Decided on August 11,1986

Ab Ahad Sheikh Appellant
STATE OF JANDK Respondents


SHAH, J. - (1.) THE petitioners secured a lease pertaining to compartment No. 88, North Lolab Range in the year 1962 in the name of M/s Abdul Ahad Ghulam Rasbol, Sopore in Consideration of royalty amounting to Rs. 4,75,000/ - for the extraction of timber in the said area. The lease deed was duly executed on January 7, 1962. In terms of Clause 12 of the said agreement of lease deed, it was due to expire with the end of November, 1964, which was extended twice and finally expired on November, 1966, it is stated that out of the royalty amount fixed, petitioners paid to the respondents towards the royalty to the tune of Rs. 2,25,100/ -. In September 1966 a writ of demand for the recovery of Rs, 2,00,000/ - was issued by Respondent No. 4 against the petitioners and a Certificate was issued for the realisation to Respondent No. 5 for the recoveries against the petitioners. The case has a chequered history, thereafter towards avoiding of the payment of the said amount, which the petitioners succeeded in avoiding, firstly by filing a civil for permanent injunction, which was dismissed on the ground that no such suit could lie against the respondents under Section 72 of the Land Revenue Act thereafter filed a writ petition No. 63 of 1974, which was dismissed for default of appearance on September 8, 1975. Pursuant to the dismissal of the said writ petition, when the proclamation of sale was issued against the respondents for the realisation of the aid sum of money in accordance with Demand notice on August 19, 976, the petitioners on 2 -9 -1976 again filed the writ petition challenging the same recovery under the said Demand Notice of 1966 and subsequently on 7 -10 -1976 tiled the amended writ petition, which as contested by the respondents on several grounds.
(2.) IT is not disputed that the proceedings were initiated for recovery of the amount as arrears of land revenue under the proviso to Section 90 of the Land -Revenue Act and that clause 44 of the agreement of lease contains an arbitration clause to the following effect, which has been reproduced in paragraph 26 of the amended petition. Every dispute which may at any time arise between the parties hereto in respect of this agreement or the subject matter thereof shall be referred to the Chief Conservator of Forests unless he is a party to the agreement in which case the dispute shall be referred to Government whose decision shall be final and binding on both the parties. None of the parties have resorted to the said arbitration clause. On the expiry of the terms of the contractual period of lease, the respondent -Forest Authorities took over the lease compartment and the material, which was lying in the Forest Compartment vested in the State. The quantity of timber lying in the said compartment was sold by auction to one Mohammad Ashan Wani for a sum of Rs. 1,25,000/ -. The petitioners claim that the said limber was worth about three lakhs of rupees, had the auction been duly notified and the petitioners informed of the same.
(3.) THE petitioners challenging the writ of demand and the recoveries against them, though raised several points. Learned counsel for the petitioners at the time of arguments concentrated his arguments firstly that the terrain of the said compartment was extremely hard, rough steep and dangerously mountainous, therefore, on account of the conditions beyond the control of the petitioners, the petitioners were handicapped to exploit the leased compartment to its fullest extent for extraction of timber within the time stipulated in the lease agreement hence they had hardly worked out l/3rd of the timber sold to them under the agreement and 2/3rd of the timber was left in the compartment, thus they were not liable to pay any royalty as demanded by the writ of demand, secondly in terms of section 90 of the Land Revenue Act, unless there is an order or adjudication by any competent authority or court of law, the amount cannot be said to be lawfully recoverable and hence the writ of demand was illegal and in -operative and lastly that the respondents having failed to proceed for the arbitration in terms of arbitration clause are not entitled to realise the un -adjudicated amount as arrears of land revenue. In reply to the first ground, the respondents submitted that in terms of conditions of lease, the petitioners were liable to pay for the road markings and other charges and were responsible before executing the agreement to inspect the markings on spot well in advance to have the idea of quality and nature of markings locality leading to operations so that they feel no difficulty in arriving at the correct estimates while tendering. On the face of the said condition, the petitioners cannot make a grievance about the terrain and difficulties faced by them in exploiting the forest and cutting the timber. Moreover, as against the initial terms ending with November, 1964, petitioners were granted extension twice expiring on November 30, 1966 leaving sufficient time for them to utilise the compartment to its fullest extent in paragraph 8 of the counter, the quantity of 2/3rd is denied and the total quantity of the timber left un -exploited, which vest in the state is detailed as 70030 cft, which was sold by public auction in June, 1967 and the highest offer of Rs. 1,25,00/ - was received for the said timber which in fact vested in the State in terms of the agreement of lease on which the petitioners have no right to claim any sum of money despite that the total recoverable outstanding royalty of Rs. 3,23,944.58 paise remains due against the petitioners and even giving the margin 1,25,000/ -, the petitioners are liable to pay the demanded amount. On the second contention also it is stated that the arrears sought to be recovered from the petitioners under the writ of demand are fully covered by the provisions of Section 90 of the Land -Revenue Act, for which the competent authority after due calculation issued a recovery certificate to Respondent No. 5 in terms of Section 90 of the Land Revenue Act, the said amount can neither be said illegal nor irrecoverable, as the arrears indicated demonstrated the balance of the price agreed upon towards the royalty of the exploited timber by the petitioners and lastly it is replied that on the face of the agreement there was no question of any adjudication, as the same was already agreed amount, which is determined at the time when the work order was issued in favour of the petitioners pursuant to the agreement executed by them in favour of the respondents towards the royalty. Such royalty is nothing, but a price which was worked out at the time of the execution of the agreement and accepted by the petitioners which is recoverable as arrears of land revenue under Section 52 of the Forest Act read with Section 90 of the land Revenue Act. Thus in terms of clause 44 of the agreement, if the petitioners were apprehensive of any dispute with respect to the recovery of the amount demanded they should have approached for arbitration, which course was never adopted by the petitioners, it was not necessary for the respondents to proceed for the arbitration as they were entitled to the liquidated sum of money towards the royalty in terms of agreement;

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