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"In either event, the sale and purchase would be completed before severance as under the impugned provisions there has to be a completed purchase of standing trees or bamboos agreed to be severed for the impugned provisions to apply."

23. (B) Timber contracts :

After laying down the above general principles of law, their Lordships took up the "timber contracts" separately (page 250) and considered the various terms and conditions thereof and gave their finding (at page 258). They observed that the "timber contracts were not unconditional contracts for the sale of goods in a deliverable state and the property in the trees specified in Schedule I of the contract, therefore, did not pass to the respondent-firm when each of the contracts was made. As mentioned earlier, the timber contracts are in the prescribed form for all forest produce annexed to the Forest Contract Rules and the provisions of the Orissa Forest Act and the Forest Contract Rules are expressly made applicable thereto ...... it did not become an unconditional contract for the sale of specific goods in a deliverable state for the respondent-firm had no right to sever the trees and take them away before it had complied with the other conditions of the contract set out above ...... under rule 12 of the Forest Contract Rules, the respondent-firm had to furnish a Coupe Declaration Certificate ...... under rule 22 ..... to register ...... its property mark or trade mark ............ could not commence any work unless it had given the required security deposit .............." and concluded :

24. From these features, it was pointed (page 259 of 60 STC) that "if the property in the trees had passed to the respondent-firm" the further work or removal could not be stopped by the Forest Department and "the only remedy open to the seller would be to sue for the balance of the price". Under rule 33 of the Orissa Rules the contract could itself be terminated, and the contractor would forfeit his right to all further trees to be severed if it committed any breach of the conditions. The mode of felling the trees was also not of the choice of the contractor but one prescribed by rule 20 of those Rules. Even after felling the trees, the Orissa contractor was not entitled to remove the felled trees by any route which he liked but only by prescribed routes and subject to permits for transport. Under rule 16 of the Orissa Rules, the felled trees could be removed only to prescribed depots. All trees had to be felled and removed within the contract period. On that basis, their Lordships observed that the "timber contracts were not transactions of sale or purchase of standing trees agreed to be severed. They were merely agreements to sell such trees. As pointed out above, each stage of the felling and removal operations was governed by the Forest Contract Rules and was under the control and supervision of the Forest Officers. The property passed to the respondent-firm only in the trees which were felled, that is, in timber, after all the conditions of the contract had been complied with and after such timber was examined and checked and removed from the contract area". Thus, at the stage of the contract to fell and remove, there was no transfer of property in the timber contracts in the case before them.

25. (C) Bamboo contracts :

Coming to the bamboo contracts entered into by the Titaghur Paper Mills (pages 268 to 272), their Lordships considered the terms of the contract and concluded (at page 272) as follows :
"While discussing the subject-matter of the impugned provisions, we have already held that they apply where there is a completed contract of purchase and the property in the goods which are the subject-matter of the contract passes from the seller to the buyer when the contract is made. In other words the purchase would be complete when the standing trees or bamboos are specific goods, that is, when they are identified and agreed upon at the time the contract of sale is made, and the contract is unconditional and further such standing trees or bamboos are in a deliverable state, that is, nothing remains to be done except for the buyer to enter upon the land of the seller and to fell and remove the trees or bamboos, as the case may be, without any let or hindrance. The very submission of the appellant with respect to when the property passed to the respondent-company in the case of the bamboo contract is sufficient to show that the impugned provisions cannot have any application to the case. The bamboo contract like the timber contract is also made subject to the Forest Contract Rules and while dealing with the timber contract we have pointed out that by reason of the operation of those Rules property in the trees passed to the forest contractor after the trees were felled and taken to the depots at inspection points and there checked and examined and thereafter removed from the contract area. The same position would apply to the case of the bamboo contract assuming for the sake of argument that it is a contract of sale of goods."

39. The above terms are similar to those in the Orissa case. The Supreme Court summarised the position in that case, on this aspect, as follows. (pages 274-276 of 60 STC).

"Having seen what the distinctive features of a profit a prendre, are, we will now turn to the bamboo contract to ascertain whether it can be described as a grant of a profit a prendre and thereafter to examine the authorities cited at the Bar in this connection. Though both the bamboo contract in some of its clauses and the timber contracts speak of the forest produce sold and purchased under this agreement', there are strong countervailing factors which go to show that the bamboo contract is not a contract of sale of goods. While each of the timber contracts is described in its body as an agreement for the sale and purchase of forest produce', the bamboo contract is in express terms described as 'a grant of exclusive right and licence to fell, cut, obtain and remove bamboos ......... for the purpose of converting the bamboos into paper pulp or for purposes connected with the manufacture of paper .........' Further, throughout the bamboo contract, the person who is giving the grant, namely, the Governor of the State of Orissa, is referred to as the 'Grantor'. While the timber contracts speak of the consideration payable by the forest contractor, the bamboo contract provides for payment of royalty. 'Royalty' is not a term used in legal parlance for the price of goods sold."