New World Investment (P) Limited vs The State Of Kerala on 19 November, 2015

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Kerala High Court

New World Investment (P) Limited vs The State Of Kerala on 19 November, 2015

The subject matter involved in both these Review Petitions is closely interlinked with each other and hence both the cases are dealt with together. Review Petition 730 of 2016 arises from the judgment rendered in W.P.(C)No.18339 of 2011, whereby Ext.P10 order of cancellation of lease over the property having an extent of 483.63 acres has not been intercepted. R.P. 741 of 2016 is against the verdict passed in W.A.No.89 of 2011, whereby the verdict passed by the learned single Judge in favour of the review petitioner, to have survey and measurement of the property concerned has been interdicted and the writ Appeal came to be allowed.

2. Heard Mr. N.N. Sugunapalan, the learned counsel for the review petitioners and Mr. Sandesh Raja., the learned Spl.Govt. Pleader (Forest) appearing for the respondents at length. R.P.730 & 741 of 2016 2

3. The crux of the contentions raised by the review petitioners is that, the Bench was not correct in holding that the Government was not aware of the transfer effected to the petitioner, as the sale deed was registered pursuant to a verdict passed by this Court wherein the Government was a party and that violation of Section 22 of the Forest Act was never pointed out in Ext.P7 notice, by virtue of which, it could not be answered in Ext.P9 objections and hence the scope could not have been widened. It is also pointed out that there is no absolute prohibition under Section 22 of the Forest Act, 1961 and if the transfer of the leased property is by 'authorised person' of the Government, it is quite possible. The alleged conversion of the 'land use' was in respect of only one item of the properties and as such, the finding rendered treating all the properties together, detrimental to the rights and interests of the review petitioners, was quite wrong. Above all, if at all any violation was there, para 10 of the Lease Deed clearly envisaged issuance of 6 months' notice enabling the defaulter to cure the defect, which opportunity was denied to the review petitioners and it was R.P.730 & 741 of 2016 3 omitted to be considered by the Bench while passing the verdict under challenge and hence the Review.

4. According to the respondent/State, the review petitions themselves are not maintainable, either in law or on facts. It is pointed out that, the review petitioners, admittedly had challenged the verdicts by approaching the Apex Court by filing SLPs, wherein interference was declined and SLPs were dismissed and as such, they cannot come back and file Review Petitions before this Court under any circumstance. Reliance is sought to be placed on the verdict passed by the Apex Court in 1998 (7) SCC 386 ( three judges) [Abbai Maligai Partnership Firm and another vs. K. Santhakumaran and others] and such other verdicts (which will be discussed in the due course); whereas the review petitioners contend that the review petitions are maintainable by virtue of subsequent ruling rendered by the Apex Court of equal strength as reported in (2000(3) KLT 354) [Kunhayammed v. State of Kerala], pointing out that the order passed by the Apex Court in the SLP is a one line order without any discussion on merits and hence there is no merger. R.P.730 & 741 of 2016 4 In respect of the merit as well, according to the State, all the relevant aspects were considered by the Bench and the contentions now raised by the review petitioners are not supported by proper pleading; especially with regard to the change in 'land use', in relation to the entire properties and hence cannot be raised at this stage. It is also pointed out that there is no error apparent on the face of the records and hence no interference is warranted.

5. The gist of the factual matrix is that the properties covered by Exts.P1 to P5 lease deeds were given on lease by the erstwhile Cochin Government, during the period from 1933 to 1947. There were several subsequent transfers and finally the entire properties, having a total extent of 507.68 acres, were purchased by the petitioners as per Exts.P1. P1(a), P1(b), P1

(c) and P1(d)Sale Deeds executed in the year 1994. On a fine morning, the Government proposed to cancel the lease and issued Ext.P7 notice, inviting objections, if any. The main reason stated therein was that, there was change in 'land use' and that such change in land use was without getting any R.P.730 & 741 of 2016 5 permission from the appropriate Government; more so when how to effect the cultivation was specified in Exts.P1 to P5 Lease Deeds. On receipt of Ext.P7, the petitioner submitted Ext.P9 statement of objections . But according to the review petitioners, it was not properly considered and the Government cancelled the lease as per Ext.P10 order dated 24.06.2011, which made the review petitioners to approach this Court by filing W.P.(C) No.18339 of 2011.

6. In the meanwhile, the property which was being owned, possessed and enjoyed by the review petitioners was sought to be properly identified and demarcated. The review petitioners had expressed willingness to have a 'joint verification', when it was called for. It was in the further course and events, that O.P.No.35736 of 2002 was filed with the following prayers:

"(i) to issue writ of mandamus or other appropriate order directing the respondents 2 to 5 or other concerned officers to conduct a survey under the Kerala Survey and Boundaries Act in the Forest Land to identify the Boundary of 486.63 acres of plantation in Nelliyampathy Forest, Nenmara Division as described in Exts.P1 to P3 documents.

R.P.730 & 741 of 2016 6

(ii) to issue a writ of prohibition or any other writ or order restraining the respondents 2 to 5 from attaching any portion of 486.63 acres of the plantation including the Bungalow No.N.P.VI 387 and two workmen quarters attached to it situated in the Nelliampathy Grama Panchayat owned by the petitioner company.

(iii) to issue a writ of mandamus or any other writ, order or direction directing the respondents 2 to 5 to supply copies of preliminary report in respect of 486.63 acres comprised in the Estate if any to the petitioner forthwith.

(iv) to issue a writ of mandamus or any other writ, order or direction directing the forest authorities or their subordinates not to unnecessarily harass the petitioner before the final determination of the exact boundaries of the 486.63 acres comprised in the Estate"

7. The averments and allegations were sought to be opposed by the State. But after hearing both the sides, the said writ petition was allowed, ordering the property to be surveyed, demarcated and measured out and a cost of Rs.25000/- was mulcted upon the State to be paid to the petitioners. This was sought to be challenged by the State, by filing Writ Appeal No.89 of 2011. The above matters were heard together and the Division Bench raised the following issues:

R.P.730 & 741 of 2016 7 "I. Whether the land in question, i.e. 486.63 Acres leased out by five lease deeds between 1933 to 1947 and purchased by the petitioners by three sale deeds dated 26.04.1994 from the subsequent purchasers are part of reserve forest?

II. Whether the respondents are estopped from raising any objection regarding sale deeds dated 26.04.1994 as the sale deeds having been registered under the orders of High Court dated 17.03.1994 in O.P. No. 3953 of 1994 ?

III. Whether the transfer of leased area in favour of petitioners through sale deeds dated 26.04.1994 executed by subsequent purchasers from the original lessee is void in view of Section 22 of the Kerala Forest Act, 1961 ?

IV. Whether the order of the State Government, cancelling the leases, in the facts of the present case, could also be supported on the ground of violation of terms and conditions of the lease R.P.730 & 741 of 2016 8 deed ?

V. Whether the petitioners violated the provisions of the Forest (Conservation) Act, 1980 by using the leased land comprised in reserve forest for running 'tourist resort' which is a non-forest activity ?

VI. Whether, on the contention of the petitioners that they were running a tourist resort only in a part of the leased property, the State was justified in cancelling the entire lease ?"

8. All the contentions raised from both the sides were heard in detail and it was held in paragraph 45 of the common verdict, that the writ petitioner in W.P.(C)No.18339 of 2011 had not made out any ground for setting aside Ext.P10 order cancelling the lease deed in respect of 'Miraflores Estate' of 486.63 Acres and that the State, after issuance of Ext.P10, had already resumed the land on 27.06.2011.

9. Coming to Writ Appeal No.89 of 2011, the Bench accepted the version of the State that survey was already R.P.730 & 741 of 2016 9 conducted and the boundaries were demarcated. A copy of the survey sketch was forming part of the records as Ext.R3(a). It was also found that there was absolutely no rhyme or reason to have awarded the cost of Rs.25000/- on the State. In the said circumstances, the verdict passed by the learned single judge was set aside.

10. The first question is whether the Review Petitions are maintainable, after dismissal of the SLPs by the Apex Court.

11. A three member Bench of the Apex Court has held in 1998 (7) SCC 386(=AIR 1999 SC 1486) (cited supra) that a Review Petition before the High Court is not maintainable, once SLP is dismissed(paragraph 2 and 4). In the said case, a caveat petition was filed by the respondents and it was accordingly, that the case was heard and discussed on merits. The scope of the said decision was considered by a co-ordinate Bench of the Apex Court in 2000(3)KLT 354 (cited supra), and it was held that, if the SLP was dismissed 'in limine', there was no merger and no principle of res judicata would be attracted; by virtue of which, review petition would be maintainable. The conclusion, as it R.P.730 & 741 of 2016 10 appears in paragraph 44 of the judgment, is in the following terms:

"To sum up our conclusions are :-

(i) Where an appeal or revision is provided against an order passed by a Court, tribunal or any other authority before superior forum and such superior forum modifies, reverses or affirms the decision put in issue before it, the decision by the sub-ordinate forum merges in the decision by the superior forum and it is the latter which subsists, remains operative and is capable of enforcement in the eye of law.

(ii) The jurisdiction conferred by Article 136 of the Constitution is divisible into two stages. First stage is up to the disposal of prayer for special leave to file an appeal. The second stage commences if and when the leave to appeal is granted and special leave petition is converted into an appeal.

(iii) Doctrine of merger is not a doctrine of universal or unlimited application. It will depend on the nature of jurisdiction exercised by the superior forum and the content or subject-matter of challenge laid or capable of being laid shall be determinative of the applicability of merger. The superior jurisdiction should be capable of reversing, modifying or affirming the order put in issue before it. Under Article 136 of the Constitution the Supreme Court may reverse, modify or affirm the judgment-decree or order appealed against while R.P.730 & 741 of 2016 11 exercising its appellate jurisdiction and not while exercising the discretionary jurisdiction disposing of petition for special leave to appeal. The doctrine of merger can therefore be applied to the former and not to the latter.

(iv) An order refusing special leave to appeal may be a non-speaking order or a speaking one. In either case it does not attract the doctrine of merger. An order refusing special leave to appeal does not stand substituted in place of the order under challenge. All that it means is that the Court was not inclined to exercise its discretion so as to allow the appeal being filed.

(v) If the order refusing leave to appeal is a speaking order, i.e. gives reasons for refusing the grant of leave, then the order has two implications. Firstly, the statement of law contained in the order is a declaration of law by the Supreme Court within the meaning of Article 141 of the Constitution. Secondly, other than the declaration of law, whatever is stated in the order are the findings recorded by the Supreme Court which would bind the parties thereto and also the Court, tribunal or authority in any proceedings subsequent thereto by way of judicial discipline, the Supreme Court being the Apex Court of the country. But, this does not amount to saying that the order of the Court, tribunal or authority below has stood merged in the order of the Supreme Court rejecting special leave petition or that the order of the Supreme Court is the only R.P.730 & 741 of 2016 12 order binding as res judicata in subsequent proceedings between the parties.

(vi) Once leave to appeal has been granted and appellate jurisdiction of Supreme Court has been invoked the order passed in appeal would attract the doctrine of merger; the order may be of reversal, modification or merely affirmation.

(vii) On an appeal having been preferred or a petition seeking leave to appeal having been converted into an appeal before Supreme Court the jurisdiction of High Court to entertain a review petition is lost thereafter as provided by sub-rule (1) of Rule (1) of Order 47 of the C.P.C.

12. The said verdict was followed by the Apex Court in the subsequent decision in 2005 (12) SCC 149 [National Housing Coop. Society Ltd. v. State of Rajasthan and others). In 2001 (5) SCC 37 (=AIR 2001 SC 2316) [K. Rajamouli vs. A.V.K.N. Swamy], a Two Member Bench of the Apex Court held that review petition would be maintainable, provided it was filed before filing the SLP and was pending on the date of dismissal of the SLP. The said dictum was followed in AIR 2004 SC 1738 [M/s. Green View Tea & Industries v. Collector, R.P.730 & 741 of 2016 13 Golaghat, Assam and another ]as well and also in 2010(8) SCC 383 (Two Member Bench) [Meghmala and others v. G.Narasimha Reddy and others]. But in the next decision reported in 2011 (4) SCC 602 [Gangadhara Palo v. Revenue Divisional Officer and another], a Bench of two judges of the Apex Court, differed from the clarification given by the earlier Benches in 2001(5) SCC 37 and 2010(8) SCC 383 and held that there was no principle of any merger and hence review petition was maintainable. Shortly thereafter, another Bench of the Apex Court noted the different lines of approach and hence the issue was referred to 'Larger Bench' for authoritative pronouncement as per the order/verdict reported in 2012 (12) SCC 291[Khoday Distilleries Ltd and others vs. Mahadeshwara S.S.K. Ltd.]. However, without noting the above 'reference order', the course pursued by the earlier Bench in upholding the maintainability of review petition, even after dismissal of SLP, was followed in Dineshan K.K. vs. R.K. Singh [2014(16) SCC 88] and 2015 (2) SCC 262 [Major General Kapil Mehra and others vs. Union of India and another]. It is submitted across R.P.730 & 741 of 2016 14 the Bar, that the reference is still to be answered by the Larger Bench and the position as on date is as declared by the Three Member Bench of the Apex Court in 2000 (3)KLT 354 (cited supra),which was rendered after referring to the earlier three Member Bench decision in 1998(7) SCC 386 (cited supra). In the instant case, admittedly no notice was issued to the respondents and only the Review Petitioners (petitioners in the SLP) were heard by the Apex Court. The SLP came to be dismissed then and there. As such, by virtue of settled law, there is no principle of merger and hence Review Petitions can be held as legally maintainable, if it is otherwise sustainable in law. We hold this point in favour of the review petitioners.

13. The next question is whether there is any "error apparent on the face of the records", to sustain invocation of the power of review. With regard to the first point raised by the review petitioners, it may be true that the earlier sale deeds were caused to be registered pursuant to intervention made by this Court wherein the Government was a party. But the said judgment was only to direct the Registering authority, who was R.P.730 & 741 of 2016 15 to discharge its functions under the Registration Act/Rules, subject to satisfaction of the relevant requirements. In other words, it did not have anything to deal with the merits of the case, the nature of transaction, validity or otherwise. Merely for the reason that the 'conveyance' was caused to be registered with the intervention of the Court, it cannot be said that the Government was called upon to answer with regard to the nature of transaction as well and as such, there is nothing wrong in the observations made by the Bench in the common judgment sought to be reviewed herein.

14. Regarding the next aspect to be considered, [the basic issue with reference to the circumstances noted in Ext.P7 notice] is the violation of Section 22 of the Forest Act. The version of the review petitioners is that it was never pleaded or pointed out when the matter was argued/finalised by the Bench. If the transfer is admitted and if the documents produced do not refer to any power for effecting the transfer, the violation is established . If the violation is established, then the rest is only a question of law, which can be considered at any stage. This being R.P.730 & 741 of 2016 16 the position, the contention made by the learned Sr. Counsel for the review petitioners that the Government is estopped in raising any contention with reference to violation of Section 22 of the Forest Act does not hold good; more so since there is no estoppel against law.

15. In response to the contention of the review petitioners that there is no absolute restriction/prohibition under Section 22 of the Forest Act, 1961 and that if the transfer is by authorised person of the Government, no adverse consequence can be resulted, it is to be noted that the lease, though is made by the authorised person, the basic question to be answered is whether any right was conferred in the lease deed to have the property transferred. The version of the review petitioners is that there is no prohibition in the lease deed for creating transfer. But that is not enough. The purpose of lease is clearly discernible from Exts.P1 to P5 lease deeds. Obviously, there is no provision enabling the lessee to transfer the rights. If any such transfer is made without any enabling provision, all the structures built up on the said foundation will simply crumble down. In the instant case, the transfer stands admitted. Though the lease deeds R.P.730 & 741 of 2016 17 confer only lease hold rights, the ownership itself seems to be transferred as per the relevant sale deeds, which has no validity in the eye of law and as such, cancellation of lease deed as per Ext.P10 was held as sustainable by the Bench.

16. A serious contention is raised by the learned counsel for the review petitioners that the Bench went wrong in arriving at a finding as to the change in 'land use' of the entire lease hold property, since as per the relevant materials on record, such conversion(of the existing Bungalows for Tourism) was applicable only in respect of one of the estates. A question has been raised specifically under Issue No.VI by the Bench and it has been discussed in detail. It is to be noted that there was no specific pleading in this regard, but for a vague submission from the part of the Review Petitioners. According to the learned Sr. Counsel for the Review Petitioners, though the said aspect was conceded as not specifically pleaded, it could not have been ignored by the Bench by virtue of the law declared by the Supreme Court in 2015 (7) SCC 728 [Joshi Technologies International Inc. vs. Union of India and others](Para 50 and 51]. But in the R.P.730 & 741 of 2016 18 above case, the issue was with regard to absence of 'specific prayers'. The Apex Court found that specific averments were already raised in the 'Body' and also in the 'Grounds' and as such, absence of 'specific prayers' could not be a bar in moulding the relief. Unlike the said case, no specific pleading was ever raised, either in the Body or in the Grounds or even in the Prayers and as such, the said decision does not come to the rescue of the review petitioners in any manner.

17. The last ground of submissions is that the Bench omitted to note the scope of paragraph 10 of the Lease Deed which clearly insisted issuance of 6 months' notice to rectify the defect/failure and denial of opportunity to the review petitioners in this regard. The said provision reads as follows:

"In the event of the Lessees making default in the observance or fulfilment of any of the items and conditions herein contained and failing to remedy such default for six months after notice so to do shall have been given to them by the Conservator of Forests, the lessor shall be at liberty at any time thereafter after notice to the Lessees and hearing them in person or through their agent or vakil duly appointed about the failure of the Lessees to remedy such default that may be reported to the R.P.730 & 741 of 2016 19 Lessor from time to time by the Conservator of Forests to determine this lease and the Lessees shall forthwith vacate the land hereby leased and demised and notwithstanding such determination of this lease be liable for any loss which the lessor may sustain by reason of such default and all such improvements made by the Lessees on the land hereby leased and de... as exist at the time of vacating the same must be left intact and no compensation therefor can be claimed. "

18. Obviously, the said provision is applicable only in respect of a case where the defect/lapse, is curable. In the instant case, transfer of the lease hold property was effected without any authority to have effected the transfer and as such, the said violation was not a defect which was possible to be cured in any manner, on issuance of any notice under Clause 10 of the lease deed. As such, the said contention fails. Further, the benefit conferred under paragraph 10 of the lease deed is only to the lessee therein and not to the subsequent transferees, who allegedly acquired rights by way of sales effected in the due course, which was quite beyond the terms of the lease. For this reason also, the said contention does not appear to be correct or R.P.730 & 741 of 2016 20 sustainable.

19. With regard to the scope of review, it can be invoked only if there is any "error apparent on the face of the records". An error which has to be established by a long drawn process of reasoning and points, where it may be possible to have two opinions, can never be said as an error apparent on the face of the records as held by a three member bench of the Apex Court in AIR 1960 SC 137 (Satyanarayan Laxminarayan Hegde and others vs. Mallikarjun Bhavanappa Tirumale]. The position was further explained by the Apex Court in AIR 1995 SC 455 - (Meera Bhanja vs. Nirmala Kumari Choudhuri) holding that the power of review cannot be exercised on the ground that the decision was erroneous on merits. The Apex Court held that an "error apparent on the face of the record"

must be such an error which would strike one on mere looking at the records and would not require any long drawn process of reasoning on point, where there may be two different opinions. The Bench alerted all concerned that the power of review is not a substitute for appeal. The position was reiterated in [(1997) 8 R.P.730 & 741 of 2016 21 SCC 715] as well [Parsion Devi vs. Sumitri Devi].

20. After hearing both the sides, this Court finds that the so called errors are not at all errors apparent on the face of the records. That apart, there is no case for the review petitioners that these aspects, now argued before this Court, were never argued before the Apex Court at the time of hearing of the SLP. As it stands so, re-consideration of the very same points by this Court, after having declined them to be considered by the Apex Court, is in no way liable to be entertained. This Court does not find any merit in the Review Petitions and they are dismissed accordingly.

P.R. RAMACHANDRA MENON, JUDGE P. SOMARAJAN, JUDGE lk

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