Kuchwar Lime and Stone Co., Ltd. vs Secy, of State

Courtney-Terrell, C.J.—The Collector of Shahabad, through the Secretary of State for India in Council, one S.N. Ghose, described as the manager of the Kalyanpur Lime Works, Limited and one S.N. Banerjee, the Managing Director of the said Company, have been called upon to show cause why they should not be dealt with for alleged contempt of Court in respect of an injunction granted against the Secretary of State in a suit brought by the petitioners, the Kuchwar Lime & Stone Works, Limited, against the Secretary of State. It is necessary to narrate the circumstances of this litigation.

The Government were the owners of the mineral rights in two adjacent properties known, respectively, as the Upper and Lower Murli Hill. In respect of the Upper Murli Hill they also owned the surface rights. The surface rights in the Lower Murli Hill had been purchased by the plaintiff company from the zamindars. On 1st April 1928, the Government leased the mineral rights in the Lower Murli Hill and the surface and the mineral rights in the Upper Murli Hill to the plaintiffs for a period of twenty years. The mineral rights concerned are in respect of the quarrying of lime stone, and royalties were to be paid at a specified rate per ton on all lime stone extracted. The plaintiff company worked the quarries on both properties until January 1933, when they went into voluntary liquidation. The lease is a peculiar one inasmuch as it does not provide for any minimum royalty, nor does there seem to be any clause imposing upon the lessees the obligation to work the quarries to any defined extent. On 23rd March 19,33 the Government, under a mistaken impression that there was a clause in the leases providing for minimum royalty, asked for payment thereof and on 27th March the plaintiffs'' solicitors replied that there was no such obligation upon the plaintiff company. The Government seem to have examined the leases and found that this was the fact. Clause 5 of one lease and 01.6 of the other run as follows:

That neither the lessee nor any person claiming through or under it shall assign the lease or transfer any right or interest thereunder or underlet the hill or any portion of the premises comprised in such lease without the assent of the Board of Revenue first obtained. The penalty for, the infraction of this condition shall be the forfeiture of the lease.

3.On 30th September 1933, the plaintiff company through their liquidators entered into an agreement in writing with one S.G Bose. It was agreed that, subject to the sanction of the Government (the Board of Revenue) the company should sell their rights under the leases in question to Bose for a sum of Rs. 6,000. Until the attitude of the Government with regard to the prospective transfer should be ascertained, Bose was to be appointed local agent of the company in respect of their leasehold rights and to continue so to act until either the transfer of the legal right should be effected or until the Government refused to sanction such transfer. Bose was to work the quarries for his own benefit and to pay to the plaintiff all royalties and other dues in respect of the leased property which might become due from the company to the Government. On 9th October 1933, Bose entered on the property and began to work on the terms of the said agreement, and on the same day the company applied to the Collector for permission to assign the leases to him. Following the normal procedure, the Collector, on 25th October 1933, enquired as to the financial position and status of Bose. On 15th November 1933, the Commissioner wrote to the Collector inquiring as to Bose''s solvency and on 16th the Deputy Collector reported to the Commissioner that he was a suitable transferee. On 20th October Bose informed the Sub-divisional Officer at Sasaram, in whose jurisdiction the quarries lay, that he had opened the quarry on 9th October and had begun work and expected the despatch of limestone to begin on 23rd October, but on 26th October the Sub-divisional Officer had written to the Collector a letter in which, referring to Bose''s letter, announcing the commencement of work, he called attention to the fact that the transfer of the leases could only be made with the permission of the Board of Revenue and that in his (the Sub-divisional Officer''s) opinion Bose, though styling himself the agent, appeared to be the proprietor of the quarries, and then went on to say that this was an opportunity to get rid of the disadvantages of the lease (i.e., the lack of provision for a minimum royalty). He wrote:

This is the opportunity for us to get the previous mistake rectified. Since no permission has been taken from the Board the lease becomes null and void. So I am soliciting instructions whether despatch should be stopped at once or not.

On 21st November 1933 the Commissioner wrote to the Collector of Shahabad to say that the working by Bose must bestopped at once. On 6th December the Sub-divisional Officer ordered Bose to stop working. On 9th December the Solicitors to the plaintiff company wrote to the Collector complaining of the action of the Sub-divisional Officer, stating that Bose was the agent of the company and that the Government would be held liable to pay compensation to the company. There was a long delay in replying to this letter; reminders were sent by the Solicitors on 4th January 1934, on 12th January, on 10th February and on 14th March. On 21st March 1934 the Commissioner wrote to the Solicitors stating that the matter had been referred to the Government for orders. On 12th April the Solicitors again reminded the Commissioner, and on 20th April the Commissioner wrote to the Solicitors stating that the Government had forfeited the leases. It appears that the Government had "sanctioned" the forfeiture (whatever that may mean) on 27th March. This fact was not communicated to the plaintiff until 20th April 1934, but the Government resolution to that effect was not passed until 18th July, nor was the intimation of the resolution conveyed to the plaintiff company until 10th August 1934.

On 24th September 1934, the plaintiff company began a suit against the Government. In their plaint they set out a statement of the action of the Sub-divisional Officer in stopping the work of their agent Bose and further complained that the Government had wrongfully authorized a company called the Kalyanpur Lime-Works Limited to carry on quarrying operations on the lands demised to the plaintiff company with a view to granting a lease thereof to the said Kalyanpur Lime Works Limited and to oust the plaintiff company therefrom. They asked for an injunction restraining the grant of a lease to Kalyanpur Lime Works Limited or any other person and to restrain the defendant from authorising such person or persons to carry on operations on the demised lands and from otherwise interfering with the rights and possession of the plaintiff company. On 15th November the Secretary of State filed a written statement alleging that the agreement with Bose of September 1933 justified forfeiture of the lease and that the leases were forfeited under the order of 18th July 1934. Paras, 11-(d) and 11-(e) of the written statement are as follows:

11-(d). That the Government rightly re-entered, authorized and inducted the Kalyanpur Lime Works Co. to quarry or to carry on quarrying operations in the lands previously leased out to the Kuchwar Limestone Co. with a view to avoid loss to the Government and to grant subsequently a lease thereof to the said company.

(e) That the plaintiff company was rightly ejected under the terms of the lease from the leased premises.

The plaintiff company by their plaint had not in fact complained of ejectment, but sought protection against interference with their rights, and based such claim upon threats of ejectment. This must be noted in view of a contention to be hereinafter considered that the plaintiffs admitted dispossession by that defendant, the Secretary of State or by any one else. It may be noted in passing that the written statement also contended that the plaintiff company had failed to work the quarry since it went into liquidation and by para. 17 a further grievance of the Secretary of State was also pleaded:

That the company also claimed not to pay a minimum royalty as there was no such clause in the leases to pay the same.

This last statement is a curious defence and needs no further comment. No suggestion was made that a lease had been in fact granted to anyone by the Secretary of State. It is further to be noted that the Collector of Shahabad verified the written statement; para. 11-(d) was stated to be a matter of his "personal knowledge, information and record" which he believed to be true, but para. 11-(e) was "verified" as a "matter of legal opinion."

On 12th January 1935 the application for an interim injunction was heard, but it was ordered to be adjourned until the trial of the suit and an order for expedition was made. The suit came on for hearing on 1st March 1935 and was dismissed by the Subordinate Judge on 7th March. On 10th April the plaintiffs appealed to the High Court (First Appeal No. 68 of 1935) and on 23rd April they made an ex parte application to the High Court for an interim injunction. On 25th April an interim injunction was ordered by the Court with a rule calling upon the defendant to show cause. The Secretary of State applied for security for costs which was rejected on the ground that the plaintiffs had already put in security.

On 25th July 1935 the defendant was heard on the rule and the ex parte injunction which had been granted on 25th April was continued until the trial of the suit. It is this injunction which on the final hearing of the appeal was made permanent. Therefore, from 25th April 1935, the opposite party to this motion, the Secretary of State, has been under injunction restraining him from interfering with the plaintiff company''s leasehold. It is necessary at this stage to interrupt the narration in order to trace the activity of the Kalyanpur Lime Works Limited of which the respondent Banerjee is managing director and the respondent Ghose is the local manager. The earliest recorded appearance on the scene of this company is in the month of January 1934, though whether the Kalyanpur Lime Works Limited had opened up negotiations at an earlier date is not clear. On 25th January they wrote a letter to the Collector through the Sub-divisional Officer of Sasaram and they stated that they understood that the lease to the plaintiffs had been terminated since the firm went into liquidation and desired to apply for a lease. They set forth the extent of their business and offered to guarantee a minimum royalty of Rs. 10,000 per annum and pointed out that the interest of the Government had suffered by the arrangement (without such minimum royalty) with the plaintiffs. They also stated that the plaintiffs had improperly worked the quarries and had damaged them. On 31st March 1934 the Secretary to the Board of Revenue wrote to the Commissioner approving of the grant of a lease to the Kalyanpur Company on the terms and conditions set forth in Chap. 5 of the Bihar and Orissa Waste, Lands and Mineral Concessions Manual:

On the understanding that after the lease is executed the question of royalty would be re-examined by the Board provided it is well understood that any reduction, if made, would be a matter of grace.

An examination of the Manual referred to shows that leases might be arranged on varying terms both as to period and royalty. It is contended on behalf of the respondent that these documents constitute an agreement to grant a lease but the essential terms were not settled and no such agreement was in fact come to. The Government appear, however, to have given permission to the Kalyanpur Company to work the quarries, and on 15th April 1934 the respondent Ghose, the local manager, wrote to the Collector referring to an interview between the managing director and the Collector three days before, and stated that he had received a copy of a letter dated 14th April 1934 from the Board of Revenue to the Sub-divisional Officer at Sasaram sanctioning the beginning of work on the quarries. He asked that a draft lease might be sent to him without delay and stated that he was "arranging to start quarrying limestone and manufacturing lime." On 2nd May Ghose wrote a letter to the Collector asking formal permission to start quarrying operations and on 13th May the Collector replied:

Having been granted a lease for limestone concession in the Upper and Lower Murli areas, you are lawfully entitled to start work in them at once. The draft leases have been submitted to the Board of Revenue.

It is interesting to observe that at this time, although the matter of granting permission to the plaintiff company to transfer the lease to Bose had been "under the consideration" of Government since December 1933, the Government resolution to forfeit the lease was not passed until 18th July 1934 and the "sanctioning" of forfeiture (however that may have been effected) did not take place until 27th March 1934 and it was not until 10th August 1934 as hereinbefore narrated that the resolution was conveyed to the plaintiff company. The respondent Banerjee in his affidavit says that the forfeiture was acquiesced in by the plaintiff company but there appears to be no ground for this assertion. There must also be narrated the effort on the part of Bose whom the plaintiff company had, pending the decision on the matter of the transfer of the lease to him by Government, appointed as their agent to work the quarries, to obstruct the Kalyanpur Company from getting into possession of the quarries. At the beginning of this judgment it was stated that as to the Lower Murli Hill estate the Government possessed the mineral rights only; the surface was owned by the zamindars who, on 23rd September 1928, sold the surface rights to the plaintiff company. They in their turn sold the surface rights to Bose who carried on business as the "Kuchwar Lime and Stone Co." It would seem that Bose decided to obstruct the Kalyanpur Company''s men from crossing the surface of the Lower Murli Hill on their journey to the quarries. No doubt this behaviour of Bose, relying upon his personal rights as the owner of the surface, was with the approval of the plaintiff company.

On 23rd April 1934, on a report of the Sub-Inspector of Police, the Sub-divisional Officer issued notice to Bose (describing him as the manager of the Kuchwar Lime and Stone Co.) u/s 144, Criminal P.C. Bose, instead of showing cause, moved the High Court to quash the proceedings or to transfer the same to some other Magistrate. This petition was rejected by the Court on 7th June. It has been contended before us that in his petition to the High Court the plaintiffs admitted that the Kalyanpur Company had obtained possession on 22nd April 1934. The answer to this is that the plaintiff company were not parties to the proceedings and an examination of the petition makes it perfectly clear that the only question in dispute between the parties was as to whether Bose, as the owner of the surface rights over the Lower Murli Hill, had the right to obstruct the Kalyanpur workmen from proceeding to and from the quarry. The order u/s 144 was made absolute by the Sub-divisional Officer. Later on certain employees of Bose were prosecuted under Sections 143 and 341, Penal Code, for obstructing the Kalyanpur men. The Magistrate acquitted them but stated that as the Kalyanpur men had to get to the Upper Murli Hill quarries and there was no other road other than over the Lower Murli land, they had a right to pass over such land. The circumstances of this litigation in the Magistrate''s Court has nothing to do with the question of fact as to whether the plaintiffs had been ousted by the Kalyanpur Company from possession of the quarries: it is concerned solely with the surface rights of the Lower Murli Hill of which the plaintiff company had no legal control.

On 11th May 1935 the Civil Suit Deputy Collector of Arrah wrote to the Subdivisional Officer of Sasaram, forwarding a copy of the injunction which had been granted by the High Court; and on 14th May he wrote that the order of the High Court should be carried out at once and requesting him to report immediately. The Sub-divisional Officer on 17th May also forwarded a copy of the High Court''s injunction to Ghose and on 21st, the Civil Suit Deputy Collector wrote to the Subdivisional Officer stating that he had been asked by the Collector to inform the Kalyanpur Company that they should be directed to stop work as ordered by the High Court. On 4th June Banerjee wrote to the Sub-divisional Officer of Sasaram stating that the Khasmahal Tahsildar had sent to Ghose asking him to stop work, that Ghose had asked for a written order and that, since writing, a copy of the Collector''s letter of 20th May forwarding the injunction had been received. Then follows this extraordinary passage:

In compliance with your executive order communicated through the Khasmahal Tahsildar, we have stopped all quarrying operations from the 21st ultimo and we have been suffering daily losses and damages to a considerable extent. Would you kindly let us know as early as possible how long you direct us to stop work?

The reply of the Sub-divisional Officer is dated 7th June. He states that he is surprised at Banerjee''s letter, that no executive order was passed, and that the work was stopped by the injunction of the High Court and not by an executive order. On the 13th, Banerjee replies that his company is suffering daily losses and damages and earnestly requests that instructions may be issued to the Government Pleader to move the High Court to get the injunction set aside. On 3rd July the managing director writes again to the Sub-divisional Officer stating that the injunction order is not binding on his company as it was not a party to the suit, that the work had been stopped on account of the administrative order through the Khasmahal Officer and again requesting that the Government Pleader might be instructed to get the High Court order set aside. A copy of this letter was sent by the Sub-divisional Officer to the Collector, stating that the Kalyanpur Company appear to persist in their determination to misunderstand the order to stop work as an executive order and saying:

As it appears to me they have some ulterior motive in doing so, I have thought it better to bring to your notice before replying to them.

On 12th July the Collector wrote to Banerjee stating that if he disobeyed the High Court order he would do so at his own risk. The High Court appeal was duly heard at the end of December and beginning of January 1936 and on 7th February judgment was delivered, allowing the appeal of the plaintiffs and making the temporary injunction permanent. It was held that the plaintiffs had committed no breach of the conditions of their lease which would justify forfeiture under the terms thereof; that the lease had not been forfeited and that the plaintiffs were still the lessees of the Government. At the hearing of this appeal there was a suggestion that the Government or their nominees the Kalyanpur Company had succeeded in ousting the plaintiffs from possession; but there was no suggestion that any lease had in fact been granted to the Kalyanpur Company, and as the point of dispossession had not been raised in the Court below the learned Judges rightly refused to entertain it.

As a matter of fact it was admitted on behalf of the opposite party on this motion that the plant and machinery of the plaintiffs is still on the quarries. They include a light, railway track and tub cars for the conveyance of limestone from the immediate site of the quarry to the railway line. Such work as has been done by the Kalyanpur Company is quite trifling in extent and the total royalty paid to the Government in respect thereof amounts only to Rs. 2,344-6-9. The first payment was of Rs. 100-14-9 on 4th January 1935. If this is in respect of the previous quarter then it was in respect of working after the institution of the suit. There is no evidence of any working before the institution of the suit on 24th September 1934, and at the rate of As. 13-6 per ton which is the rate quoted in the Manual the amount of limestone quarried comes to only a little more than 2,000 tons. We are told that the limestone has been carried down from the quarry in baskets on the heads of labourers and tipped into bullock carts which have been the sole means of removing it from the quarry. This degree of "working" of the quarry is insignificant and does not constitute an ouster of the plaintiffs from possession.

The Kalyanpur Company at any time might have intervened in the suit and asked to be joined as a party but they refrained from so doing. In the affidavit filed on behalf of the plaintiff company on this motion it is stated that on 19/20th December 1935, and on 2nd/3rd January 1936, Ghose and Banerjee were both present throughout the hearing of the appeal, either instructing the Government Pleader or watching the proceedings on behalf of the Kalyanpur Lime Works, Limited. On 9th March 1936 the plaintiffs'' Solicitors wrote to the Collector complaining that Bose was not allowed to work and that the Kalyanpur Company had begun to work and asking that Bose might be put in undisturbed possession, On the 16th March the Collector replied stating that the matter was under consideration. This evidently crossed with a letter of the 18th March in which the Solicitors sent a reminder to the Collector and on the same date the Solicitors also wrote to the Commissioner. They again wrote on the 30th March and this letter crossed with a reply by the Collector to the Solicitors dated the 28th March. It is a very important letter because it makes it quite clear that the Government had made up their minds to depart from the correct attitude of the Collector (who had warned the Kalyanpur Company of the risk of working in view of the injunction) and had decided to come out into the open and support the cause of the Kalyanpur Company. The letter is as follows:

With reference to your Letter Number M/N-7463, dated 18th March 1936, I have the honour to say that on the authority of Letter Number 21-27-4 dated 31st March 1934, issued by the Board of Revenue of Bihar and Orissa, possession of the quarries at the Murli Hill was delivered to Messrs. The Kalyanpur Lime Works Limited on 15th April 1934. That company took possession of the quarry on that date and they have been working in it since 15th May 1934. Messrs. The Kalyanpur Lime Works Limited were not parties to the suit which was brought against Government by the liquidators of the Kuchwar Lime and Stone Company Limited, and the decree passed by the High Court does not give Government authority to eject their present lessees. You may take such legal action against Messrs. The Kalyanpur Lime Works Limited as you are advised.

It would be interesting to know how this change of attitude was brought about. Up to a point the Collector and apparently the Commissioner had acted correctly in warning the Kalyanpur Company that any resumption of work by them would involve risk in view of the High Court order. They did not, as they should have done, inform the company that the Government''s authority could no longer be relied upon to support the claim of the Kalyanpur Company to work the quarry. The Government in view of the judgment of the High Court were not entitled to treat the Kalyanpur Company as their lessees, for it had been held that the lease to the plaintiff company still subsisted and had not been forfeited. Having regard to the injunction, they were not entitled to authorise licensees to work in the quarries. By the letter above reproduced the Government through the Collector made it quite clear that the Kalyanpur Company were treated by the Government as lessees and that the Government would support their supposed lessees in that attitude. On the 31st March the plaintiffs'' Solicitors wrote to the Kalyanpur Company stating that although they were not parties to the suit they were aware of the injunction and should have obeyed it, and on 21st April 1936, Ghose wrote to the plaintiffs'' Solicitors in reply stating:

I beg to point out that I have been in peaceful and continuous possession of the Murli limestone quarries in Upper and Lower Murli Hill areas since April 1934, and have been working the same as lessees of the Government paying royalties, etc., to them ever since. In spite of full knowledge and repeated intimation ... did not choose to make us parties or to ask for recovery of possession. We had no knowledge of the title suit filed by your clients in the Second Sub-Judge''s Court, Arrah, until at a very late stage after the matter had gone up to the High Court in appeal and not having been made parties we have had no opportunity to put in our papers and evidence and present our case as bona fide lessees of Government in which capacity we had taken full and complete possession of the quarries, etc., long before your clients filed this suit, referred to.

It is not attempted on behalf of either Banerjee or Ghose to support the truth of the statement by Ghose as to the lack of knowledge of the Kalyanpur Company as to the suit or the filing of the appeal. The statement is a manifest falsehood and it is sought to excuse Ghose on the ground that he was merely the local manager without knowledge of the litigation. We have been informed, though there is no evidence to that effect, that the assistance or intervention of Banerjee was positively declined by the Government Pleader in the course of the suit and the appeal. It may well be that the Government Pleader had been instructed not to allow any interference on behalf of the Kalyanpur Company. The Kalyanpur Company could, however, had they so chosen, have intervened and stated, if it were the fact, that they were in possession under a title from the lessor and that they had a right to be heard. There is little doubt that the real reason for the non-intervention of the Kalyanpur Company was with a view that they might be able at a later stage, in the event of the decision being against the Government, to offer a second line of defence in subsequent proceedings, and it is difficult to believe that this was done without complete co-operation between the Kalyanpur Company and the Government though it may be that the Government Pleader was not instructed to that effect. It is much to be regretted that an open and candid attitude was not adopted. Similarly, after the disposal of the appeal, there was a change of attitude, when the Kalyanpur Company re-started work which "they had stopped after the temporary injunction. On 16th March 1936, the Collector warned the company of the danger of working the quarry in view of the High Court judgment. The later letter of the 28th March, which I have?quoted above, cannot be explained on any other basis than that by some means the Kalyanpur Company had persuaded the higher authorities in the Government hierarchy to support their possession. In June, during the vacation, an application was tentatively made to the Vacation Judge to issue notice to the Government to show cause why they should not be dealt with for contempt. The Vacation Judge directed that the application might well wait until the beginning of the term and on 4th August 1936 the present petition was lodged.

I now proceed to deal with the arguments in support of and against the application for an order of committal for contempt of Court. As against the Government it is urged, and rightly urged, that they are in contempt by direct breach of the injunction by allowing Banerjee and Ghose to work the quarries and encouraging them by their support. On behalf of the Government Sir Sultan Ahmad took the correct attitude that the Government were anxious to obey the orders of the Court and that if their action should be held by the Court to be in breach of the injunction, the Government would unreservedly apologise and refrain from such action as the Court might consider a ''breach. He nevertheless contended that the decision of the High Court against the "Government did not compel the Government to eject the Kalyanpur Co. from the works. He contended that the Government were bound to the Kalyanpur Co. by an agreement to grant a lease and had let them into possession of the quarries. This argument has no substance. Until the judgment of the High Court be set aside the Government are precluded from denying the title of the petitioners from being considered as tenants of the Government in possession of the quarries. The supposed contract has no binding effect even if it be true that the Government in granting and the Kalyanpur Co. in accepting a lease or a contract for a lease were under the impression that the Government had a title to grant such a lease or a contract, for they are under a mutual mistake of fact as to the plaintiffs'' title and it was the duty of the Government after the judgment to repudiate the contract and to withdraw any license or authority given by them to the Kalyanpur Co. As was said in Cooper v. Phibbs (1867) 2 HL 149:

Private right of ownership is a matter of fact; it may be the result also of matter of law; but if parties contract under a mutual mistake and misapprehension as to their relative and respective rights, the result is that that agreement is liable to be set aside as having proceeded upon a common mistake.

See also Ram Chandra Misra v. Ganesh Chandra Gangopadhaya AIR 1917 Cal 786. No shelter is afforded either to the Government or to the other respondents by such a contract even if it existed. Moreover the contract relied upon is not a contract at all, for the essential term of the contract of the proposed lease is omitted as also is the matter of royalty. If the Government had had any doubt as to their position after the injunction in the matter of abiding by the contract with the Kalyanpur Co. they should have asked for directions from the Court. As was said by their Lordships of the Privy Council in Eastern Trust Co. v. McKenzie Mann & Co., Ltd. (1915) AC 750 at Cooper v. Phibbs (1867) 2 HL 149:

It is the duty of the Crown and of every branch of the executive to abide by and obey the law. If there is any difficulty in ascertaining it, the Courts are open to the Crown to sue, and it is the duty of the executive in cases of doubt to ascertain the law in order to obey it, not to disregard it.

It may well be as in the present case, that the Government may have thought that the decision of the High Court in the suit by the present petitioners was erroneous, and we are informed that they intend to appeal to His Majesty in Council; but until the decision of the High Court was reversed the executive should have adopted the course that they had no power to grant any lease inconsistent with the lease to the petitioners; that they had no power to let into possession any person other than the petitioners, and if such other person had entered into possession or was attempting to enter into possession on the strength of any authority granted by the Government, they should have notified that person that the authority was terminated. The letter cited above dated 28th March from the Collector to the Solicitors to the petitioners indicates that the Government were treating the Kalyanpur Lime Works Co. Ltd. as in possession granted by the Government and that the Government endorsed the action of the Kalyanpur Co.; The arguments presented on behalf of Banerjee by Ms. P.R. Das and adopted by Mr. P.K. Sen on behalf of Ghose may now be examined. They may very simply be summarised as follows:

Firstly, it is contended, and rightly contended, that these persons were not parties to the suit by the petitioners against the Government and are therefore not bound by the injunction granted against the Government and cannot be held guilty of a breach thereof. But if the Kalyanpur Lime Works and Banerjee and Ghose are considered as servants or agents of the Government, they are undoubtedly liable for breach of the injunction if they knowingly acted as servants or agents of the Government. We are unable to say what the precise relationship between the Government and the Kalyanpur Co. really was The almost simultaneous adoption in March and April 1935 of a common line of defence may indicate that the action of the Kalyanpur Co. was at the instance of the Government, or it may be that the Kalyanpur Co. had been able by some means to persuade the higher authorities of Government to override the Collector and give their support to the Kalyanpur Co. But quite apart from the question of service or agency, there can be no doubt whatever that from the beginning the opposite party Banerjee and Ghose, were thoroughly aware of the injunction and were thoroughly aware that their presence upon the quarry with the permission of the Government was a setting at naught the order of the Court, and in these circumstances the conduct of these respondents was a contempt of the authority of the Court whether or no they were themselves bound by the injunction. The distinction between the two kinds of contempt has long been well recognised and was clearly explained by the Court of Appeal in Seaward v. Patterson (1897) 1 Ch 545, where all the authorities were examined.

Secondly, Mr. P.R. Das endeavoured to argue that the possession of his client was analogous to that of a third party who under the CPC in execution proceedings sets up a claim to possession of property of which delivery of possession had been granted to the plaintiffs as against the defendant. The analogy is quite fallacious. In the first place, as has been pointed out above, neither the Kalyanpur Co. nor Banerjee nor Ghose is in possession of the quarry in question. Moreover, even if the analogy be good, it is incumbent upon the opposite party to show that he was bona fide in possession on his own behalf and such bona fides is in this case conspicuous by its absence. From the very beginning the course of affairs was clearly known to these respondents. Had their possession been bona fide they could have, and would have, insisted or appearing as parties at the trial or in the appeal. They were well aware that the Government could have had no power to grant them a lease or enter into a contract or let them into possession until the lease to the plaintiffs had been validly forfeited, and after the injunction the Government had no title to allow them to continue in possession. It is contended further by Mr. Das that the Kalyanpur Co. would, had they been parties to the suit, have been able to present further arguments which would have convinced the Court that the lease by the Government to the petitioners had been rightly forfeited. By way of illustration it is said that it had not been pointed out to the Court that the grant of the lease was governed by the Crown Grants Act, 1895, and that this Act renders inapplicable to such a grant the provisions of the Transfer of Property Act with regard to the requirements of notice of forfeiture, and that re-entry by the Crown was the only necessary condition to be fulfilled by their forfeiture. To this argument, if it had been offered, a simple reply might be made that the Court had'' held that, quite apart from the question of notice, no ground for forfeiture, either by re-entry or by notice, had been committed by the plaintiffs.

In conclusion it was said on behalf of both the Secretary of State and of the two other respondents, that if the Court holds that they or any of them have been guilty of contempt, they; unreservedly apologise and plead in extenuation that they had committed a bona fide mistake as to their respective legal position. That each of the three opposite parties has been guilty of contempt, the Government by a breach of the injunction, and the two other respondents by setting at defiance the authority of the Court, there is no doubt in our minds. In the circumstances we deem it sufficient to direct that the Secretary of State do forthwith pay to the petitioners one half of their costs and that the other respondents, Banerjee and Ghose shall also pay to the petitioners one half of their costs and shall be jointly and severally liable therefor; and we fix the hearing fee of this petition at two hundred and fifty gold mohurs. In view of the correct attitude taken on behalf of the respondents, that they had and have every intention of treating with respect the authority of the Court, we do not make any further order. We are much indebted to Mr. Baren Bose for his very able and lucid argument in support of the petition.

Mohamad Noor, J.

I agree.

Varma, J.

I agree.