_f_
937
TIMBER KASHMIR PVT. LTD. ETC. ETC.
_v._
CONSERVATOR OF FORESTS, JAMMU & ORS; ETC.
_October_ 26, 1976
[A. N. RAY, C.J., M. H. BEG AND P. N. SHIN6HAL, JJ.]
_Delegation_ _of Powers to officers for execution_ _of colltracts under section_ 122
( 1) _of Jam mu_ & _Kashmir Constitution-Contracts containing arbitrarion_ _c/aWJt._
_validly f#ecuted on beflalf_ _of_ _the_ _Govem1ne11t_ _cannot_ _be_ _questioned_ _011_ _the plea_
_of_ _violation_ _of_ _Section_ 122(1). .
All the three applications filed by the respondent state for a reference to
an arbitratf!r under section 20 of the Jammu & Kashmir Arbitration Act, 2002
were dismissed by a single judge of the J ammu & Kashmir High Court on the
_ground that the arbitration clause was, in each case, a part of an agreement
which was no~ duly exercised in accordance with the provisions of action 122(1)
·of the J&K constitution which correspond to those of Art. 299(1) of the Constitution of India. But the Divison Bench allowed the appeals holding that if
contracts were signed by the Conservator of Forests in compliance with an
order of the Government, the provisions of Section 122(1) of J&K constitution
could not be said to have been infringed."
Dismissing the appeals of the appellant company by certificates the Court.
A
B
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HELD : It is true that the contract could not b.e executed without the sanction. Nevertheless, if the sanction could be either expressly or impliedly givea
by or on behalf of the Government, as it could, and, if some acts of the Govern
.. ment could fasten· some obligations upon the Government, tbe lessee could also
be estopped from questioning the terms of the grant of the sanction even where
there is no written contract executed to bind the lessee. (938 G-H, 939' A] - E
But, once there had been a valid execution of lessee by duly authorised officers, the documents would be the best evidence of sanction also. That was one
of the objects of prescribing a formal mode of execution of instruments on
behalf of the Government. apart from the need to protect its interest against
_ma/a fide_ and other unauthorised acts of its servants or agents. [940 G-H]
_I_
_Mulamchand_ v. _State_ _of_ _Madhya Pradesh,'._ (1968] 3 S.C.R. 214, applied.
In tbis case the contracts were executed by duly authorised officials under
Government's orders.
C1vm APPELLATE JURISDICTION: Civil Appeal Nos. 313-315 of
1974.
F
##### From the Judgment and Order dated 8-8-1972 of the Ja=u and
Kashmir High Court in Civil First Appeals Nos. 46 to 48 of 1972. G
_Naunit Lal,_ for the Appellant.
_V._ C. _Mahajan_ and _R._ _N. Sachthey,_ for the Respondent.
The Judgment of the Court was delivered by
BEG, J.-These are three appeals by certification against the
judgment of a Division Bench of the High Court of Ja=u & Kashmir,
allowing appeals from the judgment of a learned Single Judge. The
H
_I_
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B
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E
F
G
938 SUPREME COURT REPORTS [1977] ] S.C.R.
Janunu and Kashmir Government had filed. three applications under
section 20 of the Jammu & Kashmir Arbitration Act, 2002, to refer
disputes arising out of three agreements between it and the appellant
Company to arbitration under the arbitration clauses of agreements
between the parties. The applications had been dismissed by ..
the learned single Judge on the ground that the arbitration
clause was, in each case, a part of an agreement which was not duly.
executed in accordance with the provi~ions of Section 122(1) of the
Constitution of Jammu & Kashmir which correspond to those of Article 199(1) of the Constitution of India. The Division Bench hat!
allowed the appeals of the Conservator of Forests, Jammu Circle;,
after holding that the provisions of section 122 (1) of the Con~itution
of Jailllllu & Kashmir could not be said to have been infringed if contracts were signed by the Conservator of Forests in compliance with
:in order of the Government.
The main-stay of the case of the appellant company was an instruction or rule contained in "The book of the Financial Powers" ·
which reads as follows :
"'S. 13. The power to sanction or cancel the terms of instrument.s,
leases, agreements is delegated in the following cases :
s.
No.
x
Nature of power
2
x
x
To whom ctelgated.
3
x
x
Extent
4
x
'<
9. To sell forest produce Chief Conservator of Upto Rs. 7,000/· in value[
and to enter into con- Forest. in each case provided the
tract for the same. highest tender is accep
ted.
Conservators of Forests. Upto Rs. 3,000/- in each
case provided the highest
tender is accepted.
Divisional Forest Officer. Up to Rs. I,000/- in each
caiC provided the highest
tender is accepted".
The Division Bench observed that 'fhis rule existed prior to thL'
coming into force of the Constitution of Jammu and Kashmir. It may
also be pointed out that this rule deals with the power to "sanction or
H cancel" leases, agi:eements and otl;ler instruments which was delegated
to the officers mentioned there with limitation on their powers specified there. But, the Constitutional provision, relied upon on behalf
of the appellant, relates to the manner of the execution of the formal
_y_
•.
_(_
,,
'/
TIMBER KASHMIR _v._ CONSERVATOR OF FORESTS _(Beg._ J.) 939
document containing the contract after its sanction. It is true that
the contract could not be executed without the sanction. Nevertheless if the sanction could be either expressly or impliedly given by or
on behalf of the Government, as we think it could, and, if some acts
of the Government could fasten some obligations upon the Government, the lessee could also be estopped from questioning the t;)rms
of the grant of the sanction even where there is no written contract
executed to bind the lessee.
h the case before us, we have agreements from which the appellant company has derived benefits. And, there are contracts validly
executed on behalf of the Government of Jammu & Kashmir by the
Conserfator of Forests. It is true that, if the appellant could take up
the legal plea that the contracts were not duly executed, in accordance
with section 122(1) of the Constitution of Jammu & Kashmir, it could
urge that they did not have any effect at all as contracts whatever
other legal consequences its acts or conduct may have had. But, this
does not mean that, if a party obtains benefits on the understanding
that it would abide by certain conditions, as the appellant company
had done, it could not be compelled to observe those conditions, such
as the condition to refer disputes to arbitration. However, in the ins
tant case, we need not go into that question because the plea of a violation of Section .122(1) of the Jamrnu & Kashmir Constitution is
itself not sustainable for the reasons indicated below.
As the Division Bench of the High Court had pointed out, there
was a Government order and notification of 23rd February, 1957,
which reads as follows :
"In exercise of the powers conferred by sub-section ( 1)
of Section 122 of the Constitution, the Sadar-i-Riyasat is
pleased to direct that the under-mentioned contracts and
assurances of property made in the exercise of the executive
powers of the State may be executed on his. behalf by various
Officers subject _tp_ any limit fixed by Government rules and
orders as follows :
### * * * *
VI. In the Department of Development :
( 1) Agreements relating to Forest Leases and appropriation of forest products: By the secretary to Government,
Chief Conservator, Conservators of Forests and Divisional
Forest Officers".
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G
The three leases, containing the arbitration clauses which the appel
lant wants to avoid, were executed on 27th February, 1963, and
28th February, 1963, and 19th March, 1963, after the notification
mentioned above. The leases were duly signed by Conservators of
Forests, who were expressly authorised, without any limits imposed H
on the valuation of the leases, to sign and execute 'them on behalf of
the Government. The delegation of power made prior to the' Jammu
10-1338SCI/76
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B
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E
F
G
H
940 SUPREME COURT REPORTS [1977] 1 S.C.R.
and Kashmir Constitution related to grants of sanction and their cancellation. It did not expressly refer to powers to execute leases which
is a separate mattei. The notification of 1957, however, is specifi
cally related to the execution of formal documents including leases.
Hence, it will cover the three leases before us even if the former rules
relating to the limits of the authority of Forest Officers to give or
cancel certain sanctions could be said to be in existence at all after
the enactment of the new Constitution of Jammu & Kashmir and the
notification of 23rd February, 1957, cited above.
We may mention that, as has been indicated in the sepfil-ate
judgment of the learned Chief Justice of the High Court, the J ammu
& Kashmir Government had tried to remove the doubts it cntiftained
about the validity of past leases executed by the Conservator of
Forests. It, therefore, passed two orders : one of 14th April, 1965,
and the other of 29th April, 1971. The order of 14th April, 1965,
ran as follows :
. "In supersession of previous orders regarding signing of
lease agreement it is ordered that the Conservator of Forests
will sign agreements relating to all cases of Forests leases
and appropriation of forest products and Chief Conservator
of Forests will act as the arbitrator as provided under Cl. 44
of the Agreement. By order of the Government of Jammu & Kashmir.
Sd/- Bharat Bhushan
Secretary to Govt. Forests Department".
The order of 29th April, 1971, runs as follows:
"Government Order No. FST-31 dated 14-4-65 shall be
deemed to have taken effect from 29-1-63 and all actions
taken by the Conservators of Forests in executing the lease
agreements by virtue of the said order are hereby regularised.
ed.
By order of the Government of Jammu & Kashmir.
Sd/- R. C. Bhargava,
Secretary to Government, Agricultural
Department".
The learned Chief Justice had observed that these orders, purporting to ratify the leases which were valid, did not have any legal
effect whatsoever and were unnecessary. If there had been any question to be decided as to whether the Government had sanctioned the
leases its actions, apart from the execution of leases, could be considered. But, once there has been a valid execution of leases by duly
authorised officers, the documents would be the best evidence of sanction also. That was one of the objects of prescribing a formal mode
of execution of instruments on behalf of the Government apart from
the need to protect its interests against mala-fide and other unauthorised acts of its servants or agents as indicated by this Court in _Mu/am_
_Chand_ v. _State_ _of_ _Madhya Pradesh('),_
1) [1968] 3S.C.R. 214.
#### ; '
TIMBER KASHMIR _v._ CONSERVATOR OF FORESTS _(Beg._ J.) 941
In the cases before us the only question which needed decision A
was whether formal execution of the leases by duly authorised officers
had been proved. We are of opinion that th_e Conservator of Forest~
was, for the reasons given by us, duly authorised to execute the 'leases.
Accordingly, we affirm the orders of the -Division Bench so that·
matters in dispute between the parties could be validly referred to
Arbitration under the appropriate clauses of the agreements.
These appeals are, therefore, dismissed with costs. Civil Misccll.a.neous Petition No. 8573 of 1975 for interim orders is also dismissed as irtfruetuous.
# s. R. • Appeals dis11u~sed .
_I_
