NON-REPORTABLE   

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.  9353         OF 2010 (Arising out of S.L.P. (C) No. 30319 of 2008)

Mahendra Pal                             .... Appellant (s)

Versus

State of H.P. & Ors.             .... Respondent(s)

J U D G M E N T  

P. Sathasivam, J.

1)  Leave granted.

2)  This appeal is directed against the judgment and final  

order  dated  12.08.2008  passed  by  the  High  Court  of  

Himachal  Pradesh,  Shimla  in  O.S.A.  No.  13  of  2002  

whereby  the  Division  Bench  of  the  High  Court  while  

affirming the judgment dated 02.07.2002 in Civil Suit No.  

36 of 1998 passed by the learned Single Judge dismissed  

the appeal filed by the appellant herein.  

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3) Brief facts:

(a)   Kutlehar was a small princely State in Kangra Hills  

having 16 Tapas (Tikas) as forests which were known as  

‘Kutlehar  Forests’.  These  forests  were  managed  by  the  

Raja  of  Kutlehar  subject  to  the  terms  and  conditions  

specified  by  the  then  Government.   Such  management  

continued generation after generation.  The appellant was  

appointed  as  a  Forest  Officer  in  the  capacity  of  

Superintendent of Kutlehar Forests under Section 2(2) of  

the Forest Act by Notification dated 01.10.1958 issued by  

the then Government of Punjab before the formation of the  

State of Himachal Pradesh. The said forests were under  

the charge and management of the appellant and he was  

entitled  to  dispose  of  the  forest  produce such as  resin,  

timber, bamboo, grass etc. in accordance with the working  

plans  prepared  by  the  Forest  Department.   As  per  the  

terms and conditions of the management, he was entitled  

to  retain  3/4th share  of  the  total  income from the  said  

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forests and 1/4th share of the gross income was payable to  

the  Government.   The  entire  expenditure  on  the  

management  and  exploitation  of  the  forests  were  to  be  

incurred  by  the  appellant.  In  the  year  1992,  the  State  

Legislative  Assembly  passed  the  Himachal  Pradesh  

Kutlehar Forests  (Acquisition of  Management)  Act,  1992  

(hereinafter  referred  to  as  ‘the  Act’).  Pursuant  to  the  

provisions of Section 4 of the said Act, the management of  

these forests was   taken over by the State Government.  

Challenging the constitutionality of the Act, the appellant  

filed Civil Writ Petition No. 707 of 1992 in the High Court  

whereby the High Court, by judgment dated 09.05.1994,  

upheld  the  constitutional  validity  of  the  aforesaid  Act  

except Section 5.  

(b) During the year 1995, when the management of the  

Kutlehar  Forests  was  with  the  appellant,  he  offered  

1,33,591 resin  blazes  to  Divisional  Manager,  H.P.  State  

Forest  Corporation  Ltd.,  Una (hereinafter  referred  to  as  

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‘the State Corporation’)-respondent No. 3 herein, for resin  

tapping,  but  on 14.02.1995,  the State  Corporation took  

over  the  resin  blazes  so  offered  and invited  tenders  for  

undertaking  the  work  of  tapping.   On  10.03.1995,  the  

State  of  H.P.  issued  the  notification  and  enforced  the  

provisions  of  the  Act  w.e.f.  11.03.1995  and  asked  the  

appellant to hand over the management of the Kutlehar  

Forests.  On  16.03.1995,  the  appellant  filed  Civil  Writ  

Petition No. 127 of 1995 challenging the notification dated  

10.03.1995 in the High Court.  The High Court passed the  

interim  order  to  the  effect  that  the  appellant  would  

continue with the management of the forests.   

(c)   On 25.04.1995, the ‘Pricing Committee’ of the State  

Corporation decided the prices of resin blazes @ Rs. 25/-  

per blaze for the season 1995.  On 09.08.1995, the High  

Court  dismissed  the  writ  petition  observing  that  the  

disputed  questions  of  fact  could  not  be  gone  into  in  

exercise  of  extraordinary  jurisdiction  under  Articles  

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226/227 of  the  Constitution of  India and the appellant  

was  given  liberty  to  resort  to  appropriate  proceedings  

before  the  appropriate  forum.   On  05.01.1996,  the  

appellant filed a Special Leave Petition before this Court  

which  became  Civil  Appeal  No.  239  of  1996  and  was  

dismissed by order dated 22.08.2000.  

(d)  On  07.02.1996,  the  management  of  the  Kutlehar  

Forests  was  taken  over  by  the  State  Corporation  in  

absentia.  In the year 1998, the appellant filed a suit being  

Civil Suit No. 36 of 1998 for recovery of Rs. 35,67,722/-  

along  with  interest  @  16.5%  per  annum  with  costs  in  

respect  of  1,33,591  resin  blazes  offered  to  Divisional  

Manager,  Himachal  Pradesh for  resin tapping when the  

management of the Kutlehar Forests was with him in the  

1995 season.   

(e)  By order dated 02.07.2002, the learned Single Judge  

of the High Court dismissed the Civil Suit No. 36 of 1998  

stating  that  all  rights,  liabilities  and  obligations  of  the  

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appellant in relation to the grant or management under  

any contract  entered into before the appointed day and  

properties  and  rights  stood  vested  in  the  Government  

w.e.f.  11.03.1995.   Questioning  the  said  order,  the  

appellant filed Original Side Appeal No. 13 of 2002 before  

the Division Bench of the High Court which was dismissed  

by the impugned order dated 12.08.2008.  Aggrieved by  

the said order, the appellant preferred this appeal by way  

of special leave petition before this Court.   

4) Heard Mr. P.S. Patwalia, learned senior counsel for  

the appellant and Mr. Naresh K. Sharma, learned counsel  

for the State.

5) It  is  the  categorical  claim  of  the  appellant  that  

Section 4 of the Act does not take away the vested right of  

the  appellant  which  had  accrued  to  him  before  the  

appointed day, i.e., 11.03.1995.  The appellant, who was  

still  in the management of the Kutlehar Forests,  offered  

1,33,591  resin  blazes  to  the  Divisional  Manager  of  the  

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State  Corporation,  respondent  No.  3  herein,  for  resin  

tapping during 1995 vide his letter dated 03.02.1995.  It  

was also highlighted that respondent No.3 took over the  

blazes so offered and invited tenders for undertaking the  

work  of  tapping  on  14.02.1995  and  the  tenders  were  

opened  on  01.03.1995  at  2.30  p.m.   Respondent  No.3  

acknowledged vide letter dated 22.03.1995 that the work  

on these blazes was in progress.   

6) Before considering these factual aspects, it is useful  

to refer the earlier litigation and ultimate order passed by  

this  Court  between  the  same  parties  on  31.03.1999  in  

Civil Appeal No. 9495 of 1995.  The erstwhile ruler, Raja  

Mahendra Pal approached the High Court for issuance of  

the  command to  the  State  Corporation  by  treating  him  

equivalent to the Government of Himachal Pradesh with  

conferment of monetary gains which were permissible to  

the State Government on the basis of the decision of the  

Pricing Committee.   The High Court  granted the prayer  

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sought for by Raja Mahendra Pal.  By the said judgment of  

the High Court, Raja Mahendra Pal was held to have been  

equated  with  the  Government  and  entitled  to  the  relief  

claimed by him as according to the High Court  he was  

found  to  have  been  deprived  of  the  right  to  life  as  

envisaged by Article 21 of the Constitution of India.  By  

way of issuance of writ of mandamus, Raja Mahendra Pal  

was held entitled to the interest on the delayed payment of  

royalty, damages with respect to illicit felling plus 100 %  

penalty  for  the  illegally  felled  trees.   He  was  further  

conferred with the grant of interest on interest and share  

in the levy of extension fee chargeable by the State from  

the Corporation under the terms of the agreement of the  

provisions of  law applicable.   The said judgment  of  the  

High Court had been assailed on various grounds before  

this Court in C.A. No. 9495 of 1995.  By judgment dated  

31.03.1999, the directions of the relief granted in favour of  

Raja Mahendra Pal have been set aside.  However, certain  

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details/materials  mentioned  therein  are  relevant  for  

disposal  of  the  present  appeal.   It  is  seen  that  by  

Notification  No.  4531-FT(CH-58/523  dated  1.10.1958  

issued under Section 2(2) of the Act, Raja Mahendra Pal  

was  appointed  as  a  Forest  Superintendent  and  the  

employees  working  under  him  in  the  aforesaid  forest  

declared  as  Forest  Officers  with  respect  to  Kutlehar  

Forest.  As per the terms of his appointment, he was held  

entitled to retain 3/4th of the income derivable from the  

forest where 1/4th of the gross income was payable to the  

Government.  The conditions explicitly provided:

“The Raja shall keep a register showing all the receipts  from the sale of timber, bamboos and other forest produce  whether to zamindars or to traders.  Of this income, the Raja  shall in case of Kutlehar, receive ¾ and Government ¼.”

However, this practice was discontinued after the forests  

were nationalized by the State in the year 1974 when the  

State Corporation was incorporated under the provisions  

of the Companies Act, 1956.  Produce of the government  

forests,  thereafter,  could  be  sold  only  to  the  State  

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Corporation.  Though several other details are available,  

we  are  not  concerned  with  those  details  except  the  

proceedings  of  the  Pricing  Committee.   In  the  ultimate  

conclusion, this Court observed as under:

“The  respondent  No.1  as  already  noticed  could  not  be  equated with  the  State  Government  of  Himachal  Pradesh,  and had no basis to claim the ownership in the trees grown  in the Kutlehar forest after he accepted his appointment as a  Forest Superintendant in the year 1958 under Section 2(2) of  the Forest Act.  The acceptance of his position as a Forest  Superintendent  in  law,  ‘a  forest  officer’  appointed  under  Section 2(2)  of  the  Forest  Act  clearly  established that  the  respondent No.1 had accepted the State Government to be  dominant owner of the property and that he was merely an  officer  appointed  by  the  Government  in  exercise  of  its  sovereign power.  But for his position as a Forest Officer, he  had no jurisdiction to deal with the forest or even enter into  it.  The arrangements made earlier in the form of conferment  of rights upon his forefather stood extinguished and merged  with his position as a Forest Officer of the State Government.  He was entitled only to such benefits to which the Forest  Officer is entitled.  His entitlement in the present case was  restricted only to the extent of sharing of the royalty and not  for anything more.”

Hence,  it  is  clear  that  Kutlehar Forests  were under the  

charge  and  management  of  the  appellant  and  he  was  

competent  not  only  to  maintain  and  preserve  the  said  

forests but was also entitled to his share in accordance  

with  the  working  plans  prepared  by  the  Forest  

Department.  It  is also his claim that he took adequate  

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steps for the protection of Fauna and Flora available in  

the forests in question.  It is also his claim that according  

to the terms and conditions subject to which management  

of the said forests was entrusted to the appellant and his  

forefathers, they were entitled to retain 3/4th share of the  

total income derived or derivable from the forests whereas  

1/4th share  of  the  gross  income  was  payable  to  the  

Government.   

7) It  is  further  seen  that  pursuant  to  the  powers  

conferred by clause 51 of the Memorandum and Articles of  

Association,  the  Government  of  Himachal  Pradesh  vide  

Notification  No.  10-26/72-SF,  Shimla  dated  18.05.1974  

constituted a Committee of Officers to determine the price  

and terms and conditions for the supply of  resin,  resin  

blazes,  standing  trees  and  other  forest  produce  to  be  

handed over to the Himachal Pradesh Forest Corporation  

Limited from time to time.  The appellant has also pointed  

out that the Pricing Committee vide its decision recorded  

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in  item  No.8  of  the  minutes  of  the  proceedings  of  the  

meeting held on 16.05.1988 decided to apply decisions of  

the Pricing Committee to the Kutlehar Forests also.  The  

relevant portion of the decision is reproduced hereunder:

“Item No.8 : Charging of Royalty for Kutlehar forests.

It was decided and clarified that the royalty will be charged  for  Kutlehar  Forests  on  the  same  lines  as  fixed  for  Government lots linked with the nature of trees and intensity  of marking.  No differential rates or system can be fixed for  Kutlehar Forests.”

That  as  per  the  decision  of  the  Pricing  Committee  dated  

25.04.1995 at Item No.1 the price for 1995 season was fixed  

@ Rs.26/- per blaze tentatively.  Item No.1 read as under:

“Item No.1 Royalty rates of resin blazes for 1994 season.

The  royalty  rate  of  resin  blazes  is  fixed  on  the  basis  of  percentage of increase, decrease of price of ‘N’  grade resin  over a period of time during the year concerned. For the year  1994, a tentative rate of Rs.25/- per blaze was fixed.  There  have been decrease of 11.90% in the average rate of ‘N’ grade  resin  during  the  period  from  1.4.93  to  31.3.94.   After  deliberation, it was decided to fix the royalty of resin blazes  @  Rs.24/-  (twenty  four)  per  blaze  for  1994  season  and  Rs.26/- (twenty six) tentatively for 1995 tapping season.”

In  this  way,  the  appellant  made  a  claim  for  a  sum of  

Rs.34,73,366/-  to  be  payable  by  the  State  Corporation  

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towards  the  royalty  of  resin  blazes  relating  to  1995  

season.   

8) Apart  from  his  own  evidence  and  other  materials  

placed before the learned single Judge of the High Court,  

the appellant also relied on the statement of Shri Chander  

Bhusan Pandey, Divisional Manager, Forest Corporation,  

Una  who  was  examined  as  PW-3.   The  appellant  has  

pressed into service the following statement made by PW-3  

in support of his claim:

"                 On S.A.                  7.3.2001

I am posted as Divisional Manger of the State Forest  Corporation  at  Una since  8.12.2000.   I  have  brought  the  summoned record.  Letters copies of which are Ex. PW 3/A  and Ex. PW 3/B were received from the plaintiff.  A public  notice with regard to auction/tender of labour supply mate  and tapping of resin blazes for the year 1995 was issued on  14.02.1995.  Copy of such public notice is Ex.PW 3/C.  In  pursuance of this public notice, tenders were received and  final  tender  was  accepted,  and  as  per  this  final  tender  accepted,  royalty  to  the  extent  of  Rs.34,73,366.00  was  payable  to  the  plaintiff  as  claimed  by  him.   Letter  dated  1.9.1995 copy of which is Ex.PW 3/D was also received from  the  plaintiff.   Similarly,  letter  dated  18.10.1995  copies  of  which is Ex.PW 3/E was received from the plaintiff.  On 5th  September,  1995  and  6th September,  1995,  letters  were  addressed  respectively  to  the  plaintiff  and  Managing  Director, H.P. State Forest Corporation.  Copies of the same  are Ex.PW 3/F and Ex. PW 3/G.  Ex.PW 3/H is the copy of  the reminder dated 22.12.1995 addressed by the Divisional  

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Manager  of  the  Forest  Corporation,  Una  to  the  Director  (North) at Dharamshala.

XXXXXXXby defendants 1 and 2.

Presently,  Kutlehar  Forest  is  under  the  State  Government.   I  am not aware  since when it  is  under the  State  Government.   I  never  participated  on  behalf  of  the  Forest Corporation in the acceptance of tenders received in  pursuance  of  public  notice  dated  14.2.1995.   As  per  the  record, the plaintiff was claiming royalty of Rs.34,72,366.00  on the basis of acceptance of tenders.  I do not have personal  knowledge in this regard.  I have stated about the claim of  the royalty  by the plaintiff  on the basis of  letters  received  from him which is available on the record brought by me  today.  However, complete record with regard to acceptance  of tenders have not been brought by me today.

XXXXXby defendant No.3.

Nil.  Cross-examination by defendants 1 and 2 adopted.

R.O. & A.C. Sd/- illegible    Sd/- illegible  March 7, 2001   (R.L. Khurana)

           Judge”

9) The learned Single Judge and the Division Bench of  

the High Court  basing reliance on Section 4 of  the Act  

held  that  the  right,  title  and  interest  of  the  

plaintiff/appellant  herein  grantee/superintendent  of  

Kutlehar Forests stood extinguished on the appointed day,  

i.e. 11.03.1995, therefore, he was under no obligation to  

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continue with the management of the forests nor has any  

right to share in income arising out of the produce of the  

said forests on and after 11.03.1995.  It is true that after  

11.03.1995, the appellant cannot have any right over the  

forest produce.  However,  in view of the earlier order of  

this  Court  clarifying  the  position  and  his  entitlement,  

there is no need to go into the vesting right etc. as claimed  

by the State Government.  Admittedly, the appellant was  

asked to look after the forest produce as Superintendent  

of Forests and in lieu of salary he was assured grant of  

3/4th of the price of resin blaze.  It is specifically pleaded  

and the materials were also placed by the appellant about  

the work done such as maintenance, manuring protecting  

the trees etc.  It is also specifically pleaded that before the  

appointed  day,  i.e.  11.03.1995,  he  was  still  in  the  

management of  Kutlehar Forests,  offered 1,33,591 resin  

blazes to the Divisional Manager of the State Corporation  

at  Una  for  resin  tapping  during  1995  vide  letter  dated  

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03.02.1995.  It  is also seen that the State Corporation-

respondent  No.3  herein  took  over  the  resin  blazes  so  

offered and invited tenders  for  undertaking  the work of  

tapping on 14.02.1995 and the tenders were opened on  

01.03.1995 at 2.30 p.m.  All these details are available in  

the  letter  of  the  State  Corporation  dated  22.03.1995.  

Inasmuch  as  the  appellant  was  continuing  as  

Superintendent  of  Forests  without  a  specific  salary  but  

with an assurance of 3/4th price of forest produce such as  

resin blazes etc. till the appointed day, i.e. 11.03.1995, we  

are  of  the  view  that  the  appellant  is  entitled  for  his  

legitimate  dues  till  such date.   Those  aspects  were  not  

being correctly adverted to and appreciated by the learned  

single Judge as well as by the Division Bench of the High  

Court and mainly concentrated  on the “vesting” of forests  

on or after 11.03.1995 in favour of the State Corporation  

by holding that  the  appellant  was not  entitled  to  claim  

anything  thereafter.   Even  though  the  appellant  placed  

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relevant materials including the assertion and statement  

of PW-3 who is none else than the Divisional Manager for  

the State Corporation, Una, those aspects have not been  

properly appreciated.  In those circumstances, we are of  

the view that ends of justice would be met by remitting the  

matter to the learned Single Judge for fresh disposal and  

quantifying the eligible amount.

10) Under these circumstances, we set aside the orders  

passed by the learned Single Judge as well as the Division  

Bench  of  the  High  Court  and  remit  the  matter  to  the  

learned  Single  Judge  for  fresh  consideration  with  the  

available materials.  Except pointing out the claim of the  

appellant, we have not expressed anything on the merits  

and it  is  for  the learned Single  Judge to  determine the  

quantum  of  the  amount  till  the  appointed  day,  i.e.  

11.03.1995 as per the materials placed by both parties  in  

the form of oral and documentary evidence.  Inasmuch as  

the matter is pending from 1999, we request the learned  

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Single Judge to restore the suit to its original number i.e.,  

Civil suit No. 36 of 1998 and dispose of the same within a  

period  of  six  months  from  the  date  of  receipt  of  this  

judgment.   

11) The appeal is allowed to this extent.  There shall be  

no order as to costs.

...…………………………………J.                   (P. SATHASIVAM)  

...…………………………………J.           (DR. B.S. CHAUHAN)  

NEW DELHI; OCTOBER 26, 2010.   

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