- (1.) THIS is a first appeal against an order of Shri Onkar Parkash Sharma, Senior subordinate Judge, Karnal, dated 28-8-1958, staying the plaintiff-appellant's suit under Section 34 of the Indian Arbitration Act.
(2.) THE facts giving rise to this appeal are as under : The plaintiffs Messrs. Panipat electric Supply Company, Limited, were granted "the Panipat Electric Licence 1934", vide Notification No. 826-Elec. . published in the Government Gazette, punjab, dated Friday, 20-7-1934. The period of licence was originally fixed at 15 years nut was later extended by another five years. According to the plaintiffs, the licence must be deemed to have been granted on 20-7-1934. when the notification regarding the same was published in the Government Gazette vide Rules 19 and 20 framed under the Indian Electricity Act. According to the defendants, the date of the grant of the licence must be taken to be 17-7-1934, when it was actually granted and not 20-7-1934, when the notification regarding its grant was pub-lished in the Gazette. On 4-7-1952, the state of Punjab served a notice on the plaintiffs, vide Memo No. 209-EI-52/31298. dated 4-7-1952, from the Secretary to the Government, Punjab, P. W. D. , Electricity branch, Simla, which reads as under : "in accordance with the requirements of Sub-section (4) of Section 7 of the Indian Electricity Act, 1910, the Governor of Punjab is pleased to give you notice hereby that the Punjab State Government has elected to purchase the Electric Supply undertaking connected with the Panipat electric Licence, 1934, in exercise of the option given to them by Clause 9 (1) of the said licence read with Sub-section (2) of Section 7 of the indian Electricity Act, 1910. " It is not clear whether the plaintiffs sent any reply to the same earlier than 9-121953, but on the last mentioned date they sent through their lawyer notices to the state of Punjab, Shri J. R. Handa, Chief Engineer. P. W. D. and Shri S. S. Kumar, formerly Secretary to Government, Punjab (P. W. D. Electricity Branch ). In these notices the plaintiffs challenged the validity of the aforesaid notice of the State of punjab, dated 4-7-1952, on various grounds which inter alia were : 1. it had not been given by an appropriate authority : 2. it was not in the proper form; 3. it was mala fide and ultra vires the Governor of the Punjab and the Punjab State Government; 4. the Punjab State Government was not the licence granting authority; and 5. that, in any case the State Government could not acquire the undertaking without payment of compensation in full before the taking over of the concern. The Punjab Government then wrote letters to the plaintiffs on 12-0-1954, 29-61954, and 16-7-1954, informing the plaintiffs that the Punjab Government would take over the undertaking on the night between the 16th and 1. 7th July. 1954. On the aforesaid night the undertaking was actually taken over by the Government through Mr. J. R. Handa, acting under the orders of Mr. S. S. Kumar, and since then the undertaking is in possession of the Government. We have not been informed as to what correspondence, if any, ensued between the parties between 17-7-1954 and 5-4-1957, but it appears that on the latter date, i. e. 5-4-1957, the plaintiffs again served notices under Section 80, Civil procedure Code, on the State Government. Shri. T. R. Handa and Shri S. S. Kumar, stating that all of them were jointly and severally liable to pay the plaintiffs a sum of Rs. 11,76,586-4-0 together with interest at 6 per cent per annum from the date of taking over the electricity undertaking connected with the panipat Electric Licence 1934 till actual payment and requiring them to pay the afoxesaid amount within the statutory period of two months from the date of receipt of notice by each of them.
(3.) ON 15-7-1957, the plaintiffs filed the present suit against (1) The State of punjab, defendant No. 1, (2) Shri J. R. Handa, defendant No. 2, and (3) Shri S. S. Kumar, defendant No. 3, for the recovery of a sum of Rs. 13,88,371-4-0, The main allegations made in the plaint were that the various, notices served on them and referred to above were illegal and ultra vires, that the State Government was not authorised to take over the undertaking of the plaintiffs, that the action of the defendants in taking over the concern on the night between the 16th and 17th july, 1954, was illegal, highhanded, malicious and tortious, that the Government had, at any rate, no power to assume possession before the expiry of the period of licence on 20-7-1954, that all the three defendants were jointly and severally liable to pay damages to the plaintiffs to the extent of the amount in suit on account of their various tortious acts as described in the plaint. The claim in suit consisted of the following items :;