IN THE HIGH COURT OF JUDICATURE AT MADRAS
H.J. Kania, Chief Justice, M. Patanjali Sastri, B.K. Mukherjea, S.R. Das and N. Chandrasekhara Aiyar, JJ.
The State of Orissa
Versus
Madan Gopal Rungta
Case Nos.300 to 304 of 1951.
Decided On : 25 October 1951
Each of the respondents alleged that between 1941 and 1947 he had agreed to take from the Ruler of Keonjhar a mining lease and had entered into possession of the area. Some of the petitioners alleged that they had spent money on the development of the mines and installed machinery to work the same. It is however common ground that there was no registered lease in favour of any of the respondents before 1947. On the 14th December, 1947, the Ruler of Keonjhar entered into a merger agreement with the Dominion of India and as from the 1st January, 1948, the State was merged in the Dominion of India. After signing the merger agreement the Ruler gave registered leases on the 27th December, 1947, to the respondents in these appeals. In pursuance of the exercise of the powers conferred on the Government of Orissa by section 4 of the Extra Provincial Jurisdiction Act, 1949, read with Notification No.172/1B dated 23rd March, 1948, of the Government of India, the Government of Orissa issued a notification dated the 8th of June, 1949, declaring, inter alia, the said leases to be void and not binding on it. This annulment was made expressly on the ground that these commitments were not reasonable and bona fide. Thereafter, the respondents, along with others approached the Orissa Government to give them leases and the State Government gave them temporary permits to work the mines in November, 1949. On the 3rd July, 1951, however, they passed an order cancelling the temporary permits and directed the respondents to remove their assets appertaining to the respective mines within a fortnight. The respondents thereupon filed the petitions before the Orissa High Court praying for writs or directions in the nature of mandamus against the State of Orissa directing them to withdraw the notices dated the 8th of June and 3rd of July, 1951, and to forbear from acting upon or giving effect to the same. The Court after noticing the rival contentions of the parties and rejecting the contention that the State of Orissa had cancelled the permits and were attempting to take possession as an Act of State, posed the question
“whether the law of annulment relied upon by the State was applicable to the mining leases granted to the petitioners, or in the alternative, whether the State had any right in law to cancel the leases before the period mentioned therein.”
Referring to the contention of the State founded on the acceptance by the respondents of the temporary permits and the estoppel arising therefrom Ray, C.J., in his judgment stated as follows:
“In determining the validity of this contention (relating to the temporary permit and estoppel -arising therefrom) the circumstances under which these applications were made and the legal implications of such applications and the permissions granted under them will have to be considered. It is remote from our intention to express any opinion in this summary proceeding as to the respective merits of the rival contentions. I am however satisfied that in the context of events and in the logic of circumstances attending thereto, there is a case to be tried.”
He next considered the scope of the writ of mandamus and came to the conclusion that “at the moment” the respondents had no alternative legal remedy, equally convenient, beneficial and effectual because the respondents could not file a suit till after the expiry of the period of sixty days required for the purpose under section 80 of the Civil Procedure Code and he thought that unless protected by the Court in the meanwhile the respondents would undergo irreparable and irremediable loss of possession of the mining leases involving a huge waste of labour, machinery and other resources of equipments
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