STATE OF J&K Vs. GOODWILL FOREST LESSEES

JUDGEMENT

(1.) THESE two appeals under the Letters Patent are directed against the decision of Bhat J. sitting singly deciding two applications under S. 20 of the Arbitration Act, one .filed by the Goodwill Forest Co. and the other by Messers Farida Timber Co. by his order dated 9 -12 -71, the learned Judge dismissed both the applications filed by the respondents before him for making a reference of the dispute to the arbitrator. As the facts of the two cases were more or less identical, the learned judge disposed of both these applications by one common judgment and we also propose to decide the appeals by one judgment.

(2.) THE facts giving rise to the two appeals may be summarized as follows. In the year 1964 the Conservator of forests Jammu Circle invited tenders for leasing out compartments of various forests. In response to the Notification issued by the Conservator the respondents. Goodwill Forest Co. and Farida Timber Co. submitted the tenders. Goodwill Forest Co. submitted its tender for compartments No. 7 and 8 (a) of the Regeneration Deodar Kail working Circle, Dudu Range and the Farida Timber Co. submitted its tender for compartment No. 292 in Mendhar Range, Poonch Division. The tenders of both the respondents were accepted by the Government. In the case of Goodwill Forest Co. the royalty was Rs. 23,00,101.00 and in the case of Farida Timber Co. the royalty was Rs. 14,11,111.11 In consequence of the acceptance of the tender an agreement was executed between the respondent,Goodwill Forest Co. and the Government on 15 -5 -64 and between the Government and Farida Timber Co. on 19 -5 -64. These two agreements appear to have been signed by the Conservator of Forests Jammu Circle on behalf of the Sadar -i -Riyasat (as he then was). It appears that the lessees began to work out the leases, but a large number of disputes arose during the course of the leases which culminated in the filing of the applications by the respondents under S. 20 of the Arbitration Act before the learned Single Judge. We might further mention here that under cl. (44) of the agreement, the arbitration clause clearly provided that in case of dispute the matter will be referred to arbitration as provided in the agreement. In pursuance of the arbitration clause the two respondents filed applications under S. 20 of the Arbitration Act. Notices were issued on these applications and the appellants appeared to file their objections. Before the applications could be heard on merits, the respondents filed additional applications praying that the applications under S. 20 may be dismissed because the agreements were void as they were not executed in accordance with the provisions of S. 122 (1) of the State Constitution. The Goodwill Forest Co. had filed the additional application on 21 -5 -71 whereas the Farida Timber Co. filed the application on 27 -4 -71. The appellants were asked to file their objections on the two amended applications and after considering the same, the learned judge accepted the contention of the respondents and held that the agreements being void, the arbitration clause also fell with the agreements and therefore no application under S. 20 of the Arbitration Act was maintainable.

(3.) THE two appeals were heard by a Division Bench of this court, but as the learned counsel for the" respondents wanted to challenge the correctness of a Division Bench decision of this court in Con. of Forests V. M/S Kashmir Timber, 1972 J&K IR III 549 which was the sheet anchor of the argument of the appellants, the cases were referred to a Full Bench and that is how the matter has come up before us.