NAGENDRA PRASAD SINGH, J.

1. Civil Writ Jurisdiction Case No. 1053 of 1975 has been filed by the petitioners for quashing an order of the State Govern-ment, dated the 22nd October, 1974, enhancing the rate of royalty payable by the petitioners in respect of the right granted to them for collection and exploi-tation of Sal seeds from the forest area belonging to the State Govt., a copy of which is Annexure-"8" to the writ appli-cation. The said order was communicat-ed to the petitioners by a letter, dated the 2nd November, 1974, under the sig-nature of the Chief Conversator of Forests. A copy of this letter is Annexure-"7" to the writ application. Accord-ing to the petitioners, the revision of the rate of royalty by the respondent State during the subsistence of the lease in question was without any authority in law.

2. Civil Writ Jurisdiction Case No. 1054 of 1975 has been filed by the same set of petitioners for quashing the decision of the State Government cancel-ling the aforesaid lease itself for contra-vention of the terms thereof. The said decision was communicated to the Chief Conservator of Forests under a letter, dated the 15th March, 1975, with a copy to the petitioner No. 1. A copy of the said letter is Annexure-"6" to the writ appli-cation.

3. As common questions of law and fact are involved in these two writ applications, with the consent of the parties, they have been heard together and are being disposed of by this common judgment.

4. C. W. J. C. No. 1054 of 1975 has been taken up as the main case and will hereinafter referred to as the writ petition. Petitioner No. 1 is a partner-ship firm and the other petitioners are its partners.

5. Petitioner No. 1 (hereinafter referred to as the petitioner) carries on its business at Chakradharpur in the District of Singhbhum. The petitioners approached the State Government for grant of a lease in favour of the peti-tioner for collection and exploitation of Sal seeds, a forest produce. After nego-tiations, an agreement was executed by and between the petitioners and the State on the 14th May, 1970, incorporating the terms and conditions. A copy of the said agreement is Annexure-"1" to the writ petition. Under the terms of the said deed of lease, it was agreed by the res-pondent State to grant to the petitioner the right to exploit Sal seeds over the areas fully specified in Schedule A to the said deed for a period of 15 years com-mencing from the 14th May, 1970 and ending on the 31st December, 1984, in respect of forest divisions of Western and Hazaribagh Circles, and for a period of 13 years commencing from the 1st January, 1972, and ending on the 31st December, 1984, in respect of the forest division Southern Circle, with an option of rene-wal for a period of another 15 years for all the three circles.

6. The salient terms of the agree-ment were these. In Clause 2 of the agreement it was stipulated that the an-nual royalty in respect of Hazaribagh and Western Circles would be Rs. 18,200.00 each and in respect of the Southern Circle it would be Rs. 44,300.33 paise. The relevant clause regarding revision of the rate of royalty was as follows:-

"3. The rate of royalty will be re-vised after every three years cycle in consultation with the lessee and the deci-sion will be binding on the lessee."

According to Clause 4, the petitioner lessee had to establish a factory within the State of Bihar for processing of Sal seeds and extraction of oil therefrom within a period of five years from the date of the agreement, failing which the agreement itself was to stand terminated. The other clauses of the deed make pro-vision for other conditions which had to be performed and fulfilled by the peti-tioner. Clause 25 of the agreement pro-vided, that, in case of breach by the petitioner of any of the terms and con-ditions therein contained, it will be law-ful for the State Government at any time, by notice in writing to the lessee, to determine the agreement and there-upon the les