Dismissed

State of Kerala v. M/S Western India Plywoods Ltd.

Kerala HC22 Mar 2017WA/287/2017

Case brief

AI extract

What is this about?

The High Court dismissed the State's writ appeal against a lower court judgment that quashed a Government order recalling a price decision favorable to a plywood company. The Court held the recall was arbitrary, violating Article 14. It relied on precedents that public orders must stand by their stated reasons.

What did the court decide?

The writ appeal was dismissed; the judgment quashing the Government order was allowed.

State of Kerala Vs M/S Western India… — Contract and Commercial Disputes | Kerala HC (2017)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT:

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THE HONOURABLE THE CHIEF JUSTICE MR.NAVANITI PRASAD SINGH &

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THE HONOURABLE MR.JUSTICE ANTONY DOMINIC

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WEDNESDAY, THE 22ND DAY OF MARCH 2017/1ST CHAITHRA, 1939

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WA.No. 287 of 2017 IN WP(C).8041/2009

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AGAINST THE JUDGMENT IN WP(C) 8041/2009 of HIGH COURT OF KERALA DATED 19-01-2015

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APPELLANTS/RESPONDENTS IN WP(C):

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STATE OF KERALA, SECRETARY, REPRESENTED BY THE PRINCIPAL SECRETARY TO GOVERNMENT, FOREST AND WILDLIFE(D) DEPARTMENT, THIRUVANANTHAPURAM

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THE CHIEF CONSERVATOR OF FOREST (PROTECTION), GOVERNMENT OF KERALA, THIRUVANANTHAPURAM

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THE ASSISTANT CONSERVATOR OF FOREST, KASARGODE

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BY SRI.SANDESH RAJA.K., SPL. G.P. (FOREST)

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RESPONDENT/PETITONER IN WP(C):

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M/S WESTERN INDIA PLYWOODS LTD BALIAPATAM, CANNANORE-670010

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BY SRI.N.JAMES KOSHY

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THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 22-03-2017, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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NAVANITI PRASAD SINGH, C.J. &

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ANTONY DOMINIC, J.

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W. A. No.287 of 2017

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Dated this the 22^nd day of March, 2017

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JUDGMENT

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Navaniti Prasad Singh, C.J.

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aState is in appeal against judgment of the learned single Judge dated 19.01.2015 passed in W.P.(C) No.8041 of 2009 whereby the writ petition was allowed quashing Annexure-P8, the Government letter dated 06.11.2007, whereby after almost one year, the Government decided to withdraw its decision dated 19.12.2006 (Ext.P6) on the solitary ground that Ext.P6 was not in public interest.

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We have heard the learned Government Pleader at length and the private contesting respondent who was the writ petitioner.

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The facts are not in dispute. The writ petitioner is a plywood industry which buys sort wood for making veneers

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W. A. No.287 of 2017

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which are thereafter used to make plywood. The sort woods are controlled timber i.e., to say that they can only be purchased through state agencies. Accordingly, there was an agreement between the writ petitioner and the State on 11.03.2005 whereby the writ petitioner had agreed to lift certain quantities of casuarina timbers. Agreement itself provided that till Government decides the price finally, the writ petitioner would pay at the rate of 1,103/- plus₹ taxes/MT. Accordingly, the writ petitioner lifted certain quantities. Thereafter, it appears that the Principal Chief Conservator of Forests on 23.08.2005 (Ext.P2) recommended to the Government that the rate should be determined at 1,700/- per MT. Government thereafter₹ apparently accepted the recommendations and issued orders (Ext.P3) dated 26.09.2006 fixing 1,700/- per MT as₹ the price of the said timber. Immediately on receipt of the said order, the writ petitioner represented to the Government praying that the price may be fixed on the

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W. A. No.287 of 2017

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basis of what had been fixed on ad hoc basis earlier. It is pointed out that, the recommendation should not have been acted upon. Pursuant to the representation of the writ petitioner, a meeting was organized by the Government which was presided by the Minister for Industries and Minister for Forests. Apart from the Principal Chief Conservator of Forests, the Additional Principal Chief Conservator of Forests, the Chief Forest Conservator, Managing Director - Kerala Forest Development Corporation, Deputy Secretary - Forest and Wild Life Department and other officials were present. Pursuant to the discussions held, minutes of the meeting were duly recorded (Ext.P6) on 19.12.2006 whereby the Government agreed to the representations of the writ petitioner and decided that the rate chargeable from the writ petitioner would be restricted to 1,103/- instead of 1,700/- per MT. Accordingly the writ₹ ₹ petitioner made payments as he had already removed the timber. Almost one year thereafter, on 06.11.2007 (Ext.P8),

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the Government suddenly took a decision to recall its decision dated 19.12.2006. There is no reason whatsoever assigned for the action being taken at this distant point of time. The petitioner, being confronted with such a situation, made a representation which was rejected and they were directed to make payments at the rate of 1,700/- per MT.₹ Aggrieved by the above orders, the petitioner filed writ petition and the learned single Judge vide the judgment impugned, has allowed the writ petition and set aside Annexure-P8.

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State, in this appeal, submits that the action taken by the State was in public interest and that being so, the learned single Judge ought not have interfered in this matter. We have considered this argument and we find that we cannot agree with the same. The Government while entering into an agreement had clearly stipulated that the price at which the timber would be removed was 1,103/-₹ per MT till it is finalised by the Government. Parties agreed

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and abide by it. Upon recommendation by the Principal Chief Conservator of Forests, the Government issued orders fixing the final price at 1,700/- per MT. This being substantially₹ more than what was fixed on ad hoc basis earlier, the writ petitioner, the respondent herein, represented. Government convened a meeting. The meeting was attended by the Minister for Forests and Industries, the Principal Chief Conservator of Forests and other high officials of the Department. In the meeting, it was decided that the price would remain at 1,103/- per MT and not 1,700/- per MT₹ ₹ This decision, as noted above, was taken on 19.12.2006. Payments were made accordingly and account settled. Suddenly, after an year, without information on 06.11.2007, the decision is being recalled and now it is said that it is in public interest to do so. The order does not disclose what the public interest is. But, it is argued that Government has now realised that there would be a loss to the exchequer to the extent of 9 lakhs; that there would be a loss to the₹

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exchequer by reducing the price was known on the day the meeting took place and that, decision was taken to reduce the price. For it is elementary that once price is reduced, the money to be received would be reduced. Now, it is only gainsaying that it took Government eleven months to realise that they would suffer loss of 9 lakhs. Such action of the₹ Government on the face of it, is arbitrary and is in violation of the principles enshrined under Article 14 of the Constitution of India. The learned single Judge was right in thus striking down the later Government decision.

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One contention that was raised was in relation to Rules of executable business where the learned Government Pleader submitted that the decision taken was contrary to Rules of executable business. This was neither pleaded before the learned single Judge nor argued before the learned single Judge. This is not a ground which is disclosed in the impugned decision dated 06.11.2007. It is well settled that a public order publicly made has to be judged by the

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reasons given therein and cannot be supplemented by affidavits or reasons otherwise supplied. We can refer to para 8 of the judgment of the Supreme Court in Mohinder Singh v. Chief Commr. [AIR 1978 SC 851] , which is appended hereunder:

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“...... when a statutory functionary makes an order based on certain grounds, its validity must be judged by the reasons so mentioned and cannot be supplemented by fresh reasons in the shape of affidavit or otherwise. Otherwise, an order had in the beginning may, by the time it comes to court on account of a challenge, get validated by additional grounds later brought out. We may here draw attention to the observations of Bose J. in Gordhandas Bhanji (AIR 1952 SC 16) (at p. 18) :

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“Public orders publicly made, in exercise of a statutory authority cannot be construed in the light of explanations subsequently given by the officer making the order of what he meant, or of what was in his mind, or what he intended to do. Public orders made by public authorities are meant to have public effect and are intended to affect the acting and conduct of those to whom they are addressed and must be construed objectively with reference to the language used in the order itself.”

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W. A. No.287 of 2017

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Orders are not like old wine becoming better as they grow older.”

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In the above facts and circumstances, we see no reason to interfere with the impugned judgment. Appeal fails and is dismissed accordingly.

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Sd/-

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NAVANITI PRASAD SINGH CHIEF JUSTICE

Sd/- JUDGE

ANTONY DOMINIC

kns/-

//TRUE COPY//

P.S. TO JUDGE

State of Kerala v. M/S Western India Plywoods Ltd.

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State of Kerala v. M/S Western India Plywoods Ltd.

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