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TMI Blog1985 (10) TMI 278X X X X Extracts X X X X X X X X Extracts X X X X ..... e January 15, 1969, but lifted subsequent to that date. This dispute arises because of the enhancement of the rate from ₹ 10/- per ton to ₹ 20/-per ton under Government Order dated December 31, 1968. 5. The facts of the case which are mostly admitted or held proved about which there is no longer any dispute may be stated briefly as follows: The Company manufactures pulp and paper in its factory at Dandeli, using bamboos available in the Government forest as raw material. The Government was permitting the Company to remove bamboos from time to time under different agreements. Certain area in the forest was allotted to Sri S. V. Viswanathan, Managing Director of the Greater Mysore Rayon Grade Pulp and Paper Mills for removing bamboos. That Mills, however, could not start manufacture of its products for want of imported machinery, and at its request the Government by order dated January 16, 1967, permitted the Company to remove green bamboos up to an 13 extent of 1,30,000 tons from Yellapur Forest Division, consisting of Kirwati, Manchikeri and Yellapur Ranges. The period prescribed there in was one year in the first instance at a rate of ₹ 10/- per ton for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the Company the balance amount of ₹ 2,80,191.85 Ps. including the sales tax as per there revised bills (Exs. P-14 to P18). The Company, without an alternative remitted the said, amount but requested the Government to re-consider the matter. The Government did not think fit to revise its decision. The Company thereupon issued statutory notice as required under S. 80, C.P.C. and instituted the suit for refund of excess amount paid for the said bamboos. 6. The Company, inter alia, contended that the Government had illegally and unlawfully appropriated the amount of ₹ 2,34,531/- including the sales tax on the value of 22770 tons of bamboos. The Government was entitled to collect the price at ₹ 20/- per ton on bamboos cut subsequent, to January 15, 1969, and not in respect of the bamboos already extracted earlier to the said Government Order dated December 31, 1968, and the Company was there more entitled to refund of the excess amount at paid. The Government resisted the suit contending inter alia: That by virtue of Clauses 10 and 11 of the original agreement (Ex. D-1). The bamboos cut but not removed from the forest reverted back to the Government. Such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ownership passed to the Company after the bamboos were cut and since admittedly 22769 tons of bamboos were cut and stacked in the forest before January 15,1969, the price should be paid at the rate of ₹ 10/- per ton. That price was deposited by the Company under challan by January 15, 1969, the receipt of which was also acknowledged by the Divisional Forest Officer under Ex. P-5. The amount so deposited had been appropriated towards the bamboos cut prior to January 15, 1969, under the relevant bill S (Exs. P-7 to P-10). The transaction having thus been completed, it was not open to the Government unilaterally revise the rates subsequently and claim and recover the value at the revised rate of ₹ 20/- per ton for the bamboos already cut and stacked. The Company paid the excess amount under coercive circumstances and therefore it was liable to be refunded. With these conclusions, learned Civil Judge decreed the suit. The Government has preferred this appeal. 9. Since learned Civil Judge has refused to award interest from the date of suit till the date of decree without assigning any reason and also complaining about future interest awarded at the rate of 6% per annum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of suit to the date of decree and also future interest at a reasonable rate. 11. In the, light of these submissions the points that arise for decision are : (1). Whether the property in bamboos passed to the Company soon, after they were severed or extracted from the land? (2) Whether the bamboos cut, but not transported on or before January 15, 1969, were liable to be charged at the enhanced rate of ₹ 20/- per ton under the Government Order dated December 31, 1968? And (3) If not, whether the Company was entitled to the refund of the amount recovered in excess of ₹ 10/- per ton? We may at the outset clarify that although the amount of ₹ 10/- per ton payable by the Company has been loosely used by the parties as royalty in some documents, there is no room for any doubt that the transaction between the Company and the Government was one of sale of bamboos grown and standing in the Government forest. The Government had agreed to sell and the Company had agreed to purchase the bamboos available in certain areas in the forest and the Government while preparing the bills was also recovering sales tax from the Company and as such it was a sale of unascerta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly cuts and extricates the bamboos, the goods being ascertained and also being in deliverable state, the property in goods passes to the Company. This view finds support from the decision of the Supreme Court in Badri Prasad v. State of M. P.. AIR 1970 SC 706 : (1970) 1 SCJ 757. 'There, all the teak trees of more than 12 inches girth standing in the Jagir village were given to one contractor under an agreement executed on behalf of the Jagirdar. The felling of the trees had to be done in a particular manner and in terms of the conditions mentioned in the agreement. Before the contractor started felling of the trees as agreed, the Abolition of Proprietary Rights Act, 1950 (Madhya Pradesh Act I of 1951) came into force. When the contractor had just started working in the month of March, on March 31. 1951, a notification was issued vesting the estate in the State Government and the trees standing on the land also were vested in the Government. Thereafter, when the negotiations between the contractor and the Government failed, the contractor instituted a suit for declaration that the rights granted to him under the agreement had not been affected by the vesting of the estate in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of by the Company, because generally, though not always, the goods sold are at the seller risk until the property in them is transferred to the buyer and only when the property is transferred to the buyer, the goods are at the buyers risk,, whether goods are actually delivered or not. In Halsbury's Laws of England - 4th Edn., Vol. 41 Para 736, this is what has been stated : 736. General rule. Unless otherwise agreed the goods remain at the seller's risk until the property in them is transferred to the buyer, but when the property is transferred to the buyer the goods are at his risk whether delivery has been made-or not Of course, we agree with Mr. Hiremath, learned Government Advocate, that transferring the risk liability to the purchaser of goods by itself is no indication that the property in the goods has been passed to the purchaser. But, there are other terms in the agreement Ex. D1, like Clauses 10 and 11 which seem to suggest that the Company becomes the owner of the extracted bamboos. Clause 10 of the agreement Ex. DI provides that the extracted bamboos should be removed within the period specified under the contract. The extension of time could be given o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as neither any order of forfeiture of bamboos cut and stacked after the expiry of the period under Ex. P2, nor there is any order issued by the Forest Officer at any time exercising his discretion regarding the reversion of bamboos not removed from the forest. 17. In the conclusion that we have reached on point No. (1), the solution to point No. (2) presents no problem. The Government Order dated December 31, 1968 (Ex. P3) under which the Company was permitted to remove bamboos for a further period of one year from January 16, 1969 to January 15, 1970, at the enhanced rate of ₹ 20/- per ton, on the face of it, therefore had to be given effect to from January 16, 1969. The said Order expressly or impliedly does not cover the bamboos that were extracted, but not lifted or removed prior to January 16, 1969. In other words, the enhanced rate was not applicable to the bamboos cut under the Government Order dated November 4, 1968 (Ex. P2) although not removed prior to January 16, 1969. 18. The Company, therefore, is entitled to the refund of the excess amount recovered by the Government. 19. This takes us to the contention in the cross-objection. As already stated, admitte ..... X X X X Extracts X X X X X X X X Extracts X X X X
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