Reuben, J.

1. These appeals are directed against a decision of the Additional Subordinate Judge of Sasaram decreeing a suit for specific performance of an agreement to lease two limestone quarries. The appellant in Appeal No. 137 is the State of Bihar who has been directed to execute the leases. The appellant in Appeal No. 99 is Messrs Dalmia Jain & Co., hereafter referred to as Dalmia Jain, in whose favour the limestone quarries in suit were leased by the State of Bihar on the 10th of August 1949 for a period of one year. The decree directs that the leases will commence from the 1st April 1943 and that the plaintiff-respondent Messrs Kalyanpore Lime Works Limited, hereafter referred to as the Lime Company, will get compensation from the appellants for the period commencing from the 1st April 1948 till recovery of possession of the leasehold properties.

2. The main facts are undisputed. The properties in question are situated side by side on Murli Hill in the Sasaram Subdivision of the Shahabad district. One of them forms a portion of the Rehal Khasmahal and appertains to tauzi No. 4769. It occupies the upper portion of the hill and I will refer to it as Upper Murli. The other property appertains to the Banskatti Mahal and bears tauzi No. 4771. The Government besides certain rights in respect of the surface has the right to quarry limestone within this mahal. I shall refer to this property as Lower Murli.

3. The suit properties were originally leased by the Government to the Kuchwar Lime and Stone Co. Ltd. (hereafter referred to as Kuchwar Co.) for a period of twenty years commencing from the 1st April 1928. Among other terms, the leases forbade on penalty of forfeiture the transfer without the assent of the Board of Revenue of the leases or any right or interest thereunder. In September 1933, Kuchwar Co., which had gone into voluntary liquidation in the earlier portion of the year, entered into an unregistered agreement with one Subodh Gopal Bose for a consideration of Rs. 6,000 to transfer to him the entire interest under the two leases. The agreement stipulated that the assignment would be made after obtaining the assent of the Board of Revenue. By the same agreement, in anticipation of the transfer, Bose was appointed the local agent of Kuchwar Co. and subject to furnishing security for the payment of Government dues was authorised to work the quarries on his own account (Exhibit A (1), p. 47). The Kuchwar Co. then applied to the Board of Revenue for its assent to the proposed transfer and in the meantime Bose began to work the quarries in accordance with the agency agreement. The Government treated the transaction as being a transfer of the leases or at least a sublease and by an order dated the 27th March 1934 sanctioned the forfeiture of the two leases. (Annexure A : Exhibit 3A, page 106). Thereafter, Government re-entered into possession of the quarries.

4. In the meantime, the Lime Company, in anticipation that Kuchwar Co. having gone into liquidation the property would be open to resettlement, had applied for a settlement of it by an application dated the 25th January 1934 (Exhibit A, page 1) which was recommended by the local officers. The pronosal to lease these properties to the Lime Company was approved by the Board on the 31st March 1934 (Exhibit 3Z (26), page 106) and the Lime Company entered into possession on the 15th April 1934 (Annexure C). There followed correspondence between the Lime Co. and the local officers and the Board of Revenue in the course of which the drafts of the leases to be granted to the Lime Co. were settled. Before the leases could be executed, however the Kuchwar Co. on the 29th September 1934 instituted Title Suit No. 39 of 1934 in the court of the Subordinate Judge of Sasaram against the Secretary of State for India in council challenging the validity of the forfeiture and claiming damages. The Lime Company was not impleaded in this suit. The Subordinate Judge dismissed the su