THE GOVERNMENT OF KARNATAKA, BANGALORE AND ANOTHER Vs. THE INDIAN PLYWOOD MANUFACTURING COMPANY LIMITED, DANDELI

JUDGEMENT

(1.) This is the plaintiffs’ regular second appeal against the judgment and decree dated 27-8-2012 passed in R.A. No. 4 of 2009 by the District Judge, Madikeri reversing the judgment and decree dated 30-9-2008 passed in O.S. No. 49 of 2000 by the Civil Judge (Senior Counsel), Madikeri decreeing the suit for recovery' of Rs. 2,88,684.00 with costs of the suit and also the interest at the rate of 9% per annum from the date of the decree till its realisation.

(2.) The appellant-State Government, who is the plaintiff before the Trial Court had filed suit for recovery of Rs. 7,54,222.30 ps., with interest at the rate of 18% per annum from the date of the suit till its realisation against the defendant contending that plaintiff 1 is the Chief Secretary, Vidhana Soudha, Bengaluru and plaintiff 2 is the Deputy Conservator of Forests, Madikeri Division, Madikeri. The defendant is the wood based industry to which the Government of Karnataka supplies raw materials (wood) on the basis of agreement executed by the defendant and the Chief Conservator of Forest, Bengaluru on behalf of the Government of Karnataka. The rates of the materials supplied are fixed by the Government of Karnataka from time to time. By Act 1 of 1981, Sec. 101-A of the Karnataka Forest Act came to be inserted and as per the said section irrespective of agreement of lease or any other document providing supply of timber and other forest produce, the holder of such lease or agreement or any other document shall pay for such supply of timber and other forest produce at the seigniorage value specified in the Rules made or Orders passed by the Competent Authority.

(3.) It is also the case of the plaintiffs that the State Government by a notification dated 19-3-1981 has revised the seigniorage rate of several categories of timber and other forest produces. However, several wood based industries including the defendant made representation to the Government to reconsider the rate structure. Taking into account of such representations, the Government of Karnataka constituted an official committee to go into the question of revision of seigniorage rate and also to advise the Government thereon. In the meanwhile, the industry including the defendant-industry were allowed to remove the forest produce at the previous rates on 23-2-1981 and an undertaking was given by the defendant-industry and other industries to the effect that they will pay the value of the materials removed after 23-2-1981 at the rates finally fixed by the Government.