In considering whether to grant an interim injunction, the court must balance the potential harm to the plaintiff if the injunction is not granted against the potential harm to the defendant if the injunction is granted, and consider whether the plaintiff can be adequately compensated by money if the injunction is not granted.

Das, J.

1. This is an appeal from an order of the learned Subordinate Judge of Sasaram, dated 1-6-1950, rejecting a prayer for an ad interim injunction, under the provisions of Order 39, Civil P. C., against the defendants in the action, namely, (1) the State of Bihar and (2) Messrs Dalmia Jain & Company Ltd. The form of the order of injunction which the appellant, plaintiff in the action, asked for was in these terms (I am quoting the prayer portion of the petition for interim injunction):

"It is, therefore, prayed that your honour may be pleased to restrain defendant 1 from executing any lease in favour of defendant 2 during the pendency of the suit."

2. The facts leading up to the suit and the prayer for interim injunction are these : There is a Hill known as Murli Hill (the upper portion being known as upper Murli Hill and the lower-portion as lower Murli Hill) within the sub division of Sasaram in the district of Shahabad, The Hill contains lime stone etc. On 1-4-1928, the Secretary of State for India (the then competent authority) granted two leases to the Kutchwar Lime and Stone Company Ltd. (hereinafter to be referred to as Kutchwar) in respect of the two portions of the Hill in question for a period of twenty years, for the purpose of quarrying: lime stone, and converting the same into lime etc. In 1933, Kutchwar went into voluntary liquidation. On 30-9-1933, Kutchwar through their managing agents and liquidators, purport, ed to transfer the leases to one Mr. Bose, subject to the sanction of the Board of Revenue,, but in the meantime appointed Bose as their local agent The Board of Revenue refused to sanction the proposed transfer of the leases. On 25-1-1934, the Kalyanpur Lime Works Ltd. (hereinafter to be referred to as the appellant) wrote to the Collector of Shahabad and applied for leases in respect of both upper Murli Hill and lower Murli Hill. On 27-3-1934, the Government of Bihar in the Revenue Department appeared to have sanctioned the proposal to forfeit the two leases held by Kutchwar, and on 31-3-1934, the Board of Revenue approved the proposal to grant leases for quarrying lime stone to the appellant. The relevant letter is printed at p. 17 of the paper book, and shows that the proposal to grant leases in favour of the appellant was approved :

"On the existing terms and condition as set forth in Chap. V/s. Bihar and Orissa Waste Lands and Minerals Concession Manual, on the understanding that after the lease is executed the question of royalty will be re-examined by the Board provided it is well understood that any reduction, if made, would be a matter of grace."

It is stated that on 15-4-1931, the appellant got possession, and the appellant started operations on 15-5-1934. On 18-7-1934, the Board of Revenue, by a formal resolution, forfeited the leases in favour of Kutchwar. On 24-9-1934, Kutchwar filed a suit against Government. The suit was dismissed by the Subordinate Judge. There was an appeal to this Court, and on 25-4-1935, this Court issued an injunction restraining Government from granting leases to the appellant. On 7-2-1936, this Court decreed Kutchiwars suit. There was an appeal to the Privy Council which was dismissed on 9-11-1937 (see Secy of State V/s. Kuchwar Lime and Stone Co. Ltd , 65 I.A. 45 : (A.I.R. (25) 1938 P.C. 20)) In the meantime certain contempt proceedings were instituted by Kutchwar against Government and the appellant, though the appellant was not a party to the suit which Kutchwar had brought in 1934. In the contempt proceedings, this Court held on 9-10 1936, that both Government and the appellant had been guilty of contempt of Court, see Kutchwar Lime & Stone Co. Ltd. V/s. Secy. of State, 16 pat. 159 : (A. I. R. (24) 1937 Pat. 65 S. B ). The appellant alleged that as a result of this decision in the contempt proceedings, it had to give up possession which it had got in 1934. Against the decision in the contempt proceedings, there was an appeal to the Privy Council. O