in defence to the suit the defendant companypany reiterated the position it had taken in response to the claims made on it by the government of saurashtra namely that clauses 3 and 5 of the agreement were vague and void and that under clause 2 its liability was to pay royalty only on the actual amount of salt sold by the company during each year the basis of the claim put forward by the plaintiff was that during the years when there was a short fall in the production the companypany was bound to pay royalty on the minimum guaranteed quantity of 50000 tons of salt and that a sum of rs.
506959 5 0 with interest at 6 per cent per annum from the date of suit by way of royalty claimed to be payable by the defendant companypany on the terms of the aforesaid agreement of 1950.
both the defendant companypany as well as the state of gujarat filed appeals in the high companyrt questioning the correctness of the aforesaid judgment and the decree of the learned civil judge.
while the matter was pending in the trial companyrt the bifurcation of the state of bombay had taken place and the area in question became the part of the territory of the state of gujarat and the state of gujarat bad been substituted as plaintiff the suit.
first appeal number 981 of 1960 was appeal filed by the defendant companypany and first appeal number270 of 1961 was states appeal.
it was further urged on behalf of the plaintiff that on a proper construction of clause 2 of the agreement the liability of the companypany was to pay royalty number on the quantity of salt sold and delivered by them during the years when more than the minimum quantity stipulated in clause 3 had been manufactured but on the actual quantity manufactured by the company irrespective of whether any portion thereof remained unsold .
the trial companyrt after a careful and detailed consideration of the terms of the agreement as well as all the relevant aspects of the case to the companyclusion that the defendant companypany is liable to pay royalty on the minimum quantity of 50000 tons in respect of each year in which the production of salt was less than 50000 tons after excluding the quantity require l for companysumption in their own factory.
both these appeals were heard together by the division bench of the high companyrt and they were disposed of under the judgment number impugned before us.
after the merger of the dhrangadhra state in the state of saurashtra the aforesaid agreement was further modified by an agreement dated january 4 1950 entered into between the defendant company and the government of saurashtra.
107495 10 0 was due on this account.
v. gouri shankar.
civil appellate jurisdiction civil appeal number.
13/14/24.3.69 of the high companyrt of gujarat in first appeal number.
981/60 270/61.
ii wahi for the respondent.
dhrangadhra was a princely state in kathiawar region ruled by a maharaja until april 1948 when pursuant to the companyenant entered into by the maharaja with the government of india it became merged in the newly formed state of saurashtra on january 29 1937 an agreement had been entered into between the dhrangadhra chemical works limited hereinafter called the defendant companypany and the maharaja of dhrangadhra where under the defendant companypany purchased from the government of maharaja shree shakti alkali works in dhrangadhra and the salt works at kuda with exclusive rights to manufacture salt at the kuda works on certain companyditions.
2144 2145 of 1970 from the judgment and decree .
the state of bombay instituted the suit out of which these two appeals have arisen in the companyrt of civil judge senior division surendranagar seeking to recover rs.
the judgment of the companyrt was delivered by balakrishna eradi j. these two appeals have been filed by the state of gujarat on the strength of a certificate granted by the high companyrt of gujarat under article 133 1 c of the companystitution of india as it stood prior to the amendment of 1972.
that agreement was subsequently modified as per the minutes of the board of directors of the defendant companypany recorded on april 5 1953.
arora and ms.
harhi m.k.
n. phadke girish chandra c. v. subba rao and n poddar for the appellant.
