1961 (11) TMI 88 - HC - Indian Laws

Issues Involved:
1. Validity of the lease or license granted by the Raja.
2. Application of the principle of estoppel against the State of Bihar.
3. Refund of the security deposit and premium paid by the plaintiff.
4. Entitlement to damages and interest.
5. Authority of the Raja to act as an agent or trustee of the State.
6. Application of Section 65 of the Indian Contract Act.
7. Application of Order 41, Rule 33 of the Code of Civil Procedure.

Detailed Analysis:

1. Validity of the Lease or License Granted by the Raja:
The court found that the estate of the Raja vested in the State of Bihar on 14th November 1951. Consequently, the Raja had no title to execute a valid agreement on 12th April 1952. The court held that the lease or license granted by the Raja to the plaintiff was void from its inception.

2. Application of the Principle of Estoppel Against the State of Bihar:
The court rejected the application of estoppel against the State of Bihar, stating that there can be no estoppel against a statute. The State was entitled to take possession of the Raja's estate immediately after the notification on 14th November 1951. The court found that the actions of the local officers demanding revenue and cess did not mislead the Raja or the plaintiff.

3. Refund of the Security Deposit and Premium Paid by the Plaintiff:
The court held that the Raja was bound to refund the security deposit of Rs. 7,500, as he failed to prove that the plaintiff was authorized to collect biri leaves from the bakasht and zirat lands. The plaintiff was also entitled to a refund of Rs. 22,500 paid to the Raja for the 1952 season, as he had to pay the same amount again to the State, the legal owner of the jungles.

4. Entitlement to Damages and Interest:
The plaintiff was not entitled to any damages from the State of Bihar. The court also held that the plaintiff was not entitled to any interest from any of the defendants, as there was no contract for payment of interest, and interest by way of damages could not be allowed.

5. Authority of the Raja to Act as an Agent or Trustee of the State:
The court found no evidence to support the contention that the Raja acted as an agent or constructive trustee of the State of Bihar. The Raja never purported to act on behalf of the State, and there was no representation to the plaintiff by the local officials that could bind the Government.

6. Application of Section 65 of the Indian Contract Act:
The court held that Section 65 of the Indian Contract Act applied to the case, as the agreement was discovered to be void. The Raja had no right to enter into any agreement in respect of the biri leaves, and the lease was void from its inception. The plaintiff discovered this fact when he received the notice from the Additional Collector.

7. Application of Order 41, Rule 33 of the Code of Civil Procedure:
The court exercised its powers under Order 41, Rule 33 of the Code of Civil Procedure to do complete justice between the parties. The court modified the judgment and decree of the lower court, holding that the plaintiff was entitled to a decree against the Raja for Rs. 22,500 plus Rs. 7,500 with corresponding costs and interest at six percent per annum from the date of the judgment of the lower court.

Conclusion:
The appeal by the State of Bihar was allowed, and the cross-objections were dismissed. The plaintiff was not entitled to any decree against the State of Bihar but was entitled to a decree against the Raja for Rs. 22,500 plus Rs. 7,500 with corresponding costs and interest. The judgment and decree of the lower court were accordingly modified, with parties bearing their own costs of the appeal and the cross-objections.

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