Judgment

CHINNAPPA REDDY, J. :- These appeals arise out of the judgment of the High Court of Rajasthan in First Appeal No. 112 of 1958 (reported in AIR 1971 Raj 128) filed by the State of Rajasthan, successor of the State of Kotah. Civil Appeal No. 625 of 1971 is by the State of Rajasthan while Civil Appeal No. 694 of 1971 is by the Associated Stone Industries (Kotah) Limited. The Ruler of the erstwhile State of Kotah entered into an agreement (Exh. A) with the Associated Stone Industries (Kotah) Limited granting monopoly rights to the company to quarry Kacha stone from Ramganj Mandi and Chechet Tehsils. The agreement was to be effective for a period of 15 years from October 1, 1944. Clause 18(1) of the agreement which is material for the purposes of these two appeals was in the following terms :

"In consideration of the concessions and privileges granted by the Grantor and in lieu of Income-tax, Super tax and excess profit tax, the Grantee covenants to pay to the grantor royalty on the stone excavated at the rate of rupee one per 100 sq. ft., subject to the minimum amount of Rs. 1,50,000/- per financial year. Provided that the aforesaid rate of Re. 1/- per 100 sq. ft. will be operat