TaxTMI 
TaxTMI 
2004 (9) TMI 664
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....s granted subject inter alia to the Company making payment of royalty in respect of the sold trees at fixed percentage to the appellant. The initial period of the lease was subsequently extended. According to the appellant the Company had failed to make payment of royalty in terms of the lease agreement and a large amount of money amounting to over Rs. 39,56,407 was payable by the Company to the appellant. The Company was admittedly in financial difficulties and had a large number of creditors who had initiated proceedings against it during the pendency of the lease period. Without going into the facts in greater detail it is sufficient for the purpose of this appeal, to record that an arrangement was entered into between the Conservator of....
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....e Company to the appellant and generally for other consequential losses. The defence of the appellant was, inter alia, a denial of liability to pay any loss, a counter claim for an amount of Rs. 21,26,049 calculated up to 31-3-1975, a denial that the appellant or the Forest Department had taken over control of the Company or any of its assets and an assertion that the timber found lying in the leased area had been duly auctioned and whatever money has been recovered in this behalf has been credited and adjusted against the outstanding dues of the Company. The financial institutions also filed a written statement opposing the claimant's claim but it is not necessary to set out the same in connection with the present appeal. 3. The ....
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....of the appellant returning the machinery to the Company. 5. Before us the appellant has basically raised two issues: (i) That the arrangement on the basis of which it was pleaded by the Company, the machinery had been allegedly taken up by the appellant, was hit by the provisions of S.122 of the Constitution of Jammu and Kashmir. Reliance has been placed on an earlier decision of this Court, in relation to the same arrangement, being order dated 22-4-2004, in State of J&K v. UCO Bank, 2005 (10) SCC 331 (ii) That the decree for Rs. 8,50,000 had been erroneously passed in favour of the Company. 6. Learned counsel appearing on behalf of the Company has submitted that S.122 of the Jammu and Kashmir Constitution (which materially rep....
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....ed to be an agreement and if so whether such an agreement could be held to be valid in view of S.122 of the Jammu and Kashmir Constitution. The question was answered in the negative. Since the Company does not base its claim on the arrangement, the decision in UCO Bank (2005 (10) SCC 331) does not affect the Company's claim as framed in CP No. 35 of 1975. The first submission of the appellant is accordingly rejected. 7. However as far as the second submission is concerned the appellant must succeed. The learned Single Judge has relied solely upon the uncorroborated statement made in the deposition of the Company's witnesses without considering whether there was any document to establish either that the machinery as claimed ....
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....tion. Learned counsel appearing for the Company, however, has submitted that there was documentary evidence on record which would show that the State Government had indeed taken over possession of the machinery and that the machinery was not returned to the Company even after termination of the agreement of lease. We are not prepared to sift through the evidence in support of the Company's contention. Suffice it to say that the reasoning of the High Court in the impugned order is unacceptable. What should have been established has been taken as proved on the basis of conjecture. 9. However , having regard to the submissions made by the learned counsel appearing on behalf of the Company that there was sufficient evidence on record,....