M/S. STANDARD ESSENTIAL OIL INDUSTRIES & ANR.versusFOREST RANGE OFFICER KASARGOD & ORS.

532                      [2018]REPORTS
               SUPREME COURT    3 S.C.R. 532                [2018] 3 S.C.R.


A        M/S. STANDARD ESSENTIAL OIL INDUSTRIES & ANR.
                                         v.
              FOREST RANGE OFFICER KASARGOD & ORS.
                         (Civil Appeal No. 1747 of 2008)
B                                APRIL 19, 2018
          [R. K. AGRAWAL AND SANJAY KISHAN KAUL, JJ.]
             Kerela Forest Act, 1961: ss. 61A and 69 – Confiscation by
      forest officers in certain cases – On facts, order of confiscation of
      125 kgs of sandalwood oil by the Divisional Forest Officer – Said
C
      order dismissed by the Single Judge, however, the Division Bench
      of the High Court upheld the order of confiscation u/s. 61A –
      Correctness of – Held: Order by the Divisional Forest Officer
      sufficient to show that the order of confiscation was passed u/s 69
      and not u/s. 61A – Perusal of the order of Single Judge of the High
D     Court shows that Single Judge rejected the idea of confiscation of
      sandalwood oil u/s. 61A and held that though the order of
      confiscation cannot be passed u/s. 61A but by virtue of s. 69, unless
      a fact to the contrary is proved, it can be presumed that the seized
      property belongs to the Government and it enables the Government
      to possess the same – Thus, the Division Bench misdirected itself in
E
      framing the issue and upholding confiscation u/s. 61A and, hence,
      the order is bad in law – Furthermore, s.69 operates only as a tool
      to help the government in proving its title to the property but the
      said Section cannot be read as to give any power of confiscation of
      the property – Power of confiscation of sandalwood oil get vested
F     in the authorities through s. 61A only after the Kerala Forest
      (Amendment) Act, 2010 when certain specific provisions relating to
      Sandalwood were inserted through Chapter VI A and Section 47H
      – Instant case being related to the situation prior to the time of
      amendment in 2010 was made, the amended provisions do not apply
      – Thus, the order of confiscation of sandalwood oil set aside.
G
            Allowing the appeal, the Court
              HELD: 1.1 The order passed by the Divisional forest Officer
      is in itself sufficient to show that the order of confiscation is passed
      under Section 69 of the Kerela Forest Act, 1961 and not under
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                                      532
  M/S. STANDARD ESSENTIAL OIL INDUSTRIES v. FOREST                     533
             RANGE OFFICER KASARGOD

Section 61A. Further, a perusal of the order of Single Judge of        A
the High Court shows that Single Judge rejected the very idea of
confiscation of sandalwood oil under Section 61A of the Act and
held that though the order of confiscation cannot be passed under
Section 61A of the Act but by virtue of Section 69 of the Act,
unless a fact to the contrary is proved, it can be presumed that
                                                                       B
the seized property belongs to the Government and it enables
the Government to possess the same. Further, the Division Bench
misdirected itself in framing the issue and upholding confiscation
under Section 61A and, hence, on that account, the order is bad
in law. [Para 13] [538-B-C]
      1.2 Section 61A of the Act was inserted to prevent the illicit   C
removal of timber, charcoal, firewood and ivory belonging to the
government from the forests. The said provision confers power
of confiscation on Forest Officers authorised by the Government
in certain cases. The essence of the Section lies in the fact that
when forest offence is satisfactorily believed to have been            D
committed in respect of timber, charcoal, firewood and ivory which
is the property of the Government then the authorized officer
may confiscate the property irrespective of the pendency of any
criminal proceedings in this regard. [Para 15] [539-C-D]
      1.3 A perusal of the definition of forest produce, as given      E
by Section 2(f) of the Act, shows that other than timber, charcoal,
firewood it includes wood oil, gum, resin, natural varnish bark,
roots of sandalwood etc. However, the use of the specific words
“timber, charcoal, firewood and ivory” under Section 61A instead
of “any forest produce or ivory” makes it clear that the intention
of the legislature in providing armory under Section 61A is only       F
with regard to certain category specified therein and not for every
forest produce as defined under Section 2(f) of the Act.
Undoubtedly, sandalwood oil is a forest produce but Section 61A
of the Act is limited only to the categories specified therein and
does not give power of confiscation of sandalwood oil. [Para 16]       G
[539-F-G]
      1.4 Section 69 of the Act is only a rule of evidence which
raises a mandatory presumption that a forest produce, unless
proved otherwise, is a property of the government in case where
any proceedings are going on under the Act or anything is done         H
534            SUPREME COURT REPORTS                          [2018] 3 S.C.R.


A     under the Act. The Section operates only as a tool to help the
      government in proving its title to the property but the said Section
      cannot be read as to give any power of confiscation of the property.
      The power of confiscation of sandalwood oil get vested in the
      authorities through Section 61A only after the Kerala Forest
      (Amendment) Act, 2010 when certain specific provisions relating
B
      to Sandalwood were inserted through Chapter VI A and Section
      47H. The instant case being related to the situation prior to the
      time of amendment in 2010 was made, the amended provisions
      do not apply. Hence, the order of confiscation of sandalwood oil
      is liable to be set aside. The High Court erred in upholding the
C     order of confiscation. The order of confiscation is set aside. [Paras
      17, 18, 19] [539-H; 540-A-B; E-G]
            CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1747
      of 2008.
            From the Judgment and Order dated 01.03.2005 of the High Court
D     of Kerala at Ernakulam in WA. No. 1458 of 2004.
           Sanjay R. Hegde, Sr. Adv., Panjal Kishore, A. Raghunath,
      Ms. M. G. Yogamaya, Advs. for the Appellants.
           Pallav Sisodia, Sr. Adv., G. Prakash, Jishnu M. L., Ms. Priyanka
E     Prakash, Ms. Beena Prakash, Vijay Shankar V. L., Advs. for the
      Respondents.
            The Judgment of the Court was delivered by
             R. K. AGRAWAL, J. 1. The present appeal has been filed against
      the impugned judgment and order dated 01.03.2005 passed by the High
F     Court of Kerala at Ernakulum in W.A. No. 1458 of 2004 whereby the
      Division Bench of the High Court dismissed the appeal preferred by the
      appellants-herein while confirming the order of confiscation of sandalwood
      oil which was upheld by learned single Judge of the High Court in O.P.
      No. 15114 of 1998, vide order dated 19.05.2004.
G           2. Brief facts :-
             (a) The appellant-firm is engaged in the business of purchase and
      sale of sandalwood oil. N. A. Abdulrahiman (Appellant No. 2) and N.A.
      Abdulla Haji are partners in the firm and also running a factory at
      Vidyanagar, Kasargod, for the extraction of sandalwood oil. On
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  M/S. STANDARD ESSENTIAL OIL INDUSTRIES v. FOREST                              535
     RANGE OFFICER KASARGOD [R. K. AGRAWAL, J.]

16.04.1993, at about 10:30 P.M., the Kasargod Police conducted a search         A
in the premises bearing door No. C.P. 31/786 called “Rahmith Manzil”
and seized 125kgs of sandalwood oil kept in five barrels and removed
the same to the local police station.
       (b) The above premise also happens to be the residence of the
managing partner of the appellant firm and his family members. The              B
seizure of the oil was reported to the Superintendent, Central Excise,
Kasargod apprehending violation of the Central Excise Rules in removing
the oil from the factory to the residential premises.
       (c) Consequently, the partners of the appellant-firm were served
with show cause notice by the Authorized Officer under the Kerala               C
Forest Act, 1961 (hereinafter referred to as ‘the Act’) proposing to
confiscate 125 kgs of sandalwood oil seized from the aforementioned
residential building.
       (d) The appellants replied to the show cause notice and contended
that the above quantity is the accounted stock of the firm i.e., 75 kgs. of     D
sandalwood oil was manufactured in the factory premise itself as
supported by stock register whereas 50 kgs of sandalwood oil was
purchased from M/s Punjab Aromatic, A.G. Road, Calicut-2 on 15.04.1993
and in support of this claim, invoice of the said purchase was also
produced.
                                                                                E
        (e) It is the case of the appellants herein that this quantity of 125
kgs of sandalwood oil has been removed to the residence of the managing
partner on account of maintenance work carried out in the factory which
is in the adjacent compound. After considering the objections put forward
in reply to the show cause notice, the Divisional Forest Officer, vide
order dated 03.07.1998, ordered confiscation of the 125 kgs of                  F
sandalwood oil.
      (f) The appellants being dissatisfied with the order dated
03.07.1998 filed a writ petition before the High Court bearing OP. No.
15114 of 1998 which came to be dismissed vide order dated 19.05.2004.
                                                                                G
       (g) The appellants, being aggrieved by the order dated 19.05.2004,
preferred an appeal to the Division Bench of the High Court being No.
1458 of 2004. The Division Bench, vide order dated 01.03.2005 upheld
the order of confiscation and dismissed the appeal.

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536            SUPREME COURT REPORTS                          [2018] 3 S.C.R.


A           (h) Consequently, the appellants have filed this appeal by way of
      special leave before this Court.
            3. Heard Shri Sanjay R. Hegde and Shri Pallav Sisodia, learned
      senior counsel for both the parties and perused the relevant material
      placed before us.
B           Point(s) for consideration:-
            4. The issue arises for consideration is as to whether the High
      Court erred in upholding the order of confiscation under Section 61-A of
      the Act and whether confiscation of sandalwood oil can be ordered under
      Section 61A or 69 of the Act?
C           Rival contentions:-
             5. Learned senior counsel appearing for the appellants contended
      that the High Court has misdirected itself in framing the question which
      arises in the present case to the effect that the order of confiscation of
      sandalwood oil passed under Section 61A of the Act is illegal and without
D     jurisdiction. It is further contended that the entire judgment proceeds on
      the basis that the confiscation is made under Section 61A of the Act,
      which is patently and factually incorrect. It is further contended that the
      confiscation has admittedly been made under Section 69 of the Act after
      the Authorized Officer finds that confiscation under Section 61A of the
      Act will not lie and the same was also confirmed by learned single Judge
E
      of the High Court.
             6. Learned senior counsel further contended that the High Court
      erred in upholding the order of confiscation under Section 61A of the
      Act because the said Section authorize the confiscation where Forest
      offence is believed to have been committed in respect of timber, charcoal,
F
      firewood or ivory, which is the property of the Government. The
      Authorized Authority accepted the legal position that sandalwood oil is
      not a commodity included under Section 61A of the Act.
             7. He further contended that the Division Bench of the High Court
      committed a grave error in not appreciating the fact that Section 69 of
G     the Act is only a rule of evidence which facilitates the proceedings under
      the Act and the said Section nowhere gives the power to confiscate.
      Even otherwise, documentary evidence available are sufficient to rebut
      the presumption under Section 69 of the Act and to hold that sandalwood
      oil did not belong to the Central or the State Government and the same is
H     the property of the appellants herein.
  M/S. STANDARD ESSENTIAL OIL INDUSTRIES v. FOREST                              537
     RANGE OFFICER KASARGOD [R. K. AGRAWAL, J.]

       8. Learned senior counsel finally contended that the judgment            A
and order of the High Court being adverse in law, is liable to be set
aside.
      9. Per contra, learned senior counsel appearing on behalf of the
respondents submitted that the High Court has rightly upheld the order
of confiscation under Section 61A of the Act which empowers the                 B
authorized officer to confiscate the property in respect of which a forest
offence is believed to have been committed.
       10 .He further contended that the authorized officer was well
within his powers to order confiscation even under Section 69 of the Act
as Section 69 of the Act enables him to presume that the property belongs       C
to the Government and the appellants have not forwarded any reliable
evidence to support his claim to the seized quantity of the sandalwood oil
and in the absence of any such evidence, the order of confiscation was
well within the parameters of law and should not be disturbed.
       11. Learned senior counsel for the respondents finally submitted         D
that the order and judgment of the Division Bench of the High Court is in
accordance with law and no interference is sought for in this regard.
      Discussion:-
       12. The very first issue that arises for consideration is whether
the judgment and order of the High Court is bad in law for framing a            E
wrong issue and to uphold the order of confiscation under Section 61A
of the Act. The appellants herein contended that the High Court has
misdirected itself in framing the question as to the validity of the order of
confiscation under Section 61A of the Act in the present case when both
the authorities below rejected the idea of order of confiscation under          F
that Section and passed order under Section 69 of the Act only.
      13. To address the said issue, it is worthy to reproduce the operating
para of the decision of the order dated 03.07.1998 by the Divisional
Forest Officer which is as under:-
      “In the light of the decision of the Hon’ble Supreme Court in C.A.        G
      423/93, sandalwood oil will also come within the purview of wood
      oil as per Sec. 2 (F)(1) of Forest Act. Hence sandalwood oil can
      be confiscated under Section 69 of the Forest Act. The accused
      have failed to prove the ownership of the 125 kgs of sandalwood
      oil seized in the above case. Hence, I, K.K. Chandran, the
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538             SUPREME COURT REPORTS                            [2018] 3 S.C.R.


A            Authorized Officer, presume that it is illegally acquired and hence
             ordered for confiscated under Section 69 of the Forest Act.”
      The above order is in itself sufficient to show that the order of confiscation
      is passed under Section 69 of the Act and not under Section 61A. Further,
      a perusal of the order of learned single Judge of the High Court dated
B     19.05.2004 shows that learned single Judge rejected the very idea of
      confiscation of sandalwood oil under Section 61A of the Act and held
      that though the order of confiscation cannot be passed under Section
      61A of the Act but by virtue of Section 69 of the Act, unless a fact to the
      contrary is proved, it can be presumed that the seized property belongs
      to the Government and it enables the Government to possess the same.
C     Having gone through the judgment of the authorities below, it can be
      concluded that the Division Bench has misdirected itself in framing the
      issue and upholding confiscation under Section 61A and, hence, on that
      account, the order is bad in law.
             14. Moving further to the next question, whether in the light of
D     fact and circumstances of the present case, the order of confiscation of
      sandalwood oil can be passed under Section 61A or Section 69 of the
      Act. To appraise the said question, it is appropriate to discuss the contours
      of Section 61A and Section 69. Section 61A states as under:
             “61A. Confiscation by Forest Officers in certain cases -
E            Notwithstanding anything contained in the foregoing provisions of
             this Chapter, where a forest offence is believed to have been
             committed in respect of timber, charcoal, firewood or ivory which
             is the property of the Government, the officer seizing the property
             under sub-section (1) of Section 52 shall, without any unreasonable
F            delay, produce it, together with all tools, ropes, chains, boats,
             vehicles, and cattle used in committing such offence, before an
             officer authorised by the Government in this behalf by notification
             in the Gazette, not being below the rank of an Assistant Conservator
             of Forests (hereinafter referred to as the authorised officer).

G            (2) Where an authorised officer seizes under sub-section (1) of
             Section 52 any timber, charcoal, firewood or ivory which is the
             property of the Government, or where any such property is
             produced before an authorised officer under sub-section (1) of
             this section and he is satisfied that a forest offence has been
             committed in respect of such property, such authorised officer
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  M/S. STANDARD ESSENTIAL OIL INDUSTRIES v. FOREST                               539
     RANGE OFFICER KASARGOD [R. K. AGRAWAL, J.]

       may, whether or not a prosecution is instituted for the commission        A
       of such forest offence, order confiscation of the property so seized
       together with all tools, ropes, chains, boats, vehicles and cattle
       used in committing such offence.
       69. Presumption that timber or forest produce belongs to
       Government.- When, in any proceedings taken under this Act,               B
       or in consequence of anything done under this Act, a question
       arises as to whether any forest produce is the property of the
       Central or State Government, such produce shall be presumed to
       be the property of the Central or State government, as the case
       may be, until the contrary is proved.”
                                                                                 C
       15. Section 61A of the Act was inserted to prevent the illicit
removal of timber, charcoal, firewood and ivory belonging to the
government from the forests. The said provision confers power of
confiscation on Forest Officers authorised by the Government in certain
cases. The essence of the Section lies in the fact that when forest offence
is satisfactorily believed to have been committed in respect of timber,          D
charcoal, firewood and ivory which is the property of the Government
then the authorized officer may confiscate the property irrespective of
the pendency of any criminal proceedings in this regard. The question is
whether the said Section also gives the power to confiscate sandalwood
oil.                                                                             E
        16. A perusal of the definition of forest produce, as given by Section
2(f) of the Act, shows that other than timber, charcoal, firewood it includes
wood oil, gum, resin, natural varnish bark, roots of sandalwood etc.
However, the use of the specific words “timber, charcoal, firewood and
ivory” under Section 61A instead of “any forest produce or ivory” makes          F
it clear that the intention of the legislature in providing armory under
Section 61A is only with regard to certain category specified therein and
not for every forest produce as defined under Section 2(f) of the Act.
Undoubtedly, sandalwood oil is a forest produce but Section 61A of the
Act is limited only to the categories specified therein and does not give
power of confiscation of sandalwood oil.                                         G
       17. Further, we find force in the contention of the appellants that
Section 69 of the Act is only a rule of evidence which raises a mandatory
presumption that a forest produce, unless proved otherwise, is a property
of the government in case where any proceedings are going on under
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540                SUPREME COURT REPORTS                            [2018] 3 S.C.R.


A     the Act or anything is done under the Act. The Section operates only as
      a tool to help the government in proving its title to the property but the
      said Section cannot be read as to give any power of confiscation of the
      property.
             18. The power of confiscation of sandalwood oil get vested in the
B     authorities through Section 61A only after the Kerala Forest
      (Amendment) Act, 2010 when certain specific provisions relating to
      Sandalwood were inserted through Chapter VI A and Section 47H which
      specifically provides as under:
              “47H. Seizure of sandalwood, sandalwood oil etc. and
C             confiscation thereon.—Notwithstanding anything contained in
              any law for the time being in force or in any judgment, decree or
              order of any court, where an offence is believed to have been
              committed in respect of any sandalwood, the sandalwood, the
              sandalwood oil, mill, distilling unit, boiler-plant, tools, ropes, chains,
              boats, vehicles or any other contrivance used in the manufacture
D             or distillation of sandalwood oil, or in the process of sale of
              sandalwood or sandalwood oil shall be liable to be seized under
              section 52 and the provisions contained in sections 61A, 61B, 61C,
              61D, 61E and 61F shall mutatis mutandis apply to the seizure and
              confiscation thereof”.
E                                                      (Emphasis supplied by us)
      The present case being related to the situation prior to the time of
      amendment in 2010 was made, the amended provisions do not apply.
      Hence, the order of confiscation of sandalwood oil is liable to be set
      aside.
F
            19. In view of the above detailed discussion, we are of the
      considered view that the High Court erred in upholding the order of
      confiscation. Accordingly, this appeal is hereby allowed and the order of
      confiscation is set aside. The parties to bear cost on their own.

G
      Nidhi Jain                                                         Appeal allowed.




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