PETITIONER:
DIVISIONAL FOREST OFFICER
Vs.
RESPONDENT:
BISHWANATH TEA CO. LTD.
DATE OF JUDGMENT05/05/1981
BENCH:
DESAI, D.A.
BENCH:
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 referable 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]
JUDGMENT:
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 referable 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.
675