M/S P.M.GRANITE EXPORT PRIVATE LIMITED, BANGALORE vs STATE OF ODISHA
- Court
- Odisha High Court
WP(C)/23283/2025
ODHC010585622025
2026:OHC:264
IN THE HIGH COURT OF ORISSA AT CUTTACK
W.P.(C) No.23283 of 2025
CNR No- ODHC010585622025
(In the matter of an application under Articles 226 and 227 of the
Constitution of India, 1950).
M/S P. M. Granite Export Private
Limited, Bangalore
…. Petitioner (s)
-versus-
State of Odisha & Ors. …. Opposite Party (s)
Advocates appeared in the case through Hybrid Mode :
For Petitioner (s) : Mr. Sarada Prasanna Sarangi, Adv.
Mr. Arnav Behera, Adv.
Along with Mr. V. Mahapatra, Adv.
For Opposite Party (s) : Mr. Manoj Ku. Pati (Sr. P.C.),
Mr. P.P. Behera, ASC.
CORAM:
HON’BLE DR. JUSTICE SANJEEB K PANIGRAHI
DATE OF HEARING:-24.08.2026
DATE OF JUDGMENT:-30.10.2026
Dr. Sanjeeb K Panigrahi, J.
1. The Petitioner, in this Writ Petition, challenges the inaction of the
Opposite Party No.2/ Principal Chief Conservator of Forests,
Department of Forest, Environment and Climate Change, Government
of Odisha withholding the additional amount of Rs.1,99,64,250/-
(Rupees One Crore Ninety-Nine Lakhs Sixty-Four Thousand Two
Hundred and Fifty only) paid by the Petitioner towards compensatory
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Signed by: BHABAGRAHI JHANKAR
Designation: AR-CUM-SR. SECRETARY
Reason: Authentication
Location: ORISSA HIGH COURT, CUTTACK
Date: 03-Nov-2026 18:29:09
afforestation and other compensatory dues with respect to its Kanther-
Koira Manganese Ore Block. The Petitioner challenges such inaction of
the Opposite Party No.2 is without jurisdiction or authority of law, in
violation of guidelines issued by Ministry of Environment, Forest and
Climate Change, Government of India and against the fundamental
rights of the Petitioner under Articles 14,19(l)(g), 265 and 300-A of the
Constitution of India.
I. F ACTUAL M ATRIX OF THE C ASE :
2. The brief facts of the case are as follows:
(i) The Petitioner is the successful auction lessee of the Kanther-
Koira Manganese Ore Block admeasuring 73.301 Ha situated in
village Kanthar-Koira under Koira Tahasil, in the district of
Sundargarh. The Mining Lease Deed was executed in favour of
the Petitioner on 02.07.2020 .
(ii) The Ministry of Environment, Forest and Climate Change,
Government of India (“MoEF&CC”) vide F. No.11-97/2018-FC
dated 31.03.2020 issued Guidelines for transfer of forest clearance to
new lessees from the previous lessee . Under the said Guideline,
the State Government was required to realize a lump sum amount
at the rate of ₹ 7.50 lakh per ha (for the total forest area within the
mining lease) from the new lessee towards approval for transfer of
forest clearance .
(iii) In terms thereof, the Divisional Forest Officer, Bonai vide letter
No.3957/6F-(Mg.) dated 08.04.2020 called upon the Petitioner to
deposit Rs.2,66,15,250/- towards Net Present Value (“NPV”) over
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Signed by: BHABAGRAHI JHANKAR
Designation: AR-CUM-SR. SECRETARY
Reason: Authentication
Location: ORISSA HIGH COURT, CUTTACK
Date: 03-Nov-2026 18:29:09
35.487 Ha of forest land within the Mine area @ Rs.7.50 lakh per
Ha, recording that such amount shall be deposited with the
account of Compensatory Afforestation Fund towards transfer of
forest clearance.
(iv) Accordingly, the Petitioner deposited the entire sum of
Rs.2,66,15,250/- on 26.06.2020 in ORISSA CAMPA Account
No.150825851500514 vide UTR No.SBIN220178882941.
(v) The said deposit was, therefore, never a levy or a payment of
dues, but a lumpsum paid in advance and expressly held subject
to adjustment against such compensatory levies as might
ultimately be determined as payable.
(vi) In the meantime, Section 8B of the MMDR Act, 1957 was further
amended on 28.03.2021 by the Mines and Minerals (Development
and Regulation) Amendment Act, 2021, whereby all statutory
clearances of the previous lessee stood vested in the new lessee
and no fresh clearance was required to be obtained.
(vii) Thereafter, the MoEF&CC vide F.No. FC-11/112/2020-FC(Pt)
dated 07.07.2021 issued fresh Guidelines under which the forest
clearance of the old lessee is transferred to the new lessee, and the
new lessee is liable to pay (i) NPV, (ii) Safety Zone Plantation and
(iii) Compensatory Afforestation (“CA”) only if such dues have not
already been paid by the previous lessee .
(viii) Since the Previous Lessee had paid approximately Rs.2.43 crores
towards NPV and CA dues, the demand on the Petitioner for
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Signed by: BHABAGRAHI JHANKAR
Designation: AR-CUM-SR. SECRETARY
Reason: Authentication
Location: ORISSA HIGH COURT, CUTTACK
Date: 03-Nov-2026 18:29:09
transfer of the forest clearance was only Rs.66,51,000/- for balance
amount.
(ix) The sum of Rs.66,51,000/- was, accordingly, adjusted against the
sum of Rs.2,66,15,250/- already deposited by the Petitioner on
26.06.2020, leaving a balance of Rs.1,99,64,250/- in excess.
(x) The Petitioner preferred successive representations to the
Opposite Party No.2 seeking refund of the said balance, namely
letter No.PMGEPL/KK/1122/2023-24 dated 03.08.2023, letter No.
PMGEPL/KK/1590/2024-25 dated 06.08.2024 and letter No.
PMGEPL/KK/00048/2025-26 dated 26.05.2025 but to no avail.
(xi) Hence, the present Writ Petition has been preferred by the
Petitioner seeking refund of Rs.1,99,64,250/- along with interest at
18% p.a. thereon.
II. S UBMISSIONS O N B EHALF O F T HE P ETITIONER :
3. The learned counsel for the Petitioner earnestly made the following
submissions in support of his contentions:
(i) During the course of hearing, the learned counsel for the State
admitted that the Petitioner is entitled to refund of
Rs.1,99,64,250/- and sought time to effect the refund. This Court
vide order dated 15.10.2025 was pleased to direct as follows:
“2. Learned counsel for the State seeks two weeks time to
refund the amount pending before the Department.
3. Learned counsel for the State is directed to take
instruction regarding the interest compounding
which is liable to be paid by the Department .”
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Signed by: BHABAGRAHI JHANKAR
Designation: AR-CUM-SR. SECRETARY
Reason: Authentication
Location: ORISSA HIGH COURT, CUTTACK
Date: 03-Nov-2026 18:29:09
(ii) Further, on 06.11.2025, this Court vide order dated 06.11.2025
recorded and directed:
“3. Learned counsel for the State, on instruction, submits
that the Petitioner had deposited a lumpsum amount in the
account of the National CAMPA under the Government
of India, MoEF & CC, New Delhi (arrayed as Opposite
Party No.5 in the Writ Petition). The amount deposited by
the Petitioner would be adjusted for compensatory levies
payable in future and it is applicable for all new lessee in
case of transfer of FC as per guideline dated 31.03.2020 of
Government of India, MoEF & CC, New Delhi…
4. In such view of the matter, the Opposite Party
No.5/Secretary, Ministry of Environment, Forest and
Climate Change, Government of India is directed to
refund/adjust of the compensated amount and file
reply within two weeks from today.”
(iii) Pursuant to the order dated 06.11.2025, by Memo No.
702/6F(Mg.) dated 13.01.2026, addressed to the Regional Chief
Conservator of Forests, Rourkela Circle, the Divisional Forest
Officer, Bonai recorded that the Petitioner has already deposited
Rs.2,66,15,250/- in ORISSA CAMPA Account No.
150825851500514 vide UTR No. SBIN220178882941 dated
26.06.2020, the Compensatory Afforestation Scheme over 16.592
Ha stands approved for Rs.66,51,000/- vide Memo No. 9226
dated 12.05.2023 and the said sum of Rs.66,51,000/- may be
adjusted from the lumpsum amount already deposited.
Paragraph 5 of the said Memo sets out the position of the Union
of India in terms:
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Signed by: BHABAGRAHI JHANKAR
Designation: AR-CUM-SR. SECRETARY
Reason: Authentication
Location: ORISSA HIGH COURT, CUTTACK
Date: 03-Nov-2026 18:29:09
“And whereas, MoEF & CC, GoI vide the F.No. 8-
17/2001-FC (Vol) dated 11.11.2022 has clarified that the
issue related to adjustment to NPV is purely an
administrative matter & the Ministry in its guideline
dated 31.03.2020 & subsequent clarification dated
12.10.2021 has already clarified that such adjustment
can be undertaken at the State Govt. level. ”
(emphasis supplied)
(iv) The Union of India has thus admitted that no further amount is
payable to it and no further approval, concurrence, clarification
or action on its part is required to enable the refund. The
adjustment of the NPV is “purely an administrative matter” which
“can be undertaken at the State Govt. level”.
(v) The State Government has admitted the right of the Petitioner to
refund, as recorded in the orders of this Court dated 15.10.2025
and 06.11.2025, and as reinforced by the Memos dated 13.01.2026
of its own Divisional Forest Officer, Bonai.
(vi) The Petitioner has been deprived of Rs.1,99,64,250/- of its own
money since 26.06.2020, a period of over six years, during which
the Opposite Parties have had the use and benefit thereof in
interest bearing CAMPA account, unjustly enriching themselves.
(vii) Hence, the Writ Petition deserves to be allowed and the
Opposite Parties may be directed to refund Rs.1,99,64,250/-
along with interest at 18% p.a. thereon from 26.06.2020 till the
date of actual payment.
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Signed by: BHABAGRAHI JHANKAR
Designation: AR-CUM-SR. SECRETARY
Reason: Authentication
Location: ORISSA HIGH COURT, CUTTACK
Date: 03-Nov-2026 18:29:09
(viii) Further, it is contended that the CAMPA funds maintained by
the Central Government and the State Government under
Sections 3 and 4 of the Compensatory Afforestation Fund Act,
2016 are interest-bearing and earn interest at the rate declared by
the Central Government from year to year. Accordingly, without
prejudice to the Petitioner’s claim for interest at the rate of 18%
per annum, the Petitioner is, at the very least, entitled to the
interest actually earned on the excess amount of Rs.1,99,64,250/-
which has been arbitrarily and unlawfully withheld in the
CAMPA Fund by the State authorities.
(ix) In fact, grant of such interest would cause no loss or financial
prejudice to the Government, as the amount represents interest
already accrued on the Petitioner’s own funds while the same
remained deposited with and held under the CAMPA funds.
(x) It is settled law that for non-payment of admitted dues, a Writ
Petition may lie. In this case, the liability is admitted by both the
State Government and the Union of India and stands crystallized
in M/S Utkal Highways Engineers and Contractors v. Chief
1 2
General Manager & Ors. , Vikram Cement v. State of M.P . , U.P.
3
Pollution Control Board v. Kanoria Industrial Ltd . and
4
Maheswar Behera v. State of Odisha .
1
Order dated 08.01.2025 of the Hon’ble Supreme Court of India in Special Leave
Petition (C) No.14350/2022)
2
(2015) 11 SCC 708
3
(2001) 2 SCC 549
4
(Judgment dated 03.12.2025 of the Hon’ble High Court of Orissa in W.P.(C) No.
32436 of 2024)
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Signed by: BHABAGRAHI JHANKAR
Designation: AR-CUM-SR. SECRETARY
Reason: Authentication
Location: ORISSA HIGH COURT, CUTTACK
Date: 03-Nov-2026 18:29:09
(xi) It is further submitted that the Petitioner has been deprived of
the use of money to which it is legitimately entitled as the State
authorities have benefited from keeping the rightful dues of the
Petitioner in an interest-bearing CAMPA fund and denying
refund thereof. Thus, the same has to be compensated by way of
interest. Reliance has been placed in Poornima Advani v. State
5
(NCT of Delhi) , M/s Pratistha Engineering Ltd., Bhubaneswar
6
v. State of Odisha and Ors. , State of Haryana v. Jai Durgaa
7 8
Finvest P. Ltd. and Nirmal Sahoo v. State of Odisha .
(xii) Further, it is contended that the CAMPA funds maintained by
the Central Government and the State Government under
Sections 3 and 4 of the Compensatory Afforestation Fund Act,
2016 are interest-bearing and earn interest at the rate declared by
the Central Government from year to year. Accordingly, without
prejudice to the Petitioner’s claim for interest at the rate of 18%
per annum, the Petitioner is, at the very least, entitled to the
interest actually earned on the excess amount of Rs.1,99,64,250/-
which has been arbitrarily and unlawfully withheld in the
CAMPA Fund by the State authorities.
(xiii) In fact, grant of such interest would cause no loss or financial
prejudice to the Government, as the amount represents interest
5
(2025) 7 SCC 269
6
(Judgment dated 20.06.2025 of the Hon’ble High Court of Orissa in W.P.(C) No.
6634 of 2023),
7
2026 SCC OnLine SC 1323
8
(Judgment dated 13.01.2026 of the Hon’ble High Court of Orissa in W.P.(C) No.
31333 of 2025),
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Signed by: BHABAGRAHI JHANKAR
Designation: AR-CUM-SR. SECRETARY
Reason: Authentication
Location: ORISSA HIGH COURT, CUTTACK
Date: 03-Nov-2026 18:29:09
already accrued on the Petitioner’s own funds while the same
remained deposited with and held under the CAMPA funds.
(xiv) In such premises, it is prayed that this Court may direct the
Opposite Parties to refund Rs.1,99,64,250/- to the Petitioner
within a time-bound period, together with interest at 18% p.a.
from 26.06.2020 till the date of actual payment.
III. SUBMISSIONS ON BEHALF OF THE OPPOSITE PARTY NOS.2
AND 3:
4. Learned Counsel for the Opposite Party Nos.2 and 3 made the
following submissions in support of his contentions:
(i) It is submitted that previously M/s Rungta Mines Ltd. (Previous
Lessee) had been granted the mining lease for Kanther-Koira
Manganese Mines over 73.653 hectares in village Kanther-Koira
under Koira Tahasil of Sundargarh District.
(ii) It is further submitted that the application for transfer of Forest
Clearance approval granted under the Forest (Conservation) Act,
1980 for mining lease from old lessee (M/s Rungta Mines Ltd.)
under Bonai Forest Division as per Guideline issued vide Letter
File No.FC-11/112/2020-FC (Pt) dated 07.07.2021 of the MoEF &
CC, Government of India has been accorded by the State
Government vide Letter No.FE-DIV-FLD-0074-2022-18281/ FE &
CC dated 28.08.2023 subject to fulfilment of 9 (nine) nos. of
conditions.
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Signed by: BHABAGRAHI JHANKAR
Designation: AR-CUM-SR. SECRETARY
Reason: Authentication
Location: ORISSA HIGH COURT, CUTTACK
Date: 03-Nov-2026 18:29:09
(iii) The specific Condition No.(viii) of the above Letter dated
28.03.2023 of the State Government, stating “the new lessee shall
submit fresh diversion proposal for the balance forest area of 0.22 ha.
(34.488 ha. (-) 34.268 ha) for seeking approval under Section-2 (ii) of
FC Act,1980” . The new lessee has not yet applied for diversion of
0.22 ha. of balance forest area till date. The new lessee (Petitioner)
required to be paid, if any, for compensatory levies in connection
with the said proposed diversion area of 0.22 ha. of forest land
and proposed compensatory levies is to be adjusted from the said
balance due of Rs.1,99,64,250/- in future.
(iv) Accordingly, the Petitioner (M/s P.M. Granite Expert Private
Limited) has been requested vide Letter No.8816 dated 17.11.2023
of the Divisional Forest Officer, Bonai Division to comply the
conditions quoted in the said Letter dated 28.08.2023 of the Forest
Environment and Climate Change (FE&CC) Department,
Government of Odisha and submit point-wise compliance. The
compliance of the Petitioner has not yet been received.
(v) The lump sum amount deposited by the petitioner would be
adjusted for compensatory levies payable in future and it is
applicable for all new lessee in case transfer of Forest Clearance
as per guideline dated 31.3.2020 of Government of India, MoEF &
CC. New Delhi. Moreover, the petitioner has deposited the lump
sum amount in account of National CAMPA under the
Government of India, MoEF & CC, New Delhi, arrayed as
Opposite Party No. 5 to the Writ Petition.
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Signed by: BHABAGRAHI JHANKAR
Designation: AR-CUM-SR. SECRETARY
Reason: Authentication
Location: ORISSA HIGH COURT, CUTTACK
Date: 03-Nov-2026 18:29:09
(vi) Hence, the Opposite Party No.5 is the competent authority to
refund/adjust the deposited amount.
(vii) In view of the aforesaid facts and submission, the Writ Petition
has no merit and is liable to be dismissed.
IV. SUBMISSIONS ON BEHALF OF THE OPPOSITE PARTY NO.5:
5. Learned Counsel for the Opposite Party No.5 made the following
submissions in support of his contentions:
(i) It is submitted that the ‘land’ is a subject matter of State
Government. The forest areas and the legal boundaries thereof
are determined and maintained by the concerned State
Government. That being the repository of land records, State
Government has the primary responsibility to determine status of
any parcel of land, giving due regards to gazettee notifications,
provisions under State and Central Acts and concerned
judgments and directions of the Hon’ble Supreme Court.
(ii) It is also submitted that prior approval of the Central Government
under Section 2 of the Van (Sanrakshan Evam Samvardhan)
Adhiniyam, 1980 (previously known as Forest (Conservation)
Act, 1980) is required for carrying out any non-forestry activity
on forest land. Contravention to the aforesaid provisions would
attract the penal provisions of 3A and 3B of the Van (Sanrakshan
Evam Samvardhan) Adhiniyam 1980.
(iii) It is further submitted that the Government of Odisha vide its
letter dated 23.08.2023 granted transfer of FC Approval under the
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Designation: AR-CUM-SR. SECRETARY
Reason: Authentication
Location: ORISSA HIGH COURT, CUTTACK
Date: 03-Nov-2026 18:29:09
Van (Sanrakshan Evam Samvardhan) Adhiniyam 1980 with nine
conditions from old lessee M/s Rungta Mines Ltd. to new lessee
M/s P.M. Granite Exports Pvt. Ltd.
(iv) It is also contended that PCCF Hoff, Government of Odisha vide
its letter dated 25.10.2025 sought clarification regarding the
refund of balance amount of Rs.1,99,64,250/- along with interest
at 18 % P.A. thereof to the petitioner. The State Government in
the aforesaid letter has stated as follows:
“the condition (viii) of the order dated 28.08.2023
states that “The new lessee shall submit fresh diversion
proposal for the balance forest area of 0.22 ha (34.488
ha- 34.268 ha) for seeking approval under Section 2 (ii)
of FC Act, 1980”.
It is worth mentioning that the new lessee has
neither submitted the compliance to the
conditions of letter No.18281 dated 28.08.2023 of
Government of Odisha, FE & CC Department nor
submitted fresh diversion proposal for diversion
of balance area of 0.22 ha (as per condition viii)
as yet.”
(v) It is submitted that the aforesaid letter dated 25.10.2025 of the
State Government was examined in the Ministry vide its letter
dated 19.12.2025 sought additional information from the State
Government to bring clarity in the matter. The response as and
when received from the State Government will be examined in
light of the provisions of the Van (Sanrakshan Evam
Samvardhan) Adhiniyam 1980.
(vi) Furthermore, with regard to the refund of interest, it is contended
that the Ministry vide guidelines dated 20.07.2022 clarified that
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Designation: AR-CUM-SR. SECRETARY
Reason: Authentication
Location: ORISSA HIGH COURT, CUTTACK
Date: 03-Nov-2026 18:29:09
“ interest accrued on the compensatory levies realized from the user
agency in lieu of diversion of forest shall not be refunded in any case ”.
(vii) In view of the aforesaid facts, the Opposite Party No.5 prayed that
this Court may pass appropriate order as deemed fit in the
interest of justice.
OURT S EASONING AND NALYSIS
V. C ’ R A :
6. Heard learned counsel for the parties and perused the materials
available on record.
7. A sum of money may enter the State treasury under the authority of law,
yet the right to retain every rupee of it does not necessarily travel with it.
The power to collect is conditioned by the purpose for which collection is
authorized, the right to retain cannot exceed the legal foundation upon
which the collection rests. It is this relationship between public power,
fiscal accountability and the constitutional protection of property that lies
at the heart of the present controversy. The distinction between receipt
and rightful retention is the core point of dispute in the present case. What
then, in the eye of the law, was the sum of Rs.2,66,15,250/- deposited by
the Petitioner on 26.06.2020? The answer is decisive, for the character of
the payment determines the limits of the State’s authority over it. The
amount was neither a tax imposed by statute nor a fee exacted for a service
rendered. Nor was it a compensatory levy based on a liability already
ascertained. Calculated at the rate of Rs.7.50 lakh per hectare under the
MoEF&CC Guideline dated 31.03.2020, it was deposited in the ORISSA
CAMPA Account No.150825851500514 as a condition precedent to the
transfer of forest clearance from the previous lessee. More tellingly,
Opposite Party Nos.2 and 3 themselves describe it as an amount to be
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Signed by: BHABAGRAHI JHANKAR
Designation: AR-CUM-SR. SECRETARY
Reason: Authentication
Location: ORISSA HIGH COURT, CUTTACK
Date: 03-Nov-2026 18:29:09
adjusted against compensatory levies payable in future. That admission
reveals the true nature of the transaction. The money was paid in
anticipation of a liability, not in discharge of something finally
determined. It was an advance awaiting adjustment, not a concluded
exaction. The State’s authority to appropriate what was lawfully due
could not, by any legal alchemy, mature into an unrestricted right to retain
what was never found payable.
8. The said admission illuminates the true nature of the transaction. The
money was paid in anticipation of a liability, not in satisfaction of
something that is finally determined. It was an advance held for a defined
purpose, its ultimate destination depending upon the liability that would
emerge when the accounts were settled. The State was entitled to retain
what was lawfully found to be due. It was never entitled to convert the
provisional deposit into an indefeasible acquisition of the whole amount.
9. An advance is not a windfall to the holder. It carries an obligation to
account. When the liability is ascertained, the amount due may be
appropriated and the surplus must return to its owner. The purpose
determines the right of retention; the extinction of that purpose
extinguishes the right to retain beyond what remains lawfully payable.
10. Article 300-A is not an ornamental assurance in the constitutional text. It
is a restraint upon the coercive power of the State which prescribes that
the Property cannot be taken or retained without authority of law. The
State may collect what the law commands, but cannot keep what the law
does not permit. The question before this Court is, therefore, not whether
the original deposit was lawful, but whether the continued retention of it.
The legal position changed between 2020 and 2023. The Mines and
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Signed by: BHABAGRAHI JHANKAR
Designation: AR-CUM-SR. SECRETARY
Reason: Authentication
Location: ORISSA HIGH COURT, CUTTACK
Date: 03-Nov-2026 18:29:09
Minerals (Development and Regulation) Amendment Act, 2021, with
effect from 28.03.2021, recast Section 8B so that statutory clearances of the
previous lessee could vest in the successor lessee. The MoEF & CC
Guideline dated 07.07.2021 gave effect to that legislative change. It
confined the liability of the incoming lessee towards Net Present Value,
Safety Zone Plantation and Compensatory Afforestation to the extent that
the previous lessee had not already discharged those obligations. The
provisional, flat-rate computation of 2020 thus yielded to a more exact
determination of the outstanding liability.
11.
The previous lessee had already paid approximately Rs.2.43 crores. The
amount remaining payable by the Petitioner was consequently quantified
to be Rs.66,51,000/-. The Compensatory Afforestation Scheme covering
16.592 hectares was approved for that sum by Memo No.9226 dated
12.05.2023, and the transfer of forest clearance was granted on 28.08.2023.
12. The account is straightforward. From the original deposit of
Rs.2,66,15,250/-, the quantified liability of Rs.66,51,000/- must be
deducted. The balance is Rs.1,99,64,250/-. This is not an arithmetic
invented by the Petitioner. The Divisional Forest Officer, Bonai, confirms
it in Memo No.702/6F(Mg.) dated 13.01.2026. Learned counsel for the
State, on 15.10.2025, accepted the position before this Court and sought
two weeks' time to make the refund.
13. When the department's own record establishes the amount, and counsel
for the State seeks time to pay it, the controversy has passed beyond the
stage of computation. The question is no longer how much is due. It is
why an admitted sum continues to remain unpaid. The State cannot
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Designation: AR-CUM-SR. SECRETARY
Reason: Authentication
Location: ORISSA HIGH COURT, CUTTACK
Date: 03-Nov-2026 18:29:09
manufacture a dispute where its own records have already settled the
account.
14. The objection that this Court should decline jurisdiction because the claim
is monetary proceeds upon a mistaken view of constitutional remedies.
The writ jurisdiction is not rendered impotent whenever the relief sought
involves payment of money. What matters is the nature of the right
asserted and the character of the controversy. Where a public authority
retains money without lawful justification and the amount refundable is
established by its own records, the constitutional court need not send the
citizen on a fresh journey through the corridors of litigation.
9
15. In U.P. Pollution Control Board v. Kanoria Industrial Ltd ., the Supreme
Court recognized the availability of writ relief for the return of money
collected or retained without lawful authority. The principle is one of
substance, not form. A public authority cannot defeat an established right
merely by describing the relief as recovery of money.
The Petitioner has waited for years, made representations and obtained a
concession before this Court. To relegate it to a civil suit in these
circumstances would unnecessarily add procedures without advancing
justice. The writ petition is therefore maintainable.
16. The defence of the Opposite Parties rests principally on Condition (viii) of
the transfer order dated 28.08.2023. That condition requires the Petitioner
to submit a fresh proposal for diversion of the residual forest area of 0.22
hectares, being the difference between 34.488 hectares and 34.268 hectares,
for approval under Section 2(ii) of the Van (Sanrakshan Evam
Samvardhan) Adhiniyam, 1980. The Petitioner has not submitted the
9
(2001) 2 SCC 549
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Signed by: BHABAGRAHI JHANKAR
Designation: AR-CUM-SR. SECRETARY
Reason: Authentication
Location: ORISSA HIGH COURT, CUTTACK
Date: 03-Nov-2026 18:29:09
proposal and has not furnished the point-wise compliance sought by
Letter No.8816 dated 17.11.2023. The State apprehends that the proposed
diversion may attract further compensatory levies and contends that the
refundable surplus should remain in its hands until that possibility is
resolved.
17. The condition must be obeyed, however, the obligation to comply with a
condition and the authority to retain money are separate questions in law.
One cannot be used as a substitute for the other. The State must show not
merely that the Petitioner owes a continuing obligation, but that the law
authorizes the retention of this particular sum to secure its performance.
That essential link is missing in the present facts of the case.
18. First, the supposed liability is yet unborn. No diversion proposal has been
submitted, no approval has been granted and no demand has been raised.
The nature and extent of any future liability remain unknown. A
contingent demand is not a present debt. The possibility that money may
become payable cannot, by itself, justify the continued retention of money
which has already been shown to be refundable.
19. The distinction is elementary but fundamental. The law permits the
recovery of a liability when it becomes due and in the manner prescribed.
It does not permit the State to convert a possible future claim into a present
right of retention. Prudence may justify vigilance; it cannot create a power
which the law has not conferred. Secondly, the amount retained bears no
demonstrated proportion to the risk apprehended. The disputed area of
0.22 hectares is only a small fraction of the forest area covered by the lease.
At the original rate of Rs.7.50 lakh per hectare, the Net Present Value for
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that parcel would be approximately Rs.1.65 lakh. The actual liability, if
any, would depend upon the applicable rates, the nature of the proposed
diversion and the compensatory measures lawfully required. This Court
does not prejudge that question.
20. What is apparent, however, is the absence of any rational explanation for
withholding Rs.1,99,64,250/- against an uncertain liability relating to a
small parcel of land. The State cannot invoke caution as a talisman to ward
off constitutional scrutiny. Article 14 demands that administrative action
bear a rational relationship to its object. A retention grossly
disproportionate to the apprehended liability, without an identified
statutory power or for an existing demand, cannot be sustained merely
because the authority describes it as protective. Thirdly, an alleged
default does not confer upon the State a lien over the Petitioner's money.
If the Petitioner has failed to submit the proposal or comply with the
conditions of transfer, the competent authorities may proceed in
accordance with the governing statute. Non-forestry activity cannot
lawfully be undertaken in the disputed area without the requisite prior
approval. Sections 3A and 3B of the Adhiniyam prescribe consequences
for contravention and the conditions of transfer remain enforceable
according to law.
21. The State is not remediless. The power to enforce a statutory obligation
does not carry with it an unrestricted power to seize or retain property as
leverage. The rule of law requires the State to act through the remedies the
law provides, not through financial pressure of its own devising. There is
also a circumstance which cannot be ignored. On 15.10.2025, the State
sought time before this Court to make the refund. It did not then invoke
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Condition (viii) as a ground for withholding the amount. A concession
made at the Bar does not invariably extinguish a statutory defence. But
where the concession accords with the department's own records and the
admitted computation, the State cannot lightly retreat from its position
without establishing a lawful basis for doing so. No such basis has been
demonstrated here.
22.
The objection is totally based on Condition (viii) must accordingly fail as
a justification for retaining the surplus. The Petitioner remains bound to
submit the requisite proposal and comply with the transfer conditions. If
the proposal is approved and compensatory levies thereby become
payable, the competent authority may determine and recover those levies
in accordance with law. Until then, the State cannot retain the Petitioner's
money against a liability that may or may not arise in future.
23. The distinction is between enforcing the law and taking security without
authority of law. The former is the State's duty and the latter is beyond its
power. The Opposite Parties have sought to shift responsibility from one
authority to another. Opposite Party Nos.2 and 3 point to National
CAMPA and contend that Opposite Party No.5 must arrange the refund.
Opposite Party No.5, in turn, states that the matter falls within the State's
administrative domain and that it sought further information from the
State on 19.12.2025. Thus, the Petitioner, whose money was accepted by
the public authorities, is left to navigate the administrative arrangements
among those very authorities. The State cannot expect the citizen to bear
the consequences of its internal divisions. Public administration must
speak with institutional responsibility, not in a chorus of disclaimers.
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24.
The record identifies the authority principally responsible. The Ministry's
communication bearing F.No.8-17/2001-FC (Vol) dated 11.11.2022, as
noticed in the Divisional Forest Officer's Memo dated 13.01.2026, states
that adjustment of Net Present Value is an administrative matter which
may be undertaken at the State Government level under the Guideline
dated 31.03.2020 and the clarification dated 12.10.2021. The deposit was
made in the ORISSA CAMPA account. The State authorities administered
the deposit, determined the liability and appropriated Rs.66,51,000/-
towards the amount payable.
25.
The authority which dealt with the deposit and adjusted the liability
cannot disclaim responsibility for returning the balance merely because
the funds may subsequently have moved between accounts. The primary
obligation to refund rests upon Opposite Party No.2. If any part of the
refundable sum has been transferred to the National CAMPA Fund under
the Compensatory Afforestation Fund Act, 2016, the competent
authorities must arrange its restoration or direct remittance so that the
Petitioner receives the amount due at the earliest.
26. The accounting arrangements between the State and the Union are not the
Petitioner's burden. The citizen's right cannot be suspended while the
Government settles its accounts with itself. The refund must be made, and
the administrative machinery must find the means to make it. The return
of the principal is necessary, but it does not exhaust the demands of
justice. Money withheld from its owner carries with it the loss of its use.
The holder may enjoy the benefit of possession while the owner bears the
cost of deprivation. Interest is the ordinary means by which the law seeks
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to repair that imbalance. It is compensatory in principle, though its rate
and commencement must depend upon the circumstances of the case.
10
27. In Alok Shanker Pandey v. Union of India , the Supreme Court explained
the compensatory nature of interest and held that there is no hard and fast
rule about how much interest should be granted and it all depends on the
11
facts and circumstances of each case. Further, in Sandvik Asia Ltd. v. CIT
illuminate the consequences of withholding money lawfully due and the
impropriety of retaining an advantage derived from delay. These
decisions do not dispense with the need to determine the appropriate
period and rate. They do establish that restitution must take account of
the deprivation suffered by the person kept out of money which ought to
have been returned. The obligation is no less compelling when the holder
is the State. Government is entrusted with public power, not licensed to
derive an advantage from its own failure to discharge a legal obligation.
28. Opposite Party No.5 relies upon the Ministry's guidelines dated
20.07.2022, which provide that interest accrued on compensatory levies
realized in lieu of diversion of forest land is not to be refunded. The
guideline must be read in its proper setting. A compensatory levy lawfully
realized for diversion is not the same thing as the surplus of an advance
which was never required to meet the liability ultimately determined and
the present claim concerns the latter.
29. An instruction governing interest on compensatory levies cannot, merely
by its existence, transform an unutilised surplus into a lawful levy. Nor
10
2007 (3) SCC 545
11
2006 (2) SCC 508
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can an executive guideline, properly construed, extinguish the
constitutional court's power to grant restitution where money is retained
without lawful justification. The question is not whether interest on a
lawful levy is refundable, but whether the State may retain the benefit
attributable to money which it is itself obliged to return.
30. The Petitioner's claim to interest at 18% per annum from 26.06.2020,
however, is too wide in its sweep. At the time of the original deposit, the
compensatory liability had not been finally determined. The money was
then held as an advance against the liability yet to be ascertained. The
record does not justify treating the entire period from the date of deposit
as one of wrongful retention. Further, the position changed on 12.05.2023,
when Memo No.9226 quantified the liability at Rs.66,51,000/- and thereby
established the surplus of Rs.1,99,64,250/-. From that date, the State could
retain the amount lawfully due but was required to justify any further
retention of the balance. It has failed to do so.
31.
The rate of 18% per annum would, in the circumstances, be punitive rather
than compensatory. Restitution seeks to repair the wrong, not to impose a
penalty disproportionate to it. Yet the converse is equally true. The State
cannot retain the benefit of interest actually earned upon the refundable
amount while the Petitioner remains deprived of its use. The return must
be real, not merely nominal. Balancing these considerations, simple
interest at 6% per annum from 12.05.2023 until actual payment would
constitute a fair compensation. If the relevant CAMPA account records
establish that the refundable amount earned interest at a higher rate
during the corresponding period, the Petitioner should receive the higher
amount, subject to verification. The enhanced rate is not to be conceived
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Date: 03-Nov-2026 18:29:09
as a punishment. It is intended to ensure that continued default does not
become a cheaper course than obedience to the law. A judicial direction
must carry practical efficacy; otherwise, the successful litigant wins a
declaration while continuing to suffer the very deprivation which brought
him to Court
32. The conservation of forests is a public obligation of enduring importance.
Nothing in this judgment relieves the Petitioner of its statutory duties or
weakens the authority of the competent officers to enforce the law. But
environmental protection and constitutional property rights are not
adversaries. Both derive their legitimacy from the rule of law, and neither
can be advanced by disregarding the other. The liability in this case was
quantified in May 2023. The refundable surplus is established by the
department's own records, and the State sought time before this Court to
pay. Yet the money remains unpaid, while the authorities exchange
responsibility for its return. Such administrative indecision cannot be
allowed to mature into a continuing deprivation of property. The State is
entitled to insist that the citizen obey the law. The citizen is equally
entitled to insist that the State do so. Constitutional governance demands
reciprocity in legality. Accordingly, the surplus having ceased to serve the
purpose for which it was deposited, its continued retention is without
demonstrated legal justification and cannot be sustained.
VII. CONCLUSION:
33. In the result, the Writ Petition is allowed in part and the following
directions are issued:
(i) Opposite Party No.2 shall refund to the Petitioner the sum of
Rs.1,99,64,250/- (Rupees One Crore Ninety-Nine Lakhs Sixty-Four
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six weeks
Thousand Two Hundred and Fifty only) within from the
date of communication of this judgment.
(ii) The aforesaid amount shall carry simple interest at 6% per annum
12.05.2023
from until actual payment, or at the rate actually earned on
the refundable amount in the CAMPA account during the
corresponding period, whichever is higher, subject to verification from
the relevant account records. In the event of failure to make payment
within the period stipulated in clause (i), interest shall be payable at 9%
per annum from the expiry of that period until actual payment.
(iii) If any part of the refundable amount has been transferred to the
National CAMPA Fund, Opposite Party No.5 shall, within four weeks
from the date of communication of this judgment, take the necessary
steps to restore or remit the amount required to give effect to this
judgment. Any inter-fund adjustment necessary for that purpose shall
be completed without delaying the refund directed above.
(iv) The Petitioner shall remain bound by the conditions of the transfer
order dated 28.08.2023, including Condition (viii). The competent
authorities shall remain at liberty to enforce those conditions in
accordance with law and upon approval of any diversion of the
residual 0.22 hectares, to determine, demand and recover the
compensatory levies lawfully payable in respect thereof.
34. Interim order, if any, passed earlier stands vacated.
(Dr. Sanjeeb K Panigrahi)
Judge
Orissa High Court, Cuttack,
th
Dated the 30 October, 2026/-
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Location: ORISSA HIGH COURT, CUTTACK
Date: 03-Nov-2026 18:29:09