STATE OF KERALA AND ANR. versus KANAN DEVAN HILLS PRODUCE CO. LTD.

Citation: [1991] 1 S.C.R. 261 · Decided: 07-02-1991 · Supreme Court of India · Bench: KULDIP SINGH · Disposal: Appeal(s) allowed
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Judgment (excerpt)

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ST ATE OF KERALA AND ANR. 
V. 
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KANAN DEVAN HILLS PRODUCE CO. LTD. 
FEBRUARY 7, 1991 
[KULDIP SINGH AND N.M. KASLIWAL, JJ.] 
Forests: Travancore Cochin Forest Act, 1951-Section 93(2)(d) 
-~(dd) & (e)-Rules regulating.the levy of Kuttikanam on trees in respect 
of Government lands-Kuttzkanam-Govt. share of the value of the 
trees-Ownership over the growth-Held Government has right to levy 
and demand Kuttikanam under the 1951 rules saved by Section 85(3) of 
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the Kera/a Forest Act, 1961. 
The dispute between the parties is regarding the ownership rights 
and right of removal of timber clear-felled from 150 acres of jungle 
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_ ---(' area in Kallar Valley in the erstwhile Travancore territory of Kerala 
State commonly called the Kanan Devan Hills Concession area over 
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which the Poonjar Raja held free-hold proprietary rights under the 
suzerainty of Travancore State. 
By a deed dated July 11, 1877 called the 'First Concession' 
(Exhibit P-1) the Raja conveyed the concession area with all the Hills 
,.~ and Forests to one J .D. Munro for a certain cash consideration and a 
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', deferred perpetual annual payment from 1884 onwards. This was 
followed by another deed (exhibit P-2) between the same parties 
reiterating all the original terms. This grant to Munro was ratified by 
the Travancore Government by a deed dated November 28, 1878 
(Exhibit P-62). Munro in turn assigned the area to the North Travan-
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core Land Planting & Agricultural Society Ltd. Later an agreement was 
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executed between the Travancore Government and the Society in 
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August 1886 (Exhibit P-64). In 1899 the entire territory comprising the 
,...- Kanan Devan Hills including the concession area was declared part of 
Travancore State. After several transfers the concession area finally 
came to be vested in the Respondent Company in virtue of a Deed dated 
July 16, 1900. 
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Somewhere in 1963 the Respondent Company clear-felled about 
150 acres in the concession area for cultivation and sought permission 
from the State Government for grant of free passes to carry the felled 
timber out of the concession area. The Government by order dated 
25.11.1966 informed the company that it could not take out the timber 
261 
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262 
SUPREME COURT REPORTS 
(1991] 1 S.C.R. 
from the concession area without payment of Kuttikanamin terms of 
the deeds of conveyance/ratification. Thereupon the company filed a 
suit against the State pra~ing inter alia for a declaration claiming full 
ownership, title and right to remove the fimber without payment of 
Kuttikanam, a mandatory injunction directing the defendants to grant 
free passes for removal of the timber and a 'prohibitory injunction to 
restrain it from taking any further steps under its order dated 
25.11.1966. On the interpretation of Exhibits P-1, P-2, P-62 and P-64 
the trial court came to the findings that the company did not acquire 
absolute proprietary rights over the concession area or the trees and 
timber. It also held that the Government was jusfitied in demanding 
Kuttikanam in terms of the Rules framed under the Travancore 
Cochin Forest Act, 1951. Accordingly the suit was dismissed. 
The Company preferred an appeal to the High Court which was 
allowed and the decree of the Trial Court set aside. The decision of the 
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High Court has been challenged by the State in this appeal by way of 
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.....,... 
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special leave. This court while allowing the appeal and setting aside the 
judgment of the High Court, 
HE~D: The respondent-company did not acquire absolute pro-
prietary rights over the Concession Area or the trees and the timber 
therein. The company only acquired the right to fell the trees and use 
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the timber subject to the restrictions imposed in clause 7 of the agree- r-· 
_ ment Exhibit P-64. Since the respondent-company has no right to 
remove the timber beyond the limits of the Concession Area, the State 
Government was justified in refusing to permit free transportation of 
timber from the said area. [269C] 
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Clause 7 states that no unworked timber or articles manufactured 
therefrom shall be carried outside the limits of the grant except in 
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conformity with the rules of the forest department for the time being in - ""'f" 
force. [270D] 
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The Government of Kerala, in exercise of its rule making power 
under Section 93 of the Travancore-Cochin Forest Act, 1951 had by a 
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notification dated July 9, 1958 framed rules regulating the levy ofKu
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