LODHA, J.—This first appeal by the State of Rajasthan (which will hereinafter be called the State) arises out of a suit filed by it against the defendant Bundi Electric Supply Company Ltd., Bundi (which will hereinafter be referred to as "the Company" in the Court of Senior Civil Judge, Bundi. The Company also filed a cross suit against! the State. The suit by the State was filed on 4-7-1958 and was registered as Civil Original Suit N. 7 of 1958 and the suit by the Company was filed on 16-10-1958, and registered as No. 9 of 1958. The relevant facts giving rise to these two suits may be stated as follows.

2. There was a commercial concern owned by the former State of Bundi called the Bundi Petrol Automobile Supply Agency (hereinafter referred to as "the Agency") which used to carry on business of running buses and trucks and also dealt in petrol and spare motor parts etc, It is alleged in the plaint filed by the State that the Company was registered under the Bundi Companies Act, 1936. It wanted to obtain a licence for monopoly of motor service within the territory of the former Bundi State and therefore it approached the then Ruler of Bundi for the said purpose and a licence was gra

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