IN THE HIGH COURT OF ANDHRA PRADESH AT HYDERABAD

WA Nos. 42, 159, 161 and 211 of 2003 and WP Nos. 34514, 34516, 34524 and 34528 of 1998

Conservator of Forests and Anr. Vs. BR Saw Mill: Decided On: 27.03.2003

 

Acts/Rules/Orders:
Andhra Pradesh Forest Act, 1967 – Sections 29, 44 and 68; Andhra Pradesh Saw Mills (Regulation) Rules, 1969 – Rule 4(1) and 4(2)

Disposition: 
Petitions dismissed

JUDGMENT

Devinder Gupta, C.J.

1. Four Writ Appeals arising out of a common order passed on 1-11-2002 in WP Nos. 26864, 26877, 26898 and 26978 of 1999 respectively came up for consideration before us. It was brought to our notice by the learned Counsel appearing for the parties that the Writ Petition Nos. 34514, 34516, 34524, and 34528 of 1998 arising out of the same subject-matter filed by the very same writ petitioners i.e., respondents in the writ appeals were pending consideration, hence the writ appeals and the writ petitions be heard together. With the consent of all the parties the writ petitions have also been taken on record. The appeals and the writ petitions were heard together and are being disposed of by this common order.

2. The parties are being referred to by their status in the writ appeals. The respondents claim that the saw mills were established within Nizamabad Municipal area much prior to the date when Andhra Pradesh Saw Mills (Regulation) Rules, 1969 (hereinafter referred to as “the Rules”) were made applicable to the said area. When the saw mills were established there was no necessity to obtain any licence to install, erect or operate a saw mill in the notified municipal areas. Only when the rules were made applicable even to municipal areas by reason of G.O. Ms. No. 99 dated 17-7-1998, necessity arose to obtain licence.

3. It appears that huge quantity of illicit timber had flowed into Nizamabad municipal area, alleged to be covered under fake and forged permits during the year 1993-94. The forest authorities (hereinafter referred to as the appellants) issued show-cause notices invoking the provisions of the rules with a view to confiscate the stock of timber lying in the respondents’ saw mills and to explain about the illicit transportation of timber. Feeling aggrieved the respondents (Saw Mills) filed a batch of Writ Petitions, one of which was W.P.No. 22314 of 1996, seeking quashing of notices, inter alia, alleging that the permits in question were not fake and that the timber covered by the said permits had already been disposed of under the cover of transit permits granted by the forest authorities. By order dated 11.12.1996, the Writ Petitions were disposed of quashing the show cause notices on the ground that the rules were not attracted since the saw mills were located in municipal area. While disposing of the writ petitions, certain observations were made and liberty was reserved to the appellants to take action against the saw mills, in accordance with law. Pursuant thereto, second show-cause notices issued in February, 1997 intending to confiscate the timber and the saw mills, purportedly, invoking Section 44 of the A.P. Forest Act (for short “the Act”) and Rules 3 and 5 of Andhra Pradesh Forest Produce Transit Rules, 1970. Feeling aggrieved, a batch of writ petitions were filed by respondents, one of which was W.P. No. 4301 of 1997. Respondents allege that the said writ petitions were allowed by this Court on 16.6.1997 quashing the notices since the timber was not available for seizure. The appellant thereafter is alleged to have issued another show-cause notice dated 4.8.1997 under Rules 2, 8 and 11 of A.P. Forest Produce (Storage & Deport) Rules, 1989 proposing to confiscate the timber possessed by the respondents together with the saw mill equipment and infrastructure used in conversion of the timber which was alleged to have been smuggled. Another batch of writ petitions were filed by the respondents challenging the notices on the ground that the said rules under which the notices had been issued had no application to the respondents – saw mills. These writ petitions were allowed by a Common Order dated 20.3.1998. Notices were quashed and the appellants were directed to consider the applications of the respondents for grant of transit permits.

4. In view of the fact that the rules became applicable even to municipal areas by virtue of amendment to the Rules, vide G.O. Ms. No. 99 dated 17.7.1998; the respondents filed applications for grant of licences under the amended rules. The said applications were rejected on 24.11.1998 on the ground that there were criminal cases registered against the respondents. The respondents filed Writ Petitions (W.P. No. 34514, 34516, 34524 and 34528 of 1998) challenging the action of the appellants in rejecting their applications. A prayer for interim direction to grant temporary licences during the pendency of the writ petitions was also made by the respondents. When the writ petitions came up for admission, on 11.12.1998 a learned single Judge, while issuing Rule Nisi, granted interim direction directing the appellants to consider the case of the respondents for grant of licence within a period of four weeks without reference to the criminal cases stated to have been registered against them. In the meanwhile, it was directed that the respondents be permitted to carry on the business in accordance with law. The said writ petitions are still pending. The interim order passed in the said writ petitions is still in operation. The learned single Judge, however, in the impugned order, which is the subject matter of writ appeals, has observed that the said writ petitions stood disposed of on 11.12.1998.

5. The applications for grant of licences again came up for consideration but were rejected on the ground of non-submission ofcertain documents, which the respondents are alleged to have submitted again. The respondents were thereafter informed that their applications already stood rejected on 24.11.1998 and on 11.1.1999. Feeling aggrieved, respondents again challenged the appellants’ action by filing writ petitions before this Court one of which was W.P.No.7476 of 1999. The said batch of writ petitions were decided at the admission stage on concession made by the learned Counsel appearing for the appellants that direction be issued to the appellants to consider the applications and pass appropriate orders thereupon. Accordingly’ by order-dated 3.4.1999, the writ petitions were disposed of and the appellants were directed to reconsider the applications and pass fresh order thereon within a period of four weeks.

6. The applications of the respondents were again rejected on 26.11.1999. The said order was challenged by the respondents in four separate writ petitions. This batch of writ petitions have been allowed by the learned single Judge by a common order passed on 1.11.2002, which is the subject matter of the present Writ Appeals.

7. The applications of the respondents for grant of licences were rejected on several grounds. Challenge by the respondents to the order of rejection was also on several grounds. The appellants resisted the writ petitions by filing counter-affidavit Without going into the grounds which had been raised by respondents and without taking into consideration – the objections raised by the appellants in the counter-affidavit, the learned single Judge allowed the writ petitions only on one ground and directed the appellants to grant licences to the respondents within two weeks from the date of receipt of the order with costs of Rs. 3,000/- each and further directing the appellants to recover the said costs from the concerned Divisional Forest Officer who had passed the orders impugned against in the writ petitions. Till the licences are granted, it was directed that status quo be continued.

8. Paras 4 and 5 of the order reads:

4. The learned Government Pleader has filed a counter disputing and denying the allegations made in the affidavit of the petitioners. In fact, so many other allegations were also made in the counter, which we need not go into at this stage. When the grant of ninelicences subsequent to the impugned orders was put to the learned Government Pleader and was also directed to get instructions, the learned Government Pleader was not in a position to explain under what circumstances, such licences were granted to nine persons, when it was the view of the Divisional Forest Officer that the source available in the Nizamabad town does not sustain any more saw mills.

5. Therefore, these writ petitions are disposed of on the simple ground that the impugned order passed by the Divisional Forest Officer is clearly motivated and intentional and there are absolutely no justifiable grounds shown in the impugned order for not granting the licence to the petitioners who are existing saw mill owners.

9. The aforementioned order is under challenge by the appellants on the ground that the learned single Judge ought to have considered the stand taken by the appellants and the fact that the offences alleged to have been committed by the respondents were of serious nature and granting of licences to the saw mills – respondents may lead to deterioration of the forests in the area.

10. Learned Counsel appearing for the respondents submitted that there was no ground to interfere with the impugned order since one of the grounds on which the applications of respondents were rejected was that the number of saw mills in Nizamabad town was 48 and none of the saw mills were running on sustainable basis and the appellants were unable to explain the reason for grantinglicences to nine other persons subsequent to the passing of the order impugned in the writ petitions. Learned Counsel appearing for the respondents also submitted that the very act of the appellants in rejecting the applications of the respondents for grant oflicences on the ground of registration of criminal cases or pendency of criminal proceedings is bad in law inasmuch as mere registration of criminal case or pendency of criminal proceedings cannot be a ground for rejection unless it is established that respondents were responsible for the fake licences or forged permits. Reliance was placed on the decision of a learned single Judgeof this Court in Malliah v. Superintendent of Excise, 1988 (1) ALT 603. Reliance was also placed on the decision of the Supreme Court in. Dabur India Ltd. v. State of Uttar Pradesh, AIR 1990 SC 1814, in support of submission that the applications for grant oflicences must be judged in accordance with law and the appellants could not have taken mere pendency of criminal proceedings to be a ground to reject the same. Sub-rule (2) of Rule 4 of the Rules lays down the guidelines, which alone have to be taken note ofwhile granting licences. Mere registration of criminal cases or pendency of criminal proceedings is not a ground on which application for licence can be rejected under Sub-rule (2) of Rule 4.

11. We have heard learned Counsel appearing for the parties and have gone through the entire material on record and duly considered the submissions.

12. There is enough material available on record to show that there were complaints alleging that saw mill owners of Nizamabadtown were indulging in transportation of smuggled timber covered by fake licences and forged permits. The Forest Official made verification of the records of the saw mills. As per the case of the appellants, during verification of the records of the premises ofthe saw mills, it was noticed that the respondents had indulged in transportation of illicit smuggled timber into the saw mills covered under the fake permits. Number of permits were found to be fake and forged, which was confirmed by the Divisional Forest OfficerNizamabad and the Divisional Forest Officer, Yawathmal, Maharashtra. The fake permits are alleged to have been utilised by the respondents which pertain to the years 1993, 1994 and 1995.

13. In the additional counter-affidavit filed by the Divisional Forest Officer, Nizamabad the details of the saw mills which were alleged to be involved are furnished which include the respondents herein. Details of complaints lodged against the saw mills with the concerned Station House Officers of Nizamabad town have also been furnished. It is stated that the Station House Officer 1 Town Police Station, Nizamabad has filed charge sheets against the saw-mill owners including the respondents herein and that a request was made to the State government for entrusting the cases to CBCID or any independent agency, vide letter dated 20.1.1997. Government of Andhra Pradesh by letter dated 6-6-2000 entrusted the matter to CBCID and on 2.8.2000, the Principal ChiefConservator of Forests, Andhra Pradesh issued instructions to file specific complaints before the Addition Director-Genera! of Police; CBCID, Hyderabad against the saw-mills, which were involved in fake and forged permit cases. In this back ground, it is stated that applications for grant of licences were rejected because of the pendency of criminal cases which is a relevant factor which had come to the notice of the Forest Officers that illicit timber was being smuggled and respondents were involved in the said activity. After the respondents obtained interim orders on 11.12.1998 in their Writ Petitions including W.P. No. 34514 of 1998 again the matter was considered by the concerned forest authorities in the light of the impugned order and on relevant considerations, the applications were again rejected.

14. The only question that arises for consideration is whether the appellants were justified in rejecting the applications of the petitioners for grant of licences.

15. In exercise of the powers conferred by Section 29 read with Section 68 of the Andhra Pradesh Forest Act, 1967, the Governorof Andhra Pradesh issued rules regulating the location of saw mills and conversion of timber at the saw mills in the State. Rule 4(1)(a) provides that any person desiring to install, erect or operate a saw mill within the area specified in Rule 3 shall make an application together with the necessary material to the licensing authority. Sub-rule (2) of Rule 4 of the Rules empowers the licensing authority to grant licences only if the licensing authority, on making such enquiry as he deems fit and after satisfying himself whether or not there would be any objection to granting the licence applied for, having regard to safeguarding the timber in any reserved, protected or proposed forest, or in any land referred to in Rule 3. In such cases where there were serious allegationsof involvement of respondents in the very act of being in possession of smuggled timber, on strength of some forged permits, in our considered opinion, the same would be a relevant factor within the ambit of Sub-rule-(2) of Rule to be taken note of in declining the applications. Therefore, no fault can be found in the appellants having rejected the applications of the respondents on 24.11.1998, which is the-subject-matter of Writ Petition No. 34514 of 1998 and the Batch. Be it noted that the respondents got an interim order for reconsideration of their applications by not taking into consideration the fact of registration of F.I.Rs. Forest authorities thereafter had no option but to reconsider the applications without taking note of a very relevant factor. The applications were again rejected on various grounds, which was challenged by the respondents in fresh writ petitions. Learned single Judge allowed the writ petitions which has given rise to the present appeals.

16. The learned single Judge in the impugned order did not examine all the grounds on which applications had been rejected and also failed to consider vital objections raised by the appellants in the counter-affidavit in support the order and proceeded to allow the writ petitions only on one ground. Since rejection of the applications was on various grounds, it was not proper to have discarded the other grounds. Be that as it may, since the second order dated 26.11.1999 was passed because of the interim direction that the applications of the respondents may be considered without taking note of registration of criminal cases against the respondents obviously in the fresh order pendency of criminal cases could not have been taken note of by the appellants.

17. The first order of rejection of the applications of the respondents for grant of licences has to be read in continuation of the second order, which is the subject-matter of the Writ Appeals. Because of the act of the respondents in having obtained interim order for disposal of their applications de hors pendency of the criminal proceedings that the second order was passed, the respondents cannot take benefit of the situation contending that the rejection by the second order is on grounds, which are not tenable in law. Before us now the question is whether the forest authorities were justified in having rejected the applications for grant of licence. Learned single Judge proceeded to quash the order of rejection simply on one ground which as noticed above is not permissible in law inasmuch as it was necessary for the learned single Judge to have looked into the other grounds whether the same were relevant or not. Without looking at the counter or the objections raised by the forest authorities, the learned single Judge proceeded to quash the order and granted the relief to the respondents. Reading both the orders together and as we have already found earlier the very act of the forest authorities in having rejected the applications of the respondents was because oftheir involvement in criminal cases concerning the illicit timber. There is no foundation for the observations of the learned single Judge that the impugned order passed by the Divisional Forest Officer is motivated and intentional.

18. In Malliah v. Superintendent of Excise the question for consideration was refusal of authorities to renew licences under the Tree for Tappers Scheme on ground that the licensees were involved in adulteration of toddy. It was held that the criminal cases against the petitioners therein had not been decided, therefore, it cannot be said that the persons concerned were involved in adulterationof toddy as their involvement had not been proved either in departmental proceedings or in criminal proceedings before the Court. The ratio of the said case will have no application to the case in hand. In the instant case, enough material had been collected during inquiry suggesting that the respondents were in possession of illicit timber relatable to the fake and forged permits. No doubt criminal cases have not yet concluded and there is no verdict recorded therein. But the seriousness of the allegations on the basisof preliminary inquiry and on the basis of material collected would also suggest that relevant factors were prevalent as are required to be taken into consideration by the licensing authorities under Sub-rule (2) of Rule 4 of the rules, necessitating rejection of the applications for grant of licences.

19. Ratio of the decision in. Dabur India Ltd. v. State of U.P. is also of no help to the respondents. Rather it supports the stand taken by the appellants that the rejection of the application for grant of licence by order dated 24.11.1998 was in accordance with law since Sub-rule (2) of Rule 4 enjoins upon the licensing authority to satisfy itself whether or not there would be any objection to the grant of licence applied for, having regard to safeguarding the timber in any reserved, protected or proposed forest. When there are allegations that the respondents are involved in transportation of illicit timber in the area, the same as noticed above, in our view, would be a relevant factor that could be taken note of by the licensing authority while considering the applications for grantof licence under Sub-rule (2) of Rule 4 of the Rules. In this view of the matter, we are of the considered opinion that the order ofrejection dated 26-11-1999 is in accordance with law and no interference is called for. We are also of the view that there is no force in the writ petitions filed by the respondents challenging the action of the forest authorities in rejecting their applications because of the pendency of serious criminal cases against them and for that reason the writ petitions are liable to be dismissed. The necessary consequence would be that the impugned order passed by the learned single Judge giving rise to the appeals is liable to be set aside and the writ petitions are liable to be dismissed.

20. Consequently, Writ Petition Nos. 34514, 34516, 34524, and 34528 of 1998 challenging the first order dated 24-11-1998 are dismissed and the writ appeals are allowed. The impugned order passed by the learned single Judge is set aside. Resultantly, WP Nos. 26864, 26877, 26878 and 26898 of 1999 also stand dismissed. There shall be no order as to costs.