1. This order will dispose of Civil Writs Nos. 259-D of 1961, 273-D of 1961 and 32 other connected petitions.
2. It is necessary to state the facts in two petitions only, namely, Civil Writs No. 259-D/1961 and 273-D of 1981.
The petitioner, Inder Singh, has been carrying on quarry business in Delhi and claims to have been quarrying stone for the last several years. Respondent No. 2, the Collector of Mines and Quarries, used to issue a permit in Form M. 5 under the Delhi Minor Minerals Rules of 1938 (hereinafter to be referred to as the Rules). There was certain land on Anand Parbat which belonged to the Ramjas College Society and the petitioner claims to be the lessee of the Society in respect of a portion of the land for the specific purpose of quarrying stone. The permit to quarry stone was renewed last up to 30th June 1957. When he applied for further renewal, that was refused. In the year 1957 he instituted a suit in tha Civil Courts against respondent No. 2 and the Union of India for a declaration and perpetual Injunction, The relief sought was that he might be allowed to continue the quarrying of stone on payment of royalty under the Rules.
During the pendency of the civil suit an interim injunction was granted by the trial Court and by virtue of that injunction the petitioner continued the quarrying for which he paid royalty from time to lime under the Rules which was accepted by the respondents. While the temporary injunction was in force, respondent No. 2 held that the quarrying work without permit was illegal and imposed penalty on the petitioner and other persons. The orders imposing the penalty were challenged by means of an appeal under Section 13 of the Punjab Land Revenue Act in which a decision was given by Mr. A.D. Pandit, who was the Chief Commissioner, on 14th October 1958. He held that owing to the injunction issued by the court quarrying was legal and was being carried on under the authority of the Court and, therefore, no penalty could b8 levied and the petitioner was liable to pay only the amount of royalty which had been assessed.
The trial Court dismissed the suit of the petitioner. He filed an appeal against that decision which also was decided against him. Ultimately a second appeal was preferred to this Court, During the pendency of all these appeals an interim injunction had been granted in favour of the petitioner by virtue of which he continued quarrying alone and paid royalty. Tile appeal was dismissed by this Court on 26th September 1960. Thereupon the petitioner stopped quarrying work altogether.
3. It is urged in the petition that royalty subsequent to 1st June 1960 up to 26th September 1960 was tobe assessed and charged by respondent No. 2 from the petitioner. The petitioner appeared before respondent No. 2 and stated that he was prepared to pay the royalty for the aforesaid period under the Rules. However, without giving any show-cause notice and without hearing him, respondent No. 2 is alleged to have passedcertain orders directing the petitioner to pay royalty and penalty from 1st May 1960 to 31st August 1960. The petitioner filed an appeal to the Chief Commissioner which was disposed of by Shri Bhagwan Sahal on 27th June 1961. The appeal was dismissed. That is how the petitioner had to file the present writ petition in which the orders of therespondents have been impugned in so far as the penalty has been ordered to be levied.
4. In Civil Writ No. 273-D of 1961 the other facts are practically the same put what happened there was that when the civil suit had been filed and interim injunction had been granted by the trial Court and after the Chief Commissioner had made his appellate orders on 14th October 1958 the petitioner entered into a compromise with respondent No. 2 and the Union. This compromise waseffected by means of statements made by counsel. The statement of the counsel for the plaintiff was as follows:
'This suit be dismissed. However, if any relief is granted to Shri Inder Singh in suit Inder Singh v. union of India, suit No. 464 of 1957 which was dismissed by this Court on 31-12-1958, by any of the Appellate Courts, then this suit would also be deemed to have been decreed to that extent. It is further agreed that if any stay is granted in Inder Singh's case by any appellate Court, then that would be considered as a stay In this case also'. Shri Parkash Narain, counsel for the defendants, made a statement accepting the statement of the counsel for the plaintiff. The Court thereupon recorded an order on 20th January 1959 to the following effect : ' In view of the statement of the counsel for the parties, I hereby dismiss the suit. Parties would be bound by the terms of the compromise which be recorded in the decree. Under the special circumstances of the case 1 leave the parties to bear their own costs'.
5. In all the writ petitions which are being disposed of by this Judgment, the facts are either identical with Inder Singh's petition (C. W. 259-D of 1961) or with Curbachan Singh's petition (C. W. 273-D of 1961).
6. It is necessary in the first instance to refer fo the Rules. These were framed in exercise of the powers conferred by Clauses (e) and (g) of Sub-section (1) of Section 155 of the Punjab Land Revenue Act, 1887.
Rule 3 provides that no person shall quarry anyminerals belonging to Government from land whether privately owned or otherwise included within the list of any, revenue estate, or situated in land the property of Government not included within the limits of a revenue estate, unless he has first obtained a permit in the manner prescribed.
According to Rule 7 (1), any person who desires to quarry minerals in circumstances other than those stated In paragraph 5 shall make his application to the Collector.
Rule 8 says that on receipt of an application underRule 7 the Collector may after such enquiry as he deems necessary issue a permit in Form M-5 subject to the following conditions :
'(1) The permit shall be Issued for a period not exceeding one year from the date of issue ofthe permit. * * * *.'
Rule 9 provides that where the holder ol a permit in Form M-5 is unable to complete the quarrying operations within the period specified in the permit, he may make through the channel, if any, prescribed under Rule 7, and before the expiry of the period specified in the permit, an application for a renewal of the permit for a further period not exceeding three months and during this period the quarrying operations shall be finally closed. There is also a provision in this very rule that the permit shall be returned to the Collector within one week after the date of its expiry by the holder. The permit holder has to pay royalty in accordance with Rule 8.
Rule 18 concerns penalties. Sub-rule (ii) relates to the penalty for failure to return permit in time. Sub-rule (iv) may be reproduced in its entirety -
'(iv). Unauthorised extraction of minerals : --Any person who (a) quarries any mineral without a permit or who (b) quarries a different mineral from that specified in the permit or a large amount than what is so specified or (c) alienates by sale or otherwise any mineral in contravention of the conditions prescribed in these rules or in his permit shall be liable to pay five times the amount of royalty payable under Rule 8 plus the amount of royalty ordinarily payable under that rule, and such royalty it not paid within one month of demand may be realised as an arrear of land revenue under the provisions of Section 98(b) of the Punjab Land Revenue Act, 1887 (XVII of 1887).'
It is common ground that the penalty e. g. five times the amount of royalty levied in the present cases or which are likely to be levied would be under the aforesaid sub-rule.
The contentions that have been canvassed by the learned counsel for the petitioners are three-fold.
The first one is that during the period when the interim injunction was in force whether issued by the trial Court or the Appeal Courts, it could not be said that the stones were being quarried unauthorisedly. In other words, while the injunctions were operative, in law the petitioners could not be deemed to have been quarrying any mineral without a permit and as the respondents were accepting the royalty in accordance with the Rules, no question arose whatsoever of levying what may be called penalty under Rule 18 (iv).
The second line of argument is that when a Civil Court issues an injunction in a suit and if that suit is dismissed and if it is alleged that the injunction was obtained on insufficient ground, resort must be had to Section 95 of the Code of Civil Procedure for getting compensation and if no order is made on an application under Section 95 a regular suit can be Instituted for recovery of that compensation but it is not open to any one to lake penal action even under a special statute as is being sought to be done in the present cases.
The third point is that the decision given by the Chief Commissioner on 14th October 1958 was final in so far as the question of levying a penalty under Rule 18 (iv) was concerned and it was not open to the respondents to reopen that order or levy the penalties contrary to that order.
7. As regards the first contention, reference may be made to certain facts stated in the petition and the reply of the respondents. In paragraph 3 of Inder Singh's petition if is stated that his permit for quarrying stones was renewed by respondent No. 2 up to 30th June 1957. The petitioner applied for the renewal of the said permitbut his request was not acceded to by respondent No. 2. In the affidavit in reply this was not admitted. It was stated that on fresh applications new permits were issued after considering all the facts every time and permits were not renewed from time to time as alleged by the petitioner. The learned counsel for the petitioners contended that it was not necessary that a fresh permit should be issued every year and all that used to happen was that it was renewed annually. If it was being renewed every year, the case of the petitioners in the civil suits which had been filed by then was that the Collector had no right to withhold the renewal and the effect of the interim injunction was that the Collector's right not to renew the permit was suspended by the interim injunction granted by the Courts below. As the affidavit in reply of the Government shows that the permits were not renewed every year but that a fresh permit was issued to every one it is not possible to accept the position taken up on behalf of the petitioners that no fresh permits were necessary and only they had to be renewed every year.
A reference to the judgment of this Court in S. Inder Singh v. Union of India, Second Appeal No. 120D of 1959 (Punj) decided on 26-9-1960 by which 22 connected appeals were disposed of, shows that in the suits the plaintiffs had described the refusal of the respondents to renew the permits as illegal and tortuous on the ground of discrimination. The refusal to renew was also attached on the ground of its being arbitrary, capricious, wilful and mala fide. The plaintiffs claimed a fundamental right of carrying on the quarrying business without interruption from the Government. The other ground for attacking the refusal to grant the permit was that Sections 5 and 6 of Act 53 of 1955 were unconstitutional. There also, the respondents had taken up the position that every issue of permit was a fresh permit under the Rules and there was no provision for the renewal of the permit. The grievance of the plaintiffs which was pressed in those appeals was that the grounds on which the permits had been refused being non-existent and untenable, this Court must direct the permits to be issued and restrain the respondents from prohibiting the plaintiffs from carrying on their quarrying business. The learned Judge having found that the quarry in question belonged to the Government saw no basis on which the plaintiffs could insist that permits should be issued to them as of right for quarrying stone which did not belong to them.
That being the nature of controversy in the litigation in the Civil Courts it has to be seen what were the terms of the interim injunction which had been issued. Neither the petitioners nor the respondents have produced a copy of any, such interim injunction but I have been shown a copy of the injunction which was issued by Shri Diali Ram Puri, Senior Sub Judge, at the stage of appeal, the material part of which Is that the respondents, their employees or agents were restrained from interfering with the appellant's right to quarry the land in question or causing any obstruction or impediment in the way of the plaintiff-appellant in the exercise of the said right till the decision of the appeal. The respondents were consequently prohibited from interfering with what was called the petitioner's right to quarry.
8. It is argued by the learned counsel for the petitioners that their right to quarry the land could exist only if it could be deemed that they held a valid permit under the Rules and, therefore, it should be held that owing to theCourt's order the petitioners were quarrying the land under proper permits issued in accordance with the Rules, even though as a matter of fact no such permits bad been issued by the respondents. It must not be forgotten that at that stage the claim of the petitioners to the rights which had been asserted by them in respect of quarrying the land in question had yet to be determined and it was for that reason that the temporary injunctions were issued. The learned counsel for the respondents has submitted that when the suits were finally dismissed, the order of dismissal had the effect of negativing any such right which had been claimed by the petitioners, with the result that the quarrying work during that period would be tantamount to having been carried on without possession of valid permits under the Rules and this would render the petitioners liable to action under Rule 18 (iv).
A consideration of the Rules to which reference has already been made leaves little room for argument. Apparently on every occasion a fresh permit had to be obtained for quarrying minerals which had to be in the prescribed form and the permit was to be issued for a period not exceeding one year. Even the renewal under Rule 9 could not be for more than three months and under that rule a permit had to be returned to the Collector within one week after the date of its expiry by the holder. If the Rules had contained a provision of renewal every year once a permit had been issued, then the petitioners could have argued that by virtue of the injunctory orders the permits should be deemed to have been renewed during the continuance of those orders but it is difficult to see how the aforesaid orders could have the effect in law of fresh permits having been issued. Technically, therefore it would appear that the petitioners were quarrying stone without a permit which would render them liable to action under Rule 18 (iv) but that would be subject to the decision on the other two points.
9. In order to decide the second point it is essential to examine the object of an interlocutory injunction. According to Cotton L.J. in Preston v. Luck, (1884) 27 Ch. D. 497, the object is 'to keep things in statu quo so that if at the hearing the plaintiffs obtain a judgment in their favour, the defendants will have been prevented meantime from dealing with the property in such a way as to make that judgment ineffectual. x x x x'
The statement in Halsbury, Volume 21, paragraph 716, is that the object of an interlocutory or interim Injunction is to preserve matters in statu quo until the case can be tried and the party applying for an interlocutory injunction must always give an undertaking in damages, in case it should turn out at the hearing that he is in the wrong. It is not necessary that the Court should find a case which would entitle the plaintiff to relief at all events : it is quite sufficient if the Court finds a case which shows that there is a substantial question to be investigated, and that matters ought to be preserved in statu quo until that question can be finally disposed of (paragraph 763). The Court will take care that the order is so framed that neither party will be deprived of the benefit he is entitled to, if in the event it turns out that the party in whose favour it was made is in the wrong; and for this purpose it will, if necessary, impose terms upon the plaintiff as a condition of granting the injunction (paragraph 775).
A temporary injunction must be obeyed until the disposal of the suit or until it is vacated. It is well known that an injunction or an interim order must be implicitly observed and every diligence should be exercised to observeIt and that where the party served with an order did an act which, unless prevented would result in that which would create a violation of the order, he was bound to exercise the greatest diligence to prevent such result. Any party affected by the order irregularly obtained, cannot disregard it, or disobey it, or treat it as nullity, until it is discharged on a proper application (Basu's Law of Injunctions, 1961 Edition, pages 982-983).
10. Section 95 of the Code of Civil Procedure provides that where, in any suit in which an arrest or attachment has been effected or a temporary injunction granted, the defendant may apply to the Court, and the Court may award against the plaintiff such amount, not exceeding one thousand rupees, as it deems a reasonable compensation to the defendant for the expense or injury caused to him. An order determining any application under Section 95 shall bar any suit for compensation in respect of such arrest, attachment or injunction. Section 95 provides a summary remedy for an injured defendant and enables him to seek compensation for the injury done to him by the plaintiff by an application to the Court instead of by a suit. But the remedy under the section is optional, and an injured defendant may, if so chooses, institute a regular suit against the plaintiff for compensation for wrongful arrest, attachment or injunction. This clearly appears from Sub-section (2), which impliedly recognizes the right of a defendant to institute a regular suit for compensation (Mulla's Civil Procedure Code, pages 351-352 (12th Edition)).
Now an award made by the Court under Section 95 would bar a regular suit as provided by Sub-section (2) but the section is by no means exhaustive as until an order is made by the Court on an application preferred under this section, it is open to the aggrieved defendant to recover damages or compensation for the injury caused by means of a regular action. In this situation it is not possible to accede to the contention that the only remedy of the respondents in the present cases was to have resort to Section 95 of the Code on the disposal of the suits filed by the petitioners, if it was considered that the temporary injunction had been obtained on insufficient grounds or that there was no reasonable cr probable ground for instituting the suits.
11. The question still remains whether apart from filing a regular suit as contemplated by Sub-section (2) of Section 95, could the respondents in the present cases take action under Rule 18 (iv) of the Rules which is something quite independent of the Code of Civil Procedure.
The contention of the learned counsel for the petitioners is that although It may be open in certain circumstances to obtain compensation or damages by a regular action, no party can be penalised for doing what the Code permitted him to do e. g. in the present cases the effect of the temporary injunctions granted was that the petitioners were allowed to carry on the quarrying of stone and while the orders of the Court were in operation, there could be no justification for saying that the petitioners were guilty of an act which rendered them liable to imposition of penalty under Rule 18 (iv). By way of illustration it is pointed out that if a person without any valid claim or title entered into possession of properly and then he files a suit and obtains a temporary injunction refraining the real owner from dispossessing him, will it be open to the latter to subject him to penal action in Criminal Courtsfor having been guilty of trespass during the period he was in possession?
The illustration is certainly thought-provoking but what has to be decided in the present cases is whether the temporary injunctions which had been granted and which were intended only to preserve the status quo so that the rights which were being claimed by the petitioners might not be put into jeopardy, could render them immune from proceeding under the Rules for all times. There could be little doubt that during the continuance of those orders it was not open to the respondents to take any action under Rule 18 (iv) because that may have been tantamount to disobedience of the injunctory orders, but once that hurdle was removed and the petitioners had failed in their suits, it is difficult to hold that they could avoid liability under the Rules to payment of five times the royalty in addition to the royally due which is something quite distinct and apart from the right of the respondents to claim compensation or damages under the general law, namely, the Code of Civil Procedure. The grant of a temporary injunction does not render a party immune from all the results and consequences which follow the dismissal of a suit as is clear from the scheme of Section 95 of the Code of Civil Procedure itself. Such an injunction merely preserves rights, if any, during the pendency of the litigation and cannot create new rights.
12. It is true and it must be observed that the petitioners are likely to suffer a good deal of hardship by the imposition of the so-called penalty which according to the Rules must be live times the amount of the royalty. It is equally true that by accepting the orders of injunction in the form in which they were made and by accepting the royalty from the petitioners, the respondents contributed to a reasonable belief being created in the minds of the petitioners that they were being treated virtually as permit holders and that they would not be subjected to penalty but unfortunately for the petitioners there can be no estoppel against statute and the rule of estoppel cannot be applied.
13. In connection with the last contention reliance has been placed on behalf of the petitioners on section 13 of the Punjab Land Revenue Act which provides for appeals against orders made by the Assistant Collector and the Collector. It is pointed out that the order of the Chief Commissioner dated 14th October 1958 was final as provided by Section 13 and rightly or wrongly he came to the conclusion that so long as the temporary injections were in force the quarrying of stone was legal and it was being carried on under the authority of the Civil Court's orders and no penalty could be levied. It is said that as this order related to this very question, namely, the imposition of penalty during the period when the injunctions were in force, it would also create a bar to the making of the impugned orders by virtue of the applicability of the principle of res judicata which has been applied to quasi-judicial proceedings. Respondent No. 1 in his order dated 27th June 1961 has considered this aspect of the matter and according to him what was held by his predecessor in the previous order was that the Collector had no authority to levy the penalty during the continuant of the temporary injunctions. The question about the right of the Collector to levy the penalty after the final disposal of the civil suits and the consequent vacation of temporary injunctions was not before his predecessor and so the question of deciding this matter did not arise.
Now, a careful examination of the order of the Chief Commissioner dated 14th October 1958 shows that he came to the conclusion that during the continuance of the temporary injunctions it could not be said that the quarrying of stone was illegal. He did not say that if subsequently the suits failed, the penalty would not be leviable. It may be that the previous order of the Chief Commissioner had finality and cannot be now reopened so far as the penalty which was sought to be levied at that stage was concerned, but it could have no finality in respect of the penalty which is now sought to be levied by the impugned orders and it was certainly open to the Chief Commissioner to decide afresh whether it should be imposed or not, particularly for the period which was not covered by the first order. For the reasons which have already been stated, it cannot be said that the view which has been taken by the Chief Commissioner in his order dated 27th June 1961 that once the suits were dismissed and the temporary injunctions ceased to be in force, the petitioners would have to pay a penalty for contravention of Rule 18 (iv), suffers from any speaking error. It is well settled that even if two views can be taken but the view adopted is a possible one, this Court will not interfere under Article 226 if after long and elaborate arguments it comes to the conclusion that the view which has not been accepted was the correct view as that will not constitute an error apparent.
14. Mr. R. S. Narula sought to make a distinction between those set of petitions in which temporary injunctions were granted in the civil suits filed by the petitioners and the other petitions in which a compromise was effected, as stated before, but the terms of the compromise were not in any way different and I cannot agree with Mr. Narula that any such distinction can be made.
15. In the result, these petitions are dismissed, butin the circumstances I leave the parties to bear their owncosts.