- (1.) THIS appeal is directed against a judgment and decree of the District Judge, bharatpur, dated the 19th November, 1964, by which he dismissed the plaintiff's suit with costs.
(2.) THE appellant Hamra Radio and General Indus tries Limited being a public limited Company incorporated under the Indian Companies Act, 1913, was the plaintiff in the Court below. It has its registered office in Delhi. For facility of reference, we shall refer to it hereafter as the plaintiff. This suit was originally brought against the State of Rajasthan only, which is defendant No. 1 in the suit. The Union of India was also impleaded as defendant No. 2 later. The plaintiff's case, briefly put, was that on the 4th October, 1947, the 2nd october, 1947, mentioned in paragraph No. 2 of the plaint seems to be a mistake for the 4th October, 1947) it had entered into an agreement (Ex. 12) with the state of Bharatpur as it then was. Among other terms It was stipulated in the agreement that the Government of the Bharatpur State had granted permission to the plaintiff to set up a factory for the manufacture and assembly of radio receivers and transmitters and also to instal a radio transmitter at Bharatpur, that the agreement was to enure for a period of 20 years during which the plaintiff was to have the sole and exclusive right to manufacture radios, gramophones, radiograms, transmitters, loud-speakers, and 'other electronic apparatuses and also to have sole and exclusive monopoly "for broadcasting or transmitting commercials or programmes within the territorial limits of the State. " that the government would not charge any import duty on any raw materials, semimanufactured articles, manufactured articles and stores, including toots, plants, machinery, etc. imported by the plaintiff into the State for the manufacture, assembly, repairs and reconditioning of radios, transmitters and other electronic apparatuses and electric equipments, nor levy any excise or export duty on articles manufactured or es-sembled by the plaintiff for sale in the state or for export, and that the Government would advance a loan of Rs. 1,00,000/- to the plaintiff for a period of ten years bearing interest at four per cent. per annum payable at the end of each year, the Government having a paramount charge on all assets of the plaintiff wherever situated and whether fixed or moveable until the entire amount of the loan together with interest was repaid. It was further agreed between the parties that In consideration of the abovementioned facilities and advantages granted by the Bharatpur State, the plaintiff would set up a transmitter at Bharatpur, at its own cost, of sufficient strength to broadcast waves that could be received clearly by ordinary domestic radio receivers in the city of Bharatpur, that it would start a factory within the state to progressively manufacture cheap radio receiver sets and other electronic apparatuses and equipment, that it would train about ten persons who were the subjects of the Bharatpur State and were capable of reading and writing in any of the vernaculars current in the State and that it would endeavour to use, with the object of helping the prosperity of the State, as much of the resources of the state in men and material as might be practicable both In its factory and for the transmitter, but it was made clear that the plaintiff would not be required to arrange for the programme of news, music and other Items to be broadcast on the transmitter, which would be the responsibility of the State, nor to pay any salary or allowance to persons who were to be admitted as trainees In this factory. It was also agreed between the parties, and that is the most important part of the matter, so far as the present case is concerned, that the plaintiff was to receive from the State a consolidated sum of Rs. 20,0007-per annum payable in two equal half yearly instalments commencing from August 20, 1947, as its charges for maintaining the transmitter and for its depreciation, each half-yearly instalment being payable on the 20th February and 20th August in any particular year. There is one more clause in the agreement to which attention might specifically bel drawn and that is that it was also agreed between the parties that notwithstanding the liability of the plaintiff to pay income-tax or any other tax at the instance of the Government of Bharatpur or the Indian Union at that time or thereafter, the plaintiff shall not pay any income-tax upto the 31st December, 1949, and that it shall pay incomer-tax on the profits earned by it at the rate of 5 per cent, of the profits upto 31st Decem-ber, 1954, and thereafter it shall pay the said tax equal to ten per cent of its profits.
(3.) THE execution of this agreement is admitted bet-ween the parties. It is also not disputed that the plaintiff had set up a transmitter and also a factory and that the transmitting station began to function from November, 1947. It is further not disputed that the Bharatpur Government had paid a sum of Rs. 10,000/-to the plaintiff on or about the 23rd November, 1947, as the first instalment towards the maintenance charges of the transmitter in pursuance of the aforesaid agreement. The grievance of the plaintiff was that further instalments falling due during the three years 1948, 1949 and 1950 on the 20th February and 20th August of each year amounting to Rs. 60,000/-in all had fallen into arrears. Conseouently, it brought the present suit after giving the usual notice under Section 80 C. P. C. to the Rajasthan State on the 18th February, 1951. The plaintiff also claimed a sum of Rs. 45,00/-, by way of interest on the principal sum of Rs. 60,000/-, and thus claimed a decree for Rs. 64,500/-with costs and interest at six per cent. per annum from the date of the suit until realisation.;