Wort, J.These appeals arise out of two actions brought by the plaintiff claiming royalty, cess and damages, Incidentally there was also a claim for interest prior to the institution of the suit as well as afterwards. These claims were based on a mining lease dated 17th March 1915. The defendants are the appellants. Defendant 1 is one J.H. Pattinson, defendant 2 is the New Sinidih Coal Co. Led., and defendant 3 is H.V. Low & Co. Ltd. In the action out of which Appeal No. 88 of 1929 arises there was a claim for royalty, cess, damages and interest. In the action out of which Appeal No. 77 of 1930 arises there was involved the question of royalty and interest only, but before this Court the question arises as regards royalty. The matters which come before us are questions of cess, damages and interest.

2. I propose, in the first place, to deal with the position of the defendants in the action. Under a patta dated 1908 the plaintiff had got a prospecting lease with regard to certain mining lands. In March 1915 by reason of an option which has been granted by a sub-lease of 1914, Pattinson, defendant 1, took a mining lease for the unexpired term created by the patta of 1908 in favour of the plaintiff, and it is under that lease of 1915 that this claim is brought. It is not necessary to state any other fact at the moment in dealing with the position of the three defendants in action.

3. It is clear that on the merits of the questions themselves, that is to say the question of cess, interest and damages, considerations which apply to one apply to the others; but Mr. I.R. Das in appearing for all the defendants contends that there are some other questions which are applicable to defendants 2 and 3 only and on the submissions which he makes it is contended that they must he dismissed from the action. The New Sinidih Coal Co., that is defendant 2, appears to have been a company which was promoted by Messrs. Pattinson and Low, who where the lessees under the lease of 1915. There is no clear evidence regarding them, but it is suggested in the plaint that Pattinson, Low and the New Sinidih Coal Co. are one and the same person. That statement may be true in the sense that there are no shareholders in those two companies other than Pattinson and Low, but of that we have no evidence. But it cannot be said that the New Sinidih Coal Co. Ltd. and Low and Co. Ltd. are the same person and persons as Pattinson and Low in the eye of the law. There is no dispute that they defendants 2 and 3, are companies which have been incorporated under the Companies Act and the position therefore in law is that they are separate legal entities.

4. Of that there can be no doubt: Solomon v. Soloman & Co. (1897) AC 22. There is a recent Full Bench decision of this Court which bears on the point. Now we have no evidence in the case as to whether the New Sihidih Coal Co. had taken an assignment or sub-lease from Pattinson and Low. It is clear however that the New Sindih Coal Co. Ltd., in spite of what the learned Judge in his judgment has said, was not a party to the lease of 1915; but that does not conclude the matter. I have already referred to the suggestion made in the plaint as regards the personality of these three defendants but in the written statement defendants 2 and 3 made this averment, having denied their liability to pay cess:

that these defendants are bound and governed by the terms of the Indenture dated 17th March 1915 and nothing is payable by these defendants except what is mentioned in the said Indenture.

5. Mr. P.R. Das would have us ignore that admission on the ground that, if we accept that as an admission that the defendants are liable, we shall be splitting up the contentions in the written statement and disregarding therefore their denial of their liability as regards cess. But their denial as regards liability to cess is a denial that in point of law, on the construction of the deed by which they say they are bound, they are liable; but the paragraph which I have just read can be construed only on the assumption that they are admitting that some transaction had taken place which binds them to the terms of the lease, because, as I have said, it is clear that they were not parties to the lease; they could be bound only by the terms of the lease if there had been a sublease, incorporating the terms of the head lease or an assignment, and, in my judgment, by pleading as they did in para. 5 of the written statement, they have made it unnecessary for the plaintiff to prove that there was some transaction such as the assignment or sub-lease which imposed the obligation of the lease of 1915 or the patta of 1908 upon the defendants. In my judgment therefore so far as the new Sinidih Coal Co. is concerned, any liability which Pattinson is found to have incurred in this action must also be the liability of the New Sinidih Coal Co.

6. The same argument which was advanced by the plaintiff with regard to the New Sinidih Coal Co., was advanced as regards H.V. Low & Co. Ltd. That question is somewhat more difficult. We still have para. 5 of the written statement which admits liability on the part of Low & Co. Ltd., as well as the New Sinidih Coal Co. Ltd. But the defendants third party have contended in para. 2 of the written statement that they were merely managing agents of the defendants. Had the matter rested there, it seems to me that no other conclusion could have been reached than that at which I have arrived in the case of the New Sinidih Coal Co. Ltd. But in the judgments of both the cases the learned Judge has slated that the defendants H.V. Low & Co. Ltd., were the managing agents. It is true, as Sir Sultan Ahmad has pointed out, there was no evidence of that; but, in my judgment, it is possible to say that there was not some material upon which the learned Judge could have arrived at this decision. The mere statement in the written statement itself of course, is insufficient; it was necessary for the defendants to prove it.

7. But they have been excused from proving it by an admission on the part of their advocates, and there is nothing in the case to show that what the learned Judge has stated was incorrect. It seems, therefore, that one has to read para. 2 with para. 5 of the written statement, and even taking para. 5 of the written statement by itself, although both parties may have been bound by the lease of 1915 when once it is shown, as the Judge stated here, that one of them was the managing agent of the other, in law both cannot be held liable. Had Low & Co. Ltd., stood alone as agents for an undisclosed principal, undoubtedly under the Contract Act they would have been liable; but having joined both principal and agent, in law, only one can be held liable.

8. As I have come to the conclusion that the New Sinidih Coal Co. Ltd., is liable, in my judgment, for the considerations which I have stated, it necessarily follows that Low & Co. Ltd., must be dismissed from the action. Now to come to the question of cess, damages and interest in the lease of 1915 there is a clause which reads:

The lessees also duly observing all the covenants and conditions in the said instrument of lease or patta of the 7th day of May one thousand nine hundred and eight contained in the part of the lessees thereunder to be observed and performed.

9. Then comes the ordinary covenant for quiet enjoyment of the mines and premises on the part of the lessors. Mr. P.R. Dass argument, in the first instance, was that that covenant was merely the conveyancers method of imposing liability on Pattinson for such covenants in the head lease as he would otherwise be liable for in law. But it is well established in law that a covenant such as I have read out incorporates covenants of the head lease. One of the covenants in the head lease was that:

if Government levies any tax or road cess on me in regard to these leasehold mines or coal business he shall pay it.

10. In my judgment, therefore, that covenant being incorporated in the lease of 1915 the lessee becomes liable. The point, although made by Mr. Das, was not seriously pressed. In my judgment, therefore, Pattinson and the New Sinidih Coal Co. are liable as the learned Subordinate Judge has held them to be liable for cess. Before I come to the question which involved the chief argument in the case, namely, the question of interest, I propose to deal with the question of damages. Damages, which were claimed by the plaintiff were the costs which the plaintiff had to pay as defendant in the suit by her lessor, and in order to recover them she sought to prove an agreement by which Pattinson had undertaken to pay the liabilities direct to the head landlord. The learned Judge has said that there was some evidence of this but has come to the conclusion that there was no contract binding between the parties. There were letters which were produced which show some such arrangement for a period prior to the period for which the royalty and cess in these actions were claimed, but they are far from showing that during the period in dispute there was such an agreement, and without such an agreement, it is impossible for the plaintiff to say that it was reasonable for her to defend the action in the suit of the lessor; in other words, her liability was one under the head lease.

11. The liability of Pattinson was a separate liability under his lease, and by declining to pay, the plaintiff could not pass on the liability to pay costs to the defendant Pattinson, which resulted from her defending the action. In my judgment the learned Subordinate Judge was right on this point. That disposes of all the questions other than the question of interest.

12. Interest in this case was claimed and was allowed by the Subordinate Judge on the amounts claimed at the rate of 12 per cent, per annum. An elaborate argument, as I have already stated, was addressed to the Court on that question. The argument, if I may say so, was out of all proportion to the sum involved, but the point was urged and it is necessary therefore to deal with it. At first it was sought to show that the plaintiff was liable for interest by reason of the provisions in the head lease or patta of 1908: but in Clause 14 of the lease of 1915 it is clear that the covenants relating to royalty and interest to which I have referred are expressly excluded. Interest therefore could only be claimed by law; that is to say by law other than by contract.

13. The substance of the argument on behalf of the defendants was this. No interest can be claimed other than under the Interest Act, 1839. Sir Sultan Ahmad on the other hand contended that interest was recoverable other than under the Interest Act, 1839. Mr. P.R. Das modified his argument to some extent during the course of the case by admitting that there were certain cases in which interest could be claimed under the proviso to the Interest Act, 1839. Act 32 of 1839 is as follows:

It is therefore hereby enacted that upon debts or sums certain payable at a certain time or otherwise, the Court before which such debts or sums may be recovered, may, if it shall think fit, allow interest to the creditor at a rate not exceeding the current rate of interest from the time when such debts or sums certain were payable, if such debts or sums be payable by virtue of some written statement at a certain time, or if payable otherwise, then from the time when demand of payment shall have been made in writing, so as such demand shall give notice to the debtor that interest will be claimed from the date of such demand until the term of payment: Provided that interest shall be payable in all cases in which it is now payable by law.

14. Mr. Dass modification of his argument was to this effect that there are certain cases in India, as in England, in which interest was already payable by law at the time of the passing of the Interest Act. Those cases include cases in which interest is allowed on equitable principles. Now the Act, as I have said, was passed in 1839 some five or six years before there had been passed in England what is now known as Lord Tenterdens Act 3 & 4, Wm. IV, Ch. 42, the relevant section being Section 28. I mention the English Act because as Lord Tomlin said in the case to which I shall presently refer that the two Acts being indistinguishable, cases under the English law are relevant for the guidance and the consideration of the question which arises. There is no doubt what the law was in England at the time of the passing of Lord Tenterdens Act.

15. The case Page v. Newman (1829) 9 B & C 378 had been decided by Lord Tenterden and other Judges in 1829. That laid down in substance except by contract or under some commercial usage a party could not claim interest.

16. That the law has remained the same in England since that date, apart of course from Lord Tenterdens Act, is shown by the case in London Chatham and Dover Ry. Co. v. South Eastern Ry. Co. (1893) AC 429. Lord Herschell in that case said, after discussing the various English authorities that the matter was governed by the decision in Page v. Newman (1829) 9 B & C 378. I apprehend that the law at the time as since was the same in India as it is in England. It must be obvious that were it not so at the time of passing of the Interest Act there would have been no reason for passing that Act. But there may be this difference. In both the English Act and the Indian Act there is a proviso that "interest shall be payable in all cases in which it is now payable by law." The cases in which it is payable by law in India may be different from cases in which it is payable by the law in England. But one matter is perfectly clear that for the mere detention of money, however wrongful, interest could not be claimed as damages.

17. Now I propose to come to those cases in India from which it might be supposed that the law was otherwise. In Chhajmal Das v. Brijbhukhan Lal (1895) 17 All 511 Lord Morris in dealing with the case of a bond, where interest was payable after two years and in which there was no reservation of interest after that period, agreed with the High Court in its construction of the bond and expressed the view that it could hardly be the intention of the parties that no interest was payable after two years. He added even on that construction, that is the construction with which he had agreed and which had been placed upon the bond by the High Court, interest could technically be recovered by way of damages.

18. If we are to take that statement by Lord Morris in the case in which incidentally there was no discussion of the authorities at its face value, it is difficult to reconcile it with the discussion of the Privy Council in Kalyan Das v. Maqbul Ahmad AIR 1918 PC 53, in which Lord Sumner said that interest depends on contract express or implied. In one sense of the word, perhaps, and technically if I may say so with respect to Lord Morris, his statement that damages could be recovered by way of interest was correct. That leads me to a consideration of Section 73, Contract Act, upon which the statement that damages by way of interest may be recovered is usually founded.

19. Lord Wrenbury in Jamal v. Molla Dawood Sons & Co. AIR 1915 PC 48, said that Section 73, Contract Act, was merely declaratory of the right to damages for breach of contract. If I may say so that is obvious on the plain reading of the section itself. There is nothing in the section which could even suggest that interest could be claimed merely for withholding money that was due. III. (n), which is referred to is no warranty for such a position. It reads:

A contracts to pay a sum of money to B on a day specified. A does not pay the money on that day; B in consequence of not receiving the money on that day, is unable to pay his debts, and is totally ruined. A is not liable to make good to B anything except the principal sum he contracted to pay, together with interest up to the day of payment.

20. There is nothing to show from this illustration that the rule of Indian law, which was the same as English law as I have already stated has been superseded. As Mr. Mullah says in his book on the Contract Act, the illustration does not say that the defendant is necessarily liable to pay interest but assumes that he may be so under the Act, that is the Interest Act, or otherwise and says that he is not in any event liable for more. I would add that the explanation is declaratory of the principle that the defendant is not liable to pay damages in those circumstances.

21. A case which is also often referred to in this connexion is Surja Narain v. Protap Namin (1899) 26 Cal 955. It is not necessary to state the facts of that case excepting to say that it was a claim by one brother against another for a sum of money which one brother the the plaintiff, had expended in briefing counsel in litigation in which both brothers were engaged on the same side. Maclean, C.J., as did Banerji, J., held that the claim for interest that was made in the action came under the Interest Act, , 1839. Not content with that decision Banerji, J., proceeded to say that the plaintiff might have recovered interest u/s 73 as loss or damage caused by breach of contract but he goes on to explain that such a claim cannot be made unless the creditor can show that actual loss or damage has accrued by reason of the defendants breach.

22. Cuming and Mukherji, JJ., in Ramnath Karmakar Vs. Hiralal Shaha and Others, , dissenting from the proposition that in the absence of a stipulation interest could not be recoverable, awarded interest relying on the judgment of Banerji, J. But that case is no authority and could not be, having regard to the decision upon which the learned Judges relied for the proposition that interest could be recoverable for mere detention of money.

23. It is clear therefore that the law in India is, unless the matter can be brought within the Interest Act or within the proviso, there is no warranty u/s 73, Contract Act, for awarding interest for the mere detention of money after the date has arrived upon which it should have been paid. If it were otherwise it would involve in its turn the proposition that a breach of contract to pay money was an exception to the rule and that in claiming damages for breach of contract, damages had to be proved.

24. In Mohamaya Prosad v. Ram Khelawan (1912) 15 IC 911, Mookherji, J., relying on the statement of Lord Morris in the case to which I have just referred, without examining in detail the facts of the case and without referring to Surja Narain v. Protap Narain (1899) 26 Cal 955, allowed interest, relying on the broad proposition that damages may be awarded for wrongful detention of money, but upon what principle is not disclosed. As far as I can see, in no case has it been said that damages by way of interest can be had merely on the allegation that money has been detained.

25. In this connection, in my judgment, it is impossible to state the case more succinctly than was stated by Courts-Trotter, C.J., in Ramalinga Mudaliar (died) and Others Vs. S.R. Muthuswami Aiyar and Sons, . That was a case in which the plaintiff had advanced to the defendant money in consideration of the defendant supplying certain goods to him, the plaintiff. There was a breach of contract and the plaintiff sought to recover the sums of money which he had advanced together with interest. The decision in the case is correctly summed up in the headnote to that case:

That in the absence of any demand or of any stipulation as to interest, a person who has advanced money to another for supplying goods at a certain time is entitled on default to recover only the advance and damages, viz., the difference in price between the contract rate and the market rate, and not also interest on the advance by way of damages for the period between the date of breach and the date of suit.

In the course of his judgment the Chief Justice says this:

I desire to point out that if the plaintiff is entitled to interest, I do not see over what period it is to be calculated. He was clearly entitled to none up to the date of breach, because up to that time it was in the contemplation of both parties that the money should remain in the hands of the seller: in other words the parties had to abide by the contract. For any period after that and before the plaintiff launched his suit it appears to me that he has himself to blame if such a period existed. By deferring the filing of his plaint he cannot cast an additional burden on the defendant. As for the period between the filing of his plaint and the determination of the suit, he is entitled to interest in the ordinary way and he will got it.

26. The Chief Justice was obviously referring to the fact that so soon as the plaintiff filed his suit he would be entitled to interest; prior to that date he could not recover it except under contract; in other words the date from which he could recover interest was entirely a matter for himself. Cases similar to the one I have quoted are for instance Lala Jwala Prasad and Others Vs. Hoti Lal, and Kirpal Singh v. Jiwan Mal AIR 1927 Lah 287, where the proposition which I have already stated and repeated more than once was laid down, that is to say, the Allahabad High Court and the Lahore High Court had come to the conclusion that interest merely for the detention of a sum of money was not recoverable. I then come to the question of the proviso, that is the proviso to the Interest Act, which says:

Provided that interest shall be payable in all cases in which it is now payable by law.

27. The authority which is often relied upon as giving the Courts a right to award interest for detention of money on equitable principles is Hurropersaud Roy v. Shamapersaud Roy (1877) 3 Cal 651. This case was one of the authorities upon which Sir Sultan Ahmad relied for the proposition that interest is recoverable although that case was not covered by the Interest Act. In my judgment an examination of this authority will clearly show that this is one of those cases which is covered by the proviso. Their Lordships of the Judicial Committee having examined the Interest Act, 1839, said this:

And that refers their Lordships to the state of the law and the practice in India independently of the statute. They have taken some pains to ascertain what the law and the practice has been, and have been referred to a number of cases upon the subject. It may be enough now to quote a case (Rungmala Chowdharian) which is to be found reported in Carrens Reports of Summary cases in the Presidency Sudder Court of the date 1st October 1850, where certain resolutions were come to at a sitting of all the Judges of the Court and among those resolutions was this: Interest on mense profits may be awarded as a course from date of suit in a decree; when, however interest is awarded from an earlier, or from a later date than of suit, special reasons should be assigned in the decree.

Their Lordships of the Privy Council then go on to say:

Their Lordships find that this resolution has been, to a great degree, acted upon in subsequent cases; indeed there have been subsequent cases in which interest has been given at a date prior to the institution of a suit, and their Lordships are far from saying that such cases have been wrongly decided.

28. In the particular case before us interest was not allowed. That authority, in my judgment, is clearly an authority for the proposition that interest may be recovered on mesne profits. The principle and practice which had developed at the time of the resolution of the Judges referred to in the case of a rule of law and therefore a case which comes quite clearly within the the proviso to the Interest Act, a principle now recognized by the Civil P.C.

29. I come now to the only authority which has been quoted from this Court: A.W. Inglis Vs. Sarju Prasad Misser, . Dawson Miller, C.J., contented himself with agreeing with the judgment of Mullick, J., who, in dealing with the case in which a co-owner had appropriated the profits of joint property, said:

The question however is whether interest is allowable here for the period anterior to the suit.

30. And then said, quoting the Interest Act and referring the case of Hurropersaud Roy v. Shamaper Saud Roy (1877) 3 Cal 651, the case in which their Lordships of the Privy Council have referred to the resolution of the Judges:

It was cleat that in their Lordships opinion interest could be granted on equitable grounds though in the circumstances of the case before thorn they gave interest only from the date of the institution of the suit.

31. The judgment of Mullick, J., then proceeds on the basis of an analysis of the case as to whether it came within the proviso. This much must be said with respect to the learned Judge that their Lordships in Hurrropersaud Roy v. Shamapersaud Roy (1877) 3 Cal 651, did not say that interest was payable or recoverable on equitable grounds. They held, as I have already pointed out, that interest was recoverable by reason of the resolution of the Judges that the rule of practice which had developed into a rule of law. In addition to this it is to be noticed that the case which Mullick, J., was dealing with was a case of mesne profits. This brings me to the consideration of what are equitable principles for this purpose. There is no doubt that the expression "equity" has been often used in a loose sense in Indian cases as has been the expression "equity, justice and good conscience." Courts in this country are enjoined to apply the rule of equity, justice and good conscience where there is no rule of law applicable to the facts but that is far from saying or meaning that each Judge may decide a case as he thinks fit and bound by no rules, but there must be rules and the decision of the case cannot depend upon caprice. Often the rule of equity, justice and good conscience means a rule of the Common law of England or rules of equity, not as binding upon Indian Courts, but as a guidance in determining the matters which came before them in which there is no rule of Indian law.

32. In this connexion I propose to refer to Maine and New Brunswick Electrical Power Ltd v. Hart (1929) AC 331. Lord Tomlin, who delivered the opinion of their Lordships of the Judicial Committee of the Privy Council, compared there Lord Tenterdens Interest Act, 1839 and Interest Act or the equivalent statutory provisions of New Brunswick and stated that the language of the section which he had to construe was indistinguishable from that of Section 28, 2 & Wm. 4, Ch. 42. There is a case not dissimilar to the one which is before us: the plaintiff under certain covenants sought to recover what may be described as royalties against the defendants (who were assignees of certain conveyances) for horse power developed in an electrical station under the covenant exceeding 2000. A claim was made for a substantial sum amounting to about 28,000 dollars together with interest. The trial Court had rejected the claim for interest but the appellate Court had allowed it, it appears, on equitable principle. Lord Tomlin in dealing with this last point makes this observation:

It remains to consider whether any rule of equity entitles the plaintiff to interest. In order to invoke a rule of equity it is necessary in the first instance to establish the existence of a state of circumstances which attracts the equitable jurisdiction, as, for example, the non-performance of the contract of which equity can give specific performance.

33. He then points out that this case did not attract the equitable principles or the equitable jurisdiction of the Court; and then came to the conclusion that neither in law nor in equity was the plaintiff entitled to interest.

34. The case Hamira Bibi v. Zubaida Bibi AIR 1916 P.C. 46, is an authority which has been relied upon for the proposition that interest is recoverable on equitable grounds. That was a case in which a Mahomedan widow had been allowed to take possession of her husbands estate in order to satisfy her dower debt with the income of it. There was no agreement expressed or implied that she should be entitled to claim anything other than the actual amount of dower. The claim for her dower included the claim for interest. There was a discussion at the Bar as to whether interest could be recoverable by a Mahomedan under the Mahomedan Law, the contention being that the Mahomedan law was against it. In deciding the question of interest Lord Parker makes this statement:

Their Lordships think that she is so entitled and obviously compensation for forbearance to enforce a money payment is best calculated on the basis of an equitable rate of interest. This appears to be consistent with the chapter on. "The Duties (Adab) of the kazi" in the principal works on Mussalman law, which clearly shows that the rules of equity and equitable considerations commonly recognized in the Courts of Chancery in England are not foreign to the Mussalman systems but are in fact often referred to and invoked in the adjudication of cases.

35. This, as I have said, has been some times relied upon by Courts in India for the proposition that interest is recoverable under equitable principles. Lord Parker who was one of the most eminent equity Judges in England in this century no doubt uses the expression "equity" in its true significance; but it is to be noted that what the Judicial Committee awarded to the plaintiff in that case was compensation for forbearance to enforce a money payment for her management of the estate. There is nothing in the law to prevent compensation taking the form of interest and in my judgment, this case cannot be said to be an authority in law for the proposition that damages by way of interest are recoverable.

36. Having regard to these authorities, it remains in this case now to determine whether this is one of the cases, in which on equitable grounds, interest may be recoverable. To sum up I would hold that, apart from one item, to which I shall presently refer, interest is not recoverable under the Interest Act. In my judgment it is not shown, apart from the item of which, I have, spoken, that it is one of those cases in which interest is now payable by law within the meaning of the proviso to Interest Act; and clearly this being an action of law in which the equitable jurisdiction of the Court is not attracted, it is not a case in which interest is recoverable on equitable principles. The claim made in the plaint was based on the lease of 1915 and it was for two sums of Rs. 2,000 for each half year and then an additional sum for excess royalty: Royalty due on 30th September 1926 was Rs. 2,000, on 31st March 1927 Rs. 2,000, and then the excess commission for 1926 due on 1st January 1927 Rs. 749. From the lease itself it is shown that Rs. 4,000 per annum is described as rent and is recoverable in any event and it appears is recoverable as a separate item. It is only when the equity is exceeded that the excess commission becomes payable. In some leases of this description when once the minimum quantity has been exceeded then royalty is payable from the first ton to the last and it becomes in that sense a matter of calculation and therefore uncertain. But the amount to be calculated in this case is only that sum in excess of the minimum quantity. The amount that therefore remains uncertain is the excess only. The rent or minimum quantity therefore clearly comes within Interest Act. As this is a sum which is reserved by the lease, the plaintiff, in my judgment, is entitled to interest on it.

37. For the reasons which I have already elaborately stated. She is not entitled to interest on Rs. 749 in Appeal No. 88 of 1929 as not coming within the provisions of the law. The interest or rent recoverable on the minimum quantity of royalty will be at the rate of 12 per cent. per annum.

38. With this modification the appeals are dismissed. As the defendants have failed in substance, I think they should not get their costs. Costs should be awarded to the respondent.

Fazl Ali, J.

39. I agree.