WA/1884/1999 of THE DISTRICT FOREST OFFICER Vs M/S.OBLI GRANITIES REP BY ITS on 17 August 2000

JUDGMENT

K.RAVIRAJA PANDIAN,J.

The correctness of the order of the Writ Court dated 26.4.1999 in Common order made inW.P.Nos.7061 and 7062 of 1997 is assailed in these appeals by the District Forest Officer, Erode.

2. The facts of the case are as follows:

An extent of 4.89.5 hectares of land in Kannamoochi village, Mettur Taluk Salem District inS.No.265/3 was notified in the Salem District Gazette Extraordinary Issue No.1 dated 3.1.1990among other lands by the District Collector- third respondent inviting tender applications for grantof quarrying lease of granite under Rule 8 of the Tamil Nadu Minor Mineral Concession Rules, 1959.Under the notification, sealed tenders were invited upto 3 p.m on 12.2.1990. In that auction, the firstrespondent herein has become the successful bidder for a sum of Rs.81,00,900/- and paid theamount as required by the Rules. The Director of Geology and Mining through the District Collectorrecommended to the Government by proceedings dated 20.2.1990 for grant of lease in favour of thefirst respondent. The Government by its letter dated 11.5.1990 accepted the recommendation of theDirector of Geology and Mining and directed that the bid be confirmed and the letter of commitmentbe issued in favour of the first respondent. It was further informed by the said letter that therespondent should set up a granite cutting and polishing industry in Tamil Nadu immediately andthe actual lease would be granted only after the unit is set up and the first respondent was directedto intimate the fact of setting up of the unit through the Director of Geology and Mining so as toenable the Government to grant necessary quarry lease by having the unit inspected by a team oftechnical officers. Pursuant to the letter of commitment, the first respondent put up a granitepolishing and cutting industry at Chellampillai kuttai Muthunaickampatti village, Omalur Taluk,Salem district over the land in an extent of 21.41 acres with investment in a sum of Rs.4 Crores andinformed the setting up of the factory by their letter dated 24.6.1992. Despite informing about theputting up of the industry and requesting for execution of the lease deed, the revenue authorities didnot execute the lease deed, which compelled the first respondent to approach this Court by filingwrit petition in W.P.No.4159 of 1992 seeking for a relief of writ of mandamus. The writ petition wasdisposed of by this Court by observing thus:

"It is seen from the facts mentioned above that the petitioner has complied with all the conditionsstipulated by the Government and has also set up an industry as required by the Government. Inthese circumstances, it is totally unjust and unreasonable on the part of the Government not toexecute the lease agreement in favour of the petitioner. Hence,I deem it just and proper to issue amandamus directing the first respondent to grant lease and execute lease agreement with thepetitioner in respect of the lands mentioned above within three months from the date of receipt of acopy of this order. In the meanwhile, the petitioner is permitted to carry on quarrying operationsand also transport the quarry material from the land in question to any destination. The writ petitionis disposed of accordingly. No costs."

3. While that being so, the Forest Department came into picture by contending that the Governmentissued a notification under Section 4 of the Tamil Nadu Forest Act vide G.O.Ms.No.1431 Forest andFisheries Department dated 22.12.1984 in respect of the land in S.F.No.265 of Kannamoochi villageto form a reserved forest and the same has been notified in the Government Gazette dated 10.4.1985and the District Gazette dated 21.4.1985. When Forest Settlement Officer was appointed to hear theclaim, he was informed that as per G.O.Ms.No.628 Revenue Department dated 17.7.1980, theKannamoochi village was taken up for re-survey and the work was completed during fasli 1390. Asper re-settled account, the Survey Numbers and boundaries notified already under Section 4 of theForest Act were completely changed. Because of the said fact, the further proceedings pursuant toSection 4 notification could not be proceeded with. The District Forest Officer was requested topropose the amendment to the original notification. The amendment so proposed was notified in the Tamil Nadu Government Gazette on 14.8.1991 and the District Gazette on 21.11.1991 and again theForest Settlement Officer was appointed to adjudicate the claims.

4. As the first respondent was issued with a lease in respect of part of survey No.265/3 over anextent of 4.89.5 hectares of Kannamoochi village, the notification was challenged by the firstrespondent. However, the writ petition in W.P.No.3378 of 1997 was disposed of by directing the firstrespondent to approach the Forest Settlement Officer, which reads thus:

"It is open to the petitioner to bring into notice of the Forest Settlement Officer, the orders ofLAKSHMANAN,J., in W.P.NO.4159 of 1992 and W.M.P.No.5984 of 1992 dated 8.7.1992, when thepetitioner files objections. Simply because the petitioner has been granted a lease in the year 1990,the petitioner cannot question a notification issued in the year 1984 stating that after theamendment is made after the year 1990, the rights accrued to the petitioner need not be disturbed.As I have already stated the petitioner has to file objections before the Forest Settlement Officer. Asand when it is done, I do hope that the respondent especially the Forest Settlement Officer will takenote of the fact of the tender and auction conducted by the Government and the orders ofLAKSHMANAN,J. passed in W.P.No.4159 of1992 and W.M.P.No.5984 of 1992 dated 8.7.1992, whichhad become final."

5. As directed in W.P.No.3378 of 1997, the first respondent filed a claim petition claiming protectionunder Section 7 of the Forest Act before the Forest Settlement Officer -fourth respondent, who, byhis order dated 7.4.1997 rejected the first respondent's request. As against that order, the firstrespondent filed writ petition No.7061 of 1997. When the matter thus stood, the third respondent District Forest Officer by his proceedings dated 17.2.1997 directed the first respondent not toproceed with the quarrying operation, which is contrary to the Forest Act. Aggrieved by the saidproceedings dated 17.2.1997, the first respondent filed writ petition in W.P.No.7062 of 1997.

6. Both the writ petitions were allowed by the learned single Judge by reason of the impugned order.The correctness of the same is now assailed before us.

7. It is contended on behalf of the appellants that the subject land has been declared as a forest areaunder the Tamil Nadu Forest Act and when that being the position, the Forest Department is theauthority to grant lease or permission to quarry granite in that area after obtaining due permissionfrom the Central Government. Hence, the first respondent is not entitled to quarry the land pursuantto the grant made by the District Collector. In order to sustain their case, the appellants had taken inaid the decision of the Supreme Court in the case of T.N.GODAVARMAN THIRUMULKARD VS.UNION OF INDIA reported in (1997) 2 SCC 267.

8. Per contra, it was contended on behalf of the first respondent that not only the revenueDepartment, but the Forest Department also fell in error in non-suiting the first respondent for thequarrying right granted in favour of the first respondent on untenable grounds. The claim of theappellants that the land in dispute has been declared as a forest land under Forest Act is totallyincorrect. Even in the amendment to the notification alleged to have been issued under section 4 ofForest Act, the disputed land i.e., S.No.265/3 has not been included. Hence, the basic contention ofthe appellants falls to ground. Even assuming for a moment that the land is included in thenotification under section 4, until a notification under section 16 is issued, it cannot be regarded as aforest land and Section 7 of the Tamil Nadu Forest Act protects the right of the first respondent.

9. We heard the argument of the learned counsel on either side and perused the materials on record.

10. There is no dispute that the land in S.No.265/3 was notified in the Salem District Gazette as wellas daily news papers in English and Tamil offering the same for quarrying by the District Collectorby virtue of the power under the then rule 8 of the Tamil Nadu Minor Mineral Concession Rules,1959. Though there is no explicit provision in the rules during the relevant period for prospecting of the minerals, it is the duty of the Geology and Mining Department to survey the lands and themineral available in the land to furnish the details to the Government for the purpose of notifyingthat area for granting quarry lease. For that purpose, a separate cell called survey cell is availableand doing the works in the Director of Geology and Mining Department.

11. It is not disputed either by the District Collector or by the Director of Geology and Mining thatthe land has been offered for lease of quarrying right only after the survey being conducted inrespect of the land and the mineral available in the land. There is also no dispute about the subjectquarry with the sub-division in S.No.265/3 has been notified in the Salem District Gazette calling fortenders. It is an admitted fact that the first respondent has become the successful bidder and paidthe bid amount of Rs.81,00,900/- as required under the rules. The bid has been confirmed by theGovernment and the letter of commitment was also issued on condition the first respondent shouldput up an industry within the State of Tamil Nadu as required under the then existing Tamil NaduMinor Mineral Concession Rules. It is also a further admitted fact that the first respondent has putup an industry at the cost of few Crores of rupees and informed the Government and the DistrictCollector about the fulfilment of the condition of the letter of commitment. As the lease deed has notbeen executed, despite the same, the first respondent filed writ petition and obtained an orderdirecting the Government to execute lease deed and permit the first respondent to quarry, which hasbecome final.

12. It is pertinent to state that right through neither the District Collector nor the Director ofGeology and Mining have disputed the factum by filing a counter affidavit to the writ petition. Onlythe Forest Department is disputing the grant of lease by contending that the area, which is thesubject matter of the lease, is covered under a notification issued by the Forest Department underSection 4 of the Tamil Nadu Forest Act. Though it is contended by the Forest Department that anamendment to the original notification under Section 4 was issued in the Government Gazette on14.8.1991 and the Salem District Gazette on 21.11.1991, nothing was placed either before the WritCourt or before us to establish that the survey No.265/3 was notified under Section 4. Theamendment was necessitated, according to the appellants, because of the re-survey conducted bythe revenue Department, the survey numbers and alignment of the survey fields were considerablychanged and sub-division has also been effected. It is an admitted fact that the survey No.265 hasbeen sub-divided and an extent of 4.89.5 hectares was carved out and sub-division number has beengiven as 265/3 in the resurvey. This survey number has not been notified in the amended notificationunder Section 4 of the Forest Act. Thus, the appellants are not able to establish before this Courtthat survey No.265/3 is one of the survey number covered under the notification issued underSection 4 of the Tamil Nadu Forest Act.

13. Further, the notification under Section 4 of the Act is merely a notification declaring theintention of the Government to constitute certain land as a reserved forest and is specifying asnearly as possible the situation and limit of such land. Further, such notification is required to bepublished in the Government Gazette. Unless it is so published, it is of no effect. In order to be clear,it is better to re-produce the explanation offered by means of a counter by the Forest Department",which reads thus:

"According to the re-survey the S.NO.251 of the Kannamoochi village was splitted into two surveyNos., and correlated to the new survey No.(1) S.No.264/5. Extent 0.29.0 ha. which is classified asU.A.W.D. and (2)S.No.265 an extent of 768.88.5 classified as U.A.W.D. The area of the old S.No.251has also been changed as 769.17.5 ha. as against 769.08.0 ha..."

14. Thus, there is absolutely no reference in the notification about the survey number 265/3. It isclear that the appellants have not taken note of the re-survey number and sub-division and notifiedthe same as required under Section 4 of the Forest Act. In the absence of such notification, the

15. In order to be a forest land, it is declared to be so under section 16 of the Tamil Nadu Forest Actor in any land at the disposal of the State Government in respect of which Rules under Section 26 ofthe Tamil Nadu Forest Act have been made. The District Forest Officer had to exercise the powerand shall discharge the duties of the District Collector. Only in those circumstances, the forestauthorities have got power either to interfere with the mining operation or they should be consultedbefore the lease is granted. Notifying the intention of the Government under section 4 cannot beconstrued as declaring the land covered under the notification as a forest land. Unless and until thefurther notification under Section 16 of the Forest Act is issued, the Forest Department cannot claimthat the survey No.265/3 is a part of the reserved forest. The effect of the notification under Section4 is only to declare the intention of the Government to constitute certain land as a reserved forestland. It is an admitted fact that notification under section 16 of the Forest Act is yet to be issued. Sothe grant in favour of the first respondent, which has been confirmed by this Court in W.P.No.4159of 1992 dated 8.7.1992 cannot be legally questioned by the appellants.

16. From the fore-going facts, it is clear that there is a tussle between the two Departments of theGovernment i.e., the revenue Department and the Forest Department. As already stated, theGovernment represented by the District Collector and the Director of Geology and Mining, whooffered the land for quarrying and who accepted the huge amount of Rs.81,00,900/- and furtherdirected the first respondent to put up a cutting and polishing industry, it is claimed that hugeamount of Rs.4 Crores has been invested by the first respondent, have not come out with anyexplanation. They are enjoying themselves by keeping mum in the costly litigation. However, theforest Department, without declaring the subject land as a forest land as required under Section 16of the Forest Act and not even notifying the sub-division in the amendment notification under section4 of the Act claims that it is a forest land. Because of this attitude of the two Departments, the firstrespondent is put in untold hardship and he was constrained to come to the Court for more than fouroccasions for the relief.

17. The Advocate General taking cover under the T.N.GODAVARMAN THIRUMULKARD VS. UNIONOF INDIA reported in (1997) 2 SCC 267, has submitted on behalf of the Forest Department that noquarrying activity should be allowed in the forest area, as we have already held that the disputedland has not been notified under the Forest Act, the judgment is not applicable. The AdvocateGeneral is not able to advance any argument on behalf of the revenue Department claims. Thereasoning given by the learned single Judge is well founded and we are not able to take anyexception to the same.

18. It is contended that at this point of time the first respondent cannot be allowed to carry on thequarrying operation in the area, which is totally covered by the lands of the Forest Department. It istrue that the grant has been made as early as 1990 i.e., nearly two decades back. In this situation,what is the remedy available to the first respondent, who has parted with a huge sum ofRs.81,00,900/- in the year 1990 and who obtained more than two orders in its favour from this Court.Here again it is interesting to note that till date the revenue Department has not come forward toeither support their action or atleast come forward to cancel the notification or the letter ofcommitment or the grant made in favour of the first respondent. Nothing of that sort has been doneby the revenue Department and is watching the proceedings as mute spectators. The AdvocateGeneral submitted that that the amount may be directed to be refunded with six percent interest. Itis submitted on behalf of the first respondent that the first respondent has borrowed money forpayment of the bid amount and he is paying heavy interest at the rate of 24 percent. It is alsopointed out that by the first respondent that under Rule 36-B of the Tamil Nadu Minor MineralConcession Rules, if the grantee committed default in payment of any amount to the Department,simple interest at the rate of 24 percent per annum is leviable on the grantee. Hence, in the presentcase also the same rate of interest may be given. It is further submitted that in a similar set of facts the writ Court by its order dated 22.6.2000 made in W.P.No.6923 of 2000 directed the Governmentto repay the bid amount with interest at 18% per annum which order has been accepted by theGovernment. The said direction reads as follows:

"... When the entitlement of the amount is not in dispute and no offer was made to the petitionerrefunding the amout, though he is entitled for the same, the petitioner is entitled for the interest at18% per annum from the date of cancellation of the petitioner's auction viz., 2.7.1992 till the date ofpayment. So the respondent is directed to pay the said amount of Rs.1,30,400/- with simple interestat 18% per annum within two months from the date of receipt of copy of this order."

19. Having regard to the fact that the transaction between the parties in this case is a commercialtransaction and having regard to the Rule 36-B, where the Government themselves claim interest atthe rate of 24 percent per annum for the default in payment of any amount and having regard to thefurther fact the public money is going to be paid as interest, we are of the view that direction forpayment of interest at the rate of 18% per annum would meet the interest of justice. Here gain theinterest amount would be very huge having regard to the time lag. As we already confirmed theorder of the writ Court, if the Government gives the land on lease to the first respondent, that wouldnot only save the Government from payment of huge amount as interest and they will also getrevenue by way of seigniorage fee in proportion to the mineral to be quarried. But if the Governmentis still of the view that due to the lapse of time the quarry would fetch more amount or the quarryoperation cannot be allowed as the area is encircled with the forest land, we are of the view that theGovernment has to repay the bid amount with interest at the rate of 18 percent per annum from thedate of payment till the amount is paid back. Therefore, considering the peculiar facts of the case asdiscussed above, the Government is directed to pay to the first respondent the bid amount withinterest at the rate of 18 percent per annum from the date of payment of the bid amount till theamount is paid back.

20. With the above direction, the writ appeals are disposed of. However, there is no order as tocosts. Consequently, the connected C.M.P.Nos.16243 and 16244 of 1999 and W.A.M.P.No.80 of 2009are closed.

(K.R.P.,J.) (T.R.,J.)18.09.2009Index:YesInternet:YesuskCopy to:1.The District Forest OfficerErode2.Conservator of Forests, Salem .

3. The SecretaryIndustries DepartmentState of Tamil NaduFort St.GeorgeChennai — 600 0094. The District CollectorSalem DistrictSalem.

5. The Forest Settlement OfficerAttur, Salem District.

K.RAVIRAJA PANDIAN,J.AND T.RAJA,J.usk

Judgment inW.A.Nos.1884 and 1885 of 1999