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PATNA HIGH COURT
S.K.Das and V.Ramaswami JJ.
Jagdish Chandra
Versus
Muhammad Bukhtiyar Shah
Appeal from Original Decree No. 414 of 1946 ;
Decided On : MAY 02, 1952
MINING LEASE - CONSTRUCTION - COVENANT TO PAY ROYALTY - LIABILITY OF SUB-LESSEES - NEGATIVE COVENANT - DOCTRINE OF TULK V/S. MOXHAY - APPLICABILITY.
Fact of the Case:
In 1900, Raja Satrughna Deo Dhabal Deb granted a permanent mokarrari lease to Prince Mohammed Bukhlyar Shah for mining operations in the Dhalbhum estate. The lease required the Prince to pay a royalty of four annas share of the annual net profit. The Prince was also permitted to recoup himself for the expenses incurred from the sale-proceeds of the minerals and the surplus left after the deduction was considered as the year's net profit. The Raja was entitled to four annas share of the profits thus ascertained and the remaining twelve annas share would belong to the Prince. The Prince was empowered to transfer and encumber the interest acquired under the lease or make Darmokarrari settlement.
Finding of the Court:
1. The plaintiff is not entitled on a proper interpretation of the principal lease to one-fourth share of the profits from the estate of the Prince irrespective of the circumstance whether the Prince himself or the sub-lessees worked and extracted minerals from the area demised. 2. The agreement, exhibit K, dated 15th February 1919, between the Manager of the Encumbered estate and the official receiver is binding upon the plaintiff. 3. The plaintiff has no cause of action against the sub-lessees for the breach of any positive covenant contained in the principal lease. 4. The plaintiff cannot be granted a decree against the sublessees for payment of one-fourth share of the net profits made.
Issues: 1. Whether the plaintiff is entitled on a proper interpretation of the principal lease to one-fourth share of the profits from the estate of the Prince irrespective of the circumstance whether the Prince himself or the sub-lessees worked and extracted minerals from the area demised? 2. Whether the agreement, exhibit K, dated 15th February 1919, between the Manager of the Encumbered estate and the official receiver is binding upon the plaintiff? 3. Whether the plaintiff is entitled to a decree or one-fourth share of the profits as against the sub-lessees?
Ratio Decidendi: 1. The language of the clauses in its grammatical sense supports the view that the covenants are personal and the Prince alone is bound to perform the covenants. 2. Clause 18 of the lease can be properly construed only in the sense contended for by Mr. Das. Such a construction would have the effect of harmonising the language of clauses 1 to 7 with the provisions of Clause 18. 3. The agreement, exhibit K, is binding upon the plaintiff since the Manager had authority to make a bona fide settlement of a dispute in the interest of the estate. 4. There is no privity of estate between the head lessor and the sub-lessee. 5. The doctrine of TULK V/s. MOXHAY applies only to restrictive or negative covenants that the doctrine cannot be extended to affirmative covenants such as covenant compelling a man to lay out money or to do any other act of an active character, that the covenant must be one restricting or affecting the user of the land, and that the remedy is not a remedy at law by way of specific performance under a species of implied privity, but a remedy in equity by injunction against the violation of the covenant.
Final Decision: Appeal dismissed with costs to contesting respondents.
Ramaswami, J.
1. This appeal is presented on behalf of the plaintiff Jagdish Chandra Deo Dhabal Deb against the judgment and decree of the Additional Subordinate Judge of Chaibassa dated 4th June 1946.
2. The facts which lead up to the question in debate may be shortly summarised. On 27th Pous 1306 B. S., corresponding to 10th January 1900 Raja Satrughna Deo Dhabal Deb, proprietor of the Dhalbhum estate, granted a permanent mokarrari lease to Prince Mohammed Bukhlyar Shah by a registered patta and kabu-liat. The mokarrari lease related to an area of nearly 1100 Sq. miles and the Prince was granted right
to prospect and raise gold, silver, copper, lead, zinc, iron, mercury, mica, sulphur, copper sulphate, coal, chalk, red earth, ela-mati, slate stone and all kinds of precious stones such as diamond, ruby, emerald, topaz and crystals etc.. lying on the surface and subsoil of the aforesaid pargana Ghatsila".
A sum of Rs. 1,10,000 was paid as salami and the Prince covenanted to pay four annas share of the annual net profit as royalty. The Prince also agreed to provide capital necessary for the purchase of machinery for extracting and selling minerals and stones. The Prince was permitted to recoup himself for the expenses incurred from the sale-proceeds of the minerals and the surplus left after the deduction was considered as the years net profit. The Raja was entitled to four annas share of the profits thus ascertained and the remaining twelve annas share would belong to the Prince. In Clause 7, the Prince covenanted that he would commence the work of prospecting and raising minerals within five years from the date on which the mokarrari lease was executed. If the Prince failed to commence work within six years he was liable to pay a sum of Rs. 2000 per year to the Raja for such period as he would not commence the work. Clause 18 empowered the Prince to transfer and encumber the interest acquired under the lease or make Darmokarrari settlement.
3. In the year 1905, the management of the Dhalbhum estate was taken over by the Government under the Chotanagpore Encumbered Estates Act. In the same year, the estate of Prince was placed in charge of an Official Receiver by virtue of an order passed by the Calcutta High Court in Administration Suit no. 203 of 1905. The Dhalbhum estate continued to be in charge of Government till 1916 when Raja Satrughan Deo died and a dispute arose over succession to the estate. Protap Chandra claimed the estate as heir of Satrughan whereas the plaintiff alleged that he was sole legatee under a will executed by Satrughan. On 28th June 1916, the Revenue Authorities recorded the name of Protap Chandra as proprietor of the estate.
In October 1920, the estate was released from attachment under the Encumbered Estates Act but the management was immediately taken over by the Court of Wards acting on behalf of Prptap Chandra. In 1921, the plaintiff filed a suit against Protap Chandra for a declaration of his title and for possession over the Dhalbhum estate. The suit was filed in the court of the Subordinate Judge of Midnapore. The plaintiff obtained a decree on 21st August 1922 but an appeal was preferred by Protap Chandra and the Calcutta High Court appointed Rai Deben-dranath Bagchi as receiver of the estate pending the decision of the appeal. The appeal was dismissed by the Calcutta High Court on 20th June 1924 but Protap Chandra applied for leave to appeal before the Judicial Committee. Eventually the appeal was dismissed by the Judicial Committee and the decree in favour of Jagdish Chandra was confirmed. On 9th July 1927, Jagdish Chandra obtained possession of the Dhalbhum. estate.
4. On 11th August 1937, the plaintiff brought the present suit alleging that from 1905 to 1927 the Official Receiver of the Princes estate had granted a series of sub-leases but in spite of repeated requests on the part of the plaintiff neither the official receiver nor the sub-lessees had furnished him with accounts as
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