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2013 DIGILAW 316 (JK)

Conservator Of Forests v. Sat Pal & Co.

2013-05-17

DHIRAJ SINGH THAKUR, M.M.Kumar

body2013
M.M. Kumar, C.J. 1. Whether Section 3 of the J&K Nationalisation of Forest Working Act, 1987 (for brevity `Forest Working Act') would result in annulment of the judgment and decree dated 28.08.2000 which made the award passed by the Arbitrator on 13.09.1992 as Rule of the Court. The aforesaid question has been raised in the instant appeal filed by the State of J&K through its Officers under Clause 12 of the Letters Patent. 2. In order to put the controversy in its proper perspective few facts may be noticed. M/s Sat Pal and Company- respondent (to be referred to as `Contractor') filed an original suit with Registration No. 20/1985 in the Jammu Wing of this High Court. During the proceedings of the suit, an order was passed by this Court on 22.04.1991 appointing Ex. Managing Director of the J&K State Forest Corporation to be the sole Arbitrator to resolve the dispute between the parties. Following the direction issued by the learned Single Judge of this High Court on 22.04.1991, the Government vide order No. 211-FST of 1991 dated 18.09.1991 appointed Ex. Managing Director of the Forest Corporation as an Arbitrator. The Arbitrator entered upon the reference on 17.12.1991 which fructified in an award dated 13.09.1992 (annexure-A). The Arbitrator filed the award before the learned Single Judge on 15.09.1992. 3. Before making the award as Rule of the Court, the learned Single Judge afforded opportunity of hearing to the parties and framed three issues on 10.02.1994 which included the issue as to `Whether the Arbitrator has misconducted himself or the proceedings; Whether there is any error of law or fact apparent on the face of the award and whether the award could be otherwise set aside'. The parties adduced their evidence and the award was made as the Rule of the Court on 28.08.2000. In other words, the award dated 13.09.1992 became the judgment and decree of the Court with further direction issued to the appellants that Contractor would also be entitled to interest @ 12% p.a on the awarded amount from the date of judgment and decree till its realization which was to be in addition to the interest that was awarded by the Arbitrator (annexures B and C). 4. 4. The State of Jammu and Kashmir and its Officers have challenged the judgment and decree of the learned Single Judge dated 28.08.2000 as well as the award announced by the Arbitrator on 13.09.1992 on various grounds contemplated by the Jammu and Kashmir Arbitration Act. However, at the hearing only one plea has been raised by the learned Advocate General viz. Section 3 of the Forest Working Act creates a complete ban on private persons to fell any tree or convert any timber and the ban is to operate notwithstanding any judgment or decree or order of any court or authority. The view of the learned Single Judge making the award as Rule of the Court is discernable from the following para of the judgment which reads thus: "In the peculiar circumstances of this case, when it is a case of non-speaking award, this Court cannot go into the reasons, which weighed with the arbitrator while passing the impugned award. He is a person chosen by the parties, who is Master of Law and facts both. In addition to this, he is also there to see the quality of evidence that comes forth before him. This Court in no case would examine the award of the Arbitrator as if it is sitting as a Court of appeal. On the other hand, unless anaward on the basis of materials on the file and/or from other cogent and reliable material falls within the mis-chief of Section 30 and 33 of the Arbitration Act would generally and always be viewed to be supported by the Court. This proposition of law has been settled long ago. Nothing to the contrary has been brought to my notice on behalf of respondent-objector to take a contrary view muchless to suggest that on the materials on record, any misconduct is made out against the Arbitrator. So far as the plea regarding the grant of interest by the Arbitrator is concerned, this matter need not detain us any further. Reason being that there is no prohibition in the agreement and/or reference order that the Arbitrator cannot grant interest. Disputes relates to the period 1981-82, this Court cannot lose sight of the fact that had the awarded amount been paid then to the non-objector, he would have at least earned interest on it, if it was not put to any other productive use, by investing the same. Disputes relates to the period 1981-82, this Court cannot lose sight of the fact that had the awarded amount been paid then to the non-objector, he would have at least earned interest on it, if it was not put to any other productive use, by investing the same. Money value has gone down from 1981-82 till date, which fact can be judicially noticed by this Court. In addition to this, interest can be allowed by the Arbitrator. Reference in this behalf can be made to a Division Bench Judgment of this Court reported in AIR 1994 J&K 56 , Smt. Manjit Johl, Appellant v. Dewan Modern Breweries Ltd. Respondent." 5. We have heard learned counsel for the parties at length and have perused the paper book with their able assistance. 6. Mr. Qadri, learned Advocate General, has vehemently argued that Section 3 of the Forest Working Act put it beyond any doubt that there is a complete ban on private persons from using forest for felling any tree or converting any timber or carrying on the felling of any tree or conversion or removal of any timber in any demarcated forest of the State. Likewise, any lease, contract or authority with regard thereto would cease to have effect and right which might have accrued to any person would stand extinguished which might be relatable to any such agreement, contract or authority. All these rights are to vest in the State. In support of his submission, learned Advocate General has placed reliance on a Division Bench judgment of this Court rendered in the case of M/s Baldev Singh Sardool Singh v. State of J&K & ors. (CIMA No. 25/1998 decided on 12.07.2000) 7. Mr. Qadri has also made a pre-emptive submission that the argument concerning the ban created by Section 3 of the Forest Working Act cannot be nullified by sustaining the objection that such an argument has been raised for the first time in this appeal. In order to support his submission reliance has been placed on a judgment of Hon'ble the Supreme Court rendered in the case of State of Punjab v. Dr. R. N. Bhatnagar, AIR 1999 SC 647 . In order to support his submission reliance has been placed on a judgment of Hon'ble the Supreme Court rendered in the case of State of Punjab v. Dr. R. N. Bhatnagar, AIR 1999 SC 647 . Placing reliance on para 16 of the judgment, the learned Advocate General has argued that a pure question of law could be raised at any stage of the proceedings and the appellants cannot be told off at the doors by sustaining the objection. 8. Mr. Kapoor, learned counsel for the Contractor, has argued that lis between the parties had arisen in the year 1981-82 when the Forest Working Act has come into effect in the year 1987. It has been emphasized that even the Civil Original Suit No. 20 of 1985 before the Jammu Wing of this High Court was filed earlier to the promulgation of the Forest Working Act. According to the learned counsel, once the provision of the Forest Working Act has come into operation in the year 1987, it would not adversely affect the accrued rights of the Contractor which ultimately were reflected in the award dated 13.09.1992 which has now become Rule of the Court on 28.08.2000. Mr. Kapoor has insisted that accrued rights cannot be taken away by retrospective operation of a statute. 9. Another submission made by Mr. Kapoor is that the award announced by the Arbitrator on 13.09.1992 does not pertain to grant of permission for felling of any tree or converting any timber or to carry on felling of the trees etc. in any demarcated forest of the State. In that regard, he has drawn our attention to the fact that the judgment and decree has been passed upholding the award for payment of Rs. 2,55,957/- alongwith interest of Rs. 12% per anum from the date of filing of the suit fill its payment and, therefore, it cannot be argued that provisions of Section 3 of the Forest Working Act would be attracted to the fact of the present case. In support of his submission, learned counsel has placed reliance on a Division Bench judgment of this Court rendered in the case of Conservator of Forests v. Gurbachan Singh (CIMA no. 19/1992, decided on 04.09.2002). In support of his submission, learned counsel has placed reliance on a Division Bench judgment of this Court rendered in the case of Conservator of Forests v. Gurbachan Singh (CIMA no. 19/1992, decided on 04.09.2002). Learned counsel has placed specific reliance on the observation made by the Division Bench that once objection concerning Section 3 of the Forest Working Act was not taken then the award cannot be set aside by sustaining the same on the anvil of Section 3 of the Forest Working Act. The aforesaid view taken by the Division Bench was upheld by Hon'ble the Supreme Court when Special Leave to Appeal (Civil) no. CC 5522/2003 was dismissed on 07.07.2003. 10. After hearing learned counsel for the parties, we are of the view that it would first be necessary to examine the provisions of Section 3 of the Forest Working Act which reads as under: 3. "Ban of Forest working by private persons:-Notwithstanding anything to the contrary contained in any law, rule, instrument, agreement or contract or in any judgment, decree or order of any court or authority,- (a) From the commencement of the Jammu & Kashmir Nationalisation of Forest Working Ordinance 1985 (V of 1986), no person shall fell any tree or convert any timber or carry on the felling of any tree or conversion or removal of any timber in any demarcated Forest of the State. (b) Any lease, contract or authority in existence at the commencement of the Jammu & Kashmir Nationalisation of Forest Working Ordinance, 1986 (V of 1986) for felling of trees or conversion or extraction of timber from such trees or for removal f timber from the demarcated forest shall cease to have effect and right which might have accrued to any person under any such contract, agreement or authority shall stand extinguished and shall rest in the State: Provided that nothing in clause (b) shall effect the right of the Government to recover any amount payable to it on account of royalty, interest, compensation, penalty or any other sum chargeable from any person by virtue of any lease contact or authority referred to above, in the manner provided for in any such lease, contract or authority." 11. A perusal of Section 3 would show that from the date of announcement of the Forest Working Ordinance of 1985 no person was entitled to fell any tree or convert any timber or carry on felling of any tree or conversion or removal of any timber in any demarcated forest of the State, notwithstanding anything to the contrary contained in any law, agreement or contract or in any judgment / decree or order of any court or authority. There is no ambiguity in the language of Section 3 which may warrant adopting of any tools of interpretation to solve that ambiguity. Section 3 commenced with non-obstinate clause which means that this provision would prevail despite anything contrary contained in any provision of law or instrument or the judgment or decree of any court. In the case in hand every material fact took place after 1985 or even 1987. The award was announced on 13.09.1992 and it was made Rule of the Court on 28.08.2000. Therefore, no question of retrospectivity would be involved-: 12. However, the provisions of Section 3 are necessarily retrospective in its operation and nullifies any law, rule or instrument as well as any judgment or decree or order passed by any court. Presuming that it is retrospective even then the `contractor' has no case. Accordingly we proceed to examine the issue from that point of view as well. 13. It is trite of observe that Legislature is sovereign and fully competent to annul the basis of any judgment, decree or order passed by the court by passing a valid piece of legislation although it cannot supersede a judgment directly. For the aforesaid proposition, reliance may be placed on the observations made by a 5-Judge Bench of Hon'ble the Supreme Court in the case of Garikapati v. Subbiah Choudhry, AIR 1957 SC 540 . Their lordship considered the issue whether right of appeal was taken away by the amendment of Letters Patent and Code of Civil Procedure. The observations made in paras 24 and 25 are pertinent and deserves to be extracted in extenso:- "........ The question for our consideration is whether that right has been taken away expressly or by necessary intendment by any subsequent enactment. That respondents to the application maintain that it has been so taken away by the provisions of our Constitution. The observations made in paras 24 and 25 are pertinent and deserves to be extracted in extenso:- "........ The question for our consideration is whether that right has been taken away expressly or by necessary intendment by any subsequent enactment. That respondents to the application maintain that it has been so taken away by the provisions of our Constitution. (25) In construing the article of the Constitution we must bear in mind certain cardinal rules of construction. It has been said in Hough v. Windus, 1884-12 QBD 224 at p.237(V) that "statutes should be interpreted, if possible, so as to respect vested right. "The golden rule of construction is that, in the absence of anything in the enactment to show that it is to have retrospective operation it cannot be so construed as to have the effect of altering the law applicable to a claim in litigation at the time when the Act was passed. Leeds and County Bank Ltd. v. Walker, (1883)11 QBD 84 at p.91(w); Moon v. Durden, (1848)2 Ex 22:76 RR 479 at p.495 (X). The following observation of Rankin C.J in Sadar Ali v. Dalimuddin, (K) (supra) at p. 520 (of ILR Cal): (at p643 of AIR) is also apposite and helpful: "Unless the contrary can be shown the provision which takes away the jurisdiction is itself subject to the implied saving of the litigant's right. "In Janardan Reddy v. The State, 1950 SCR 940 at pp.946,947):( AIR 1951 SC 124 at pp.126-1127)(Y) Kania C.J. in delivering the judgement of the Court observed that our Constitution is generally speaking prospective in its operation and is not to have retroactive operation in the absence of any express provision to that effect. The same principle was reiterated in Keshavan Madhava Menon v. State of Bombay, 1951 SCR 228 :( AIR 1951 SC 128 )(Z) and finally in Dajisaheb Mane v. Shankar Rao Vithal Rao. 1955-2 SCR 872 at pp.876-877:(S) AIR 1956 SC 29 atp.31)(Z1)". 14. From a close examination of the observations made in the above quoted paras it becomes evident that a statute cannot be construed to operate retrospectively unless it is expressly provided or it could be validly inferred from its intendment. In the absence of any such thing the statute would operate prospectively only. 14. From a close examination of the observations made in the above quoted paras it becomes evident that a statute cannot be construed to operate retrospectively unless it is expressly provided or it could be validly inferred from its intendment. In the absence of any such thing the statute would operate prospectively only. Thus the rights which have accrued from a judgment or decree would stand annulled provided the basis of the judgment has been wiped out. For such a proposition of law we place reliance on the observations made by a 5-Judge Bench of Hon'ble the Supreme Court in the case of Cauvery Water Disputes Tribunal Re: 1993 Supp (1) SCC 96 (II). After referring to a catena of earlier judgments their Lordship concluded as under in para 76 of the judgment: "76. The principle which emerges from these authorities is that the legislature can change the basis on which a decision is given by the Court and thus change the law in general, which will affect a class of persons and events at large. It cannot, however, set aside an individual decision inter parties and affect their rights and liabilities alone. Such an act on the part of the legislature amounts to exercising the judicial power of the State and to functioning as an appellate court or tribunal." 15. Similar view has been expressed by Hon'ble the Supreme Court in the case of State of H.P v. Narain Singh (2009) 13 SCC 165 . In para 21 and 26 following pertinent observations have been made which read thus:- "21. The power of the sovereign legislature to legislate within its field, both prospectively and retrospectively cannot be questioned. This position has been settled in many judgments of this Court. Some of them may be considered below. In Bhubaneshwar Singh v. Union of India the Court expressly approved the aforesaid position in para 9 at pp. 82-83. Insofar as the validating Acts are concerned, this Court in Bhubaneshwar Singh also considered the question in para 11 and held that the Court has the powers by virtue of such validating legislation, to "wipe out" judicial pronouncements of the High Court and the Supreme Court by removing the defects in the statute retrospectively when such statutes had been declared ultra vires by Courts in view of its defects. 26. 26. It is therefore clear where there is a competent legislative provision which retrospectively removes the substratum of foundation of a judgment, the said exercise is a valid legislative exercise provided it does not transgress any other constitutional limitation. Therefore, this Court cannot uphold the reasoning in the High Court Judgment that the impugned amendment is invalid just because it nullifies some provisions of the earlier Act." 16. The judicial precedents can be multiplied on this issue. In the judgment rendered by Hon'ble the Supreme Court in the case of Goa Gaspipe Fibre Ltd v. State of Goa, (2010) 6 SCC 499 similar view has been taken. 17. On precedents and principles it stands established that Legislature enjoys sovereign power to frame law which may operate even retrospectively as long as it does not encroach upon the judicial powers of adjudication vested in the Court or it does not annul a valid decision of the Courts given inter parties without wiping out its basis. 18. Once the aforesaid legal position is clear beyond any doubt, then the fate of the present case becomes obvious. The judgment of the Division Bench of this Court rendered in the case of Baldev Singh has taken the view that Section 3 of the Forest Working Act would prevail and the judgment and decree obtained by a contractor would not give rise to any executable rights. The conclusion reached by the Division Bench by adopting a different reasoning reads as under: "A perusal of the above reproduced provision shows that the non-obstinate clause of Section 3 makes the Act enforceable in supersession of any law, rule, instrument, agreement or contract, decree or order of any Court or authority. The award is an order of an authority. This order emanates out of an agreement between the parties. When obviously the agreement between the parties and the award of the arbitrator are coming within the purview of this non-obstinate clause of section 3 of the Act, it was not possible for the learned Single Bench to act upon the award and make it a rule of the Court. Learned Single Bench has rightly dealt with interpretation of section 3 of the Act as against the agreement and the award mentioned above. The argument of Mr. Jalali that the Act only nationalized the operation of works in the forests and not the forests, cannot be accepted by us. Learned Single Bench has rightly dealt with interpretation of section 3 of the Act as against the agreement and the award mentioned above. The argument of Mr. Jalali that the Act only nationalized the operation of works in the forests and not the forests, cannot be accepted by us. We in the light of a total ban on forest working laid down in terms of section 3 (supra) have no difficulty in coming to the conclusion that the leases and the contracts existing at the time of promulgation of Forest Working Ordinance 1986 would be rendered non-est and the rights flowing from such agreement, contract or authority in favour of a private person had extinguished and the same vested in the State. Section 6 of the Act seems to have taken care of the claims of those persons affected by the Act empowering the Government to appoint an authority to determine such claims. A Forest Authority under the Forest Act has been constituted by the Government to look into such claims in terms of section 52(c) of the Forest Act, 1982. In our opinion, after promulgation of the Act, the award passed by the Arbitrator was contravening the Act and was, therefore, invalid. Thus the learned Single Bench while setting aside the award has acted in accordance with the mandate of section 30 of the Arbitration Act. In this view of the matter, we do not find any substance in this appeal and dismiss the same." 19. When we apply these principles to the facts of the case in hand it becomes evident that the Forest Working Act was enacted in the year 1987 and award was announced on 13.09.1992 (Annexure A). It was made Rule of the Court on 28.08.2000. Therefore all material events took place much after the promulgation of Forest Working Act in 1987. As already noticed in the preceding paras that we may not even require to delve deep into the proposition of law concerning retrospective annulment of judgment and decree because on facts of the case in hand Section 3 would operate only prospectively. If Section 3 is taken to operate retrospectively in the sense that suit was filed in 1985 even then it would not present any difficulty. Therefore, in view of the above, we are of the considered opinion that the appeal deserves to be accepted. 20. The arguments of Mr. If Section 3 is taken to operate retrospectively in the sense that suit was filed in 1985 even then it would not present any difficulty. Therefore, in view of the above, we are of the considered opinion that the appeal deserves to be accepted. 20. The arguments of Mr. Kapoor, learned counsel for the Contractor, have failed to impress us. It is not possible to accept the submission that the dispute between the parties was to be solved in terms of payment of money. A perusal of the award dated 13.09.1992 (annexure-A) would show that dispute has arisen between the Contractor and the State in respect of lease of compartment nos. 41, 44, 95, 96, 105 etc. of the then Thakra Range of Reasi Forest Division. It is this dispute which has been transformed into monetary claim. Therefore, an irresistible conclusion is that the dispute necessarily has its roots in the ban concerning felling of trees or removal of timber or conversion or extraction of timber from the demarcated forest and it is not a dispute with regard to recovery of some money emerging from some promissory note. 21. The other argument that the dispute has arisen in the year 1981-82 and the implementation of Forest Working Act would not adversely affect the rights in respect of the dispute accrued in the year 1981-82, would not cut any ice. The language of Section 3 would show that any law, rule, instrument, agreement or contract or any judgment, decree or order of any Court were not to operate on felling of any tree or converting any timber or carrying on felling of any tree or conversion or removal of any timber which had vested in the State Government. Therefore, the date of lis would not be the relevant date but the date of the award or the judgment and decree would alone be relevant. The award in the present case was announced on 13.09.1992 and the same was made as Rule of the Court on 28.08.2000. Therefore, the question of retrospectivity of the Forest Working Act would not even arise. 22. The last argument raised by Mr. Kapoor is based on the Division Bench judgment of this Court where the plea of Section 3 was negated by citing the reason that the issue was not raised either before the Arbitrator or before the learned Single Judge. Therefore, the question of retrospectivity of the Forest Working Act would not even arise. 22. The last argument raised by Mr. Kapoor is based on the Division Bench judgment of this Court where the plea of Section 3 was negated by citing the reason that the issue was not raised either before the Arbitrator or before the learned Single Judge. In that case, in the first round, the issue had attained finality. The view taken by the learned Single Judge was upheld by the Letters Patent Bench and Hon'ble the Supreme Court had remanded the matter back to the High Court by accepting the contention that the Government Counsel had no instructions to appear in the matter and did not even apprise the Government about the proceedings. The parties were given time to adduce evidence on remand. The objections filed against the award were rejected by the learned Single Judge making the award as Rule of the Court. Only as a passing reference, the plea based on Section 3 of the Forest Working Act was raised and the Division Bench rejected the same saying that no such plea was either raised in the earlier round of litigation nor in the objections filed by the State Government. However, the facts of the present case are entirely different. There is no history of back reference or that the plea raised by the objectors-State have attained finality. Moreover the judgment in R. N. Bhatnagar's case is absolutely clear that a legal issue can be raised at any stage of the proceedings. 23. For the reasons aforementioned, this appeal succeeds. The view taken by the learned Single Judge by making the award as Rule of the Court by judgment and decree dated 28.08.2000 is set aside. The award dated 13.09.1992 and the judgment and decree dated 28.08.2000 are declared to be illegal contravening provisions of Section 3 of the Forest Working Act, 1987. However, the Contractor-respondent is left free to work out his remedy in accordance with law.