( 1 ) THIS first appeal arises from a suit instituted by the Harda Electric Supply company (Private) Limited (hereinafter called the Company) against the Municipal committee, Harda (hereinafter called the Municipality) for recovery of Rs. 50,000/-as damages and for other alternative reliefs. The suit was resisted by the municipality, The Additional District Judge, Hoshangabad, passed a decree for Rs. 40,000/ -. The Municipality has filed this appeal the Company has filed cross-objections.

( 2 ) THE plaintiff's case was that by an agreement dated July 31, 1936, the Electro mechanics Ltd. , Bombay, agreed to supply the Municipality with electric energy for the purpose of pumping approximately 3 lac gallons of water daily. The agreement was to operate for 25 years. Of the terms and conditions contained in it one was that the water pumped per unit would not be below 1000 gallons on an average "at the specified head of 130 feet". By another clause, it was agreed between the contracting parties that the Municipality would pay to the Company two annas per unit of energy consumed. On November 29, 1939, the said Electro Mechanics Ltd. , assigned all their right, title and int