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1918 Supreme(SC) 69
PRIVY COUNCIL [ON APPEAL FROM THEEAST INDIES]
LORD BUCK MASTER, LORD DUNEDIN, AND LORD WRENBURY.
RAJA DURGA PRASHAD SINGH - Appellant
Versus
TATA IRON AND STEEL COMPANY, LIMITED - Respondents
On Appeal from the High Court in Bengal.
Decided On : July 26, 1918.
Solicitor for appellant: E. Dalgado.
Solicitors for respondents: Morgan, Price & Co.
A right to surrender a lease by notice is not restricted to specific time periods unless expressly stated. If an authorized manager requests a formal deed of surrender, the requirement to pay outstanding dues is shifted to the date of the deed's execution.
Headnote:(A) Mining Leases - Surrender and Determination - Construction of notice period - Where a lease provides a right to surrender by giving six months' written notice, and the terms regarding the calculation of royalties are obscure, the right to surrender cannot be limited to a specific period (such as the end of a year) unless expressly provided for in the lease.
(B) Condition Precedent to Surrender - Payment of Dues - Where a lease stipulates that a lessee is not entitled to surrender so long as rent or royalty remains unpaid, and the lessor's manager requests the execution of a formal deed of surrender, the obligation to pay the outstanding amount is transferred to the date when the surrender deed is executed and delivered.
(C) Authority of Agent - A manager authorized to carry out the directions of the principal regarding the administration of an estate has the authority to make reasonable arrangements for the implementation of a surrender notice, including the timing of payment of dues.
(D) Estoppel - Estoppel occurs when a party by conduct or language prevents themselves from asserting the true facts on which they would otherwise be entitled to rely; it does not apply where the party was not prevented from asserting the truth but the transaction was governed by the authority of an agent.
Facts of the case:
A lessee of mining rights sought to recover royalties under two mining leases. The lessee contended that the leases had been determined by giving six months' written notice of relinquishment. The lessor's manager requested the lessee to execute a formal deed of surrender and stated that all dues must be tendered along with the instrument for acceptance. A dispute arose when the lessor later claimed the relinquishment was invalid because the notice did not expire at the end of the year and the dues were not paid before the notice expired.
Findings of Court:
The court found that the notice was validly given as there was nothing in the lease to limit the right to surrender to a definite period. The requirement to pay dues before surrender was satisfied by the manager's request for a formal deed, which shifted the payment date to the execution of the deed. The manager acted within his general authority to carry out the lessor's directions.
Issues: Whether the notice of surrender was valid despite not expiring at the end of the year, and whether the failure to pay royalties prior to the expiration of the notice period invalidated the surrender.
Ratio Decidendi: The court ruled that a general right to surrender by notice should not be restricted by implied time limits. When a manager authorized to implement a surrender requests a formal deed, the payment of outstanding dues becomes due upon the execution of that deed, and the operation of the surrender takes effect from the date the notice expired, regardless of when the deed is executed.
Result: Appeal dismissed with costs.
Legal Category Hierarchy
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property law
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leases
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mining leases
- surrender by notice
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mining leases
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leases
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contract law
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agency
- authority of agent
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agency
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equity
- estoppel
Judgement
Appeal from a judgment and decree of the High Court (February 22, 1916) reversing a decree of the Subordinate Judge of Peerulia.
The appellant sued the respondents to recover royalties under two mining leases; the respondents pleaded that the leases had been determined.
The material terms of the leases and the relevant facts appear from the judgment of their Lordships.
The Subordinate Judge made a decree for the amount claimed; that decree was set aside by the High Court.
1918. June 21, 24. Upjohn K.C., De Gruyther K.C., and Parikh for the appellant. Upon the true construction of the leases notice could only be given under clause 9 to expire at the end of a year or half-year. In Bridges v. Pott (( 1864) 17 C. B. (N.S.) 314.), relied on in the High Court, the document was an executory agreement, and its terms materially differed from those of the leases. Further, it was a condition precedent to a surrender under the clause that the sum due should be paid on or before the expiration of the notice Grey v. Friar . (( 1854) 4 H. L. C. 565.) The operation of the notice was not merely postponed until payment. The facts do not show a waiver ; the appellants manager had no authority to waive performance of the condition.
[Their Lordships did not require to hear the respondents counsel as to the time at which a notice under clause 9 could be given.]
P. O. Lawrence K.C., Dunne K.C., and Kenworthy Brown for the respondents. The payment had not to be made when the notice was given ; at that date it was impossible to calculate the amount payable. The two months grace given by clause 3 applies to the payment required by clause 9. But even if payment was a condition precedent to the surrender, the date of payment was postponed by the request for a deed. The conduct of the manager, and of the appellant himself in entering into negotiations through his solicitors, amounted to a waiver. The respondents were led to believe that payment at the date when the notice expired was not insisted on; but for that they would have given a fresh notice. The appellants manager had implied authority in the matter Indian Contract Act, 1872, ss. 186, 229, 237.
Upjohn K.C. replied.
July 26. The judgment of their Lordships was delivered by
LORD BUCKMASTER. The appellant is the heir and legal representative of Raja Sri Sri Durga Prashad Singh, the plaintiff in the suit out of which this appeal has arisen. The proceedings were instituted to recover from the respondents the sum of Rs.26,237, being the alleged arrears of royalties due under two mining leases granted by the Raja to the respondents, and dated respectively March 4, 1908, and September 29, 1908. The defence to the claim was that the leases had been duly determined by notice, and it is this question, and this alone, which arises for consideration upon the present appeal, the High Court of Judicature in Bengal having, in reversal of the judgment of the Subordinate Judge, dismissed the action.
So far as the points to be determined are concerned, the leases may be regarded as identical, the variations in date, in the royalties payable, and the period allowed before payment begins being the only differences between the two ; as will appear in the course of this judgment, these differences are immaterial to the present dispute. Both leases appear to have been in the vernacular, and the obscurity of their terms is faithfully reflected in the translation.
The lease of March 4, 1908, is the one accepted by their Lordships for the purpose of examining the clauses that bear upon the dispute. By it a grant was made by the Raja to the respondent company of coal, land, and mining rights in certain mauzas belonging to the ancestral zamindari of the Raja of Pargana Jheria for a term of 999 years. By clause 1 certain royalties were fixed for each ton of coal, and by clause 2 it was provided that the royalties mentioned should be payable quarterly, " i.e., in four kists of Baisakh, Sraban, Kartick, and Magh."
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