( 1 ) THIS appeal, filed by the defendant, is directed against a judgment and decree of the Third Additional District Judge, Bhopal, dated 29th November 1966, decreeing the plaintiff's suit for declaration simpliciter.

( 2 ) THE material facts, shortly stated, are these. The dispute relates to rent of the distillery buildings including office and residential quarters at Jahangirabad, bhopal. On 26th March 1958, the plaintiff was granted a distillery contract for the wholesale supply of country spirit for the districts of Raisen and Sehore on the terms and conditions contained in the licence. It was permitted to occupy the distillery building for the manufacture of country liquor in terms of clauses 8 and 46 of the licence. The licence was in renewal of distillery contracts which the plaintiff had from the erstwhile Bhopal State right from the year 1916 onwards. For all these years, the then Government allowed the plaintiff to occupy the distillery building for execution of its excise contracts on payment of rent. The rent initially charged was Rs. 250/- per month and was finally enhanced to Rs. 392. 62 with certain additions and alterations to the building. When the distillery contract was granted to the plaintiff by the State of Madhya Pradesh, the pre-existing rent of Rupees 392. 62 was not adopted to be the basis for occupation of the distillery building. The renewal of the licence was subject to the condition that the plaintiff would be liable to pay such rent as was fixed by the Public Works Department under Fundamental Rule 45-B. Admittedly, there has so far been no final fixation of rent by that department.

( 3 ) CLAUSE 8 of the licence provided that if warehouse building was supplied by the state Government the plaintiff shall be liable to pay such rent as was fixed by the public Works Department. Clause 46 envisaged that it shall take on lease the distillery building on such conditions as regards rent etc. as shall be determined by that department. The relevant clauses read as follows:-

"8. The warehouse building shall be arranged by the licensee himself under the directions from the Excise Department. If warehouse building is supplied by the State Government the licensee shall be bound to pay necessary rent of the building or buildings on the terms and conditions offered by the Public Works Department of the State. "

XX XX XX XX"46. The licensee shall take on lease the distillery buildings and all other buildings and structures, etc. , attached thereto at Bhopal on such conditions as regards term, rent and otherwise as may be prescribed by the Public Works Department of the State Government. It shall be a condition of the lease that it shall terminate on the termination of this licence. "

The fixation of rent had to be in accordance with Fundamental Rule 45-B which reads:-" (i) The capital cost of all old buildings whose cost of construction or acquisition is not known shall be determined on plinth area basis at present day rates namely Rs. 10 per SQ. ft. of class I, Rs. 8 per sq. ft. of class II and Rs- 6 per sq. ft. of class III buildings and the value so assessed written down by 60 per cent (sixty per cent) on account of depreciation as the buildings are very old and lack amenities provided in modern constructions. "

( 4 ) ON 1st January 1959, the Public Works Department informed the plaintiff that it had fixed provisional rent of the building at Rs. 2071-81 per month, inclusive of taxes, which was payable w. e. f. 1st April 1958 and asked the plaintiff to execute a draft lease as furnished, embodying the terms and conditions of the lease as envisaged by clause 46 of the licence and also to pay Rs. 40,300-56, being the difference between the provisional rent and the existing rent. Along with the letter of demand, the department sent to the plaintiff a statement showing the manner in which the provisional rent had been fixed. The plaintiff did not comply with the demand for payment of provisional rent, no