1. This appeal arises out of a suit filed by the plaintiffs-respondents for declaration of their sole right to collect, remove, and sell Kendu leaves from inside the borders of the Garloisingh Zamindarl in Sambalpur district, and for recovery of a sum of Rs. 88200/- from the defendants for 'wrongful collection and removal' of the same during the years 1944 to 1946.
The plaintiffs also prayed for an injunction restraining the defendants from interfering with their right to collect Kendu leaves in future, for the period covered by the contract entered into between the plaintiffs and the deceased Zamindar, Madan Mohan Singh. Defendant 1 is a lessee from defendant 2 who is the present Zamindar of Garloisingh. The father of defendant 2 executed a document, Ex. 19 datEd 29-1-1938, in favour of plaintiffs 1 and 2 permitting them to collect and remove kendu leaves within the ambits of his Zamindari for a period of 15 years commencing from 1944.
The plaintiffs agreed to pay an annual royalty of Es. 6,000/- for the privilege granted by the zamindar. On the same date and simultaneously with the document described as a lease the previous zamindar executed a bond for Rs. 10,000/- in favour of the plaintiffs stipulating that the royalty payable by the plaintiffs under the lease should be adjusted towards interest accruing due under the debt bond if the debt bond remained undischarged till then.
Within a few months after the execution of the two deeds marked as Exs. 19 and 18 respectively, the executant died and his son defendant 2 succeeded to the zamindari. Defendant 1 pleads that under a similar document executed by the late Madan Mohan Singh in 1937 he had been granted the exclusive right of collection and removal of kendu leaves from the same area for a period of five years commencing from 1939 and that he had been exercising that right for about 25 years prior to the suit.
It is further alleged that under the lease deed executed jn his favour (Ex. H-2) on 23-9-1937 the late Madan Mohan Singh undertook to renew the contract in favour of defendant 1 and not to give it to any other person. In pursuance of the covenants in the contract, defendant 2 who succeeded to the zamindari executed a registered patta (Ex. M dated 29-3-1940) granting the exclusive right of collection and disposal of kendu leaves to defendant 1 for the years 1944 to 1953.
Defendant 1 also pleaded that the lease in favour of the plaintiffs was extinguished on the death of the zamindar Madan Mohan Singh who was holding only a life estate in the impartible zamindari of Garloisingh and that the plaintiffs have no cause of action against him find that he continued in possession under a lawful title derived from defendant No. 2.
2. A number of issues were raised at the trial each party questioning the validity of the grant in favour of the other. The contract in favour of the plaintiffs was assailed on the ground of undue influence, coercion, estoppel and want of consideration, but all these issues were found against the defendants, and learned counsel appearing for the appellants did not seriously press these points before us.
3. In order to appreciate the points involved in the controversy between the parties, it is necessary to refer to Ex. 19, described as a lease for 15 years, executed by the late zamindar Madan Mohan Singh, on 29-1-1938. That document recites that the lessor grants the lessee a lease of 15 years from 1944 to the end of 1958 to the effect that
'you will pluck the kendu leaves, get it plucked from the jungles noted in the Khasara on the boundary of the villages, jungles in the Go-chara land and from other lands where kendu leaves are found out, & you can purchase and sell it taking to different places. Within the stipulated period you can pluck and make the kendu leaves plucked from the villages within the illaka of Garloisingh zamindari, the jungles noted in the khasara, the reserved jungles of the zamindari and from Gochara land, and can purchase and sell it independently taking to different places.
You will pay me the malguzari on the 1st April of each year and will obtain a receipt therefor, Within the stipulated period I will not be able to grant lease to anybody. If granted, I will be punished and will be liable for compensation. If you will neglect to pay malguzari regularly as it is noted on the lease, I will have every right to cancel the lease'.
Simultaneously with this document the zamindar executed a debt bond Ex. 18 in favour of the plaintiffs agreeing to discharge the debt within six years. That document recites that towards the interest the plaintiff
'will collect and take an annual malguzari of Rs. 600/- (Rupees six hundred) payable to me from the lessee to whom I have granted kendu leaves lease'.
There is a further recital that if the interest is kept in arrear continuously for two years, the creditors can sue him for the interest only. The document concludes as follows:
'Be it stated that if your kendu leaves thikswill fall before the realization of the entire amountof this bond, then you will get the malguzari regarding this Thika towards the Interest of thebond'.
Reading these two documents together, it appears to me that the parties agreed that the debt shouldbe discharged within six years and that the annualinterest accruing due under the bond will be realized by the creditors from the lessee of the area,namely defendant 1. If, however, the debt remained undischarged at the end of the sixth year, theroyalty stipulated to be paid under Ex. 19 will beadjusted towards the interest on the bond.
It is the admitted case of both parties that at that time Mohammed Khan (defendant 1) was-in nossession of the area and had the exclusive license to collect kendu leaves under Ex. H-2, a registered patta executed by the very same zamindar on 26-9-1937, and that the period of the lease was to run till the end of 1943. That document also contains a restrictive covenant preventing the grantor from granting similar pattas to anybody else and if he did so 'he and his successors' would be liable for compensation. There is a further clause providing for renewal of the lease. That clause says that
'after the termination of the period of five years I will not grant any patta in future for kendu leaves of the zamindari area jungles and other lands, to any other person except you'.
The plaintiffs assert that they had no notice of this lease in favour of defendant 1 or of the provision for renewal. Similarly, defendant 1 vehemently protests that he had no idea of the execution of Ex. 19 in favour of the plaintiffs. Neither version represents the truth. It appears to me that both parties were vying with each other to take an exclusive license of the area for a further period.
It is equally obvious that the plaintiffs knew that defendant 1 had been in possession for a considerable period prior to their contract under Ex, 18 and his possession itself was notice of the contract between the zamindar and defendant 1. I am therefore not inclined to place any reliance on the testimony of plaintiff 2 that till he filed the suit in 1947 he had no idea of the terms and conditions of the lease under which defendant 1 was operating. He says that he did not enquire about the terms and conditions of the defendant's lease as
'it was not necessary for me to enquire and I had nothing to do with the terms and conditions of the lease of defendant No. 1' (Vide page 32 of the printed Paper Book (Part 1).
Later in his cross-examination, however, he admitted that in 1938 he knew that the kendu leaves lease granted to defendant 1 expired by December 1943 and admitted:
'I came to know of his lease before we took the lease of kendu leaves in January 1936. It was a week before our lease' (page 35 of the printed Paper Book, part I).
4. It may therefore be taken as proved that the plaintiffs, both of whom are lawyers and moneylenders knew what they were bargaining for and knew or could easily have ascertained the terms and conditions of the bond under which defendant 1 was in possession, curiously enough the plaintiffs slept over their rights till after defendant 1 had exercised his rights under Ex. M dated 29-3-1940, the patta granted by defendant 2 which was to operate from 1944 to 1953.
On 30-5-1944, the plaintiffs sent a registered notice, Ex. 21, to defendant 2 to the effect that they had adjusted the amount of Rs. 600/- fixed as royalty for the gathering in of the kendu leavestowards interest due under the bond, Ex. 18. Defendant 2 sent his reply, Ex. 21-B dated 12-4-1944,denying knowledge of the lease executed by his father. He further said that he was not bound by the lease even if any such lease had been executed. He intimated that he had appointed defendant 1 as the exclusive Thikadar and that the latter was in possession as such.
The plaintiffs, however, did not choose to call upon defendant 1 to vacate the premises so that they may themselves pluck kendu leaves under their lease. A year after this, the plaintiffs again sent a letter dated 20th March (Ex, 23) to defendant No. 2 tendering a sum of Rs. 600 and threatening a suit for compensation for the year 1944. A copy of this was sent to defendant 1, but no further action was taken by either party.
It was on 13-3-1947 that for the first time, the plaintiffs sent a letter Ex, 3 challenging the right of defendant No. 1 to collect kendu leaves from the zamindari, and calling upon him to make good a sum of Rs. 90,000/- to cover the losses suffered by them. Defendant 1's reply (Ex. B) dated 24-3-47 states that he had been exercising his right to collect kendu leaves since the year 1921 and that he was continuing to do so in his own right.
Shortly after this exchange of letters the suit was instituted for the recovery of Rs. 88,200/- for the wrongful deprivation of the plaintiffs' profits. The appellants tendered in evidence a certified copy of the plaint filed by the plaintiffs in Money Suit No. 3 of 1947 for recovery of the principal and interest due under the money bond (Ex. 18). The plaint and the judgment in that suit were exhibited as Exs. P. and Q. The plaint shows that the suit was filed on 26-1-1947 -- nearly two and a half months prior to the institution of the present suit.
5. Resting here, let me examine the scope and the legal effect to be given to the contract, Ex. 19. Although the document describes the transaction as a 'lease' counsel for both parties argued on the basis that it is a 'license coupled with a grant' and as such it is ordinarily irrevocable. The Indian Easements Act is applicable to the district of Sam-balpur and the rights of the parties will have to be determined by the provisions of the Act.
The contention for the appellant is that the contract remained executory till 1944 and could be revoked before it took effect. No consideration was paid under it and no rights were created thereunder. If the plaintiffs had entered into possession and had been unlawfully evicted they could certainly maintain a suit for damages or injunction against the grantor, but the contract was merely executory and the plaintiffs have neither acted under it, nor have they suffered any damage by a breach of it.
All that the zamindar undertook to do was not to cancel the lease within 'the stipulated period' but there is no covenant restricting his right to revoke it before it took effect. It is argued, therefore, that by the very terms of the deed it was a revocable license and conferred no right on the grantees. The contention on behalf of the respondents is that the contract is in the nature of a grant of a 'profit a prendre' coupled with a license and thus it creates an interest in land. Permission for removal of kendu leaves confers a benefit arising out of land and therefore it amounts to transfer of immmovable property which is binding on the successor in interest of the grantor.
6. 'License' is defined in Section 52, Indian Easement Act as a right to do or continue to do in or upon the immovable property of the grantor something which would, in the absence of such right be unlawful and such right does not amount to an easement or an interest in the property.
It is a personal right granted to a person to do something upon the immovable property of the grantor, and does not amount to the creation of an interest in the property itself. It is purely a permissive right, and is personal to the grantee. It creates no duties and obligations upon the person making the grant and is, therefore, revocable except in certain circumstances expressly provided for in the Act itself. The license has no other effect than to confer a liberty upon the licensee to go upon the land which would otherwise be unlawful.
7. In King v. David Alien & Sons, (1916) 2 AC 54 (A), the appellant transferred his interest in a site to a Picture Palace Company. The respondents had the bill-pasting rights under a prior agreement executed by the predecessor in title of the appellant. The Picture Palace Company having prevented the respondents from pasting their advertisements on the new building, the latter brought a suit for damages against the appellant for breach of agreement.
It was held by the House of Lords that the facts of the rent reserved, the term of years granted, or the covenant not to allow other people to have competing rights with the licensees, were riot enough to create an estate or interest in the land, nor an easement to which the land would thereafter be subject. Lord Buckmaster held that the contract created nothing but a personal obligation.
It was a license given for good and valuable consideration to enure for a certain time, but it. did not create any right beyond that. Earl Lore-burn observed that the contract merely amounted-to a promise on the part of Mr. King that he would allow the other party to the contract to use the wall for advertising purposes, and that there was an implied undertaking that he would not disable himself from carrying out his contract.
8. Another principle that has to be remembered in this connection is that a licensee must hold the land in respect of which the right or privilege is created before he can seek to enforce the covenant under the document. It is not enough that he has a contract in his favour. He must continue to have an interest in the subject-matter of the contract before a right of injunction or damages can be conceded. See 'London County Council v. Alien (1914) 3 KB 642 (B).
In Heap v. Hartley. (1889) 42 Ch. D. 461 (C) the distinction between a license and a grant has been discussed and it was held that a licensee as such has no right of suit even if it be an exclusive license. The light to go upon the grantor's land is a license but the right to cut a tree and carry it away is a grant.
The decision in Wood v. Leadbitter, (1845) 13 M & W 838 (D) in so far as it affirms on general principles that a mere license is, in its nature. revocable and that a license coupled with a grant is irrevocable, has received statutory recognition in Section 60, Indian Easements Act. Section 60 lays down that
'a license may be revoked by the grantor unless (a) it is coupled with a transfer of property, and such transfer is in force; and (b) the licensee acting upon the license has executed a work of a permanent character and incurred expenses in the execution'.
The second clause has no application to the present case as it is not claimed that the licensee undertook any work of a permanent character on the premises or incurred expenses in the execution. Both sides appeal to the first clause in support of their respective cases, the appellant contending that there was no transfer of property involved in the contract and the license was therefore revocable, and the respondent contending that the grant of a benefit arising out of the land amounts to a transfer of property and was therefore irrevocable.
9. It appears to me that? the applicability of Section 50, Indian Easements Act does not arise as the grantor did not revoke the contract at all. The true position is that the license became extinguished when the grantor's interest in the zamin-dari ceased. But as considerable argument has been addressed to us on the applicability of Section 60 I think it right that we record our view on the point.
As pointed out already the plaintiffs entered into a contract, with notice of defendant's possession and of a subsisting contract in his favour. They did nothing under the contract except to wait from 1938 till 1947 and then came up with a claim for recovery of mesne profits.
In these circumstances I am of opinion that the license was terminable at the will of the licensor if he had continued to live. The rule applicable in similar circumstances has been laid down by the Judicial Committee thus in Canadian Pacific Railway v. King, AIR 1932 PC 108 (E).
'When the exercise of the rights conferred by the license involves nothing beyond, there can be no reason to urge against the existence of a power to determine the license brevi manu, at the will of the licensor'.
But if the exercise of the right may have involved the licensee in obligations in other directions the licensee would be entitled to notice before it is revoked so as to give him breathing space or make alternative arrangement. The leading case on the subject is Wallis v. Harrison, (1838) 51 RR 715 (F) in which Parke, B. said:
'I take it to be clear that a parol executory license is countermandable at any time and if the owner of the land grants to another a license to go over or do any act upon his close, and then conveys away that close, there is an end to the license; for it is an authority only with respect to the soil of the grantor and if the close ceases to be his soil, the authority is instantly gone'.
The converse case where the license had been executed and was therefore irrevocable can be found in Webb v. Paternoster, (1319) 2 Roll Rep 143 (G). See also Winter v. Brockwell, (1807) 103 ER 359 (H). In that case the defendant had been led to incur expenditure in consequence of his having obtained a license from the plaintiff to put up a skylight and had acted upon it.
Lord Ellenborough, C. J. held that a license executed is not countermandable, but only when it Is executory. To the same effect is the case of Wood v. Manley, (1839) 113 ER 325 (I) where goods upon the plaintiff's land had been sold to the defendant and the buyer was to be allowed to enter and take the goods. It was held that after the sale the plaintiff could not countermand the license.
The same principle has also been recognised in Indian law in Section 59, Easements Act.
10. In Winter Garden Theatre v. Millenium Productions Ltd., 1948 AC 173 (J) the House of Lords reversing the decision of the Court of Appeal held that a license, the consideration for which is stipulated to be a periodic payment (as is the case in the appeal before us) is revocable on notice, although there was no express provision providing for such revocation.
It was further held that such a contract conveyed no interest in land, but was purely a license for value. A license may fall under one of various classes : one in return for which the grantor gets nothing at all, e.g. a license for B to walk acrossA's field, this, in fact, is the authority which prevents B from being regarded as a trespasser whenhe avails himself of the license : See Thomas v.Sorrell, (1673) Vaugh 330 (K).
The second class of license may be called a license for value in which B pays consideration for the permission he obtained from A. Such consideration may be given once for all as for instance, by the payment of a capital sum or by conferring a single benefit at the beginning. The case of Llanelly Railway and Dock Company v. London & North Western Rly. Co., (187S) 7 HL 550 (L) is an example of this.
There is yet a third class of licenses for value which constantly occurs as in the sale of a ticket to enter premises and witness a particular event. In this class of license the ticket entitles the purchaser to enter and remain on the premises until the performance is over : See Hurst v. Picture Theatres, Ltd., (1915) 1 KB 1 (M).
If the consideration takes the form of a periodic payment as was the case in Winter Garden Theatre case (J), it is nonetheless revocable and a notice would be required if the licensee is in possession of the premises. Even if the revocation be in breach of the contract, the licensee has no right to enter upon the premises and his entry will be an act of trespass. The law on the point islaid down thus in Salmond on Torts (9th Edition, p. 258) :
'If however the licensee insists, notwithstanding the revocation of his license (even though it is thus premature and wrongful in entering or remaining on the land, or in otherwise exercising his license he becomes at common law a trespasser or other wrong-doer ..... The rule is an illustration of the difference between a legal power to do a thing effectively and a legal right or liberty to do it lawfully.'
In Thompson v. Park, (1944) 1 KB 408 (N) by an agreement between T and P, each of whom had owned a school, the schools were amalgamatedand T Licensed P to enter with some 25 boys on his school premises. T, on differences havingarisen, revoked the contract.
It was held that even on the assumption that T had been guilty of breach of contract P was only a licensee and that if T had revoked the license, P was a trespasser and had no right to re-enter the premises or remain on them.
11. These principles have received judicial recognition in Indian cases and learned counsel for the appellant has placed before us three decisions in which the nature of a license for collecting kendu leaves has been considered.
The first of these cases is Mohanlal Hargovind v. Commr. of Income-tax', AIR 1949 PC 311 (O) where the question arose under the Indian In- come-tax Act as to whether the expenditure incurred in acquiring kendu leaves for the manufacture of Biris was an expenditure on revenue account and as such exempt from tax.
The contract between the appellant and the Government was described as a forest contractand related to the removal of the forest produce sold and purchased under the agreement. By ' Clause B of the agreement the forest produce was de- fined as 'all the said produce which may nowexist or may come into existence in the contract-area.'
This agreement also granted the right to col- lect and remove kendu leaves from the area and a sum payable in instalments was fixed as the con- sideration for the grant. The Nagpur High Court had held, in an earlier case reported in Mulji Sicca & Co. v. Nurmohammad, AIR 1938 Nag 377 : (P) that such a grant amounted to transfer of a right to enjoy a profit a prendre and was therefore grant of immovaole property within the definitions contained m the General Clauses Act, Section 3(2) and Section 2(6), Registration Act, as relating to 'benefits arising out of land'.
This was followed in a later decision of that High Court, in Income-tax Appellate T.ibunal v. Haji Sabumiyan, AIR 1946 Nag 241 (Q) and it was held that the right to collect lac and hara fruit was a right relating to immovable property as it related to a benefit arising out of land.
In that view the expenditure was held to be a capital expenditure and the assessee was not allowed any deduction under the Income-tax Act. This was the judgment in AIR 1946 Nag 241 (Q) which was heard along with Misc. Civil Case No. 96 of 1952 (Nag) (R), Misc. Civil Case No. 97 of 1942 (Nag) (R1) and Misc. Civil Case No. 56 of 1943 (Nag) (R2), all of which were argued on the same day, as the point involved in all those cases was the same.
The asssssees were Haji Sabumian and Sheodas Daga who had obtained a right to the forest product of hara and lac and the assessee Mohanlal Hargobind had obtained the right to collect kendu leaves from certain forests for a number of years.
Hargovind went up in appeal to the Privy Council against the, judgment of the High Court and the decision of the Judicial Committee is re-ported in AIR 1949 PC 311 (O) to which reference has been made already. The Nagpur cases were considered by the Privy Council and they were overruled. Their Lordships observed as follows :
'It appears to their Lordships that there has been some misapprehension as to the true nature of these agreements and they wish to state at once what, in their opinion is and is not the effect of them. They are merely examples of many similar contracts entered into by the appellantswholly and exclusively for the purpose of the business, that purpose being to supply them with one of the raw materials of the business.
The contracts grant no interest in land and no interest in the trees or plants themselves. They are simply and solely contracts giving to the grantees the right to pick and carry away leaves which, of course, implies the right to appropriate them as their own property'.
In para 5 of the judgment the following observation is made:
'Under the contract it is the kendu leaves and nothing but the kendu leaves that are acquired; it is only the right to pick the leaves or to go on the lands for the purpose -- those rights are merely ancillary to the real purpose of the contracts, and -- if not expressed it will be implied by law -- to the sale of a growing crop'.
It was further held that the distinction between moveable and immovable property drawn in the various Acts was not a reliable test to determine the real nature of such contracts. If the standing timber had been purchased it would amount to an interest in land, but neither in the case before their Lordships nor in the case before us were trees acquired. Nor were the leaves acquired until the licenses had reduced them into their possession and ownership by picking them.
In Chhotabhai Jethabhai Patel & Co. v. State of Madhya Pradesh, AIR 1953 SC 108 (S) the nature of the right accrued under such contracts for removal of kendu leaves was again considered. In . that case consideration had been paid by the licensees to the proprietors and possession had been taken. The estate later vested in the State and the possession of the licensees was sought to be disturbed.
The State was directed not to interfere with the rights of the petitioners which they were enjoying under the contract at the time as no proprietary right was conveyed by the contract, to tne petitioners who were mere licensees.
In Mohammed Khan v. The State, ILR (1954) Cut 671 (T) the present first defendant applied for a writ against the State of Orissa prohibiting it from interfering with his rights under the registered patta executed in his favour by the zamin-dar of Garloisingh on 29-3-1940 which is Ex. M in the present case; and I held that the effect of the contract was not to transfer any title or possession of the land on which the kendu trees stand or the leaves grow. It was merely the grant of a permission to go upon the land of the propvietor to pluck, gather and carry away the kendu leaves.
12. The distinction between English and Indian law on the irrevocability of a contract of license is pointed out in Dominion of India v. Sohan Lal, AIR 1950 EP 40 (U), by Das C. J. (as he then was). Referring to Section 60(a) his Lordship observes, in para. 12 of the report :--
'The first of the two tests of irrevocability, laid down in the Section is obviously narrower than the corresponding test laid down in the English cases. In order to be irrevocable under the section, a license has to be coupled with transfer of property, whereas under the English law it is enough if it is coupled with a grant or interest in the nature of property'.
It is therefore not possible to apply the liberalised. principles adopted by the English Courts to cases to which the Indian Easements Act applies. Even in England the view now taken of such contracts, which merely enable the licensee to do something upon the property of the licensor does not create a legal interest in land like a tenancy.
But it is essential, whatever be the rights of the licensee, that he should have, and continue to have, an interest in the subject-matter of the contract. Actual occupation of the land is necessary for clothing the licensee with a right which can be enforced in a Court: See Bendall v. Mcwhir-ter. (1952) 2 QB 466 (V).
13. Another branch of the appellant's argument may now be considered. It is contended that when the property has changed hands the license is at an end. In Chinnan v. Ranjithammal, AIR 1931 Mad 216 (W) the plaintiff sued to eject the defendants from a portion of the lands on which the defendant had out up a hut and lived. The defendant's prcdecessor-in-title was one Punjoli who was serving as the plaintiff's watchman and had been permitted to put up a hut. The property changed hands and the plaintiff, as the owner of the land, brought the suit.
Relying on Coleman v. Poster, (1853) 108 RR 442 (X) in which Pollock, C.B. observed that in such circumstances the license is gone, the Court held that the transferee was not bound by the license created by her predecessor-in-title. In a later case of the same High Court, Alagiri Chetty v. Muthuswamy Chetty, AIR 1940 Mad 102 (Y) Patanjali Sastri J. (as he then was) held that a license lapsed on the death of the licensor.
It is accordingly contended that Ex. 19 became inoperative on the death of the grantor and that it did not enure beyond his life-time. The plaintiffs had only an inchoate right created by the contract which was an executory license not accompanied by occupation of land.
14. After having given my anxious consideration to the terms of the contract, I am inclined to accept the appellant's contention that the plaintiffs in this case have no right to sue as they had parted with no consideration, and therefore thecontract remained executory at the time of its extinguishment by the death of the grantor. Nor was there any breach of the contract to let the plaintiffs enjoy the license when it fell due, as the license itself came to an end by the death of the grantor.
If there had been a breach of the contract by revocation of the license it may be that the plaintiffs might have had a right to sue on the contract, or obtained an injunction and so be indirectly restored to the enjoyment of the license. But he has no title, as such, to the possession of the premises or the trees in respect of which the permission was granted.
We have not been referred to any decision on the point as to whether the plaintiffs could recover damages in an action founded upon a breach of contract when a license is revoked. The plaint is not so drafted. The suit is for recovery of profits wrongfully enjoyed by defendant 1, and not for damages for breach of contract against a party to it.
I would not, therefore, go into the question particularly as the second defendant is not represented before us and plaintiff 1 died pending disposal of this appeal.
15. Learned counsel for the respondents relied on Bhiku v. Sheoram, AIR 1928 Nag 87 (Z) and AIR 1938 Nag 377 (P), and contended that the suit contract purports to transfer a right to the benefits arising out of land, but neither of these cases is applicable.
In the first case, the right granted was to excavate the earth and to carry it away for the purpose of making pots. In the other case, it was held that a similar grant required registration underSection 2(6), Registration Act as it related to benefit arising out of land.
In so far as it lays down that a right to take away kendu leaves amounts to the grant of an interest in land or benefits arising out of land, it can no longer be regarded as good law in view of the later decision of the Privy Council in Har-govind's case (O).
16. Learned counsel for the respondents built up his argument on a passage in Halsbury's Laws of England, Vol. XI, Second Edition, at p. 387, where it is stated that a profit a prendre is an Interest in land. His contention is that in this case there was a transfer of such interest in land and consequently of 'property' within the meaning ofSection 60, Easements Act.
This argument proceeds on a misconception of the law of easements as applicable to India. The explanation to Section 4, Easements Act shows that the expression 'land' includes the power 'to do some-thing' on the servient heritage. The expression 'to do some thing' includes removal and appropriation of anything growing or subsisting thereon. The grant of profits a prendre is therefore regarded as a part of the law of easements in India.
The separation that obtains in England of easement and profits a prendre was not adopted by the Indian Legislature. Any argument therefore based on analogy with the law of England is not only Incorrect, but also misleading. It may also be noted that 'land' is defined in Section 205, (English) Law of Property Act of 1925 as including an easement, right, privilege or benefit derived from land, and Section 201 of that Act makes it applicable to all incorporeal hereditaments.
A privilege granted by way of a license to hunt or shoot over another's land amounts to the grant of an incorporeal hereditament and is therefore land and is a part of the law of property in England. In India, however, the position is different. The grant of profits a prendre in gross being unconnected with land, cannot be annexed as an Incident to? it, and is merely a personal right.
If the grantee does not claim the right by reason of ownership of a dominant heritage, he acquires only a contractual right to enjoy the profits and nothing more. Nor can such grants be regarded and a lease as defined in the Transfer of Property Act as exclusive possession has not been transferred by the grantor to the grantee.
The contract between the parties does not create any right beyond a power to walk on the zamin-dar's land and pluck kendu leaves. In a lease there is warranty of possession, but a mere license conveys no such warranty. It has, therefore, to be held that a document which does not give exclusive possession can take effect only as a license.
17. Mr. Mohapatra next referred us to the case of Janardhan Mahadeo v. Ramchandra, AIR 1927 Bom 240 (Z1) where the plaintiff allowed his brother (defendant 1) to use the water of the well which had fallen to the share of the plaintiff, out of brotherly regard. Their Lordships of the Bombay High Court held that the contract did not amount to an easement, nor did it create an interest in the property.
Fawcett, J. was of opinion that the expression 'transfer of property' used in Section 60 Easements Act was not used in the limited sense of 'transfer' as defined in the Transfer of Property Act. Shah, J. however, took the view that the allotment of share to the plaintiff was a transfer of property in which the well was situated as a part of the house and its appurtenances, and therefore the license was coupled with transfer of property. It should be remembered that the Transfer of Property Act 4 of 1882 and the Indian Easements Act 5 of 1882 were passed about the same time, and both came into force on the same day, namely 1-7-1882.
Section 5, Transfer of Property Act defines 'transfer of property' as an act by which a living person conveys property in present or in future to one or more other living persons and to transfer property is to perform such act. The word 'property' has not been defined, but Section 6 says that property of any kind may be transferred. If any interest short of absolute ownership is transferred the Transfer of Property Act deals with such transfers, as for instance by way of mortgage, gift, exchange and lease.
Mr. Mohapatra pointed out that the Transfer of Property Act is not exhaustive. It may be so, but I can find no justification for the further assumption that a license coupled with a grant should be regarded as 'transfer of property within the meaning of Section 60, Easements Act. Property must be understood in the most generic and comprehensive sense, as including absolute rights and 'transfer' is to be understood as meaning alienation or conveyance and includes all rights and all species of contracts which pass real rights in property. It is in this sense that Section 8 describes how a transfer operates. It says :
'A transfer of property passes forthwith to the transferee all the interest which the transferor is then capable ol passing in the property, and in the legal incidents thereof.
Such incidents include, where the property is land, the easements annexed thereto, the rents and profits thereof accruing after the transfer, and all things attached to the earth:'
18. Mr. Mohapatra then drew our attention to a case of the Madras High Court Venugopal Pillai v. Thiranavukkarasu, AIR 1949 Mad 148 (Z2). There the question that fell for decision was whether the right to tap cocoanut trees was a benefit arising out of land. The learned officiating Chief Justice held that the right was in the nature of immovable property because it is a benefit which arises out or land. It should be pointed out however that, in this case, the licensee was entitled to exclusive possession of all the cocoanut trees, except 12, which had peen reserved for the use of the owner.
It was therefore held that it amounted to a lease for agricultural purposes and accordingly reasonable notice was required under the provisions of the Transfer of Property Act. That case was decided as one arising under the Transfer of Property Act and no reference was made to Section 60, Easements Act. In any event it will be noticed that the case was decided some months before the Privy Council had occasion to consider the effect of such contracts in Mohanlal Hargovind's case (O).
19. On the other hand reference may be made to Indian Hotels Co Led v. Phiroz Sorabji AIR 1923 Bom 228 (Z3) where an agreement for providing stabling accommodation was held only to be a license. The test is whether there is a right to exclusive possession. The ordinary distinction between a lease and a license is that it is essential to the creation of a tenancy of a corporeal hereditament that the tenant should have the right to the exclusive possession of the premises.
A grant under which the grantee takes only right to use the premises without exclusive possession, operates as a license & not as a lease -- Hals-bury. I am unable to appreciate the inconsistent positions taken by learned counsel for the respondent, namely, that the contract was a license coupled with a grant & also that it amounted to transfer of property of the grantor. When it was pointed out to learned counsel that the contract could not be given effect to as a lease as it had not been signed by both parties, he was obliged to give up that line of reasoning.
20. Another point which has been debated at some length is whether the agreement executed by the late Madan Mohan Singh js valid beyond his lifetime so as to be operative against defendant 2. This contention is founded upon the fact that the zamindari of Garloisingh is impartible and inalienable and is governed by the law of primogeniture. The license granted by him, therefore, would not enure beyond the executant's lifetime.
It will be convenient at this stage to set out a few facts relating to the nature of the tenure under which the zamindari is held. The zamindari of Garloisingh is one of the ten zamindaries held by Gonds on feudal tenures. The Sambalpur District Gazetteer gives an account of the origin and nature of the tenure on which these zamindaris are held, and says at page 169:
'Whatever their origin may have been it appears that before the district came under direct British administration while it was under the rule of the Rajas of Sambalpur, the zamindaris were service tenures held on payment of a small tribute called 'Takoli' subject to the proviso that the proprietors were bound to render military service when called upon. When the district escheated to the British those zamindars who held in perpetuity continued in the enjoyment of their tenures on payment of their existing 'takoli' and were directed to perform Police duties instead of rendering military service.'
All the zamindaris except the zamindari of Garloisingh were confiscated because of their having revolted against the British during the rebellion of Surendra Sai (1857 to 1862) but were restored on the proclamation of amnesty in 1859. When the Settlement of 1856 was undertaken a summary enquiry was made into the circumstances of each zamindari and its payments to Government were re-adjusted. No sanads were granted as the Government found it imposible, in absence of a detailed enquiry, to define the relations of the zamindari with their gountias and their ryots.
Later in 1855-1859 it was ruled, during the next settlement, that no sanads would be given but that a wazib-ul-urz should be framed in two parts: the first defining the zamindar's rights and liabilities, and the second the relations between himself and his tenants. Undoubtedly, these zamindars were exercising independent powers for a long time and were responsible for police administration In their estates.
But in 1888 the Government resumed the police administration and the takoli payable by the zamin-dar was enhanced as they were relieved of maintaining the police service. The zamindars were, however, allowed to retain management of their forest in their estates and pay revenue for them. Their status is described as standing half way between the chief of a feudatory state who pays tribute to the British Government, and the ordinary proprietor of a khalsa village who pass a portion of his assets as land revenue. The Settlement Report of Mr. Dewar, of the year 1906, deals with land tenures in Chap VI, at page 48 and the legal status of the zamindar is described as follows:
'Briefly, the legal status of the feudal zamindars is that they are proprietors of estates which are impartible and non-transferable except to heirs preferably the nearest legitimate male heirs, who are approved by Government. Each estate is held by the zamindar only on terms. He may be dispossessed in case of continued gross mismanagement. But no such dispossession has actually occurred in Sambalpur even after many of the zamindars took up arms against the British Government in 1857.
On the other hand the right of the Executive Government to determine succession has been enforced and the impartibility of estates has been insisted upon. No person other than the zamindar has been recognised as a proprietor of land within a zamindari or has successfully contested his claim to proprietorship'.
The zamindari wazib-ul-urz is given in Appendix 12 of the Report and it defines the rights and liabilities of the zamindar as against Government. Clauses I and II of the wazib-ul-urz deal with Tenure and Succession and are reproduced below :
I. The tenure of the zamindari is impartible and non-transferable save to the nearest heir and each such transfer shall be subject to the approval of the Local Government. The zamindari is held by one person, the zamindar or zamlndarin for the time being, and is held on condition of loyalty, proper management and the improvement and cultivation of the estate.
2. The privileges of the zamindar are personal and should at any time the estate be transferred otherwise than in accordance with this clause, the Government will be at liberty to impose a full land revenue and forest assessment, and to resume all special zamindari privileges.
I, On the death of the zamindar the estate devolves upon his eldest legitimate son. In default of a son, either born to him or adopted, the estate devolves upon the nearest legitimate heir of the zamindar according to Hindu Law and the custom of the family. In the event of any dispute arising as to the legitimacy of any claimant to the succession the case shall be decided according to the custom of the family.'
These provisions are rested upon a recognition by the Government of what was undoubtedly the customary law governing succession to these estates held as feudal tenures for rendering military or police service. These incidents of the tenure are not peculiar to the Hill zammdars of Samualpur alone, but are annexed to the principalities and propnetary estates cheated unaer the permanent settlement Regulations throughout the country.
The hill zamindars of Sambalpur are bound by the terms ol their tenure recorded in the Administration papers or the wazio-ul-urz which is accepted by the zamindars at each settlement (Dewar's Settlement Report, para 81, page 48). The estate is inalienable under the customary law and any interest created by the zamindar ceases on his death, and the licensee becomes a trespasser after the licensor's death.
21. A case which is on all lours with the present one is reported in Karselal v. Badriprasad, AIR 1922 Nag 162 (Z4). But apart from authority, I have no hesitation in arriving at the same conclusion having regard to the inalienable character of the Estate. Section 62, Easements Act, was placed before us and it was argued that that section makes provision for a case like the present. that section reads as follows :
'62. A license is deemed to be revoked (a) when from a cause preceding the grant of it the grantor ceases to have any interest in the property affected by the license'.
The rule of succession laid down in the wazib-ul-urz is Chat on the death of the zamindar the estate devolves upon his eldest legitimate son. The cause preceding the grant of the license is the nature of the tenure of the grantor who ceases to have any interest in the properly affected by the license on his death. It was, however, contended for the respondents that the rule of inalienability not being absolute the transaction can at best be voidable but not void.
This argument appears to proceed on a wrong reading of the wazib-ul-urz. There was no transfer of property as such by the grantor under Ex. 18 and therefore any discussion regarding the question as to whether the transfer would be void or voidable is merely academic and not germane to the discussion.
Mr. Mohapatra laid great emphasis on the second clausa which says that the privileges of the zamindar are personal and argues that the only consequence of a transier contrary to the provisions of the wazib-ul-urz would be the imposition of full land revenue and resumption of zamindari privi-leges. The very fact that the Government is at liberty to impose full land revenue shows that the estate might be terminated by Government, and the zamindar would cease to be the proprietor of the land.
His interest in the estate therefore continues so long as he holds it on the terms and conditions recorded in the wazib-ul-urz and he has no larger interests than those. I am, therefore, led to conclude that any clog or fetter created on the estate by the zamindar would not enure beyond his lifetime. In my opinion Section 62(a) provides for such a contingency and governs the case.
22. The only other point that now remains to be noticed is whether the plaintiffs are entitled to any mesne profits and, if so, whether the quantum of profits allowed by the Trial Court is to be sustained. This point is covered by issues 4 and 5 and has been dealt with by the learned Subordinate Judge at great length at page 127 of the Paper Book (Part P.)
At the outset I have to state a few facts which have a considerable bearing on the question at issue. Ct the 29 villages comprised in the Garloisingh zamindari only two or three were in the exclusive possession of the zamindar and the rest were held by Thikadars. The plaintiffs themselves are the thikadars of two villages, defendant 1 is the gauntia in respect of live, the rest being held by strangers.
According to part II of the wazib-ul-urz which defines tne relations of the zamindar with his thik-dars and tenants, the iruit and timber or self-grown trees are to be enjoyed by the persons on whose lands they stand and by the thikadars in the case of those standing on waste lands. The villagers are also allowed to graze their cattle on all village waste and jungle except the area recorded as jyapti jungle of the zamindar and take therefrom reasonable quantities at lirewood, leaves, nencing terns, thatching grass, etc.
As a matter of practice, the gountias collect the kendu leases from the village waste land and the tenants from the trees on their holdings. The learned Suuordinate Judge failed to notice the distinction between ownership 01 the trees and the customary right to pluck the leaves and held that the zamindar had the right to giant a license to pick and collect kendu leaves on such land also and that the zamindar has acquired by prescription the right to lease out the kendu leaves growing on the lanas of the tenants and the thikadars.
A good deal of the evidence relied on by him appears to me to be wholly irrelevant and unreliable as a guide to ascertain the quantity of leaves growing on such lands. There is no evidence as to the relative quantity of leaves that could be gathered from the villages in the khas possession of the zamindar and those that weie in the possession of others. Any calculation based on the extent of unoccupied land shown in the Milan Khasaras (Ex. 4 series) is nothing more than a surmise.
23. Similarly, with regard to the price of the leaves the learned Subordinate Judge made use ol certain materials which can hardly be regarded as relevant or admissible. We called upon respon-dents' counsel to enlighten us as to how the price fixed by the lower Court can be supported. Beyond an alleged admission made by the defendant in para 8 of his written statement in which he said that the annual profit varied from Rs. 5/- to Rs. 10/-per bag we were not shown any other material which could be a safe guide in ascertaining the price.
Counsel for the appellant pointed out that the defendant was himself in trouble during the years 1945-46 and had filed suits as his possession was disturbed by the second defendant. He had claimed damages at Rs. 10/- per bag, and was therefore obliged to give that figure in the written statement. I am not prepared to say that this may not be the correct position. What however strikes me is that the plaintiffs have failed to place any reliable material on which the Court can come to a judicial finding.
The non-production of the account books of the defendant has been severely commented upon, but that fact only raises presumption against him that he derived the maximum profit. The judgments of High Court (Exs. R and R-1) may give some idea of the profits he may have made. But this does not absolve the plaintiffs from discharging the onus that lies on them showing what profits could reasonably have been made.
It must be remembered that in a ease for damages arising out of breach of contract the primary and immediate result of breach can alone be taken into consideration. The plaintiffs would be entitled to such damages as may fairly and reasonably be considered either as arising naturally or as the probable result of it, in other words, the damages suffered by the plaintiffs as a direct consequence of the breach.
If I had held that the plaintiffs are entitled to some damages on this score, I would have directed a remand of the suit for a finding on this issue, but in the view I have taken of the nature of the contract the plaintiffs are entitled to no relief.
24. Another point of interest that arises in the case is whether the plaintiffs abandoned the benefit of the contract by reason of their having filed a suit for recovery of the debt evidenced by Ex. 18. It is however unnecessary to go into this question as it was only suggested during the argument, and is not covered by the pleadings.
25. After this judgment had been prepared learned counsel for the appellant placed before us a table showing the quantity of leaves collected by Mohammed Khan, as proved by his previous state/-ment in Exs. 41 and 42. This statement shows that he made no collections at certain centres during the suit years but, as I have observed already, it is not necessary to go into this point at this stage in the view I, have taken of the nature of the contract.
26. In the result, I would accept the appeal and direct that the plaintiffs' suit be dismissed with costs. The cross-appeal filed by the plaintiffs for enhancement of the damages is dismissed. The appellant shall have the costs of this Court.
27. I agree.