. Proviso to Rule 37 is an enabling provision. The relevant
portion of the proviso reads as under:
"Provided that if any person taking up
land for special cultivation is unwilling to pay the full royalty valuation of
the timber as estimated, he shall have the option of paying a reduced valuation
representing only the profit which is likely to derive from the use of the
timber for the purposes connected with the exploitation of the grant. If he
exercises such option, he shall be liable to pay royalty at full rates on all
timber sold, bartered, mortgaged, given or otherwise, transferred or removed
for transfer and on all timber removed for use unconnected with the
exploitation of the grant during the period of his lease or renewed
lease." 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 precondition 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 respon- 669 dent grantee paid Rs. 124727/- 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 case.
But we would first address ourselves to the
question of law. Art. 226 confers extraordinary jurisdiction on the High Court
to issue high prerogative writs for enforcement of the fundamental rights or
for any other purpose. Undoubtedly, the respondent contended that its
fundamental right under Art. 19(1) (g) to carry on trade has been violated. The
High Court overlooked the well-settled legal position that a juristic person
such as a Corporation is not entitled to any of the freedoms guaranteed by Art.
19. The respondent was the sole petitioner in the High Court. It is a company
incorporated under the Companies Act. The fundamental right claimed under Art.
19 (1) (g) is to practise any profession or carry on any occupation, trade or
business. The respondent (company) contended that it had a right to carry on
its trade or business of cultivating and raising a tea garden and as part of it
to cut timber and remove the same from the leased area without the payment of
royalty and that insistence upon payment of royalty unsupported by law is an
unreasonable restriction denying the fundamental right guaranteed to the
respondent. Art.
670 19 (1) (g) guarantees the fundamental
freedom to a citizen.
The respondent not being a citizen was not
entitled to complain of breach or violation of fundamental right under Art. 19
(1) (g). [See State Trading Corporation of India Ltd. v. The Commercial Tax
Officer, Vishakhapatnam and Tata Engineering and Locomotive Co. v. State of
Bihar .] However, the shareholders of a company can complain of infringement of
their fundamental rights [See Bennett Coleman & Co. and others v. Union of
India and others]. Such is not the case pleaded. Therefore the writ petition on
the allegation of infringement of fundamental right under Art. 19 (1) (g) at
the instance of respondent company alone was not maintainable.
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 where 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 regulations. 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.
Ordinarily, where a breach of contract is
complained of, a party complaining of such breach may sue for specific
performance of the contract, if contract is capable of being specifically
performed, or the party may sue for damages.
Such a suit would ordinarily be cognizable by
the Civil Court. The High Court in its extraordinary jurisdiction would not
entertain a petition either for specific performance of contract or for
recovering damages. A right to relief flowing from a contract has to be claimed
in a civil court where a suit for specific performance of contract or for
damages could be 671 filed. This is so well settled that no authority is
needed.
However, we may refer to a recent decision
bearing on the subject. In Har Shankar and Ors. etc. etc. v. The Deputy Excise
and Taxation Commissioner and Ors., the petitioners offered their bids in the
auctions held for granting licences for the sale of liquor. Subsequently, the
petitioners moved to invalidate the auctions challenging the power of the Financial
Commissioner to grant liquor licence.
Rejecting this contention, Chandrachud J., as
he than was speaking for the Constitution Bench at page 263 observed as under:
"Those who contract with open eyes must
accept the burdens of the contract along with its benefits. The powers of the
Financial Commissioner to grant liquor licences by auction and to collect
licence fees through the medium of auctions cannot by writ petitions be
questioned by those who, had their venture succeeded, would have relied upon those
very powers to found a legal claim. Reciprocal rights and obligations arising
out of contract do not depend for their enforceability upon whether a
contracting party finds it prudent to abide by the terms of the contract. By
such a test no contract could ever have a binding force." Again at page
265 there is a pertinent observation which may be extracted.
Analysing the situation here, a concluded
contract must be held to have come into existence between the parties. The
appellants have displayed ingenuity in their search for invalidating
circumstances but a writ petition is not an appropriate remedy for impeaching
contractual obligations." This apart, it also appears that in a later
decision, the Assam High Court itself took an exactly opposite view in almost
identical circumstances. In Woodcrafts Assam v. Chief Conservator of Forests,
Assam, 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.
672 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.
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.
Respondent No. 1 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 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 the 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
proved for obtaining relief:
(i) The area covered by the grant.
673 (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 called upon to decide complicated questions
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 situated in
Dekorai Division. Admittedly, this 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 No. 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 benefit of removal of timber without payment of royalty can be 674
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.
Accordingly, this appeal is allowed and the
judgment of the High Court is quashed and set aside and the writ petition filed
by the respondent in the High Court is dismissed with costs throughout.
S.R. Appeal allowed.
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