1985 Supreme(Raj) 342
RAJASTHAN HIGH COURT
Guman Mal Lodha, J.
State Of Rajasthan - Appellant
Versus
Maharaja Shree Umaid Mills Ltd. - Respondent
S. B. Civil First Appeal No. 11 of 1973.
Decided On : 24-01-1985
Headnote:
The Rajasthan High Court held that the State of Rajasthan was liable to refund the royalty paid by the plaintiff-mill to the State under an agreement dated 17th April, 1941, which was declared void by the Supreme Court. The Court held that the plaintiff was entitled to the refund of the royalty paid by it to the State under the agreement, as the agreement was void and unenforceable. The Court also held that the suit for the refund of the royalty was within limitation, as the limitation period started from the date when the mistake was discovered by the plaintiff.
Fact of the Case:
The plaintiff-mill filed a suit against the State of Rajasthan for a refund of the royalty paid to the State under an agreement dated 17th April, 1941, which was declared void by the Supreme Court. The State of Rajasthan contested the suit on the grounds that the agreement was not void, that the plaintiff was not entitled to the refund of the royalty, and that the suit was barred by limitation.
Finding of the Court:
The Court held that the agreement dated 17th April, 1941 was void and unenforceable, as it was not affirmed by the United State of Rajasthan or the Part B State of Rajasthan. The Court also held that the plaintiff was entitled to the refund of the royalty paid by it to the State under the agreement, as the agreement was void and unenforceable. The Court further held that the suit for the refund of the royalty was within limitation, as the limitation period started from the date when the mistake was discovered by the plaintiff.
Issues: 1. Whether the agreement dated 17th April, 1941 was void and unenforceable? 2. Whether the plaintiff was entitled to the refund of the royalty paid by it to the State under the agreement? 3. Whether the suit for the refund of the royalty was within limitation?
Ratio Decidendi: The Court held that the agreement dated 17th April, 1941 was void and unenforceable, as it was not affirmed by the United State of Rajasthan or the Part B State of Rajasthan. The Court also held that the plaintiff was entitled to the refund of the royalty paid by it to the State under the agreement, as the agreement was void and unenforceable. The Court further held that the suit for the refund of the royalty was within limitation, as the limitation period started from the date when the mistake was discovered by the plaintiff.
Final Decision: The Court dismissed the appeal filed by the State of Rajasthan and allowed the cross-objection filed by the plaintiff-mill. The Court held that the plaintiff was entitled to the refund of the royalty paid by it to the State under the agreement, as the agreement was void and unenforceable. The Court also held that the suit for the refund of the royalty was within limitation, as the limitation period started from the date when the mistake was discovered by the plaintiff.
JUDGMENT
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 regard to the exemption from the payment of duties and royalties. According to the appellant, the plaintiff-Mill in consideration of the concessions and immunities granted to it by the erstwhile State of Jodhpur under the said agreement agreed vide its Clause 12 to pay to the State royalties at rate of 71/2% of the profits of the company in each of its financial year.
4. The case of the plaintiff respondent before the lower court was that the agreement in question was acted upon by the erstwhile Government of Jodhpur so long as it remained in existence. The plaintiff-respondent had filed the present suit when its suit No. 13/52 was dismissed by the District Judge, Jodhpur on 3rd September 1954 and when the District Judge had already held that the agreement of 17th April, 1941 was not at all binding and enforceable against the State of Rajasthan. Since the appeal against the judgment of the District Judge in suit No. 13/52 was pending before this Court and since after the decision of this Court dated the 7th April, 1959 a further appeal in this connection was pending before the Supreme Court along with an appeal which the plaintiff respondent had filed before the Supreme Court against the decision of this Court dated the 19th October, 1959 given in Civil Writ Petition No. 47/53 so the proceedings of the present suit under appeal remained stayed uptil 26th October, 1963 when a review petition filed by the plaintiff-respondent in relation to the decision of the Supreme Court dated 27th November, 1961 was also dismissed by the Supreme Court.
5. Thereafter the plaintiff respondent filed an application on 28th November, 1964 praying for permission to amend the plaint so as to include the prayer for refund of money of royalty paid to the State @ 71/2% on its net profits in respect of the period commencing from 2nd June, 1949 to 22nd January, 1954 amounting to Rs. j5,78,887.13. The application for amendment was contested on behalf of the appellant State and it was contended that the said application was a highly belated one and, that any permission which may be granted now at that stage to amend the plaint would change the very nature of the suit.
6. The amendment was partly allowed to the effect that the amount paid within three years of the filing of the suit from 18th March, 1952 to 18th March, 1955 be included in the plaint and prayer for its refund may be made. The Union of India and the Income Tax Officer prayed that the suit against them be dismissed in view of the decision of the Supreme Court in a former-suit. This prayer was accepted and the suit against the defendant Nos. 1 and 3 was dismissed.
7. The learned Addl. District Judge No. 2, Jodhpur who tried the suit, decreed the suit of the plaintiff respondent, in toto and hence this appeal has been file
Click Here to Read the rest of this document
Back
