Patna High Court
Jagdish Chandra vs Muhammad Bukhtiyar Shah And Ors. on 2 May, 1952
Equivalent citations: AIR1952PAT409, AIR 1952 PATNA 409
JUDGMENT Ramaswami, J 1. This appeal is presented on behalf of the plaintiff Jagdish Chandra Deo Dhabal Deb against the judgment and decree of the Additional Subordinate Judge of Chaibassa dated 4th June 1946. 2. The facts which lead up to the question in debate may be shortly summarised. On 27th Pous 1306 B. S., corresponding to 10th January 1900 Raja Satrughna Deo Dhabal Deb, proprietor of the Dhalbhum estate, granted a permanent mokarrari lease to Prince Mohammed Bukhlyar Shah by a registered patta and kabu-liat. The mokarrari lease related to an area of nearly 1100 Sq. miles and the Prince was granted right to prospect and raise gold, silver, copper, lead, zinc, iron, mercury, mica, sulphur, copper sulphate, coal, chalk, red earth, ela-mati, slate stone and all kinds of precious stones such as diamond, ruby, emerald, topaz and crystals etc.. lying on the surface and subsoil of the aforesaid pargana Ghatsila". A sum of Rs. 1,10,000 was paid as salami and the Prince covenanted to pay four annas share of the annual net profit as royalty. The Prince also agreed to provide capital necessary for the purchase of machinery for extracting and selling minerals and stones. The Prince was permitted to recoup himself for the expenses incurred from the sale-proceeds of the minerals and the surplus left after the deduction was considered as the year's net profit. The Raja was entitled to four annas share of the profits thus ascertained and the remaining twelve annas share would belong to the Prince. In Clause 7, the Prince covenanted that he would commence the work of prospecting and raising minerals within five years from the date on which the mokarrari lease was executed. If the Prince failed to commence work within six years he was liable to pay a sum of Rs. 2000 per year to the Raja for such period as he would not commence the work. Clause 18 empowered the Prince to transfer and encumber the interest acquired under the lease or make Darmokarrari settlement. 3. In the year 1905, the management of the Dhalbhum estate was taken over by the Government under the Chotanagpore Encumbered Estates Act. In the same year, the estate of Prince was placed in charge of an Official Receiver by virtue of an order passed by the Calcutta High Court in Administration Suit no. 203 of 1905. The Dhalbhum estate continued to be in charge of Government till 1916 when Raja Satrughan Deo died and a dispute arose over succession to the estate. Protap Chandra claimed the estate as heir of Satrughan whereas the plaintiff alleged that he was sole legatee under a will executed by Satrughan. On 28th June 1916, the Revenue Authorities recorded the name of Protap Chandra as proprietor of the estate. In October 1920, the estate was released from attachment under the Encumbered Estates Act but the management was immediately taken over by the Court of Wards acting on behalf of Prptap Chandra. In 1921, the plaintiff filed a suit against Protap Chandra for a declaration of his title and for possession over the Dhalbhum estate. The suit was filed in the court of the Subordinate Judge of Midnapore. The plaintiff obtained a decree on 21st August 1922 but an appeal was preferred by Protap Chandra and the Calcutta High Court appointed Rai Deben-dranath Bagchi as receiver of the estate pending the decision of the appeal. The appeal was dismissed by the Calcutta High Court on 20th June 1924 but Protap Chandra applied for leave to appeal before the Judicial Committee. Eventually the appeal was dismissed by the Judicial Committee and the decree in favour of Jagdish Chandra was confirmed. On 9th July 1927, Jagdish Chandra obtained possession of the Dhalbhum. estate. 4. On 11th August 1937, the plaintiff brought the present suit alleging that from 1905 to 1927 the Official Receiver of the Prince's estate had granted a series of sub-leases but in spite of repeated requests on the part of the plaintiff neither the official receiver nor the sub-lessees had furnished him with accounts as required by the covenants of the principal lease. The plaintiff claimed that he was entitled under the covenants of the principal lease to a decree for one-fourth share of the profits made by the sublessees. The plaintiff asked that a preliminary decree for accounts should be granted against the defendants for the period from 1st November 1927 up to the date of the institution of the suit. 5. Defendants 1 series are the heirs and representatives of the deceased Prince Bukhtyar Shah and defendant No. 2 is Muhamad Kamgar Shah in whom the management of the estate of the Prince has been vested by the order of the Calcutta High Court. Defendants 3 to 14 are sub-lessees or their representatives-in-inte-rest. Defendants 1 and 2 contested the suit mainly on the ground that the Prince or his representatives had not commenced working of the mines within the demised area at any time, that upon a proper construction of the mokarrari lease the plaintiff was entitled only to a sum of Rs. 2000 per year from the estate of the Prince. It was alleged that in the year 1919, there was a dispute between the Manager of the Encumbered estates and the official receiver with respect to the interpretation of the principal lease, and it was settled that the official receiver would pay to the Manager, Encumbered estates, one-fourth share of the gross salami, royalties, rents and income from the sub-lessees. Defendants 1 and 2 asserted that the agreement was binding upon the plaintiff and payments in accordance with the compromise were made to the Manager of the Encumbered estate for the years in suit. Tne defence of the sub-lessees was that upon a proper construction of the principal lease there was no liability on the part of the sub-lessees to pay one-fourth share of the profits to the plaintiff, that, in any case, there was no privity of estate nor privity of contract between the plaintiff and the sub-lessees and the various covenants in the principal lease were therefore not binding upon the latter. 6. Upon a consideration of the oral and documentary evidence, the Subordinate Judge held that plaintiff was not entitled to one-fourth share of the profits from the working of mines either from the Prince or from the sub-lessees but the plaintiff was only entitled to a decree for one-fourth share of the salami, and royalties which the Prince had received from the sub-lessees. He further held that the plaintiff had no cause of action against the sub-lessees since there was no privity of estate or privity of contract. As against defendants 1 and 2, the plaintiff was granted a preliminary decree for accounts from 1st January 1927 up to the date when the suit was instituted. The Subordinate Judge held that the royalty paid to the plaintiff would be one-fourth of the gross salami, rent and royalty payable by the sub-lessees to the estate of the Prince. A decree was accordingly granted against the lessees but the suit was dismissed as against sub-lessee defendants. 7. The questions arising in this appeal are, (1) whether the plaintiff' is entitled on a proper interpretation of the principal lease to one-fourth share of the profits from the estate of the Prince irrespective of the circumstance whether the Prince himself or the sub-lessees worked and extracted minerals from the area demised; (2) whether the agreement, exhibit K, dated 15th February 1919, between the Manager of the Encumbered estate and the official receiver is binding upon the plaintiff; and (3) whether the plaintiff is entitled to a decree or one-fourth share of the profits as against the sub-lessees. 8. The first question involves the construction of certain provisions of the registered kabu-liat, exhibit 2, and the registered patta, exhibit A, dated 10th January 1900. The two documents which constitute the principal mokarrari lease are almost in identical terms and written in Bengali. The opening paragraph recites that settlement was made with the Prince for carrying on mining operations, that the Prince had paid Rs. 1,10,000 as salami and the rental was four annas share net profits which would accrue from the mining operation. Paragraph 2 stipulates that the Prince would provide working capital necessary for carrying on the mining operation and from the sale-proceeds of the minerals raised the Prince would deduct the expenses incurred. Out of the net profits so calculated the Raja was to get four annas share and the Prince was to appropriate the remaining twelve annas share. Paragraph 3 provides that after the Prince had recouped the amount spent by him for the purchase of machinery the Raja would become owner to the extent of four annas in the machinery and the Prince would be owner to the extent of the remaining twelve annas. Clause 7 is very important. It stipulates that the Prince should commence the mining operation within five years and sell the minerals within six years from the date of the execution of the lease. Out of the profits calculated in accordance with Clause 2 the Raja was entitled to four annas share as 'malikana' royalty and the Prince was to appropriate the remaining twelve annas share. There is a provision that if the Prince did not start selling minerals within six years of the execution of the lease the Raja would be entitled to get royalty at the rate, of Rs. 2000 per year until the work of extracting and selling minerals was commenced. Clause 8 of the lease states that if instead of profits there was loss incurred in the mining operation the Raja was not liable for the capital invested by the Prince. On behalf of the lessee, Mr. P. R. Das pointed out that the transaction was a combination of lease and partnership and that the intention was that the Prince would carry on the mining operation himself and that he would give a share of the profits to the Raja only when he carried on the work. Learned counsel pointed out that in a mining lease royalty is not normally calculated on the basis of net profits but royalty is fixed on tonnage or acreage or according to quantity of minerals sold or level of prices according to a sliding scale. Learned Counsel maintained that the covenants contained in Clauses 1, 2, 3, 7 and 8 were personal and the Prince was bound to pay one-fourth share of the profits only when he himself worked the mines and not when he made a grant to the sub-lessees. There is great force in the argument of Mr. P. R. Das. The actual language of the clauses in its grammatical sense supports the view that the covenants are personal and the Prince alone is bound to perform the covenants. On behalf of the appellants Mr. N. C. Chatterjee laid stress on Clause 18 and argued on the basis of that clause that the plaintiff was entitled to a decree for one-fourth profits from the Prince irrespective of the circumstance that the sub-lessees were actually working the minerals of the land demised. Clause 18 states: "That I shall be competent if I like, to transfer, and encumber the right acquired by me, under the said patta or make meadi and darmukarrari etc., settlement under the terms of the said patta, should any kist of royalty due by me to you be in arrears and I transfer or make darmukarrari settlement, those lessees etc. shall be liable for the said amount i.e. current and arrears due to you". ("Ami ichcha karie amar ali pattai swatta hastantar daisangyog athaba ai pattar sarter adhin meadi wo darmukarrariadi bandobasta, karite pariba. Amar nikat apanar kona gata kistir babat royalty prapya thakile taha adai na diya hastantar ba dar mukarrari bandobasta karile sei bandobasta adi grihita apanar prapya ai takar janya arthat hal wo bakeya takar janya dayee thakibe"). In the course of argument there was a dispute whether in Clause 18 the phrase used is "pattar 'sarter' adhin meadi wo darmukarrari adi" or "pattar sattwer adhin meadi wo darmukarrari adi". I shall assume in favour of the appellant that the word "Sarter" is used. The correct translation would then be: "If you wish (you may) transfer (or) create charge (over) this pattai right of yours or make meadi and darmokarrari etc. settlements under the terms of this patta. If you transfer or make 'darmukarrari' settlement without paying the royalty due to me on any past kist those leases etc. would remain liable for my aforesaid dues that is current and arrears." The question is -- what is the true meaning and import of this clause? Does it mean that the Prince was liable to pay 1/4th share of the net profits made by third parties in whose favour he had granted a sub-lease or 'darmokarrari' settlement? This is the meaning which Mr. Chatterji contends for. The alternative construction of Clause 18 is that the Prince would be liable to pay the minimum royalty of Rs. 2000 even though he granted sub-lease and that the Prince could not avoid liability on the ground that the mines were worked by sub-lessees. Mr. Das contends that the alternative construction should be accepted. In my opinion, the language of Clause 18 can be properly construed only in the sense contended for by Mr. Das. Such a construction would have the effect of harmonising the language of clauses 1 to 7 with the provisions of Clause 18. In contrast, the construction for which Mr. Chatterjee, contends would do violence to the plain language of Clauses 1 to 7 and would involve rewriting and material alteration of these clauses. It would be necessary to substitute "I and my sub-lessees" for the word "I" in Clauses 1 to 6 and to make a more extensive paraphrasing in the language of Clause 7. It would be necessary to paraphrase Clause 7 in some such manner: "That (my lessee) shall commence the work of prospecting and raising of the aforesaid minerals and stone etc. within 5 years from today and (my lessee) shall begin to sell the said articles within 6 years. From the very year (my lessee) shall begin selling within 6 years from today, all or any of the above articles, you shall get as malikana royalty and 4 annas share in the profit in respect of each of the years in which it will serve, after deducting the expenses referred to in para 2 and (I) shall pay the same to you and (my lessee) shall take the 12 annas (twelve anna) share, you shall get no 'malikana' royalty in respect of the years in which, after the commencement of the said work of selling, there shall accrue no profit after deducting the aforesaid expenses. Should (my lessee) fail to commence the work of selling the aforesaid minerals and stones etc. within 6 years from today, you shall after the expiry of the said 6 years, get from (me) at the rate of Rs. 2000/- (two thousand) per year till such period as (my lessee) do not commence the said work and should (my lessee) after the commencement of the work, keep the work suspended for one year, (I) shall continue to pay you at the said rate of Rs. 2000/- per year for the period (my lessee)" keep the work suspended i.e. till the period (my lessee) again start the work." 9. It is apparent that the expression 'I' has to be interpreted in two different senses, in the same clause according to the nature of the context. But the construction of Mr. P. R. Das would avoid such a consequence; it would not require any substitution or paraphrase of the language used in Clause 7. The construction which Mr. P. R. Das advocates is also supported by a consideration of Clause 19 which states: "All the terms of this deed shall be binding on me and my heirs and successors-in-interest and you and your heirs and successors-in-interest" ("EI Daliler Tabat Sarta ami wo amar Ottaradhikari wo sthalabhishiktgan ebong apni wo apnar Uttaradhikari wo Stha-labhishiktagan Badhya hoiba wo hoiben") Mr. N. C. Chatterjee suggested that the expression "Sthalabhishikta" would include a sublease. But "Sthalabhishikta" literally means "installed in one's place" or "anointed in one's place" and cannot properly denote a sub-lessee who holds merely a subordinate interest carved out of the patent tenure. In this context Clauses 9, 10 and 11 are significant. They refer to certain prospecting licenses granting on behalf of the Raja's predecessors. Clause 9 makes an assignment of the right of the Raja in favour of the Prince, and there is a provision that the Prince would collect rent and royalty in respect of the leases granted and pay four annas share of the same to the Raja. Clause 10 lays down that if the land in respect of which the licenses were granted became 'khas' of the landlord, the other clauses of lease would operate and the Prince would give the Raja four annas share of the net profits out of the mining operation and would keep the remaining twelve annas. Clause 11 states that the work by the Gillanders or their assigns under clause 9 would not be considered as work by the Prince for operation of the Clause 7 of the lease. Clauses 9, 10 and 11 therefore specifically deal with the liability of the Prince in case of subleases granted to Gillanders. If it was intended that the Prince should be liable to pay one-fourth share of the net profits in the case of other sub-leases, why did not the parties make an express provision to that effect in the document? It was argued by Mr. N. C. Chatterjee that it was inconceivable that the parties intended that the defendant would by adopting the devise of granting sub-leases to defeat the right of the plaintiff to one-fourth share of the net profits. But the question is not what the parties to the deed intended to do by entering into the document, but what is the meaning of the words used in the document. The principle is stated by Lord Wright in 'INLAND REVENUE COMMRS. v. RAPHAEL', (1935) AC 96 at p. 142 "It must be remembered at the outset that the Court, while' it seeks to give effect to the intention of the parties, must give effect to that intention as expressed, that is, it must ascertain the meaning of the words actually used. There is often an ambiguity in the use of the word "intention" in cases of this character. The word is constantly used as meaning motive purpose, desire as a state of mind, and not as meaning intention as expressed. The words actually used must no doubt be construed with reference to the facts known to the parties and in contemplation of which the parties must be deemed to have used them. Such facts may be proved by extrinsic evidence or appear in recitals. Again the meaning of the words used must be ascertained by considering the whole context of the document and so as to harmonise as far as possible all the parts; particular words may appear to have been used in a special sense which may be technical or trade sense, or in a special meaning adopted by the parties themselves as shown by the whole document. Terms may be implied by custom and on similar grounds. But allowing for these and other rules of the same kind, the principle of the common law has been to adopt an objective standard of construction." 10. In the present case, it is impossible to construe the principal lease in the way contended for on behalf of the appellant. In my opinion, there is no ambiguity in the language of the principal lease and upon a true construction of the various clauses it is patent that the plaintiff is entitled only to a sum of Rs. 2000 per year from the Prince and not to one-fourth share of the net profits made by the sub-lessees. 11. The problem in this case does not go beyond the sphere of difficult construction into one of ambiguity. But it is right that I should express my view on the alternative argument of Mr. P. R. Das that even if Clause 18 created ambiguity the document ought to be interpreted with reference to the conduct of the parties and the surrounding circumstances of the case. The principle is established that where there is ambiguity in the language of an instrument evidence may be given of usage to show what was the meaning attached to the instrument soon after its execution by those interested in interpreting it. It was objected by Mr. N. C. Chatterjee that neither the manager of the Encumbered estate nor the receiver were acting as agents of parties in the case and their actings would not be 'contemporanea exposita'. The argument is not correct. It is not necessary that the actings should be of parties or their agents; it is sufficient that the actings are of parties purporting to act under the document. In 'VAN DIEMAN'S LAND CO. v. MARINE BOARD OF TABLE CAPE', (1906) AC 92, Lord Halsbury observed that contemporaneous exposition was not confined to usage under the deed, and that all circumstances tending to show the intention of the parties whether before or after the execution of the deed were relevant: "When these are the circumstances under which the grant is actually made -- why is it not evidence, and cogent evidence, when the taking possession of the particular piece of land is proved and the continuance in possession before and after the grant is proved?...... It would be a singular application of the maxim quoted by Coke (2 Inst. 11) 'Contem poranea exposito est fortissima in lege' to suggest that the proof of user must be confined to ancient documents, whatever the word 'an cient' may be supposed to involve. The reason why the word is relied on is because the user is supposed to have continued, and thus to have brought us back to the contemporaneous expo sition of the deed. The contemporaneous ex position is not confined to user under the deed. All circumstances which can tend to show the intention of the parties whether be fore or after the execution of the deed itself may be relevant, and in this case their Lord ships think are very relevant to the question in debate". 12. In a later case 'COMMUNE DE LAP- RAIRIE v. COMPAGNIE DE JESUS', (1921) A C 314, the question arose whether upon a proper construction of the deed executed by the owners of a seigniory the proprietorship of the soil or only right of user passed to the in habitants of Laprairie. By the document the owners of a seigniory granted land to the present and future inhabitants of a village Laprairie and of certain adjoining districts for a common. The land was granted in terms appropriate to a feudal grant by seigniors to consitaires. but the deed contained provisions which made it very doubtful whether more than a right of user passed. Agreements made in 1705 and 1724, to which some of the inhabitants who signed the deed of 1694 were parties, the same notary as in that case being employed, were based upon the view that the seigniors could alienate the land with the consent of the inhabitants. By the agreement of 1724 "the greater part of the inhabitants" purported to concede to the seigniors the right to grant build ing lots (emplacements) out of the land. The boundaries of the common had been ascertained and fixed under an Act of 1822. It was held by the Judicial Committee that in construing the deed it was permissible in the circumstances to take note of the agreements and that the in ference from them was that the deed passed only a right of user. At page 323 Viscount Cave states: "In view of the ambiguity of the grant, it is permissible to take note of the manner in which it was construed at or about the time of its execution; and accordingly, reference may be made to certain agreement entered into before the same notary in 1705 and 1724. to which some of the inhabitants who signed the deed of 1694 were also parties. By a convention entered into between the Jesuit Fathers and a number of inhabitants of Laprairie on January 21, 1705, and found among the notarial acts of Maitre Adhemar it was agreed that the Jesuit Fathers should be at liberty to dispose of four arpents of the common on the terms of replacing them by other land of equal extent; and by another convention entered into by a meeting of inhabitants of Laprairie with the Jesuit Fathers on November, 30 1724 (to which more particular reference will be made hereafter) it was agreed that the Jesuit Fathers and their successors should be at liberty to grant as building lots (Conceder pour emplacements) such parts of the common as might be required for that purpose. In each of these agreements it is assumed that, subject to the consent of the commoners, the seigneurs are in a . position to alienate the soil. These agreements therefore, support the view that the soil had not passed under the grant of 1694, but was still vested in the seigneurs". 13. In the present case, it is manifest that the evidence of the conduct of the parties is relevant as an important circumstance to interrupt the mokarrari lease. From the accounts filed by the official receiver, exhibits J/5, J/10, J/16, J/19, J/28 and J/30, it appears that the official receiver never paid to the estate of Raja more than one fourth of the royalties and rents collected by him and no demands were made by the Raja of one-fourth share in the profits which the Sub-lessees were making from the mining operations. It is true that there is no evidence to show how the parties acted between the years 1900 to 1905. In 1905, the management of the estate of Shatrughan was taken over by the Encumbered estate and the estate of the Prince was taken over by the official receiver appointed by the Calcutta High Court. Exhibits J series are the accounts of the official receiver of the Prince's estate from 1905 to 1938. There is evidence that for a long period from 1905 to 1927 the official receiver had paid to the Manager of the Encumbered Estate only one-fourth share of the gross collections made by him from the sub-lessees including 'salami', 'royalties and rents. In 1919, there was a dispute between the official receiver and the Manager of the Encumbered estate with reference to the interpretation of the lease. The official receiver maintained that he was liable to pay only one-fourth of the rents and royalties realised from the sub-lessees after deducting the expense of management. The Manager of the Encumbered estate claimed that the official receiver ought to pay one-fourth of the gross-collection made from the sub-lessees. The matter was settled in a conference between the Manager and the official receiver. It was agreed that from 1st January, 1919 the official receiver would pay to the estate of the Raja one-fourth of the gross-collections made from the sub-lessees including salami, royalties and rents. Payment according to the agreement was made bv the official receiver on 31st March. 1919 and the pending account for the previous years was adjusted. From 1919 onwards, the official receiver made payments to the Deputy Commissioner of Singhbhum in accordance with the terms of the agreement. From August, 1923, up to the beginning of 1927, all payments were made to Mr. D. P. Bagchi, the receiver of the plaintiff's estate. This evidence of conduct is highly important. It supports the argument of the lessee that the document can in no circumstance be interpreted to mean that the Prince was liable to pay to the estate of the Raja one-fourth of the profits made by the sub-lessees and that the claim of the appellant in this regard is untenable. 14. The respondent lessee also relied upon the alternative argument that in any event there was an agreement between the official receiver and the Manager of the Encumbered estate on 16th February, 1919 with respect to the amount payable by the Prince, it was claimed by the Manager that the official receiver should pay 25 per cent. of tne gross incoma from Royalties and 'salamis' received from the sublessees. The receiver did not admit the claim of the Manager but after some discussion a compromise was reached and in order to settle all the dispute the receiver agreed to pay 25 percent of gross 'salamis', royalties and rents collected from the sub-lessees as from 1st January, 1919. As regards the claim of the Raja for the previous years the receiver paid a sum of Rs. 3,000 in full satisfaction. It appears from exhibit D that the Board of Revenue, Bihar, sent a telegram to the official receiver approving of the terms of the agreement arrived at. It was argued by Mr. P. R. Das that the agreement, exhibit K, was binding upon the plaintiff since the Manager had authority to make a 'bona fide' settlement of a dispute in the interest of the estate. The argument is based upon Section 18B of the Chotanagpore Encumbered Estates Act which states: "Subject to the sanction of the Commissioner the Manager shall have power to enter upon any contract or to execute or relinquish any lease or counterpart of a lease, or to take any action not otherwise provided for in this Act which in his opinion is necessary for the proper care and management of the property". It is necessary to refer to certain other sections of the Act in this context. Under Section 2, the management of the estate is vested in the Manager appointed by the Commissioner with the previous consent of the Provincial Government. Under Section 4, the Manager has power to recover rent payable to the estate. Under Section 16, the Manager has for the purpose of realising and recovering the rents and profits the same powers as the holder of the property would have had for such purpose if the Act had not been passed. Reading these sections it is clear that the Manager is vested with the management of the estate, that he is responsible for the fidelity and discharge of his duties, and that he has authority to take any action which is necessary for proper care and management. Section 18B of the Act is wide in its terms and confers a large measure of discretion in the management of the estate. Under Section 4, the Manager has power to recover rent payable, and by necessary implication the Manager has the power to determine what is the amount payable as rent to the encumbered estate. So long as the Manager acts 'bona fide' and within the scope of the authority conferred by the statute there is no question that the act of the Manager would be binding on the owner of the estate. It is not disputed in the present case that the Manager acted bona fide when he entered into the agreement, exhibit K, with respect to the interpretation of the lease. The Manager was also acting within the ambit of his authority conferred by Section 4 read with Section 16 of the Act. The agreement could also be supported under Section 18B, for the settlement of a legal dispute about interpretation of a document is an act done for the prudent management of the estate and falls within the Manager's competence. It must be held therefore that the agreement, exhibit K, is binding upon the plaintiff. It was objected for the appellant that there is no evidence that Commissioner had given sanction to the agreement. Mr. P. R. Das pointed out that no such point was raised before the Subordinate Judge and hence no evidence was given. Mr. P. R. Das however referred to exhibit C/19, dated 21st March 1919 from which it appears that the draft compromise was submitted to the Commissioner. Reference was also made to the letter, exhibit C/21, dated 30th April 1919, from the Commissioner addressed to the Receiver. Learned Counsel also relied upon the telegram, exhibit D, which shows that the Board of Revenue approved of the terms of the agreement. It was argued that under Section 21A of the Encumbered Estates Act the Board of Revenue has power of supervision and control over the orders and proceedings of the Commissioner. I think that in the background of these facts, the Court may invoke the presumption, that alt official acts have been regularly performed. Though there is no document to show that the Commissioner sanctioned the agreement, the material on the record suggests that not merely the Board of Revenue taut also the Commissioner had approved of the agreement, exhibit K, which the parties had reached. It was also objected on behalf of the appellant that the agreement, exhibit K, was not admissible in evidence, since it was not stamped. No such objection was taken in the trial court and under Section 36 of the Stamp Act, when the document has been admitted in evidence, such admission cannot be called in question at any stage of the same suit on the ground that the. document has not been duly stamped. The objection must therefore fail. The appellant then contended that the agreement, exhibit K, was in effect a variation of the terms of the principal lease and not having been registered the document was not admissible in evidence. But the answer to this argument is that the agreement did not alter the terms of the mokarrari lease but merely resolved a dispute as to its interpretation. The dispute between the parties was as to what their rights under the lease were and the compromise petition did nothing more than express an agreement that the lease would be interpreted in a particular way. It follows that exhibit K did not require registration and was properly admitted in evidence by the lower court. 15. I hold that the agreement, exhibit K, is binding upon the plaintiff for the reasons already stated and the argument of Mr. N. C. Chatterji on this part of the case must fail. 16. As regards the sub-lessees, Mr. N. C. Chatterji argued that the covenants in the principal lease were covenants running with the land and the sub-lessees would be liable under those covenants to pay to the plaintiff one-fourth share of the net profits made in the mining operations. Mr. Chatterji stressed the argument that payment of rent was a covenant running with the land. It was contended by the learned Counsel that Clause 7 of the principal lease which stipulated that the lessee would pay one-fourth share of the net profits was clearly a covenant for payment of rent and would be binding upon the sub-lessees. It is not necessary in this contest to examine the question whether Clause 7 of the principal lease is a covenant running with the land; for the argument of Mr. Chatterji must fail on the ground that there is no privity of estate between the head lessor and the sub-lessee. It is true that covenants that touch and con cern the land, as distinguished from collateral covenants, run with the land and bind the assignees. But it is elementary that as between the plaintiff and the defendants who are sub- lessees there is neither privity of contract nor privity of estate and the sub-lessees would not be bound by the covenants of the principal lease. The law is plainly stated in Platt on Leases: "But as no privity exists between the under- lessee and the original lessor, the covenants entered into between the latter and the origi nal lessee, though they be covenants which run with the land, as to pay rent, to repair, and etc., cannot affect, either by way of right or liability, the underlessee personally", the reason being that an underlessee is not an assignee. The rule is based on important autho rities-- 'BERNEY v. MOORE', (1791) 2 Ridg. Parl. Rep. 310, at p. 331 and 'HOLFORD v. HATCH', (1779) 1 Doug. (K.B.) 183. The same rule applies in India--TIMMAPPA v. RAMA VENKANNA', 21 Bom. 311, 'AKSHOY KUMAR v. AKMAN MULLA', 19 Cal. W. N. 1197 and 'GANGES CO. LTD. v. RADHA RANI DASP, I.L.R. (1947) 1 Cal. 365. In view of these authorities, it is clear that the plaintiff has no cause of action against the sub lessees for the breach of any positive covenant contained in the principal lease. 17. I now turn to the question argued on behalf of the appellant with much force and ingenuity, whether the plaintiff has cause of action against the sub-lessees on the ground that the covenant contained in the principal lease about payment of one-fourth share of the net profits is negative and restrictive. The argument is founded upon 'TULK v. MOXHAY' (1848) 41 E.R, 1143 in which it was decided that if a person took land with notice of a restrictive or negative covenant, he would be bound thereby, but such a covenant should be one restricting the user of the land and for the benefit of land in which the covenantee was interested. 'TULK v. MOXHAY' was actually a case of an assignee and not of a sub-lessee, and the covenant was contained in a deed of conveyance by which the purchaser bound himself (and his heirs and assigns) to keep the land sold "in an open state, uncovered with buildings." On the land afterwards passing into other hands by successive assignments, the last assignee xwas held bound by the covenant on the ground that he had notice of it, and an injunction was granted to restrain a breach. The scope and limitation of the rule in 'TULK v. MOXHAY' has been explained in subsequent authorities. In 'HAYWOOD v. BRUNSWICK PERMANENT BENEFIT BUILDING SOCIETY' (1882) 8 Q B D 403 it was held by the Court of Appeal that where land has been- granted in fee in consideration of a rent charge and a covenant to build and repair buildings, the assignee of the grantee of the land is not liable, either at law or in equity on the ground of notice, to the assignee of the grantee of the rent charge on the covenant to repair. It was observed by Brett, L. J. that the doctrine of 'TULK v. MOXHAY' applied only to covenants which restricted the mode of using the land and that the doctrine cannot be extended to a covenant to repair which was a covenant of an affirmative character. In 'LONDON AND SOUTH WESTERN RAILWAY CO. v. GOMM', (1882) 20 CH. D. 562 it was held by the Court of Appeal that a covenant which gave an option for repurchase cannot be enforced under the doctrine of 'TULK v. MOXHAY'. At page 583, Jessel, M. R., states "with regard to the argument founded on 'TULK v. MOXHAY' that case was very much considered by the Court of Appeal at Westminster in 'HAYWOOD v. THE BRUNSWICK PERMANENT BENEFIT BUILDING SOCIETY', (1882) 8 Q. B. D. 403, and the Court there decided that they would not extend the doctrine of 'TULK v. MOXHAY' to affirmative covenants, compelling a man to lay out money or do any other act of what I may call an active character, but that it was confined to restrictive covenants. Of course, that authority would be binding upon us if we did not agree to it, but I most cordially accede to it. I think that we ought not to extend the doctrine of 'TULK v. MOXHAY' in the way suggested here. The doctrine of that case, rightly considered, appears to me to be either an extension in equity of the doctrine of 'SPENCER'S CASE', (1583) 5 Co, Re. 16a to another line of cases, or else an extension in equity of the doctrine of negative easements, such, for instance, as a right to the access of light, which prevents the owner of the servient tenement from building so as to obstruct the light". The same principle was enunciated in 'AUS-TERBERRY v. CORPORATION OF OLDHAM'. (1885) 29 Ch. D. 750 in which the Court of Appeal held that the doctrine of 'TULK v. MOXHAY' could not be extended so as to bind in equity a purchaser taking with notice of a covenant to expend money on repairs. At page 773 Cotton, L. J. states; "In my opinion, if this is not a covenant running at law, there can be no relief in respect of it in equity; it is not a restrictive covenant; it is not a covenant restraining the corporation or the trustees from using the land in any particular way, at least so far as this case is concerned. If either the trustees or the corporation were intending to divert this land from the purpose for which it was conveyed, that is, from its being used as a road or street, that would be a very different question; then one would have to consider this--how far, haying regard to the Act of 1880, the equitable right would travel; because, undoubtedly where there is a restrictive covenant, the burden and benefit of which do not run at law, Courts of Equity restrain anyone who takes the property with notice of that covenant from using it in a way inconsistent with the covenant. But here the covenant which is attempted to be insisted upon on this appeal is a covenant to lay out money in doing certain work upon this land; and. that being so, in my opinion -- and the Court of Appeal has already expressed a similar opinion in a case which was before it -- that is not a covenant which a Court of Equity will enforce: it will not enforce a covenant not running at law when it is sought to enforce that covenant in such a way as to require the successors in title of the covenantor, to spend money, and in that way to undertake a burden upon themselves. The covenantor must not use the property for a purpose inconsistent with the use for which it was originally granted: but in my opinion a Court of Equity does not and ought not to enforce a covenant binding only in equity in such a way as to require the successors of the covenantor himself, they having entered into no covenant, to expend sums of money in accordance with what the original covenantor bound himself to do." All these cases demonstrate that the doctrine of 'TULK v. MOXHAY' applies only to restrictive or negative covenants that the doctrine cannot be extended to affirmative covenants such as covenant compelling a man to lay out money or to do any other act of an active character, that the covenant must be one restricting or affecting the user of the land, and that the remedy is not a remedy at law by way of specific performance under a species of implied privity, but a remedy in equity by injunction against the violation of the covenant. In the present case, there is no room for the application of the doctrine. Clause 2 of the principal lease requires that the lessee should lay out capital for working the mines, prospecting and raising the minerals. Clause 7 stipulates that four annas share of the net profits will be paid as royalty to the Raja. Clause 12 empowers the Raja to inspect the mines and the process of extracting minerals. The Raja is also empowered to supervise the work at all times. Clause 13 stipulates that the lessee should supply a true copy of the account of expenditure and income every year to the Raja. Clause 14 states that if the accounts are not furnished the Raja may keep the mining work suspended. It is obvious that none of the clauses is a restrictive covenant falling within the rule in 'TULK v. MOXHAY' and the plaintiff cannot be granted a decree against the sublessees for payment of one-fourth share of the net profits made. 18. It is right to state that in the lower court the Counsel for the plaintiff attempted to raise an issue whether the plaintiff was entitled to damages from the lessee on account of breach of the covenants of the principal lease. It was argued that the lessee had committed breach of Clause 18 of the principal lease since sub-leases were not created in such a manner as to enable the Raja to realise one-fourth share of the profits from the sub-lessees. It was submitted that the Raja had suffered damages on account of the breach of covenant on the part of the lessee. The argument was rejected by the learned Subordinate Judge who declined to frame such an issue on the ground that there was nothing in the plaint to indicate that there was a breach of the covenant on the part of the lessee or that the plaintiff had suffered damages on that account. On the contrary, paras, 19 and 21 of the plaint indicate that there was no breach of the covenant on the part of the lessee, but the sub-lessee was bound by the term's and conditions of the principal lease to pay one-fourth share of profits to head lessor. The plaintiff had in fact based his claim on the sub-leases on the ground that the Prince had validly created the sub-leases and the sub-lessees were therefore liable to perform the covenants in the principal lease. 19. For the reasons assigned I would affirm the decree of the Subordinate Judge and dismiss the appeal with costs to contesting respondents. There will be one hearing fee to be divided between lessee and contesting sublessees in proportion of 2/3 and 1/3 respectively. Das, J.
20. I agree.