Nasim Ali, J.
1. These two appeals arise out of a suit for recovery of road cess, mine cess and income-tax charged on the royalty payable for a certain colliery under the terms of a registered indenture of lease. The trial Judge decreed the suit. On appeal by the defendants to the lower appellate Court the learned District Judge has affirmed the decree of the trial Judge for road cess and mine cess, but has dismissed the plaintiffs' claim for income-tax. Hence these two second appeals, one (S. A. 856) by the defendants and the other (S. A. 1003) is by the plaintiffs. The point for determination in the two appeals is whether under the terms of the lease the plaintiffs are entitled to recover: (a) road cess, (b) mine cess (c) income-tax, paid by them on the royalties reserved in the lease. The relevant clauses in the lease are these:
(a) All the aforesaid royalties shall be paid free from any deduction (Clause 1 of Part 6 of the indenture).
(b) The lessee shall pay the royalty and royalties reserved in the lease at the time and manner appointed in that behalf and shall also pay and discharge all taxes, rates, assessments and imposition whatever being in the nature of public demand which shall from time to time be charged, assessed or imposed upon the said mines or any part thereof by the authority of the Government of India or the said local Government except demand of land revenue, and shall also pay interest at the rate of 12 per cent per annum on all arrears of such royalty or royalties from the due date thereof (Clause 1, Part 7 of the Indenture).
2. It is contended on behalf of the lessee that the object of the covenant to pay taxes, rates, assessments and impositions was not to throw upon the lessee the burden of the assessments payable by the lessor under the statutes but only to state the liability of the lessee to pay his share of the assessment under the Statute Laws. The words 'all taxes etc.' indicate that the lessee was made liable by the covenant for the whole of the impositions upon the demised mines payable by the lessor and the lessee and not simply for the portion payable by the lessee only. If the object of the covenant was to make the tenant liable for his share of the assessments only there was no necessity for inserting it in the lease because the liability was already fixed by the Statutes. The covenant was not intended to be a mere surplusage but was framed with the object of throwing on the tenant the burden of obligations which in the absence of such a covenant might have fallen on the landlord. The question is whether the burden of the obligations in the present case namely, road cess, mine cess and income-tax which was on the plaintiffs has been thrown on the defendant by the operation of the covenants in the lease. The contention on behalf of the tenant is that these impositions do not come within the covenants in the lease as they are not charged upon the mines but are charged upon the landlord in respect of the mines. Now what is the difference between an imposition upon the mines and an imposition in respect of the mines? All impositions are ultimately charged to the landlord or the tenant or both. Mr. Bose's contention however is that when parties to a covenant use the words 'imposed, assessed or charged upon the premises' the meaning of the words is the sense in which the words are used in the Statute. In support of his contention he invited our attention to the following passage in the judgment of Banks, J., in East Wood v. McNab (1914) 2 K B 361:
When parties to a covenant use the words 'charged on premises' the meaning of 'charged' includes the sense in which the word is used in the statutes.
3. In this passage the word 'includes' has been used by the learned Judge. This word is wider than the word 'means.' The plaintiffs have been assessed for Road cess under the provisions of the Cess Act (Bengal Act 9 of 1880) in respect of the royalty received or receivable by them. The Cess Act provides for the imposition of a cess on all immoveable property situated in the province. For the purposes of the Act 'mines etc. are included in the definition of immoveable property.' In the case of mines the cess is assessed on the annual net profits of which the royalty receivable by the landlord is a part: Manindra Chowdhury Nundy v. Secy. of State (1911) 38 Cal 372. It is therefore a cess imposed on the mines; and comes within the covenant. Mine cess is a cess imposed by the Bengal Mining Settlement Act (Bengal Act 2 of 1912). It appears from Section 10 of the Act that certain expenses incurred by the Mines Board of Health for the better sanitation of mining settlements are charged to the owner of mines and all persons who receive any royalty from such mines, and the assessment in the case of receivers of royalty are based on the road cess payable by them. In view of these provisions in the Act, Mr. Bose contends on the authority of the observations of Jessel M. R., in Allum v. Dickinson (1882) 9 Q B 632 that the mines cess is not charged or imposed upon the mines but is a personal demand on the plaintiffs who are the receivers of royalty from the mines and is therefore not within the covenant as there are no words in the covenant to the effect 'or in respect of the mines' 'or on the lessor in respect of the mines.' The liability in Allum v. Dickinson (1882) 9 Q B 632 arose under Section 105, Metropolis Management Act 1855, 18 & 19 Viet. Ch. 120, the relevant portion of which is as follows: 'The owner of such houses forming such street (laid out or made by the Vestry or District Board under that Act) shall on demand pay to such Vestry or Board the amount of actual expenses of providing and laying such pavement.' The real question for determination in that case was about the liability under the covenant not for annual charges but for payment which was to be made once for all for the permanent improvement of the property. A covenant to pay charges, etc., is 'not construed to throw expenses of permanent improvement on the tenant unless there are words clearly requiring such a result': Halsbury's Law of England, Vol. 18, P. 491. In general the tenant is 'liable to bear all expenses which are of a regularly recurring nature and which are incident to the occupation of the premises': Ibid. In discussing the nature of the charge in question in Allum v. Dickinson (1882) 9 Q B 632, Jessel M. R., observed:
The charge in question was for making a new street which was a charge naturally payable by the owner. The tenant is not usually made liable to any charges for the permanent improvement of the property. But this is not conclusive. Then there is another circumstance in favour of the tenant. The other charges mentioned in the covenant are annual charges; but this is a payment which is to be made once for all and is therefore not similar to the other payments which are to be thrown on the tenant.
4. In Foulger v. Arding (1902) 1 K B 700, the charge in question was also a capital charge. The covenant in that case contained the words 'or in respect of the said premises or in respect thereof on the landlord and tenant.' But the following observations in that case are instructive
It appears to me that a lamentable waste of judicial time and power is often involved in examining decisions with regard to the meaning of words which with one context are capable of one meaning and with another context of another meaning. Underlying the whole matter is the consideration that we are dealing with a contract of demise between landlord and tenant and the covenant must be assumed to relate only to matters which may reasonably be supposed to have been contemplated by the parties as being within the purview of such a contract: per Collins M. R.
The authorities on the subject are in a very unsatisfactory condition. The general current of decisions has been in favour of the landlord and not in favour of restricting the meaning of such covenants: per Romer, L. J.
The general tendency of the decisions is strongly in the direction of increasing liability upon the tenant by reason of the intention now generally imputed to the covenant of enabling the landlord to receive his rent free from all deductions: Landlord and Tenant, Edn. 6, pp. 212-213.
5. The decision in the case should not therefore turn on the magic of a particular word or words in one covenant; what matter may be reasonably supposed to be in the contemplation of the parties at the time of the contract is to be ascertained from a conspection of all the terms of the contract. The liability for the mine cess is on both the owner and occupier. The policy of the Act is that all persons who benefit by the maintenance of the works of sanitation should bear the liability of paying the same. It is a charge of a regularly recurring nature and is incident to the occupation of the premises. It is payable in respect of the mines benefited. The covenant to pay rates, taxes, etc., in this case described these impositions as being in the nature of public demands. If the words in the covenant are to be taken as used in the same sense in which they are used in the statute, we must look to the statute which imposes the obligation on the landlord to ascertain whether it is in the nature of a public demand. Section 10, Clause (4), Bengal Act 2 of 1912, lays down that all expenses chargeable under the section shall be recoverable as if they were arrears of land revenue. Section 3 (6) and Clause (3) of Schedule 1, Bengal Public Demand Recovery Act (Bengal Act 3 of 1913), make these charges public demands for the purposes of that Act. The words 'being in the nature of public demands' were inserted in the covenant for some purpose and some meaning must be given to it. Demand of land revenue and not demands 'in the nature of land revenue' are excluded from the covenant. Public demands which are not land revenue but are recoverable as if they were arrears of land revenue can be therefore reasonably supposed to have been in the contemplation of the parties. Again the covenant about the payment of royalty contains the words 'free from any deductions.' The words must be given some meaning. They suggest an increase in the liability of the tenant. Mr. Bose however contends that the object of the covenant was to lay down that the tenant will have to pay the minimum royalty of Rs. 2,170 per annum whether the lessee raises sufficient quantity of coal or not. But in Clause (1), part 5 of the lease there is a distinct provision that the minimum royalty of Rs. 2,170 shall always be paid whether the quantity mentioned in that clause in fact be raised or not.
6. It is true that in the covenant the words used are 'upon the said mines' and there are no words of the type 'or in respect of them.' But on a consideration of all the terms of the lease, I am of opinion that the obligation cannot be limited to charges on the mines themselves but extends to charges imposed in respect of them on persons, namely landlord or tenant, and that the tenant undertook the liability to pay all charges of a recurring nature imposed by the statutes whether they are described in the statute as imposed on the mines or on the lessor or the lessee in respect of them. The lessee paid this cess without any objection for several years before the institution of the present suit. I am therefore not prepared to say that the decision of the Courts below on the point is wrong. As regards the claim for income-tax the contention of the lessor is that it is also within the covenant. For the purposes of the decision in the case I do not express any opinion on this question as the plaintiffs' claim under this head fails for want of any materials to show what amount was imposed on them under the Income-Tax Act for the demised mines only. The amount claimed by the plaintiffs as Income-tax has not been separately assessed on them by the Income-Tax authorities under the Income-Tax Act. The amount claimed in the plaint has been laid at a certain figure by the plaintiffs on calculation at a certain rate on their income from the mines. This rate is not the rate imposed on the plaintiffs' income from mines alone by the Income-tax authorities. It has been fixed not only with reference to the income from the mines but also with reference to their other source of income. The amount claimed under this head is not therefore the amount imposed by the Income-tax authorities under the Income-Tax Act in respect of the mines only. The result therefore is that both the appeals are dismissed. The parties are directed to bear their own costs in these two appeals.
7. In Appeal No. 856 of 1933 one of the main arguments addressed to us in favour of the appellant Company was to the effect that the road and public health'cesses are charged not upon the mines but in respect of the mines, and this being the case, the company are not liable to pay the cesses under the terms of their lease. During the course of the argument learned Counsel referred to certain English cases in order to show that a delicate distinction must be drawn between the expression 'upon' and in 'in respect of.' A distinction of this nature appears to have been drawn in Allum v. Dickinson (1882) 9 Q B 632, in which it was decided that the proportion of the expense of paying a new street assessed upon the demised house was not a rate payable by the tenant under the covenant. It was however, pointed out by Jessel, M. R., in that particular case that the pavement in question was one for the permanent improvement of the property and was a personal demand on the owner which might be enforced on his premises. In a subsequent case, Brett v. Rogers (1897) 1 Q B 525, in which the tenant was held liable to pay the plaintiff the amount expended by her in complying with a notice of the sanitary authority, the decision turned mainly upon a construction of the expression 'duties imposed in respect of the premises' and it was held that this expression was wide enough to enable the plaintiff to succeed in the case in question. From the decision in these two cases on which learned Counsel for the Bengal Coal Company mainly based his argument, it is difficult to deduce any clear principle with reference to the precise meaning of words in covenants relating to assessments. The principal authorities were however reviewed by the Court of Appeal in 1902 in Foulger v. Arding (1902) 1 K B 700. In that case it was pointed out by Collins, M.R. that in dealing with a contract of demise between landlord and tenant,
The covenant must be assumed to relate only to matters which may reasonably be supposed to have been contemplated by the parties as being within the purview of such a contract.
8. Romer, L.J. further pointed out that the authorities on the subject were in a very unsatisfactory condition and that the general current of decision had been in favour of the landlord and not in favour of restricting the meaning of such covenants. In the case in question the decision turned mainly upon the construction to be placed upon the expression
'Impositions charged or imposed upon or in respect of the said premises on the landlord, tenant or occupier of the same.'
9. And it was held that the obligation in respect of which the suit had been brought was one within the natural meaning of the terms of the covenant and clearly within the contemplation of the parties to the lease. In the lease with reference to which these appeals arise, the lessees have clearly covenanted to pay:
All taxes, rates, assessments and impositions whatsoever being in the nature of public demand, which shall from time to time be charged, assessed or imposed upon the said mines or any part thereof by authority of the Government of India or the said local Government or otherwise, except demands for land revenue.
10. The question therefore, arises as to what were the payments in contemplation of the parties at the time when the lease was executed. Land revenue was clearly to be paid by the lessors but other taxes in the nature of a public demand and upon the said mines were to be paid by the lessees. The only taxes with regard to which we have been asked to adjudicate in this connection are road cess, Mines Board of Health Cess, and income-tax. No question has so far arisen with regard to any other tax and it is in fact not suggested that any other tax, besides land revenue, which has been expressly excluded, has been imposed either upon or in respect of the mines covered by the lease. At the outset I may say that, having regard to what appears to have been the intention of the parties to this lease as expressed in the language of the covenant, it would have made little practical difference even if the expression 'in respect of the said mines' had been used instead of the expression 'upon the said mines.' The latter is the expression which appears in the covenant, but it is obvious that, although the taxes which were in contemplation of the parties might have been assessed upon the mines or upon income arising therefrom, such taxes would actually be paid in respect of the mines. The main point, therefore, seems to be whether the three taxes mentioned above are really taxes upon the mines as contemplated by the parties to the lease. The three taxes in question are all in the nature of public demands although the principles upon which they are assessed are different. To my mind, the expression 'charged, assessed, or imposed upon the said mines' conveys the idea of direct and separate assessment arising from ownership of the mines or the receipt of profits therefrom and I am of opinion that, if the covenant be read as a whole, this was the meaning of the expression, which the parties had in contemplation at the time of the execution of the lease.
11. Learned counsel for the Bengal Coal Company admits that, in view of the preamble to the Cess Act (Bengal Act 9 of 1880) and the provisions of Ch. 5 thereof, there is some difficulty in contending that road-cess is not a tax upon the mines. The preamble clearly authorizes the levy of such a cess on immoveable property and under the provisions of Ch. 5 of the Act this tax is assessed, in the case of mines, on the average of the annual net profits thereof. Further, in the case of the Mines Board of Health Cess, it is provided in Section 10 of the Act that the cess shall be charged to the owners of mines, and to persons who receive any royalty, rent or fine, from such mines. It seems to be clear therefore that the liability to pay the road-cess and the Mines Board of Health Cess arises directly in connexion with the ownership of the mines or the receipt of income arising therefrom. These taxes are also separately assessed upon the persons concerned and they must, I think, be regarded as charges which the lessees have rendered themselves liable to pay under the terms of the covenant, and I am of opinion that the lessors have clearly contracted themselves out of any statutory liability which they would otherwise have incurred with reference to these taxes.
12. Different considerations apply however in the case of income-tax. With regard to this tax I am in agreement with the learned District Judge in thinking that it is a personal tax. Further,as was pointed out by Lord McNaughten in London County Council v. The Attorney-General (1901) 70 L J K B 77, income-tax is a tax on income. It is not meant to 'be a tax on anything else; it is one tax not a collection of taxes essentially distinct.' In this connexion it is argued by learned Counsel for the appellants in Appeal No. 1003 of 1933, that income-tax must also be regarded as having been contemplated by the parties to the covenant, in view of the fact that mines are property and that property is one of heads of income chargeable to income-tax under Section 6, Income-tax Act (Act 11 of 1922). It must however be remembered that income-tax is assessed under Section 23 of the Act not separately in respect of the various items mentioned in Section 6, but upon 'total income' of the assessee. Under Section 2 (15) of the Act the expression 'total income' means the 'total amount of income, profits and gains from all sources to which this Act applied computed in the manner laid down in Section 16,' which latter section relates to exemptions and exclusions in determining the total income. Having regard to the provisions of the Income-tax Act with regard to assessment, it would in this particular case be impossible to separate any income-tax which might be payable upon the mine from the total amount of income-tax payable by the party concerned. The amount of the income-tax payable by a person who owns mines or derives any portion of his income therefrom is not separately assessed upon the mines and income arising therefrom but is assessed upon his total income which is determined according to certain specific directions contained in the Income-tax Act. In my view such a tax cannot be said to be a tax upon the said mines and could not have been in contemplation of the parties when the lease was executed. I therefore agree that these two appeals must be dismissed.