Commissioner of Income Tax-II vs. The Sind Coop. Urban Bank Ltd.,

M.F.A.(Forest) Nos. 24 & 69 of 2011 4 . out that, but for the reliance placed on Ext.B3, the Tribunal had found that there were no grounds for exemption of the land from the Kerala Forests (Vesting and Management of Ecologically Fragile Lands) Act, 2003 (for brevity, the EFL Act). There was no commission taken out to establish the nature of cultivation as on the appointed day under the EFL Act. The Tribunal placed reliance on the declaration made in an application filed under S.8 of the Kerala Private Forest (Vesting and Assignment) Act, 1971 (for brevity, the Vesting Act); which ought not to have been relied upon. The Tribunal then found that the adjudication under the EFL Act cannot be solely on the basis of the declaration under the Vesting Act. It was found that the scheduled property is situated in a very sensitive ecologically fragile area as revealed from the various averments made in the appeal; but refused to give credence to such claims, due to the said facts having not been substantiated by the respondents. In fact the definition of EFL is very evident from the enactment and there is no question of the respondents adducing evidence to establish the nature of the land. It is the bounden duty of

M.F.A.(Forest) Nos. 24 & 69 of 2011 5 . the applicant to establish exclusion, with proof of the property being principally cultivated with long duration crops or existence of residential buildings with beneficial use of the appurtenant land. 3. The Tribunal's reliance on the factors to be considered by the Advisory Committee constituted under S.15, to make a recommendation for bringing out a notification under S.4, are alien to the present dispute raised; which is not based on a notification under S.4 and is purely founded on the statutory vesting under S.3. The Tribunal having found that the scheduled property is lying contiguous to reserve forest, ought not to have looked at Ext.B3 to grant exemption to bit No.1 and 2. The learned Special Government Pleader also points out that the properties under the Vesting Act were said to be comprised in Sy.No.924/1, while the larger extent on which exemption was sought under the Vesting Act is comprised in various Sy.Nos. The contention is that the properties, which were the subject of dispute under the Vesting Act and the EFL Act are not similar, especially when there were large extents of properties comprised in one Sy.No, the identity of which has also not been clearly

M.F.A.(Forest) Nos. 24 & 69 of 2011 6 . established. 4. Learned Sr. Counsel, Sri. P. Viswanathan objected to the respondent disowning the document they produced before the Tribunal; Ext.B3. It is pointed out that if Ext.B3 report is looked into, it is very clear that there was principal cultivation of coffee in all the bits categorized in Ext.B3 on the basis of the sampling done; which reveals tea planted, interspersed with oil palm. Ext.B3 was copiously read to argue that all the extents referred to in Ext.B3 have to be granted exemption from vesting. It is specifically pointed out that no commission was taken out in the proceedings under the EFL Act, since there was a commission taken out in the application under the Vesting Act, which clearly establishes the lands having remained as a plantation. Even when the proceedings were continuing before the Tribunal constituted under the Vesting Act, the plantation was carried on, which plantation was purchased by the applicants 1 to 3 from the 4th applicant, who purchased it from the applicants under the Vesting Act. It is also pointed out that the property is also excluded from the ceiling limit on

M.F.A.(Forest) Nos. 24 & 69 of 2011 7 . the ground that it is a plantation, under Chapter III of the Land Reforms Act. The applicant was paying plantation tax as is evident from the receipts produced before the Tribunal. The learned Sr. Counsel would seek dismissal of the appeal filed by the State and a declaration to be granted to the entire property scheduled, by allowing the appeal of the applicants. 5. The applicants claimed exemption with respect to 108.90 acres comprised in Sy.No.924/1 of Kulathupuzha Village, which was originally part of an estate called the Rockwood/Shendurney estate, which had a total extent of 486.29 acres. The property which originally belonged to one Murphy Estate, a private company, was purchased by A.W. Leslie in 1946, from which time the area was fully planted with tea. In 1954, the said Leslie executed a settlement deed in favor of his wife and children and there was a subsequent transfer in 1989 to M./s Cross Field Tyres. Then, the above property was obtained by K.T. Joseph and his wife Rani Joseph, from whom the 4th applicant obtained title and possession of the scheduled properties by various sale deeds of the year 1990. The

M.F.A.(Forest) Nos. 24 & 69 of 2011 8 . applicants 1 to 3, in the year 2005, purchased the scheduled lands from the 4th applicant, after which they were in possession and on a notification being published, they approached the Tribunal with the instant application. It was specifically averred that the land was fully planted with tea in closed spacing, inter-planted with oil palm at a spacing of 30-40 feet. The nature of the land was also considered by the Taluk Surveyor, Kottarakkaara in its proceedings dated 5.5.1982 in S.M.P No. 2/82/KKA under the provisions of the Kerala Land Reforms Act and exempted from the ceiling proceedings. O.A.No. 161/1980 was the application filed under S.8 of the Vesting Act with respect to the very same property covered under Sy.No.924/1, which, even prior to 1971 and later, continued as a plantation. The declaration made by the Tribunal under the Vesting Act stood affirmed by this Court and the Supreme Court. After information regarding the notification under the EFL Act, the applicants approached the Custodian with a joint application, which stood rejected. 6. The Tribunal raised two issues; whether the scheduled

M.F.A.(Forest) Nos. 24 & 69 of 2011 9 . property is an ecologically fragile land and whether the impugned notifications are valid. The Tribunal looked into the definition of 'ecologically fragile lands' to rightly find that, exemption from the definition of forest can be only for lands principally cultivated with crops of long duration such as tea etc. It was also found that the burden of proving the land in question to be not a forest, as defined under S.2(c), is squarely on the applicant. Though the title deeds were not produced, the tax certificate and the encumbrance were held, to have proven the ownership of the land, at various periods on the 4th applicant and the applicants 1 to 3; as is required by the definition of 'owner' in the EFL Act. The judgment of the Tribunal under the Vesting Act in O.A.No.161/1980 was specifically noticed and it was observed that the affirmation of the High Court was in 2002, while the notification under the EFL Act was in 2001. An interim order of the High Court in W.P.(C) No.3912/2010, raising serious doubts about the justification of the notification was noticed. It was observed that the applicants have not produced any accounts regarding the agricultural operations carried on

M.F.A.(Forest) Nos. 24 & 69 of 2011 10 . in the property nor was there any mention of such accounts having been maintained by PW1, who was examined on behalf of the applicants. PW2, the power of attorney holder of the 4th applicant also did not testify on the same and merely spoke of 18 workers having been employed by the 4th applicant. It was categorically found that, the deposition of PWs1 and 2 do not establish the cultivation of tea and oil palm in the entire extent of the property throughout the period from 1946, when the various owners were in occupation and on the appointed day. Despite these findings, Ext.B3 alleged to be a report drawn up under Rule 18 of the Kerala Forest (Vesting and Management of Ecologically Fragile Lands) Rules, 2007 was relied on, based on the evidence of RW2 who had been a member of the Committee and spoke of an inspection carried out on 20.8.2000. Despite the applicants having contested the acceptance of Ext.B3; for reason of it being a photocopy and inspection having been carried out without notice to them, the Tribunal chose to accept it. The averments in the written statement regarding the sensitive nature of the entire extent of the lands, in which

M.F.A.(Forest) Nos. 24 & 69 of 2011 11 . is comprised, the entire extent of the scheduled properties, was accepted despite noticing that there is no substantive evidence produced on behalf of the respondents. The distinction is so far as a consideration under S.15 and Rule 18 was emphasized. From Ext.B3, it was found to have indicated the scheduled property being contiguous to reserved forest. The crops of long duration specified in each bit sampled by the Committee under Rule 18, was noticed, to find that bit Nos.3 to 5 have abundant growth of natural vegetation, but bit Nos.1 and 2 are properties on which agricultural operation of tea is maintained even now. This was the reasoning of the impugned order; which demonstrably is erroneous. 7. The Tribunal rightly found exclusion from the definition of 'forest' and that, exclusion of vesting under the EFL Act is possible only if there is principle cultivation of long duration crops or existence of buildings, with requirement of beneficial use of appurtenant lands. The burden to prove the existence of such requirement of exclusion also squarely falls on the applicants under S.10 of the Act. At the outset, it

M.F.A.(Forest) Nos. 24 & 69 of 2011 12 . has to be noticed that the declaration of exclusion or exemption under the Vesting Act is not at all relevant for the consideration of a dispute regarding vesting under the EFL Act. Under the Vesting Act, the exclusion provided is of private forests covered under the MPPF Act, comprised in a total extent of more than 100 acres, within the Malabar district; which are cultivated principally under Clause (A) to (C) of S.2(f) (1)(i) or has a building with beneficial enjoyment of appurtenant lands excluded under Clause (D) of S.2(f)(1)(i). The definition of private forest under S.2(f) for the purpose of Vesting Act, are of three categories. The first, as mentioned above, are governed by the MPPF Act and comprised in total extents of more than 100 acres within the district of Malabar, for which alone the exclusion above referred is applicable. The second category is that under the S.2(f)(1)(ii), which are forests not owned by the Government, on which MPPF Act is not applicable, including waste lands enclosed within wooden areas; within the district of Malabar. The third category are those under S2(f)(2), being private forest or waste lands, including waste lands enclosed

M.F.A.(Forest) Nos. 24 & 69 of 2011 13 . within wooded areas, in the remaining areas of the State of Kerala. 8. The two categories of land on which the MPPF Act does not apply can be saved from vesting only by an exemption under sub clause (2) or (3) of S.3 of the Vesting Act; while such exemption could apply even to the lands in Malabar District, governed by the MPPF Act. Sub- section (2) of S.3 requires proof of personal cultivation by the owner as also proof of the lands held by the owner to be within the ceiling limit under the Kerala Land Reforms Act. As far as sub-section (3) is concerned, the owner should be holding the property under a registered deed, with intention to cultivate the same and his total holdings should be within the ceiling limits of the Kerala Land Reforms Act. Definitely, the principal cultivation as required for an exclusion, or personal cultivation under S.3(2) and an intention to cultivate under S.3(3), for availing an exemption, should be as on the appointed day, i.e., 10.5.1971. Merely because an exemption was declared under the Vesting Act, it does not automatically absolve the property from vesting under the EFL Act, the appointed day of which is 2.6.2000. For excluding

M.F.A.(Forest) Nos. 24 & 69 of 2011 14 . the land from the definition of 'forest', as on the appointed day of the EFL Act, there should be principal cultivation of long duration crops or existence of buildings with requirement of beneficial use. 9. Here we have to pause, to refer to State of Kerala v. Kumari Varma 2011(1) KLT 1008 which trod a different path on distinctive facts coming forth in that case. Therein, the cultivated land was dispossessed on a notification under the Vesting Act being published and despite the declaration by the Tribunal, of exemption for reason of the cultivation as on the appointed day, the lands were not restored to the owners even after the High Court and the Supreme Court affirmed the order of the Tribunal. In fact, under S.8(3)(b), there is a statutory obligation on the Custodian to restore possession of land or portion thereof to the rightful owners on the dismissal of an appeal from the order, declaring a subject land to be not a private forest. In Kumari Varma (supra), the possession continued with the State till the appointed day under the EFL Act. The Government raised a contention that despite the finding of a cultivation as on 1.10.1971, in the intervening period, natural vegetation had

M.F.A.(Forest) Nos. 24 & 69 of 2011 15 . sprouted in such lands bringing it under the ambit of an ecologically fragile land, as defined under the EFL Act. It was held that the object to exclude forests, wherein there is principle cultivation of long duration crops would be frustrated, if the State is allowed to rely on its own wrong of having not complied with the statutory mandate to resume the lands to its owner; despite a declaration of exemption of such land being affirmed by the High Court. Hence, only in such circumstances, the cultivation as on 1.10.1971 has any relevance to the EFL Act. In this context, we also have to notice S.3 of the EFL Act which is a non- obstante clause nullifying the effect of any judgment, decree or order of any Court or Tribunal. Except in a case where the issue is entwined with the question of restoration of possession, the order/judgment under the Vesting Act cannot be of any avail in a proceeding under the EFL Act, in view of the non obstante clause. Hence, the order of a Forest Tribunal under the Vesting Act, except when such distinctive facts are available, has limited relevance in considering the exclusion from the definition of forest under the EFL Act.

M.F.A.(Forest) Nos. 24 & 69 of 2011 16 . 10. Kumari Verma (supra) has no application in the above case since admittedly the owners of the land were never dispossessed by the State. After the proceedings before the Forest Tribunal, Kozhikode ended by Ext.A12 dated 15.2.1992, in 1998, the land was transferred to the 4th applicant. PW2, the power-of-attorney of the 4th applicant asserts that the land was purchased in 1998 after satisfaction of the existence of plantation crops in the said lands. It was in 2002 that this Court dismissed the appeal filed against the order of the Tribunal, as a consequence of the dismissal of the delay condonation sought. The land was purchased by the applicants 1 to 3 in 2005, after which Ext.A9 was filed by applicants 1 to 3 before the Custodian (EFL). Therein, it has been stated that “the above land is Ecologically Fragile Land only on 4.1.2006 and evidently, at the time of notification the petitioners were in absolute title and possession of the land covered under the above notification”. Un-disputedly the owners were never dispossessed of the lands. The reference made to the interim order in W.P.C No.3912/2010 by the Tribunal was unnecessary. Therein, the petitioners were the

M.F.A.(Forest) Nos. 24 & 69 of 2011 17 . applicants 1 to 3 and what was impugned was the order of the Tribunal refusing to permit maintenance work of the estate and to take yield therefrom. The writ petition was allowed, but the State filed an appeal in which there was a stay granted. Subsequently, on 16.8.2010, by an interim order, the Division Bench directed the Tribunal to consider and dispose of the matter expeditiously preferably within a period of 3 months. It was also clearly indicated that the Tribunal shall examine the issue uninfluenced by any observation made in the judgment under appeal. The impugned order in this appeal is the result of such disposal by the Tribunal. It goes without saying that the interim orders passed in the writ petition are of no relevance and could not have been relied on by the Tribunal. 11. Before we deal with the earlier order of the Forest Tribunal, we have to briefly recapitulate the facts of the ownership, which was on the predecessor-in-interest, Rockwood/Shendurney estate at the time of the Vesting Act and when the application under that Act was filed before the Forest Tribunal. The 4th applicant came into the possession

M.F.A.(Forest) Nos. 24 & 69 of 2011 18 . of the 108.90 acres of land, that scheduled in the instant application, on 29.12.1997, and the applicants 1 to 3 purchased it from the 4th applicant on 20.09.2005. Though there are no title deeds produced, as found by the Tribunal, the possession is clear; of the various parties from the documents produced, the tax receipts and the encumbrance certificates. A1 to A3 land tax receipts and thandaper statements are in the name of the 4th applicant, while A4 and A5 land tax receipts are in the name of applicants 1 to 3, and so is A6 receipt issued by the Agricultural Workers Welfare Fund Board to appellants 1 to 3. The encumbrance certificates produced as A17 to 19 also indicates the ownership on the various parties. As far as the application under the Vesting Act is concerned, the same was filed by the Shendurini Estate represented by the authorized persons and it was concluded by order dated 15.2.1992 in O.A.No.161/18. 12. A reading of the order in O.A.No.161/18 would indicate that the scheduled lands were excluded from vesting, since it was a plantation as reported by the Commissioners appointed therein. The

M.F.A.(Forest) Nos. 24 & 69 of 2011 19 . Commissioners, as we see from the order of the Tribunal, produced as Ext.A12, reported that the property was fully planted with tea at regular close spacing and oil palm inter-planted, with wide and regular spacing of 30-40 feet. The age of the tea plants was reported to be 50 years and that of oil palm, 6 years. The tea plants were reported to be bushy in appearance due to regular and repeated pruning, to maximize production of new flush of leaves and to facilitate plucking of leaves. The aforesaid observations of the Commissioners arise from the inspection of the properties on 19.4.1990, and 20.4.1990, as seen from Ext.A12. This establishes the plantation of tea as on the appointed day under the Vesting Act; but not necessarily as on the appointed day under the EFL Act, which falls subsequently. Hence, neither the Commissioner's report filed therein, which has not been produced here, nor the observations in the report taken note of by the Forest Tribunal, in Ext.A12, would be relevant for consideration of exclusion from the definition of 'forest' under the EFL Act. 13. The applicants in the instant dispute contended before the

M.F.A.(Forest) Nos. 24 & 69 of 2011 20 . Tribunal that the notification under the EFL Act was brought out in 2002, when the judgment of the High Court approving the order of the Tribunal was in 2001. According to us, this is not at all material, since, the findings were with respect to the cultivation in the land as on 10.5.1971 and based on the report of the Commissioners on an inspection of the properties in 1990. We also have to notice that Annexure A13 order of the High Court was in a delay condonation application. A Division Bench of this Court, in the said order, found that there was no sufficient ground to condone the delay. However, their Lordships also examined the merits of the case and upheld the order of the Tribunal based on its findings on the exclusion, relying on the commission report filed in that case. The appeal stood dismissed by Ext.A14 as a consequence of A13 order in the I.A. for condonation of delay. The factum of the notification under the EFL Act having been published subsequent to the dismissal of the appeal by this Court, is not at all relevant since the exemption was made in relation to the appointed day under the Vesting Act, 10.05.1971.

M.F.A.(Forest) Nos. 24 & 69 of 2011 21 . 14. The learned Sr. Counsel also argued about an exemption granted by the Taluk Land Board under Chapter III of the Kerala Land Reforms Act. It is pertinent to observe that no such order was produced before the Tribunal or this Court. It is equally pertinent to notice that the said proceedings were allegedly produced as Ext.A7 in the application filed under the Vesting Act; which however has not been referred to in Ext. A12 judgment of the Tribunal. In this context, we have to notice Kunjanam Antony v. State of Kerala [(2003) 3 SCC 221] and State of Kerala v. Popular Estates [(2004) 12 SCC 434] wherein the Hon'ble Supreme Court held that the proceedings of the Taluk Land Board under Chapter III of the Land Reforms Act would only be a piece of evidence before the Forest Tribunal and there cannot be an exemption under the Vesting Act, solely relying on the said proceedings. Even for argument sake, if we reckon the proceedings of the Taluk Land Board, which as we see from Ext.A12; is Ext.A7 produced there, it can only lead to a conclusion of the exemption having been allowed on the ground of the land being a plantation in the year 1982. This may have

M.F.A.(Forest) Nos. 24 & 69 of 2011 22 . some relevance to the proceedings under the Vesting Act in which cultivation has to be proved as on 10.5.1971. This has absolutely no relevance in so far as a vesting under the EFL Act for reason of the appointed day being 2.6.2000, under the EFL Act. As on the appointed day under the EFL Act, the applicant has to prove that the land is principally cultivated with long duration crops or is a plantation, or beneficial enjoyment for a building, which alone can exclude it from the definition of 'forest' under S.2(c) of the EFL Act. 15. From the above reasoning, it is very clear that the proceedings under the Vesting Act has no relevance in the instant case for adjudication of the dispute raised under the EFL Act. At the risk of repetition, what is to be established is the cultivation as on 2.6.2000, the appointed day under the EFL Act. PW1 is the 1st applicant who testified on behalf of applicants 1 to 3. The said applicants came into possession of the property in the year 2005, and they do not have any knowledge of the cultivation carried on in the property as on 2.6.2000. PW2 is the power-of-attorney holder of the 4th applicant who again came into the

M.F.A.(Forest) Nos. 24 & 69 of 2011 23 . picture with the purchase of the 4th applicant in the year 1998. He testified on behalf of the 4th applicant that she had inspected the property and purchased it after ensuring that the property is planted with tea and oil palm. But for the interested testimony, there is no evidence to substantiate such plantation having existed at the time of the purchase by the 4th applicant or on the appointed day, which fell later to the purchase on 1998. It was held in State of Kerala vs. C.J. Alexander (1993 (1) ILR Ker. 731) the interested testimony of an applicant, in the absence of other relevant evidence, can be of no avail. The parties though tied down to their testimony, it cannot be proof of the fact asserted. 16. The learned Senior Counsel referred to plantation tax having been paid along with the land tax as per the receipts produced before the Tribunal. Just as land tax payment does not establish title, the mere payment of plantation tax would not establish the existence of the plantation. In fact, the extent of plantation claimed is not a small area and even according to the applicants, there were other extents

M.F.A.(Forest) Nos. 24 & 69 of 2011 24 . purchased from Shendurini estate. There would definitely have been accounts maintained and agricultural income tax paid for the yield received from the property. Nothing has been produced to establish such agricultural operations having been carried on, in the scale in which a plantation principally cultivated with tea and oil palm would have warranted. 17. Now we come to Ext.B3, which the Tribunal finds, is supported by the evidence of RW2. Before looking at Ext.B3, we have to specifically notice that Ext.B3 is just a photocopy, which is not even properly authenticated. It is just a true copy attested by RW1, who does not say in his chief examination as to how he came across the said document nor does he speak of the same having been obtained from the records maintained in his office. He specifically stated that he was not a part of the team which prepared Ext.B3 report. RW2 was the Working Plant Officer of Punalur, who was a member of the Committee which inspected the property on 20.8.2000, and submitted Ext.B3 report. He testified that Ext.B3 is the report prepared by the Committee and that

M.F.A.(Forest) Nos. 24 & 69 of 2011 25 . all the 5 bits in ExtB3 lies adjacent to reserved forest and has predominant natural growth of trees and vegetation, thus, enabling vesting under S.3(1) of the EFL Act. In cross examination, he denied knowledge about the original, which he deposed he had signed along with the other committee members. 18. Ext.B3 not only is a copy but the type of sampling employed has not been disclosed, which alone would reveal a fair representation of the entire land and the plantation therein having been reckoned. At the outset, it is also to be noticed that the inspection was on 20.8.2000, immediately after the appointed day. As to bit No.1, the extent was 12.1302 hectares in Sy.No.924/1 with reserve forest on the northern boundary. It was specifically stated that the crop in that bit is generally a mixture of secondary vegetation, with scattered oil palm trees planted here and there. Two samples were taken and the vegetation therein recorded, but without the extent of the sample area being specified. The analysis of the details enumerated also indicate negligible number of oil palm trees planted 15-20 years back, which cannot be considered as a

M.F.A.(Forest) Nos. 24 & 69 of 2011 26 . properly maintained estate portion. It was categorically sated that the analysis of vegetation in bit No.1 reveals that it is not used principally for the cultivation of long duration crops and on the contrary, the land is covered with naturally grown trees and undergrowth. As far as bit No.2 is concerned, the extent was 4.10 hectares lying in Sy.No.924/2 with the reserve forest on its southern boundary. The crop pattern and vegetation type of bit No.2 was found to be similar to bit No.1. Therein also, without the extent shown, there were two sample plots taken with enumeration of details of vegetation therein. We fail to understand how the Tribunal came to the finding that Ext.B3 report substantiates the contention of plantation, atleast with respect to bit 1 and bit 2 properties enumerated therein. We also have to notice that bit No.2, in Ext.B3 is said to be lying within Sy.No.924/2, while the property on which exemption claimed and notified in Exts.A8 and A10 are properly lying in Sy.No.924/1. 19. Bit Nos. 3 and 4 lie contiguously and have reserve forest on the northern and southern boundaries. The area is found to be a closed

M.F.A.(Forest) Nos. 24 & 69 of 2011 27 . type of forest having abundant growth of natural regeneration and profuse evergreen crops. The density of natural vegetation was observed to be very high and the canopy was 0.8. The species contained were also forest species trees having girth as enumerated in the sampling table. Bit No.5 also has reserve forest on the southern and eastern boundaries and the vegetation type, its variety, nature and density of the crop, according to Ext.B3 report, proves that it is a natural forest area. The general comments indicate that though there are plantation crops in the actual estate portion of the lands, in the scheduled property there was no plantation crops and only a few oil palm trees were seen. 20. Ext.B3 was not an authenticated report which could have been relied on by the Tribunal and in any event the facts noticed therein, even if accepted, there could have been no exemption granted as we noticed herein above. Admittedly, no Commission was taken out from the Tribunal and there is absolutely no proof as to the notified properties being exempted from the definition of forest on the ground

M.F.A.(Forest) Nos. 24 & 69 of 2011 28 . of principal cultivation of plantation crops, as on the appointed day under the EFL Act. We find no reason to uphold the order of the Tribunal to the extent it granted exemption to bit Nos.1 and 2, placing reliance on Ext.B3, an unauthenticated report. We confirm the findings of the Tribunal with respect to bit Nos.4 and 5. The property scheduled and notified cannot hence be exempted from vesting under the EFL Act. The appeal of the State is allowed and the appeal of the applicants stands rejected. The application filed before the Forest Tribunal stands dismissed. Parties are left to suffer their costs. Sd/- K.VINOD CHANDRAN, JUDGE Sd/- C.JAYACHANDRAN, JUDGE uu