Supreme Court Sets Aside Confiscation of Sandalwood Oil Under Kerala Forest Act: M/s. Standard Essential Oil Industries vs. Forest Range Officer (2018)

Introduction

Date of the Judgment: April 19, 2018

Citation: (2018) INSC 344

Judges: R.K. Agrawal, J., Sanjay Kishan Kaul, J.

Can forest officials confiscate sandalwood oil under the Kerala Forest Act, 1961? The Supreme Court of India recently addressed this question, clarifying the specific circumstances under which forest produce can be confiscated. The case revolves around the interpretation of Sections 61A and 69 of the Kerala Forest Act, 1961, and whether these sections apply to sandalwood oil. The judgment was delivered by a two-judge bench comprising Justice R.K. Agrawal and Justice Sanjay Kishan Kaul, with the opinion authored by Justice R.K. Agrawal.

Case Background

M/s. Standard Essential Oil Industries, a firm engaged in the purchase and sale of sandalwood oil, had its premises searched by the Kasargod Police on April 16, 1993. During the search, 125 kgs of sandalwood oil were seized from a residential building belonging to the firm’s managing partner. The seizure was reported to the Central Excise Department, suspecting a violation of Central Excise Rules. Subsequently, the partners of the firm received a show cause notice from the Authorized Officer under the Kerala Forest Act, 1961, proposing to confiscate the seized sandalwood oil.

The firm contended that 75 kgs of the oil were manufactured in their factory and 50 kgs were purchased from M/s Punjab Aromatic, supported by an invoice. They claimed the oil was moved to the residence due to maintenance work at the factory. However, the Divisional Forest Officer ordered the confiscation of the oil on July 3, 1998. The firm challenged this order through a writ petition in the High Court, which was dismissed on May 19, 2004. An appeal to the Division Bench of the High Court was also dismissed on March 1, 2005, leading to the current appeal before the Supreme Court.

Timeline

Legal Framework

The case primarily revolves around the interpretation of two sections of the Kerala Forest Act, 1961: Section 61A and Section 69.

Section 61A of the Kerala Forest Act, 1961, titled “Confiscation by Forest Officers in certain cases,” states:

“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 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).
(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 may, whether or not a prosecution is instituted for the commission 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.”

This section allows authorized forest officers to confiscate timber, charcoal, firewood, or ivory that belongs to the government if a forest offense is believed to have been committed.

Section 69 of the Kerala Forest Act, 1961, titled “Presumption that timber or forest produce belongs to Government,” states:

“When, in any proceedings taken under this Act, 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.”

This section establishes a presumption that any forest produce is the property of the government unless proven otherwise.

The interplay between these two sections is crucial to the case. While Section 61A provides for confiscation of specific items, Section 69 establishes a presumption of government ownership over forest produce. The court had to determine whether sandalwood oil fell under the ambit of Section 61A and how Section 69 should be applied in the context of confiscation.

Arguments

Appellants’ Arguments:

• The appellants argued that the High Court misdirected itself by framing the issue as whether the confiscation was valid under Section 61A of the Kerala Forest Act, 1961, when the confiscation was actually done under Section 69.
• They contended that Section 61A applies only to timber, charcoal, firewood, or ivory, which are the property of the Government and that sandalwood oil does not fall under these categories. The Authorized Authority also accepted that sandalwood oil is not covered under Section 61A of the Act.
• The appellants argued that Section 69 of the Kerala Forest Act, 1961, is merely a rule of evidence that creates a presumption of government ownership but does not grant the power to confiscate. They also contended that they had sufficient documentary evidence to rebut the presumption under Section 69, proving that the sandalwood oil belonged to them and not the government.

Respondents’ Arguments:

• The respondents argued that the High Court correctly upheld the order of confiscation under Section 61A of the Kerala Forest Act, 1961, which empowers the authorized officer to confiscate property when a forest offense is believed to have been committed.
• They contended that the authorized officer was within his powers to order confiscation under Section 69 of the Kerala Forest Act, 1961, as the appellants failed to provide reliable evidence to support their claim to the sandalwood oil. The respondents argued that in the absence of such evidence, the presumption under Section 69 that the property belongs to the government should prevail.

Issues Framed by the Supreme Court

The Supreme Court framed the following issues for consideration:

1. Whether the High Court erred in upholding the order of confiscation under Section 61A of the Kerala Forest Act, 1961.
2. Whether confiscation of sandalwood oil can be ordered under Section 61A or Section 69 of the Kerala Forest Act, 1961.

Treatment of the Issue by the Court

Authorities

The Court considered the following legal provisions and their interpretations:

• Section 2(f) of the Kerala Forest Act, 1961: Defines “forest produce” to include timber, charcoal, firewood, wood oil, gum, resin, natural varnish, bark, and roots of sandalwood.
• Section 61A of the Kerala Forest Act, 1961: Provides for confiscation of timber, charcoal, firewood, or ivory that belongs to the government.
• Section 69 of the Kerala Forest Act, 1961: Establishes the presumption that forest produce belongs to the government unless proven otherwise.
• Section 47H of the Kerala Forest (Amendment) Act, 2010: Allows for the seizure and confiscation of sandalwood, sandalwood oil, and related equipment.

Judgment

How each authority was viewed by the Court:

• Section 2(f) of the Kerala Forest Act, 1961: The Court acknowledged that while sandalwood oil is a forest produce under this section, it does not extend the scope of Section 61A.
• Section 61A of the Kerala Forest Act, 1961: The Court clarified that this section is limited to timber, charcoal, firewood, and ivory, and does not include sandalwood oil.
• Section 69 of the Kerala Forest Act, 1961: The Court held that this section is a rule of evidence and does not grant the power to confiscate.
• Section 47H of the Kerala Forest (Amendment) Act, 2010: The Court noted that this amendment, which includes sandalwood oil, was not applicable to the case.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by a strict interpretation of the legal provisions, particularly Section 61A of the Kerala Forest Act, 1961. The Court emphasized that the specific wording of Section 61A limits its application to timber, charcoal, firewood, and ivory, explicitly excluding sandalwood oil. The Court also clarified that Section 69 is merely a rule of evidence and does not grant any power of confiscation. The absence of a specific provision to confiscate sandalwood oil before the 2010 amendment was a crucial factor in the Court’s decision.

The Supreme Court’s reasoning was heavily based on the legal interpretation of the statutes. Here is a flowchart illustrating the logical reasoning:

The Court considered alternative interpretations but rejected them because the plain reading of the statute did not allow for the inclusion of sandalwood oil under Section 61A. The court also emphasized that Section 69 cannot be interpreted as a provision for confiscation.

The Supreme Court concluded that the High Court erred in upholding the confiscation order. The Court’s decision was based on the following key reasons:

• Section 61A of the Kerala Forest Act, 1961, specifically lists the items that can be confiscated, and sandalwood oil is not among them.
• Section 69 of the Kerala Forest Act, 1961, is merely a rule of evidence and does not grant the power to confiscate.
• The power to confiscate sandalwood oil was vested in the authorities only after the Kerala Forest (Amendment) Act, 2010, which was not applicable to the present case.

“The essence of the Section lies in the fact that when forest offence is satisfactorily believed to have been 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.”

“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 the Act or anything is done under the Act.”

“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 to Sandalwood were inserted through Chapter VI A and Section 47H.”

Key Takeaways

• The Supreme Court clarified that Section 61A of the Kerala Forest Act, 1961, does not apply to sandalwood oil.
• Section 69 of the Kerala Forest Act, 1961, is a rule of evidence and does not grant the power to confiscate.
• Confiscation of sandalwood oil was not legally permissible under the Kerala Forest Act, 1961, before the 2010 amendment.
• This judgment highlights the importance of strict interpretation of legal provisions and the need for specific legal authority for confiscation.

The judgment has significant implications for future cases involving the confiscation of forest produce. It establishes that authorities must have explicit legal authority to confiscate specific items, and general presumptions of ownership are not sufficient to justify confiscation.

Directions

The Supreme Court set aside the order of confiscation. The parties were directed to bear their own costs.

Development of Law

The ratio decidendi of this case is that the power to confiscate forest produce under the Kerala Forest Act, 1961, is limited to the specific items mentioned in Section 61A, and it does not extend to other forest produce like sandalwood oil. Additionally, Section 69 of the Act is only a rule of evidence and does not grant the power to confiscate. This judgment clarifies the scope of these provisions and sets a precedent for strict interpretation of the law, ensuring that confiscation is only done when explicitly authorized by law.

Conclusion

The Supreme Court’s judgment in M/s. Standard Essential Oil Industries vs. Forest Range Officer clarifies that sandalwood oil cannot be confiscated under Section 61A or Section 69 of the Kerala Forest Act, 1961. The Court emphasized the need for specific legal provisions for confiscation and highlighted that Section 69 is merely a rule of evidence. This decision underscores the importance of strict interpretation of legal provisions and ensures that authorities act within the confines of the law.