1950 Supreme(Pat) 130

PATNA HIGH COURT
Reuben and S.K.Das JJ.
Bukhtiarpur Bihar Light Railway Co.Ltd.
Versus
State Of Bihar
Miscellaneous Judicial Case No. 139 of 1950 ;
Decided On : SEPTEMBER 08, 1950

Headnote:

Bengal Tramways Act, 1883 - Sec. 41 - District Board's right to purchase undertaking - Agreement between District Board and Company - Interpretation - Whether agreement constituted an undertaking to the Court - Whether contempt of Court committed - Whether mandamus should issue against District Board - Held, agreement was a contract between parties and not an undertaking to the Court - No contempt of Court committed - No case for issue of mandamus.

Fact of the Case:

The Light Railway Company was established under the provisions of the Bengal Tramways Act, 1883. By a notification dated 25-6-1901, the Local Government of Bengal sanctioned its construction between Bukhtiarpur and Bihar Sharif, subject to an agreement between Messrs. Martin & Co., the promoters of the Bukhtiarpur-Bihar Light Railway Co. Ltd., on the one side and the District Board of Patna on the other which was entered on 21-8-1899. Subsequently, there was an extension of the Light Railway to Rajgir. The agreement of August 1899 is set out in a schedule to the Government Order. Under Sec. 41, Bengal Tramways Act, the District Board is entitled on six months notice in writing to purchase the undertaking upon the expiration of twenty one years from the date of the order under Sec. 5 of the Act, and, thereafter, the Board has a renewed right of purchase on similar notice at the expiry of every period of seven years after the expiry of the initial period of twenty one years. The last seven-year period expired in June 1950. On 16-12-1949, in pursuance of a resolution of the District Board of the same date, Mr. Syed Hassan, Advocate on behalf of the District Board, gave notice to the Light Railway Company of the decision of the District Board to exercise its right of purchase with effect from 25-6-1950 on the expiry of the current period of seven years, and called on the Light Railway Company to settle the transfer value by mutual agreement. The legal validity of this notice is not admitted by the Light Railway Company, but it is agreed that, for the purposes of this case, the notice may be treated as legally valid. There followed a correspondence between the Company and Mr. Syed Hassan, the details of which it is unnecessary to set out at length. A difference arose between the Company and the District Board as to the interpretation of Clause 5 of the agreement of August 1899. According to the Company, in addition to the amount calculated under Clause (5), the purchase price must include the present market value of the assets, such as plant, buildings, rolling stock, land, etc., whereas, according to the District Board, that amount is an inclusive price for the Railway as a going concern. The Company also questioned the validity of the notice under Section 8. Finally, on 29-3-1950, the District Board gave a notice to the Company, appointing Mr. Baldeva Sahay, Advocate, as its arbitrator, and calling upon the Company to appoint its arbitrator within one month, failing which in accordance with the agreement of August 1899, Mr. Baldeva Sahay would proceed as the sole arbitrator and give "a final and conclusive award". Thereupon, the Railway Company appointed Mr. Abdul Manan, a pleader of Purnea, as its arbitrator, but limited his authority to the point as to whether the notice under Sec. 5 was legally valid. Upon protest by the District Board on this limitation, Mr. Manan retired from the arbitration and subsequently Mr. Nizamuddin Khan, Advocate, was appointed by the Company "under protest" with authority to consider the question of valuation. The arbitrators, however, were unable to come to a definite decision for want of the audited accounts of the preceding four years.

Finding of the Court:

1. The agreement of 23rd June was a contract between the parties and not an undertaking to the Court. 2. There was no contempt of Court committed by the District Board. 3. There was no case for the issue of a writ of mandamus against the District Board.

Issues: 1. Whether the agreement of 23rd June was an undertaking to the Court? 2. Whether contempt of Court was committed by the District Board? 3. Whether a case was made out for the issue of a writ of mandamus against the District Board?

Ratio Decidendi: 1. The agreement of 23rd June was a contract between the parties and not an undertaking to the Court, as it did not result in any order of the Court, except disposal of the application without consideration of merits and a termination of the interim order of injunction. 2. There was no contempt of Court committed by the District Board, as the agreement of 23rd June did not constitute an undertaking to the Court, and its breach did not amount to contempt of Court. 3. There was no case for the issue of a writ of mandamus against the District Board, as the petitioner had an alternative adequate remedy by way of an ordinary action in the Civil Court.

Final Decision: The petition was dismissed with costs to the opposite parties other than opposite parties 3 and 4. The hearing fee was assessed in three sets as follows: Opposite parties 1 and 2 -- S gold mohars; Opposite party 5 -- 5 gold mohara; Opposite parties 6 to 26 -- 2 gold mohars.