Andhra HC (Pre-Telangana)
Decent Saw Mill vs Divisional Forest Officer & Others on 20 March, 1998
Equivalent citations: 1998(3)ALD177, 1998(4)ALT128
JUDGMENT
1. The show cause notice dated: 4.8.1997 and similar such notices issued for the third successive time are challenged in these writ petitions. The questions of law in all the writ petitions arc similar and hence all the writ petitions arc decided by a common judgment.
2. The facts are in short compass: The Petitioners herein are the Saw Mills situate within the municipal limits of Nizamabad. They have been running the Saw Mills in accordance with the procedure established by law. It is the case of the petitioners that they do not always directly purchase the timber. But, the brokers or commission agents as per the requirements of the Saw Mill owners purchase the timber from the timber depot of the Government or from the pattedars either in Andhra Pradcsh or Maharashtra and obtained permits for transporting them to Saw Mills. The timber covered by the valid permits arc being checked at the posts and necessary endorsements are made on the permits. Even when the timber is unloaded in the Saw Mills, the authorities are informed- The timber unloaded was sawn and sold to the pruchascrs under permits granted by the officials. While so, show cause notices were issued to the petitioners on 12.8.1996 alleging that huge quantity of illicit timber was unloaded in the Saw Mill under the fake and forged permits and therefore they indulged in the illegal transportation of timber and hence show cause notices were issued to them as to why the Saw Mills, equipment and infrastructure should not be confiscated to the State under Rule 9 of A.P. Saw Mill (Regulation) Rules, 1969 and as per the provisions of the A.P. Forest Act, 1967 and the Rules made thereunder.
Aggrieved by the said show cause notices, all the petitioners filed different writ petitions namely W.P.No.22314/1996& Batch. When the matter came up for hearing, the learned Government Pleader conceded before the Court that the show cause notices issued could not be sustained in law as Rule 9 of A.P. Saw Mill (Regulation) Rules, 1969 was not applicable to the Nizamabad town. Basing on the said submissions, all the writ petitions were allowed on 11-12-1196. However, it was made open to the Respondents to proceed against the petitioners in accordance with law.
3. For the second time, again the show cause notices were issued to the petitioners on 8.2.1997 alleging that timber was transported in violation of the Rule 3 of A.P. Transit Rules, 1970 and thereupon required the petitioners to submit the explanations as to why the action under A.P. Forests Act and also under Section 44(2-B) and Rules 3 and 5 of A.P. Forest Transit Rules, 1970 should not be taken against the petitioners for confiscating the Saw Mill, equipment and infrastructure. Again the petitioners filed Writ Petition No.4301/1997 & Batch. This Court by an order dated: 16.6.2297 quashed the said show cause notices, observing that it is open for the Respondents to issue fresh notices under appropriate rules, if they are so advised.
4. For the third time, the present show cause notices dated: 4.8.1997 were issued to all the petitioners asking the petitioners to submit the explanation as to why the timber possessed by the Saw Mill together with Saw Mill, equipment and infrastructure should not be confiscated under Rules 2,8 and 11 of A.P. Forest Produce (Storage and Depot) Rules, 1989. The said notices are again challenged by the petitioners in the present batch of writ petitions.
5. The learned Counsel for the petitioners submit that the impugned show cause notices are wholly without jurisdiction and contrary to law. Further, he submits that Rule 11 of the A.P. Forest Produce (Storage and Depot) Rules, 1989 (for short Storage Rules) are not applicable to the facts of the case, he also submits that though the Storage Rules of 1989 were promulgated they were never brought into effect and it is only on 6.1.1997 all the petitioners were asked to apply for storage Licences under the Rules. Accordingly, they filed three applications even though these rules are not applicable, but so far the Licences were not granted to the petitioners. He also submits that the Rule 11 of Storage Rules is ultra vires of the provisions of the A.P. Forest Act inasmuch as Section 44 only enables the competent authority to seize and confiscate the forest produce, seized timber or forest produce together with all tools, ropes, chains, boats, vehicles and cattle used in committing any such offence. But, however in the Storage Rules, the power is given to the authorities to confiscate any forest produce together with machinery, equipment and infrastructure etc. which might have been used in the commission of offence. Thus, he submits that subordinate legislation cannot go travel the norms fixed under the Act and as such the delegated authority cannot frame the Rules beyond the permissible limits contained in Section 44. The Section itself contemplates seizure of forest produce, with all tools, ropes, chains etc. and it would not be open for subordinate legislation to authorise the confiscation of machinery, equipment etc. Therefore, Rule 11 of Storage Rules are ultra vires the Act. He also relied on the decisions of the Supreme Court reported in Agricultural Market Committee vs. Shalimar Chemical Works Ltd., JT 1997(5) S.C. News Papers Ltd. vs. State Industrial Tribunal, U.P., , Babaji Kondaji Garad vs. Nasik Merchants Cooperative Bank Ltd. Nasik, , Neditrimilli Janardhana Reddy vs. Progressive Democratic Students Union, and Indian Express News Papers (Bombay) vs. Union of India, 1984(2) Scale 853. Thus, the learned Counsel submits that the impugned notices are to be quashed and the directions may be issued to grant the transport permits to the petitioners. On the other hand, the learned Government Pleader submits that the authorities have been vested with the powers to confiscate the timber which is available in the saw mill along with the machines and other instruments. The said power is traceable under Rule 11 of Storage Rules and also Section 44 of the A.P. Forest Act. The petitioners have been conducting clandestine business by illegally transporting the timber on a fake and forged permits and therefore they are not entitled for any relief. He also submits that the writ petitions arc not maintainable as it is only a show cause notice it is open for the petitioners to file the explanations and if at all they are aggrieved by the final orders if any passed, it is open for them to seek appropriate remedial process. Hence, he submits that it was premature for the petitioners to approach this Court at this juncture.
6. I have heard the learned Counsel for the parties at length.
7. As far as the challenge with regard to show cause notice is concerned, there is no quarrel about the proposition that the writ petitions are not to be entertained at the show cause level except where there is a total lack of jurisdiction or gross violation of the principles of natural justice. But, in the instant case, already the petitioners challenged the show cause notices in two rounds of litigations and such an objection was not taken. Further, the very foundation of show cause notice is sought to be shaken on the ground that there is a total lack of jurisdiction to the authorities. All the writ petitions were admitted and also interim directions were granted. In such circumstances, it would not be appropriate to reject the writ petitions on the ground that the writ petitions are premature. Therefore, I have to necessarily reject this contention of the learned Government Pleader.
8. Before considering the vires of Rule 11 of Storage Rules, let us consider the legality of the show cause notice issued to the petitioners.
9. In the first round of show cause notices, issued in 1996, the action was sought to be initiated for the alleged violation of Rule 9 of Saw Mill Regulations for confiscation of the Saw Mill, equipment and infrastructure. That was allowed on the submission of the learned Government Pleader itself. Second time, the show cause notice was issued on 8.2.1997 wherein the confiscation was sought to be proceeded with for the alleged violation of Section 44(2-B) and contravention of Rules 3 and 5 of A.P. Forest Transit Rules, 1970 (for short 'Transit Rules').
10. Ramakrishnam Raju J. who heard the batch of writ petitions assailing the show cause notices dated: 8.2.1997 and after considering Section 44 held that there should be a timber or forest produce available for seizure for confiscation under Section 44, and then only tools and other articles used in the commission of offence can be confiscated. Since the forest produce was not seized the question of confiscation with tools etc. under sub-section(2) of Section 44(A) does not arise. Hence, the show cause notices under Section 44 was held illegal. Secondly also, the learned Judge observed that though the forest produce cannot be moved without valid permit under Rule 5 and when such forest produce was already moved and disposed of, it would be too late in the day to insist upon production of valid permit for timber which was already sawn and disposed of. Thus, the learned Judge held that Transit Permit Rules could not be invoked on those two grounds. The learned Judge allowed the writ petitions. But, however, he observed that under sub-rule (2) of Rule 11 of A.P. Forest Produce (Storage & Depot) Rules, 1989 the Forest Officer who is the competent authority is entitled to seize and confiscate any property together with equipment etc. which might have been used in the commission of offence and therefore he left it open for the respondents to issue fresh show cause notices under the relevant provisions. For the third time, the show cause notice was issued on 4.8.1997 and similar such notices issued which are assailed in these Writ Petitions. It has to be noted that in all the three show cause notices, the format except the quoting provisions of law, other references are same. It would be appropriate to extract one show cause notice which was issued at the earliest point of time namely dated: 12.8.1996 for the purpose of proper appreciation of the case. It reads thus:
"As per the provisions of A.P. Forest Act, 1967, and as per Rule-3 of A.P. Forest Produce Transit Rules, 1970, the rules made thereunder the Forest Act, no forest produce shall be moved, unless such produce is accompanied by a permit issued by the Government of the State from where such produce is imported and the said permit shall be valid only for the transport of such produce and such quantity to the destination specified therein. And as per Rule 5(1) of the said rules, permit can be issued on for the genuine produce after ensuring its origin and whether lawfully belongs to the applicant and after securing the compliance of the rules.
There were allegations that a huge quantity of illicit timber has been flowed into the saw mills in Nizamabad and covered with fake and forged permits. To probe into the allegations, the records of your saw mill have been checked with the reference to origin of the permits. On checking of the records, the following permits submitted by you are found to be fake and forged permits, as in fact these permits were not issued by the office of the Divisional Forest Officer, Nirmal/ Forest Range Officers as mentioned in the permit.
S. No. Permit/Book No. & Date of issue Quantity ofTimber LogsCmt.
Origin placeand issue by (asmentioned inthe permit)
1. XX X X X X X XXX
2. XX X X X X X XXX
3. XX X X X X X XXX
4. XX X X X X X XXX You have taken the above permits in your saw mill account without actually bringing the produce and thus you have deceived the Government with the interest to secure illicit and smuggled timber. Your fraudulent activity in securing the illicit timber covered with fake and forged permits caused destruction to valuable teak growth in the forests resulting irreparable loss sustained to the Government. Thus the grounds established to believe beyond any doubt that you have indulged in transportation of illicit timber covering with the fake and forged permits and used your Saw Mill for conversion of such illicit timber."
However, in the second show cause notice, the entire matter was kept in tact except last para, wherein the provisions of Sections 44 and 3 and 5 of A.P. Transit Rules are made hereunder. The said para is extracted below:
"Hence, as per A.P. Forest Act, 1987 under Section 44 (2-E) and in contravention of Rule-3 and 5 of A.P-Transit Rules, 1970. You arc hereby asked to submit your explanation as to why the timber possessed by you together with your saw mill, equipment and infrastructure used in conversion of illicit and smuggled timber should not be confiscated to the State, per the provisions of A.P. Forest Act, 1967 and the rules made thereunder."
11. Same situation existed in third show cause notice dated 4.8.1997 except last para and addition of one sentence regarding storage Rules, the other matter is same word by word. The last para reads as follows:
"Hence, as per A.P. Forest Act. 1967 and in contravention of Rule-2,8 and Rule 11 of A.P. Forest Produce (Storage and Depot) Rules, 1989 you are hereby asked to submit your explanation as to why the timber possessed by you together with your saw mill, equipment and infrastructure used in conversion of illicit and smuggled timber should not be confiscated to the state, as per the provisions of A.P. Forest Act, 1967, and the rules made thereunder."
The substance of the show cause notices is that the petitioners violated the Rules 3 and 5 of Transit Rules. The only additional sentence which was added is "As per Rule-3 of A.P. Forest (Storage and Depot) Rules, 1989 you have stored the timber in depot and converted the same for selling through the permits issued by this office." Thus, as can be seen from the show cause notice, the authority was satisfied about the grounds which established to believe beyond any doubt that the petitioners indulged in transportation of illicit timber covering with fake and forged permits and used saw mill for convertion of such illicit timber. For this alleged contravention Rules 2,8 and 11 of the Storage Rules were invoked for confiscation of saw mill, equipment and infrastructure etc. Rule 11 only contemplates action for contravention of provisions of A.P. Storage and Depot Rules framed under the Forest Act. Rule 11 reads thus:
"1. Cancellation of the licence on contravention of the provisions:-(1) Notwithstanding anything in the foregoing rules, the Divisional Forest Officer, may where he has reason to believe that a licensee has contravened the provision of Act or any rule made thereunder at any time, revoke the licence granted under these rules, after giving the licensee an opportunity of being heard.
(2) For any violation of the provisions of the Act, or the rules made thereunder by the licencee, the Divisional Forest Officer shall be competent to seize and confiscate any forest produce together with machinery, implements, and equipments which might have been used in the commission of the offence.
(3) In case of violation, where it is not proposed to either revoke the licence or seize and confiscate the produce etc. the Divisional Forest Officer shall be competent to impose a penalty not exceeding a sum of rupees ten thousand or upto the extent of the security deposit.
(4) All penalties levied shall be paid by the licensee within fifteen days from the date of despatch by Registered post of the order of the notice of demand for payment. In case of" failure to pay the penalties in time, the same will be adjusted from the security deposit, which shall be replenished immediately. The licence granted shall be deemed to be inoperative until such time the licensee replenishes the adjustments in the security deposit.
(5) In the event of revocation of licence under sub-rule(1) or seizure and confiscation of forest produce together with machinery, implements etc. under sub-rule (2) the Divisional Forest Officer shall be competent to forfeit security deposit cither in part or the whole."
12. It is curious to note that there was no allegation of violation of rules under the Storage Rules. On the other hand, it is clearly stated in the show cause notices itself that the petitioners have stored the timber in timber depots as required under Rule 3 of Storage Rules and converted the same for selling through permits used by the office. When such is the stand of the authority, it has to be necessarily construed that there is no violation of the Storage Rules. But, however, the learned Govt. Pleader submits that the sentence was not properly worded and that the words "as per" should be read as "contrary to" so as to read that the petitioners have violated the Rule 3 of Storage Rules. I am afraid, such a construction cannot be given to the notice. When a penal provisions are sought to be invoked, which has the effect of confiscation of the property, the show cause notice should be specific, clear and unambiguous in all material particulars, and it is not the case of the respondents that corrigendum was issued to the notices. Therefore, it has to be concluded that the petitioners have not violated the storage and depot Rules. What was made to believe by the authorities was that the petitioners had indulged in the transportation of the illicit timber covering with forged and fake permits and used the saw mill for conversion of such illicit timber. In respect of such an irregularity, show cause notice was issued on 8.2.1987 which was the subject-matter of writ petition No. 4301/ 1997 and Batch and the said show cause notices were quashed. Except stating that the timber has been stored in the depot in accordance with Rule 3, which ensures to the benefit of the petitioners, there is no iota of any allegations of any type of irregularity which could be covered under the Storage Rules. Affording reasonable opportunity or giving show cause notices are the off shoots of natural law of audi alteram partem. In the instant case, the rule itself mandates opportunity before final order of confiscation is passed. Therefore, the show cause notice being mandatory is required to contain the material particulars as to the alleged irregularities leading to the penal consequences with reference to the relevant Rules. Merely quoting the rule without referring to the violations would not meet the requirement of the show cause notice, and it would only mean empty formality. It is a substantive right to the person to effectively defend his case. Therefore, a show cause notice bereft of material details of the alleged violation/irregularity cannot be said to afford real and substantial opportunity in the eye of law. In the instant case, I find no traces of alleged violation of Storage Rules leave alone material particulars. Accordingly, the notices stand quashed as unsustainable. In view of this finding, I need not consider the vires of Rule 11 of the Storage Rules.
13. The Writ Petitions are allowed and there shall be direction to the Respondents to consider the applications of the petitioners for grant of transit permits in accordance with the Rules.
14. No Costs.