Skip to content


Durga Prasad Singh Vs. Gosta Behari Nandi and ors. - Court Judgment

LegalCrystal Citation
CourtKolkata
Decided On
Judge
Reported in18Ind.Cas.545
AppellantDurga Prasad Singh
RespondentGosta Behari Nandi and ors.
Cases ReferredLeader v. Duffy
Excerpt:
document - construction--intention of parties to be determined from words in document--unexpressed intention not to be given effect to--mining lease--contract to pay increased royalty on reduction of railway fare--contract to be given effect to, without reference to unexpressed intention of parties. - .....in the third sentence and is intended to emphasise it. the lessee affirms that on all the coal despatched by the east india railway line, which at the time was the only railway available, he would pay royalty at the fixed rate, that is, at the rate specified in the first sentence. the third sentence then proceeds to provide for a contingency anticipated by the parties, namely, a reduction in the freight for carriage of coal, upon construction of the bengal nagpur railway line. that contingency has happened. the bengal nagpur railway line has been constructed and extended to the jheria coal fields. the rate for carriage of coal has been reduced. the plaintiff has, consequently, become entitled to the increased royalty. a simple recital of these facts makes it abundantly clear.....
Judgment:

Asutosh Mookerjee, J.

1. This is an appeal on behalf of the plaintiff, the Raja of Jheria, in a suit for recovery of royalty due under a mining lease granted by his predecessor, on the 20th October 1898, to the second defendant, the Maharaja of Cassimbazar, in the name of the first defendant. The claim covers the period from the 14th April 1903 to the 16th October 1908. The controversy between the parties relates to the rate at which the royalty is payable, and must be determined upon a true construction of the first clause of the lease, which may be literally rendered as follows:

In respect of the coal, which I may raise from the entire 1103 bighas 13 kottas of coal land in Mouza Ekra under Settlement and despatch or sell, I shall be bound to pay commission, that is, royalty, on steam coal, rubble coal, hard coke and soft coke at 3 annas per ton, and 1 shall pay commission for brick burning rubble and dust at 1 1/2 annas per ton. Be it known that I shall pay royalty, at the present fixed rate, for all the coal that may be despatched by the East India Railway line. But if, in future, on construction of the Bengal Nagpur Railway line, the freight for coal be reduced, from what is at present fixed, by at least 2 annas or more per ton, then with regard to all the coal which may be despatched at such reduced freight, I shall pay royalty for steam (coal), steam rubble, soft coke and hard coke at 5 annas per ton, and for brick burning rubble and dust at 2 1/2 annas per ton; but if the said railway freight be reduced by lees than 2 annas per ton, such amount of reduction shall be added to the present royalty rate for steam (coal), steam rubble, soft coke and hard coke, and half thereof shall be added to that for brick burning rubble and dust.

2. It is not disputed that the Bengal Nagpur Railway, which was in course of construction at the time of the grant of the lease, was extended to Jheria in February 1903. Shortly before this, in August 1902, the Bast India Railway reduced the rate of freight for the carriage of coal, with the result that the freight from Jheria to Calcutta was reduced from Rs. 3-11 to Rs. 3-2 per ton. The Subordinate Judge has found that this reduction was made in anticipation of the competition likely to follow upon completion of the Bengal Nagpur Railway line. This conclusion is manifestly sound and has not been challenged before us. The action of the Bengal Nagpur Railway authorities, after their line had been opened, and the infructuous attempt made by them to reduce the rates further, need not be considered for our present purpose; it is sufficient to state that the two Railway authorities subsequently agreed that Rs. 3-2 would be charged by both Railways on every ton of coal carried from Jheria to Calcutta. The fact, therefore, is well established that the rate of freight on coal from Jheria to Calcutta has been reduced by 9 annas per ton. The plaintiff contends that this entitles him to royalty at the increased rate mentioned in the first clause of the lease. In my opinion, there is no answer to this claim.

3. The Subordinate Judge has entirely misdirected himself in the decision of the fairly simple question in issue between the parties. He has allowed oral evidence to be adduced in proof of their intention and has based his conclusion upon what he assumes must have been the intention of the grantee. The course pursued by the Subordinate Judge contravenes the elementary test laid down by Lord Wensleydale in Monypenny v. Monypenny (1861) 9 H.L.C. 114 at p. 146; 31 L.J. Ch. 269; 131 R.R. 72: 'The question is not what the parties to a deed may have intended to do by entering into the deed, but what is the meaning of the words used in the deed-a most important distinction in all cases of construction, and the disregard of which often leads to erroneous conclusions'. This vital distinction was emphasised by Baron Parke in Dungannon v. Smith (1846) 12 Cl. & F. 516 at p. 599; 69 R.R. 137; 10 Jur. 721 and by Lord Selborne in Pearks v. Moseley (1880) 5 App. Cas. 714 at p. 719; 50 L.J. Ch. 57; 43 L.T. 449; 20 W.R. 1 and was concisely summed up by Lord Halsbury in Leader v. Duffy (1888) 13 App, Cas. 294 at p. 301; 58 L.J.P.C. 13; 59 L.T. 9 in the following terms: 'You will be arguing in a vicious circle if you begin by assuming an intention apart from the language of the instrument itself, and, having made that fallacious assumption, you bend the language in favour of the assumption so made'. If the first clause of the lease be examined in view of this rule of construction, the case turns out to be reasonably free from all difficulties. In the first sentence, the lessee undertakes to pay commission upon the different kinds of coal at 3 annas and 1 1/2 annas respectively per ton. The second sentence is introductory to the provision in the third sentence and is intended to emphasise it. The lessee affirms that on all the coal despatched by the East India Railway line, which at the time was the only Railway available, he would pay royalty at the fixed rate, that is, at the rate specified in the first sentence. The third sentence then proceeds to provide for a contingency anticipated by the parties, namely, a reduction in the freight for carriage of coal, upon construction of the Bengal Nagpur Railway line. That contingency has happened. The Bengal Nagpur Railway line has been constructed and extended to the Jheria coal fields. The rate for carriage of coal has been reduced. The plaintiff has, consequently, become entitled to the increased royalty. A simple recital of these facts makes it abundantly clear that the claim is well founded, What, then, is the answer suggested by the defendant?

4. It is ingeniously argued, in the first place, that the parties, or, at any rate, the defendant and his advisers, intended that the increase in royalty should take effect, only if the East India Railway adhered to the original rate while the Bengal Nagpur Railway charged a lower freight. The obvious answer to this argument is that if this was the intention of the parties, they have not said so. Their intention must be determined from the plain language actually used; the Court cannot give effect to their unexpressed intention.

5. It is boldly contended, in the second place, that the intention of the parties, or, at any rate, of the lessee and his advisers, was that the higher rate of royalty should be payable only upon coal despatched by the Bengal Nagpur Railway line. This construction, however, finds no support from the language of the instrument. The words used are neither obscure nor ambiguous, and if I were to accede to the contention of the respondent, I would have to make a new contract for the parties. The Court is concerned solely with the language of the instrument and is called upon to determine the intention of the parties as expressed thereby; the Court cannot take into account the expectations which might have been formed by the lessee as to the probable result of the completion of the Bengal Nagpur Railway line, of the action likely to be taken by the East India Railway, and of the economic effect which would in all probability follow therefrom. Upon a plain reading of the first clause of the lease it is clear that the increased royalty became payable as soon as the freight was reduced and it was immaterial whether the reduced rate was adopted by one of the Railways or by both, and whether the coal was despatched by the one Railway or by the other. The event contemplated by the parties has happened, and the liability to pay royalty at the higher rate has accrued. If the parties or either of them had any unexpressed intention, the Court cannot be invited to give effect to it; it is a matter for speculation and beyond the province of judicial inquiry. The suit is not framed for reformation of the contract which must be enforced according to its terms.

6. The result, therefore, is that this appeal is allowed and the decree of the Subordinate Judge varied. The royalty will be calculated upon the coal despatched at the higher rate claimed. The plaintiff is entitled to the costs of this appeal; but the costs of the preparation of the paper book must be disallowed as a very considerable portion thereof was entirely unnecessary for the purposes of this appeal and no reference was made thereto at the hearing. The costs in the lower Court will be calculated on the sum decreed by this Court. A self-contained decree will be drawn up here to prevent possible dispute hereafter. It may be added finally that a memorandum of cross-objection was filed in this Court insufficiently valued and stamped and beyond the period prescribed by the law; it has not been pressed and is dismissed without costs.

Beachcroft, J.

7. The decision of this appeal depends solely on the meaning that is to be attached to one sentence in the lease. If that sentence is to be taken to provide that the increased royalty was to be paid only on coal and coke despatched by the Bengal Nagpur Railway, the respondent must succeed; if it be understood to cover despatches of coal and coke by the East India Railway, the appellant must have a decree.

8. In approaching this question the learned Subordinate Judge has adopted the erroneous course of speculating as to the contract which the parties might have been expected to make if they had considered and appreciated rightly all the economic results which might follow on the opening of the Bengal Nagpur Railway and interpreting the language of the contract by the result of his speculations. As a consequence he has arrived at the conclusion that the sentence in question bears a meaning which is not the most obvious and natural meaning to be applied to it.

9. The first sentence deals with the royalty to be paid on all coal and coke raised, whether despatched elsewhere or sold at the pit's mouth. The second provides that the lessee will pay royalty at the 'present fixed rate' on all coal despatched by the East India Railway. The third sentence is the one on which the decision of the suit depends. It runs, 'but if in future, the Bengal Nagpur Railway being constructed, the present fixed freight on coal is reduced by two annas or more per ton, than on all coal despatched in the aforesaid manner at less freight, royalty will be paid at 5 annas per ton on steam coal, steam rubble, hard and soft coke, and at two annas six pies per ton on brick burning rubble and dust; but if the said railway freight be reduced by less than 2 annas per ton, such amount of reduction shall be added to the present royalty rate for steam coal steam rabble, hard and soft coke and half thereof for brick burning rubble, and dust.' The sentence opens with the word 'but.' This introduces either a qualification to the previous sentence, or if the language of the rest of the sentence justifies the inference that the despatches referred to in it apply only to the Bengal Nagpur Railway, merely an antithesis to the previous sentence, showing that different terms were to obtain according as coal was despatched by one line or the other. To paraphrase the language of the two sentences according to the meaning contended for them by the respondents, the contract would in the latter case run: 'The present royalty is to be paid on coal despatched by the East India Railway: but higher royalty is to be paid on coal despatched by the Bengal Nagpur Railway, if that railway, on its completion, introduces a lower rate of freight.'

10. But this construction involves the difficulty that their most natural meaning is not to be placed on the words 'if the present fixed freight on coal is reduced.' We are asked to read these words as meaning 'a lower rate of freight is introduced by the Bengal Nagpur Railway than that at present in force on the East India Railway.' To do so would be to strain language. The word used in the vernacular implies 'redaction,' and there can be no reduction of that which is nonexistent. Had the parties intended that additional royalty was to be paid only on coal despatched by the Bengal Nagpur Railway, if that Railway introduced a lower rate of freight than that levied on the East India Railway, they could, and presumably would, have said so in plain unambiguous language. And if the various considerations, which have found weight with the learned Subordinate Judge, had been present to the minds of the contracting parties, and their intention had been that which is attributed to them by the Subordinate Judge, they would doubtless have used language which would make that intention clear and not language which prima facie bears the contrary meaning.

11. The respondent is faced by a further difficulty in the words 'all coal despatched in the aforesaid manner at less freight.' In this connection there is a dispute as to the correct translation of the words used. The plaintiff argued before the learned Subordinate Judge that the words 'in the aforesaid manner' had reference to the words less freight' and not to the word 'despatched,' and in the official translation the passage is rendered which may be despatched at such reduced freight.' I am of opinion that the view taken by the learned Subordinate Judge as to the translation is correct and have adopted it in the translation which I have given.

12. Now dealing with this passage, the learned Subordinate Judge says: 'I must say that the words 'ukta rupe' (aforesaid manner) may also mean both the railways or either of them,' but he discounts their application to the Bast India Railway on the supposition that if so applied, the lessee could not hope to derive any special benefit by the reduction of freight, and, therefore, would not have agreed to an enhancement of the royalty. I do not appreciate the argument based on the theory of special benefit to the lessee. It is not as though the Bengal Nagpur Railway was to be opened immediately for traffic. That line was, it is true, under construction at the time of the lease, which was executed in 1898, but it was not opened till 1903, and there is no reason to suppose that it was intended that the lessee alone should reap the benefit of the anticipated lower freights.

13. If the words in question can be taken to apply to both Railways, the plaintiff must get a decree; if they are limited to only one Railway, then, if language is to have its ordinary meaning, they must apply to the East India Railway mentioned in the previous sentence. The words are, despatched in the aforesaid manner,' and the only despatch of which any mention has been made is despatch by the East India Railway.

14. The meaning of the contract seems to me to be perfectly clear. A. rate of royalty was fixed for coal despatched by the East India Railway, the only line serving the coal field at the time. But as another line was under construction, it was naturally expected that competition would reduce freights. Accordingly provision was made by which the lessor would get all the benefit of cheaper freights up to 2 annas a ton on coal and the lessee all the subsequent benefit in case of greater reduction. In fact freights have been reduced by nine annas per ton on despatches to Calcutta.

15. In dealing with the question of profits by reason of the reduction of freights, the learned Subordinate Judge remarks, 'it is, no doubt, true that it was assumed... that if the freight was reduced, the lessee would be benefited....' If that were assumed there can be no force in his argument in regard to special benefit to the lessee: and the assumption would explain, if any explanation were needed, why the royalty was to be raised in case freights were reduced, for, as I remarked before, there appears to be no reason why the lessee should gain all the benefit of the reduction, though the Subordinate Judge makes the unwarrantable inference from the terms of the patta and kabuliat that it was assumed that any reduction in freight was to operate solely for the benefit of the lessee and the lessor was to derive no advantage therefrom. But the Subordinate Judge qualifies his remark, quoted above, by saying that it is improbable that the lessee or his advisers thought the reduction in freight would go to the benefit of the seller if there was a reduction by both routes. This is pure speculation. I might add that the Subordinate Judge appears too lightly to have come to the conclusion that the lessee would only benefit by the reduction in freight, if the freight charged by the East India Railway remained higher than that charged by the Bengal Nagpur Railway. The effect both of reduction of freights and of a difference in freights would depend largely on the law of supply and demand and the competition of other coal fields; an effect which could not be accurately estimated beforehand, and speculation as to the effect of the laws of political economy cannot be taken into consideration in construing the plain words of a document.

16. Both parties are agreed that the additional royalty was to be paid if the freight on the Bengal Nagpur Railway fell below that in force on the Bast India Railway at the time of the execution of the lease, and as I have pointed out, it is clear on the terms of the lease that reduction of freight on the East India Railway was to have the same result.

17. I am, therefore, clearly of opinion that the additional royalty must be paid on despatches by both lines, at the rates specified in the lease, and I can find nothing in that lease which restricts the payment to despatches to Calcutta.

18. I agree that this appeal should be allowed with costs, and the memorandum of cross-objection dismissed without costs.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //