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H.V. Low and Co. Ltd. Vs. Raja Bahadur Jyoti Prosad Singh Deo - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtMumbai
Decided On
Judge
Reported in(1931)33BOMLR1544
AppellantH.V. Low and Co. Ltd.
RespondentRaja Bahadur Jyoti Prosad Singh Deo
DispositionAppeal dismissed
Excerpt:
.....belief act (i of 1877), section 25--specific performance of contract for lease of property--lessor's title, when not free from reasonable doubt--forfeiture of salami or premium, when incurred.;an agreement for the lease of underground coal rights in two mouzas comprised in a zemindari provided that 'if the lessee neglect or fail to take such lease except for the reason of the want of the lessor's titlo to the said mouzas' the salami or premium deposited by him would be forfeited to the zemindar. in a suit by the lessee to recover the salami, on the ground thab the zemindar had no title to the underground mining rights, the mouzas being held under debuttar and brahmottar grants made by the zemidar's ancestors:--;held, that, in view of the provisions of the specific relief act,..........or fail to take such lease within the aforesaid time except for the reason of the want of the lessor's title to the said mouzas the sum of rupees thirty-four thousand four hundred and forty, deposited as aforsaid, will be forfeited unto the raja bahadur. 2. there was considerable delay in proceeding with the transaction, but at length on may 29, 1925, a draft lease was sent to the appellant company. on june 30, 1925, the company's solicitors returned the draft approved, with certain alterations, adding in their covering letter, that 'our approval is subject to the title of the maharaja being satisfactory,' the letter proceeded as follows:--we may mention that we do not yet know what right the maharaja has td the properties in question. we are, however, informed that mouza methadi is.....
Judgment:

Macmillan, J.

1. The appellant company seeks in this action to recover from the respondent a sum of Rs. 34,440 which on October 13, 1923, is paid to him as salami or premium in respect of a contemplated 999 years lease of the underground coal rights in two mouzas known as Raidi and Methadi comprised in the respondent's zemindari. Subsequent to the payment of this premium the parties entered into a formal agreement dated January 22, 1925, whereby the appellant company agreed that within two months from the date of the submission of the draft lease by the respondent it would take the proposed mining lease from the respondent or his leassee 'on a salami of Rs. 84,400 already deposited,' and on certain specified royalty terms. The agreement contained the following clause:--

If they [i.e., the appellant company] neglect or fail to take such lease within the aforesaid time except for the reason of the want of the lessor's title to the said mouzas the sum of rupees thirty-four thousand four hundred and forty, deposited as aforsaid, will be forfeited unto the Raja Bahadur.

2. There was considerable delay in proceeding with the transaction, but at length on May 29, 1925, a draft lease was sent to the appellant company. On June 30, 1925, the company's solicitors returned the draft approved, with certain alterations, adding in their covering letter, that 'our approval is subject to the title of the Maharaja being satisfactory,' The letter proceeded as follows:--

We may mention that we do not yet know what right the Maharaja has td the properties in question. We are, however, informed that mouza Methadi is held under a putnee lease under the Maharaja by the Mohtas. If this be so, we shall be glad to know how the Maharaja claims to deal with the underground rights. Mouza Raidi, we understand, is held by Gopal Kaviraj and others. We do not know what the nature of their title is and whether the Maharaja has the underground rights or these Kavirajas have the underground rights. Before the lease is finally completed we must be satisfied that the Maharaja has the right to deal with the underground.

3. This was the first occasion on which any question was raised by the appellant company as to the respondent's title. On July 11, 1925, the respondent's manager wrote in reply:--

As regards the Maharaja's title in the said mouzas I have to inform you that Maharaja Bahadur is the landlord of both the mouzas under whom the surface right in Mouza Raidi is held as a rent free debuttar tenure paying cess to this estate by Radhasyam Roy and others as Sebaits of Dadhipaban Thakur, and the surface right in Mouza Methadi is held as a rent paying {Kheraji) brakmoltar tenure by Ajodhyaram Chatterjee and others. Tor your information I am sending herewith a copy of the last Survey Settlemenb recerds of these mouzas, from which it will be quite clear that Maharaja Bahadur is the landlord, and as such the right in the underground minerals is vested in him.

4. The company's solicitors on July 17, 1925, wrote in reply:--

It is not clear whether the mineral rights of the above mouzas have not been parted with by the ancestors of the Raja Bahadur to the Debuttardara and Brahmottardars, and we think you will admit that copies of the debuttar and brahmottar grants are necessary to arrive at a decision. We shall, therefore, uhank you to send copies of the above documents, failing which, we are afraid, an indemnity by the Raja Bahadur will be necessary to safeguard the interests of our clients.

5. On August 5, 1925, the respondent's manager replied as follows:--

I have to inform you that the brahmottar and debuttar grants were made by the ancestors of the Raja Bahadur in days long gone by, and no traoe of the origin of the grants can be found out. Prima facie, the mining rights in the villages belong to tha Raja Bahadur, who is admittedly the proprietor thereof, and if anybody questions his rights it will evidently be for him to show the same. Under the circumstances the Raja Bahadur is not in a position to execute any indemnity bond.

6. The solicitors of the appellant company on August 18, 1925, intimated that their clients were not prepared to take the lease 'as the Maharaja has failed to produce any title to the underground mining rights,' and requested repayment of the salami already paid, with interest and expanses, at the same time claiming a sum in name of damages. The respondent denied all liability, and the appellant company thereupon brought the present suit against him in the High Court of Calcutta on June 7, 1926. On February 12, 1929, the Judge of first instance (Page J.) gave judgment in favour of the plaintiff for the return of the salami with interest. This judgment was reversed and the suit dismissed by the appellate Court (Rankin C. J. and Buckland J.) on December 13, 1929. The matter is now before their Lordships on the original plaintiffs' appeal.

7. The parties having, in the clause above quoted from the agreement of January 22, 1925, made their own bargain as to the circumstances in which the salami should be forfeited to the respondent, the first question which arises is as to the true meaning and intent of that clause. The appellant company has failed to take the lease tendered to it; it has, therefore, forfeited its deposit unless the reason for its failure to accept the lease has been 'the want of the lessor's title.' The burden is upon the appellant company to establish this justification of its rejection of the lease.

8. In their Lordships' view the appellant company is not required to prove that the respondent has no title to the subjects he professed to lease. The expression 'want of title' in the clause must be read as covering deficiency of title as well as absence of title. If the appellant company can show that, owing to the state of the respondent's title, the lease tendered is not such as it can be required to accept, then forfeiture of the salami has not been incurred. The action is not one by an intending lessor for specific performance, but, in their Lordships' opinion, the test of the appellant company's right to recover the salami is whether an action for specific performance at the instance of the respondent could have been successfully resisted by the appellant company on the ground that the respondent's title was defective. The Specific Relief Act, 1877 (No. 1 of 1877), formulates the test. By Section 25 of that statute it is enacted that a contract for the letting of property cannot be specifically enforced in favour of a lessor who cannot give the lessee ' a title free from reasonable doubt.' Reference may also be made to Section 18 which enacts that where the lessor sues for specific performance of the contract and the suit is dismissed ' on the ground of his imperfect title,' the defendant is entitled to the return of any deposit he has made.

9. The real question at issue, therefore, is whether the appellant company has shown that the respondent's title to grant a lease of the mineral rights in the two villages is not free from reasonable doubt, or may be fairly described as imperfect. It is obvious that the question is one of degree. The doubt suggested must be a reasonable doubt; the imperfection must be material.

10. The appellant company has led no evidence and maintains that the infirmity of the respondent's title is sufficiently demonstrated by his admission that his ancestors have at some unknown date in the past made a debuttar grant of mouza Raidi and a brahmottar grant of mouza Methadi in virtue of which the successors of the original grantees are at the present day in possession, there being no evidence as to the terms of these grants, and, in particular, whether they included the underground rights. The respondent called one witness, a servant, who described his duties as being ' to look after suits and to carry out all directions of the manager.' This witness stated that he had made a search in the respondent's sherista for any debuttar and brahmottar grants relating to the two villages, but had failed to find any such grants or any copies thereof; that at the survey settlement the holders of the grants attended, but did not produce any grants'; that after the institution of the present suit he had seen the two holders of the largest shares of the grants, upon whom subpoenas had been served, but that neither could produce any grant. The evidence of this witness was criticized on the ground that he was not the regular keeper of the respondent's records, and that his search was inadequate. Their Lordships are satisfied that suffi cient diligence was shown in the prosecution of the respondent's investigation.

11. The result is that the appellant company is unable to do more than conjecture that the grants made by the respondent's prede-cessors may have comprised the underground rights. On the other hand, there is no evidence that the grantees have ever asserted any right to the minerals under the villages or that they have ever been worked by them or their predecessors. It is, moreover, sufficiently established that there are no written grants in existence, and it must, in any event, be , borne in mind that since 1866 no document, unless registered, can affect the title to immovable property in Calcutta. Now, 'a long series of recent decisions by the Board has established that if a claimant to subsoil rights holds under the zamindar, or by a grant emanating from him, even though his powers may be permanent, heritable and transferable, he must still prove the express inclusion of the sub-soil rights': Gobinda Narayan Singh v. Sham Lal Singh (193) L.R. 58 IndAp 125 33 Bom. L.R. 885 and see cases there cited. In the present case the grants not being in writing, must, to be effectual, be earlier in date than 1883, for since then such grants have required to be by written instrument. Consequently the grantees in order to establish the inclusion of the sub-soil rights in their grants would have to prove that the terms of oral grants made half a century ago expressly included these rights. Where, as here, there is no evidence that the grantees have ever claimed or worked the minerals, the possibility of the grantees being now able to prove that the mineral rights were expressly granted to their predecessors is reduced to a contingency so remote as to be practically negligible.

12. The rights and liabilities of lessor and lessee are defined in the Transfer of Property Act, 1882 (No. IV of 1882), Section 108. These contrast markedly with the rights and liabilities of buyer and seller as defined in Section 55, particularly in the matter of the requirements as to title which the seller must satisfy. The appellant company has not shown that the respondent has failed, or is not in a position, to perform any of the duties incumbent on a lessor under Section 108.

13. Their Lordships, for the reasons indicated, are of opinion that the appellant company has not justified its refusal to take the lease offered to it, inasmuch as it has not shown any such want of title ' on the lessor's part as would create a reasonable doubt. This is sufficient for the disposal of the case, and their Lordships will accordingly humbly advise His Majesty that the appeal should be dismissed with costs.


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