PETITIONER: CHIEF CONSERVATOR OF FORESTS AND ORS. Vs. RESPONDENT: RATTAN SINGH DATE OF JUDGMENT: 07/04/1966 BENCH: SHAH, J.C. BENCH: SHAH, J.C. WANCHOO, K.N. SIKRI, S.M. CITATION: 1967 AIR 166 1966 SCR (1) 58 CITATOR INFO : R 1981 SC 479 (6,7) ACT: Central Provinces and Berar Forest Contract Rules-Rule 15(1)--Scope of. HEADNOTE: Under r. 15(1) of the Central Provinces and Berar Forest Contract Rules a forest contractor is responsible for any damage done in a reserved forest by himself or his servants or agents and compensation for such damage is to be assessed by the Divisional Forest Officer. The respondent was, under a contract, granted a right to the forest produce. By cl. 9 of the Contract any doubt or dispute arising between the parties as to the performance or breach of any of the conditions of the contract had to be referred to the Chief Conservator of Forests for decision. The Divisional Forest Officer, acting under r. 15(1), held that the contractor committed a breach of the contract and assessed the compensation for damages. HELD:Rule 15(1) does not invest the Divisional Forest Officer with authority to determine whether the contractor, his servants or his agents have committed a breach of the contract. When a dispute arises between the contractor and the forest authorities relating to the performance or breach of the contract, there has to be, under the terms of cl. 9, a reference to the officer denominated in the contract. After liability is determined, there may have to be an assessment, by the Divisional Forest Officer,, of compensation payable by the contractor to the State, There is no inconsistency between cl. 9 of the Contract and r. 15 [161 F-H; 162 E-F]. JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 255 of
1964.]
Appeal by special leave from the judgment and order dated
November 14, 1960 of the Madhya Pradesh High Court in Misc.
Petition No. 273 of 1959.
B. Sen, R. P. Kapur and 1. N. Shroff, for the appellants.
S. P. Sinha, and S. Shaukat Hussain, for the respondent.
The Judgment of the Court was delivered by
Shah, J. Under a contract dated October 14. 1956, the
respondent was granted a right to the forest produce from
Coupe No. 9, Lendara in the Saiura Borgain Reserved Forest
in the Kanker Forest Division of Bastar District of Madhya
Pradesh, for the period October 14, 1956 to March 31, 1958.
The Divisional Forest Officer held an enquiry in respect of
certain breaches committed by the respondent of the terms of
the contract, and by order dated January 30, 1958 directed
the respondent in exercise of the authority under r. 15(1)
of the Forest Contract Rules framed by the Government of
Cenytral Provinces & Berar, to pay Rs. 8,500 as compensation
assessed by him for damage done in the reserved
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forest and Rs. 500 as penalty under r. 30(1) of the Forest
Contract Rules. An appeal against the order to the
Conservator of Forests, and a revision petition to the Chief
Conservator of Forests, Madhya Pradesh, were unsuccessful.
The respondent then moved the High Court of Madhya Pradesh
by a petition under Art. 226 of the Constitution for a writ
quashing the order dated January 30, 1958 directing payment
of compensation and penalty and restraining enforcement of
the order. The High Court granted the petition and
restrained the State and the forest authorities from
recovering Rs. 9,000, ordered on January 30, 1958, from the
respondent.
In this appeal, the appellants contended in the first
instance that the High Court was in error in holding that by
r. 15 of the Forest Contract Rules the Divisional Forest
Officer was not authorized to direct the contractor to pay
compensation for damage done by him or his agents or
servants, because the coupe was not in “a reserved forest”.
Such a case, it was said, was never pleaded by the
contractor in his petition, and the High Court in granting
relief to the respondent made out a case which the
appellants had no opportunity to meet. In support of their
case that the coupe is a part of the reserved forest, the
appellants have annexed to their petition for special leave
a “true copy” of a notification issued under S. 20 of the
Indian Forest Act, 1927, as applied to the Central
Provinces, declaring that the State forests of the Bastar
District in Tahsil Kanker Sainmura-Borgaon specified in the
Schedule shall be reserved forests.
We agree with the appellants that the High Court has without
any plea or evidence assumed that compensation under r.
15(1) could not be directed to be paid by the contractor for
damage done in the coupe, for which he was given a contract,
because the coupe was not included in a. reserved forest.
The plea which appealed to the High Court was not raised in
the petition, nor in the objections to the Divisional Forest
Officer in reply to the notice to show cause, nor in the
memorandum of appeal before the Conservator of Forests, nor
in the petition invoking the revisional jurisdiction of the
Chief Conservator of Forests. The High Court assumed that
because the forest authorities charged the contractor with
“illegal fellings in the coupe” granted to him, the
“fellings could not be in a reserved forest”. For this
assumption there is no warrant. The High Court was
therefore in error in setting up the ground that the
impugned order was not authorised by the terms of r. 15(1).
But the appeal filed by the appellants must still fail on
the grounds to be presently set out.
The following are the relevant terms of the
contract:
“1. The Governor hereby agrees to sell to the
forest contractor, and the forest contractor
agrees to purchase the forest produce
described in the First Schedule hereunder
160 …….situated in the area specified in
the said
Schedule……… on the conditions
hereinafter stated.” The First Schedule
describes the area of the forestand sets out
the forest produce sold under the contract.
“6. The forest contractor shall be subject
to the Forest Contract Rules as amended from
time to time (a copy of which has been
furnished to the forest contractor, the
receipt of which the forest contractor hereby
acknowledges) and the Rules shall be deemed to
De part of this contract in so far as they are
applicable thereto:
Provided that the said Rules shall be deemed
to be modified to tile extent and in the
manner laid down in the Second Schedule
hereunder.”
“7. The forest contractor hereby binds himself
to perform all acts and duties required, and
to abstain by himself and his servants or
agents from performing any act forbidden by
the Indian Forest Act, 1927, by the Forest
Contract Rules and by this contract.
“9. In the event of any doubt or dispute
arising between the parties as to the
interpretation of any of the conditions of
this contract or as to the performance or
breach thereof, the matter shall be referred
to the Chief Conservator of Forests, Madhya
Pradesh, Nagpur, whose decision shall be final
and binding on the parties hereto.”
By cl. 6 of the contract, the Forest Contract Rules framed
by the local Government are made part of the contract. The
material clauses of the Rules read as follows:
“2. All contracts whereby Government sells
forest produces to a purchaser shall be
subject to the following rules, in so far as
they are applicable, and these rules, in so
far as they are applicable, shall be deemed to
be binding on every forest contractor not only
as rules made under the Forest Act, but also
as conditions of his forest contract:
Provided that the forest officer executing a
forest contract shall have power to vary these
rules by express provision in such contract,
and where these rules are in conflict with
such an express provision, such express
provision shall prevail:Provided further
“15(1) A forest contractor shall be
responsible for any damage that may be done in
a reserved forest by himself or his servants
and agents. The compensation for such damage
shall be assessed by the Divisional Forest
Officer, whose decision shall be deemed to be
that of an arbitrator and shall be
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final and binding on the parties, except to
the extent that it shall be subject to an
appeal to the Conservator of Forests.
Explanation…………
(2) Any sum assessed as damages under this
rule shall be recoverable as arrears of land
revenue………………
“30(1) Where the forest contractor commits a
breach of any of the conditions of his
contract but it is not proposed to terminate
his contract on account thereof, the whole
penalty provided for in rule 28 shall not be
recovered from him, but the Divisional Forest
Officer shall have power to recover a portion
thereof, not exceeding five hundred rupees, in
accordance with the provisions of section 85
of the Act.
(2) An order of the Divisional Forest
Officer under this rule shall be subject to
appeal to the Conservator of Forests if the
amount levied exceeds two hundred rupees, but
shall otherwise be final.
(3)The payment of a sum assessed under this
rule shall absolve the forest contractor from
all further liabilities under his contract in
respect of such breach, except his liability
under rule 15 for damage done in a reserved
forest.”
On behalf of the respondent it was urged before the High
Court, as also before this Court, that where a dispute arose
between the Divisional Forest Officer and the contractor,
whether the contractor, his servants or agents had caused
damage in a reserved forest, the question could be decided
in the manner appointed in cl. 9 of the contract alone,
i.e., by arbitration of the officer denominated, and not by
the Divisional Forest Officer. In dealing with the validity
of the order imposing penalty upon the contractor the High
Court upheld that argument. Rule 15 in the first instance
declares that the forest contractor shall be responsible for
any damage done either by himself, or his servants or
agents: it then proceeds to state that compensation shall be
assessed by the Divisional Forest Officer whose decision
shall be deemed to be that of an arbitrator subject to an
appeal to the Conservator of Forests. The rule does not
confer upon the Divisional Forest Officer authority to
determine, when a dispute is raised, whether damage has been
caused in a reserved forest by the contractor, his agents or
his servants. The rule only declares that for damage that
may be done, by the contractor, his servants or agents, in
the forest, the contractor shall be liable: the rule also
invites the Divisional Forest Officer with authority to
determine the amount of compensation payable by the
contractor, but not to determine whether the contractor, his
servants or his agents have committed breach of the
contract. Clause 9 of the contract confers authority upon
the Chief Conservator of Forests to adjudicate upon
disputes, inter alia, as to the performance or breach of the
contractor. By. cl. I read with the Schedule to the
contract “the contractor had to fell or uproot
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trees marked with a geru band or to fell trees on coupes and
section lines which bear a marking hammer impression on the
stump buttends and all Karra over 9″ at B.H. whether marked
or not”.It was the case of the Divisional Forest Officer
that the contractor had, contrary to the terms of the
contract, cut trees not marked with the geru band. Plainly,
the Divisional Forest Officer claimed that the contractor
had committed a breach of the terms of the contract, and
when the contractor denied the breach, a dispute arose
between the parties as to the performance or breach of the
terms of the contract, and it had to be referred to the
Chief Conservator of Forests. It is conceded, and in our
judgment counsel is right in so conceding, that the
expression “shall be referred to” means “shall be referred
to the Officer denominated” as an arbitrator to decide the
dispute.
It was argued however that by virtue of cl. 6 of the
contract, the Forest Contract Rules were made part of the
contract, and the Divisional Forest Officer was invested
with authority not only to determine the amount of
compensation which may be payable by the contractor for
damage done in a reserved forest, but also to determine
whether the contractor or his agents or servants had been
responsible for causing the damage. This, for reasons
already stated, we are unable to accept.
There is no inconsistency between cl. 9 of the contract and
r. 15. It is unnecessary, therefore, to consider whether in
case of inconsistency, the terms of the contract expressly
setting out a certain covenant may supersede the terms of
the rule. Under r. 15 the liability for damage done in a
reserved forest is declared against the contractor. He is
also declared liable to pay compensation as may be assessed
by the Divisional Forest Officer. But the Divisional Forest
Officer is not invested with authority to determine whether
the damage was done by the contractor, his agents or
servants. That is a matter which must be determined in a
reference under cl. 9 of the contract.
It was urged by the appellants that it could not have been
intended by the rule-making authority, who had also
prescribed the form as part of the rules in which the
contract was required to be executed, to set Lip a
complicated and clumsy procedure for determination of a
dispute about the breach of contract, if the language of the
rules were ambiguous, this may be a relevant consideration.
When a dispute arises between the contractor and the forest
authorities relating to the performance or breach of the
contract, there has, under the terms of cl. 9, to be a
reference to the Officer denominated in the contract. After
liability is determined, there may have to be an assessment
by the Divisional Forest Officer of compensation payable by
the contractor to the State.
163
That would necessitate another inquiry. The procedure is
apparently clumsy and likely to be dilatory. But we are
unable to ignore the plain terms of the contract and the
rules, and to hold that in respect of the determination of
responsibility for damage done in a reserved forest, there
need be no reference under cl. 9 of the terms of the
contract.
It was then urged that in any event a decision was in fact
given by the Chief Conservator of Forests in this case, and
that decision complied with the requirements of cl. 9 of the
contract. But as already stated, the Divisional Forest
Officer passed an order holding the respondent liable to pay
compensation for damage done in a reserved forest and
assessing the compensation at Rs. 8,500 and penalty at Rs.
500. That order was confirmed in appeal by the Conservator
of Forests, and in exercise of his revisional jurisdiction
the Chief Conservator of Forests upheld the order of the
Conservator of Forests. The Chief Conservator of Forests
did not even purport to act as an arbitrator: he recorded no
evidence, and expressly held that the Divisional Forest
Officer was not obliged to refer the case for arbitration
under cl. 9 of the contract, The trial was not of a
proceeding in arbitration, but of a proceeding in exercise
of supervisory or revisional jurisdiction. If in truth the
dispute had to be referred for adjudication to the Chief
Conservator of Forests, his decision that he found no reason
to interfere with the “findings of the Divisional Forest
Officer” who was one of the parties to the dispute, cannot
conceivably be regarded as an award between two contesting
parties. It must therefore be held that the order passed by
the Divisional Forest Officer imposing liability for
compensation for damage done by illegal fellings cannot be
sustained.
The second part of the order imposing penalty under r. 30(1)
also suffers from the same infirmity. It is true that under
the rule the Divisional Forest Officer had power to impose
penalty in a sum not exceeding Rs. 500. But exercise of
that power is conditioned by the existence of a breach by
the forest contractor of any of the terms of the contract.
Where a, dispute arises whether there has been a breach of
any of the terms of the contract, it is, for reasons already
stated, to be determined by the Chief Conservator of
Forests. That has admittedly not been done. The order
imposing penalty under r. 30(1) must also be set aside.
The appeal therefore fails and is dismissed with costs.
Appeal dismissed.
164