Judgment

GHULAM HASAN, J. : Two appeals have been filed by the plaintiff because of the existence of two decrees prepared by the High Court. The appeals are in substance against the dismissal of the suit. We accordingly treat them as one appeal.

2. This appeal by the plaintiff is directed against the judgment and decree of the High Court at Patna dated March 27, 1952, dismissing the suit of the plaintiff by reversing the judgment and decree dated February 7, 1951, of the Second Additional subordinate Judge, Sasaram, District Shahabad, who had decreed the suit, Kalyanpur Lime Works Ltd., hereinafter referred to as Lime co., instituted a suit for specific performance of the contract made by it with the state of Bihar, hereinafter referred to as defendant No. 1. To this suit Dalmia Jain & Co. Ltd., was impleaded as defendant No. 2.

3. The facts leading up to the present appeal are these :

4. Defendant No. 1 is admittedly the owner of what is called Murli Hills situate in the Sub-Division of Sasaram in the District of Shahabad, the upper portion of which is known as the upper Murli Hill and the lower portion as the lower Murli Hill. On the 1st April, 1928, the defendant No. 1 gave a lease of the Murli Hill to the Kuchwar Lime and Stone Co. Ltd., hereinafter called the Kuchwar Co., for 20 years for the purpose of quarrying limestone therein, on the basis of two indentures of leases in respect of the two portions of the Murli Hill. The leases contained a prohibition against assignment of the Company s leasehold rights without the permission of the Government.

In January 1933, Kuchwar Co. went into voluntary liquidation and the liquidators of the Company purported to assign the leasehold interest of the Company to one Subodh Gopal Bose for Rs. 35,000/- by an unregistered deed dated the 30th September, 1933. The assignee took possession of the property, on the 9th October, 1933, but was stopped from working the quarries under orders of the Government from the 8th December, 1933, as the Government considered the assignment to be a breach of the contract in the lease which made the lessees interest liable to forfeiture. It appears from the proceedings of the Lime Co. that on the 4th January, 1934, the Managing director and the Manager of the Lime Co. were authorized to take all steps to apply for and secure the lease of the Muril Hill property and on the 25th January, 1934, the Lime Co. made an application (Exhibit A) to the Collector of Shahabad for getting the lease. The Lime Co. offered a minimum royalty of Rs. 10,000/- and on the 14th March, 1934, the Board of Revenue granted an interview to Mr. Banerjee, the representative of the Lime Co., and recorded an order that

"the Commissioner may be told that the Board approves of the execution of the lease but the letter should not issue until the Government order cancelling the old lease, is received" (A-5).

The defendant no. 1 forfeited the lease in favour of Kuchwar Co. by an order dated the 27th March, 1934, and re-entered into possession. Thereafter the defendant No. 1 offered to grant leases of Murli Hill to the Lime Co., for a period of 20 years on the existing terms and conditions as set forth in Chapter V of the Bihar & Orissa Waste Lands & Mineral Concession Mannual. This offer was made by a letter of the Board of Revenue dated the 31st March, 1934. (Annexure B) and was accepted by the Lime Co, in their letter dated the 15th April, 1934, communicated to the Collector of Shahabad (Annexure C). The Lime Co. obtained possession on the 15th of April, 1934, but the lease were to take effect from the 1st April, 1934. The Lime Co. started quarrying operations on the 15th May, 1934.

It appears that on the 24th September, 1934, the Kuchwar Co. sued the Secretary of State for India for declaration that the leases in their favour had not been validly forfeited and for an injunction restraining him from granting leases to any one else and for damage. The suit was dismissed by the trial Court but was