ARUN GENERAL INDUSTRIES Vs. RISHAB MANUFACTURERS PR LTD
LAWS(MPH)-1969-4-5
HIGH COURT OF MADHYA PRADESH
Decided on April 30,1969

ARUN GENERAL INDUSTRIES LTD. Appellant
VERSUS
RISHAB MANUFACTURERS(PR)LTD. Respondents

JUDGEMENT

- (1.) THIS revision under Section 115 of the Code of Civil Procedure. filed by the plaintiff, seeks to challenge the validity of a direction made by the IIIrd Additional district Judge, Jabalpur, on 8th November 1968 in terms of Order XII. Rule 6 of the Code of Civil Procedure, upon an application made by the defendants, directing it to be placed in possession of the property in suit "without prejudice to the rights of the parties".
(2.) THAT direction came to be made in the following circumstances. The plaintiff. M/s Arun General Industries Ltd. , Calcutta, which is the lessee of the establishment known as 'arun Board and Paper Mills' at Umaria, having acquired a lease of the same from the State Government of Madhya Pradesh in terms of agreement dated 21st April 1961, made certain additions and alterations therein. On or about 6th August 1964 the plaintiff entered into an Agreement with the defendant No. 2. Kundanlal Jain, for the sale of the establishment for a sum of Rs. 1,25,000/- on certain conditions. Amongst others, the plaintiff stipulated for the transfer of its interest in the lease, including the buildings, sheds, structures, machinery, stores and other materials in the said establishment in their existing conditions. This description of the lease hold premises includes 99. 36 acres of land adjacent to the factory, but it appears that the plaintiff had earlier surrendered the land to the Government by its letter dated 25th July 1964. In terms of the said agreement, the defendant No. 2 paid to the plaintiff a sum of Rs. 25,000/- on or about 10th August 1964, and was placed in possession of the property. At the time, the defendant No. 2 nominated the defendant No. 1 M/s. Rishab manufacturers (Pvt) Ltd. Katni as his nominee in whose name the lease was to be transferred. The defendant No. 3. Nemichand Jain, has been impleaded by the plaintiff as a guarantor for the due performance of the agreement. The suit is primarily for the recovery of the balance of Rs. 1,00,000/- towards the price with interest thereon.
(3.) THE entire dispute between the parties now turns on this surrender. The defendants allege that the plaintiff had concealed the fact that it had surrendered these 99. 36 acres of land which formed an essential part of its lease with the government under the Agreement dated 21st April 1961, and that the transfer of these lands was an essential term of the Agreement dated 6th August 1964 between the parties. Anticipating this difficulty, the plaintiff had claimed the alternative relief of return of the establishment together with profits which the defendants may have earned. The main or primary relief, of course, was specific performance of the agreement by payment of the balance amount of Rs. 1,00,000/- together with interest. We are only concerned at the moment with the alternative relief and it is based on the following averments in para 15 of the plaint which read as follows:- " in case it is held that such No Objection letter had not been granted or that the 99. 36 acres of land were surrendered by the Plaintiff and that such surrender was duly accented by the Government of Madhya pradesh, the Plaintiff pleads alternative as under:- (a) If the Government of Madhya Pradesh has not granted the no Objection for the contemplated transfer, the said agreement cannot be specifically performed and so the said agreement has become void and inoperative. (b) As the said 99. 36 acres of land have been surrendered by the Plaintiff to the Government of Madhya Pradesh and as such surrender has been duly accepted by the said Government, the plaintiff is unable to transfer all the lands contemplated by the Agreement and hence the performance of the contract has become impossible on the doctrine of frustration. Under the circumstances, either the Defendants must signify the assent to take the transaction of the remaining part of the land with the appurtenances thereto after paying the full agreed price or if they are not willing to do so, they are bound to deliver back vacant possession of the said plant and the establishment including all buildings, structures and machinery etc. , and also the additions and alterations made by the plaintiff and the Plaintiff is entitled to a decree for ejectment against the said Defendants in respect of the said property and the Defendants are liable to account for all the profits made therefrom, from the time they began running the plant. They must also pay back to the plaintiff all the benefits received by them in the meanwhile out of the transaction in question. Such earned profit therefrom is tentatively valued by the Plaintiff at Rs. 5,000/ -. ";


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