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Mati Lal Daga and ors. Vs. (Sri Sri) Iswar Radha Damodar Chandra Jew Thakur - Court Judgment

LegalCrystal Citation
SubjectProperty;Contract
CourtKolkata
Decided On
Reported inAIR1936Cal727
AppellantMati Lal Daga and ors.
Respondent(Sri Sri) Iswar Radha Damodar Chandra Jew Thakur
Cases ReferredRam Krishna Muraji v. Ratan Chand
Excerpt:
- d.n. mitter, j.1. this is an appeal by defendants 5 to 9 against a preliminary judgment of the subordinate judge of asansol dated 28th september 1932 by which he directed certain enquiry as to damages as also against the final decree passed by another subordinate judge on 5th october 1934, by which he directed the payment by the said defendants to the plaintiff of the sum of rs. 1,80,747 for damages and for rents and royalties. the hazra respondents describing themselves as shebaits of a deity sri sri radha damodar chandra jiu thakur brought the suit in which this appeal arises: (1) to recover khas possession of a colliery known as kajora colliery, which belongs to the deity in putni right, (2) to recover one lakh twenty thousand from the defendants on account of the commission and.....
Judgment:

D.N. Mitter, J.

1. This is an appeal by defendants 5 to 9 against a preliminary judgment of the Subordinate Judge of Asansol dated 28th September 1932 by which he directed certain enquiry as to damages as also against the final decree passed by another Subordinate Judge on 5th October 1934, by which he directed the payment by the said defendants to the plaintiff of the sum of Rs. 1,80,747 for damages and for rents and royalties. The Hazra respondents describing themselves as Shebaits of a deity Sri Sri Radha Damodar Chandra Jiu Thakur brought the suit in which this appeal arises: (1) to recover khas possession of a colliery known as Kajora Colliery, which belongs to the deity in Putni right, (2) to recover one lakh twenty thousand from the defendants on account of the commission and royalties in arrears and for damages, and (3) for other reliefs. The suit was directed against (1) defendant 1 Narendra Chaudhury, in whose name a lease of the underground rights was taken from the plaintiff for a period of 499 years by Sudhangsu Bhusan (defendant 11), (2) Defendants 2 and 3 (the Sarkars), transferees from the real lessee defendant 11; (3) Defendant 4, the Official Assignee, the Sarkars having been adjudged insolvent; (4) the Dagas, defendants 5 to 9, who advanced money to the Sarkars on mortgage of their leasehold rights in the Colliery: and (5) Defendant 10, Vithal Das, purchaser at the sale by the Official Assignee who are to sell the mortgaged property and to pay off the mortgage; and (6) defendant 11, the real lessee under the plaintiff.

2. The plaintiff deity founds its claim on the pottah executed in favour of defendant 1 on 31st Chaitra 1327, B.S. 13th April 1921 and filed the Kabuliyat which is the counterpart of the said pottah along with the plaint. It is common ground that defendants 2 and 3 took a transfer of the leasehold interest under the lease of 13th April 1921 from defendants 1 and 11, the real lessee. The plaintiff next alleges that defendants 5 to 9(now appellants) took an English mortgage of the property in suit from defendants 2 and 3 on the basis of two registered deeds executed on 26th February 1923 and 17th December 1926 and that defendants 5 to 9 have become liable for the money sought to be recovered in the suit. The plaintiffs' case is that there have been breaches of several covenants contained in the kabuliat. One of such breaches is mentioned in para. 7 of the plaint which is reproduced below:

7. That the defendants did not keep square pillars at least 12 cubits in dimensions at a distance of eight cubits as mentioned in para. 6 of the said pottah and kabuliat and are cutting coal by making much wider galleries. In consequence of this there is likelihood of great damage being done to the coal mine. Moreover, in spite of repeated requests, the officers of this plaintiff were not allowed to go underground into the pits for inspection of the work of the mine, as stated in the said paragraph. Under the circumstances, the plaintiff had not been able to know the actual state of things in the mine.

3. The plaint further alleges that daily accounts of the coal raised from the mine have not been filed with the Shebaits of the plaintiff in accordance with para. 16 of the pottah and kabuliat. The plaint further alleges that minimum and excess royalty have not been paid. The plaintiff after enumerating the breaches of covenant as aforesaid states that it has become entitled to get khas possession of the property in suit in accordance with the terms of pottah and kabuliat. The plaint alleges that a notice was sent by the deity plaintiff to the defendants on 14th September 1928 by registered post asking them to give up possession to the plaintiff, but the defendants have not given up khas possession, that the defendants are liable to be regarded as trespassers after the said notice and are bound to pay damages. In para. 10 of the plaint it is stated that as the defendants did not submit accounts regularly the plaintiff assessed the money claim at Rs. 84,000 approximately and the plaintiff was willing to pay deficit court-fees in case his claim is ultimately determined to be larger on final accounting. On this state of the pleading khas possession was asked for and there was a prayer for recovery of the damages and royalties, etc.

4. Defendants 5 to 9 (the Dagas) filed a written defence: see p. 122, Book A. They alleged that they did not violate any covenants contained in the lease in question; they deny that they have kept wider galleries; they allege that the statement in para. 7 of the plaint quoted above is false; they pleaded that the rule as to keeping of galleries of certain dimensions was not an inflexible rule and that she working of the mine was done with the full knowledge of plaintiffs and there was waiver and that the plaintiff's officers frequently used to come and inspect the mines, that the plaintiffs are estopped From claiming damages; that the claim for damages are excessive; that they are not trespassers and they did no injury to the colliery. On this state of the pleadings several issues were framed and decided, but it is not necessary to refer to them all as the question in controversy before us in appeal has been limited to certain issues. The material issues are: issue 2 which is in these terms:

Whether the mortgages dated 26th February 1923 and 17th December 1926 were English mortgages as defined in the Transfer of Property Act. If so, are the mortgagees liable for the rents and royalties?

5. Issue 4 is to the following effect:

Are the defendants 5 to 9 liable to any portion of the claim. If so for what period and for how much?

6. Issue 5 raised the question of estoppel and waiver on the ground raised by the defence that the alleged breaches of the covenant were done with the knowledge and consent of the plaintiff. The Subordinate Judge who tried the suit in the first instance found: (1) that the mortgages in favour of the Dagas (defendants 5 to 9) are not English mortgages; (2) that there is no absolute assignment to the Dagas the mortgages being for 1 bigha less and the term being two days less; (3) the mortgage loan and security did not constitute an out and out transfer; (4) the Sarkars (mortgagors) remain tenants of the lessor (the plaintiff) all the time and they are liable for the rents although the Dagas were in possession; (5) the Dagas were really sub-lessees and he held that the Dagas were not liable for the rents and royalties as there was no privity of estate between the Dagas and the plaintiff: (6) that the Dagas are bound by breaches of covenants contained in the head lease of 13th April 1931; and (7) that the Dagas should bo held liable for damages for two different periods on two different basis, i.e., they would be liable after notice for breach of contract for the sale of the coal and before notice for actual breaches only.

7. On this basis the first Subordinate Judge passed the preliminary judgment on 28th September 1932, directing an inquiry as to damages and referring the question to a Commissioner. The matter was referred to two Commissioners who submitted two reports. The matter of the passing of the final decree came before another Subordinate Judge who after considering the two reports of the Commissioners, as also a report passed before the preliminary decree, has granted a decree to the plaintiff for Rs. 1,80,747 by his judgment dated 5th October 1934. The present appeal was directed against the preliminary decree originally, but after the final decree was passed the memorandum of appeal was allowed to be amended so as to include the grounds of appeal against the final decree.

8. The first question of law which has been taken in the appeal is really an attack on the preliminary judgment which has made the Daga defendants (Nos. 5 to 9) liable for damages for breach of covenants contained in the head lease. It is argued that the Subordinate Judge below has committed an error in law in making the appellants liable for breach of covenants, for keeping proper pillars of coal for supporting the roof contained in the head lease Ex. 1 dated 13th April 1921 (Book B, p. 1) as they were no parties to the head lease and as they were not as-signees of the head lease, but the mortgages in their favour being by way of sub-lease they were merely lessees under the Sarkars (defendants 2 and 3), the transferees from defendants 1 and 11, the head lessees. The argument of the appellant has been put in this way:

9. It is unarguable on the authorities that there being no privity between Dagas (sub-lessees) and the plaintiff the Dagas are liable for breach of covenants contained in the head lease, assuming that the breach was committed by the Dagas and that the view of the Subordinate Judge, that this rule does not apply as the Dagas had notice of the covenants contained in the head lease, is erroneous as the basis of the principle is not whether the sub-lessee had notice of the covenants, but that there is neither privity of contract nor estate as between the lessor and the sub.lessee, and the following authorities were cited in support of this contention: Holford v. Hatch (1779) 1 Doug 183 at p. 186 and Akshoy Kumar Chatterjee v. Akman Molla 1915 Cal 154 at p. 554, Halsbury's Laws of England, Vol. 18, Article 865.

10. In order to consider the soundness or otherwise of this contention it would be convenient at this stage to set forth the relevant parts of the lease containing the covenant for the breach of which this suit has been brought and then to narrate the circumstances under which defendants 5 to 9 were put in possession of the Colliery in question, and the subsequent events that followed up to the date of the institution of the suit. The plaintiff deity granted a lease to Narendra Kumar Chaudhury, defendant 1, on 13th April 1921 of the underground mineral rights in 181 bighas of land for 499 years on terms and conditions which are contained in the kabuliat (counterpart of the lease) printed at pp. 1 to 12 of Book B (Part 2). The relevant covenant is contained in para. 6 which is as follows:

In the pits which I shall make in the land settled I shall keep proper pillars of coal for supporting the roof, etc. I shall keep square pillars of coal at least 12 cubits in dimensions at an interval of every eight cubits and shall keep the mine clean. For inspection of the said work and other works, you or your officer or the surveyor appointed by you shall be entitled to go under the mine, and I shall be bound to show you or them all the places under-ground in the mine. If any sort of damage be caused to your property on account of not keeping such coal pillars or for not keeping the mine clean, I shall be liable for the loss at the rate of Rs. 2,000 (two thousand) per bigha for such extent of the property as would be damaged. Whenever any of you or your officers will inspect mine, he will note his remarks in my books. I shall keep intact the limits and boundaries of the land settled. I shall properly close the mouth of the exhausted pits by making pucca masonary structures approved of by you. If I do not do so, I shall be bound to pay the amount of loss sustained by you or the costs may be incurred by you for closing the same.

11. On 28th September 1921 there was a declaration of trust by defendant 1, Narendra, in favour of defendant 11 in respect of the leasehold property and it is common ground that defendant 11 Sudhangshu Bhusan Mukherjee is the real lessee under the lease of 13th April 1921 (Ex. 1). It is also common ground that the interest of Sudhangshu Mukherjee in the leasehold devolved by several intermediate transactions on 8th November 1922 on Bolai Sarkkar, defendant 2; and the said defendant along with his brother Sailendra, defendant 3, mortgaged the leasehold in the colliery along with other properties to the Dagas (defendants 5 to 9) on 17th December 1926: see Ex. A (1) p. 47, Book B, This mortgage was by way of sub-lease for the residue of the terms less two days as the habendum clause at p. 51, line 20 would show.

12. The mortgage by way of sub. demise was for a consideration of over a lakh of rupees. And it provides that the Dagas were to take possession but the Sarkars were to pay rent and royalty. There was some discussion at the Bar as to the real nature of this mortgage. On the one hand it is argued for the respondent that this mortgage was an English mortgage and it was contended on the other hand by the appellants that this was really a mortgage by way of sub-lease within the meaning of Section 108 (J), T. P. Act. We have no doubt that it is not an English mortgage which would have vested the whole legal interest in the mortgagees and created privity of estate between the mortgagee of the lessee and the lessor. It is an assignment of a lesser term and therefore it created no privity of estate between the lessor and the sub. lessee. We are not unmindful of the recent decision of their Lordships of the Judicial Committee that even if the sub-lease is for the whole of the residue of the term, it would not operate otherwise than as a sub-lease: see Hansraj v. Bejoy Lal 1930 P C 59. We may have to revert to the construction of the document later. To complete the narrative of events leading to the institution of the suit the following facts should be stated.

13. On 19th December 1926 the Dagas (defendants 5 to 9) took possession of the colliery and started working the same. On 8th March 1927 the firm of Balai and Sailendra (defendants 2 and 3) was adjudged insolvent. After a great deal of correspondence between the Dagas and the Sarkars about rent, on 7th September 1927, the Dagas proved their claim through their Agent Sakti Pada Bhattacharjee and the claim having been accepted on 5th June 1928 there was an order of discharge. On 14th September 1928 the plaintiff through the Shebaits wrote to the Dagas (Messrs Harsook Das Balkissen Das & Co ), a letter through their pleader marked Ex. 2 (d) complaining that they had broken many of the terms of the lease of 13th April 1921:

(2) in that you have not kept proper pillars and that your galleries are not kept in accordance with the terms of the kabuliyat; (4) in that you are not allowing my clients men to have access to the Colliery and pits to examine your works: see Book B, p. 207.

14. To this letter the Dagas replied refusing to make over khas possession: see Ex. 2 (c) Book B, p. 210. On 22nd January 1929 on the application of the Dagas to the insolvency Court there was an enquiry. On 29th January 1929 it was found that the Dagas had a valid and subsisting mortgage. On 7th February 1929 there was an order by the Insolvency Court to take accounts; on 22nd March 1929 the Registrar found that Rupees 1,24,629-9-9 was due to the Dagas under the mortgage. On 21st May 1929 the Official Assignee sold the mortgaged property to Vithal Das, defendant 10. On 24th May 1929 the present suit was filed.

15. Two other material events after suit should be stated. On 14th June 1929 Vithal Das, defendant 10, took possession of the Colliery in question. On 25th October the receiver who was appointed took possession of the Colliery. In support of the ground that as there is no privity of contract between the sub-lessees (Dagas) and the head lessor (the plaintiff) the latter cannot sue the sub-lessee on any of the covenants in the head lease: reliance has been placed in Holford v. Hatch, (1779) 1 Doug 183 and on the decision of this Court in Akshoy Kumar Chatterjee v. Akman Molla 1915 Cal 154, at p. 554; reliance has also been placed on the following passage from Woodfall's Law of Landlord and Tenant, 23rd Edn. 334.

Where there is a contract to perform all the contracts of the head lease or to perform sub-stantially the same covenants in substantially the same terms and both the contracts of the head lease and the sub-lease are broken the head landlord (although he can eject) cannot sue the sub-tenant for damages, there being no privity of contract between them; but the head landlord may sue the mesne landlord who, in his turn, may sue the sub-tenant, or pursue what seems to be the more convenient course of bringing him in as third party under Section 39, Supreme Court of Judicature (consolidation) Act, 1925 (re-enacting Section 24, Sub-section 3, Judicature Act, 1873), and replacing Order 16a, Rules 48 to 55 of the Rules of the Supreme Court. If this be done, the High Court has a discretion under O.65 to order the sub-tenant so made third party to pay the costs of an action by the head landlord against the mesne landlord reasonably defended.

16. The respondent points out that this question hardly arises, for in the Court below Dagas (defendants 5 to 9) admitted liability during their occupation from 26th December to 14th September 1928 and we were referred to Order 89, Vol. A, p. 18 which supports their case. The order is important and is reproduced below:

The pleader for defendants 5 to 9 states that their clients admit that after 30th December 1926 up to the time of delivery of possession to the receiver none but themselves did any work in the mine. They take upon themselves the responsibility for all the works done after 30th December 1926 up to commencement of possession of the receiver such as would be found by the expert in the locality on verification.

17. This no doubt simplified the position and the only question for determination would be whether damage was done during their occupation. But it is argued that the appellants are not bound by the admission of their pleader on a point of law and as the question was debated before us we proceed to deal with it. The case in Akshoy Kumar Chatterjee v. Akman Molla 1915 Cal 154 is obviously distinguishable. In that case a tenure holder undertook in a lease not to excavate tanks in the property. He granted to a raiyat lease of some lands within the tenure but there was no restrictive covenant as to the excavation of the tank. The raiyat was unaware of any restrictive covenant in the lease of the tenure holder. In such circumstances it was held that the tenure-holder and not the raiyat was liable in damages to his lessor for excavation of the tank by the raiyat. In the present case it is conceded that the Dagas had constructive notice (if not actual notice) of the covenants contained in the head lease, Ex. 1. It is argued however by Mr. P.R. Das, the learned Counsel who has appeared for the appellant, that the basis of the principle is not whether the sub-lessee had notice of the covenants or not, but want of privity of contract or estate as between the lessor and sub-lessee. That may be so with reference to affirmative covenants, but not so with restrictive covenants where, as the authorities, presently to be noticed show, the question of notice becomes very material even if there is want of privity of contract or estate as between lessor and sub-lessee.

18. Indeed in support of the view taken in Woodfall's Landlord and Tenant in the passage referred to above the learned author refers to the case in Hornoy v. Cardwell (1881) 8 Q B D 329 which was the case of an affirmative covenant-covenant by the defendant being 'to repair and paint and leave in repairs' the demised premises. The equitable doctrine of restrictive covenants has been brought to a focus in the leading case of Tulk v. Maxhay (1848)2 Ph 774. That doctrine has been affirmed in later decisions: see Haywood v Brunswick Permanent Benefit Building Society (1881) 8 Q B D 403, and has more recently been approved by their Lorships of the Judicial Committee of the Privy Council in Lord Strathcona Ltd. v. Dominion Coal Co. Ltd. (1926) A C 108, a case to which I drew the attention of Mr. P.R. Das, in the course of his argument. If therefore the covenant to keep pillars of a certain width, which it is conceded is a negative covenant although affirmative in form be also a restrictive covenant, the authorities to which we have just referred and other authorities to be referred here after, and which will be discussed presently, lay down that it will be binding not only on assignees (absolute assignees) of the leasehold but also on sub-lessees and there can be no question that the head lessor has a remedy by injunction against the sub-lessee, for it is a covenant which 'runs with the land' as also for damages against him. The case in Lord Strathcona Ltd. v. Dominion Coal Co. Ltd. (1926) A C 108, before the Judicial Committee, to which I drew the attention of learned Counsel for appellant, contains a lucid statement of the principle as laid down in Tulk v. Maxhay (1848)2 Ph 774 in the following illuminating passage. Lord Shaw said:

The general character of the principle on which a Court of Equity acts was explained In Tulk v. Maxhay (1848) 2 Ph 774, at pp. 776, 779. The plaintiff there was owner in fee of Leicester Square and several houses forming the Square. He sold the property to one Elms in fee, and the deed of Conveyance contained a Covenant obliging Elms his heirs and assigns, to 'keep and maintain the said piece of ground and Square Garden . . . in its then form ... in an open state, uncovered with any buildings.' Elms sold to others, and the property came into the hands of the defendant, who admitted that he had purchased with notice of the covenant. The defendant, 'having manifested an intention to alter the character of the Square Garden, and asserted a right., if he thought fit, to build upon it,' the plaintiff who still remained owner of several houses in the Square filed a bill for an injunction. All this is familiar knowledge, but it appears to have been sometimes forgotten what was the nature of the argument for the defendant. He contended that the covenant did not run with the land so as to be binding upon him as a purchaser, and Sir Roundell Palmer, on his behalf, relied on the dictum of Brougham, L. C. Keppell v. Bailey (1834) 2 My & K 517, at p. 547, to the effect that 'notice of such a covenant did not give a Court of Equity jurisdiction to enforce it by injunction against such purchaser, inasmuch as the knowledge by an assignee of an estate, that his assignor had assumed to bind others than the law authorised him to affect by his contract, had attempted to create a burden upon property which was inconsistent with the nature of that property and unknown to the principles of the law and could not bind such assignee by affecting his conscience.' No reply was called for to this argument and the Lord Chancellor said that Lord Brougham never could have meant to lay down the doctrine 'that this Court would not enforce an equity attached to land by the owner, unless under such circumstances as would maintain an action at law.' 'If that be the result of thess observations' added the Lord Chancellor, 'I can only say that I cannot coincide with it:'

and again Lord Shaw remarks

But Tulk v. Maxhay (1848) 2 Ph 774 is important for a further and vital consideration, namely that it analyses the true situation of a purchaser who having bought upon the terms of the restriction upon free contract existing, thereafter when vested in the lands attempts to divest himself of the condition under which he had bought: 'it is said that the covenant being one which does not run with the land, this Court cannot enforce it; but the question is not whether the covenant runs with the land, but whether a party shall be permitted to use the land in a manner inconsistent with the contract entered into by his vendor, and with notice of which he purchased. Of course, the price would be affected by the covenant and nothing could be more inequitable than that the original purchaser should be able to sell the property the next day for a greater price, in consideration of the assignee being allowed to escape from the liability which he had himself undertaken.' In the opinion of the Board these views, much expressive of the justice and good faith of the situation, are still part of English equity jurisprudence, and an injunction can still be granted thereunder to compel, as in a Court of conscience, one who obtains a conveyance or grant sub-conditions from violating the condition of his purchase to the prejudice of the original contractor. Honesty forbids this; and a Court of equity will grant an injunction against it.

19. That constructive notice might before the Law of Property Act 1925 bind the lessee by the restrictive covenants of his lessor although he had no actual knowledge of them was laid down in Fielden v. Slater (1869) 7 Eq 523 and in one case Jessel, M.R. went so far as to say that even an express representation that there were no restrictive covenants affecting the demised property would not do away with the effect of constructive notice: see Patman v. Harland (1881) 17 Ch D 353 and Nicol v. Fenning (1882) 19 Ch D 258. That was also a case before the Law of Property Act 1925, which by Section 8 has altered in England the rule of 'constructive notice' as laid down in these cases: see Woodfall's Landlord and Tenant, Edn; 23, p. 855. In Holloway v. Hill (1902) 2 Ch 612 it was held that the lessee of a person bound by a restrictive covenant can be sued whether assigns are mentioned in the covenant or not.

20. The case in Hall v. Ewin (1888) 37 Ch D 74 cited for the respondent would show that remedy by way of injunction would lie at the instance of the head lessor against the sub-lessee if there has been a violation of a restrictive covenant. In this case the action was dismissed against the lessor as the lessor did not encourage the violation of the restrictive covenant in the lease by the sub-lessee, and the action was maintained against the sub-lessee. The appellant has, in view of the decisions just referred to, concentrated all effort's towards showing that Clause (6) of the lease does not contain a restrictive covenant as it is argued that it is essential for a covenant to be restrictive that the covenantee must retain some interest in the land for the benefit of which the covenant is entered into. That this is an essential requirement of a restrictive covenant appears plain on the authorities as has been pointed out by Lord Shaw in Lord Strathcona Ltd. v. Dominion Coal Co. Ltd. (1926) A C 108, at p. 121, in the following passage:

A perusal of the numerous decisions on this branch of the law shows that much difficulty has been caused by the attempt to extend these principles to cases to which they could not by the nature of the case have been meant to apply. It has been forgotten that to put the point very simply the person seeking to enforce such a restriction must, of course, have and continue to have an interest in the subject matter of the contract: for instance, in the case of land he must continue to hold the land in whose favour the restrictive covenant was meant to apply. That was clearly the state of matters in Tulk v. Maxhay (1848)2 Ph 774 applicable to the possession of real estate in Leicester Square. It was also clearly the case in De Mattos v. Gibson (1858) 4 De G & J 276 in which the person seeking to enforce the injunction had an interest in the user of the ship. In short, in regard to the user of land or of any chattel, an interest must remain in the subject matter of the covenant before a right can be conceded to an injunction against the violation by another of the covenant in question. This proposition seems so elementary as not to require to be stated. And it is only mentioned because in numerous decisions as is clearly brought out in the judgment of Lord Wrenbury, then Buckley, L.J. in London County Council v. Allen (1914) 3 K B 642, at pp. 656 to 658, it was necessary to shear away this misapplication or improper extension of the equitable principle. As Romer, L.J. said in Form by v. Barker (1903) 2 Ch 539, at p. 554, if restrictive covenants are entered into with a covenantee, not in respect of or concerning any ascertainable property belonging to him or in which he is interested, then the covenant must be regarded so far as he is concerned as a personal covenant, that is, as one obtained by him for some personal purpose or object.

21. The argument for the appellants is that by the grant of the 499 years' lease (Ex. 1) there remained no reversion in the plaintiff head lessor concerning the demised premises. There can be no question that the clause as to maintaining pillars of a certain width was for the benefit of the plaintiff's reversion in the land demised. Mr. Das has been driven to argue that the lease of 499 years which must be taken to be for all intents and purposes a permanent lease left no reversion in the plaintiff. But this argument generally speaking is contrary to all authority. The distinction between a conveyance in fee simple and a lease in perpetuity was pointed out by Sir Lawrence Jenkins in Kalli Das Ahiri v. Mon Mohini Dassee (1897) 24 Cal 440 at p. 447, a distinction which was recognised by their Lordships of the Judicial Committee in Abhiram Goswami v. Sham Charan Nandi (1909) 36 Cal 1003 where their Lordships expressed themselves thus:

Sir Robert Finlay in his able argument for the respondents contended that a mokarari lease is tantamount to a conveyance in fee simple, and that the lessee must therefore be treated as a purchaser within the meaning of the Limitation Act. But the distinction between the two transactions had been well pointed out by Jenkins, J. in his judgment in Kalli Das Ahiri v. Mon Mohini Dassee (1897) 24 Cal 440 at p. 447: 'Because at the present day,' says the learned Judge, 'a conveyance in fee simple leaves nothing in the grantor, it does not follow that a lease in perpetuity here has any such result .... The law of this country does undoubtedly allow of a lease in perpetuity ... a man who being owner of land, grants a lease in perpetuity carves a subordinate interest out of his own, and does not annihilate his own interest. This result is to be inferred by the use of the word lease, which implies an interest still remaining in the lessor.' He held, therefore, that whether the Transfer of Property Act applied or not, such a lease is forfeitable, notwithstanding that it is permanent. In this opinion their Lordships concur, and it follows that they are unable to give to the Limitation Act wider interpretation adopted by the High Court and to treat the lessee as a purchaser under Article 134 of the Act. The purchaser must be the purchaser of an absolute title.

22. The reversion in the Kajora Colliery still remained in the plaintiff and to protect that, the covenant that the galleries and pillars of certain width must be kept was entered into. The only case which supports the contention of the appellant, that there is no reversion in the plaintiff, is the decision of Beaumont, C.J. in Keshav Lal v. Magan Lal 1934 Bom 134, but we are not prepared to follow it as it is contrary to the decision of Sir Lawrence Jenkins in Kalli Das Ahiri v. Mon Mohini Dassee (1897) 24 Cal 440, which was approved by the Privy Council in Abhiram Goswami v. Sham Charan Nandi (1909) 36 Cal 1003. It was argued that the property for the benefit of which restrictive covenant was entered into must be independent of and outside the demised premises. But the fallacy in this argument is that it disregards the true legal position, viz. that what passes by the lease is not the entire property, for a lease is not an out and out sale so that nothing remains in the lessor. All that is necessary is, in order that a covenant may be a restrictive covenant, that the covenant must be for the benefit of some ascertainable property retained by the vendor. As was pointed out by Romer, L.J. in Form by v. Barker (1903) 2 Ch 539 at p. 554:

If restrictive covenants are entered into with a covenantee, not in respect of or concerning any ascertainable property belonging to him or in which he is interested, then the covenant must be regarded, so far as he is concerned, as a personal covenant-that is as one obtained by him for some personal purpose or object.

23. Here the covenant was made for protecting the reversion in the lessor. If for instance, there was a forfeiture by reason, say of breach of the covenant for rent, the lease was liable to forfeiture and leasehold property may in such circumstances revert to the lessor (the plaintiff). It was not the intention that the pillars and galleries should be worked except in the manner specified without the consent of the plaintiff. In this connection reference may be made to para. 17 of the lease (p. 8, Book B) about the official translation of which there was some dispute and which correctly translated would be in these terms:

When the cutting of the coal in all the land settled, on keeping pillars regularly is finished I shall be able to cut the pillars after informing you and presenting a petition to you and after making arrangements for the support of the roof.

24. It has been argued for the respondent that apart from the reversion being in the plaintiff for the protection of which the covenant was entered into it was also entered into for the protection of the surface which belongs to the plaintiff and the covenant is for that reason also a restrictive covenant in the sense stated by the authorities previously referred to. In reply the appellant has argued that the covenant was for the protection of the roof which is distinct from the surface and as the roof is a part of the demised premises the covenant is not a restrictive one. The argument of the respondent, however, seems to be plausible one and apart from the question of the protection of the reversion, the protection of the surface which belongs to the respondent might have been intended when the covenant to keep pillars of certain width was entered into. For the aforesaid reasons we are of opinion that the defendants 5 to 9 treating them as sub-lessees, i.e., treating their mortgage being by way of sub-demise are bound by the covenant and remedy by injunction was undoubtedly available against them apart from the principle of restrictive covenant on the principle laid down in the following passage in the judgment of Knight Bruce, L.J. in De Mattos v. Gibson (1858) 4 De G & J 276:

Reason and justice seem to prescribe that at least as a general rule where a man by gift or purchase, acquires property from another, with knowledge of a previous contract, lawfully and for valuable consideration made by him with a third person to use and employ the property for a particular purpose in a specified manner, the acquirer shall not to the material damage of the third person, in opposition to the contract and inconsistently with it, use and employ the property in a manner not allowable to the giver or seller.

25. A principle, not without analogy, had previously been laid down in reference to the user of land. This principle enunciated as aforesaid in De Mattos v. Gibson (14) has been approved by their Lordships of the Judicial Committee in Lord Strathcona Ltd. v. Dominion Coal Co. Ltd. (1926) A C 108 at p. 117. The question is that if the remedy by injunction was available as laid down in Lord Strathcona's case (7), even where the covenant broken was not a restrictive one, whether in the absence of a breach of restrictive covenant, remedy by way of damages would be available against a purchaser with notice of the covenants. It would seem that remedy by way of damages would be available against the contracting party only and not his assigns: see Lord Strathcona's case (7). But in the case of breach of restrictive covenant remedy by way of injunction as well as damages would be available against the assignee. In the present case if there was secret working of the mine and the respondent was not allowed access to the working as by the terms of the lease they were entitled to till a year and a half after the institution of the suit and if these circustances are established as to which we shall revert later, a Court of equity can surely award damages in lieu of injunction and in addition to an injunction: see Leeds Industrial Co-oparative Society v. Slack (1924) A C 851.

26. There is another point of view from which the covenant regarding the keeping of pillars may have to be approached. It would seem from a possible construction of the provisions of Clause 6 read with Clause 17 of the lease that it was not intended to pass the property in the pillars of the dimensions implied from Clause 6. The vernacular of Clause 17 was read to us and its correct translation has been given before. It would seem that square pillars of certain dimensions were intended to be kept for the protection of the roof. The words 'your property' in Clause 6 read with correct translation of Clause 17 indicate that property in pillars did not pass and was excepted from the demise. It is a possible construction in any event. The clause that permission was intended to be taken (although not definitely expressed) in cutting pillars after 'all the land on regularly keeping pillars is worked out ' would suggest that property in the pillars remained in the lessor. As against this construction it is pointed out for the appellants that the pillars were not exempted from the demise and that what passed were the underground rights in the entire 181 bighas which included the pillars, and the lease in this case was sought to be distinguished from the lease in Taylor v. Mostyn (1883) 23 Ch D 583 to which I drew the attention of learned Counsel for the appellant. According to Clause 6, the pillars of certain width had to be kept for the protection of the roof and then follows Clause 17 which according to the correct translation agreed to by the learned advocates on both sides is in these terms:

When the cutting of all coal in all the land settled on keeping proper pillars regularly is finished I will be able to cut the pillars after informing you and presenting a petition to you and after making arrangements for the support of the roof.

27. It is argued that the pillars are demised but that the lessee was prevented from cutting it without satisfying a condition precedent, viz., without informing the lessor and without presenting a written petition and without making proper arrangement for the protection of the roof. Although it is not so expressly mentioned the object of presenting a petition was to obtain the consent of the plaintiff (the lessor) of Ex.1. It is true that in Taylor v. Mostyn (1883) 23 Ch D 583 the covenant on the part of the lessees was to the effect

that they shall and will at the end of or sooner determination of this demise leave sufficient walls or pillars for the support of the roof and for preventing of thrusts and creeps and not remove the same without the consent in writing of the said Sir Thomas Mostyn, his heirs and assigns for that purpose had and obtained;

and this clause was treated as an exception and it was held both by Bacon V. C. and the Court of appeal that the pillars were exempted from the demise: see pp. 599 and 624 of Taylor v. Mostyn (1883) 23 Ch D 583 respectively. As the construction which we put on the words of Clause 6 and 17 as indicated above is one of a doubtful character we do not propose to rest our decision on the ground that pillars were exempted from demise; but this in no way affects our view that the covenant in Clause 6 is a restrictive one and binds the mortgagee sub-lessees (defendants 5 to 9) and that action for damages lie against them. It is next argued on this part of the case that the doctrine of restrictive covenants is embodied in Section 40, T. P. Act, and as the essence of a Code is to be exhaustive and whole law on the subject must be taken to be crystallized in Section 40 and any covenant that does not fall with-in Section 40 is not a restrictive covenant so as to bind sub lessees.

28. For the respondent it has been contended that Section 40 has no application to lessor and lessee as the rights of lessor and lessee occur in a different Chapters and are governed by different provisions: perhaps the broad contention of the respondent cannot be sustained. As I understand it the law in India closely follows the law in England with regard to restrictive covenants. In Mathewson v. Ram Kanai Singh (1909) 36 Cal 675 reference was made to the case in Dyson v. Forster (1909) A C 98 and it was held that a covenant is annexed to land if it binds the land in its inception or affects the nature, value and quality of the land. In the same case it was said that the principle of restrictive covenants as enunciated in Rogers v. Hosegood (1900) 2 Ch 388 as between vendor and purchaser was equally applicable to the case of lessor and lessee. The Rt. Hon'ble late Sir Dinshaw Mulla in his commentary on the Transfer of Property notices under his notes to Section 40 that the case law in India as to restrictive covenants is meagre and it has not yet been decided whether a restrictive covenant would be binding on trespasser as in In Re: Nisbet & Potta's Contract (1906) 1 Ch 386 or a more occupier as in Mander v. Fakke (1891) 2 Ch 554. The words 'immoveable property' are not defined in the Transfer of Property Act. They are said to include timber, standing crops. We have to look for its definition to the General Clauses Act which again is not exhaustive. The definition is as follows:

Immoveable property shall include land, benefits to arise out of land and things attached to earth.

29. A benefit to arise out of land is interest in land and is, therefore, immoveable property. The question is whether plaintiff in whom there is reversion in the colliery after the expiration of the term of 499 years or treating the lease (Ex. 1) as permanent lease in whom there is a reversion is said to possess his own immoveable property and if for the more beneficial enjoyment of the reversion a negative stipulation is made, I do not see any reason why the principle of Section 40 should not be applied to the present case. We have given longer time to the consideration of this question of law although this point was never sifted in the Court below in view of the admission made by the appellant's pleader undertaking all liability in damages for the breach if such breach was established. The first contention of the appellants that in law damages are not recoverable from the appellants (Dagas) for breach of covenants regarding the keeping of pillars on the ground that there is no privity of contract between them and the plaintiff must for the reasons aforesaid fail.

30. The second ground taken on behalf of the appellants is that the plaintiff claimed no damages for breach of covenant regarding keeping of pillars and galleries and the decree awarded by the Subordinate Judge on this head is contrary to the pleadings in this case. In support of this we were referred to the plaint (Vol. A), p. 107. Paras 5 to 8 refer to various breaches of covenants. Para. 7 refers to the particular breach of covenant regarding keeping of pillars and galleries. Reference is made in particular to the following sentence in para. 7 of the plaint:

In consequence of this there is a likelihood of great damage being done to the coal mine,

and it is argued that damages claimed by plaintiff would be damages which would be sustained by them in future. It is to be noticed however that the plaintiff states in the said para. 7 that plaintiff was not allowed to go underground and has not been able to know the actual state of things in the mine. The plaintiffs claim damages both for breach of covenants and trespass. An issue was joined on the question of liability of defendants 5 to 9 regarding damages for breach of covenants (see issue 5) on the question as to whether the alleged breaches of covenants on the part of defendants 5 to 9 were done with the knowledge and consent of the plaintiffs and if so whether there was waiver or acquiescence and there was no issue on the question of liability of defendants 5 to 9 as to damages which was admitted. See, p. 36, Vol. A, order sheet. See also the written statement of the defendants para. 17, p. 124, Vol. A, the question of waiver by the plaintiff is suggested. There is no substance in this ground, which must fail. It is also to be mentioned in fairness to learned Counsel for the appellant that although this point was taken in the opening it was not eventually persisted in.

31. The third ground taken is that the evidence does not show that there has been any breach of covenants by the appellants (Dagas, defendants 5 to 9). It is argued with great force that there is no evidence that breaches of covenants regarding pillars and galleries took place after the Dagas entered into possession in December 1926. On the other hand it is submitted that the plan Ex. 4 (i), which was adduced in evidence on behalf of the plaintiff, is conclusive on the point that all the breaches of covenant regarding pillars and galleries took place before the Dagas (appellants) took possession. Ex. 4 (i) is map No. 5 in the book of maps. It is pointed out that the dotted red lines show the workings before the Dagas took possession and all breaches are on the eastern side. It is argued that by the preliminary judgment which determined the liability of the appellants this plan was apparently accepted by the Subordinate Judge, for there is nothing in the preliminary judgment to show that the plan Ex. 4 (i) was not a correct plan and the Subordinate Judge passing the final decree had no authority to reject this plan from evidence.

32. In order to decide on the soundness of this contention a few facts and dates have to be kept in view. Sometime in July 1930 the plaintiff applied for a direction on the defendants to dewater the mine. On 8th July 1930 the Subordinate Judge appointed a receiver to dewater the mine. Either on 25th or 31st October 1930, the receiver obtained possession of the mine. On 21st November 1930, the receiver applied for directions on the defendants to make over plans and papers relating to the property. On 10th December 1930, defendant 10 produced the working plan Ex. 4 (i). Then a very important event happened. On 29th January 1931 plaintiff applied for directions on the receiver to work the mine. Defendant 10, Vithal Das, objected; on 11th April 1931, the appellants applied for appointment of experts to examine the mine. On 22nd June 1931 two experts, Mr. Samson and Mr. Ram Gopal Chatterjee, were appointed to examine the mine; on 30th June 1931 a writ was issued to the commissioner: see Vol. A, p. 200. The commissioners submitted a report by which they challenged the accuracy of the plan Ex. 4 (i). The commissioners' report has been subjected to considerable criticism by the learned Counsel for appellants and it is broadly contended that the commissioners' report should be brushed aside as they never conducted an underground survey.

33. The scope of the commissioners' enquiry was extended by an order dated 6th July 1931 (Vol. A, p. 26).' The commissioners commenced work on 3rd August 1931 and continued the work till 21st September 1931 and they attached two sketch maps 1 and 2 to their report. It is said that the commissioners never made an underground survey but as they had the map Ex. 4 (i) with them they merely examined the roof--falls and it is submitted that the defendants plan Ex. 4 (i) could not be verified at all without drawing a map to scale and all that the commissioners did was to note the roof-falls in the enlarged plan [enlargement of plan Ex. 4 (i)]. Here a little correction must be made in the printed map 5, Ex. 4 (i). The printed map shows working up to 1929-in the original it is up to 27th June 1928. It is to be noticed that during the hearing plaintiff produced Ex. 4 (h) which was filed by the defendants to the Chief Inspector of Mines under the Mines Regulation, Ch. (i). Rules 10, and 12 of the Regulation and the commissioner relied on the same. The appellants strongly object to the reception of this map in evidence as it was made for another purpose. The first exception taken to the Commissioners' report, viz. that Ex. 4 (i) plan could not be verified as the Commissioners never made an underground survey must fail seeing that the Commissioners in para. 5 of their report, Vol. A, p. 213 say:

We held an investigation after giving due notice to the parties and made a thorough inspection of all the underground working accompanied by the representatives of the parties.

34. The Commissioners were never examined on this point although there were ample opportunities of examining them as we shall show hereafter. It is said that it was physically 'impossible for the commissioners to measure the galleries in the affected area of 15 bighas within 16 hours and 45 minutes which was the time occupied according to the time noted in inspection book of the commissioners regarding the real Kajora Colliery (see pp. 208 210 Book A). In these sittings they examined some witnesses. It is difficult to give effect to this objection seeing that neither of the commissioners were asked about it and learned Counsel was consequently driven to argue that the Court did not give the appellants any opportunity to examine the commissioners. If this point is made out there may be necessity for a remand, but the following facts will make it abundantly clear that the appellants are themselves to blame for not availing themselves of the opportunity to examine the commissioners. The report of the commissioners was filed on 20th September 1931. The appellants filed an application on 22nd April 1932, (p. 244), Book A, stating that the matter of the commission need not be pursued specially at that stage. On this the Court passed order No. 162, (see p. 35, Book A) postponing at the instance of the appellants the considerations of the objections to the commissioners' report. On 30th April 1934 Mr. Samson was in India and no attempt was made to get his evidence. On 5th July 1934 the appellants applied for issue of a summons on the other commissioner (Book A, p. 469) Mr. R.G. Chatterjee, and on 10th August 1934 the defendants put in a petition to examine the other commissioner after Mr. Samson had left for England: see p. 470, Book A, and we agree with the opinion of the Subordinate Judge that defendants 5 to 9 did not really want to examine either of the commissioners and with the reasons on which the said opinion was founded.. The appellant argues that it was the duty of the Court to tell Mr. Chatterjee on 19th July 1934 that he was to attend on 9th August 1934. We do not agree with him. It was the duty of the appellants to take steps under the Code to enforce attendance of Mr. Chatterjee when he did not turn up on the 9th August.

35. The second exception to the commissioners' report is that they should not have relied on Ex. 4 (h), a plan submitted by the defendants-appellants to the Inspector of Mines under the Mines Regulation as it was prepared for a different purpose and its accuracy cannot be presumed and in support of this view reliance is placed on the case John Kerr v. Nuzzur Mahomed (1865) 2 W R 28 (P C) at p. 29, and the case in Preo Nath Mozumdar v. Durga Tarini Ghose (1911) 14 C L J 578 at p. 582. It is said that for the purpose of Mines Regulation Rule 12, Ch. (i), it was not necessary to show the correct working on the eastern side. The mine authorities were not concerned with the question as to whether there was depillaring or not or whether the galleries were driven wide. The report of the commissioners, it may be stated in passing, was not attacked on the ground that it was a dishonest report. So far as the statements of fact were concerned learned Counsel for the appellants said he was prepared to accept them, e.g., the fact that roof stones have been exposed and collapsed, but what is challenged is the findings of the commissioners that these devastating acts were committed after the appellants came on the scene. The respondents wanted to prove depillaring and for that purpose they would rely on Ex. 4 (i) but they are not prepared to accept the date of depillaring as given in Ex. 4 (i), viz. all the depillaring was done before 30th December 1926, the crucial date as the defendants came on the scene after that date. It is argued that it is not permissible to dissect the admission in plan Ex. (4) (i) in that way. From this digression we proceed to deal with the objection as to the admissibility of Ex. 4 (h) on the ground that it was made for a different purpose. We are not impressed by the reasoning on which the objection is founded. Surely the Mining Regulations (Reg. 4 of 1923) require that the galleries would be of a certain width and the pillars must be of certain dimensions. It must follow that the plan should show all the galleries and pillars. In this connexion the evidence of Golokeswar p. 286, (Book A) is important. He states this:

I know the real Kajora Colliery. A letter for permission to work the mine underground under a Local Board Road together with a plan thereof was sent from the real Kajora Colliery to the Mines Board at Dhanbad. Aswini Kumar Banerjee was at the time the surveyor in the colliery. He signed the plan in my presence. This was traced in my presence by Aswini Babu from the original plan.

36. Then follows a note by the Subordinate Judge showing how the copy produced from the Mining Office was marked as Ex. (4) (h). The note is as follows: [The original plan was called for from defendants 5 to 9 but not produced. The copy produced from the Mining Office on being called for by the plaintiffs is marked as an exhibit against defendants 2 to 10 only as Ex. 4 (h) and not against others after objection]. The witness adds:

The plan from which this was copied was the working plan of the company;

and the deposition of Narendra, the surveyor of defendant 10, would show

that there was a working plan of the real Kajora Colliery when I worked (in September 1927). In the plan the galleries shown by me were duly shown (p. 282, Book A);

and again at p. 283, Book A, this witness states at line 26:

This plan produced from the office of the Chief Inspector of Mines (shown) is a tracing from the original working plan referred to by me; only some additional work done after September 1927 has been shown in it.

37. The deposition of these two witnesses can leave no doubt that the mine office plan was a true representation of the workings to January 1928 and it is difficult to understand how Ex. 4 (h) can be rejected from evidence on the ground that it was made for a different purpose. In our opinion the map Ex. 4 (h) would be a perfectly relevant document on the workings of the mine up to January 1928 and has been properly admitted in evidence. The admission of this map in evidence has this important effect that it discredits Ex. (4) (i), the map No. 5, to a large extent and justified the view of the Subordinate Judge that if not a fabrication it does not correctly represent the working of the mine with reference to the dates of the workings in particular. It is a matter of very great significance that Aswini under whose supervision the working plan, of which Ex. 4 (h) is a tracing, was prepared was not examined to prove that Ex. 4 (h) was incorrect although he was cited as a witness by the defendants and was present in Court: see p. 248 (Book A). For the reason given, we must overrule the objection to the reports of the Commissioners on the ground that the Commissioners should not have compared their own plan with Ex. 4 (h) as the same was inadmissible. It may also be mentioned in this connexion that under Section 35 of the Mines Act 4 of 1923, that Act prescribes a punishment for not preparing a plan. It is very unlikely that in such circumstances an incorrect plan would be submitted. We agree therefore with the Subordinate Judge in the preliminary judgment that it is clear from a comparison of Ex. 4 (h) and Ex. 4 (i) that almost all the breaches complained of happened after the date of the mine office plan Ex. 4 (h), i.e. January 1928, and before the last date of working as shown in second plan Ex. 4 (i), i.e. November 1928, i.e. at the time of the occupation of the mine by defendants 5 to 9.

38. The second report of the Commissioner dated 7th July 1933 on the question of damages in so far as it has been adopted in the final judgment of the Subordinate Judge dated 5th October 1934 has been attacked in this appeal. It appears that out of the damaged area of 15 bighas referred to in the first report of the Commissioners 5-1/4 bighas have been sealed by the receiver. The Commissioners found that the plaintiff sustained a loss of 8,800 tons of steam coal and 2,200 tons of Slack Coal for permanently isolating 5 bighas which was found unworkable. For the appellants it has been argued that the Subordinate Judge should have exonerated defendants 5 to 9 from liability in damages in respect of the loss of the 5 bighas as the sealing of 5 bighas was not due to any breach of covenant by defendants 5 to 9 but was an act of God and an inevitable accident. No foundation has been laid for sustaining this ground. The report (second) of the Commissioners dated 7th July 1933 point out that an area has been sealed off to prevent fire and indicated the loss which the plaintiff had to sustain by the sealing of the 5 bighas: see Book A, p. 404. On 24th July 1933 the defendants-appellants took as many as 21 exceptions to the report, and none of the exceptions refers to exemption from liability for loss due to sealing off of the 5 bighas on the ground that the loss was due to inevitable accident, and in the grounds of appeal to this Court we find no such ground. We do not think it would be right to allow this objection to be taken at this stage as the matter depends on evidence. On the other hand we are rather inclined to think that the risk of a fire was due to depillaring by defendants 5 to 9.

39. The next ground urged on behalf of the appellant is one of substance. If the plaintiff is entitled to price of coal the defendants are entitled to deduction of Rs. 2 per cent per ton for severing the coal and bringing it to the pit's mouth, and the commissioners have recommended a deduction of Rs. 2 per ton. The Subordinate Judge, while conceding that in assessing damages all expenses incurred by defendants for raising coal should be deducted from the whole value of the coal, felt himself bound by the preliminary judgment and held that he could not allow any deduction on account of costs for bringing it to the pit's mouth and for severing the coal. The learned Counsel for the appellant has contended that this view is opposed to a recent decision of the Judicial Committee in Currimbhoy v. L.A. Creet 1933 P C 29 and as the present appeal is directed both against the preliminary and final judgment there is nothing to prevent us in giving the relief on this head asked for by the defendant. The rule laid down in Currimbhoy v. L.A. Creet 1933 P C 29, is this:

As against the gross value of the coal there will be charged all expenses properly incurred by the defendants in getting the coal, bringing it to Bank and marketing it, including any rents or royalties so incurred; if these are not ascertainable the Court will fix a proper rate to be deducted from the gross value in respect of these matters. A deduction from the gross value will also be allowed, to be leased on a reasonable rate of depreciation on any capital expenditure by the defendants in respect of development of the mines, structures above and below ground, boilers and machinery properly incurred for colliery purposes.

40. The commissioners have taken all this into account but have not allowed development cost or interest on capital, but have allowed 6 annas per ton for depreciation and Calcutta charges. We think that a deduction of Rs. 2 per ton should be made from the price of coal as recommended by the Commissioners. Mr. Brojo Lal Chakravarti appearing for the respondents has contended that this rule of making allowances for bringing the coal to bank and severing the coal, etc., was made in Currimbhoy's case (29) for there the party made liable was working under a colour of title and in the bona fide belief in the exercise of a right; but if a man causes damage without a right, in that case he is allowed only a deduction for bringing coal up to the pit's mouth.

41. It is complained that in the present case the defendants acted in a very high-handed and fraudulent manner and their acts have been described as acts of vandalism by the Subordinate Judge below and in these circumstances no deductions should be allowed, and we were referred to the decision of the Judicial Committee in Bulli Coal Mining Co. v. Osborne (1899) A C 351, where the facts were that the appellants had furtively, for a series of years, taken the respondents' coal by means of a wilful and secret underground trespass and no laches was attributable to the respondents in not discovering the existence of wrongful workings by the appellants, and it was held in those circumstances that the respondents were entitled to recover from the appellants the market value of all the coal worked and gotten by them from the respondents' land, no allowance being made for the cost of working. The present is not a case of that kind for defendants 5 to 9 were, at least for a period before the notice to quit on the ground of forfeiture, working the colliery on a legal title as mortgagees from the lessees. There were covenants that inspection would be allowed and although the correspondence shows that defendants 5 to 9 had refused the plaintiff proper facilities for inspection, the present case does not stand on the same footing as the Bulli Coal Mining case (30) cited above. As the commissioners have proceeded on the evidence of Sakti Pada Bhattacharya, plaintiff's agent, see Book A, p. 394, line 10 et seq, we think a deduction should be made on the basis of Rs. 2 per ton. It has been conceded by Mr. Chakravarti that from the quantity of 25,338 tons, there would be a deduction of 6,490 tons upon which royalty was allowed so that the profit must be calculated on the basis of the steam coal and dust coal being in the proportion of 80 per cent and 20 per cent. To this extent the decree must be varied on this head. The result is that the decree of the Subordinate Judge on this head of damages must be varied in this way. On the head of damages, for 25,338 tons of coal raised after December 1927 up to the date of suit the Subordinate Judge has awarded a decree to plaintiff for Rs. 80,449.8-0 (see p. 487, Book-A). This figure was arrived at on the basis indicated in the 2nd and 3rd report of the commissioners (see pp. 405 and 458, Book-A).

For 20,271 tons steam coal at Rs. 3-10-0 per ton ... Rs. 73,482-6-05,067 tons Slack coal at Re. 1-6-0 per ton ... ' 6,967-2-0---------- Rs. 80,449-8-0

42. According to the concession made by Mr. Brojo Lal Chakravarty the price of 6,490 tons of steam and slack coal in the proportion of 80 to 20 per cent must be deducted, i.e. the price of 5,192 tons of steam at Rs. 3-10-0 per ton and of 1,298 tons of slack coal at Re. 1-6-0 per ton will have to be deducted.

The aggregate of the price comes to Rs. 20,606-6-0 deducting that from ... ... Rs. 80,449-8-0

' 20,606-6-0

-----------

The price of coal comes to Rs. 59,843-2-0

43. From this sum of Rs. 59,843-2-0 according to the commissioners a sum of Rs. 2 per ton must be deducted for the cost of cutting, hauling, etc. on (25,338-6,490 tons) 19,048 tons which amount comes to Rs. 38,096. For the reasons already given disagreeing with the Subordinate Judge we are of opinion in view of the decision of the Judicial Committee in Currimbhoy v. L. A. Creet 1933 P C 29 that the defendants are entitled so far as the price of coal is concerned to a deduction of Rs. 38,096, i.e. their liability on this head of damages would be Rs. 59,843-2-0 less Rs. 38,096, i.e. Rs. 21,747-2-0. At p. 487 of the judgment at Book-A for the figure Rs. 80,449-8-0 under the head of account of damages on account of coal raised after December 1927 up to date of suit, the figure Rs. 21,747-2-0 will have to be substituted. The liability of the Daga defendants under this head is reduced from Rs. 80,449 to Rs. 21,747-2-0. Although the principle in Bulli Coal Mining Co. v. Osborne (1899) A C 351, does not apply to the taking of coal after December 1927 a distinction will have to be drawn when we are considering the question of damages for breach of covenant which has been assessed by the Commissioner and the Subordinate Judge to Rs. 50,001-4-0, a damage which has been the result of secret working of the pillars contrary to the covenant. No laches is attributable to the respondent in not discovering the secret working and in such circumstances we think that no deduction on the head of severing the coal etc. should be allowed.

44. The whole series of correspondence beginning on 13th August 1928 Ex. 2 (b), (p. 200, Book B), and ending with 19th September 1928, Ex. 2 (c), (p. 210, Book B), viz. letters Exs. 2 (b), 3 (e), 3 (d), 3 (f), 2 (e), 2 (d), 3 (j) and 2 (c) reveal the fact that the Daga defendants were putting off the inspection of the mine from day to day on some pretext and other and in the meantime were secretly working underground and unlawfully working the pillars with the result that 15 bighas of mine has become unworkable and has caused great loss to the plaintiff. With reference to such state of facts, the following observations of Lord Hatherby in Livingstones v. Raw Yards Coal Co. (1880) 5 A C 25 at p. 34, quoted in the Bulli Mining Co. case (30) ought to be usefully reproduced here in order to clear the ground as to the extent of the legal liability of the defendants-appellants on this head. There is no doubt, said his Lordships:

That if a man furtively and in bad faith robs his neighbour of property and, because it is underground, is probably not for some time detected the Court of Equity in this country will struggle or I would rather say will assert its authority to punish fraud by fixing the person with the value of the whole of the property which he has so furtively taken, and making him no allowance in respect of what he has done as would have been justly made to him if the parties had been working by agreement or if as in the present case they had been the one working and the other permitting the working through a mistake. The Courts have already made a wide distinction between that which is done'by the common error of both parties, and that which is done by fraud.

45. In the case before us the pillars were being worked out secretly contrary to the covenants. No one can deny that it is a fraud to rob the owner of the colliery of the pillars of coal contrary to the covenant resulting in portions of the mine being sealed. The respondent made several attempts to find out what the Dagas were doing and they were prevented from doing so. The shebaits, the earthly representatives of the plaintiff, who was the party defrauded by the robbing of the pillars remained in ignorance of the fraud without any fault of their own. As appears from the first report, Vol. A, p. 214, of the Commissioners, as also from the second report, see Vol. A, p. 483, the result of the depillaring has been that an area of 15 bighas has been damaged out of which 5 bighas have been sealed off altogether and the basis of the damages of Rs. 50,000 has been given at p. 483, Book A.

46. In Trotter v. Maclean (1880) 13 Ch D 574, there is an exhaustive discussion on the question as to what allowances are to be made to the defendant in taking the account. Accounts in actions of this character in the Court of Chancery have been directed on two footings; sometimes an allowance for the costs of severance or getting the coal has been made and sometimes it has not. In all cases an allowance has been made for the costs of bringing the coal to the bank. In Trotter v. Maclean (1880) 13 Ch D 574, there is an enumeration of cases which decide whether the milder or the harsher rule should be applied. The harsher rule has been applied where the Courts have found fraud: see Ecclesiastical Commissioners for England v. N. E. Ry. Co. (1877) 4 Ch D 845. It has been applied where the Court has said that the defendant has acted in a manner wholly unauthorized and unlawful: see Llynvi Co. v. Brogden (1871) 11 Equity 188. We find in this case the Act of the Daga defendants in depillaring contrary to covenant was wholly unauthorized and fraudulent and we think the harsher rule should be applied. The defendant would only be entitled to a deduction of bringing the coal to the Bank from the price of coal. There is hardly any evidence on this head and we have to proceed to some extent on guess. Sakti Pada Chakravarty at Book A, p. 394, was asked the question: 'What is the cost of hauling up the cost to the surface?' Answer: 'Cannot give the exact figure without calculation.' A deduction might be made at the rate of 4 annas per ton for steam coal and slack coal for the cost of carriage of the coal to the Bank. In place of Rs. 50,001 on this head there will be a deduction of 4 annas per ton. So at p. 483, Vol. A in place of 45,675-42,525 will have to be substituted on the basis of 12,600 tons at Rs. 3-10-0 less 4 annas per ton, and in lieu of Rs. 4,331-4-0 the figures Rs. 3,544-2-0 will have to be substituted, and in lieu of Rs. 50,001-4-0 the sum of Rs. 46,044-2-0 will have to be substituted. The respondent contended that on the evidence 1 anna 4 pies per ton might be allowed for bringing coal to pit's mouth. Although there is some evidence to that effect it is not decisive. We think 4 annas per ton might be allowed.

47. It has next been argued that the report of the Commissioners as to the amount of coal worked is wrong as the Commissioners have not acted on the raising reports which would show that the raisings during the material period were much below 25,538 tons. The Subordinate Judge has held that the defendants did not produce the real raising reports which were contained in a bound book and we agree with the Subordinate Judge that Ex. 7 was not the original despatch book of the colliery as is testified to by the witness of the plaintiff. Both the witnesses of the plaintiff state that the original despatch book of the colliery was a big bound book and had printed heading on each page. We have looked into Ex. 7 and we are not satisfied that the conclusion of the Subordinate Judge on this part of the case is wrong. Besides the raising book does not show local sales. It is argued by the appellant that it is idle to talk of forgery of Ex. 7 when forgery could be demonstrated in this case with reference to the railway books and mining books. It is said that the Court should have undertaken the duty of believing or not believing documentary evidence instead of leaving the same to the Commissioner and our attention has been drawn to the decision of the Judicial Committee in Ram Krishna Muraji v. Ratan Chand 1931 P C 136. The facts of the case, however, were very different. There an order was made by the High Court appointing a Commissioner to examine the books of business and report whether it was of a gambling nature and this was disapproved by their Lordships of the Judicial Committee and it was held that it was not a question which could safely be left to be so determined. Besides, the Subordinate Judge in the present case has considered the evidence, and after considering them he has concurred with the findings of the commissioners: see Book A, p. 484 (1).

48. This ground appears, when closely examined to be of no substance and must fail. It is next argued that the plaintiff is not entitled to any damage for trespass after notice to quit had been given as under Clause (24) of the Kabuliyat, see p. 9, Vol. B, the plaintiff was not entitled to reenter until the settlement was cancelled with the help of the Court and much argument was spent on the provision of Section 111, T. P. Act. In the first place this point was not taken in the Court below, no issue was joined on it, defendants 5 to 9 admitted liability in damages provided that the damages occurred during their occupation were established. This point was not taken in the grounds of appeal. We do not think in these circumstances we should allow this point to be taken. This argument was not submitted to the Court below and it would not be right to allow this point to be raised for the first time in appeal. The next point taken is that the Subordinate Judge should have awarded no interest on damages. The definition of 'mesne profits' in the Civil Procedure Code includes interest on such profits and we see no reason why interest on such profits should not be given. The preliminary decree directed that the plaintiffs will get a decree against defendants 5 to 9 for the price of all coal raised by them during the period and interest thereon after date of notice (14th September 1928) up to the date of suit for which period they are trespassers: see p. 341, Book A. In the final judgment at p. 484, Book A, the Judge expresses himself thus:

I again quote the following from the judgment of the Court to show what the intention of the Court was if it were not possible to ascertain separately the quality of coal mined after the date of notice and that raised after January 1928. If however it cannot be ascertained how much coal was raised after January 1928 and the date of notice (14th September 1928) then the price of coal raised after January 1928 will have to be allowed: see p. 333 of the preliminary judgment.

49. In passing the final decree the Subordinate Judge said: 'The plaintiffs are entitled to interest on price of coal as directed in the said judgment and decree.' Interest has therefore been rightly allowed from date of suit up to the date of final judgment. Another point has been taken that the Court both by preliminary decree and final decree has awarded the costs of dewatering the mines, viz., Rs. 16,834-14-3 as against defendants 5 to 9: see Vol. A, p. 344; also Vol. A, p. 490. It is contended that this direction is wrong as it has not been established that mines have been flooded as the result of depillaring. This ground has been specifically taken at p. 359 ground 43. We think the Court is wrong in giving the direction in the preliminary judgment and final judgment regarding Rs. 16,834-14-3 which must be deleted as there is no evidence that the flooding of the mines was the result of depillaring by the defendants. The result is that the final decree of the Subordinate Judge as against defendants 5 to 9,appellants, must be varied in this way: The plaintiffs will have a decree against the Daga defendants for

Rs. 21,747-2-0 On account of coal raised after December 1927 up to date of suit after allowing for

deduction of severing coal, etc.

Rs. 46,044-2-0 On account of the loss of coal from the damaged area of 15 bighas after allowing

deductions.

--------------

Rs. 67,791-4-0

50. To this will have to be added interest at 6 per cent per annum from date of suit up to the date of final decree, i.e. 5th October 1934, and to this will have to be added the cost of logs and timberings, Rs. 6,100 + Rs. 1,800 = Rs. 7,900. This aggregate sum will be the decretal amount against defendants 5 to 9. The decretal amount will bear interest at 6 per cent per annum until realisation from date of final decree. A decree will be drawn up on the lines indicated in the judgment. The appeal is partly allowed. Costs will be costs in proportion throughout.

Patterson, J.

51. I agree.


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