BALDEODAS BAJORIA Vs. GOVERNOR OF UNITED PROVINCES

JUDGEMENT

(1.) This is an application on the part of the plaintiffs for an order that a mandatory injunction be granted by this Court enjoining the defendant his servants and agents to restore the status quo by handing back or causing to be handed back to the plaintiffs the areas taken away from them by the requisitioning order of the defendant dated 30 September 1942, together with all moveable property thereon belonging to the plaintiffs. The present application came to be made in the following circumstances: On 28 September 1937, a contract was entered into between the plaintiffs and the defendant which granted the plaintiffs the right to extract bhabar grass for 15 years in six forest areas in the Western circle in the United Provinces, namely, the Saharanpur, Lansdowne, Kalagarh, Ramnagar, Haldwani and Dehra Dun Division. The contract a copy of which is annexure "A" to the plaint was expressed to be made between the Governor of the United Provinces of the one part and Baldeodas Bajoria and Nandkishore Bajoria carrying on business in partnership under the name and style of Messrs. Bajoria and Co. of the other part. By this contract it was provided that: (i) the plaintiffs should pay to the defendant certain annual payments as therein specified and in addition thereto a royalty of a sum equal to 2 per cent, of the net profits; (ii) that the plaintiffs should extract from the said areas a minimum of four lakhs maunds of bhabar grass in every year and pay a penalty in respect of any shortage of extraction; (iii) that if the factory was not capable of producing 6000 tons of paper annually then the defendant should have the option either to cancel the sale thereby made in respect of so much quantity of the produce of every year as would in the opinion of the Conservator be in excess of the requirements of the factory or to permit the plaintiffs to sell such surplus to a third party on such terms and conditions as the Conservator may fix. There was also a provision for referring all disputes between the parties arising out of this contract or concerning any of the terms or conditions to be referred to the Chief Conservator of Forests of the United Provinces.

(2.) It appears that in the years 1938-39 and 1939-40 there was shortage in extraction and certain amount of fine was imposed upon the plaintiffs in terms of the contract. On 16 April 1942, the Conservator of Forest purported to act under Clause 17(2) and gave notice to the plaintiffs cancelling the said contract in respect of three areas, namely, Lansdowne, Kalagarh and Ramnagar divisions. It is stated that those three areas have been transferred to a rival concern of the name of Sri Gopal Paper Mills. Objection was taken to this notice by the plaintiffs through their solicitors by letter dated 22 May, 1912. On the same day notice under Section 80, Civil P. C, was given on behalf of the plaintiffs. Thereafter on 19 June 1942, the forest authorities purported to refer the matter to the Chief Conservator of Forests for a decision that the notice given on 16 April 1942, was valid and binding and the Chief Conservator of Forests gave a notice to the plaintiffs fixing 8 July 1942 as the date when he would hold the arbitration. The period of notice under Section 80, Civil P. C, was still current and accordingly on 6 July 1942 the plaintiffs made an application under Secs.5 and 33, Arbitration Act, and obtained an interim injunction restraining the defendant and the arbitrator from further proceeding with the threatened arbitration. On 28 July 1942 the present suit was filed in this Court by the plaintiffs against the Governor of the United Provinces as the defendant. The reliefs claimed in this suit are as follows: (a) a declaration that the defendant is not entitled to take any action against the plaintiffs under and by virtue of para. 2, Clause 17(2) of the said contract, (b) For an injunction restraining the defendant, his officers, servants and agents from taking any action against the plaintiffs under para. 2, Clause 17(2) of the said contract and, (c) alternatively damages for breach of contract.

(3.) After this suit was filed the plaintiffs application under Secs.5 and 33, Arbitration Act, came up for hearing before Khundkar J. on 4 August 1942 when that application was dismissed, but without prejudice to the plaintiffs right in any application that might be made by the defendant under Section 34, Arbitration Act. On 10 August 1942 the defendant took out a notice of motion for stay of the suit under Section 34, Arbitration Act. The annual vacation of this Court having intervened the motion could not be heard for sometime. In the meantime, on 30 September 1942, an order was made under Rule 75A, Defence of India Rules by the defendant. The copy of this order is Ex. A to the present petition. By this order the defendant in exercise of the powers conferred by it. 75A, Defence of India Rules, requisitioned the bhabar grass in the Lansdowne and Kalagarh forest divisions for a period commencing from 20 October 1942 and ending with 30 September 1943, and directed the plaintiff to place the same at the disposal of the Government and made provisions for compensation to be paid to the plaintiff as therein stated.