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Baldeodas Bajoria v. Governor Of United Provinces

Calcutta High Court

May 10, 1943

Judgment

Subsequent
References

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Structured Summary of the Opinion

Factual and Procedural Background

In 1937 the plaintiffs (Baldeodas Bajoria and Nandkishore Bajoria trading as Messrs Bajoria & Co.) entered a 15-year contract with the Governor of the United Provinces granting them the right to extract bhabar grass from six forest areas (Saharanpur, Lansdowne, Kalagarh, Ramnagar, Haldwani and Dehra Dun divisions). The contract required annual payments, a royalty of 2% of net profits, minimum annual extraction, penalties for shortfall, and included a clause giving the Conservator an option if the factory could not consume the contracted quantity. Disputes under the contract were to be referred to the Chief Conservator of Forests.

Shortages in extraction occurred in 1938–39 and 1939–40 and fines were imposed. On 16 April 1942 the Conservator purported to cancel the contract with respect to three areas (Lansdowne, Kalagarh and Ramnagar). Those areas were transferred to a rival, Shree Gopal Paper Mills. Plaintiffs objected and invoked arbitration procedures and the protections of Section 80 CPC. Plaintiffs obtained an interim injunction under Sections 5 and 33 of the Arbitration Act on 6 July 1942 and filed the present suit on 28 July 1942 seeking: (a) a declaration that the defendant could not act under para. 2, cl. 17(2) of the contract; (b) an injunction restraining such action; and (c) alternatively, damages.

Following interlocutory proceedings, an application under Section 34 of the Arbitration Act for a stay of the suit was taken out by the defendant and ultimately granted by Sen J. on 25 February 1943. Meanwhile, on 30 September 1942 the defendant issued an order under Rule 75A of the Defence of India Rules requisitioning bhabar grass in Lansdowne and Kalagarh for the period 20 October 1942 to 30 September 1943 and making provision for compensation. Plaintiffs applied on 23 February 1943 for a mandatory injunction to restore the status quo (i.e., hand back the requisitioned areas and movable property). The defendant opposed on multiple grounds. The present judgment decides that application.

Legal Issues Presented

Whether this Court can grant a mandatory interlocutory injunction in the suit as framed to compel restoration of areas and movables allegedly taken under the requisition order dated 30 September 1942.
Whether the requisition order made under Rule 75A, Defence of India Rules (and within the Defence of India Act framework) can be challenged in this Court given Section 16 of the Defence of India Act (which, it was argued, bars judicial questioning of such orders) and Section 17 (protection for acts done in good faith under the Act).
Whether the plaintiffs' delay (from 30 September 1942 to 23 February 1943) in seeking a mandatory injunction is fatal to equitable relief (i.e., whether laches/prejudice and the exceptional nature of such relief preclude it).
Whether the interlocutory relief sought would be infructuous because (a) the requisition period extended until 30 September 1943 and Shree Gopal Paper Mills were already extracting grass, and (b) seasonal restrictions meant little practical remedy remained.
Whether the suit as framed is incompetent or misconceived because it was brought nominally in the name of the Governor (implicating Section 306 of the Government of India Act and the correct party being the Province under Section 79 CPC).
Whether principles in the Specific Relief Act (Section 56) preclude granting an injunction interfering with public duties of the Provincial Government and therefore bar temporary as well as perpetual relief.
Whether procedurally the application was defective for not being intituled under the Arbitration Act rules and for not giving notice to Shree Gopal Paper Mills who would be affected.

Arguments of the Parties

Plaintiffs' (Mr. Isaacs) Arguments

The requisition order displaces the plaintiffs' suit and affects the reliefs they seek in the suit; it is a wrongful act which the Court has power to restrain to give the relief claimed in the suit.
The delay in applying for relief after the requisition order is explained by correspondence and attempts to resolve the matter with authorities; the application was filed within days after correspondence was closed.
Relied on a recent case reported in A.I.R. 1943 Lahore 41 (cited by Mr. Isaacs) to support his position (details of reliance appear in the text).

Defendant's (Mr. S. N. Banerjee) Arguments

The requisition order dated 30 September 1942 post-dated the suit and therefore could not form part of the cause of action pleaded; the present application raises matters outside the scope of the suit and the Court lacks jurisdiction to grant relief in the suit.
The plaintiffs delayed unreasonably in bringing an application for an exceptional remedy (mandatory interlocutory injunction), and such delay is fatal to equitable relief.
The injunction sought would be infructuous because Shree Gopal Paper Mills have already been working the areas, the grass already extracted cannot now be restored, and seasonal restrictions (no work 1 July–30 September) mean little practical effect would follow.
Under Section 306 of the Government of India Act the suit is incompetent/misconceived because it is framed against the Governor rather than the Province; Section 49 and related provisions show the contract being in the Governor's name was ordinary, but the suit as presented is hit by Section 306.
Under Section 16 of the Defence of India Act, orders made under that Act (and rules) cannot be questioned in any Court; Section 17 gives protection for acts done in good faith under the Act. If the requisition order complies with the rules and is bona fide, courts should not inquire into the authority's opinion.
Relied on Section 56 of the Specific Relief Act to argue that injunctions should not be granted to interfere with public duties of the Government; if a perpetual injunction is barred, a temporary injunction also should not be granted (though the Court did not accept this submission in full).
Procedural defects: the application should have been intituled under the Arbitration Act rules and Shree Gopal Paper Mills should have been given notice.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
A.I.R. 1943 Lahore 41	Illustration relevant to challenges to orders under Defence of India legislation — in that reported instance the Advocate-General of the Punjab conceded that if plaintiffs could show orders were passed for a collateral (improper) purpose or not bona fide then Section 16 would not bar a challenge.	The Court noted that Mr. Isaacs relied on this case but distinguished it on the basis that in the present matter no concession was made by the defendant analogous to the concession in that case. The Court observed that Mr. Banerjee did not concede that the requisition might be non-bona fide and therefore relied on Section 16 as a bar. The Court was inclined to accept that Section 16 barred this application on the facts before it.

Court's Reasoning and Analysis

The Court proceeded through multiple analytical steps, grounding each conclusion on material in the record and the arguments advanced:

Jurisdiction and scope of the suit: The Court held that the requisition order of 30 September 1942 came after the suit was filed and therefore could not properly form part of the cause of action as framed. Because the present application sought relief concerning that subsequent order, the Court concluded it could not make the requested order in the suit as it stood. The Court accepted the defendant's point that the application raised matters outside the scope of the existing suit.
Delay and laches: The Court emphasized that a mandatory interlocutory injunction is an exceptional remedy and should be sought promptly. Although plaintiffs explained delay by prior correspondence with authorities, the Court found that explanation insufficient in light of the pending suit and the course of correspondence. The Court considered the delay fatal to equitable relief.
Infructuousness of relief: The Court found that practical considerations made the sought injunction ineffective: Shree Gopal Paper Mills had already been operating the areas since the requisition order, the grass already extracted could not be restored, and seasonal restrictions meant that little work could be done between 1 July and 30 September. Given that the requisition was to remain in force until 30 September 1943, the Court found the relief would be, for all practical purposes, infructuous.
Competency of the suit under constitutional provisions: The Court addressed Section 306 of the Government of India Act and related provisions concerning suits against the Governor. It found that although contracts are commonly expressed to be made by the Governor under the Government of India Act (Section 49 and S.175(3) referenced), the suit being, on its face, against the Governor of a Province was subject to Section 306 and therefore the suit was incompetent or misconceived. The Court was not persuaded that the defendant was estopped by having appeared and resisted the plaintiffs' application.
Defence of India Act bar: The Court considered Section 16 of the Defence of India Act and Section 17 (protection for acts done in good faith) relied on by the defendant. Noting the Plaintiffs' reliance on A.I.R. 1943 Lah. 41 (where a concession was made that collateral mala fides would allow judicial inquiry), the Court observed no similar concession here and was inclined to hold that Section 16 barred the present application where the requisition ostensibly complied with the rules and was expressed to be bona fide.
Specific Relief Act argument: The defendant argued (via Section 56 of the Specific Relief Act) that injunctions cannot be granted to interfere with public duties of government and therefore temporary injunctions should likewise be barred. The Court stated that it was not prepared, on the present materials, to hold that its power to grant temporary injunctions was limited only to cases where a perpetual injunction could be granted, and therefore did not refuse the application solely on this ground.
Procedural defects: The Court noted the application appeared defective in form — it should have been intituled under the Arbitration Act rules, and notice ought to have been given to Shree Gopal Paper Mills who would be affected by any order. For these procedural deficiencies the Court took a negative view of the application.
Synthesis and disposition: Considering all the above factors together — jurisdictional defect (suit as framed), delay, infructuousness of the relief, statutory bar under Section 16 in the circumstances, and procedural defects — the Court concluded that the application was misconceived and should be dismissed with costs.

Holding and Implications

Holding: The application for a mandatory injunction was DISMISSED.

Consequences and immediate effect:

The plaintiffs' application seeking an order to restore the status quo (hand back the areas requisitioned by the 30 September 1942 order and movable property) was refused and dismissed with costs.
The Court declined to grant the extraordinary remedy of a mandatory interlocutory injunction for the reasons identified: lack of jurisdiction to entertain the matter in the suit as framed, delay by the plaintiffs, practical infructuousness of the relief, potential statutory bar under Section 16 of the Defence of India Act, and procedural shortcomings in the application.
The opinion does not state or purport to establish any new legal precedent beyond the reasoning applied to the facts; the decision is expressed as a dismissal of the application on the recorded grounds rather than a formal pronouncement of novel law.

Order: Application dismissed.

Show all summary ...

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 30th September 1942, together with all moveable property thereon belonging to the plaintiffs. The present application came to be made in the following circumstances: On 28th 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 1938–1939 and 1939–1940 there was shortage in extraction and certain amount of fine was imposed upon the plaintiffs in terms of the contract. On 16th April 1942, the Conservator of Forest purported to act under cl. 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 22nd May 1942. On the same day notice under Section 60 of the CPC, was given on behalf of the plaintiffs. Thereafter on 19th June 1942, the forest authorities purported to refer the matter to the Chief Conservator of Forests for a decision that the notice given on 16th April 1942, was valid and binding and the Chief Conservator of Forests gave a notice to the plaintiffs fixing 8th July 1942 as the date when he would hold the arbitration. The period of notice under Section 80 of the CPC, was still current and accordingly on 6th July 1942 the plaintiffs made an application under Sections 5 and 33 of the Arbitration Act, and obtained an interim injunction restraining the defendant and the arbitrator from further proceeding with the threatened arbitration. On 28th 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, cl. 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, cl. 17(2) of the said contract and, (c) alternatively damages for breach of contract.

3. After this suit was filed the plaintiffs' application under Sections 5 and 33 of the Arbitration Act, came up for hearing before Khundkar J. on 4th 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 of the Arbitration Act. On 10th August 1942 the defendant took out a notice of motion for stay of the suit under Section 34 of the Arbitration Act. The annual vacation of this Court having intervened the motion could not be heard for sometime. In the meantime, on 30th September 1942, an order was made under B. 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 R. 75A, Defence of India Rules, requisitioned the bhabar grass in the Lansdowne and Kalagarh forest divisions for a period commencing from 20th October 1942 and ending with 30th 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.

4. The application for stay of the suit came up for hearing before Sen J. in February 1943 and was heard for several days. Pending the delivery of judgment on that application the present notice of motion was taken out on 23rd February 1943. Two days later, that is to say, on 25th February 1943 Sen J. acceded to the application under S. 34 and ordered a stay of this suit. The present application before me has been opposed by Mr. S.N Banerjee on behalf of the defendant on a variety of grounds. His first point is that the suit in which this application has been made is based on the alleged rights of the plaintiffs under certain provisions of the contract, and they are asking for a declaration that the defendant was not entitled to take action against the plaintiff under those provisions of the contract and also an injunction restraining the defendant from doing so, and alternatively damages for breach of contract. In the present application the plaintiffs are complaining against the order under R. 75A which came long after the suit had been filed and therefore could not possibly form part of the cause of action in this suit as framed, and the validity or otherwise of this order would not form the subject-matter of any issue for the determination of this Court in this suit, and therefore having regard to the fact that the present application raises questions which are outside the scope of the suit this Court has no jurisdiction to grant any relief in this suit.

5. Mr. Isaacs, on the other hand, contends that the effect of the order is to displace his suit and it affects reliefs that he is entitled to get in the suit and therefore it is a wrong act which this Court has every power to prevent the defendant from doing in order to give relief asked for in this suit. I am inclined to agree with Mr. Banerjee on this point. In my opinion if the plaintiffs are aggrieved by this order, it affords an independent cause of action to them and in a properly constituted suit it may or may not give them the right to have an interlocutory order of the nature asked for now, but I do not think that I can make an order of this nature in the suit as framed.

6. Mr. Banerjee next contends that an interlocutory mandatory injunction is indeed an exceptional remedy and consequently it is essential for the aggrieved party to come to Court as early as possible. He points out that in this case the order complained against was made on 30th September 1942 and this application was not made until 23rd February 1943. Mr. Isaacs has explained that after the order was made the matter was taken up with the authorities and correspondence went on between the parties until 12th February 1943 when the Government authorities definitely closed the correspondence and the application was made within 11 or 12 days after that. Having regard to the acrimonious correspondence that was going on between the parties I do not think that this delay is sufficiently explained by the facts mentioned by Mr. Isaacs. I do not think that the plaintiffs could reasonably, in view of the fact that suit was pending and in circumstances set out in their petition, expect any consideration from the authorities. They should not have waited in the vain hope of getting relief from the defendant. If they were aggrieved and wanted a remedy they ought to have come to Court much earlier, and this delay, in my opinion, is fatal to this application. The next point urged by Mr. Banerjee is that the order prayed for will be infructuous. The requisitioning order was made on 30th September 1942 and it was to be operative for a period up to 30th September 1943. The Shree Gopal Paper Mills have been working in these areas since the order was made. The grass extracted by them cannot now be restored to the plaintiff. Further it appears from the correspondence that no work can be done in the forest between 1st July and 30th September. Therefore after only a month and a half the work will stop. Therefore the mischief has practically been completed. In these circumstances in my opinion the Court should not make any interlocutory order which will be infructuous for all practical purposes.

7. Mr. Banerjee then relies on Section 306 of the Government of India Act and contends that the suit in which this application has been made is incompetent and misconceived. Mr. Isaacs suggests that although the suit was nominally in the name of the Governor of United Provinces, in substance the suit was against the Province.

8. He explains that the contract was expressed to be made by the Governor and therefore the suit had to be brought in the name of the Governor. I do not think the explanation is sound. Section 49 of the Government of India Act, lays down that the executive powers of the Province fire to be exercised by the Governor, and S. 175 sub-s. (3) provides that all contracts are to be expressed to be made by the Governor. Therefore, there was nothing peculiar in this particular contract having been expressed to have been made by the Governor. Under Section 79 of the CPC, such a suit is to be filed in the name of the Province, but that was not done in this case. I think the suit being, on the face of it, against the Governor of a Province it is hit by S. 306, and that being so, it would not be right for me to entertain any application in such a suit. It is true that the Governor of the United Provinces received the notice under S. 80, appeared in the suit and resisted the plaintiff's application, and also made a substantive application for stay, but I do not agree with Mr. Isaacs that by those proceedings the defendant is estopped from relying on this point.

9. The next point argued by Mr. Banerjee is that under Section 16 of the Defence of India Act, an order made in exercise of any power conferred by or under that Act cannot be called in question in any Court. I have also been referred to S. 17 which gives protection to persons for anything which is in good faith done or intended to be done in pursuance of that Act, or any rules made thereunder. Mr. Isaacs relies on a recent case reported in A.I.R 1943 Lah. 41.1 But Mr. Banerjee points out that in that case the learned Advocate-General of the Punjab conceded that if the plaintiffs could show and the Court came to the conclusion that the orders were passed for some collateral purpose, that if they were not made bona fide for the purpose alleged by the order, S. 16 would be no bar. In this case Mr. Banerjee makes no such concession, and he has argued that if the requirements of the rules are complied with, namely, if it is made to appear that in the opinion of the requisite authority a certain thing is necessary to be done then it is not for any Court to question the bona fide of such opinion of the authority. In this case, the order is on the face of it explicit on this point, and, I am inclined to agree with Mr. Banerjee that S. 16 is also a bar to this application. Mr. Banerjee also relies upon Section 56 of the Specific Relief Act, and contends that under that section no perpetual injunction can be granted to interfere with the public duties of any department of the Central Government, the Crown representative or any Provincial Government, and if a perpetual injunction of this nature cannot be granted a temporary should not also be granted. As at present advised I am not prepared to hold that the powers of this Court to grant temporary injunction are limited to the cases where a perpetual injunction can be; granted and I would not be prepared to refuse this application on this ground. This application appears to me to be defective also in form. According to the rules of this Court framed under the Indian Arbitration Act, this application should have been intituled in the matter of that Act. Further under those rules notice should have been given to Shree Gopal Paper Mills who are likely to be affected. The result is that for reasons hereinbefore stated, in my opinion, this application is misconceived and should be dismissed with costs.

R.K

10. Application dismissed.