Mineral Development Ltd v. The State Of Bihar

    High Court Of Judicature at Patna

Name of the Case                 –         Mineral Development Ltd vs The State Of Bihar

Citation                                  –          AIR 1962 Pat 443

Date of Judgment                 –         02-05-1962

Appellant                               –          Mineral Development Ltd.

Respondent                            –          The State of Bihar

Bench/ Judges                        –       Justice Mishra, Justice S.P Singh

Acts Involved                        –           Code of Civil Procedure, Bihar Land Reforms Act, 1950, Indian Mines Act, 1952, Indian Companies Act, 1930.

Important Sections              –           Section 3 of the Bihar Land Reforms Act, 1950, Order 39, Rule 2(3), of the Code of Civil Procedure.

The petition under Article 32 of the Constitution was filed by the Mineral Development Limited against the State of Bihar and another for the issue of a writ of certiorari to quash the order of the Government of Bihar dated September 7, 1955, canceling the petitioner’s license and for the issue of a writ of mandamus directing them to forbear from giving effect to the said order of cancellation. It is important to bear in mind that the test of reasonableness, wherever prescribed, should be applied to each individual statute impugned, and no abstract standard or general pattern of reasonableness can be laid down as applicable to all cases. The nature of the right alleged to have been infringed, the underlying purpose of the restrictions imposed, the extent and urgency of the evil sought to be remedied thereby, the disproportion of the imposition, the prevailing conditions at the time, should all enter into the judicial verdict.


This is an important case, which deals with the authority of the government, and for the act of the Sub-lessee does the petitioner is liable or not. The court, in this case, discussed the concept of principal and agent and which in this case the sub-lessee does not act as an agent and the petitioner does not act as a principle. The Sub-lessee acts as an Independent Contractor.

Background of the Case

This appeal emerges out of an order passed by the scholarly Subordinate Judge of Hazaribagh, holding the appellant, the Mineral Development Limited, a Company formed under the Indian Companies Act, liable of abusing the order for ad interim injunction passed by the Court and as such at risk to discipline under Order 39, Rule 2 (3), of the Code of Civil Procedure.


  • The order passed was the connection between the properties of the appellant of the estimation of Rs. 6,000/ – . The appellant is litigant No. 4 in Title Suit No. 53 of 1954 brought by the respondent, State of Bihar, for a presentation that the appellant had no option to proceed with the activities of the mines in specific territories which were rented out to it by the owner of the Ramgarh Raja after the enthusiasm of the lessor vested in the State of Bihar by uprightness of a warning gave under Section 3 of the Bihar Land Reforms Act.
  • The offended party petitioned for the issue of ad interim injunction limiting the appellant from carrying on crafted by mining pending the ultimate choice of the suit. It is expressed that the towns worried regarding which the request for ad interim injunction was viable are Pundri, Bairi Tanr, Ambakola, Goriato, Kawabar, and Pujari. The appellant showed up in Court after notification was properly served on all the respondents, who were 24 in number, on the eighteenth January 1955, and recorded a request indicating cause against the request for an injunction. Disregarding information, subsequently, of the request for restriction passed by the educated Subordinate Judge, the appellant proceeded with the working of the mine as before which added up to the rebellion of the request for an injunction and as such the appellant was at risk to be managed as per Order 39, Rule 2 (3).
  • This was found when the Mining Officer Sri S. Sinha Choudhury visited town Pundri on the first February 1955 and discovered two truckloads of mica being moved from Pundri godown to Bhade Dih godown of the Mineral Development Limited, the appellant, under excavator’s permit No. 261 given for the Company. It is pointless to set out further realities about this issue as scholarly direction for the appellant has not precluded the factum from claiming activity carried on in the mine at Pundri on the fifth of February, 1955, when the Mining Officer and the Inspector of Mica Accounts, Kodarma, visited the mine.


  1. Whether the appellant is guilty of violating the order of the ad-interim injunction passed by the learned Subordinate Judge of Hazaribagh.
  2. Whether the Mineral Development Ltd is liable for the act done by the Ambika Prasad Singh (Sub-Lessee)?

Related Provisions

  1. Section 3 of the Bihar Land Reforms Act, 1950 –Notification vesting an estate or tenure in the State. – (1) The State Government may from time to time, by notification, declare that the estates or tenures of a proprietor or tenure-holder, specified in the notification, have passed to and become vested in the State.
  2. Order 39, Rule 2(3), of the Code of Civil Procedure– Punishment under Order 39, Rule 2 (3), of the Code of Civil Procedure for violation of ad interim injunction passed by the court.  (Sub-rules (3) and (4) of Rule 2 omitted by Act 104 of 1976, w.e.f. 1-2-1977}.

Related Cases

  • S.N Bannerjee v. Kuchwar Lime and Stone Co., Ltd1   

The learned Subordinate Judge for coming to the conclusion that the act of the agent would make the principal liable, relied upon the decision of the Privy Council in this case.

  • Jaharuddin v. Haricharan,.2

In this case, it was held that even where a suit or proceeding is transferred from one Court to another, it is for the transferor Court which has issued the injunction to dispose of any action concerning the injunction and not the transferee Court.

  • Sheobrich Singh v. Basgit Singh 3

It has laid down that when a suit or proceeding is transferred from one Court to another, it means the transfer not only of the suit or proceeding alone, leaving intact the transferor Court’s jurisdiction to dispose of any act of disobedience of an injunction which may have been issued by that Court before the transfer, but that order of transfer, of the suit or proceeding, includes the suit as also the ancillary proceeding such as disobedience of an order of injunction by the party concerned and both these matters must be disposed of by the transferee Court itself


It is made clear beyond question that this decision is not to affect the Hading on merits in the suit itself which the trial Court may have occasion to record as to the genuineness or validity of the transactions, which are sought to be challenged by the plaintiff on the footing that they were sham and collusive and were devised by defendant No. 1 to retain the interest in the mining areas comprised in the zamindari even after it vested in the State of Bihar by the provisions of the Bihar Land Reforms Act.

 Ratio Decidendi

In the present case, however, Ambika Prasad Singh has been authorized to carry on all the operations of these mines, according to the agreement as referred to, independent of the supervision and control of the principal, and as such he cannot be regarded as an agent. He might well be regarded as a lessee or sub-lessee, but not as an agent working under the control of the Mineral Development Limited. In the Privy Council case also the Kalyanpur Company which was in actual possession as lessee under the Govt., whose officer was Mr. S.N. Bannerjee, the appellant although it held a lease from the Government, was held not to be an agent of the Government, and, as such, neither the Government who were not in possession nor the Kalyanpur Company, against whom no order of injunction was issued could be held liable. The appeal was accordingly allowed and the order of this Court set aside, which proceeded on the footing that the Government encouraged Kalyanpur Company to disobey the order of injunction by treating the Company as lessee.

It was held further by the Privy Council that the Government is at all liable, might be proceeded against for aiding and abetting the Kalyanpur Company in its act of disobedience, but Government themselves would not be liable for committing contempt by the disobedience of the order of injunction. Dr. Sultan Ahmad has relied upon this passage from Bowstead on Agency (page 2, 12th edition) in support of the proposition that Ambika Prasad Singh could not be regarded as the agent of the appellant and, if that be not so then, according to the pronouncement of the Privy Council in S.N. Bannerjee’s case, AIR 1938 PC 295 the company would not be liable for the act of Ambika Prasad Singh. As S.P Singh said that in my opinion, this question does not arise in the present case because I have already held that Ambika Prasad Singh cannot be regarded as an agent but as an independent contractor.

Concepts Highlighted

“No principal is liable for any wrongful act or omission of his agent while acting, without the principal’s authority, outside the ordinary course of his employment, or while not acting nor purporting to act on the principal’s behalf.”

In this case, the concept of agent, principal, and independent contractor are highlighted to get a clear picture. A principal is responsible for the acts done by the agent within the scope of employment. But here Ambika Prasad Singh is not even an agent but an Independent Contractor. So an independent contractor is responsible for the acts done by him and cannot shift the liability.



  1.  AIR 1938 PC 295
  2. AIR 1914 Cal 815
  3. AIR 1957 Pat 73.

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