Lord Atkin:-

These are two consolidated appeals from orders made by the High Court at Patna refusing to the appellants restoration of possession of limestone quarries in the district of Shababad. There are two appeals because application was originally made by the first two appellants, managing director and manager, respectively of the appellant company. A separate application was afterwards made by the company, the appellants in the second appeal. No separate point arises in respect of them. The disputes between the parties have already twice been carried to this Board and the judgments given have made it unnecessary to go into detail in deciding this appeal. In 1928 the Secretary of State granted to the Kuchwar Lime and Stone Co., Ltd., the present respondents, quarrying leases for the term of 20 years of the quarries in question. There were covenants in each lease that the lessees would not assign the lease or transfer any right or interest thereunder or underlet the whole or any portion of the premises without the assent of the Board of Revenue of Bihar and Orissa, with a provision for forfeiture on breach. In 1933 the lessee company went into liquidation and in the same year the company agreed with one Bose for the sale to him of the rights under both leases, subject to the sanction of the Board of Revenue. In the meantime, Bose was to act as agent for the company, pay to the company the dues payable by it to the Government, and work the quarries for his own profit. The agreement was not registered.

In 1934 the Government purported to forfeit the leases for breach of the above covenant and gave permission to the appellant company to enter and work the quarries, which they did. No formal lease to the appellants was executed. In September 1934, the respondent company brought a suit against the Secretary of State for a declaration that their leases had not been forfeited; and for an injunction to restrain the defendant, his servants or agents, from granting leases to the present appellants or others or authorizing them to carry on quarrying operations on the premises. The Subordinate Judge dismissed the suit, but in February 1936 the High Court allowed the appeal See ('36) 23 AIR 1936 Pat 372: 163 IC 501: 15 Pat 460: 17 PLT 217, Kuchwar Lime and Stone Co. Ltd. v. Secretary of State and made the declaration and granted the injunction claimed. On appeal by the Secretary of State to the Privy Council in November 1937, their Lordships dismissed the appeal See ('38) 25 AIR 1938 PC 20: 172 IC 443: 17 Pat 69: 65 IA 45: 32 SLR 276 (PC), Secretary of State v. Kuchwar Lime and Stone Co. Ltd. holding that though the agreement with Bose purported to transfer to him "pending the assent of the Board of Revenue a definite interest in the property, yet as the transfer was not registered it was invalid and did not operate to create a forfeiture.

In the meantime, in August 1936, the respondent company filed a petition in the High Court in the action alleging that the Secretary of State and the present appellants, Banerji and Ghose, had been guilty of contempt See ('37) 24 AIR 1937 Pat 65: 166 IC 966: 16 Pat 159: 18 PLT 95 (SB), Kuchwar Lime and Stone Co. Ltd. v. Secretary of State in working the quarries. The High Court found all the parties to be in contempt: and on receiving an apology ordered them to pay the costs. The appellant company thereupon withdrew from the quarries and ceased to work them. The Secretary of State and the appellants, Banerji and Ghose, appealed to the Privy Council from the order made on the contempt application. In October 1938, the appeal was allowed See ('38) 25 AIR 1938 PC 295: 178 IC 490: 17 Pat 770: ILR (1939) Kar PC 42 (PC), S.N. Banerjee v. Kuchwar Lime and Stone Co. Ltd., the Board holding that the Secretary of State had committed no breach of the injunction, and that the other two appellants were not within its terms. In November 1938, the appellants applied by petition to the High Court for restitution of pos