Kuchwar Lime and Stone Co. Ltd. vs Secy. of State

Mohamad Noor, J.—This appeal is from the decree of the Subordinate Judge of Shahabad, dated 7th March 1935, dismissing the appellant''s suit the facts of which are these: By two indentures, both dated 1st April 1928, the Government leased to the plaintiff company for 20 years the right to quarry limestone in the two areas specified in the documents, situated in the district of Shahabad and known as Murli Hill. By one of them (Ex. 2) only the right to quarry limestone was leased as the Government have no surface right in the lands of that area, but by the second (Ex. 2-A) the land itself measuring 137 acres was leased out for the purpose of quarrying and extracting limestone. The plaintiff was to pay to the Government on the limestone extracted and removed royalties at a rate specified in the leases. No minimum royalty was fixed. In both the leases there was a clause which prohibited without the previous permission of the Board of Revenue, assignment of the lease, or transfer of any right acquired thereunder or underletting it. The penalty for the breach of this condition was forfeiture of the lease. Clause 5 of the one and 6 of the other which are identical run thus:

That neither the lessee nor any person claiming through or under it shall assign the lease or transfer any right or interest thereunder or underlet the whole or any portion of the premises comprised in such lease without the assent of the Board of Revenue first obtained. The penalty for the infraction of this condition shall be the forfeiture of the lease.

By Clause 20 of the one and Clause 22 of the other it was provided that in the event of the breach of any of the conditions specified in certain clauses (one of them being the clause prohibiting assignment, transfer and subletting) the lessee was liable to be ejected. The leases were terminable by the lessee giving six months'' previous notice to the Collector. In January 1933, the plaintiff company went into voluntary liquidation and Messrs. Lovelock and Lewis, Chartered Accountants of Calcutta, were appointed liquidators. On 30th September 1933, the Company through its Managing Agents and the liquidators entered into an agreement with one Subodh Gopal Bose for the sale of the leases to him for a sum of Rs. 6,000 of which a sum of Rs. 101 was taken by them from the prospective vendee by way of earnest money. The agreement was subject to the sanction of the Board of Revenue of Bihar and Orissa it being provided that it would stand cancelled if such assent was not given. The agreement is not registered. In the meantime the prospective vendee was to work the quarries as an agent of the vendor. He was to pay to the plaintiff company the royalties payable by the latter to the Government under the leases and submit accounts to it. Clause 6 of the agreement runs thus:

The purchaser shall be appointed local agent of the vendor in respect of the leasehold right of the vendor to the lands set out in the Schedule hereto and continue to act as such until the transfer of the leasehold right be effected or until it is finally decided that such transfer cannot be made on and after purchaser''s furnishing guarantee to the vendor of regular payment of all royalties and other dues on despatches from the Murli centre or otherwise in respect of the lands set out in the Schedule hereto and on and after his depositing with the liquidators a sum of Rs. 4,000 in cash by way of security for such payment, such deposits bearing interest at the rate of 5 per cent, per annum from the date of deposit till the transfer of the said leasehold right or final decision that the leases should not be transferred.

By Clause 5 of the agreement it was provided that Rs. 4,000 so deposited would be forfeited if the purchaser failed to pay the balance of Rs. 5,899 after the assent of the Board of Revenue was obtained for the transfer of the leases and so also would be forfeited the earnest money deposited. The liquidators of the plaintiff company by a letter dated 9th October 1933, applied to the Collector of Shahabad for permission to assign the leases to Subodh Gopal Bose, but in the meantime things had taken a different turn. It seems that when the plaintiff company went into liquidation, and thus ceased working, the Government lost its income. It was discovered that by some oversight no minimum royalty was provided in the leases. As early as 23rd March 1933, the Collector addressed a letter (Ex. 4) to the Managing Agent of the Company to the effect that it was understood that the Company had gone into liquidation but no notice of the determination of the leases was given to the Collector. It was pointed out that the leases could not be transferred to anybody without the permission of the Board of Revenue. Attention was also drawn to an earlier lease, dated 19th July 1914, (that lease is not before us) in which a minimum royalty of Rs. 5,000 was provided. The relevancy of a reference to an earlier lease is not clear to me, unless it was intended to convey to the Company that it was liable to pay the minimum royalty under it.

The liquidators replied to it on 27th March 1933 (Ex. A) to the effect that they had not decided whether they would surrender the leases and that they knew that the assent of the Board of Revenue was required for assigning them to any other person. They however enquired the meaning of the reference to the minimum royalty of Rs. 5,000 mentioned in the Collector''s letter. On 12th April 1933, (Ex. 1) the Collector again asked the liquidators either to apply for cancellation of the leases or for permission to assign them to some other person or persons. After the conclusion of the agreement with Subodh Gopal Bose referred to above the liquidators, as I have already stated, applied to the Collector of Shahabad on 9th October 1933, for permission to assign the two leases to Subodh Gopal Bose. By a letter dated 25th October 1933, the Collector inquired about the position, status, solvency and business capacity of the proposed assignee. No further correspondence on the subject of permission to assign the leases is on the record; but the liquidators must have supplied to the Collector the necessary information, as from the letter of the Collector to the Commissioner of the Patna Division, dated 15th/16th November 1933 (Ex. D) it appears that" the liquidators reported to the former that the proposed transferee was solvent and of sufficient standing to be a party to a Government lease. Nothing further seems to have happened in this connexion.

On 20th October 1933, the local agent of Subodh Gopal Bose informed the Sub-divisional Officer of Sasaram, within whose jurisdiction the properties lie, that the mines were opened on 9th of the month and that the despatch of lime and limestone was expected to commence on the 22nd. The Subdivisional Officer already had independent information of the opening of the work and reported the fact to the Collector suggesting that opportunity of the situation should be taken to rectify the mistake of not providing a minimum royalty in the two leases (Ex. B, dated 26th October 1933). Under instruction from the Commissioner of the Patna Division the Subdivisional Officer stopped the work of Subodh Gopal Bose on or about 6th December 1933. Steps were also taken for the forfeiture of the leases and ejecting the plaintiff. On 27th March 1934 (Ex. E) the Local Government sanctioned the proposal of the Commissioner for the forfeiture of the two leases and later a formal Resolution, dated 18th July 1934, was issued declaring that the leases were forfeited on the ground that the lessee had by an indenture of 30th September 1933, between it and Subodh Gopal Bose which was a contract to transfer, coupled with a sublease of the Company''s right, transferred or sublet the rights or interest under the two leases to the said Subodh Gopal Bose without the assent of the Board of Revenue and that Subodh Gopal Bose was found working the quarries on his own account without being liable to the Company for profit and loss.

In the meantime, on 23rd March 1934, the Collector wrote to Mr. Bose asking him, if he himself wanted to take the lease of Murli Hill limestone deposits, to submit a formal application offering terms. On 29th March, Mr. Bose replied to this letter offering certain terms. Nothing turns on this correspondence, and it need not be considered for the purposes of this suit. I have mentioned it only to complete the narration of facts. On 23rd July 1934, within a few days of the Government Notification of 18th July 1934, referred to above, the plaintiff Company served upon the Collector notice u/s 80, Civil P.C., and thereafter instituted the present suit on 24th November 1934.

The plaintiff prayed for (1) a declaration that the leases of 1st April 1924, were not validly forfeited and were operative for and during the residue of their respective terms; (2) damages estimated at Rs. 11,000 for wrongful interference with the leases; (3) an injunction restraining the defendant, his servants and agents from granting a lease or leases of the leasehold properties and from authorizing any person to carry on any operation in or on the leasehold properties or on any portion thereof and from interfering with any of the rights of the plaintiff company; (4) interest and (5) costs.

The defence was that the leases were lawfully forfeited and that the officers of the Government rightly re-entered the leasehold properties. The learned Subordinate Judge has dismissed the suit holding that the agreement of 30th September 1933 between the plaintiff and Mr. Bose coupled with the plaintiff company making over the possession of the properties to Mr. Bose constituted a breach of the conditions of the leases and the defendant was entitled to forfeit them. The plaintiff has preferred this appeal.

The learned Government pleader has raised a question about the maintainability of the suit, which does not seem to have been specifically raised before the lower Court. I shall take it up in the end. The main question is whether the defendant was entitled to forfeit the leases. The defendant has relied upon two acts of the plaintiff company as constituting a breach of the condition of the leases, namely, the execution of the agreement and putting Mr. Bose in possession of the properties leased. The agreement may be divided into two parts: one is a contract to assign to Mr. Bose, subject to the consent of the Board of Revenue, the leases on a consideration of Rs. 6,000 out of which Rs. 101 was taken in advance; and the second is a promise to put the prospective vendee in a position to work the quarries of the leasehold properties on the latter''s depositing with the liquidators of the company a sum of Rs. 4,000. It is not contended on behalf of the Government, as it cannot possibly be contended, that the first part of the agreement constituted any breach of the covenants of the leases. The covenant relied upon by the Government prohibits

assignment of the leases or transfer any right or interest thereunder or under-letting whole or any portion of the premises comprised in the leases without the assent of the Board of Revenue.

A contract to assign is not an assignment especially when the contract was subject to the Company''s obtaining the necessary assent of the Board of Revenue. It is well established that a forfeiture clause must be literally and strictly construed and should be taken most strongly against the lessor inasmuch as he can always provide as stringent conditions as he likes. In this case the condition itself makes it possible for the lessee to assign the leases provided that the Board of Revenue gives its assent. In order to obtain such assent there must be a negotiation for assignment. The lessee cannot apply for assent unless there is a prospective purchaser. Therefore, it does not require any argument to hold that the plaintiff Company did not incur forfeiture by entering into an agreement with Mr. Bose promising to sell the leases to him provided that the assent of the Board of Revenue was obtained.

The second part is a promise to put the prospective purchaser in a position to work the quarries of the leasehold properties "as agent of the Company," provided he deposited Rs. 4,000 with the liquidators of the Company. According to the Government this contract, coupled with a subsequent making over of the possession of the property to Mr. Bose, constitutes subletting. The learned Subordinate Judge has held that the possession of Mr. Bose could not be that of an agent of the Company as he was described in the argument because he was to work the quarries on his own account without being liable to the Company for profit or loss. This was also the reason given by the Government in their Notification for holding the transaction as subletting. It may be that strictly speaking Mr. Bose was not an agent of the plaintiff. An agent acts on behalf of his principal at the instance of the principal and the profit and loss of the business is that of the principal. In this case Mr. Bose was in fact to work the quarries on his own account pending the decision of the Board of Revenue about the assignment of the leases to hint. It was clearly provided that if the Board of Revenue would sanction the transfer of the leases a proper deed would be executed and Mr. Bose would continue in possession as purchaser; otherwise the transaction was to come to an end.

The present case seems to be almost similar to the case in Horsey Estate, Ltd. v. Steiger (1899) 2 QB 79 In that case a lease was granted to an individual and a Joint Stock Co., and it contained, among others, a covenant by lessees for themselves and their assigns not at any time or times during the term to assign or underlet the premises or any part thereof without first obtaining the consent of the lessor in writing which consent was not to be unreasonably withheld. The lessors conveyed all their interest in the premises to the plaintiff. There was also a clause providing forfeiture if the company went into liquidation for certain purposes. The lessees with the consent of the plaintiff assigned the residue of the term of the lease to the defendants. The consent of the plaintiff was expressly limited to the particular assignment. Thereafter the company went into voluntary liquidation. The liquidation was for the purpose of reconstructing the company and increasing its capital. A new company was formed and duly registered. Notice was served upon the original lessees and the defendant preparatory to taking proceedings to enforce the right of re-entry. Thereafter an agreement was entered into between the defendant company, the defendant Steiger and the new company for the sale of the lease by which it was provided that at a certain period, though the purchase might not then be completed, the purchaser should be let into possession of the premises and from that date pay the rents and outgoings in respect of the same. The purchasers were let into possession under that agreement, the purchase remaining uncompleted. It was contended by the lessor among others that an agreement to assign the lease, coupled with the making over of the possession to the proposed assignee, constituted the subletting of the premises. Lord Russell of Killowen, C.J., delivering the judgment of the appeal Court, said:

Finally, as to the alleged breach by underletting. It is admitted that there has been no assignment within the meaning of the covenant against assignment. What has taken place is this. The defendants, having agreed to sell to the new company, have let them into possession pending the completion of the purchase, the new company undertaking to pay all rents, rates and outgoings in connection with the premises or the business there carried on. There is a provision for redelivery of possession to the defendants if the contract should be rescinded. It is contended that this makes the new company the defendant''s under-tenants. But on what terms? The new company pay no rent to the defendants; they have undertaken no obligations to the defendants except those mentioned, which are not necessarily obligations of tenancy. But it is said the proper implication from those facts is that a tenancy at will has been created. Whether this may be technically so or not, the practical answer to this contention seems to be that the defendants could not by the exercise of their will turn the new company out. The effective answer of the new company would be: We have come in as purchasers and we are willing to carry out our terms of purchase. In this sense and according to the ordinary understanding of men, this is not a case of underletting at all, but merely a case in which the new company has been let in on terms of purchase. Had the covenant been (as is of late years often the case) against parting with possession without license of the landlord, the plaintiff company would have provided a breach of such a covenant, but they have not established a breach of the covenant in question, which is against under-letting only.

The learned Government Pleader tried to distinguish this case from the case before us. He contended that the reason why the transaction in that case was not held to be subletting was that there was no rent payable to the vendor, and in this case there is a provision for the payment of royalties by Subodh Gopal Bose to the plaintiff company. In my opinion, there is no force in this contention. In that case also rent, etc., were required to be paid by the prospective assignee to the lessor. In this case nothing strictly speaking was payable to the plaintiff company. The royalties which Mr. Bose was required to pay were only those which were payable to the Government. As there was no relationship of landlord and tenant between the Government and Mr. Bose the royalties were to be paid through the plaintiff. Putting a prospective assignee into possession of the premises cannot, in my opinion, be said to be subletting. Lease of an Immovable property is a transfer of a right to enjoy such property. The agreement of 30th September 1933, does not, in my opinion, purport to transfer any right in the lease, hold properties. Clause (6) which is the only operative clause in this respect says:

The purchaser (Mr. Bose) shall be appointed local agent of the vendors of the leasehold right of the vendors to the lands ... until the transfer of the leasehold right be effected or until it is finally decided that such transfer cannot be made.

Allowing a man to work cannot be said to be a transfer of an interest in the properties. Assuming, however, that the transaction amounted to a sublease, it was void on account of want of registration of the document. Section 107, T.P. Act, says that:

A lease of Immovable property from year to year, or for any term exceeding one year, or reserving a yearly rent can be made only by a registered instrument. All other leases of Immovable property may be made either by a registered instrument or by oral agreement accompanied by delivery of possession.

The learned Government Pleader contended that the transaction in question did not come within para. 1 of the section. Assuming it to be so, there is no question that it comes under the para. 2 being included in the words "all other leases." In that case the lease must, be made either by a registered instrument or orally accompanied by delivery of possession. u/s 4, T.P. Act, Section 107 of the Act, is to be read as supplemental to the Indian Registration Act. Under para. 2 of Section 107, if a document is to be executed for a lease not coming under para. 1, the document, must be registered and the effect of nonregistration u/s 49, Registration Act, is that the document shall not affect any Immovable property comprised therein. In order to attract forfeiture the subletting must be legal. A condition against transfer is not broken by transfer which is in fact void (Halsbury''s Laws of England. Vol. 18, para. 1040).

The learned Government Pleader next contended that if the transaction did not amount to a sublease, it was a transfer of a right or interest under the lease and therefore it lead to forfeiture. I have already stated that in my opinion the transaction does not amount to transfer of any interest in the leasehold property. Assuming that it does, it is inoperative for want of registration of the document. Being an interest created in an Immovable property of more than Rs. 100 the document was compulsorily registerable u/s 17, Registration Act, and not having been registered has not affected the property u/s 49 of the Act.

The learned Government Pleader further contended that as Mr. Bose was put in possession of the leasehold premises as a prospective purchaser or as a sublessee or a transferee by virtue of the agreement he had a complete title to the premises u/s 53-A, T.P. Act. This argument is also in my opinion untenable. In order to attract the provisions of Section 53-A which is based on the English doctrine of part performance, it is necessary that there should be a completed agreement and that possession be delivered in part performance of that agreement. In this case, first of all, there was no completed agreement to sell nor any agreement to sublease or to transfer any interest acquired under the lease. The agreement to sell was dependent upon the obtaining of the assent of the Board of Revenue. As long as this assent was not given Mr. Bose was not entitled to sue for specific performance of contract. Secondly, the possession which was to be given to Mr. Bose under the agreement was not in part performance of the contract nor Mr. Bose took possession of the premises in part performance of the contract. In the agreement it was clearly stated that the possession of the latter would be that of an agent. The learned Subordinate Judge has held, as I have stated, that Mr. Bose could not be treated as an agent, as the plaintiff company was not responsible for the profit and loss of the quarry business. The position of Mr. Bose may not be exactly that of an agent, but it was definitely provided that he could not claim any position other than that of an agent. Clause (9) of the agreement sets forth:

If the purchaser do not take any appointment as local agent of the vendors as provided in Clause (6) aforesaid he shall not do any work in the quarries of the lands set out in the schedule or burn or manufacture lime thereon nor despatch lime and stone from the said Murli centre until the transfer of such leases has been completed.

It was by virtue of this agreement that Mr. Bose took possession of the quarries. It was not possible for Mr. Bose to claim that he took possession in part performance of the contract to assign the leases. In this view of the matter it is not necessary to consider the contention of Mr. Manuk on behalf of the appellant that an equitable transfer contemplated in Section 53-A, T.P. Act, cannot constitute a breach of the prohibition assignment contained in the leases, though it has some force. In Halsbury''s Laws of England under the heading, "Landlord and Tenant," para. 1106, it is stated that

a covenant "not to assign," or "not to assign or otherwise part with" the premises is only broken by a legal assignment for the entire residue of the term. Consequently the covenant is not broken by a declaration of trust of the premises in favour of a third person, or by the deposit of the lease as security for an advance.

This principle seems to have been laid down in the case in Doed Lloyd v. C. Powell (1826) 5 B & C 308. In Woodfall''s Law of Landlord and Tenant (p. 844, 23rd Edn.) the same principle has been enunciated, i.e., an equitable assignment is not sufficient to operate as a breach of the covenant. There must be an assignment in law. The Judicature Act has not effected any alteration of the law in this respect. Section 53-A, T.P. Act, does not provide that under the circumstances stated therein a good title passes to the transferee. It only says that the transferor shall be debarred from enforcing against the transferee and persons claiming under him any right in respect of the property of which the transferee has taken possession. However, it is not necessary for me to pursue this matter further as in my opinion, as I have already said, in this case even an estoppel has not been created as contemplated in Section 53-A, T.P. Act.

Let us now see whether the act of parting with the possession of the leasehold properties by itself constitutes a breach of the conditions independent of the execution of the agreement of 30th September 1933. In my opinion it does not. The only undertakings given by the lessee were: "(1) not to assign the lease; (2) not to transfer any right or interest thereunder, and (3) not to underlet the whole or any portion of the premises comprised in such leases without the assent of the Board of Revenue being obtained." If the transaction was not an assignment of the leases nor subletting nor transfer of any right or interest thereunder the plaintiff company did not incur forfeiture of the leases. There was no covenant that the plaintiff company would not part with possession. Such a covenant was necessary in order to attract forfeiture. In Church v. Brown (1808) 15 VJ 258, decided in 1908, the question was whether a covenant restraining alienation without licenses was a proper and usual covenant in a lease. Lord Chancellor Eldon referring to Dumpor''s case observed:

But how does the fact, that there was such a covenant in that case where it was held to be gone by alienation with license, prove that this is a usual, general covenant in a lease? The conclusion is rather the other way; that this is a special and particular covenant. Consider how this grows. This covenant (meaning thereby covenant, and not alienation), which is represented to be usual, would not prevent underletting. Then is a covenant against under-letting a usual covenant and is it proved to be so by the authorities, that it is not restrained by the other covenant. Further, if the landlord has a covenant against both assigning and under-letting, the tenant might by an agreement, neither assigning, nor under-letting, put another person in possession of the premises; and parting with the possession in that manner would not be a breach of those covenants. Is a further covenant therefore not to part with the possession of the premises, to be given as a usual covenant? That would not have restrained the tenant from parting with a part of the premises, these covenants having been always construed by Courts of law with the utmost jealousy to prevent the restraint from going beyond the express stipulation.

Later on a practice grew in England for a covenant in a lease against parting with possession without license of the landlord. Referring to this Lord Russell of Killowen in the case in Horsey Estate, Ltd. v. Steiger (1899) 2 QB 79 (already referred to) said:

Had the covenant been (as is of late years often the case) against parting with possession without license of the landlord, the plaintiff company would have proved a breach of such a covenant, but they have not established a breach of the covenant in question which is against under-letting only.

Hitherto I have treated the case as if the plaintiff company parted with the possession of the leasehold properties. In my opinion, in fact, this has not been the case if the agreement be literally construed. It simply allowed Mr. Bose to work the quarries on certain conditions and, as I have said, Mr. Bose was to claim no other position than that of an agent. It is not essential for the determination of the case to find the exact legal position of Mr. Bose, vis a vis the plaintiff company. It is enough to hold that he was neither an assignee nor a sublessee nor a transferee of any interest in the leasehold property. He was obviously put in a position to work the quarries on his own account in anticipation of the execution of a proper deed of conveyance which depended on the sanction of the Board of Revenue being obtained. As I have held this cannot incur forfeiture. Mr. Bose was more of a licensee under the plaintiff than anything else. The learned Subordinate Judge has referred to the cases in Secy. of State v. Karuna Kanta (1908) 35 Cal 82, Mohipal Singh v. Lalji Singh (1913) 16 IC 705 and Board of Revenue v. S.I. Ry. Co., Ltd. 1925 Mad 434. These cases discuss about distinction between a lessee and a licensee which is well known, that is in a lease there is a transfer of interest in the land and in a license there is a permission to do something on the land. The learned Government Pleader contended that a person to whom a mining right is given is not a licensee. He referred us to the case of Duke of Southerland v. Hathcote (1892) 1 Ch D 475, where Lindley, L.J., observed:

A right to work mines is something more than a mere licence: it is a profit a prendre, an incorporeal hereditament lying in a grant. The distinction between a licence and a profit a prendre was pointed out in Wickham v. Hawker (1840) 7 M & W 63, a leading case on rights of sporting.

In this case however there is no grant of mineral rights. If the document of 30th September be taken to be a grant, it is void for want of registration as I have already stated. The learned Subordinate Judge has held that Mr. Bose was not a licensee as he was given exclusive possession of the properties. I do not however find anything in the agreement which shows that this was the case. The deed simply authorised him to extract and remove the limestone on his own account. I next take up the question of the maintainability of the suit which was urged by the learned Government Pleader. He contended that as the plaintiff company was dispossessed from the leasehold properties by the Government it ought to have sued for recovery of possession and in such a case injunction is not the proper remedy. The plaintiff not having sued for possession the suit was not maintainable. He relied on the proviso to Section 42 and Section 56(i), Specific Relief Act. The proviso to Section 42 only says that a plaintiff is not entitled to a declaration where being able to seek further relief than a mere declaration, he omits to do so. In this case the plaintiff has not asked for a mere declaration but also for an injunction as a consequential relief though I think that on the facts a simple declaration was enough. Section 56(i) provides that an injunction cannot be granted when equally efficacious relief can certainly be obtained by any other usual mode of proceeding. The learned Government Pleader contended that the plaintiff being able to sue for recovery of possession cannot get an injunction; whether the plaintiff is out of possession is a question of fact and it was not raised before the trial Court. No doubt, the defendant in his written statement vaguely asserted that the suit was not maintainable, but no ground was mentioned. No, issue about the maintainability of the suit was raised. The order-sheet of the lower Court, dated 1st March 1935 records as follows:

Parties ready. Suit taken up. It appears that no issues were framed. Pleaders heard, and issues settled.

The issues therefore were framed after the parties were heard. There were only two issues raised and they do not refer to the maintainability of the suit. The parties adduced no evidence and the case was argued purely on the pleadings and on the documentary evidence. In these circumstances the defendant, in my opinion, is not entitled to raise in the appeal Court the issue of maintainability on the ground of the plaintiff being out of possession. The determination of this question depends upon facts for which evidence will be necessary. The learned Government Pleader however argued that it was clear from the pleadings of the parties that the plaintiff was dispossessed by the defendant. I do not find any such statement either in the plaint or in the applications for temporary injunctions filed by the plaintiff in the lower Court or in this Court. The only thing in this connexion is contained in para. 7 of the plaint which runs thus:

On or about 6th December 1933, whilst the said Subodh Gopal Bose was working as local agent of the plaintiff company as aforesaid, the Subdivisional Officer of Sasaram wrongfully caused the said working to be suddenly stopped and by a letter, dated 20th April 1934, the Commissioner of Patna Division informed the plaintiff company that Government had forfeited the said two leases. The Government further wrongfully authorised Kalyanpur Lime Works Limited, to carry on quarrying operations in the lands demised to the plaintiff company as aforesaid with a view to granting a lease thereof to the said Kalyanpur Lime Works, Limited, and to oust the plaintiff company therefrom.

The only admission in this paragraph is that the Subdivisional Officer of Sasaram stopped the work at about 6th December 1933 and that the Government authorised a certain company to quarry stone in the area "with a view to grant leases to the said company." It appears that the Subdivisional Officer asked the local agent of Mr. Bose to stop the work, and this was done. This does not, in my opinion, amount to dispossession of the plaintiff. It was before the forfeiture of the leases and I cannot presume that the Government dispossessed the lessees seven months before they forfeited the leases. Nor can the fact that the Government authorised a certain company to quarry stone amounts to dispossession of the plaintiff. Even if a landlord grants a new lease the grant by itself does not constitute dispossession of the previous lessee unless the new lessee actually dispossesses him. In the application for injunction filed before the lower Court there are two statements of the plaintiff which have been relied upon by the learned Government Pleader. One is in para. 6 and the other in para. 7. In para. 6 it is stated as follows:

Your petitioner verily believes and apprehends that the defendant is looking for an opportunity to put the said Kalyanpur Lime Works, Limited, into possession of the said mines and will do so at its earliest opportunity without recourse to process of law.

This is not an admission of dispossession. In para. 7 it is stated:

That the plaintiff is informed that Messrs. Kalyanpur Lime Works, Limited, are removing limestone from the said lands.

Removal of some limestone, even if it was a fact, does not mean the ouster of the plaintiff. Coming to the written statement of the defendant, there is no allegation even that the Government have taken possession of the leasehold properties. Para. 11(e) of the written statement says that

the plaintiff company was rightly ejected under the terms of the lease from the leased premises.

This at first sight appears to be a statement of fact, but while verifying the written statement of the Collector stated about some paragraphs including para. 11(e) that they were matters of legal opinion. Therefore the fact that the plaintiff was ejected was not stated as a matter of fact but as a matter of law, as the Collector was so advised. I must point out that legal opinion given to the Collector ought not to have found a place in a written statement. The only other paragraph in this connexion is para. 11(d) which runs thus:

That the Government rightly re-entered, authorized and inducted the Kalyanpur Lime Works Company to quarry or to carry on quarry operations in the lands previously leased out to the Kachhua Lime Stone Company with a view to avoid loss to the Government and to grant subsequently a lease thereof to the said company.

But this, in my opinion, hardly means dispossession of the plaintiff. The reentry may refer to ejectment mentioned in the next paragraph as the legal effect of forfeiture. Nor is it clear that any act of dispossessing the plaintiff was done prior to the institution of the ''suit. The learned Government Pleader has referred us to the observation of the learned Subordinate Judge where he says:

In the present case the defendant was able to effect peaceful ejectment and therefore it was not necessary for the defendant to have recourse to a regular suit in order to enforce the ejectment clause in the indenture.

As I have said there is no basis for this observation. The only statement about ejectment is in para. 11(e) of the written statement which, according to the Collector, is a matter of legal opinion. I have stated in the beginning of my judgment that the Government Notification forfeiting the lease was dated 18th July 1933, and the notice of the suit u/s 80, Civil P.C. was served on the Collector on 23rd July of that year. There is nothing on the record to show that between these two dates anything was done by the Government which may constitute dispossession of the plaintiff. The plaintiff was entitled to sue only on the cause of action which accrued to him before the notice and it was the forfeiture of the lease. Until the date of notice there was no act of dispossession of the plaintiff. When the present appeal was filed the plaintiff applied for a temporary injunction. In that application it was stated:

That the petitioner verily believes and apprehends that the defendant-respondent is looking for an opportunity to put the said Kalyanpur Lime Stone Works, Limited, into possession of the said lands and will do so at its early opportunity without recourse to the process of law and grant a lease of the said lands to the said Kalyanpur Lime Stone Works, Limited, and thereby cause irreparable loss and injury to the petitioner unless the defendant-respondent is immediately restrained by an injunction from doing so.

In the next paragraph it is stated:

That the petitioner is informed that Messrs. Kalyanpur Lime Works, Limited, is removing limestone from the said lands.

This statement in the petition which was filed on 23rd April 1935, shows that up to that date, according to the plaintiff, the Government had not given a fresh lease to the Kalyanpur Lime Works, Limited, and the plaintiff was not dispossessed. The injunction prayed for was:

That the defendant be restrained forthwith till the disposal of the appeal from granting lease or leases either to the said Kalyanpur Lime Works, Limited, or to any other person or persons and from authorizing and allowing such person or persons their servants, agents, tenants and workmen to carry on or suffer to be carried on any portion of the said lands or any portion thereof and from otherwise interfering with any of the rights of your petitioner, possessory or otherwise, over or in respect thereof, and from changing the character and conditions of the said lands.

An ad interim stay was granted by this Court on 25th April 1935 and notices were served on the defendant. No written refutation of the allegations of the plaintiff was filed on his behalf. When the matter of temporary injunction came up for hearing it was orally opposed, but it was granted on 25th July 1935. It was open to the defendant at that stage to prove by an affidavit or otherwise or even to assert that a lease had already been granted to the Kalyanpur Lime Works, Limited, and that the plaintiff was dispossessed and therefore a temporary injunction would be infructuous. Nothing seems to have been done. On the other hand, after the plaintiff had applied for a temporary injunction, the defendant applied that security for costs be taken from the appellant. In, that application, which was filed after the notice of application for injunction was served upon the defendant, it was stated that:

The plaintiff company were removing the rails and tubs from the Murli quarries and it is submitted that they are doing so in a precautionary measure to avoid payment of costs awarded in the decree.

The application for an order for security of costs was rejected by the Registrar of this Court on 23rd July 1935, as the plaintiff had already paid in the Court below the costs decreed by that Court. But the statement in the petition of the defendant shows that the plaintiff company''s men were on the leasehold properties, its rails were there and that it was removing them. This can hardly be consistent with the fact which was urged by the Government Pleader at the hearing of the appeal that the plaintiff was entirely out of possession. No doubt, the plaintiff stated that it was informed that the Kalyanpur Company was removing stones, but that cannot be said to be an admission of dispossession. The removal by the Kalyanpur Company of some stones, which might possibly have been quarried by the plaintiff or Mr. Bose, cannot amount to dispossession of the plaintiff specially when we know nothing of the extent of the removal. Nor, as I have said, is there anything to show that it was done before 23rd July 1933, when the plaintiff gave notice of the suit. In my opinion therefore the suit is maintainable.

The next question urged by the learned Government Pleader was that the plaintiff was not entitled to any damages for interference with the leases as it had abandoned the claim for them. I do not find any such abandonment. In fact an issue about the damages was raised, but no evidence was given as parties very rightly wanted the determination of the main issue. When dealing with the question of damages the learned Subordinate Judge has stated that the plaintiff adduced no evidence. The remark is not justified. Both parties seem to have agreed that no oral evidence should be adduced and the case should be decided on the pleadings and documents. Ordinarily it is desirable that the question of the amount of damages should await the decision of the question of title. This is a procedure which has been approved by their Lordships of the Judicial Committee in the case of Naresh Mohan Thakur v. Brij Mohan Misra 1933 PC 43, where the trial Court had reserved the question of the amount of damages till a further stage of the suit. This was disapproved by this Court, but their Lord-ships of the Judicial Committee observed that the course adopted by the trial Court was a very usual, a very proper and a very convenient one. In its appeal to this Court the plaintiff has claimed damages, as it has paid court-fee on that claim.

The result of my findings is that that the plaintiff succeeds, and the suit will be decreed with costs throughout. It will be declared that the two leases, dated 1st April 1928, have not been validly forfeited on account of the agreement of 30th September 1933 and the plaintiff allowing Mr. Bose to quarry stone in the leasehold properties. There will also be an injunction restraining the defendant and his servants from interfering with the plaintiff''s leases on the basis of the forfeiture claimed by him in the Government Notification of 18th July 1933. The plaintiff will also get from the defendant damages for wrongful interference with its leases, the amount of which will be ascertained in a subsequent proceeding on a proper application being made to the lower Court. In calculating the costs of the plaintiff in the two Courts the court-fee and the hearing-fee on the value of the damages claimed will not be allowed at this stage, but they will be allowed by the lower Court when the amount of damages have been ascertained and only on the amount which the plaintiff may be found to be entitled to. The trial Court may then also award to the defendant costs on any amount by which the plaintiff''s claim for damages may be found to have been overvalued.

Varma, J.

I agree.