KALYANPUR LIME WORKS LTD versus STATE OF BIHAR AND ANOTHER

Citation: [1954] 1 S.C.R. 958 · Decided: 14-12-1953 · Supreme Court of India · Bench: BIJAN KUMAR MUKHERJEA · Disposal: Appeal(s) allowed
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Judgment (excerpt)

195 
December 14. 
958 
SUPREME COURT REPORTS 
KALYANPUR LIME WORKS LTD. 
fl. 
STATE OF BIHAR AND ANOTHER. 
[MuKHERTEA, 
GHuLAM 
HASAN and 
JAGANNADHADAS JJ. J 
[1954] 
Indian Contract Act (IX of 1872), ss. 20 and 21-Mistake as to 
fact and 1nistake as to law-GoverTnnent of India Act (5 and 6 Geo. 
5 Ch. 61; 6 and 7 Geo. 5 Ch. 37; and 9 and 10 Geo. 5 Ch. 101), s. 30 
-Contract granting lease 
for quarrying lime-stone-JV hether falls 
within the section-Civil Procedure Code (Act V of 1908), Or. VI, 
r. 8 a•d Or. VJ//, r. 2-Denial of contract-Absence of a specific 
plea of unenforceability-Specific Relief Act (Act 1 of 1877), ss. 15 
and 18(a)-Purchaser's right against vendor with imperfect title-
Specific performance of part of contract t1Jhere part unperformed is 
large. 
The Government of Bihar (defendant No. I) gave a lease of 
hills on April I, 1928, to K (a company) for a period of 20 years 
for the purpose of quarrying lime-stones \Vith a condition attached 
thereto that it would not assign its lease-hold rights to anyone 
without its consent. 
In 1933 K assigned its lease-hold rights to 
one Bo:;e by an unregistered deed handing over 
the possession of 
the leased property to him. 
The Government stopped the assignee 
from working the quarry and forfeited the lease in favour of K in 
March, 1934; and re-entered into 
possession. 
L (plaintiff) took 
the lease of the hills from the Governn1ent on the 1st April, 1934, 
taking possession thereof on the 15th April, 1934. 
K sued the 
Secretary of State for India in Septe1nber, 1934, for a declaration 
that leases in its favour had not been validly forfeited and for an 
injunction restraining him from 
granting leases to anyone else 
and for damages. The suit, though dismissed by the trial court, 
was decreed by the High Court in appeal in 1936. 
Pending the 
.appeal before the High Court K obtained an interim injunction 
restraining the Secretary of State from granting lease to L. The 
decision of the High Court vvas affirmed by the Privy Council. K, 
\vhich had been reinstated into possession surrendered it when the 
lease in its favour expired on 31st March, 1948, and the Govern-
n1ent entered into possession informing the plaintiff that it had 
decided to lease the hills to defendant No. 2. L obtained a decree 
against the Government for specific 
perfonnance and compensa-
tion from the trial court for the period commencing from 1st April, 
1948, till L would get possession of lease hold property. Tlic High 
Court dismissed plaintiff's suit on the grounds, inter alia, 
(i) that the agreement was void under s. 20 of the Indian 
Contract Act as both the parties were under a mistake of fact ; 
• 
S.C.R. 
SUPREME COURT REPORTS 
959 
(ii) that it was void under s. 30 of the Government of India 
Act, 1915, as the conditions laid down in that section had not 
been complied with ; 
. 
, 
(iii) that no relief under s. 18(a) of the Specific Relief Act 
could be gi:;anted to plaintiff as that would amount to a reconstruc-
tion of the agreement between the parties; and 
(iv) that no alternative relief under s. 15 of the Specific 
Relief Act could be granted as plaintiff had· not relinquished all 
further claims. 
Held, (reversing the judgment of the High Court) (i) that 
neither party was under a mistake of fact as both knew that K 
had assigned its interest to Bose and, the assignment having been 
made without the consent of the lessor, K's interest was liable to 
forfeiture and the mistake, if any, was a mistake of law as it was 
regarding the validity of the assignment deed under the registra-
tion law; 
(ii) that inasmuch as the objection founded on s. 30 of the 
Governn1ent of India Act, 1915, involved investigation into the 
fact whether the draft leases bore the signatures of the appropriate 
authority on behalf of the Government and the plaintiff had no 
opportunity in the trial court to produce necessary evidence to 
111eet the point, the High Court was not justified in allowing the 
question to be raised at the time of arguments, in view of the 
provisions of Or. VI, r. 8 and Or. VIII, r. 2 of the Civil Procedure 
Code; 
(iii) thats. 18(a) of the Specific Reiief Act applied to the case 
as when the Government entered 
into the 
contract to 
grant 
lease to 1. in 1934 it had an imperfect title, and it could not grant 
the fresh lease to anyone during the existence of previous lease in 
favour of K, but after 31st March, 1948, when the lease in favour 
of K had expi
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