JAGAT NARAYAN, C.J.—This is an appeal by the State of Rajasthan (defendant No. 2) against a decree of the District Judge, Kota, dated 25-9 58 decreeing a suit instituted against it and against the Union of India (defendant No. 1) by the Associated Stone Industries Kota (hereinafter referred to as the Company). 2. The relevant facts are that the Ruler of the erstwhile State of Kota entered into an agreement Ex.A on 2-5-45 with the Company for quarrying Kachcha stone from the Tehsils of Ramganj Mandi and Chechat. Monopoly rights for quarrying Kachcha stone in [these two tehsils were granted to the Company for a period of 15 years from 1-10-44 The terms and conditions contained in cl.18 (1) of the agreement ran as under. "In consideration of the concessions and privileges granted by the Grantor and in lieu of Income-tax, Super-tax and excess profits tax, the Grantee covenants to pay to the Grantor royalty on the stone excavated at the rate of rupee one per 100 sq. ft. subject to the minimum amount of Rs. 1,50,000 per financial year. Provided that the aforesaid rate of Re. 1 per 100 sq. ft. will be operative so long as the selling rate of unpolished slabs does not exceed Rs. 10 per 100 sq. ft. In the event of the selling rate going above this figure, the royalty per 100 sq ft. shall be increased by 25% of the excess over ten rupees." 3. The agreement was acted upon by both the parties. The Rulers of Kota Bundi, Banswara, Dungarpur, Jhalawar, Kishangarh, Partabgarh, Shahpura and Tonk formed the first United State of Rajasthan on 25-3-48. The Ruler of Mewar agreed to join this Union and the second United State of Rajasthan was formed on 18-4-48. Jaipur, Jodhpur, Bikaner and Jaisalmer later on joined in and the third United State of Rajasthan was formed on March 30, 1949. Matsya Union, which was inaugurated on 18-4-48 joined this Union and the fourth United State of Rajasthan came into being on May 15, 1949. On 23-11-49 the Rajpramukh of the United State of Rajasthan agreed to accept the Constitution of India which may be framed and on 26 1 -50 the United State of Rajasthan became the Part B State of Rajasthan under the Constitution. On 1-11-56 the present State of Rajasthan was formed as a result of the reorganisation of States. 4. On 23-11-49 the Rajpramukh of the United State of Rajasthan agreed to accept the Constitution of India which may be framed and on 26 1 -50 the United State of Rajasthan became the Part B State of Rajasthan under the Constitution. On 1-11-56 the present State of Rajasthan was formed as a result of the reorganisation of States. 4. On 1-4-1950 the Union of India extended the Finance Act to Rajasthan with the result that the Indian Income-tax Act 1922 was extended to it. The Government of India appointed a Commissioner of Income-tax for Rajasthan. An Income-tax Officer was also appointed at Kota, who served the Company with a notice under sec. 22 (2) of the Indian Income-tax Act asking it to file return of income for the income-tax year 1950-51. The Company filed an application under para 16 of the Part B States (Taxation Concession) Order 1950 on 2-4-51 (Ex. D), But the same was rejected by the Commissioner of Income-tax by his letter dated 24.10.51 (Ex. E). A representation was made to the Ministry of States, Government of India, on 17th December, 1952 (Ex. F.) The Ministry of Finance (Revenue Division) advised the Company by its letter dated 29th April, 1953 (Ex. G.) to approach the Rajasthan Government for relief from the payment of royalty under the agreement entered into with the former Ruler of Kota. 5. The Company had already made a representation to the Minister for Industries and Commerce of Rajasthan on 3rd July 1950 Ex. H) to the effect that part of the payment of royalty under agreement (Ex, A) was in lieu of income tax etc. and that if income-tax is demanded from it and it is hed liable to pay the same "the payment which we are making to you is, without prejudice to right under cl. H) to the effect that part of the payment of royalty under agreement (Ex, A) was in lieu of income tax etc. and that if income-tax is demanded from it and it is hed liable to pay the same "the payment which we are making to you is, without prejudice to right under cl. 18 of the agreement, against the Government of India for exemption on the basis of the agreement and therefore we are entitled from the Rajasthan Government for the refund to the extent to which we may be held liable to pay income-tax etc." In reply to this letter the Government of Rajasthan wrote letter dated 2.11.50 (Ex.I) to the Company, which runs as follows - "I am directed to inform you that the contention made in your above noted letter is not tenable inasmuch as no undertaking to compensate the Company for levy of any income-tax, super tax etc. under the authority of a valid statute to be promulgated in future was ever given in the agreement. For the levy of income-tax or super tax etc. by the Central Government which was beyond the control of the Rajasthan Government, the Rajasthan Government cannot be made to pay the compensation." 6. On 2nd Tune 1952 the Government of Rajasthan served notice Ex. A. 1 on the Company cancelling the agreement dated 2nd May, 1945 on the ground that it was "prima facie against public interest" and the terms and concessions obtained thereby were "grossly unreasonable and extravagant" and requiring it to deliver possession over the quarries to the Director of Mines and Geology, Rajasthan, within 3 months from the date of the receipt of the notice. 7. The Company then filed suit No.8/1952 for an injunction to restrain the State from taking possession over the quarries. On 2-9-52 an ex parte injunction was issued restraining the State from taking possession of the quarries or from taking any acton whatsoever to the prejudice of the plaintiff Company in enforcing the memorandum or notice dated 2-6-52 or committing any breach of the terms and conditions of the grant dated 2-5-45. This order was confirmed on 22 9 56 and remained in force throughout the pendency of the suit out of which the present appeal arises. On the expiry of the term of the agreement dated 2 5-45 on 30-9 59 the suit No. 8/52 became infructuous and was dismissed. This order was confirmed on 22 9 56 and remained in force throughout the pendency of the suit out of which the present appeal arises. On the expiry of the term of the agreement dated 2 5-45 on 30-9 59 the suit No. 8/52 became infructuous and was dismissed. The State granted a fresh lease to the Company under the Rajasthan Minor Mineral Concession Rules for a period of 10 years. 8. On 15-12 53 the present suit was filed by the Company against the Union of India and the State of Rajasthan. With regard to income-tax the case of the Company was that in view of agreement Ex. A the Union of India is not entitled to recover it from the Company. In the alternative the case was that the Union of India should recover income-tax etc from the State which should pay it out of royalty part of which was attributable to exemption from income-tax etc. Another alternative case was that the court should decide what part of royalty is attributable to the consideration of exempting the Company from income tax etc. Under cl.18 of the agreement and restrain the State from recovering it from the Company. Appropriate reliefs were prayed for on the basis of the above case. Both the Union of India and the State contested the suit. With regard to income-tax the following 3 issues were framed by the learned District Judge which were decided against the Company by the High Court and the decision was affirmed by the Supreme Court in Associated Stone Industries (Kotha) Ltd. vs. Union of India (1)— (2) Whether cl. 18 of the Grant created a legal obligation not to levy income tax, etc. on the income of the plaintiff for the duration of the grant? (on plaintiff) (3) Whether the obligation not to levy income tax etc. devolved upon defendant No. 2 by virtue of Art. 6 of the Covenant and upon defendant No. 1 by virtue of Art. 29 of the Constitution ? ( on plaintiff) (4) Is the Income-tax Act not applicable to the plaintiff in view of the Government Grants Act or any other reason ? ( on plaintiff) The remaining issues were decided by the learned District Judge and his findings were these. It was held that agreement Ex. ( on plaintiff) (4) Is the Income-tax Act not applicable to the plaintiff in view of the Government Grants Act or any other reason ? ( on plaintiff) The remaining issues were decided by the learned District Judge and his findings were these. It was held that agreement Ex. A had the force of law which was binding on the State by virtue of the covenants entered into between the Rulers of the successive integrating States and laws enacted by them after the formation of various Unions of States. Next it was held that agreement Ex.A was recognised by the State of Rajasthan and was binding on it for that reason also. Lastly it was held that the amount of royalty above the sum of Rs.1,50,000 was in lieu of income tax etc. The decree of the learned District Judge was based on these findings. 9. All the above findings were challenged by the learned Additional Government Advocate on behalf of the State. The learned counsel for the Company conceded that the first finding namely that the agreement dated 2 5 45 was law could not be supported in view of the decision of the Supreme Court in Maharaja Shree Umaid Mills Ltd. vs. Union of India{2) in which it was held that an agreement between the Sovereign and the subject which rested solely on the consent of the parties and was entirely contractual in nature was not law. He supported the other two findings of the learned District Judge. 10. We shall first take up the question as to whether agreement Ex. A was binding on the State of Rajasthan when it was formed. In this connection we refer to the following decisions of this Court and of the Supreme Court which are fully applicable to the facts of this case— Full Bench decision of this Court in State of Rajasthan vs. Shyamlal (3) 11. This decision was affirmed by the Supreme Court in State of Rajasthan vs. Shyaralal (4). 2 The State of Rajasthan vs. The Bundi Electric Supply Co. Ltd. Bundi (5) (Certified copy placed on record) The facts in State of Rajasthan vs. Shyamlal (1) were these. In June 1947 Shyam Lal, a resident of the former State of Dholpur applied for and was granted a permit for export of 15,000 mds. chuni and in connection therewith deposited Rs. 30,000/-an export duty in advance. Ltd. Bundi (5) (Certified copy placed on record) The facts in State of Rajasthan vs. Shyamlal (1) were these. In June 1947 Shyam Lal, a resident of the former State of Dholpur applied for and was granted a permit for export of 15,000 mds. chuni and in connection therewith deposited Rs. 30,000/-an export duty in advance. The permit remained in force upto 2-12-47 and was not extended further. During this period he could export only 4,572 mds due to market conditions and as such was entitled to refund of Rs. 20,855/- out of the advance duty already paid by him. He filed a suit for refund of the excess amount against the State of Rajasthan in January, 1952. In defence it was contended that the liability of the former State of Dholpur to refund the amount of tax collected in advance did not devolve on the Part B State of Rajasthan as there was no recognition of this liability by the new State at any time. It was held after reviewing the process of merger of former Rajasthan States by different stages to form the Part B State of Rajasthan that there was recognition of liability by new State throughout this process and under the Constitution the suit was maintainable against the Part-B State of Rajasthan. 12. In the State of Rajasthan vs. Bundi Electric Supply Co. an agreement was executed between the Bundi Co. and the former Bundi State on 9th October, 1945 under which a sum of Rs. 6,000 was payable annually by the State as rent for the electricity lines belonging to the Bundi Co. The State of Rajasthan refused to pay the agreed yearly amount and took the plea that it was not bound by the liability as it never recognised the agreement dated 9th October, 1945. This contention was overruled by this Court on the basis of covenants executed and the laws enacted by the Rulers at successive stages of integration which ultimately resulted in the formation of the Part B State of Rajasthan and on the authority of the decision of the Supreme Court in State of Rajasthan vs. Shyamlal [4]. As we have pointed out above Bundi State like Kota State integrated along with seven other States to form the first United State of Rajasthan on 25th March, 1948. As we have pointed out above Bundi State like Kota State integrated along with seven other States to form the first United State of Rajasthan on 25th March, 1948. Soon thereafter the Ruler of Mewar joined the Rajasthan Union and this second United State of Rajasthan was inaugurated on 18-4-48 by the covenant entered into by the Rulers of the various States. On 28th April, 1948 The United State of Rajasthan Administration Ordinance No. 1 of 1948 was issued by the Rajpramukh. By Cl. 2 of the Ordinance Cls. (a), (b) and (c)i of paragraph (1) of Art 6 of the Covenant were enforced as law. Under cl. (c) all the assets and liabilities of covenanting States became the assets and liabilities of the United State of Rajasthan. 13. The next union was integrated on 30.3 49. The Covenant entered into by the Rulers of the integrating States is given in the White Paper at page 274. On the formation of this new State of Rajasthan Ordinance No. 1 of 1949 was promulgated by the Rajpramukh on 7th April, 1949. Cl. 3(1) of this Ordinance provided for of the existing laws and it ran as follows— "All the laws in force in any covenanting State immediately before the commencement of this Ordinance in that State shall, until altered or repealed or amended by a competent Legislature or other competent authority, continue in force in that State subject to the modification that any reference therein to the Ruler or Government of that State shall be construed as a reference to the Rajpramukh, or as the case may be, to the Government of Rajasthan." 14. Thereafter Matsya Union also merged into the United State of Rajasthan. It was held by this Court that the Covenant entered in the year 1949 read with Ordinance No.1 of 1949 must be taken to mean that the liability of the former State of Bundi devolved on the State of Rajasthan. It was observed— "This is the view taken by their Lordships of the Supreme Court in State of Rajasthan vs. Shyamlal (4). It was pointed out in that case that "each time a merger took place the new State by a provision in the Covenant took over the assets and liabilities of the merging States. It was observed— "This is the view taken by their Lordships of the Supreme Court in State of Rajasthan vs. Shyamlal (4). It was pointed out in that case that "each time a merger took place the new State by a provision in the Covenant took over the assets and liabilities of the merging States. This provision in the Covenant could not be availed of by the subjects of the new state as in view of the decision in Dalmia Dadri Cement Companys case ( AIR 1958 S.C. 816 ), the Covenant in whole or in part was an act of State. But according to the same decision the presence of such a clause in the Covenant throughout would be valuable evidence which would show that the new State assumed the liabilities of the merging State and further every time when there was a merger and formation of a new State, the old laws were always to continue till they were repealed, amended or altered by the new State." Under these circumstances their Lordships of the Supreme Court took the view that "when the new State continued all the old laws till they were altered or repealed, and there was specific provision in each Covenant that the assets and liabilities of the Covenanting States were to be the assets and liabilities of the Union, the new State must have intended to respect all the rights flowing from laws so continued and assume all liabilities arising from the existence of those laws". In the face of this authority we cannot accept the argument of the learned counsel for the defendant that the State of Rajasthan was not liable to honour the terms of the agreement." 15. We have found it necessary to refer to the case of Bundi Electric Supply Co. because it was argued by the learned Additional Government Advocate that the decision in the State of Rajasthan vs. Shyamlal (3) is not applicable where the liabilities arise out of a contract entered into between the parties. In the Bundi Electric Supply Companys case the liability arose out of a contract entered into by the Ruler with his subject as in the present case. 16. We may point out that the liability in Shyamlals case arose out of a quasi-contract The former State of Dholpur was liable to refund the amount under sec. In the Bundi Electric Supply Companys case the liability arose out of a contract entered into by the Ruler with his subject as in the present case. 16. We may point out that the liability in Shyamlals case arose out of a quasi-contract The former State of Dholpur was liable to refund the amount under sec. 70 of the Contract Act, which was in force in that State. As the Contract Act continued to remain in force as existing law in the United State of Rajasthan under Ordinance No. 1 of 1949 the liability under sec. 70 of the Contract Act would be deemed to have been recognised by the new State. We may in this connection refer to the following passage in the judgment of Sarjoo Prasad C.J. in the State of Rajasthan vs. Shyamlal (3) at page 264 of the A.I.R. report— "It follows, therefore, that where the new sovereign does not repudiate the laws prevailing in the acceding territory, his conduct is equivocal, and the laws would be deemed to operate, and, therefore, in terms of Art. 6 of the Covenant those laws would continue to protect individual rights of the citizens. Here we find that under sec. 3 of the Rajasthan Administration Ordinance 1949 (No.1 of 1949) it was expressly provided that all the laws in force in any covenanting State immediately before the commencement of the Ordinance in that State shall, until altered or repealed or amended by a competent Legislature or other competent authority, continue in force in that state and again by virtue of Art. 372, of the Constitution these laws continued to operate as existing laws at the date of the commencement of the Constitution. Therefore, under the law of contract, the liabilities of the Dholpur State devolved on the United State of Rajasthan, and then on the present State of Rajasthan when the Constitution came into force, because each of the successor States and their the then Sovereigns recognised those laws, and lent their authority tacitly or by express declaration to their continuance. Therefore, under the law of contract, the liabilities of the Dholpur State devolved on the United State of Rajasthan, and then on the present State of Rajasthan when the Constitution came into force, because each of the successor States and their the then Sovereigns recognised those laws, and lent their authority tacitly or by express declaration to their continuance. Thus it was no longer open to the United State of Rajasthan so long as those laws continued to operate to repudiate the liability which arose under that law in favour of the individual concerned." Wanchoo J. (as he then was) while delivering the judgment of the Supreme Court in the State of Rajasthan vs. Shyamlal (4) observed as follows— "But where as in the present case the old laws were to continue till they were repealed or altered it follows in our opinion that the rights arising under the old laws in the subjects of the merging States would continue and these subjects would have the same rights against the new State as they would have under the old laws against the merging State. Thus by continuing the old laws, till they are repealed, altered or modified, the new State in effect undertook the liability which might arise against it by virtue of the continuance of the old laws. Even if there was some doubt about the new State undertaking the liabilities of the old State in view of the continuance of the old laws, we can in accordance with the decision in Dalmia Dadri Cement Companys case ( AIR 1958 SC 816 ) lock to Art. 6 of the Covenant to come to the conclusion that on continuing the old laws, until they were altered, repealed or modified, the new State intended to affirm the rights of the subjects which they had against the merging State and to assume itself the liability if any arising against the merging State. We are therefore of opinion that there was recognition of liability by the new State throughout this process and under the circumstances the suit was maintainable against the Part-B State of Rajasthan in view of Art.295 (2) of the Constitution." We accordingly hold that the Part-B State of Rajasthan against whom the present suit was brought was bound by agreement Ex A In view of this finding it is not necessary to consider whether the conduct of the Government of Rajasthan amounted to express recognition of the contract or not. 17. We now come to the last finding of the learned District Judge that the amount of royalty payable under Cl. 18 in excess of the minimum amount of Rs. 1,50,000 is attributable to the consideration of exemption from income-tax etc. Under agreement Ex.A the Company agreed to pay the royalty specified in cl 18 in lieu of the following consideration — (1) right to exploit the stone quarries in the two Tehsils, (2) exclusive right to do so in these two Tehsils, (3) the long term of the lease 15 years, (4) exemption from income tax etc. It was not specified in the agreement what portion of the royalty was payable in respect of each of the above considerations. In our opinion it is not possible to apportion any part of the royalty payable under cl 18 as consideration for exemption from income tax etc. At the time of the agreement there was no income tax etc. in force in Kota State. We are unable to arrive at a finding on the basis of the material on record as to what amount of royalty would have been settled between the parties if exemption from income-tax etc, had not been granted. Income-tax had been imposed in the neighbouring State of Bundi. The agreement shows that the possibility of imposing this tax in the near future was in the minds of the parties when the agreement was entered into. 18. We are however of the opinion that the effect of the Union of India extending the Finance Act to Rajasthan with effect from 1-4-50 was to make void agreement Ex.A under sec.56 of the Contract Act. 19. 18. We are however of the opinion that the effect of the Union of India extending the Finance Act to Rajasthan with effect from 1-4-50 was to make void agreement Ex.A under sec.56 of the Contract Act. 19. In view of Art. 295 of the Constitution both the Union of India and the State of Rajasthan succeeded to the assets and liabilities of the State of Kota and are to be substituted for the latter with effect from 26.1.50 to the extent of their spheres laid down in that article. They became liable to meet the liabilities of the former State of Kota subject to this that if the new State pissed any law which would affect the liability that law would prevail and the liability would disappear provided the new law is within the competence of the Legislature and does not transgress the constitutional limits after the Constitution came into force. 20. The Union of India extended the Finance Act to Rajasthan with effect from 1.4.50. In view of this law which was within the competence of the Union of India the Union of India was no longer bound by agreement Ex.A so far as it was concerned with it. In other words it was not bound to exempt the Company from the payment of income-tax etc. and that part of the agreement by which the Union of India would have otherwise been bound became void. If the part of the agreement which remained binding on the State could be separated from the whole of the agreement then it would continue to bind the State and the Company respectively. But as that part cannot be separated as held by us above the whole of the agreement became void with effect from 1.4.50. With effect from that date neither the State nor the Company are bound by the agreement. 21. The contention on behalf of the State is that, as pleaded by it in para 32 of its written statement, the agreement became void with effect from 26-1-50 when the Constitution came into force as a monopoly contract was hit by Art. 19(l)(g) of the Constitution. It is unnecessary for us to consider whether the agreement became void with effect from 26-1-50 because it would make no difference in the present case whether the agreement became void on that date or on 1-4 50. It is unnecessary for us to consider whether the agreement became void with effect from 26-1-50 because it would make no difference in the present case whether the agreement became void on that date or on 1-4 50. The suit was filed on 15-12-53 and the Company is not entitled to a refund of the payments made by it before 15 12-50, as they are barred by limitation. 22. The Company derived benefit in the shape of quarrying and removing stone from the mines after the agreement became void. Under sec 65 of the Contract Act the Company is bound to make compensation for it to the State. Similarly the Company continued to make payments due under the agreement under the impression that it continued to be valid and enforceable. The State is bound to refund these payments to the Company. 23. On the conclusion of the arguments in the appeal on, 12-3-70 learned counsel for the parties agreed that in case this Court comes to the finding that the agreement dated 2-5-1945 became void on the coming into force of the Constitution or on 1-4-50 when the Finance Act was extended to Rajasthan sec. 65 and 70 of the Contract Act would apply. We then observed that in that case parties will have to produce material to enable us to pass an appropriate decree. Both parties wanted time to produce the necessary material in this behalf and we passed the following order— "The arguments of the parties have been concluded. It may be that the Court comes to a finding that the contract was frustrated and in that case it was not disputed that secs.65 and 70 of the Contract Act shall apply. Parties should produce material before this Court to pass an appropriate decree in that case. Parties want some time. The next date of hearing is fixed for 27th April 1970." 24. Parties thereafter filed affidavits and furnished other material to enable the Court to adjudicate upon the compensation payable to the State under sec. 65 of the Contract Act, On 28-4-70 another opportunity was given to the State to file further documentary evidence by 18th May 1970, This date was extended to 22nd May 1970 at the request of the learned Additional Government Advocate and the case was fixed for hearing on 13-7-70. It actually came up for hearing on 3-8 70. 65 of the Contract Act, On 28-4-70 another opportunity was given to the State to file further documentary evidence by 18th May 1970, This date was extended to 22nd May 1970 at the request of the learned Additional Government Advocate and the case was fixed for hearing on 13-7-70. It actually came up for hearing on 3-8 70. In its application dated 22nd May 1970 the State took an objection that no relief could be granted to the Company under sec. 65, Contract Act as the plaint had not been amended. In arguments the learned Additional Advocate General raised another objection that no relief could be granted under sec. 65 of the Contract Act as the same was not claimed in the notice served by the plaintiff under sec. 80 C.P.C. We shall deal with these two legal objections first. 25. On behalf of the Company it was contended that the State is estopped from taking these pleas as it furnished material for determining compensation under sec. 65, Contract Act, without raising any such objection and also took adjournments for the purpose. We are of the opinion that it is open to the State to put forward these legal pleas. 26. The learned Additional Advocate General relied on the decision of a Division Bench of the Calcutta High Court in New Churulia Coal Co. vs. Union of India 6). The plaintiff in that case being in need of Lancashire boilers, registered his requirement with the Department of Government which had been helping parties in India to obtain such boilers from abroad. It appears that a second-hand boiler had been allocated to the plaintiff for installation in his colliery. The plaintiff sent a cheque for Rs. 34.000/- on account of the price of the boiler and took delivery of the same. His case was that the boiler supplied to him remained unserviceable inspite of repeated repairs and he, therefore, wrote to the Department to take back the boiler and to refund the price, as also the freight and the handling charges. The Department refused to do that and, therefore, the plaintiff sued for recovery of the price and other incidental costs. The main defence taken on behalf of the Government was that the contract was void inasmuch as it did not fulfil the requirements of sec, 175(3) of the Government of India Act, 1935. The Department refused to do that and, therefore, the plaintiff sued for recovery of the price and other incidental costs. The main defence taken on behalf of the Government was that the contract was void inasmuch as it did not fulfil the requirements of sec, 175(3) of the Government of India Act, 1935. The plaintiff thereupon abandoned his claim on the basis of the contract and sought the Courts permission to raise a second issue as to whether he was entitled to recover the amount claimed in the plaint u/s. 65, Contract Act, that is, for restitution. G.K. Mitter J. who tried the suit on the original side held (decision reported in A.I.R. 1956 Calcutta, 138) firstly, that the issue could not be raised without an amendment of the plaint, and secondly that in respect of the cause of action u/s. 65, Contract Act, as against the Government a suit will not lie except after service of notice u/s. 80 C.P.C. 27. The case came up before a Division Bench consisting of K. G. Das Gupta C.J. and H. K. Bose J. Bose J. agreed with the decision of the trial court on both the points. K.C. Das Gupta C. J. did not agree with the decision of the trial court on the first point and held that the issue could be allowed to be raised without an amendment of the plaint subject to leave being granted to the defendant to make a claim for set off in respect of the advantage to which it in its turn would be entitled to be restored. With all respect we are in agreement with this decision. The same view was taken by a Division Bench of this Court in Municipal Committee, Kishangarh v. Maharaja Kishangarh Mills Ltd.(7). 28. In Raja Mohan vs. Manzoor Ahmed (8) the plaintiff had brought a suit to enforce a registered mortgage granted by one Iltifat Ahmed Khan, the defendants father in favour of Motilal Manucha, the plaintiffs father. The deed contained also a personal covenant to pay the interest half yearly and to repay the principal at the end of 3 years. The plaintiff sought relief both by sale of the mortgaged property and by enforcement of the covenant. The deed contained also a personal covenant to pay the interest half yearly and to repay the principal at the end of 3 years. The plaintiff sought relief both by sale of the mortgaged property and by enforcement of the covenant. The defendant maintained, inter alia, that the mortgage sued upon was void having been made in circumstances which brought into operation para 11 of the Third Schedule of the Code of Civil Procedure, by reason of which, it was stated, the defendants father was not competent to mortgage the property. The trial Judge sustained the defendants contention and also refused the plaintiffs a money decree on the covenant on the ground that the cause of action had become barred by limitation. Accordingly he dismissed the suit. Before the Chief Court it was contended on behalf of the plaintiffs that they were at least entitled to relief under sec. 65 of the Indian Contract Act. The Chief Court however refused to entertain that ground of claim because it had not been pleaded and was not taken in the memorandum of appeal Accordingly they left the plaintiffs to seek that remedy by a separate suit. In their appeal to His Majesty in Council the plaintiffs contested the findings of the Courts in India both as regards the invalidity of the mortgage and as to their claim on the personal covenant being statute barred, but they also insisted on their right to relief under sec. 65, Contract Act. The appeal was heard ex parte. In spite of this, however, their Lordships came to the conclusion that the appellants ought not to be refused restitution in the suit u/s. 65 even though that had not been pleaded as a separate ground or claim in the plaint. Dealing with this question their Lordship observed: "With all due respect to the Chief Court, their Lordships think that their attitude towards the question of pleading was unduly rigid. A defendant who when sued for money lent pleads that the contract was void can hardly regard with surprise a demand that he restore what he received thereunder." 29. In Firm Sriniwas Ram vs. Mahabir Prasad (9) the plaintiff brought a suit for specific performance of a contract to sell a house on the allegation that the defendant had agreed to sell it for Rs. 34,000/- and out of this a sum of Rs. In Firm Sriniwas Ram vs. Mahabir Prasad (9) the plaintiff brought a suit for specific performance of a contract to sell a house on the allegation that the defendant had agreed to sell it for Rs. 34,000/- and out of this a sum of Rs. 30,000/-had been paid by the plaintiff on behalf of the vendors to a creditor of the latter. The defendants contended that they had never agreed to sell the house to the plaintiff and the story of a contract of sale as set up was false They however admitted that they had approached the plaintiff for a loan and the plaintiff advanced to them a sum of Rs. 30,000/-. The trial court came to the conclusion that the story of contract of sale was not established, that the defendants story was true and that the plaintiff did advance a sum of Rs. 30,000/- by way of a loan to the defendants. In this view the trial court dismissed the plaintiffs claim for specific performance and passed a money decree for a sum of Rs. 30,000/- against the defendants. On appeal the High Court agreed with trial Judge that the plaintiff was not entitled to a decree for specific performance of the contract. As regards the money decree granted against the defendants the High Court held that this was not warranted in law as no case as a loan was made by the plaintiff in the plaint and no relief was claimed on that basis. Accordingly the High Court dismissed the suit in its entirety. On appeal the Supreme Court held that trial court was right in giving a decree for money against the defendants. It was observed by the Supreme Court: "The rule undoubtedly is that the Court cannot grant relief to the plaintiff on a case for which there was no foundation in the pleadings and which the other side was not called upon or had an opportunity to meet. But when the alternative case, which the plaintiff could have made, was not only admitted by the defendant in his written statement but was expressly put forward as an answer to the claim which the plaintiff made in the suit, there would be nothing improper in giving the plaintiff a decree upon the case which the defendant himself makes. But when the alternative case, which the plaintiff could have made, was not only admitted by the defendant in his written statement but was expressly put forward as an answer to the claim which the plaintiff made in the suit, there would be nothing improper in giving the plaintiff a decree upon the case which the defendant himself makes. A demand of the plaintiff based on the defendants own plea cannot possibly be regarded with surprise by the latter. 30. Their Lordships relied on the decision of the Privy Council in Raja-Mohan Manuchas case (8). 31. In the present case the defendant pleaded that the agreement dated 2.5.45 became void on the coming into force of the Constitution. The plaintiff-Company can be granted relief u/s. 65 of the Contract Act on the basis of this plea. 32. The learned Additional Advocate General next relied on the following observations made in the Municipal Committee Kishangarh v. Maharaja Kishan-garh Mills Ltd. (7):— "where further facts require to be investigated, it may be necessary to insist upon an averment of a case under S. 65. Contract Act in the pleading so as not to take the defendant by surprise before granting relief under s. 65 of the Contract Act and contended that further investigation is necessary in this case to determine compensation payable to the state and therefore relief should not be granted without insisting upon an amendment of the plaint. We are of the opinion that so far as the plaintiff is concerned no further investigation is required as the amounts paid by it under the contract which subsequently became void are already on record and no further investigation of facts is necessary in order to grant relief to the plaintiff under section 65 of the Contract Act. Further investigation is only necessary to determine the compensation to which the defendant is entitled under section 65. For determining that compensation this Court has allowed ample opportunity to both parties to adduce the necessary evidence. It was observed by K.C. Das Gupta C. J. in New Churulia Goal Go. Further investigation is only necessary to determine the compensation to which the defendant is entitled under section 65. For determining that compensation this Court has allowed ample opportunity to both parties to adduce the necessary evidence. It was observed by K.C. Das Gupta C. J. in New Churulia Goal Go. v. Union of India (60)— "If there were nothing else to be considered, I would for these reasons be prepared to allow the appellant to raise the question of relief under S. 65 of the Contract Act, subject it may be to leave being given to the defendant respondent to make a claim for set off in respect of the advantage to which it in its turn would be entitled to be restored." 33. Next we come to the question as to whether the plaintiff is debarred from getting the relief under section 65 of the Contract Act because in the notice under section 80 C. P. G. which was served on the State before the institution of the suit such an alternative claim was not made. Having heard the learned counsel for the parties and having considered the rulings cited before us we are unable to subscribe to the view taken by the learned Judges of the Calcutta High Court in New Churulia Coal Co. v. Union of India (6). In Bhagchand Dagdusa v. Secy. of State (10) no notice had been served on the Secretary of State before the institution of the suit. 34. As was observed by the Supreme Court in Raghunath Das vs. Union of India (11), the object of the notice contemplated by sec, 80 C. P. G. is to give to the concerned Government opportunity to reconsider the legal position and make amends or settle the claim, if so advised, without litigation. The legislative intention behind that section is that public money and time should not be wasted on unnecessary litigation and the Government should be given a reasonable opportunity to examine the claim made against them lest they should be drawn into avoidable litigations. The legislative intention behind that section is that public money and time should not be wasted on unnecessary litigation and the Government should be given a reasonable opportunity to examine the claim made against them lest they should be drawn into avoidable litigations. We are of the opinion that if in the circumstances of a particular case it is open to the Court to grant relief to the plaintiff against an ordinary defendant on the basis of the pleading of the latter without requiring an amendment of the plaint, the Court is not debarred from granting such relief if the defendant happens to be a Government or a public officer on the ground that such an alternative relief was not claimed in the notice under sec. 80 G. P. G. For in such a case the Government will be deemed to have knowledge of the alternative case which could have been pleaded by plaintiff, but was not so pleaded. 35. In Ezra vs. The Secretary of State (l2) it was held as follows: "We propose to deal first with the objections of the defendants relating to the notices under sec. 424 of the Code of Civil Procedure and sec. 52 of Act I of 1894. It is contended by the learned Advocate General that, although a notice of action had been given to the Secretary of State as provided for under the section of the Civil Procedure Code in respect of the allegations contained in the original plaint, the Secretary of State is entitled to a further notice with regard to the cause of action disclosed in the amendments made under the order of the 30th of June last; he contends that the amendments allege an entirely new cause of action, based upon an allegation of fraud and he refers to the case of the Secretary of State for India in Council vs. Rajlucki Debi (I. L. R. 25 Calcutta 239) in support of his proposition that the provisions of sec. 424 must be strictly complied with. Sec. 424 relates to the institution of a suit against the Secretary of State for India in Council. There is nothing in the law to show that in case of any amendment necessitated by the alleged discovery of facts previously unknown to the plaintiff, the Secretary of State should have a further notice of two month?. Sec. 424 relates to the institution of a suit against the Secretary of State for India in Council. There is nothing in the law to show that in case of any amendment necessitated by the alleged discovery of facts previously unknown to the plaintiff, the Secretary of State should have a further notice of two month?. Although the Appellate Court has laid down that the section should be literally construed and strictly applied in favour of the necessity for notice, we are not disposed to extend its operation beyond the actual words used. In the case before us the relief asked for is not altered by the amendments, which only embody certain further materials in support of the plaintiffs contention. It was also urged by the learned Advocate General that notice not having been served on Mohanundo Gupta, the suit against him is bad and ought to be dismissed. He is not sued for any act done by him independently of the Government, and no separate relief is asked for against him. He is joined in the action in order that he may be restrained by an order of this Court from giving effect to the instructions received by him. Under these circumstances we do not think notice of action is required in his case." This case went up in appeal before the Privy Council. It was not contended on behalf of the Secretary of State there that the decision of the learned Judge of the Calcutta High Court on the question of notice was erroneous. The decision of the Privy Council is reported in I. L. R. 32 Calcutta 605. 36 We would like to make it clear that we do not regard the above decision as an authority for the broad proposition that sec. 80 C. P. G. has no application to the amendment of the plaint, once the suit has been instituted after such notice. We only regard it as an authority on the point that there can be cases where a fresh notice under sec. 80 CPC. is not required to be served after an amendment of the plaint In other words, in appropriate cases the court may grant relief to a plaintiff which he has not claimed in his notice under sec. 80 C. P. C. 37. 80 CPC. is not required to be served after an amendment of the plaint In other words, in appropriate cases the court may grant relief to a plaintiff which he has not claimed in his notice under sec. 80 C. P. C. 37. The decision in Ezra vs. the Secretary State (l2) was followed by a Division Bench of the Madras High Court in J. G. H. Fowler vs. Secretary of State (13). Ezras case was also followed by a learned single Judge of the Calcutta High Court in Lalchand vs. Union of India (14). 38 In Dinbai vs. Dominion of India (15) Chagla, C.J. and Bhagwati J. allowed a prayer for amendment of the plaint being of opinion that the amendment proposed did not introduce into the plaint a new or fresh cause of action and all that it did was that it gave further grounds in support of the contentions and allegations which went to constitute the plaintiffs cause of action. An order requisitioning land by the Central Government was challenged in that suit on various grounds. The plaintiffs were allowed to amend the plaint by adding the following ground of challenge.— "The plaintiffs say that the Collector of Bombay made the said orders at the direction and under the orders from defendant 2. The plaintiff say that in making the said orders the Collector of Bombay did not apply his own mind to the question whether the property was required by defendant for the purposes mentioned in R. 75-A, Defence of India Rules. Under the circumstances the plaintiffs submit that the said orders are mala fide, ultra vires and illegal." It was observed— "Section 80 of the Code provides that no suit shall be instituted against the Crown or against a public officer in respect of any act purporting to be dope by such public officer in his official capacity, until the expiration of two months next after notice in writing has been given, and the notice has to state the cause of action and other particulars which are set out in the section. It is clear that the object of the section is to give intimation to Govt. of the grievance that the subject has and to give to Government an opportunity to redress that grievance before it is brought to Court. It is clear that the object of the section is to give intimation to Govt. of the grievance that the subject has and to give to Government an opportunity to redress that grievance before it is brought to Court. The section is not intended to be an instrument of oppression against the subject- It is perfectly true that the Privy Council in Bhagchand Dagadusa vs. Secy. of State (10) laid down that sec. 80 was express, explicit and mandatory and admitted of no implications or exceptions. But even so as pointed out by Sir John Beaumont in Chandulal vs. Govt. of Bombay (A.I.R. 1943 Bombay 138) the section should be construed with some regard to commonsense and to the object with which it appears to have been passed." The above Bombay case as well as Ezras case was followed by a Division Bench of the Jammu & Kashmir High Court in Ghulam Mohi-ud-din vs. State of J&K (16). 39. We are accordingly of the opinion that we are not debarred from granting relief to the plaintiff under sec. 65. Contract Act, in the circumstances of the present case on the ground that no claim based on that section was made in the notice under sec. 80 C.P.C. 40...............................