Narayan Jieu vs A.C. Banerjee

Das, J.—This is an appeal by the Plaintiff and is directed against a judgment and decree passed by Mr. P.C. Banerjee, learned subordinate judge, Asansol, dated July 31, 1947.

The Plaintiff''s case was that his father Raja Jyoti Prosad Singdeo granted a lease for a term of 999 years ostensibly in favour of Defendant No. 1 on the terms recited in the indenture to which reference would be made hereafter. The lease was granted on September 10, 1916; that on September 11, 1933, Raja Jyoti Prosad Singdeo executed a deed of trust whereby he appointed certain trustees for the benefit of certain deities and for certain other purposes. By the deed of trust he appointed himself as the first trustee. On September 29, 1938, Raja Jyoti Prosad Singdeo died and the Plaintiff''s case is that according to the rule of primogeniture by which the family was governed the Plaintiff Kalyani Prosad Singdeo alone succeeded to the estate of the Raja and also became the succeeding trustee. The suit was instituted by Kalyani Prosad Singdeo for himself and as trustee under the deed of trust referred to above. In the suit the Plaintiff prayed for recovery of a sum of Rs. 25,619-10 annas together with cost and interest pendente lite. The Plaintiff also prayed that in default of payment of the aforesaid sum, the property mentioned in the schedule and which was alleged to have been charged for the payment of the aforesaid dues should be brought to sale. He also prayed for leave to apply for a personal decree in case the sale-proceeds did not satisfy the decretal debt.

On June 1, 1946, the Plaintiff Kalyani Prosad Singdeo died and was succeeded by his eldest son Sankari Prosad Singdeo as the heir to the estate and also as the succeeding trustee. On this footing Sankari Prosad Singdeo was substituted in place of the deceased Plaintiff Kalyani Prosad Singdeo.

In the schedule to the plaint, the Plaintiff set out the arrears of road cess and mining cess which were claimed. It is not necessary to refer to the details according to which road cess and mining cess were claimed. The claim covered a period from 1340 to 1349 B.S. In schedule 3 the Plaintiff also claimed royalty coal but this claim was abandoned in the course of the trial. The suit proceeded thereafter in respect of the claim for road cess and mining cess. In the plaint the Plaintiff stated that all the Defendants were liable for the claim. The suit was filed on September 14, 1943.

In order to appreciate the contentions which were raised in the court below and some of which have been re-agitated in this Court it would be necessary to set out the devolution of the interest of the lessee. As I have already stated, the lease was originally taken in the name of Dhirendra Nath Mukherjee, Defendant No. 1. It appears that Dhirendra Nath Mukherjee had certain undisclosed co-parceners and that two of these co-parceners were Rai Bahadur A.C. Banerji, Defendant No. 2, and Sarojini Devi, Defendant No. 12. It further appears that Dhirendra Nath Mukherji sold a third share in the leasehold interest in favour of Jugal Kishori Devi. Jugal Kishori Devi in her turn executed on August 1, 1926, a document termed as a deed of gift in favour of her grandsons. By this document she granted 6 annas share-out of her l/3rd share to her grandson Kartick Chandra Mukherji, Defendant No. 3; she also granted a 5 annas share each to her two other grandsons named Satyanarain Banerjee and Bhut-nath Banerjee. Kartick Chandra Mukherji alleged that his interest which on the above calculation comes up to 1/3th had been sold. Satyanarain Banerjee and his heirs are Defendants Nos. 4 to 9, Defendants Nos. 4 to 8 being his minor sons and Defendant No. 9 is his widow. They alleged that the interest of Satyanarain had passed to Defendant No. 14 Haimabati Debya. The interest of Bhutnath Banerjee was purchased by Defendant No. 13 Kamala Bala Ghose by a document dated July 5, 1941.

It appears that on June 12, 1928, the lessees granted a sublease in favour of Aldih Coal Company, Limited, Defendant No. 15. This company went into liquidation and the liquidators are Defendants Nos. 16 and 16A. It also appears that the interest of Aldih Coal Company, Limited, devolved on January 1, 1941, on Defendant No. 17, Equitable Coal Company.

In the course of the suit certain other persons were added as Defendants. These are Defendant No. 18 Naresh Nandini Devi and Defendants Nos. 19 and 20 Satyanarain Banerjee and Nitya Narain Banerjee.

It is not necessary to set out separately the defences taken by the different Defendants in the suit. The substantial defenses to the suit were that the suit was not maintainable by the Plaintiff Kalyani Prosad Singdeo alone, his brothers being necessary parties. A further defence was that the suit was not maintainable by the Plaintiff Kalyani Prosad Singdeo for himself and as a trustee, that is, in both capacities. A further defence was that the sub-lessees were not bound to pay rent or royalty or the cesses claimed on the terms of the original lease granted to Dhirendra Nath Mukherjee. It was also pleaded that the sublease was recognised by the Plaintiff or his predecessor and, as such, the Plaintiff is precluded from challenging the liability of the sub-lessee; that the road cess and mine cess are not payable under the lease granted to Dhirendra Nath Mukherjee; that Raja J''yoti Prosad Singdeo did not claim these cesses and hence the Plaintiff is estopped from claiming the same; that the claim for mine cess and road cess which were not payable under the lease cannot be regarded as a charge on the demised premises. It was also pleaded that a substantial part of the claim was barred by limitation. The defence of Defendant No. 3 was that his interest was sold some time before the suit and that he is not at all liable for the claim. The defence of Defendants Nos. 4 to 9 was that their interest passed on to Haimabati Debya by a kabala, dated September 4, 1935. The defence of Defendant No. 10 was that his interest had passed to Kamalabala, Defendant No. 13. Defendant No. 11 Manindra Nath Mukherjee claimed to have acquired the interest of Defendant No. 3 by a kabala, dated April 3, 1939. Defendant No. 12 Sarojini Devi claimed to be a co-sharer of Defendant No. 1. Defendant No. 13 Kamala Bala Ghose asserted that the original lessees were liable for the claim, that in any event she cannot be made liable for the entirety of the claim. It is not necessary to set out the defence of Defendant No. 15. The defence of Defendant No. 17 is that as a sublessee the Plaintiff has no right to recover cesses claimed from that Defendant; that no interest is payable in respect of the claim and that no charge has been created on the demised premises.

After the death of Kalyani Prosad Singdeo and on the substitution of Sankari Prasad Singdeo as Plaintiff, a further defence was taken that Sankari Prosad Singdeo had no right to maintain the suit.

On these pleadings various issues were raised. The learned subordinate judge was of the opinion that the lessee undertook to pay the cesses claimed; that the Plaintiff''s claim to recover these cesses is not barred by estoppel or waiver; that no apportionment of rent is permissible as between the transferees from the lessee; that the sub-tenant was not liable for the claim in suit; that the claim in suit did not form a charge on the demised premises; that the claim for the period of six years prior to the suit was barred by limitation; that the suit was maintainable by the Plaintiff in his capacity as trustee and it was not defective on the ground that the other sons of Raja Jyoti Singdeo or the other sons of Kalyani Prosad Singdeo were not made parties. On these findings the learned subordinate judge passed a decree for a sum of Rs. 13,166-2 annas against the Defendants other than Defendants Nos. 4 to 9, 15 to 17 against whom the suit was dismissed. In the view I have taken it is not necessary to set out the respective liabilities of some of the Defendants as found by the learned subordinate judge.

The Plaintiff has appealed to this Court. There is a cross-objection by Defendant No. 13 Kamala Bala Ghose.

I may point out that the question about the Plaintiff''s right to maintain the suit in his capacity as trustee has not been contested in this appeal nor has it been contended that the Plaintiff is not entitled to recover the cesses claimed in the suit as against his lessees and the assignees.

Mr. Sanyal who has appeared in support of the appeal has raised several contentions. I shall deal with these contentions in the order in which they were placed before us.

Mr. Sanyal has first contended that the learned subordinate judge should have allowed interest on the sums claimed as cesses. He has submitted that interest is allowable on equitable grounds, the ground suggested being that as the Defendants were liable to pay the cesses claimed and had defaulted in making the payment, the court is entitled to award interest in the cesses claimed.

The power of a court to award interest prior to the suit is now well-settled. The law was firmly laid down by the Judicial Committee of the Privy Council in the case of The Bengal Nagpur Railway Co. v. Ruttanji Ramji (1937) L.R. 65 I.A. 66. It was there pointed that the power of the court to award interest prior to the suit depends not upon the provisions contained in the CPC but upon rules of substantive law, namely, where there is an agreement to pay interest at a fixed rate or where the interest is payable under the usage of trade or under some provisions of substantive law, e.g., Section 88 of the Negotiable Instruments Act or under the Interest Act (Act XXXII of 1839). It was further pointed out that interest cannot be awarded merely by way of damages u/s 73 of the Indian Contract Act. In the present case, the lease granted to Dhirendra Nath Mukherjee does not specifically provide for payment of interest on the cesses claimed nor is there any agreement alleged or proved under which interest is payable. No usage of trade has also been alleged or proved. The question, therefore, is whether the Plaintiff is entitled to claim interest under the Interest Act (Act XXXII of 1839). That Act empowers the court to award interest if the amount claimed is a sum certain which is payable at a certain time by virtue of a written instrument. The section itself can have no application to the present case. There is no written instrument in this case which has been alleged or proved. The proviso states that interest shall be payable in all cases in which it is now payable by law. This last sentence has been held to mean that interest can be awarded in cases in which the Courts of Equity exercising jurisdiction allowed interest, that is to say, where circumstances exist which attract the equitable jurisdiction of the court, e.g., the non-performance of a contract of which a Court of Equity would decree specific performance. The question thus is whether in the present case circumstances have been proved which would have attracted the equitable jurisdiction of the court to award interest. In the present case the evidence discloses that the cesses claimed had not been realised previously and this is the first time that the estate has attempted to recover the cesses claimed. No demand was ever made from the lessees calling upon them to pay the cesses which are now in suit. The mere fact that the lessees did not pay the cesses does not, in my opinion, attract the equitable jurisdiction of the court to award interest in the facts of the present case. There is, therefore, no force in the first contention which was urged by Mr. Sanyal on behalf of the Appellant.

The next contention which was raised by Mr. Sanyal relates to the existence or non-existence of a charge on the demised premises in respect of the cesses claimed in the suit. Reference has been made by learned Counsel on both sides to the terms of the lease, Ext. 1, dated September 10, 1916. The relevant provisions of this lease may be shortly set forth. In para. 8 of the lease the lessee agreed to pay commission at the rate of 4 annas per ton, the sum which may be due as such being payable in two kists in the months of Aswin and Chaitra. Paragraph 9 provided for the payment of minimum royalty at the rate of Rs. 5 per bigha, that is, on the whole a sum of Rs. 4,035 in two kists, namely, Aswin and Chaitra. Paragraph 10 provided for the delivery of 4 wagons of steam coal every year known popularly as royalty coal. Paragraph 12 provided that besides royalty or commission the lessee shall pay all taxes or cesses or rates that are levied or may be levied and that the lessor will have no connection with the same. The paragraph further provided that in case of default in payment of royalty or commission interest would be payable at 1 per cent, per month. Paragraph 13 may be translated as follows:

For the commission or minimum royalty, etc., payable by me (lessee) the demised lands and mines, etc., and all machinery, etc., and buildings, etc., attached thereto will always remain charged.

In other words, for the royalties, etc., all these will remain a first charge. It is contended on behalf of the Appellant that in para. 13, the parties intended that the charge would operate not merely in case of non-payment of commission or minimum royalty but also in regard to cesses which are payable under the terms of the lease. It is pointed out that the word "etcetra" following the words "commission or minimum royalty" as also the word "royalty" in para. 13, includes the rates and cesses which are mentioned in the previous paragraph, namely, para. 12. The question is whether this contention is supported by the terms of the lease. In order to create a charge, the charged property must be made a security for the payment of the cesses claimed. In para. 12 the lessor draws a distinction between royalty and commission and cesses and taxes and rates. In reward to royalty and commission, a default in payment of the same entails a liability to pay interest at 1 per cent, per month but no such provision is made as regards cesses, taxes and rates. In regard to the cesses, rates and taxes, the liability which is undertaken by the lessee extends to sums which the lessor may, under the statute, be liable to pay. It cannot, therefore, be said, as a matter of course, that the lessor intended to lump all payments, be they royalty or commission or cesses, rates and taxes, in one category. It is apparent that the lessor was fully alive to the distinction between the different categories of payments which the lessor was required to pay in terms of the lease. In my opinion, it is difficult to incorporate within the word "etcetra" the liability for a charge for non-payment of cesses, rates and taxes. If the parties intended that the charge should operate in favour of all these categories of payments, clearer words would have been used. Mr. Sen, learned Counsel for Respondent No. 17, contended that by the use of the word "etcetra" the parties were contemplating payments which were akin to those which had preceded the word "etcetra", namely, the payment of royalty coal which is similar to payment of commission or royalty. In my opinion, this is a reasonable construction of the lease. I am unable to hold that all these payments, viz., payments of cesses, taxes and rates were intended to be charged on the demised premises. The intention clearly was that payments of royalty and commission or like payments which were payable by force of the lease to the lessor would be a charge on the demised premises. The charge was not, in my mind, intended to operate in regard to payments of cesses, rates and taxes which were partly payable by the lessors themselves under the statutory provisions like the Cess Act. There is, therefore, no substance in the second contention raised by Mr. Sanyal.

The third contention raised by Mr. Sanyal relates to the liability of the sub-lessee, Respondent No. 17, the Equitable Coal Company, to pay to the Plaintiff the cesses claimed. The learned subordinate judge has held that the Plaintiff is not entitled to proceed against the sub-lessees for recovery of the sums payable as cesses claimed in the suit. The contention of Mr. Sanyal is based on a threefold ground. He has first coutended that, as a matter of law, the liability to pay the cesses claimed is based on a covenant contained in the head lease. This covenant runs with the land and binds the sub-lessee. He has based this contention firstly on the term of Section 108(j) of the Transfer of Property Act. He has submitted that Section 108(j) empowers a lessee to transfer his interest either absolutely or by way of mortgage or sub-lease of the whole or a part of the property leased but. From this he contends that the necessary corollary is that as a result of the sub-lease of a part or whole of the property demised liability to pay the cesses passes to the sub-lessee. In my opinion, Section 108(j) did not intend to deal with the question of liability of a transferee from the lessee. That liability had to be determined on general principles of law. The first part of Section 108(j) merely declared an incident of the lease, namely, its transferability either absolutely or by way of mortgage or sub-lease.

The second part of Section 108(j) states that the lessee shall not, by reason of such transfer, cease to be subject to any of the liabilities attached to the lease. This provision was intended to make it clear that the contractual obligation of the lessee depending on privity of contract did not cease solely by reason of the fact that he had parted with his interest in favour of a transferee. The liability of a transferee from a lessee on the covenants to be found in the lease, has to be decided on certain well-defined principles.

Mr. Sen, learned Counsel for the Respondent No. 17, has argued this matter from its historical perspective. He has submitted that in England the liability of an assignee from a lessee on a covenant to pay rent was based on the privity of estate, the principle being that the land was the debtor and the idea of a personal obligation played only a small part. In an early case, Walker''s case (1587) 3 Coke''s R. 22(a), 22(b) it was pointed out that if the lessee grants over all his interest the lessor may have an action of debt against the assignee with whom there was no contract by deed. But for, as much as the rent issues out of the land, the assignee who hath the land, and is privy in estate is a debtor in respect of the land. Mr. Sen, learned Counsel for the Respondent No. 17, also referred us to the case of Halford v. Hatch (1779) 1 Douglas 174 (178). Lord Mansfield delivering the judgment of the court was of the opinion that the covenant to pay rent contained in a lease was available only against an assignee of the whole term.

This doctrine of privity of estate thus stated in England in 1587, has been applied in this country. Reference may be made to the case of Akhaya Kumar Chatterjee v. Akman Molla (1914) 19 C.W.N. 1197, where it was pointed out that an absolute assignee of the lease on the basis of privity of estate, was liable for rent and all covenants of the head lease. The same view was taken in the case of Adhar Chandra Mondal v. Dolgobinda Das (1936) 40 C.W.N. 1037. The question whether the assignee went into possession or not was held to be immaterial provided the assignment was absolute. Ananda Chandra v. Abdulla Hossain (1913) ILR 41 Cal. 148. That these principles have been accepted as underlying the liability of a transferee from the lessee receives support from the recent pronouncement of the Judicial Committee of the Privy Council (vide Jagadamba Loan Company v. Raja Siba Prosad Singh (1940) L.R. 68 I.A. 67. That the liability on the covenant to pay rent did not attach to a transferee where the transfer is a partial one was laid down by the Judicial Committee in case of an English mortgage and it was held to be non-existent in case of partial transfer [vide the case of Ram Kinkar Banerjee v. Satyanarain Sreemani (1938) L.R. 66 I.A. 50].

Mr. Sanyal referred us to a decision of the Allahabad High Court in the case of Rai Girinda Narain v. Ganga. Narain ILR [1938] All. 288. In that case the lessor was held to be entitled to sue the usufructuary mortgagee from the lessee who had paid rents to the lessor. This case referred to the conflict of opinion between the different High Courts and chose to accept the view that a lessor was entitled to sue a usufructuary mortgagee from his lessee. This view, in my opinion, can no longer be supported in view of the clear pronouncement of the Judicial Committee in the case to which I have already referred. The cases bearing on this point were considered in a recent decision of the Patna High Court in the case of Jagadish Chandra v. Md. Mukteyar Shah [1952] AIR (Pat.) 409, where it was held that as between the lessor and the sub-lessee there is neither a privity of contract nor a privity of estate and the sub-lessees are not bound by the covenants of the head lease. Mr. Sanyal also submitted that on the principle laid down in the case of Tulk v. Moxhay (1848) 4 E.R. 1143 the sub-lessee is bound to pay rent on the covenant in the lease as this is a covenant which runs with the land. It is well-known that an affirmative covenant, a covenant which compels a man to pay money, does not run with the land and as such it cannot be enforced against a sub-lessee. The result, in my opinion, therefore, is that the Plaintiff is not entitled to sue the sub-lessee on the covenant to pay the cesses claimed in the suit. This contention of Mr. Sanyal must, therefore, be overruled.

Mr. Sanyal also contended that the sub-lessee made himself liable to pay the cesses claimed on the basis of express terms in the lease.

The lease in favour of Dhirendra Nath Mukherjee, dated September, 10, 1916, is Ex. 1 in this case. Reference was made to para. 37 of the said indenture. That paragraph merely speaks of a right to sell or transfer the leasehold interest and provides that on payment of a selami of Rs. 2,000 the name of the purchaser or the transferee will be mutated.

It seems to me that this paragraph contemplates cases of absolute assignment. In this case, there is no suggestion that the name of the sub-lessee was mutated in the landlord''s books. It cannot, therefore, be said that the sub-lessee was liable to pay the cesses claimed on the basis of this covenant. It was also suggested that the sub-lease granted by Dhirendra and Jugal Kishori to Aldih Coal Company, dated June 12, 1928, which was marked Ex. A4 had the effect of making the sub-lessee liable to be sued by the lessor. Reference was made to the general words of demise in this document as also to pt. 5, para. 3, and pt. 6, paras. 1-3. Part 5, para. 3 merely provides that the sub-lessee (Aldih Coal Company) shall be at liberty to pay to the superior landlords direct the rent and royalties in terms of the head lease. This paragraph conferred a privilege on the sub-lessee. It was not intended to impose a liability on the sub-lessee to be sued on the covenants to pay the cesses appearing at the head lease. Part 6, clauses 1-3 also speak of direct payment to the head lessor. Paragraph 10 merely states that the sub-lessee will observe the covenant and the conditions in the head lease. None of these paragraphs nor the general words of demise, in my opinion, made the sub-lessee liable to be sued directly by the head lessor on the covenant to pay the cesses as claimed in the suit. This contention of Mr. Sanyal must, therefore, also be overruled.

It was also contended that by the conduct of the parties a privity of contract could be inferred as between the head lessor and the sub-lessee. In support of this submission reliance was placed on a letter, dated February 18, 1933, written by Macneil and Company, managing agents, Aldih Coal Company, to Dhirendra. This was marked Ex. 11(4).

This letter refers to a conference in which the head lessor was represented by Sri Ajit Prosad Singha Bahadur and Bagalananda. This letter also states that the parties agreed that in future the sub-lessee would pay the rent payable by the lessor to the head lessee. This agreement, in my opinion, conferred a privilege on the sub-lessees to pay the royalties which were payable to their lessors Dhirendra Nath Mukherjee and others. This has nothing to do with the question of imposing a liability on the sub-lessee, viz., the liability to be sued by the head lessor. There was no contract to which the three parties, the head lessor, the lessees Dhirendra Nath Mukherjee and others and the sub-lessee, were parties and under which the sub-lessee could be made liable. It was also suggested that such a contract can be inferred from the fact that on certain occasions the sub-lessee paid the head rent. In my opinion, the payment was accepted as a matter of concession granted to the sub-lessees so that the rent due by Dhirendra Nath Mukherjee and others could be wiped off. In my opinion, the facts referred to above do not furnish any ground for holding that the sub-lessees made themselves liable to be sued by the head lessor on the covenant to pay the cesses which was contained in the head lease. This contention must also be overruled.

It remains to consider the question of costs which was also raised by Mr. Sanyal. It was contended that the Defendants raised certain contentions in bar of the suit which were found to be untenable. As the Plaintiff succeeded on these points the court was not justified in awarding full costs to the contesting Defendants. In my opinion, the principle is that the costs follow the event, that is, the result of the suit. The mere fact that on certain points the defence failed does not necessarily require the court to award proportionate costs. The court below had A discretion in the matter and in my opinion this Court as a Court of Appeal will be slow to interfere with the discretion exercised by the court below as no question of violation of a principle arises. This contention must also be overruled.

This disposes of all the contentions raised on behalf of the Plaintiff Appellant.

It remains for me to dispose of the point raised in the cross-objection which was filed on behalf of Kamala Bala Ghose, Respondent No. 13.

Mr. Sen, learned advocate appearing on her behalf, contended that as his client had purchased only a share in the leasehold interest she should be made liable only for a proportionate share of the rent. In support of his submission he referred us to a decision in the case of Streemati Madhabilata Devi v. Butto Kristo Ray [1944] AIR (Pat.) 129. The facts in that case were entirely dissimilar. In that case one of the Defendants, Defendant No. 22, was in specific possession of a plot of 7 1/2 bighas of land out of 39 1/2 bighas in suit. The question arose whether the said Defendant should be liable for the proportionate part of the rent in a suit for contribution. No question of apportioning the liability vis a vis the landlord arose in the case. It was held by a Bench of the Patna High Court that Defendant No. 22 would only be made liable for a proportionate part of the rent payable in respect of the entire land. Incidentally, Monoharlal J. observed that as a proposition of law this is correct. In my opinion, the view taken by Monoharlal J. is opposed to a later decision of the Patna High Court in the case of Raja Jyotiprosad Singhdeo Bahadur v. S.H. Seddon ILR [1940] 19 Pat. 433, where it was held that the transferee of a share of a leasehold interest is liable for the whole of the rent payable in respect of the lease. That this is the correct view is supported on general principles. The liability to pay rent, when it is contractual, can only be apportioned by the consensus of the two parties to the agreement; viz., the lessors and the lessees. In a case where one of the lessees transfers an undivided portion of the leasehold premises the transferee becomes a co-lessee with the other lessees. The rent is not apportioned merely because there has been a transfer by one of the co-lessees. The liability to pay rent is joint and several so far as the successors of the lessee are concerned. Jagan Mohan Sarkar v. Brojendra Kumar Chakrabarti (1925) ILR 53 Cal. 197 (F.B.).

In my opinion, therefore, the view taken by the court below in making the transferees liable along with the other lessees for the whole of the cesses claimed is correct. The contention raised in. the cross-objection must also be overruled.

The result, therefore, is that this appeal fails and is dismissed with costs to Respondent No. 17. The cross-objection also fails and is dismissed. There will be no order for costs in the cross-objection.

Sen, J.

I agree.