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Gauhati High Court · body

1998 DIGILAW 311 (GAU)

State of Tripura and another v. Md. Sayefuddin

1998-10-29

A.K.PATNAIK

body1998
Judgement This is an appeal under Section 100 of the Code of Civil Procedure against the judgment and decree dated 2-9-97 of the learned District Judge, North Tripura, Kailasahar in Title Appeal No. 11 of 1996. 2. The facts briefly are that the respondent filed Title Suit No. 20 of 1994 against the appellants in the Court of Assistant District Judge, North Tripura, Kailasahar. The case of the respondent in the said suit was that he set up a saw mill under the name and style of "Srinathpur Saw Mill" at Srinathpur in Kailasahar in the district of North Tripura in the year 1984 with the loan of Rs. 25,000/- from the State Bank of India, Kailasahar Branch. The Industry Department of Government of Tripura initially registered the aforesaid saw mill of the respondent as a small scale industrial unit and sanctioned a subsidy of Rs. 8,437.25. The saw mill started functioning and had a decent income. In 1985, however, the Tripura Forest (Establishment and Regulations of Saw Mills and Other Wood-based Industries) Rules, (for short "the 1985 Rules") were made by the Government of Tripura under Section 51-A of the Indian Forest Act, 1927. Rule 3(2)(a) of the 1985 Rules provided that all persons carrying on business in saw mills and other units including factories immediately before the commencement of the Rules would obtain licence from the Authorised Officer and Rule 3(2)(b) further stipulated that such persons would apply in Form II within the period of 90 days from the date of commencement of the Rules and might carry on the said business or occupation until a licence was granted under the Rules. The respondent accordingly applied for licence in the prescribed format No. II and offered the requisite fees. But the Authorised Officer did not accept the fees and did not intimate the respondent the reasons for such non-acceptance and no licence was granted to the respondent. For such refusal on the part of the Forest Department to grant licence to the respondent for running the saw mill, the Industry Department did not renew the small scale Industrial unit registration certificate of the respondent and the Electricity Department discontinued the electricity supply to the saw mill premises of the respondent. For such refusal on the part of the Forest Department to grant licence to the respondent for running the saw mill, the Industry Department did not renew the small scale Industrial unit registration certificate of the respondent and the Electricity Department discontinued the electricity supply to the saw mill premises of the respondent. On these facts the respondent filed the suit for a declaration that he was entitled to deposit the necessary licence fee and to have a licence to run the saw mill, and for a mandatory injunction directing the appellants to accept the licence fee and issue licence to the respondent. In the said suit, the respondent also claimed compensation and damages as detailed in Schedule A to the plaint. The appellants contested the said suit by taking, inter alia, the plea in their written statement that under Rule 3(2)(b) of the 1985 Rules, the respondent was required to apply for licence within the period of 90 days from the date of commencement of the Rules, but the respondent applied for licence long beyond the said period of 90 days on 21-7-1986 and, as such, the application of the respondent was time-barred and deserved no consideration and for this reason the fee of Rs. 250/- deposited by the respondent for licence was not accepted by the Forest Authorities. The Trial Court after recording evidence accepted the said plea of the appellants in the written statement and dismissed the suit by the judgment and decree dated 27-9-96. 3. Aggrieved, the respondent filed Title Appeal No. 11/96 in the Court of District Judge, North Tripura, Kailasahar and after hearing the parties, the learned District Judge held that the requirement under Rule 3(2)(b) of the 1985 Rules that persons carrying on the business of saw mills would apply for licence in Form II within the period of 90 days from the date of commencement of the Rules was not mandatory but directory and that there was no justification for the Forest Department not to accept the fee of Rs. 250/- and issue a licence under the said Rules to the respondent and that the respondents saw mill was entitled to be considered for grant of licence under the 1985 Rules and directed the Forest Department to consider and dispose of the pending application of the respondent within 60 days and to communicate the said decision to the respondent. 250/- and issue a licence under the said Rules to the respondent and that the respondents saw mill was entitled to be considered for grant of licence under the 1985 Rules and directed the Forest Department to consider and dispose of the pending application of the respondent within 60 days and to communicate the said decision to the respondent. The learned District Judge, however, refused to grant any compensation or damages in favour of the respondent and allowed the appeal to the extent indicated above by the impugned judgment and decree dated 2-9-97. Aggrieved by the said judgment and decree, the appellants have preferred the present appeal. 4. At the hearing of this appeal, Mr. S. Roy, learned counsel appearing for the appellants, submitted that the only substantial question of law involved in the present appeal for determination is as to whether the provision underlying Rule 3(2)(b) of the 1985 Rules to the effect that persons carrying on the business in saw mills would apply for licence in Form II within the period of 90 days from the date of commencement of the 1985 Rules was mandatory or directory. According to Mr. Roy, the said provision was mandatory inasmuch as a person who had an existing saw mill and did not apply for licence within the period of 90 days from the date of commencement of the 1985 Rules could not carry on the business of saw mill until a licence was granted under the said Rules. He further submitted that if an application was not filed by a person carrying on the business of existing saw mill within the period of 90 days from the date of commencement of the 1985 Rules, the saw mill was not to be treated as an existing saw mill but a new unit for which an application had to be filed not under Rule 3(2) which applied to the existing saw mill but under Rule 3(1) which applied to new saw mill to be established by a person. Mr Roy further submitted that in any case the Supreme Court has now held in the case of TN Godavarman Thirumulpad v. Union of India, AIR 1997 SC 1228 , that as per the provisions of the Forest Conservation Act, 1980, no forest activity including running of saw mill of any kind is permissible in any forest without the prior approval of the Central Government. Hence, no licence can be granted to the respondent under the 1985 Rules in case the saw mill of the respondent is situated in forest as explained by the Supreme Court in the said judgment. According to Mr Roy, therefore, the impugned judgment and decree of the learned District Judge are liable to be set aside for being contrary to the provisions of the 1985 Rules and the aforesaid judgment of the Supreme Court. 5. In reply, Mr. D. K. Biswas, learned counsel appearing for the respondent supported the impugned judgment of the learned District Judge and relied on the reasons given by the learned District Judge in the impugned judgment for his finding that the provision of Rule 3(2)(b) of the 1985 Rules requiring a person carrying on the business of saw mill to apply for licence within the period of 90 days from the date of commencement of the 1985 Rules is directory and not mandatory. Regarding the contention of Mr. Roy that the Supreme Court in the case of TN Godavarman Thirumulpad v. Union of India (supra) had clearly held that no saw mill could be set up in a forest without the prior approval of the Central Government as per the provisions of the Forest Conservation Act, 1980, Mr. Biswas submitted that the saw mill of the respondent was situated in Kailasahar and not in the forest and hence the said judgment of the Supreme Court did not apply to the saw mill of the respondent. He further submitted that the said judgment of the Supreme Court in TN Godavarman Thirumulpad v. Union of India as reported in AIR 1997 SC 1228 has been subsequently clarified in AIR 1998 SC 769 and some specific directions have been given by the Supreme Court with regard to the disposal of timber in North-Eastern States. According to Mr. Biswas, if the two judgments as reported in AIR 1997 SC 1228 and AIR 1998 SC 769 are read together, there would be no bar for the authorities to grant licence in favour of the respondents. 6. According to Mr. Biswas, if the two judgments as reported in AIR 1997 SC 1228 and AIR 1998 SC 769 are read together, there would be no bar for the authorities to grant licence in favour of the respondents. 6. On the reading of the impugned judgment, it appears that the learned District Judge has relied on the provisions of Rules 3 and 4 of the 1985 Rules as well as the decision of the Supreme Court in the case of Sharif-ud-Din v. Abdul Gani, AIR 1980 SC 303 , for coming to the conclusion that the provision in Rule 3(2)(b) of the 1985 Rules requiring a person carrying on the business of saw mill to apply for licence within 90 days from the date of commencement of the Rules was directory and not mandatory. Rules 3 and 4 of the 1985 Rules are quoted hereinbelow : "CIRCUMSTANCES PROHIBITING ESTABLISHMENT OF SAW MILLS, ETC. AND GRANT OF LICENCE : 3. (1) No person shall establish a saw mill and other units including factories of the categories mentioned in Section 51-A- (a) within such distance from the Government forest boundary as may be decided by the Authorised Officer; (b) without obtaining a licence in Form I issued by an Authorised Officer. (2)(a) All persons carrying on business in saw-mills and other units including factories immediately before the commencement of these rules shall also obtain licence from the Authorised Officer; (b) For the purpose of clause (a) such persons shall apply in Form II within a period of 90 days from the date of commencement of these rules and may carry on the said business or occupation until a licence is granted under these rules." "APPLICATION FOR LICENCE : 4. (1) For obtaining a licence under Rule 3 a person shall apply to the Authorised Officer in Form II. (2) On receipt of an application for licence, the Authorised Officer shall, after making such inquiry as he may think fit and within a period of sixty days from the date of receipt of such application, either grant or refuse to grant the licence: Provided that no licence shall be granted unless the Authorised Officer is satisfied about the location, availability of raw materials, financial capacity and past records in business of such person. Where the Authorised Officer refuses to grant such licence, he shall record the reasons therefor and such reasons shall be communicated to the person in writing. (3) For the purpose of inquiry under sub-rule (2), the Authorised Officer may exercise the following powers : (a) enter into or upon any land, survey and demarcate the same, make a map thereof or authorise any other Officer to do so; (b) Call for such documents as he deems necessary for ascertaining the merit of the application." A reading of sub-rule (1) of Rule 3 quoted above would show that no person can establish a saw mill without obtaining a licence in Form I issued by an Authorised Officer. Sub-rule (1) of Rule 3 applies to establishment of a new saw mill and it stipulates that such a new saw mill cannot be established without obtaining a licence in Form I issued by an Authorised Officer. Sub-rule (2)(a) of Rule 3 is applicable to existing saw mill and it provides that all persons carrying on business in saw mills will also obtain licence from the Authorised Officer. Sub-rule (2)(b) however states that persons carrying on business in saw mills shall apply in Form II within the period of 90 days from the date of commencement of the Rules and may carry on the said business in the saw mill until a licence is granted under the Rules. Thus, if a person carrying on business in existing saw mill applies in Form II within the period of 90 days from the date of commencement of the Rules, he may carry on the said business even without a licence and does not have to wait for carrying on the business in the said saw mill until a licence is granted under the Rules. But where a person carrying on business of a saw mill does not apply within the period of 90 days from the date of commencement of the Rules, the consequence of the aforesaid provision would be that from the ninetyfirst day from the date of commencement of the Rules, he cannot carry on the business in the existing saw mill without a licence. In my considered opinion, therefore, the provision in sub-rule (2)(b) of Rule 3 of the 1985 Rules requiring a person having business of saw mill to apply in Form II for licence within the period of 90 days from the date of commencement of the Rules is mandatory if such person wants to continue the business without such licence after the period of 90 days from the date of commencement of the Rules. But a bare reading of Rule 4 of the 1985 Rules quoted above would show that it nowhere states that no application can be made for obtaining a licence by a person having an existing saw mill beyond the period of 90 days from the date of commencement of the 1985 Rules and it nowhere also states that if such an application is made by a person having an existing saw mill beyond the period of 90 days from the date of commencement of the 1985 Rules, such application shall not be considered by the Authorised Officer. The proviso to sub-rule (2) of Rule 4, on the other hand, states the specific circumstances or grounds on which an Authorised Officer shall not grant a licence and it has not been stated therein that an application filed by a person having an existing saw mill beyond the period of 90 days from the date of commencement of the 1985 Rules would be a ground for the Authorised Officer to reject an application or refuse to grant a licence under the Rules. 7. The finding of the learned District Judge, therefore, in the impugned judgment that the provision in sub-rule (2)(b) of Rule 3 of the 1985 Rules requiring a person having an existing saw mill to apply in Form II within the period of 90 days from the date of commencement of the Rules was not mandatory and directory was not entirely correct. The said provision was mandatory for the reason that non-compliance of the said provision would disentitle a person having an existing saw mill to carry on business in the said saw mill beyond the period of 90 days from the date of commencement of the Rules without a licence, but the said provision was not mandatory in so far as it did not create a bar on a person having an existing saw mill to apply for a licence under the Rules even after the expiry of the period of 90 days from the date of commencement of the 1985 Rules, and for the authorities to consider such an application in accordance with law. This is what appears to be the object of the provisions of Rules 3 and 4 of the 1985 Rules quoted above. Learned District Judge while applying the decision of the Supreme Court in the case of Sharif-ud-Din v. Abdul Gani ( AIR 1980 SC 303 ) (supra) lost sight of the following observations made by the Supreme Court in para 9 of the judgment as reported in AIR 1980 SC 303 : "....................The fact that the statute uses the word shall while laying down a duty is not conclusive on the question whether it is a mandatory or directory provision. In order to find out the true character of the legislation, the Court has to ascertain the object which the provision of law in question is to subserve and its design and the context in which it is enacted. If the object of a law is to be defeated by non-compliance with it, it has to be regarded as mandatory................" 8. The aforesaid incorrect finding of the learned District Judge in the impugned judgment that the provision of sub-rule (2)(b) of Rule 3 requiring a person having an existing saw mill to apply in Form II within the period of 90 days from the date of commencement of the 1985 Rules was not mandatory but directory, however, does not make any difference to the ultimate relief that the learned District Judge has granted to the respondent. As has been held above, the aforesaid provision in sub-rule (2)(b) of Rule 3 did not create a bar for a person having an existing saw mill to submit an application in Form II for licence beyond the said period of 90 days from the date of commencement of the 1985 Rules and for the Authorised Officer to consider such application in accordance with law. Hence, the learned District Judge rightly held that the Authorised Officer should not have refused to accept the fee of Rs. 250/- deposited by the respondent along with the application and the learned District Judge rightly directed the Authorised Officer in the impugned judgment to consider and dispose of the application of the respondent within the period of 60 days and communicate the decision thereon in writing to the respondent. While considering the application of the respondent for such licence to run the existing saw mill, however, the Authorised Officer will have to be satisfied about the location, availability of raw materials, financial capacity and past records in business of the respondent as indicated in sub-rule (3) of Rule 4 of the 1985 Rules, and while considering the same has to keep in mind the judgments of the Supreme Court in the case of TN Godavarman Thirumulpad v. Union of India, as reported in AIR 1997 SC 1228 and AIR 1998 SC 769 . The impugned judgment and decree dated 2-9-97 of the learned District Judge, North Tripura, Kailasahar are modified to the extent indicated above and the Authorised Officer will now comply with the said impugned judgment and decree as modified by this judgment within a period of 60 days from the date of receipt of a certified copy of this judgment from the respondent. However, considering the entire facts and circumstances of the case, the parties shall bear their own costs. Order accordingly.