1. :- This appeal has been filed by the State of Rajasthan, the appellant-defendant, against the judgment and decree-dated 11th April, 1972 passed by the Additional District Judge No. 2, Jodhpur, decreeing the suit of the plaintiff-respondent for a sum of Rs. j5,78,817.13p.

2. Before I proceed to consider the respective contentions of the learned Counsel for the parties in appeal, it would be useful to mention, in brief, the facts.

3. The plaintiff-respondent filed the suit under appeal on May 18, 1955 against the appellant as well as the Union of India and the Income tax Officer, Jodhpur. The His highness Maharaja of erstwhile State of Jodhpur invited applications from the financiers for the purpose of industrial development of the Jodhpur State and in pursuance of that, the plaintiff-respondent submitted an offer for establishing a Mill under the State sponsorship and patronage. The said offer was accepted by the erstwhile Government of Jodhpur State and eventually on 17th April, 1941 a formal agreement was entered into and executed between the parties In the said agreement, amongst many concessions & immunities granted to the plaintiff-Mill also included a concession in r