The Kutlehar forest administration refers to the forests spread over an area of 50,000 acres within the limits of the Kutlehar State, these forests were used as the royal hunting grounds and were under the direct management of the Raja of Kutlehar and were zealously guarded.

The forests were kept under royal management under an agreement first with the British government and then when the British left India the agreement was transferred to the Indian Government, some of the points in the agreement between the Raja and the government were:
(i) The Raja would manage the forests and employ people for its upkeep
(ii) The Raja would have his administration sell the forest produce and deposit 25% of the amount with the government and keep 75%.
(iii) The management and the upkeep of the forests would be paid for by the Raja from his 75% of the share.
(iv) If there was mismanagement of the forests then the Government reserves the right to acquire the same after paying compensation to the Raja.

The government of Himachal Pradesh passed a special bill for the take over of the forests called 'The Himachal Pradesh Kutlehar Forest (Acquisition of Management) Act, 1992', but as the forests were not mismanaged, there could not be an acquisition, the Raja went to court and asked for a stay, and produced all the detailed reports of the management of the forests, the High Court of Himachal Pradesh not only granted a stay but also observed in a judgment that "it would not be wrong to accept the contention that it is (Kutlehar Forests) one of the best managed forests in India".

Infact the forests had been very closely guarded by the successive generations of Raja’s, from the times of the Mughal Emperors, when the Sikh Gurus took refuge in the thick forests to the British times when in 1882, Mr. A. Anderson, the forest settlement officer wrote in his report  “the Kutlehar Raja has taken more interest in forest conservancy than any of the other Raja’s” In 1884, Mr. R.G. Tomson, Esq., secretary to the Punjab Government wrote “the Raja is fully alive to the value of preservation and has been particularly careful in this respect” Colonel Devies and Mr. Lyall, the settlement officers reported to the government of Punjab, “the Raja has managed the forests extremely well and Kutlehar forests have to be among the best forests in India”

The Himachal government took the case to the Supreme Court and ultimately, the Supreme Court of India ruled for the take over of the forest.

The Raja was provided for a compensation spread over a period of 5 years, to be given in equal installments.

The Raja’s case is still pending in the court for enhancement of the compensation as the Government allotted about a crore and a half rupees or three hundred thousand dollars, which is still to be given, where as the amount of property acquired is over 450 crores or about one hundred and fifty million dollars.