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1996 DIGILAW 547 (KAR)

SOUTH INDIAN PLYWOOD MANUFACTURERS ASSOCIATION, MYSORE v. STATE OF KARNATAKA

1996-09-11

R.P.SETHI, S.RAJENDRA BABU

body1996
R. P. SETHI, C. J. ( 1 ) THE petitioners, who are running the plywood industries in the States of Karnataka, Kerala, tamil Nadu and Andhra Pradesh, have, in these petitions, prayed for: (i) Issuance of a writ of mandamus directing the respondents to implement the assurances held out on 17-11-1984 and set out in Annexures-G and L. (ii) Issuance of a writ in the nature of mandamus directing the respondents to forthwith release and supply the raw materials to petitioners 2 to 12 for the years 1986-87 and 1987-88 at the rates respectively prevailing in the quantities set out in the agreements entered into by the Government with each of the petitioner and continue to supply the same as per the agreements. (iii) Issuance of a writ in the nature of mandamus directing the respondents to renew such of the agreements entered into by the Government with each of the petitioners and which have since expired. (iv) Issuance of an appropriate writ, direction or order restraining the respondents from recovering any amounts pertaining to payment of the timber value supplied during the period 23-2-1981 till 29-6-1982 at the enhanced rates except after fulfilling the assurances held out on 17-11-1984 and rescheduling the payments accordingly. (v) Issuance of a writ in the nature of declaration, declaring that Section 101-A of the Karnataka forest Act, 1963, inserted by the Karnataka Forest (Amendment) Act, 1980, as unconstitutional and void. (vi) Issuance of a writ of declaration declaring that Section 7 of the Karnataka Forest (Amendment) Act, 1984 as unconstitutional and void and grant such other reliefs that are appropriate in the circumstances in the case. ( 2 ) LEARNED Counsel for the petitioner has not pressed prayer No. (v ). He has confined his arguments to the following points only: " (i) Under valid agreements and validly fixed rates (1-6-1979 to 31-5-1982), the petitioners had cut trees even prior to 23-2-1981. Assuming that the 1984 Act is valid, even then the petitioners were entitled to cut the trees under the agreed rates in respect of the trees allowed to be cut prior to 23-2-1981. (ii) Even in respect of the timber cut after 23-2-1981, even though there were valid renewed agreements upto 1989, the Government stopped supply altogether in 1986-87. Therefore, the industry was in ruins and the petitioners were not in a position to pay the seigniorage payable by them. (ii) Even in respect of the timber cut after 23-2-1981, even though there were valid renewed agreements upto 1989, the Government stopped supply altogether in 1986-87. Therefore, the industry was in ruins and the petitioners were not in a position to pay the seigniorage payable by them. The policy of the Government does not prevent the supply of timber to plywood industries. Hence, the Government may be asked to consider Supply of timber and enable the petitioners to pay the arrears without interest in instalments linking such payment to the supply of timber in the interest of the industry and the public". ( 3 ) LEARNED Advocate General appearing for the respondents has, however, submitted that in view of the provisions of the Karnataka Forest Act and the National Forest Policy, the petitioners were not entitled to any relief. ( 4 ) FROM the pleadings of the parties and the records available, it is seen that the Karnataka Forest (Amendment) Act, Act No, 14 of 1980 came into force on 17-4-1980. The leases for supply of soft wood/timber were executed between 1963 and 1980, Vide Act No. 1 of 1981, Section 101-A was inserted on 23-2-1981. Schedule II, Rule 83, fixing the rates was amended on 26-2-1981. On the representation of the plywood industries, the Government constituted a Committee on 17-9-1981 to examine the question of the reviewing of seigniorages. The report of the committee was submitted on 17-4-1982 and pursuant to the recommendation of the Committee, the rates were reduced on 28-6-1982. Vide Act No. 11 of 1984, Section 101-D was inserted on 13-1-1984, A Government order permitting wood based industries to pay the arrears of differential seigniorage value for the period from 23-2-1981 to 28-6-1982 in five equal instalments beginning from the financial year 1985-86 was issued on 6-2-1986. The said government order required the payment of arrears to be effected by 31-3-1990. The said government order required the payment of arrears to be effected by 31-3-1990. ( 5 ) SO far as the prayer of the petitioners for directions to the respondents to charge the agreed rates in respect of the trees allowed to be cut prior to 23-2-1981 is concerned, the same stands already adjudicated by the Apex Court vide judgment in State of Karnataka v M/s. Southern india Plywood Company, Peramanoor, wherein it was held that for the wood cut or removed from the forests prior to the amendment of Section 101-A (2) with effect from 23-2-1981, the persons removing such wood were liable to pay the price of the wood at the rates current at the time of removal. In that case, it was found that pursuant to an agreement between the parties, trees of the species described in the agreements were cut and removed prior to the amendment of section 101-A. The rate for the payment of the wood had been proved to be fixed by agreement. In the petition filed in this Court, it was found that the writ petitioners therein had felled trees of the species described, in accordance with the terms of the agreement. Because of certain proceedings, the wood was not allowed to be removed by the authorities of the State for sometime. In the writ petition filed, this Court held that the petitioners were entitled to remove the wood at the rate agreed upon between the parties under the agreement. Not satisfied with the judgment of this Court, the State filed an appeal before the Apex Court, which was dismissed by holding that the writ petitioners therein were not liable to pay for wood at a higher rate. ( 6 ) SO far as the second submission of the learned Counsel for the petitioners is concerned, we are neither impressed nor inclined to issue any directions, as the learned Counsel for the petitioners has not referred to any provision of law, entitling the petitioners the grant of relief in the form of direction to the respondents to charge from the petitioners at the agreed rates even in respect of timber cut after 23-2-1981. The only submission made is that as there existed a valid renewed agreement between the parties upto 1989 and as the Government had stopped supply of timber in 1986-87, the petitioners were not liable to pay for the wood at the higher rates, The submission of the learned Counsel, if accepted, would defeat the very purpose for which Sections 101-A and 101-B of the Karnataka Forest Act were enacted. ( 7 ) IT was provided by the amendment in the Karnataka Forest Act that the State Government may grant to any person any tree, wood or timber or any other forest produce in any district or reserved forest, on payment by such person, such seigniorage value as may, subject to general or special order of the State Government, be fixed by the Chief Conservator of Forests. Vide sub-section (2) of Section 101-A, it is provided: "the holder of a lease or agreement or any other document granted or entered into prior to the commencement of the Karnataka Forest (Amendment) Act, 1980 and providing for supply of any tree, wood, timber or other forest produce by the State Government shall, notwithstanding anything contained in the instrument of lease or agreement or other document or in any law in force as such commencement, pay, in respect of such tree, wood, timber or other forest produce received by him after such commencement, value, (by whatever name called) at the rate for the time being specified in the rules made or orders issued under sub-section (1), in respect of such tree, wood, timber or other forest produce". Under sub-section (3), the holder of any lease, agreement or document granted or entered into after the commencement of Karnataka Forest (Amendment) Act, 1980 was held liable to pay at the rate for the time being specified in the rules made or orders issued under sub-section (1), in respect of such tree, wood, timber or other forest produce. Under sub-section (3), the holder of any lease, agreement or document granted or entered into after the commencement of Karnataka Forest (Amendment) Act, 1980 was held liable to pay at the rate for the time being specified in the rules made or orders issued under sub-section (1), in respect of such tree, wood, timber or other forest produce. Vide Section 101-B, it was provided that no lease, agreement or any other document entered into by the State Government shall, at a time, be for a term exceeding five years and the supply under every such lease, agreement or other document shall be subject to the condition of availability of such tree, wood, timber or other forest produce, ( 8 ) AFTER a joint reading of Sections 101-A and 101-B, it emerges that all agreements executed before or after the commencement of the Karnataka Forest (Amendment) Act were made subject to the provisions of the aforesaid two sections. No party to any such agreement could project any grievance only on the basis of the agreements executed in his or their favour. The conditions of the agreements executed by the parties stood amended and supplemented by virtue of the conditions specified in the aforesaid two sections. Rule 83 of the Karnataka Forest Rules, 1969 provided that the seigniorage rates were to be charged for each kind of tree or other forest produce granted on licences at the rates specified in the schedule, the same being substituted by notification No. FFD 100 FDP 80, dated 19-2-1981, which was published in the Karnataka gazette dated 26-2-1981. A combined reading of Sections 101-A, 101-B, Rule 83 and the schedule attached therewith, unambiguously leads to the conclusion that after 23-2-1981, the lessees or parties to the agreements executed were liable to pay according to the seigniorage rates and not according to the contracted rates, as has been argued by and on behalf of the petitioners. ( 9 ) SO far as the issuance of direction to the respondents for implementation of the alleged assurance held out to the petitioners are concerned, no relief can be granted, inasmuch as the petitioners have not succeeded in establishing the requisite conditions for invoking the principle of equitable estoppel. The reliance of the petitioners on Annexures-G and L is misplaced. The reliance of the petitioners on Annexures-G and L is misplaced. No assurance appears to have been given to the petitioners, which according to them, would have pursuaded them to change their positions. Annexure-G refers to the letter of the petitioner-Association dated 20-12-1984, in which reference was made to some alleged agreement arrived at in the meeting held on 17-11-1984. Vide Annexure-H, the Principal Chief conservator of Forests intimated one of the petitioners that the Government had not agreed for renewal of allotment of soft wood, as claimed. Annexure-L is again a representation made to the government requesting for help to the plywood industry, who were stated to be in dire straits, consequent to the action taken by the State Government and the Forest Department. Reference was again made to the meeting allegedly convened by the Chief Minister on 17-11-1984, where some package compromise was alleged to have been arrived at. The petitioners have detailed therein the alleged package compromise in the said Annexure. It is, however, worth mentioning that despite various representations made by and on behalf of the petitioners, no assurance is shown to have been given by the respondents to the extent and in the manner which would attract the applicability of the principle of equitable estoppel. Making representations for help could not be made a basis for binding the respondent-authorities to implement the alleged assurances. In Union of India and Others v M/s. Anglo-Afghan Agencies, it was held that even though where a case did not fall within the terms of Section 115 of the Evidence Act, it was open to a party who had acted upon a representation made by the Government to claim that the government shall be bound to carry out the promise made by it even though the promise was not recorded in the form a formal contract, as required by the Constitution. However, to attract the applicability of this general principle of equitable estoppel, the party claiming the benefit was bound to place on record sufficient material in support of his or their claim. A representation of an existing fact is required to be distinguished from a representation that something was to be done in future. However, to attract the applicability of this general principle of equitable estoppel, the party claiming the benefit was bound to place on record sufficient material in support of his or their claim. A representation of an existing fact is required to be distinguished from a representation that something was to be done in future. The Supreme Court in Century Spinning and Manufacturing Company Limited and Another v Ulhasnagar Municipal Council and Another, held that if the representation is acted upon by a person, it may, unless the statute governing the person making the representation provided otherwise, result in an agreement enforceable at law; if the statute requires that the agreement should be in a certain form, no contract may result from the representation and acting therefor, but the law was not powerless to raise in appropriate cases, an equity against him to compel performance of the obligation arising out of the representation made. Public bodies were as much bound as private individuals to carry out representations of facts and promises made by them. ( 10 ) IN the instant case, however, the petitioners have not placed on record sufficient material to show that there was any representation or that upon such representation, they acted upon or that on the basis of the alleged representation, they changed their position, which they would not have done in the absence of such a representation. The claim preferred by the petitioners on the basis of the principle of equitable estoppel is without any substance. ( 11 ) THE petitioners have not referred to any provision of law, statutory or contractual obligation attributed to the respondents under which they could claim their reliefs as prayed for by them, under the prayer clauses numbered as (i), (ii), (iii), (iv) and (vi ). The claim of the petitioners, to that extent, is liable to be rejected. ( 12 ) NO other point was argued. ( 13 ) UNDER the circumstances, the writ petitions are partly allowed by directing the respondents to charge from the petitioners the value of the trees cut by them, prior to 23-2-1981, at the agreed rates and not seigniorage rates in terms of the Amended Act and the Rules. The respondents shall ascertain the quantity of such trees which were felled, cut and removed prior to 23-2-1981 and notify to the petitioners the amount payable on that account. The respondents shall ascertain the quantity of such trees which were felled, cut and removed prior to 23-2-1981 and notify to the petitioners the amount payable on that account. On receipt of the bills, the petitioners shall be liable to make the payment of such determined amount within the time as may be specified by the Government. ( 14 ) THE petitioners are not entitled to any other relief and the writ petitions filed by them, to that extent, shall be deemed to have been dismissed. ( 15 ) NO costs.