DALMIA JAIN AND COMPANY LTD Vs. KALYANPUR LIME WORKS LTD

JUDGEMENT

(1.) This appeal by one of the defendants [hereinafter referred to as the Dalmias) is directed against a decree of the Additional Subordinate Judge, Sasaram, in Title suit No. 87 of 1949, determining the amount pf compensation payable to the plaintiff in substitution for the specific performance of a contract to grant a lease for the purpose of quarrying limestone. The plaintiff, Kalyanpur Lime Works Ltd. (hereinafter referred to as the Kalyanpur Lime Company) has preferred a cross-objection claiming a higher amount as compensation. The only other party to the appeal is the other defendant, namely, the State of Bihar, and it has supported the plaintiff-respondent.

(2.) In order to appreciate the order of the lower Court, it is necessary to recapitulate tha past history of the litigation. The State of Bihar is the owner of the Murli Hills, situate in the Sasaram subdivision of the district of Shahabad. The upper portion of the hill is called the Upper Murli Hill and the lower portion is called the tower Murli Hill. On the 1st April, 1928, the then Local Government gave to Kuchwar Lime and Stone Company Ltd. (hereinafter referred to as the Kuchwar Company) a lease of the entire Murli Hills under two deeds for a period of twenty years for the purpose of quarrying limestone. On the 25th January, 1933, Kuchwar Company went into voluntary liquidation, and on the 30th Septembar, 1933 this Company, through their Managing Agents and Liquidators, purported to assign the leasehold interest to one Mr. Bose. On the 9th October, 1933, Mr. Bose entered into possession of the leasehold property, but was subsequently stopped by Government from working the quarries for breach of a term of the contract. The Government forfeited the lease on the 27th March, 1934 and re-entered into possession. In March-April, 1934, the Government agreed to grant a lease for twenty years of the Murli HilIs to the present plaintiff-respondent, that is, the Kalyanpur Lime Company, for the purpose of quarrying limestone and they obtained possession on the 15th April, 1934, though the lease was to take effect from the 1st April, 1934. Hence, on the 24th September, 1934, Kuchwar Company filed Title Suit No. 39 of 1934 against the Government for declaration that the leases in their favour had not been validly forfeited. They also prayed for damages and injunction restraining the Government from granting any lease to Kalyanpur Lime Company. On the 7th March 1935, this title suit was dismissed by the Subordinate Judge; but, on appeal by the Kuchwar company, the suit was decreed by the High Court on the 7th February, 1936. In the meantime, the High Court had passed an order of injunction on the 7th August, 1935 prohibiting the Government from executing any lease in favour of the Kalyanpur Lime Company, who had to vacate the quarries in April, 1936.

(3.) On the 31st March, 1948, the leases in favour of Kuchwar Company expired, and the Government entered into possession. In spite of repeated requests of the Kalyanpur Lime Company to execute the document of lease in their favour, in pursuance of the agrement that took place in March-April, 1934, the Government granted lease for one year in favour of the Dalmias, who are the appellants in the present appeal; and, thereafter, this lease was renewed from year to year. On the 11th August, 1949, Kuchwar Company filed another title suit, which was numbered as Title Suit No. 51 of 1949, against the Government of Bihar and the Dalmias for declaration of their surface right to the lower Murli Hill. On the 21st September, 1949, an application for injunction by Kuchwar Company was dismissed by the Subordinate Judge, but, on appeal, the High Court passed an order of injunction on the 5th December, 1949 in respect of the lower Murli Hill in favour of the Kuchwar Company. On the 17th November, 1950, Mr. P. N. Gour, Advocate, was appointed Receiver in Title Suit No. 51 of 1949 instituted by Kuchwar Company; and the Receiver started working the quarries on the 21st November, 1950. But the suit was dismissed on the 22nd April, 1951.