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PETITIONER: CHIEF CONSERVATOR OF FORESTS AND ORS.

       Vs.

RESPONDENT: RATTAN SINGH

DATE OF JUDGMENT: 07/04/1966

BENCH: SHAH, J.C. BENCH: SHAH, J.C. WANCHOO, K.N. SIKRI, S.M.

CITATION:  1967 AIR  166            1966 SCR  (1)  58  CITATOR INFO :  R          1981 SC 479  (6,7)

ACT: Central  Provinces  and  Berar  Forest  Contract  Rules-Rule 15(1)--Scope of.

HEADNOTE: Under  r.  15(1) of the Central Provinces and  Berar  Forest Contract  Rules a forest contractor is responsible  for  any damage done in a reserved forest by himself or his  servants or agents and compensation for such damage is to be assessed by the Divisional Forest Officer.  The respondent was, under a contract, granted a right to the forest produce.  By cl. 9 of  the  Contract any doubt or dispute arising  between  the parties  as  to  the performance or breach  of  any  of  the conditions  of the contract had to be referred to the  Chief Conservator of Forests for decision.  The Divisional  Forest Officer,  acting  under r. 15(1), held that  the  contractor committed  a  breach  of  the  contract  and  assessed   the compensation for damages. HELD:Rule  15(1)  does  not  invest  the  Divisional  Forest Officer with authority to determine whether the  contractor, his  servants or his agents have committed a breach  of  the contract.  When a dispute arises between the contractor  and the forest authorities relating to the performance or breach of the contract, there has to be, under the terms of cl.  9, a  reference  to the officer denominated  in  the  contract. After  liability  is  determined, there may have  to  be  an assessment,   by   the  Divisional   Forest   Officer,,   of compensation  payable by the contractor to the State,  There is no inconsistency between cl. 9 of the Contract and r.  15 [161 F-H; 162 E-F].

JUDGMENT: CIVIL  APPELLATE  JURISDICTION:  Civil Appeal  No.  255  of 1964.] Appeal  by special leave from the judgment and  order  dated November 14, 1960 of the Madhya Pradesh High Court in  Misc. Petition No. 273 of 1959.

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B.   Sen, R. P. Kapur and 1. N. Shroff, for the appellants. S.   P. Sinha, and S. Shaukat Hussain, for the respondent. The Judgment of the Court was delivered by Shah,  J.  Under  a contract dated  October  14.  1956,  the respondent  was granted a right to the forest  produce  from Coupe  No. 9, Lendara in the Saiura Borgain Reserved  Forest in  the Kanker Forest Division of Bastar District of  Madhya Pradesh, for the period October 14, 1956 to March 31,  1958. The Divisional Forest Officer held an enquiry in respect  of certain breaches committed by the respondent of the terms of the  contract, and by order dated January 30, 1958  directed the  respondent in exercise of the authority under r.  15(1) of  the  Forest Contract Rules framed by the  Government  of Cenytral Provinces & Berar, to pay Rs. 8,500 as compensation assessed by him for damage done in the reserved                             159 forest  and Rs. 500 as penalty under r. 30(1) of the  Forest Contract  Rules.   An  appeal  against  the  order  to   the Conservator of Forests, and a revision petition to the Chief Conservator  of Forests, Madhya Pradesh, were  unsuccessful. The  respondent then moved the High Court of Madhya  Pradesh by a petition under Art. 226 of the Constitution for a  writ quashing the order dated January 30, 1958 directing  payment of  compensation and penalty and restraining enforcement  of the  order.   The  High  Court  granted  the  petition   and restrained  the  State  and  the  forest  authorities   from recovering Rs. 9,000, ordered on January 30, 1958, from  the respondent. In  this  appeal,  the appellants  contended  in  the  first instance that the High Court was in error in holding that by r.  15  of the Forest Contract Rules the  Divisional  Forest Officer  was not authorized to direct the contractor to  pay compensation  for  damage  done  by him  or  his  agents  or servants, because the coupe was not in "a reserved  forest". Such  a  case,  it  was  said,  was  never  pleaded  by  the contractor  in his petition, and the High Court in  granting relief  to  the  respondent  made  out  a  case  which   the appellants had no opportunity to meet.  In support of  their case  that the coupe is a part of the reserved  forest,  the appellants have annexed to their petition for special  leave a  "true copy" of a notification issued under S. 20  of  the Indian   Forest  Act,  1927,  as  applied  to  the   Central Provinces,  declaring that the State forests of  the  Bastar District in Tahsil Kanker Sainmura-Borgaon specified in  the Schedule shall be reserved forests. We agree with the appellants that the High Court has without any  plea  or evidence assumed that  compensation  under  r. 15(1) could not be directed to be paid by the contractor for damage done in the coupe, for which he was given a contract, because  the coupe was not included in a.  reserved  forest. The plea which appealed to the High Court was not raised  in the petition, nor in the objections to the Divisional Forest Officer  in  reply to the notice to show cause, nor  in  the memorandum of appeal before the Conservator of Forests,  nor in the petition invoking the revisional jurisdiction of  the Chief  Conservator of Forests.  The High Court assumed  that because  the forest authorities charged the contractor  with "illegal  fellings  in  the  coupe"  granted  to  him,   the "fellings  could  not be in a reserved  forest".   For  this assumption  there  is  no  warrant.   The  High  Court   was therefore  in  error  in  setting up  the  ground  that  the impugned order was not authorised by the terms of r. 15(1). But  the appeal filed by the appellants must still  fail  on the grounds to be presently set out.               The  following are the relevant terms  of  the

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             contract:               "1. The Governor hereby agrees to sell to  the               forest  contractor, and the forest  contractor               agrees   to   purchase  the   forest   produce               described in the First Schedule hereunder               160   .......situated in the area specified in               the said               Schedule.........    on     the     conditions               hereinafter stated." The    First     Schedule               describes the area of the forestand sets   out               the forest produce sold under the contract.                "6.  The  forest contractor shall be  subject               to  the Forest Contract Rules as amended  from               time  to  time  (a  copy  of  which  has  been               furnished   to  the  forest  contractor,   the               receipt of which the forest contractor  hereby               acknowledges) and the Rules shall be deemed to               De part of this contract in so far as they are               applicable thereto:               Provided  that the said Rules shall be  deemed               to  be  modified  to tile extent  and  in  the               manner  laid  down  in  the  Second   Schedule               hereunder."               "7. The forest contractor hereby binds himself               to  perform all acts and duties required,  and               to  abstain  by himself and  his  servants  or               agents  from performing any act  forbidden  by               the  Indian  Forest Act, 1927, by  the  Forest               Contract Rules and by this contract.               "9.  In  the  event of any  doubt  or  dispute               arising   between  the  parties  as   to   the               interpretation  of  any of the  conditions  of               this  contract  or as to  the  performance  or               breach  thereof, the matter shall be  referred               to  the Chief Conservator of  Forests,  Madhya               Pradesh, Nagpur, whose decision shall be final               and binding on the parties hereto." By  cl. 6 of the contract, the Forest Contract Rules  framed by the local Government are made part of the contract.   The material clauses of the Rules read as follows:               "2.  All  contracts whereby  Government  sells               forest  produces  to  a  purchaser  shall   be               subject  to the following rules, in so far  as               they  are applicable, and these rules,  in  so               far as they are applicable, shall be deemed to               be binding on every forest contractor not only               as  rules made under the Forest Act, but  also               as conditions of his forest contract:               Provided  that the forest officer executing  a               forest contract shall have power to vary these               rules  by express provision in such  contract,               and  where  these rules are in  conflict  with               such   an  express  provision,  such   express               provision shall prevail:Provided further               "15(1)   A   forest   contractor   shall    be               responsible for any damage that may be done in               a  reserved forest by himself or his  servants               and agents.  The compensation for such  damage               shall  be  assessed by the  Divisional  Forest               Officer, whose decision shall be deemed to  be               that of an arbitrator and shall be                                    161               final  and binding on the parties,  except  to               the  extent  that it shall be  subject  to  an               appeal to the Conservator of Forests.

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             Explanation............               (2)   Any  sum assessed as damages under  this               rule  shall be recoverable as arrears of  land               revenue..................               "30(1)  Where the forest contractor commits  a               breach  of  any  of  the  conditions  of   his               contract  but it is not proposed to  terminate               his  contract  on account thereof,  the  whole               penalty  provided for in rule 28 shall not  be               recovered from him, but the Divisional  Forest               Officer shall have power to recover a  portion               thereof, not exceeding five hundred rupees, in               accordance  with the provisions of section  85               of the Act.               (2)   An   order  of  the  Divisional   Forest               Officer  under this rule shall be  subject  to               appeal  to the Conservator of Forests  if  the               amount levied exceeds two hundred rupees,  but               shall otherwise be final.                (3)The  payment of a sum assessed under  this               rule shall absolve the forest contractor  from               all further liabilities under his contract  in               respect  of such breach, except his  liability               under  rule 15 for damage done in  a  reserved               forest." On  behalf  of the respondent it was urged before  the  High Court, as also before this Court, that where a dispute arose between  the Divisional Forest Officer and  the  contractor, whether  the contractor, his servants or agents  had  caused damage  in a reserved forest, the question could be  decided in  the  manner appointed in cl. 9 of  the  contract  alone, i.e., by arbitration of the officer denominated, and not  by the Divisional Forest Officer.  In dealing with the validity of  the order imposing penalty upon the contractor the  High Court  upheld that argument.  Rule 15 in the first  instance declares that the forest contractor shall be responsible for any  damage  done  either by himself,  or  his  servants  or agents: it then proceeds to state that compensation shall be assessed  by  the Divisional Forest Officer  whose  decision shall  be deemed to be that of an arbitrator subject  to  an appeal  to  the Conservator of Forests.  The rule  does  not confer  upon  the  Divisional Forest  Officer  authority  to determine, when a dispute is raised, whether damage has been caused in a reserved forest by the contractor, his agents or his  servants.  The rule only declares that for damage  that may  be done, by the contractor, his servants or agents,  in the  forest, the contractor shall be liable: the  rule  also invites  the  Divisional Forest Officer  with  authority  to determine   the  amount  of  compensation  payable  by   the contractor, but not to determine whether the contractor, his servants  or  his  agents  have  committed  breach  of   the contract.   Clause 9 of the contract confers authority  upon the   Chief  Conservator  of  Forests  to  adjudicate   upon disputes, inter alia, as to the performance or breach of the contractor.   By.  cl.   I read with  the  Schedule  to  the contract "the contractor had to fell or uproot 162 trees marked with a geru band or to fell trees on coupes and section lines which bear a marking hammer impression on  the stump buttends and all Karra over 9" at B.H. whether  marked or  not".It  was the case of the Divisional  Forest  Officer that  the  contractor  had, contrary to  the  terms  of  the contract, cut trees not marked with the geru band.  Plainly, the  Divisional Forest Officer claimed that  the  contractor had  committed  a breach of the terms of the  contract,  and

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when  the  contractor  denied the breach,  a  dispute  arose between  the parties as to the performance or breach of  the terms  of  the contract, and it had to be  referred  to  the Chief  Conservator of Forests.  It is conceded, and  in  our judgment  counsel  is  right  in  so  conceding,  that   the expression  "shall be referred to" means "shall be  referred to  the Officer denominated" as an arbitrator to decide  the dispute. It  was  argued  however  that by virtue of  cl.  6  of  the contract,  the Forest Contract Rules were made part  of  the contract,  and  the Divisional Forest Officer  was  invested with   authority  not  only  to  determine  the  amount   of compensation  which  may be payable by  the  contractor  for damage  done  in a reserved forest, but  also  to  determine whether  the contractor or his agents or servants  had  been responsible  for  causing  the damage.   This,  for  reasons already stated, we are unable to accept. There is no inconsistency between cl. 9 of the contract  and r. 15. It is unnecessary, therefore, to consider whether  in case  of inconsistency, the terms of the contract  expressly setting  out a certain covenant may supersede the  terms  of the  rule.  Under r. 15 the liability for damage done  in  a reserved  forest is declared against the contractor.  He  is also declared liable to pay compensation as may be  assessed by the Divisional Forest Officer.  But the Divisional Forest Officer is not invested with authority to determine  whether the  damage  was  done  by the  contractor,  his  agents  or servants.   That is a matter which must be determined  in  a reference under cl. 9 of the contract. It  was urged by the appellants that it could not have  been intended   by  the  rule-making  authority,  who  had   also prescribed  the  form  as part of the  rules  in  which  the contract  was  required  to  be  executed,  to  set  Lip   a complicated  and  clumsy procedure for  determination  of  a dispute about the breach of contract, if the language of the rules were ambiguous, this may be a relevant  consideration. When a dispute arises between the contractor and the  forest authorities  relating  to the performance or breach  of  the contract,  there  has,  under the terms of cl. 9,  to  be  a reference to the Officer denominated in the contract.  After liability is determined, there may have to be an  assessment by the Divisional Forest Officer of compensation payable  by the contractor to the State. 163 That  would necessitate another inquiry.  The  procedure  is apparently  clumsy  and likely to be dilatory.  But  we  are unable  to  ignore the plain terms of the contract  and  the rules,  and to hold that in respect of the determination  of responsibility  for damage done in a reserved forest,  there need  be  no  reference  under cl. 9 of  the  terms  of  the contract. It  was then urged that in any event a decision was in  fact given by the Chief Conservator of Forests in this case,  and that decision complied with the requirements of cl. 9 of the contract.   But  as already stated,  the  Divisional  Forest Officer passed an order holding the respondent liable to pay compensation  for  damage  done in  a  reserved  forest  and assessing  the compensation at Rs. 8,500 and penalty at  Rs. 500.  That order was confirmed in appeal by the  Conservator of  Forests, and in exercise of his revisional  jurisdiction the  Chief  Conservator of Forests upheld the order  of  the Conservator  of Forests.  The Chief Conservator  of  Forests did not even purport to act as an arbitrator: he recorded no evidence,  and  expressly held that  the  Divisional  Forest Officer  was not obliged to refer the case  for  arbitration

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under  cl.  9  of  the contract, The  trial  was  not  of  a proceeding  in arbitration, but of a proceeding in  exercise of supervisory or revisional jurisdiction.  If in truth  the dispute  had  to be referred for adjudication to  the  Chief Conservator of Forests, his decision that he found no reason to  interfere  with the "findings of the  Divisional  Forest Officer"  who was one of the parties to the dispute,  cannot conceivably  be regarded as an award between two  contesting parties.  It must therefore be held that the order passed by the   Divisional  Forest  Officer  imposing  liability   for compensation  for damage done by illegal fellings cannot  be sustained. The second part of the order imposing penalty under r. 30(1) also suffers from the same infirmity.  It is true that under the  rule the Divisional Forest Officer had power to  impose penalty  in  a sum not exceeding Rs. 500.  But  exercise  of that  power is conditioned by the existence of a  breach  by the  forest contractor of any of the terms of the  contract. Where  a, dispute arises whether there has been a breach  of any of the terms of the contract, it is, for reasons already stated,  to  be  determined  by  the  Chief  Conservator  of Forests.   That  has admittedly not been  done.   The  order imposing penalty under r. 30(1) must also be set aside. The appeal therefore fails and is dismissed with costs. Appeal dismissed. 164