Judgement

Consolidated Appeals (No. 62 of 1947) from a decree of the High Court (December 4, 1942) which varied a judgment and decree of the Subordinate Judge, Dhanbad (June 29, 1937). The following facts are taken from the judgment of the Judicial Committee The appellant was the owner of the Jharia estate. In 1898 his predecessor granted a mining lease of a part of that estate to the predecessor of the first respondent. The terms of that lease were set out in a Kabuliyat of October 22, 1898, which began " This kabuliyat " regarding mourushi mukarrari, i.e., permanent settlement " on commission of coal land is executed to the following " effect.” The provision the meaning of which was in dispute in the present litigation was as follows

" 1. That for the quantity of coal which I shall raise " from the leasehold entire 1103 bighas 13 kathas of coal " land of Ekra I shall pay commission, i.e., royalty on " steam coal, rubble coal, hard coke and soft coke at the " rate of 3 annas per ton and for rubble and dust for burning " bricks at 1 anna 6 pies per ton. Be it stated that I shall " pay royalty at the present fixed rate for the coals, which " will be despatched by the East Indian Railway line. " But in future if the Bengal Nagpur Railway line is constructed and the freight of coal becomes less by 2 annas " at least or more than what is fixed at present per ton, " I shall pay royalty for those coals, which shall be despatched " in the aforesaid manner, at the said reduced freight, " at 5 annas per ton on steam, steam rubble, soft coke " and hard coke and 2 annas 6 pies per ton on rubble and " dust for burning bricks. But if the said railway freight " becomes less than 2 annas per ton, the amount which " will be reduced will be enhanced on the rate of royalty " at present fixed on steam, steam rubble, soft coke and " hard coke and enhanced by half thereof on rubble and dust " for burning coal."

There followed a number of other provisions for an annual minimum royalty, for interest, for hypothecation of the tenants property at the colliery and for other matters which need not be further referred to at this point. In 1898, when the lease was granted, the only railway available for transport of coal from that district was the East Indian Railway, but it was contemplated that the Bengal Nagpur Railway might be extended so as also to serve that district. The Bengal Nagpur Railway was so extended, and the extension was opened for traffic in 1903. At the time when the lease was granted the freight for coal from the colliery to Calcutta was Rs. 3-11 annas, but in 1902 that freight was reduced to Rs. 3-2 annas, and after some fluctuation both the East Indian Railway and the Bengal Nagpur Railway maintained the freight at Rs. 3-2 annas from 1904 for many years. The interpretation of the clause quoted above gave rise to litigation in 1910 between the then lessor and lessee. That litigation ended in an appeal to His Majesty in Council and the judgment of their Lordships was delivered on March 8, 1917, by Lord Parmoor (( 1917) 25 Cal. L. J. 567.). The question at issue was whether the lessor was entitled to the enhanced rate of royalty provided in that clause, and after quoting the clause the judgment proceeded (Ibid. 571.) —

" The royalty clause fixes a royalty of 3 annas per ton " of steam coal, steam rubble, hard and soft coke, and of " 1 anna 6 pies per ton of brick-burning rubble and dust, " raised and despatched or sold by the lessee. These " latter words are important in construing the clause. " A contrast is drawn between coal or rubble despatched " and coal or rubble sold at the pits mouth, and the claim " for an enhanced royalty on coal is made in respect of coal " despatched by rail. It does not appear, and it is not " material, whether at the date of the lease any coal was " despatched in any other way than by rail. The only " railway which served the coal field at the date of the " lease was that of the East Indian Company. The cl