Fazl Ali, J.This appeal arises out; of a suit brought by the appellants father the Raja of Pachet (who will sometimes be referred to hereinafter as the Raja) to recover a sum of Rs. 11,73,309-3-3 from the defendants who are ten in number on account of royalty in respect of 32 villages held under several mining leases by a firm known as Seddon & Co. This firm originally consisted of two partners only named Henry Seddon and Rasaraj Biswas. Later on these persons took into the firm two more partners, these being Kishori Mohan Sarkar (who will be referred to hereinafter as Kishori) and Dakshina Prasad Bhattacharjee (who will be referred to hereinafter as Dakshina.) Out of the 10 defendants in the suit, defendant 1 is Henry Seddon.
2. As Rasaraj, Kishori and Dakshina had died before the suit was instituted, their heirs have been impleaded as defendants 2 to 6. Defendants 7 and 8 are the sons of one Kedar Nath Daga (to be referred to hereinafter as Daga) who along with defendant 9 Mangniram Bangar (to be referred to hereinafter as Bangar) had advanced considerable sums of money to the firm of Seddon & Co. These three defendants--defendants 7 to 9 have been impleaded in the suit on the allegation that Daga and Bangar had acquired a 2 annas interest in the proper, ties for which royalty is claimed. Defendant 10 is a receiver appointed by the High Court at Calcutta in a suit for dissolution of partnership brought by one Sastikinkar Banerjee (to be referred to hereinafter as Sasti) against Seddon and two other persons named Gibson and Ram Ratan. As will appear later, Seddon had in 1922 formed a new partnership consisting of himself, Sasti, Gibson and Ram Ratan, his case being that Rasaraj, Dakshina and Kishori had reisired from the original firm before that date.
3. The suit was contested by defendants 7 to 9 and defendant 10 only, though written statements were filed by all the defendants excepting defendants 2 and 3, the sons of Rasaraj. The contesting defendants raised a number of questions in their written statement, but apart from certain side issues, we are concerned with only two major questions in this appeal. These are: (1) whether any royalty can be recovered by the plaintiff in respect of 15 villages which had been surrendered by defendant 10 as receiver of the estate of Seddon & Co. in 1925, and (2) whether defendants 7 to 9 are liable for the whole or any portion of the royalty claimed. Both these questions have been answered by the trial Court (Subordinate Judge of Purulia) in the negative, that is to say against the plaintiff, and hence this appeal.
4. Before dealing with the points raised in this appeal I consider it necessary to give the following brief summary of certain material facts in chronological order.
August 1915.--Seddon and Rasaraj entered into a partnership, though no formal document was executed and thereafter they proceeded to take mining leases and prospecting licenses in respect of a number of villages from the plaintiff,
July 1920.--There was an agreement between Daga and Bangar on the one hand and Seddon & Co. on the other, by which the former agreed to advance a sum of Rs. 10 lakhs payable within one year from the date of the advance and a further sum of Rs. 10 lakhs payable within three years from the date of the advance, and in their turn Seddon & Co. agreed to assign to them a two annas share in "royalty profits" in certain properties and a two annas share in "the profits of the salamis" to be derived from certain other properties.
5. 3rd November 1920.-- A formal document of partnership was executed by Seddon and Rasaraj in which the share of each of the two partners was specified to be eight annas in the partnership property and id was stated that each of them was to be managing partner of the firm with equal rights and privileges.
12th November 1920.--Dakshina and Kishori were admitted as partners in Seddon & Co. by means of an agreement executed on that date. By this agreement1 "Seddon was to have an eight annas share in the partnership as before; Rasaraj was to have six annas and Dakshina and Kishori were to have one anna each. All the partners accepted their liability to Daga and Bangar to the extent of ten lakhs of rupees and ratified the arrangement by which the former partners had bound themselves to execute a deed of assignment in favour of the latter in respect of a two annas share of "the profits in royalty, salami and mini-mum royalty to be accrued of all the properties" described in certain schedules.
6. 31st March 1921.--Seddon and Rasaraj executed two deeds in favour of Daga and Bangar: (1) a deed of assignment in respect of two annas share in the salami and royalty accruing from a number of properties described in certain schedules appended to the deed (including the properties for which royalty is claimed in the present suit) and (2) a deed of mortgage in respect of the remaining fourteen annas share in the same.
28th July 1922.--Seddon & Co. brought a suit in the Calcutta High Court against Daga and Bangar claiming from them a sum of Rs. 30,00,000 as damages for their failure to advance the second instalment of Rs. 10,00,000 to the plaintiff.
7. 29th August 1922.--Daga and Bangar instituted a suit at Asansol against Seddon and Rasaraj on the basis of the deeds of assignment and mortgage for a declaration of their title to two annas share of "the properties mentioned in the indenture of conveyance dated 31st March 1921 and to all salamis, rents and royalties and profits arising or issuing therefrom" and for enforcement of their mortgage "by the sale of the 14 annas share of the mortgaged properties together with all salamis, rents, royalties and profits arising therefrom."
25th October 1922.--Seddon agreed to take Sasti Kumar Banerjee as a partner in the firm of Seddon & Co. on his agreeing to pay certain sums of money to Rasaraj, Kishori and Dakshina who were alleged to have ceased to be partners. Under the arrangement entered into on that date the share of Seddon in the partnership was to tie 7 annas 6 pies; that of Sasti 6 annas and two other partners Ramratan and Gibson were to have 1 anna 6 pies and 1 anna respectively.
23rd March 1923.--Sasti brought a suit in the Calcutta High Court against Seddon, Gibson and Ramratan for dissolution of partnership and accounts.
8. 10th April 1923.--A consent decree was passed in Sastis suit for dissolution of partnership, one of the terms of the decree being that five persons including Daga, Bangar and Satish Chandra Sen (defendant 10 in the present suit) were to be appointed as receivers of the properties, assets, etc. of Seddon & Co.
13th June 1923,--Satish Chandra Sen (defendant 10 in the present suit) was appointed sole reoeiver by the consent of the parties.
30th June 1923. --A compromise petition was filed in the suit instituted by Daga and Bangar against Seddon and Rasaraj ab Asansol which contained among others the following provisions: (1) that Seddon & Co., should forthwith withdjawthe suit which they had brought in the1 Calcutta High Court claiming Rs. 30,00,000 as damages from Daga and Bangar and also pay the costs of that suit to the latter; (2) that the suit of Daga and Bangar at Asansol should be decreed under Order 34, Rule 2, Civil P.C.; (3) that Rasarajs name should be expunged from the record and the suit be dismissed against him. To explain why Rasaraj was to be expunged it was recited in the petition of compromise that his own written statement was that
he had sold his right, title and interest in the joint business of Seddon & Go. with their assets and liabilities together with their interest in the properties of the firm to defendant 1 and had ceased to be a partner of the business on and from 1st January 1923.
9. 3rd July 1923.--The parties filed a supplementary compromise petition in above suit setting forth certain terms which had not been included in the petition filed on 30th June 1923 one of these terms being that the Court should declare the title of Daga and Bangar to a 2 annas share of the properties mentioned in the indenture of assignment dated 31st March 1921 and to all salamis, rents and royalties and profits arising or issuing therefrom.
3rd July 1923--The Subordinate Judge at Asansol passed in the above suit a preliminary mortgage decree which also declared the right of Daga and Bangar to a 2 annas share in the properties as stated in the compromise petition.
26th September 1924.--Kedar Nath Daga being dead, defendants 7 and 8 his sons, applied to be substituted in his place in the suit at Asansol.
10. 19th November 1924.--The Subordinate Judge at Asansol substituted defendants 7 and 8 in place of Kedar Hath Daga and rejected Sastis petition asking him to make the receiver of his assets a party to the suit. The receiver who was asked to be impleaded in the suit was not defendant 10 but another person who had been appointed a receiver in a proceeding for adjudicating Sasti to be an insolvent.
20th November 1924.--Bangar and Daga moved the Subordinate Judge to pass a final decree in the mortgage suit.
18th April 1925.--The final decree was passed.
22nd January 1925.--An agreement was entered into between the plaintiff (Raja of Faohet) and Satish Chandra Sen (defendant 10) in his capacity as receiver in the suit brought by Sasti against Seddon & Co. One of the terms of this agreement was that the Raja shall accept the surrender of leases of such mauzas as Seddon & Co., will choose in the month of March 1925 and he will give up the royalties payable in respect of the lands to be surrendered up to the end of the month of March.
29th March 1925.--Defendant 10 gave notice to the plaintiff that he was prepared to surrender nine mauzas specified in the notice.
11. 27th June 1925.--The Raja accepted the surrender of the nine mauzas.
27th July 1925.--Defendant 10 gave notice to the Raja that he was prepared to surrender six other mauzas. Surrender of these mauzas also was accepted by the plaintiff.
7th February 1930.--The plaintiff brought a suit for royalty in the Court of the Subordinate Judge at Burdwan against defendants 1 to 6 and 10. In this suit he neither impleaded defendants 7 to 9 of the present suit as defendants nor did he claim any royalty in respect of those mauzas of Burdwan District which had been surrendered by the receiver in 1925.
10th February 1930.--Defendants 7 and 8 applied for execution of the mortgage decree against Seddon and defendant 10 making Bangar a pro forma party.
19th May 1930 and 21st June 1930--Defendant 10 and Seddon objected to the execution on the grounds that it was barred by limitation and the decree-holders were
not entitled to put the decree into execution as they had failed to carry out the terms of the compromise within the time limited thereby.
3rd February 1931.--Both the objections were dismissed by the Subordinate" Judge of Asansol and his judgment was upheld on appeal by the High Court on 3rd March 1933.
12. 20th March 1931--Bangar filed an application stating that the other decree-holders (the Dagas) had executed the decree in the interest of all the decree-holders and that he had no objection to the execution provided that his interest was safeguarded,
27th July 1931.--Dagas filed an application in the executing Court at Assansol to the effect that they wanted to sell only three of the mortgaged properties in the execution proceeding then pending before it.
7th September 1931.--Dagas applied that the execution proceeding might be struck off.
12th April 1932--The suit for royalty brought by the Raja at Burdwan was-decreed vide the judgment Ex. 10.)
18th April 1933.--The present suit was-instituted in the Court of the Subordinate-Judge at Purulia.
I will now proceed to deal with the question whether the plaintiff is entitled to recover royalty in respect of the 15 mauza which were surrendered in his favour by defendant 10. The surrender as will appear from the above summary, took place in the year 1925 and the Raja admittedly did not claim any royalty in respect of any of the surrendered mauzas between that date and the date of the institution of the present suit.
13. His case in the plaint is (1) that to wards the end of 1930 he came to know for the first time that defendant 10 was not a receiver in respect of the entire 16 annas of the mauzas (meaning thereby that he did not represent all the persons interested in them) and that defendant 10 had not obtained the permission of the High Court at Calcutta to surrender any of; the mauzas, (2) that defendant 10 had deliberately suppressed from him the fact that a two annas interest in the mauzas surrendered by him had been assigned to defendant 9 and the father of defendants 7 and 8 and the remaining fourteen annas had been mortgaged to them and that he (the plaintiff) had accepted the surrender "on, account of the suppression and misrepresentation of fact made by the reoeiver and under the bona fide mistake caused thereby as to the jrue state of facts" and (3) that, notwithstanding the surrender the plaintiffs lessees and their representatives and assignees continued to be in possession of the surrendered mauzas and the plaintiff himself never got possession of any of them. In this Court the learned Advocate for the appellant frankly conceded that he could not press his case as to misrepresentation on the part of the receiver, but he put for-ward a new plea which had not been raised in the Court below, namely that both the receiver and the plaintiff had entered into the transaction under a bona fide mistake. To explain the nature of the mistake reference was made to the following statement made by the receiver in his evidence:
From the beginning up to the time of my giving of surrender and up to the time of acceptance of the surrender no one gave me any infortion that two annas share of the concern of Seddon and Co., had been sold to any one.
14. It was contended that this statement of the receiver was sufficient to establish "mutual mistake," it being the case of the plaintiff also that he was unaware of the deeds of mortgage and assignment in favour of Bangar and Daga at the time when he accepted the proposal of defendant 10 to surrender the mouzas in question. Before dealing with the points raised by the appellant I consider it necessary to refer in greater detail to certain important facts relevant to the question of surrender. On 7th March 1924 Babu Lalit Kishore Mitra, Vakil, wrote a letter (Ex. D-l) on behalf of the Raja to Seddon stating that if he did not pay up all arrears of royalty, minimum royalty and other dues together with interest within a fortnight, the Raja would file a suit against him to recover these dues. Seddon handed over this letter to defendant 10 who on 31st March 1924 sent a reply (Ex. P) in which he blamed the Raja for not having given possession to Seddon & Co. and their sub-lessees of the major portion of the leasehold properties and warned him against writing directly to the lessees of Seddon & Co., for royalty as such a request "would amount to unwarranted interference with the possession of the company."
15. There was further correspondence between the parties in the course of which the receiver made heavy counter-claims against the Raja. On 9th January 1925 Seddon filed a petition (Ex. 24) in the High Court in which after referring to the claims and the counterclaims made by the Raja and the receiver he stated as follows:
(1) That the matter in dispute was ultimately settled by the said receiver as follows;
(a) The Raja will give up all his claims to rents, royalties up to the 31st Aswin 1331.
(b) The said firm ox the receiver should also give up "all claims for damages for infirmity of the title of the Raja or otherwise against the Raja; that the said receiver should advance to the Raja a sum of one lakh of rupees free of interest on account of future royalties to the Raja under his lease and that the said receiver should also transfer to the Raja all his claims to royalty coal payable by the said sub-tenants of the firm up to the 31st Aswin. 1331.
(2) That the above settlement was absolutely beneficial to the firm as it saves expenses and numerous litigations and also the sum of one lakh fifty eight thousand admittedly due to the Raja on account of royalty.
16. The petition concluded with the prayer that the Court might sanction the settlement and the receiver might be authorized to borrow money to the extent of one lakh of rupees for payment to the Raja. The High Court sanctioned the settlement and on 22nd January 1925 the receiver paid a sum of rupees one lakh to the Raja and on that very day a formal agreement (Ex. L) was executed by them which stated among; other things that:
The Raja Bahadur will accept surrenders of such, mauzas as Messrs. Seddon & Co., will choose within the month of March 192S. The Raja Bahadur will give up the royalty payable in respect of the lands to be surrendered within the month of March 1925 up to the end of March 1925.
On 9th February 1925 the attorneys of plaintiff wrote to the receiver asking him to furnish them with a copy of the order of the High Court sanctioning settlement with, his client on Seddons petition and on 13th February 1925 the receiver sent him a copy of the order.
17. On 29th March 1925 the-receiver gave a notice (Ex. 7) to the Raja. to the effect that in pursuance of the terms of the agreement dated 22nd January 1925 he was prepared to surrender 11 mauzas. On 22nd June 1925 the Raja accepted the surrender of 9 mauzas but refused to accept the surrender of the remaining two as Villiers Colliery Ltd., who were joint lessees of these mauzas with Seddon & Co., had not joined in the surrender. On 27th July 1925 the receiver offered to surrender 6 other mauzas as under the mining lease, under which they were held, any property granted under that lease could be surrendered by giving six months notice. On 8th, August 1925 the Raja accepted the surrender of these mauzas also.
18. On 17th September 1927 the Raja wrote a letter (Ex. 0-4) to the receiver in which after stating that Seddon & Co., had not paid royalty for nearly two years, he made a proposal that the company might surrender certain other mauzas in which case he was prepared to forego the royalties due in respect thereof. The Raja stated in that letter that certain persons were willing to take settlement of the mauzas in question and "that he hoped that the receiver would agree with him that this was a fair proposal and no doubt most advantageous to him." The letter concluded with the threat that if the receiver decided to hold on the lease the Raja would call upon him to make immediate payment of all royalties due to him. With these facts before us I will now proceed to state briefly some of the conclusions which I have arrived at on a consideration of the evidence adduced in the case. They are as follows.
19. Firstly, that the Raja having been in close touch with his legal advisers throughout the negotiations which went on between him and the receiver relating to the surrender, it does not seem probable that he would have accepted the surrender without ascertaining who were the persons interested in the properties to be surrendered--whether as partners or as creditors or otherwise, and without being reasonably certain that the surrender was not likely to be questioned by any of these persons. Secondly, that the Raja was anxious to raise money and the proposal as to surrender was probably made by him in the first instance. The receivers statement as to the conversation which took place between him and the Raja in November 1924 is as follows:
I do not remember the details of the conversation, but I may say generally that he (the Raja) stated that I should give money or loan. He told me why should Seddon keep so many mauzas which he is not leasing out. He expressed the desire that he would himself like to lease them out, if he got them. He asked to give money on account of future rent.
20. The fact that the Raja was keen about "surrender" is further supported by his letter dated 17th September 1927 in which he suggested that Seddon & Co., might surrender certain mauzas in addition to those already surrendered in which case he was prepared to forego royalties in respect of those mauzas also.
Thirdly, that the Raja was fully aware of the fact that there was no order of the High Court expressly sanctioning the surrender of any mauzas. It has been proved beyond doubt that the receiver provided him with a true copy of the order of the High Court sanctioning settlement between them and that no loss than three copies of that order had been obtained by the Raja himself. The Raja probably never apprehended that the surrender would be questioned by any of the parties interested in the properties.
Fourthly, that the receiver was in possession of and dealt with the entire property of Seddon & Co., including the mauzas to which this suit relates and neither Bangar and Daga nor Dakshina, Kishori and Rasaraj had ever challenged his power to deal With any of the properties. So far as the last three persons are concerned, Seddons case in his written statement is that by reason of certain arrangements arrived at between them and the other partners they had retired from the partnership altogether and whether in law their interest in the partnership had ceased or not, it seems to be a fact that they never asserted their right in regard to the partnership property after the said arrangements nor did Seddon or any one else treat them as partners.
21. Similarly, there is nothing on the record to show that Bangar or Daga ever questioned the authority of the receiver to deal with the entire property or tried to interfere with his possession. On the other hand one of the terms in the compromise decree which was passed in their favour in Asansol was that one Mr. Leslie was to be appointed as a receiver in that suit only upon the discharge of the receiver appointed by the Calcutta High Court in Sastis suit.
Fifthly that the case of defendant 10 that he had surrendered the mauzas in question with the consent of Bangar and Daga as well as Sasti and Seddon is not improbable. The evidence on the point is wholly one-sided, because defendant 10 who is undoubtedly a respectable person has stated so on oath and his evidence is supported by the witnesses examined on behalf of Bangar and Daga.
22. As the villages which were surrendered brought no income to Seddon & Co., but merely added to the liability of the partnership by making the partners liable to pay royalty, it is conceivable that none of the parties interested in the properties raised any objection to the proposed surrender.
23. Sixthly, that though there is no evidence to show that the Raja was aware of the deeds of assignment and mortgage executed by Seddon in favour of Bangar and Daga, yet it is not likely that the Raja did not know that these persons were interested in the affairs of Seddon & Co., at least as their chief creditors. As has been already stated Bangar and Daga were among the five original receivers appointed in Sastis suit and it appears that in one of the letters written to Seddon on behalf of the Raja it was clearly stated that his Manager had been informed that "the original lease for the mining rights of certain villages were in possession of Mr. Daga."
It may be recalled here that the main points on which the surrender is attacked are firstly, that it was effected without the leave of the Calcutta High Court; secondly, that the receiver did not represent the 16 annas interest, as it is called, in the mauzas which were surrendered, the suggestion being that he did not represent at least Bangar, Daga, Dakshina, Kishori and Rasaraj at the time the transaction was concluded and thirdly, that the whole transaction was vitiated by mutual mistake.
24. On behalf of the receiver as well as defendants 7 to 9 it was contended that the leave of the Court was not necessary as defendant 10 by the order appointing him a receiver had been vested with very large powers including the power of winding up the business of the partnership. It was also argued in the alternative that the question of "leave" was a domestic question, that is to say, a question between the Court and the receiver and not one which can be raised properly by the plaintiff. As to the argument that the surrender was effected without the consent of some of the parties interested in the properties, it was pointed out on behalf of the receiver that in fact Dakshina, Kishori and Rasaraj had already ceased to be partners and Bangar and Daga had given their consent to the surrender. It was further contended that the Raja was estopped from challenging the surrender and at any rate he could not avoid the transaction without restoring the benefits which he had received under the agreement dated 22nd January 1925. Lastly it was contended that the plaintiff not having pleaded a case of mutual mistake and not having raised it in the Court below should not be allowed to raise it for the first time in this Court, because if the respondents had proper opportunity to meet it, they would have shown it to be wholly untenable.
25. In my opinion it is unnecessary to consider these arguments, because even if it be assumed that the plaintiff is entitled to avoid the surrender in a proper proceeding, I am unable to hold on the facts established in this case that he can recover royalty for the period in suit in respect of the surrendered villages. The present suit is merely a suit to recover royalty and the plaintiff has made no prayer in his plaint for declaring the surrender to be invalid or for setting it aside. The plaintiff cannot recover royalty in respect of the surrendered villages in this suit, because until the present suit was instituted he had treated the surrender as a good transaction and for that reason neither the receiver nor any of the other defendants has exercised any act of possession over the surrendered villages since the date of the surrender. The third witness for the Raja when asked whether the surrendered mauzas were or were not in khas possession of the Raja said, "Yes, they came into the khas possession of the Raja."
26. He also added that the Assistant Manager Gopi Babu had given him instructions "to note the istafas (surrender) and they were accordingly noted." This shows that the plaintiffs case in the plaint that the possession of the surrendered villages remained all along with "the lessees and their representatives and assigns" and the surrender was never acted upon is not true. It is common ground that in the accounts which were sent from time to time by the Raja to the receiver between the date of the surrender and the institution of the suit, the royalty for the surrendered mauzas was not included at all. Again in the suit which was brought at Burdwan to recover royalty for the years 1332 to 1336 in respect of the mauzas of that district no claim was made for royalty in respect of any of the surrendered mauzas though several of them are situated in that district. It seems to me that if the surrender had not been acted upon, the Raja would not have allowed his claim to royalty for a considerable period in respect of the surrendered mauzas of Burdwan district and other districts to become time-barred. What is strange is that the surrender is assailed by the Raja who was himself anxious to obtain it and not by any of the partners of Seddon & Co. or the Marwari defendants (Bangar and Daga).
27. However that may be, the issue in the present case is in my opinion a very simple one and may be put thus: Can a lessor, who by his own act has prevented his lessees from enjoying the demised premises during a certain period, recover from them rent or royalty for that period In my opinion there can be only one answer to that question and that should also be the answer to the Bajas claim in so far as it relates to the surrendered mauzas. Therefore so far as this claim is concerned, the judgment of the trial Court must be upheld.
28. The next question to be considered is whether the suit can succeed against defendants 7 to 9. The learned advocate to the appellant conceded before us that defendant 8 is not liable to pay the royalty claimed in the suit, as he has been adopted into another family, but he has pressed the claim against defendants 7 and 9 on the ground that defendant 9 and the father of defendant 7 were assignees of a two annas interest in the lands originally demised to Seddon & Co. The allegations made by the plaintiff on this point are to be found in paras. 2 and 11 (a) of the plaint, the latter paragraph being inserted therein on 29th March 1935 with the leave of the trial Court. Paras. 2 and 11 (a) are as follows:
Paragraph 2.--That the plaintiff has been informed and believes that on 31st March 1921 the said Mr. Seddon and Rasaraj Biswas for them-selves and as representatives of their cosharers in the said properties by an indenture of conveyance dated 31st March 1921 conveyed and assigned unto late Kedar Nath Daga, the father of defendants 7 and 8 and defendant 9, an undivided two annas share of their rights in the properties mentioned in the Schedule annexed thereto including the two annas shares of their rights in the properties mentioned in Schedule 1. That by another indenture of the same date the said Mr. Seddon and Rasaraj Biswas for themselves and as representatives of their cosharers mortgaged to the said Kedar Nath Daga and Mungniram Bangar the remaining fourteen annas share of the rights of those properties.
Paragraph 11 (a).--That defendant 9 and father of defendants 7 and 8 also acquired good and valid title to two annas share of the mauzas described in Sen. 1A and 1B annexed to the plaint by virtue of the compromise and compromise decree in Suit No. 288 of 1922 in the Court of the Subordinate Judge of Asansole and as such they are liable to pay rents and royalties and deliver royalty coal to the plaintiff as claimed.
29. The answer of defendants 7 and 9 to para. 2 of the plaint is firstly that the deed of assignment did not convey a two annas share in properties referred to in the deed but only a two annas share in the salamis and royalties payable to the assignors in respect of them and secondly that having regard to the fact that the said indenture was executed by two out of the four partners of the firm of Seddon & Co. the said indenture was wholly inoperative and ineffectual in law and did not vest in defendant!) and in the late Kedar Nath Daga any share in what was purported to have assigned by the said indenture.
As to the compromise decree referred to in para. 11 (a) their written statement is to the following effect:
1. With reference to the allegations made in para. 11 (a) of the plaint, this defendant denies that he and the father of defendants 7 and 8 or either of them acquired a title, good and valid on otherwise or at all, to two annas share or any other share in the mouzas desoribed in Schedule (a) and Schedule 1(b) annexed to the plaint or in either of the said Schedules by virtue of the compromise and the compromise decree or by virtue of any other terms or term or transactions as alleged in the said paragraph.
2. This defendant is advised and believes and he submits that the said compromise and the compromise decree are wholly irrelevant in this suit and he further submits that on a proper construction of the said compromise and compromise decree, 2 annas share of salamis and royalties and not 2 annas share of the mouzas described in the said schedule was declared to belong to this defendant and defendant 9.
30. In the course of the trial, defendants 1 to 9 further elaborated their defence and attacked the compromise decree as being altogether void on a number of grounds which will be referred to later. The learned Subordinate Judge has accepted their case in regard to the deed of assignment and the compromise decree in its entirety and has held that they are not liable to pay the royalty claimed in the suit.
The first question to be considered is what interest, if any, passed to Bangar and Daga under the deed of assignment. This deed refers to two kinds of properties : (1) properties in respect of which salami was payable at the date of assignment or might become payable in future; (2) properties in respect of which royalty was payable or might be payable in future.
31. The deed provides in the first place that the assignees were to receive a two annas share in the salamis after deducting (a) a sum equal to 15 per cent, of the salami moneys and (b) a sum or sums payable as salami by the assignors to their superior landlords. As to royalty the deed provides that
assignees were entitled to 2 annas share in them after payment of the royalties payable by the assignors to the superior landlords and to surface owners and occupiers.
The assignees were to enjoy for ever the benefits assigned under the indenture there being no limitation whatsoever as to time and the document contained all the usual clauses which are to be found in a deed assigning real property. One of the clauses provided that "all the estate, right, title, interest, claim and demand whatsoever of the assignors into of or upon the said one-eighth or two annas share" had been assigned. CI. (2) provided that the "assignees shall and may at all times hereafter peaceably and quietly enjoy and receive the said share of the said salamis and royalties hereby assigned or intended so to be without any let, stay, eviction, interruption, claim or demand whatsoever from or by the assignors or any person or persons" lawfully claiming through them. The deed further provided that the assignors shall or will from time to time and at all times hereafter at the request and cost of the assignees do or execute or cause to be done and executed such acts, deed, matters and things whatsoever for further better and more perfectly assuring the said share of the said salamis and royalties hereby assigned...unto the assignees in manner aforesaid as shall or may be reasonably required.
32. In the concluding clause the assignees bound themselves to deliver a full detailed account of salamis and royalties and to verify and prove the correctness of the same in such reasonable manner as the assignee shall require and to inform them of the executions of any lease or other documents that may be executed afterwards at their request and cost supply them with certified copies of the same.
The case of the appellant is that the deed was intended to convey to Bangar and Daga nothing short of a two annas interest in the coal lands and the document was made to appear as a deed assigning only the salamis and royalties with a view to prevent the superior landlord from realizing the royalty directly from the assignees. It was also contended on his behalf that inasmuch as the assignors still held 14 annas share in the coal lands referred to in the deed, they were allowed to manage the whole property and hand over to the assignees their share in the profits which consisted only of salamis and royalties after deducting the royalty payable to the landlord and other incidental expenses and also 15 per cent, as collection charges from the salamis. Defendants 7 to 9 on the other hand contend that the deed was nothing more than an assignment of a share in salamis and royalty with the result that the assignors still had the reversion and were free to settle and deal with the undisposed of properties in any manner they liked.
33. It is pointed out on their behalf that a few of the mouzas had not been sub-leased and were in the khas possession of Seddon & Go. and there was nothing in the deed of assignment to prevent them from carrying on mining operations in them in which case no salami or royalty would be payable to Bangar and Daga in respect of them.
That the construction of the deed owing to its peculiar form does present certain difficulties cannot be denied, but on the whole I am inclined to think that it was intended to convey a two annas interest in the coal lands and not merely in salamis and royalties. So far as bequests are concerned, it is well settled that a gift of rents and profits arising out of any defined property held by a testator is sufficient to pass the property itself: see Mannox v. Greener (1872) 14 Eq 456, Mayor, Alderman and Burgesses of Southmolton v. Attorney-General at the relation of James Miles (1854) 10 ER 796, Blann v. Bell (1852) 42 ER 1075, Humphery v. Humphery (1861) 61 ER 207, Shookmoy Chandra Das v. Monoharri Dassi (1885) 11 Cal 684, Vaithianatha Aiyar v. Theyagaraja Aiyar AIR (1921) Mad 568 and Durga Devi v. Duni Chand (1905)2 ALJ 568 . It has been re-marked in certain cases that the rule enunciated above is founded on the old feudal law that a devise of rent and profits of real estate carried with it the property in the land : see the observations of Lord Cran-worth in Blann v. Bell (1852) 42 ER 1075; but the rule having now received statutory recognition in Section 172, Succession Act, it is unnecessary to investigate its origin.
34. The only question which requires consideration is whether the rule is confined to wills or is applicable also to assignments. On the whole, I am inclined to think that it applies to gifts and assignments also, because as Coke put it in his simple way "What is land but profits thereof" It is true that there is no express provision in the Transfer of Property Act corresponding to Section 172, Succession Act, but that does not dispose of the question, because the Act nowhere provides what exact words are necessary to convey title under a deed of conveyance. In C. Venkataohariar v. Panohayappa Chetty AI R (1926) Mad 250 the rule was held to be applicable to a case other than that of a will and I do not see any reason why it may not be applied to this case, provided that it is clear among other things that the deed in question related to all the incomes derived from the coal lands referred to in the deed. As Mallins V. C., observed in Mannox v. Greener (1872) 14 Eq 456
there is no distinction whatever between giving the income of the lands and the rents and profits of the land. The income means rents and profits and rents and profits mean the income. They are convertible terms.
I think that on the facts of this case it will not be unreasonable to hold that under the deed of assignment a two annas share in all the incomes which did or could accrue from the properties referred to therein was assigned to Bangar and Daga. It appears that Seddon & Co., had granted either subleases or prospecting licenses in respect of the bulk of the mauzas acquired by them, but they also had some mauzas in khas possession, especially those in respect of which sub-leases or licenses granted by them had been surrendered.
35. So far as the first two kinds of land are concerned, there can be no doubt that royalty and salami constituted their entire income. It is, however, contended that in regard to the properties which were in khas possession of Seddon & Co., it was open to them to carry on mining operations in them in which case they would yield income other than salamis and royalties. The argument is a plausible one, but on carefully scrutinising the deed of assignment I find it difficult to hold that Seddon & Co. intended to carry on mining operations in any of these properties, because otherwise, there was no meaning in their being included in that deed. The deed deals with a large number of properties some of which had been acquired by Seddon & Co., from landlords other than the plaintiff.
36. The question as to what was the exact number of mauzas which were in khas possession of Seddon & Co., at the date of the assignment has not been investigated by the Court below and there is no direct evidence on the record to show whether or not Seddon & Co., actually intended to carry on mining operations in any of them. It seems, however, to be clear that the number of properties in their khas possession was negligibly small and the fact that they were included in the deed of assignment shows that they were intended to be ealt with only in such manner as to be capable of yielding income consisting of nothing else but salami and royalty.
37. It was pointed out to us that if we confine our attention to the mauzas in regard to which royalty is claimed in the present suit, it will appear that only two of them, namely Mahal and Shivabardih, were at the date of the assignment in khas possession of Seddon & Co. Seddon & Co., had granted prospecting licenses in respect of these two mauzas also but later on the lioenses were surrendered and afterwards defendant 10 as receiver on behalf of Seddon and others surrendered both these mauzas to the plaintiff with the full concurrence of Seddon. It is contended on behalf of defendants 7 and 9 that by the deed of assignment Seddon & Co., did not part with the right of reversion but still retained it. I am however not impressed by this argument. If it is a correct rule of construction that assignment of rents and profits without limitation is sufficient to pass the property which is the source of such rents and profits and if the intention of the document appears to be to pass the property itself, then a deed cast in that form will pass everything including the reversion and no question of reversion remaining in the assignors can arise.
38. It is open to an assignor to frame his document in any form he likes and he may, instead of saying "I convey such and such property," use any other set phraseology which will have the same effect. It was contended on behalf of the appellant that the question of reversion cannot arise in a mining lease, because such a lease is tantamount to a sale of the land or minerals. The better view however seems to be that it is not a mere sale but also partakes of the character of a lease: see falakrishna Pal v. Jagannath Marwari, AIR (1982) Cal 775. In the view however that I have already expressed, it is needless to discuss the matter further. The view which I have expressed is very strongly supported by the manner in which the parties to the deed themselves construed it afterwards. (His Lordship then referred to the evidence on this and proceeded.)
39. It is unnecessary to deal with this question at any length, because it was conceded before us that the deed of assignment cannot be challenged by any of the partners, because all the partners other than Seddon and Rasaraj, be it Kishori, Dakshina or Sasti, entered into the partnership subject to the rights acquired by Bangar and Daga under the contract of July 1920 to which reference has been already made in the statement of fact. In the Court below, as well as in this Court, a large number of arguments were put forward on behalf of defendants 7 to 9 to show that the grounds put forward in paras. 11 (a) of the plaint, that is to say, that Daga and Bangar acquired title to a two annas share in the properties of Seddon & Co., under the compromise decree cannot be accepted.
40. Broadly speaking, these arguments may be divided under three heads: (1) that the decree contains no provision whatsoever giving effect to the deed of assignment, (2) that the construction put upon the decree by the plaintiff is wrong and (3) that the decree is void and did not confer any title upon Daga and Bangar. (His Lordship then dealt with the first two points and proceeded.) The learned Subordinate Judge has accepted almost all the contentions of defendants 7 to 9 against the compromise decree and though I am not disposed to agree with many of his conclusions, I consider it unnecessary to refer to them or give my reasons for differing from them, because being of the view that the deed of assignment had conveyed a 2 annas share in the properties to Bangar and Daga, I consider it unnecessary to deal with the question whether the decree by itself and apart from the deed of assignment would operate to convey such title.
41. One of the peculiar features of this case is that the Raja has impugned "the surrender" which was brought about by direct negotiations between him and the receiver, and defendants 7 to 9 have impugned the decree which was passed with their consent in their own suit and which they treated as a valid decree up to the stage of execution. In order to impugn these transactions the plaintiff as well as defendants 7 to 9 have come to Court with the common case that Basaraj, Dakshina and Kishori are still interested in the properties which were in possession of Seddon & Co., at the date of the suit. Seddon and the receiver on the other hand have asserted that these three persons having ceased to be partners long ago are no longer interested in those properties.
42. The account given by Seddon in his written statement is that he purchased the interest of Kishori and Dakshina in the partnership properties on 23rd May 1922 and has paid Rs. 10,000 to them out of the consideration and that Rasaraj retired from the partnership on and from 1st January 1923. The written statement of defendant 10 is silent on the point but in Court he has supported Seddons statement.
Now, on the evidence as it stands which is somewhat meagre the true position seems to be that Basaraj, Dakshina and Kishori had retired from the partnership on or about the dates mentioned in Seddons written statement, but as no formal document has been executed by them giving up their interest in the partnership properties, it has now become a debatable question as to whether in law their interest in the properties has come to an end.
43. However that may be, in the view which I have taken the question is not of much importance. If my interpretation of the deed of assignment is correct, Bangar and Daga acquired a good title to a 2 annas share in the properties in question by virtue of that deed and the title so acquired has been only reaffirmed by the decree.
It appears that the title of Bangar and Daga under the deed of assignment and under the decree is challenged by no one excepting Bangar himself and the sons of Daga. As I have already stated Seddon was a party to the compromise decree in the suit at Asansol and Rasaraj had stated in that suit that he was no longer interested in the partnership properties. In the present suit Seddon accepts the plaintiffs case in toto and the heirs of Dakshina and Kishori have not traversed the statement made in the plaint that Daga and Bangar had acquired a valid title to a two annas share in the properties mentioned in the deed of assignment.
44. Thus, on such materials as are before us, it is difficult to hold that Daga and Bangar have no share in the properties in respect of which royalties are claimed in the suit. The next question to be considered is whether as assignees of a share in the properties, defendants 7 and 9 are liable to pay the royalty claimed in the suit. It has been contended on their behalf that the doctrine of privity of estate on which they are sought to be made liable cannot be invoked in India, but Section 108, T.P. Act, suggests otherwise and the point is concluded by the decision of the Judicial Committee in Ramkinkar Banerjee v. Satya Charan, AIR (1989) PC 14 where it has been held that the doctrine of privity of estate is applicable to this country also.
45. It was also contended on behalf of defendants 7 to 9 that even if the consent decree operated to transfer title, they are not liable to pay royalty, because the estate being in the hands of the receiver they were never in direct possession of it and because the compromise decree in so far as it relates to a two annas interest in the properties is incapable of execution nor can they under that decree obtain khas possession of any part of the property. The argument, how-ever does not take note of the fact that for the application of the doctrine of privity of estate all that is necessary to be found is whether possessery title has passed or not and the question whether possession has been taken is immaterial.
46. The mere fact that Bangar and Daga did not take any effective step to obtain possession from the receiver or to realise their share in the profits of the estate from him is not sufficient to defeat the landlords right to realise royalty from them. That actual possession is not necessary in such a case is established by the decision of the Judicial Committee in 20 PLT 147.10 The next point to be considered is whether defendants 7 and 9 are liable jointly and severally with the other defendants to pay the whole royalty or they are liable to pay it only in proportion to their share in the properties. The law a3 to the liability of an assignee of a part of a demised premises has been stated thus by Roa in his book on the Law of Landlord and Tenant.
Whether an assignment by the lessee of his whole interest in part of the demised premises (an act by which he is said to "sever" the term) oreates a privity of estate between the lessor and assignee in respect of the whole land has been said to be doubtful Curtis v. Spitty, (1834 40) 1 Bing 756 But such an assignment will at all events render the assignee liable for rent Gamon v. Vernon, (1662-97) 2 Lev 231 and upon the oovenants of the lease which can be apportioned e.g. the covenant to repair Congham v. King, (1625) Cro Car 221 in proportion to the share it conveys to him; and it has now been laid down (in Ireland) as "well-settled law" that the assignee is liable in so far, and in so far only as the covenants affect the lands in his possession, and as regards rent only for an apportioned part of the rent properly chargeable in respect of the lands actually vested in him: Dooner v. Odium, (1914) 2 LR 411. where however the share of demised premises is not held by the assignee in severality, as where they become vested in joint tenants or tenants in common, the Case is different, because he with the others, holds the whole estate, and privity in respect of it exists accordingly between him and the lessor. Consequently, where a lease became vested by assignment in two tenants in common, it was held that either of them was liable to the lessor for the full amount of damages found to be due for breaches of the covenant to repair (1923) 1KB 469. And the same principle probably applies, to rent.
47. The italicized words in the above passage will show that there is no direct authority on the question even in England. In United Dairies Ltd. v. Public Trustee, (1923) 1KB 469 which is the latest case on the subject, Greer J. recognized that the question was one of some difficulty and he also stated that the case had been argued before him on the assumption that in English law, whatever may be the Case in Ireland a tenant-in-common was not liable for the whole rent, but only for a proportionate part.
He was, however, of the opinion that the question was not definitely concluded by any decision of the English Courts and after examining the cases on which the old view was based he observed as follows:
It seems to me on the authorities that it has never been conclusively established that an assignee holding with other tenants under the terms of the original lease is not liable jointly with those other tenants for the whole rent. He has an interest in the whole of the land leased, though it is only a partial interest; his estate extends over the whole of the land leased; and I see no valid reason why tenants in common should be in a position as regards liability for rent different from that of joint tenants. I am inclined to think that each of the tenants-in-common has the privity of estate with the landlord in the whole of the land leased.
48. The learned Judge then pointed out that the case before him was not a case of rent, but was an action to recover damages for breach of covenant to repair the leased property and so he concluded as follows:
However this may be, even if tenants-in-common are only liable for the duly apportioned part of the rent, it by no means follows that they are only liable for an apportioned part of the damage for breach of covenant to repair. It seems clea that before the breach the obligation of each of them is of necessity an obligation to repair the whole estate. This in itself is not divisible.
Thus, strictly speaking the above case does not decide that the assignee of a share in a demised premises is liable for the whole rent, but in view of the observations of Greer J. it has been held in several cases in India that such an assignee may be sued for the whole rent: see Kunnisow v. Parkum Mulloli Chathu AIR (1916) Mad 768 ; Musafkanni Ravuthar v. Doraisingham AIR (1927) Mad 931 ; Kailash Chandra Mitra Vs. Brojendra K. Chakravarti and Others, and Moti Lal v. Kartar Singh, AIR (1930) Lah 515. The English authors are also inclined to take the same view now.
49. Now, if the matter was not covered by authorities and I was free to express my own opinion untrammelled by the decisions to which I have referred, I would be inclined to the view that the assignee of a part of demised premises in a case like the present is liable only for proportionate rent. The doctrine of privity of estate is a somewhat technical doctrine and apart from it one might find it difficult to discriminate on general principles between an assignment by a lessee of his whole interest in part of the demised premises (severance of terms) and an assignment by him of a share only in the whole of the demised premises. The landlord in each case is entitled to ignore the assignment and sue the assignor alone for the whole rent on the ground of privity of contract. If however, he does not desire to ignore the assignment and wants to make both the assignor and the assignee liable, it is only fair that he should be required to give the assignment which is the basis of the assignees liability its full effect and realize rent which is a divisible claim in proportion to the shares held by the assignor and the assignee. The question, however, as was observed by Greer J. is a difficult one and as at present advised I am not prepared to dissent from the prevailing view.
50. There is only one other question which I wish to deal with before I proceed to consider what should be the form of the decree in this case. Defendant 10 has now been replaced by two other receivers who, after the argument for the appellant had been nearly concluded filed an application asking as to hold that the appeal is not properly constituted inasmuch as all the heirs of the "deceased plaintiff have not been made par-ties and that no new decree can be passed in the absence of these heirs. It is common ground that the deceased plaintiff was the owner of an impartible estate and on his death the impartible estate has now devolved on his eldest son, the present appellant.
51. It is stated on behalf of the new receivers that the deceased Raja has left several other heira and they are necessary .parties to the appeal, inasmuch as the royalties for which the suit has been brought were under the law not part of the impartible estate but were the personal property of the deceased plaintiff.
Now, it appears that after the death of the late Raja the present appellant made an application for being substituted for him in this appeal on the allegation that he was the legal representative of the deceased appellant. Notice of this application was served on all the respondents including defendant 10 who has been succeeded by the new receivers as well as defendants 7 to 9, but as none of them objected to the appellants petition, he was duly substituted in the place of his deceased father.
52. It appears to me therefore that so far as the present proceedings are concerned, the question cannot be re-opened and it must be deemed to have been constructively decided "that the appellant is the legal representative of his deceased father and is entitled to prosecute the appeal in this capacity. If the old receiver could not raise the present objection, I do not see how the present receivers can do so. None of the alleged heirs of the Raja has appeared in this Court to oppose the appellants petition or applied before us to be substituted in place of the deceased Raja nor have we any materials before us which would justify the view that so far as the present appeal is concerned, the present appellant who is admittedly the senior most member of a Hindu family cannot represent the other members of the family.
53. In these circumstances I am not inclined to entertain the objection at this late stage of the case. The question however as to what will be the rights inter se of the present appellants and the other heirs of the Raja is one which need not be decided in this Court, as it is always open to any party who claims to be interested in the royalties to claim his share from the appellant in a duly constituted suit, if necessary. The only point which remains to be decided is what should be the form of the decree to be passed in this appeal. As it has been held by me that the plaintiff cannot recover royalty for the surrendered villages in this suit, the decision of the Court below must stand so far as the amount decreed is concerned and it must also stand with regard to defendants other than defendants 7 and 9, those defendants not having appealed against the decree of the trial Court. As to defendants 7 and 9 .
54. I should have in view of my findings granted a decree against them in the same terms as are to be found in the decree granted by the trial Court against defendants 1 to 6, but in my opinion in the circumstances disclosed in the evidence, it will not be just to pass such a decree against them. It was not disputed before us that defendant 9 and the father of defendant 7, Kedar Nath Daga, had advanced very large sums of money to Seddon & Co. and the money has still remained unpaid. In the deed of assignment there was an express clause that the royalty would be paid to the landlord by Seddon & Co. who were to be in possession of and manage the whole property including the share assigned by them.
55. Under the compromise decree also, defendant 9 or Kedar Nath Daga did not get khas possession of the two annas share, in the properties of Seddon & Co. Faras. & to 6 of the terms of settlement which have been incorporated in the decree contain provisions as to how the decretal money was to be paid and how the interests of defendant 9 and Daga were to be safeguarded, but it is common ground that no receiver, as contemplated in the decree, has yet been appointed and the property still continues to be in possession of the receiver appointed in Sastis suit. Whether technically the possession of the receiver is possession on behalf of all the parties interested or not, there is no doubt that he is the person who is in de facto possession of the entire estate.
56. It is also clearly established that the whole property was in the possession of the receiver during the years for which royalty is claimed and defendants 7 and 9 never dealt with the property in any way. It is also not disputed that the royalty has been made the first charge on the demised premises under the lease granted by the plaintiff to Seddon & Co. though it is true that the plaintiff has his option under the law not to enforce the charge.
In these circumstances it seems fair and equitable that the decree passed against defendants 7 and 9 should be subject to this condition that before proceeding against them the appellant should in the first instance try to recover the amount decreed from the receivers who have succeeded defendant 10. The receivers will not be personally liable, but they shall pay the decretal amount out of the assets of Seddon & Co.
57 In case the whole or any part of the amount decreed cannot be realized from the receivers the appellant will be entitled to realize such amount from defendants 7 and 9, but defendant 7 will be liable only to the extent of the assets of his deceased father. I should like to state that the learned advocate for the appellant had no objection to a decree being passed in these terms as against defendants 7 and 9. As the decree of the Court below stands the appellant will be at liberty to proceed against defendants 1 to 6 at once. If however the appellant chooses not to proceed against them, but to proceed against defendants 7 and 9, he must adopt the procedure indicated above and if he does so, these defendants will not be heard to say that the appellant must first proceed against defendants 1 to 6.
58. The appeal is accordingly allowed in part as against defendants 7 and 9 who are respondents 7 and 9 and it is dismissed as against the other respondents. As the appeal fails against the receiver-respondents, the latter will be entitled to their costs in this appeal, hearing fee being fixed at 50 gold mohurs. There will however be no order as to costs as between the appellant and the other respondents. We make no order for costs as against respondents 7 and 9 because the success is divided. The appellant did not press his appeal as against-respondent 8 and there was little or no contest on behalf of the other respondents and1 so we make no order for costs so far as they are concerned.
Chatterji, J.
59. After stating the facts, his Lordship proceeded.) Before dealing with the merits of the appeal I should dispose of the preliminary objection of the-new receivers. Their contention is that although the estate within which the disputed villages lie is an impartible estate which on the death of the original appellant devolved on his eldest son the present appellant the royalties for which the-suit was brought were under the law not part of the impartible estate but were the personal property of the deceased proprietor and as such devolved after his death on his heirs under the ordinary law of inheritance. The appellants answer to this is that the application for substitution which was made by him was based on the allegation that he was the legal representative of the deceased appellant and notice of that application having been served on the respondents including the late receiver, substitution was made without any objection, and therefore it was not open to the present receivers who merely Btepped into the shoes of the old receiver to challenge the order of substitution which was binding i on the latter. In my view this contention, of the appellant must be accepted.
60. When in a suit or an appeal any party dies the question as to who is his legal representative must be decided by the Court and its decision must be binding on the parties. Order 22, Rule 5, Civil P.C., provides for the decision of such question, and the fact that an order passed under that rule is not appealable shows that the decision is of a; summary character and for the purpose of; the suit or appeal the person who is substituted in place of the deceased party shall; be deemed to be his legal representative. It I cannot be disputed that an ex parte order , is as much binding on the parties as a contested order. The preliminary objection must therefore be overruled.
61. Sir Manmatha Nath Mukhar ji on behalf of the appellant did not challenge the finding, of the learned Subordinate Judge with regard to adoption of defendant 8 nor did he advance any argument on the question of limitation. Upon the arguments advanced by the learned advocates on both sides the-broad points that emerge for consideration are these: (1) Is the suit bad for want of notice u/s 80, Civil P.C., on the receiver (2) Are the surrenders of villages mentioned in Schedules 3 and 4 of the plaint void and inoperative Is the plaintiff entitled to claim any royalty for those villages (3) Whether the deed of assignment dated 31st March 1921 conveyed merely a two annas share of the salamies and royalties or a two annas share in the leasehold properties. (4)(a) Did the compromise decree in Suit No. 238 of 1922 of the Asansol Court declare the title of Kedar Nath Daga and Mugniram Bangur only to two annas share of royalties and salamis or to two annas share of the leasehold properties (b) Is the decree void and ineffective (c) Did the decree have the effect of assigning to Kedar Nath Daga and Mugniram Bangur two annas share of the leasehold proper, ties (5) Are defendants 7 and 9 liable for the plaintiffs claim by reason of privity of estate (6) Assuming that defendants 7 and 9 are liable by privity of estate, are they liable for two annas or the entire 16 annas of the claim
62. Point (1)--Section 80, Civil P.C., provides:
No suit shall be instituted against....a publics officer in respect of any act purporting to be done by such public officer in his official capacity until the expiration of two months next after notice in writing has been....delivered to him.
It need not be disputed that a receiver appointed in a suit is a public officer with-in the meaning of the Section; but the question is whether the present suit is in respect of any act purporting to be done by the receiver in his official capacity. This is a suit for royalty of lands in the possession of the receiver. Non-payment of the royalty cannot be said to be an official act done by the receiver. So far as the surrenders are concerned, they were the result of individual contract between the receiver and the plaintiff and cannot be regarded as the official act of the receiver. Section 80 there-fore in my opinion has no application. Besides, the receiver, not having appealed against the decree passed against him, cannot raise the objection which, if valid, would bar the whole suit as against him.
63. Point (2).--The leases in respect of which royalty is claimed were granted to, (1) Henry Seddon, (2) Easaraj Biswas, (3) Dakshina Prasad Bhattacharya and (4) Kishori Mohan Sarkar who constituted the firm of Seddon & Co. The partnership was started on 1st August 1915 but without any formal deed. The first deed of partnership (Ex. A) was executed on 3rd November 1920 by Seddon and Rasaraj each of whom was stated therein to have 8 annas share. On 12th November 1920 another deed of partnership (Ex. 4) was executed by Seddon, Easaraj, Dakshina and Kishori accepting the terms and conditions of the earlier partnership deed (Ex. A). In this second deed (Ex. 4), the shares of the four partners were stated as follows:
It appears that sometime before 25th October 1922, Easaraj, Dakshina and Kishori wanted to retire from the partnership provided they were paid their dues. On 25th October 1922 Seddon agreed to take three other persons, namely, Sasti Kinkar Banerji, Ram Eatan Mahata, and T.S. Gibson as partners in the firm of Seddon & Co., on condition of Sasti Kinkar agreeing to pay Rasaraj, Dakshina and Kishori the balance of their dues: vide letter Ex. A H I. The shares of all these new, partners were stated to be as follows:
64. Though no deed of partnership is forth, coming it is common ground that these four persons did form a new partnership. On 23rd March 1923, Sasti Kinkar Banerji brought a suit (No. 908 of 1923) on the Original Side of the Calcutta High Court against the other three partners, Seddon, Gibson and Ramratan for dissolution of partnership and accounts: vide plaint Ex. A-H. In this suit a preliminary decree (Ex. 27) was passed by consent of the parties on 10th April 1923 and by the terms of the decree itself five persons, namely, (1) Kedar Nath Daga, (2) Mugniram Bangur, (3) Satis Chandra Sen, (4) Rai Bahadur Sukh Lal Karnani and (5) Kissen Gopal Dagree were appointed joint receivers of the properties of Seddon & Co. Subsequently, by an order (Ex. 27-a) dated 13tb June 1923 made with the consent of both parties, Mr. Satish Chandra Sen alone was appointed receiver with the same powers and under the same conditions as were mentioned in the decree (Ex. 27).
65. By Clause 4 of the decree the receivers were authorized to sell, mortgage or lease out the partnership properties including the properties taken up from S. Banerji or any portion thereof for the payment of liabilities of the firm including the debts of S. Banerji. It is not disputed that the receiver Mr. Satis Chandra Sen (defendant 10) came into possession of the entire properties of Seddon & Co., including the leasehold interests in the villages in question. The royalty payable to the plaintiff for these villages fell into arrears regarding which there was some correspondence between the plaintiff through his manager or legal advisers and the receiver. Eventually there was an agreement (Ex. L) dated 22nd January 1925 between the plaintiff and the receiver by which it was agreed among other things that the plaintiff would accept surrenders of such villages as Messrs. Seddon & Co. would choose by the end of March 1925. It was also stated in that agreement that Seddon & Co. had till that date paid to the plaintiff rupees one lakh on account of advance royalty. In pursuance of this agreement the receiver by his letter (Ex. 7) dated 29th March 1925 surrendered 11 villages. This surrender was accepted by the plaintiff by his managers letter (Ex. 8) dated 27th June 1925 with regard to the nine villages mentioned in schedule 3 of the plaint.
65. As. regards the other two villages the plaintiff declined to accept the surrender as there were some other cosharers with Seddon & Co., who did not join in the surrender. Again by a letter (Ex. 7-a) dated 27th July 1925 the receiver gave notice of his intention to surrender the six villages mentioned in schedule 4 of the plaint with effect from 31st January 1926, such notice being provided for in the mining leases dated 18th December 1919 relating to those villages. This surrender was accepted by the plaintiff by his managers letter (Ex. 8-a) dated 8th August 1925. There can therefore be no doubt that the plaintiff willingly accepted surrender of the 15 villages mentioned in schedules 3 and 4 of the plaint. His Case in the plaint was that he was induced to enter into the agreement (Ex. L) dated 22nd January 1925 and then to accept the surrenders on account of mis-representation and suppression of facts made by the receiver.
66. The learned Subordinate Judge after carefully considering the evidence came to the conclusion that there was no misrepresentation or suppression of facts and the plaintiff entered into the agreement and accepted the surrenders with his eyes open. In appeal Sir Man-matha Nath Mukharji frankly conceded that on the evidence on the record it would be difficult to hold that there was any misrepresentation by the receiver. He how-ever argued that in point of law the surrenders were void because, in the first place the surrenders were effected without the sanction of the Court. In the second place, the receiver had no authority to surrender the 2 annas share which belonged to Kedar Nath Daga and Mugniram Bangur by virtue of assignment and did not form the subject-matter of the Suit No. 908 of 1923 of the Calcutta High Court.
67. In the third place, both the contracting parties, namely the plaintiff and the receiver, were not at the time of surrender aware of the fact that 2 annas share of the leasehold properties had been assigned to Kedar Nath Daga and Mugniram Bangur, and that the receiver was appointed in respect of 14 annas share and not the entire 16 annas of the properties, and thus the surrenders were vitiated by mutual mistake.
As regards the first ground, namely that the receiver did not obtain the sanction of the Calcutta High Court for the surrenders, it is not disputed that in fact, no such sanction was obtained. It was, however, contended on behalf of the receiver that the powers conferred by the consent decree (Ex. 27) dated 10th April 1923 were wide enough to authorize the surrenders. Clause 4 of the decree authorized the receiver to sell, mortgage or lease out the partnership properties for the payment of liabilities of the firm. It would be unreasonable to hold that the power to sell, mortgage or lease included the power to surrender.
68. It was next contended that by the decree the receiver was entrusted with the winding up of the business and therefore he was clothed with the power to deal with partnership properties in whatever way he thought proper without any reference to the Court. It is impossible to accept this contention because in that case the receiver would be taking upon himself the entire function of the Court itself. An attempt was made to show that the surrenders were effected for the benefit of the estate. But evidence on the point, in my opinion, is neither satisfactory nor sufficient to enable us to come to any definite conclusion one way or the other. The only thing that was pointed out to us is that the surrendered villages were not in the possession of any sub-lessees and the receiver was hot deriving any income therefrom whereas he was incurring a recurring liability for the annual royalty. There is however nothing to show that the receiver made any attempts to lease out the villages or otherwise work the mines. If those tillages were really so unprofitable, the plaintiff who was always acting under the advice: of his manager or lawyers would not have readily agreed to accept the surrenders. Under these circumstances it must be held that the receiver had no authority express or implied from the Court to effect the surrenders.
69. The question then arises whether on that ground the plaintiff can impugn the surrenders as void. It is no doubt true on general principles that a receiver cannot effectively deal with the properties in his possession without the sanction of the Court that appointed him. Where he deals with any property without the sanction of the Court his transaction may be impugned by the party affected thereby and he may be held accountable if he has thereby caused any loss to such party. The object of the Courts sanction to any transaction by a receiver is to ensure that the interest of the parties whose properties the receiver is entrusted to deal with are properly protected. It is difficult to see how a third party who has himself with his eyes open entered into a transaction with the receiver can challenge it merely on the ground that it was not sanctioned by the Court. In the present case the plaintiff was the lessor and the receiver was in possession of the leased properties. The plaintiff himself in his evidence admits:
After Mr. Sen waa appointed receiver I used to get my royalty duo from Seddon & Co., from Mr. Ben. I used to get the whole sixteen annas of the royalty when they were paid.
70. He also says that he accepted the surrenders in the belief that the entire sixteen annas was being surrendered. It is not his case that after the surrender he was not in a position to deal with the surrendered villages. His employee, P.W. 3, says: "I did not make any demand of royalty for these nine mouzas after this under the orders of the manager." Then again in answer to the question
Can you deny that after 1926 you never made any demand prior to this suit in respect of the above nine mouzas beside sis others of Sandmara groups he said, "No I cannot deny this." The plaintiffs case is that the receiver did not deliver to him actual physical possession of the surrendered villages. But nowhere in the correspondence that passed between him and the receiver subsequent to the surrenders was any complaint made about nondelivery of possession. It is significant that by the letter (Ex. 0-4) dated 17th September 1927, the plaintiff proposed to the receiver that the latter might surrender the remaining villages that were held in khas (except one) in which case the plaintiff would forgo the royalties due to him in respect of those villages. P.W. 3 says: "The 9 mouzas given in istafa are in the khas possession of the Raja." The evidence thus leaves ho room for doubt that the surrenders were acted upon and the receiver had nothing to do with the surrendered villages after, the surrenders. So far as he and the plaintiff are concerned, the surrenders were, complete and effective.
71. As regards the second ground, namely that two annas share of the leasehold properties belonged to Kedar Nath Daga and Mugniram Bangur and was not the subject matter of the Suit (No. 908 of 1923) of the Calcutta High Court, it is enough to state that the receiver did in fact surrender the entire sixteen annas and the plaintiffs also accepted the surrenders in that belief. If Kedar Nath Daga and Mugniram Bangur had two annas share in the leasehold properties their right would no doubt remain unaffected by the surrenders. But so long as the receiver was in possession of the entire sixteen annas--and it cannot be disputed that he was--they could not interfere with his possession. Even after the surrenders they are not said to have interfered with the plaintiffs possession. Different considerations may arise if and when these persons assert their rights to the two annas share in any of the surrendered villages. But in the present suit defendants 7 to 9 accept the surrenders as valid and binding. The plaintiff therefore cannot complain that the surrenders are bad because defendants 7 to 9 have two annas share in the surrendered villages.
72. As regards the third ground namely that the surrenders were vitiated by mistake, it should be observed that no such case was made out either in the plaint or at the hearing before the trial Court. Mutual mistake such as would render a contract void within the meaning of Section 20, Contract Act, depends upon facts which must be pleaded and proved. Sir Manmatha Nath Mukharji, however contended that though mutual mistake was not pleaded, the evidence disclosed that both the plaintiff and the receiver were at the time of the surrenders not aware of the existence of the compromise decree in the Asansol Suit (No. 238 of 1922) or of the fact that two annas share of the leasehold properties had been assigned to Kedar Nath Daga and Mugniram Bangur. Even assuming that that was so, that would not have affected the surrenders because unquestionably the receiver was in possession of the entire sixteen annas and what was in his possession was surrendered to the plaintiff. Section 20, Contract Act, therefore will have no application. For the aforesaid seasons it must be held that the surrenders are not void and inoperative and are binding on the plaintiff and he is not entitled to claim any royalty for the surrendered villages.
73. Point 3.--According to the appellant the deed of assignment, Ex. 5 conveyed a two annas share in the leasehold properties specified therein. The respondents contention, on the other hand, is that what was assigned by the deed .was merely a two annas share of the salamis and royalties derivable from the leasehold properties. The question has to be decided with reference to the intention of the parties to be gathered from the deed itself. There are three schedules annexed to the deed. Schedule 1 which consists of four parts sets out in parts 1 and 3 respectively the mining leases and the prospecting licences which the assignors (Seddon & Co.) had obtained, and in parts 2 and 4 the villages to which those leases and licenses respectively relate. Schedule 2 which consists of five parts sets out, in part 1 the leases granted by the assignors, in part 2 the villages to which those leases relate, in part 3 the prospecting licences granted by them, in part 4 the villages to which those licences relate, and in part 5 certain villages in respect of which they had agreed to grant mining leases to the persons and firms mentioned therein. Schedule 3 specifies the royalties and salamis payable for the mining leases and prospecting licenses referred to in schedule 2. To understand the full import of the deed it is necessary to reproduce it (omitting the unnecessary portions) as follows:
74. Whereas by an indenture of even date with these presents and made between the assignors (therein described as mortgagors) of the one part and the assignees (therein described as mortgagees) of the other part a seven-eighths or fourteen annas share of and in the salamies and royalties now due and payable or hereafter to become due and payable to the assignors under or in respect of or by virtue of all or any of the mining leases and prospecting licences specified in parts 1 and 3 and the mining leases of the mouzas described in part 5 of schedule 2 hereunder written after making the deductions therein referred to was mortgaged and charged to the assignees (subject as therein mentioned) as security for the repayment of the principal sum of Ks. 10,00,000 with interest and other sums as therein mentioned and whereas as part of the consideration for the said mortgage it was agreed:
1. That the assignors shall transfer and assign to the assignees for their own use and benefit absolutely a one-eighth or two annas share of all moneys after the date hereof to be received by or to become payable to the assignors as salami in respect of any of the mining leases or prospecting licenses specified in parts 1 and 3 of schedule 2 hereto or the mining leases agreed to be granted of the mouzaa described in part 5 of the said schedule 2 and in respect of any mining leases hereafter to be granted by the assignors in pursuance of any of such prospecting licenses after deducting from such salami moneys the following sums namely : (a) A sum equal to fifteen per cent, of the said salami moneys: (b) the sum or sums payable as salami by the assignors to their superior landlords under the leases or licenses specified in parts 1 and 8 of schedule 1 hereto or otherwise.
2. That the assignors shall assign to the assignees for their own use and benefit absolutely a one-eighth or two annas share of and in all royalties reserved by the mining leases specified in parti of schedule 2 hereunder written or relating to the mouzas described in part S of schedule 2 and by any mining lease hereinafter to be granted by the assignors to any person or persons in pursuance of any prospecting licence specified in part 3 of the said schedule 2 alter payment there out of the royalties payable by the assignors to their superior landlords and to surface owners and coupiers. How this indenture witness the that in pursuance of the said agreement and for the purpose of carrying the same into effect, the assignors do hereby assign, transfer, set over and assure unto the assignees all that one-eighth or two annas share of in and all and singular the salamies and royalties now due and payable or hereafter to become due and payable to the assignors under or in respect of or by virtue of all or any of the mining leases and prospecting licenses specified in parts 1 and 3 and the mining leases of the mouzas described in parts of sch. 2 hereto after deducting therefrom in the case of the salamies and sum equal to IS per cent, thereof and also the salamies payable to the superior landlords of the assignors and in the case of the royalties and royalties payable to the superior landlords of the assignors and to surface owners and occupiers and which said mining leases and prospecting licenses affect all or part of the mines, veins, Rams and beds of coal situate lying and being under the lands set out and described in parts 2, 4 and 6 of schedule 2 hereunder written and which are comprised and in and demised or granted by these verbal pattas and prospecting licenses specified in parts 1 and 2 of schedule 1 hereunder written and all the estate right, title, interest, claim and demand whatsoever of the assignors into, of or upon the said one-eighth or two annas share to have and to hold the said share into the assignees absolutely and the assignors do hereby covenant with the assignees that, . the assignees shall and may at all times hereafter peaceably and quietly enjoy and receive the said share of the said salamies and royalties hereby assigned or intended so to be without any let, stay, eviction, interruption, claim or demand whatsoever from or by the assignors or any person or persons lawfully or equitably claiming or to claim or under or in trust for them or either of them and that free from all in. cumbrances whatsoever made or suffered by the assignors or any person or persons lawfully or equitably claiming as aforesaid. And further that the assignors and all persons lawfully or equitably claiming any estate or interest in the said share of the said salamies and royalties hereby assigned or Intended so to be or any part thereof from under or in trust for the assignors shall or will from time to time and at all times hereafter at the request and costs of the assignees do or execute or cause to be done and executed such acts, deeds, matters and things whatsoever for further better and more perfectly assuring the said share of the said salamies and royalties hereby assigned or intended so to be and every part thereof unto the assignees in manner aforesaid as shall or may be reasonably required and the assignors hereby further covenant with the assignees that they will from time to time and at all times hereafter upon the request of the assignees in writing deliver or cause to be delivered to the assignees a full detailed account of all salamies and royalties payable in respect of any lease hereinbefore referred to or in respect of any lease or other document hereafter executed in pursuance of any prospecting license or agreement hereinbefore referred to and will verify and prove the correctness of the same in such reasonable manner as the assignees shall require and immediately upon any such lease as aforesaid being hereafter executed will inform the assignees thereof and will at the request and cost of the assignees supply them with a certified copy of the same.
75. From these provisions it is clear that subject to certain deductions the salamies and royalties were assigned absolutely to the assignees and the assignors reserved to themselves no right to the income of the leasehold properties except only 15 per cent, of the salamies payable in respect of the leases and licenses specified in schedule 2. The royalties which form the recurring income of the leasehold properties are to be enjoyed at all times absolutely and entirely by the assignees subject of course to the payment of the royalties to the superior landlord which form a first charge. The salamies represent the price agreed to be paid once for all to the assignors for the leases and licenses granted by them and might at their option have been reserved to them while assigning their rights. The price so payable formed no part of the recurring income of the properties and the fact that 15 per cent, thereof was reserved to the assignors does not make the assignment any the less operative as an assignment of the entire income. Looking to the terms of the document, it seems to me that it was intended to operate as an absolute assignment of the entire income of the leasehold properties.
76. That being so, the inference is legitimate that the leasehold properties themselves were intended to be assigned. It is an accepted rule of construction that an absolute grant of the income of an estate passes the estate itself. In Blann v. Bell (1852) 42 ER 1075 it was held that "a devise of the rents and profits of real estate carries with it the property in the land." In Mannox v. Greener (1872) 14 Eq 456 where the same principle was laid down, Malins, V.C. said:
There is no distinction whatever between giving the income of the land and of the rents and profits of the land. The income means rents and profits and the rents and profits mean the income; the; are convertible terms.
In Shookmoy Chandra Das v. Monoharri Dassi (1885) 11 Cal 684 their Lordships of the Judicial Committee observed:
If the bequest had been of rents and profits, and it appeared that it was the intention of the testator to pass the estate, those words would be sufficient to do it.
77. In Durga Devi v. Duni Chand (1905)2 ALJ 568 it was held that gift of rents and profits is equivalent to gift of property. In C. Venkataohariar v. Panohayappa Chetty AI R (1926) Mad 250 it was held that "A gift of the income of a property without! any limitation is a gift of the property it-self." No doubt all these oases relate to devises by wills, but I do not understand why on principle there should be a different rule of interpretation with regard to transfers inter vives, In C. Venkataohariar v. Panohayappa Chetty AI R (1926) Mad 250 which wag not a case of devise by will, it was held that) a grant of the income of certain property without limitation is grant of the property itself. Mr. Das drew our attention to Section 172, Succession Act, which runs thus:
Where the interest or produce of a fund is bequeathed to any person, and the will affords no indication of an intention that the enjoyment of the bequest should be of limited duration, the principal, as well as the interest, shall belong to the legatee.
And Illus. (iii) to the Section says "A bequeaths to B the rents of his lands at X. B is entitled to the lands." It was urged that this Section specifically provides for the above rule of interpretation with regard to bequests whereas there is no such provision in the Transfer of Property Act.
78. But in the Succession Act there are various provisions including an entire chapter (Chapter 6) regarding the construction of wills, while there are no corresponding provisions in the Transfer of Property Act. Nor does the latter Act prescribe what particular words are necessary to constitute a transfer. Section 8 of the Act to which Mr. Das referred in contrast to Section 172, Succession Act, lays down that
a transfer of property passes forthwith to the transferee all the interest which the transferor is thus capable of passing in the property and in the legal incidents thereof.
Such incidents are enumerated in the Section and include, "where the property is land...the rents and profits thereof accruing after the transfer," and "where the property is money or other property yielding income the interest or income thereof accruing after the transfer takes effect." With reference to these provisions in the Section it was argued that assignment of land carries with it the rents and profits thereof but not vice versa.
79. The object of these provisions however is to clarify what are the legal incidents of each particular class of property which pass along with the property when it is transferred. The Section is not intended to lay down any rule as to what words are necessary to effect a transfer of any particular kind of property. What property is actually conveyed by a particular deed depends upon its own terms. Of course it may be asked why, if by the deed (Ex. 5) the assignors really intended to convey the leasehold properties and not merely the salamis and royalties, they did not say so in clear terms. But we have to construe the deed as a whole and if the intention to be gathered from it appears to be that the leasehold properties were assigned full effect must be given to it.
80. It is important to bear in mind that the properties dealt with by the deed of assignment are coal mining leases. The characteristic of such leases is that the corpus is gradually destroyed in the process of extraction of coal which fetches the income. If the income of such property is assigned absolutely and for ever, nothing is left to the assignor. The property itself passes to the assignee. As I have already shown, the deed (Ex. 5) purports to assign the income of the leasehold properties in question absolutely and for ever. The deed also contains various clauses providing for quiet enjoyment which are appropriate to an assignment of real property. Then it appears from part III of schedule 2 in the deed that certain prospecting licences are included in it, though they were already surrendered or option had expired. (See items 4, 7, 9-a, 9-b, 14 and 16.) Part IV of the same schedule includes the corresponding villages. The inclusion of these villages would be meaningless if merely the salamis and royalties were intended to be assigned.
81. On the contrary there are certain passages in the deed which were relied upon by Mr. Das in support of his contention that nothing more than salamis and royalties was assigned. In the first place he relied upon the expression "all moneys" occurring in Clause 1 of the deed quoted above. But it is to be noticed that this expression is used> with reference to the salamis only and not to the royalties. As I have already pointed out, the salamis were not recurring income but certain specified amounts payable once for all as part of the consideration for the leases and licences. In the second place Mr. Das relied upon those passages in Clauses 1 and 2 of the deed quoted above which provide that the assignors were to grant the leases in pursuance of the prospecting licences or agreements referred to in parts III and V of schedule 2. But the contracts having been already entered into by the assignors, it was by mutual consent provided that they should execute the deeds-necessary to complete the contracts. In the next place Mr. Das referred to the concluding portion of the deed quoted above which, provides that the assignors would furnish the assignees with a full detailed account of the salamis and royalties payable. The assignment being in respect of two annas, share only, it was covenanted that the assignors who had the remaining 14 annas would at the request of the assignees deliver to them a full detailed account.
82. Though some of the provisions in the document present some difficulty the general tenor to my mind indicates that the intention was to convey the leasehold properties and not merely the salamis and royalties. That this was the intention is also supported by the subsequent conduct of the parties to the deed themselves. In 1922 the assignees brought a suit (No. 238 of 1922) against the assignors in the Court of the Subordinate Judge at Asansole for declaration of-their (the assignees) title to the two annas share of the properties mentioned in the deed of assignment and to all salamis, rents, royalties and profits arising and issuing therefrom {vide plaint Ex. AF). The title thus claimed was based on the deed of assignment. The suit was compromised and & compromise decree (Ex. 20(b)) was passed on 3rd July 1923 on the following among other terms:
That the plaintiffs title to the two annas share of the properties mentioned in the indenture of assignment dated 31st March 1921 and to all salamis, rents, loyalties and profits arising or issuing therefrom be declared.
83. Some controversy has been raised with regard to this part of the decree but, as I shall show later, there can be no doubt that this term was incorporated in the decree and it clearly means that the plaintiffs title was declared not merely to two annas share of the salamis and royalties but to two annas share of the leasehold proper, ties. It is hardly conceivable that if by the indenture of assignment merely a two annas share of the salamis and royalties had been conveyed Seddon would by the compromise confess that he had parted with two annas share in the leasehold properties. The fact seems to be that both parties knew that by the indenture of assignment two annas share of the leasehold properties and not merely of the salamis and the royalties had already been conveyed.
84. Then on 8th October 1923 Seddon executed a mortgage (Ex. 1) in favour of Kedar Nath Daga in respect of other properties in which Seddon admitted that two annas share of the properties, meaning with reference to the context the leasehold properties, had been conveyed by the indenture of assignment. This also shows that the parties understood that what was conveyed by the deed of assignment was not merely a two annas share of the salamis and royalties but of the leasehold properties. I am therefore of opinion that the deed of assignment conveyed a two annas share of the leasehold properties and not merely of the salamis and royalties. (His Lordship then dealt with point 4(a) and held that the decree did declare the plaintiffs title to the two annas share of the properties mentioned in the indenture of assignment dated 31st March 1921 and proceeded.)
85. Point 4(b).--The learned Subordinate Judge, accepting the contention of the respondents, has held that the compromise decree is void because the compromise was opposed to public policy. The argument is that the effect of the compromise was to interfere with the authority of the receiver to deal with the properties covered by the compromise. Defendant 10 was appointed the sole receiver on 13th June 1923 and the compromise decree was passed later on 3rd July 1923. Seddon who entered into the compromise on behalf of Seddon & Co. was a party to the suit in which the receiver was appointed and the receiver was in possession of all the properties of Seddon & Co. It is no doubt true that the appointment of a receiver operates as an injunction upon the parties not to interfere with the rights conferred on him by the Court. If any party deals with any of the proper. ties in the possession of the receiver the transaction will not be binding on the receiver nor can his possession be interfered with. Prom this it does not follow that the transaction is void as being opposed to public policy. The position here however is quite different. In the first place, the compromise in question did no more than affirm the title already created by the deed of assignment (Ex. 5) in respect of the two annas share in the leasehold properties.
86. In the second place, the compromise was not intended to interfere with the receivers possession. In this connexion it may be mentioned that when the compromise decree, so far as it related to the mortgage, was executed the receiver was impleaded as a judgment-debtor with previous sanction of the Calcutta High Court: vide execution application Ex. 16a. The receiver raised several objections: vide his petition Ex. 17(c) dated 19th May 1930. This objection was overruled by the order (Ex. 22) dated 3rd February 1981. Against this order an appeal was presented by the receiver to the Calcutta High Court which. was dismissed on 3rd March 1933: vide Ex. 22(a). In the circumstances there is no justification for holding that the compromise decree is void.
The learned Subordinate Judge has also held that the compromise decree was passed without jurisdiction because all the necessary parties were not before the Court. The Suit (No. 238of 1922) was, as already stated, brought against Henry Seddon and Rasaraj Biswas as representing Seddon & Co.
87. But there were two other partners namely Dakshina and Kishori. Whether they were necessary parties or not is a different question. If they were, and the objection has been taken, the suit would have been dismissed. But so far as the parties to the suit were concerned there was no lack of jurisdiction in the Court to make the decree which, when once it was passed whether rightly or wrongly, was binding on them. Parties left out, if they were not actually represented in the suit, would of course not be bound by the decree.
The next question is whether the compromise decree is ineffective, as held by the learned Subordinate Judge. One of the grounds given by him is that the suit was not against the firm. Mr. Das on behalf of the respondents did not support this part of the decision.
88. In fact the suit was brought against the firm represented by Henry Seddon and Rasaraj Biswas. The main ground is that the compromise, being effected by Seddon only and not by the other three partners, could not be binding on them. Sir Manmatha Nath Mukherji contended that the other three partners Rasaraj, Dakshina and Kishori ceased to have any interest in the partnership. Seddon in his written statement in the present suit alleged that he purchased the interests of Kishori and Dakshina in the partnership properties on 23rd May 1922, and that Rasaraj retired from the partnership from 1st January 1923. Indeed there is some evidence on the record to indicate that these three persons ceased to have any eon. mexion with the partnership. For instance, the receiver in his evidence says:
So far as I remember there was a document of sale by Dakshina and Kishori to Seddon which was shown.
89. He also says "Rasaraj had no interest left." The letter (Ex. AH 1) dated 25th October 1922 written by Seddon to S.K. Banarji by which the former agreed to accept the latter with two others, namely Ramratan and T.S. Gibson, as partners in the firm of Seddon & Co. coupled with the fact that in the following March Sasti Kinker Banarji brought the Suit No. 908 of 1923 in the Calcutta High Court for dissolution of the partnership that was composed of himself and Seddon, Gibson and Ramratan, clearly indicates that Rasaraj, Dakshina and Kishori were no longer regarded as having any interest in the firm of Seddon & Co. The difficulty however is created by the fact that the plaintiff in this suit framed his plaint on the basis that Rasaraj, Dakshina and Kishori all along continued to be the partners of Seddon & Co., and defendants 2 to 6 as their successors-in-interest were sought to be made liable for the plaintiffs claim. It is also remarkable that in the course of the cross-examination of the receiver on behalf of the plaintiff the following question was put: "Is it not a fact that Rasarajs interest to the extent of six annas has not passed to Seddon" Just below this there is the note by the Court:
The plaintiffs advocate now contends that this interest has not passed. He further says that this has been his case all along.
90. It should also be mentioned here that previously the present plaintiff brought a suit (23/22 of 1931/1930) in the Subordinate Judges Court at Burdwan for royalty for some of the villages to which the present suit relates, impleading the present defendants 2 to 6, and goji a decree against them : vide judgment Ex. 10 dated 12th April 1932. The reason why defendants 2 to 6 have been impleaded in this suit, as they were in the Burdwan suit, is said to be that as there was no registered document by which Rasaraj, Dakshina and Kishori gave up their interests in the partnership which consisted of immovable properties, their interests in those properties could not be extinguished. Monghibai v. Oooverji Umersey AIR (1989) PC 170. Whatever may be the reason, the plaintiff accepts the position that Rasaraj, Dakhshina and Kishori all along continued to be the partners of Seddon & Co.
91. But the question whether the compromise decree is ineffective on the ground that Rasaraj, Dakshina and Kishori were not parties to the compromise is a question which could be raised only by them, or their successors-in. interest. Each partner is an agent of the others, and how far a transaction entered into by one partner on behalf of the firm binds the other partners is a question which can properly be raised by those other partners. If they by their acts and conduct assent to the transaction the third party who himself enters into the transaction cannot question it. Here the compromise decree in question was obtained by Mugniram Bangar and Kedar Nath Daga. The first petition of compromise (Ex. 20) which was filed on 30th June 1923 shows that Rasaraj in his written statement having pleaded that he had ceased to be a partner of Seddon & Co., his name was expunged from the record of the suit and the compromise was effected between the plaintiffs Mugniram and Kedar Nath On the one hand and defendant 1, Seddon, on the other. So far therefore Rasaraj is concerned, Mugniram and Kedar Nath could not be heard to say that the compromise decree was ineffective.
92. As regards Dakshina and Kishori, it should be remembered that their successors-in-interest, defendants 4 to 6 in the present suit, in their written statements accept the position that Dakshina and Kishori ceased to be partners of Seddon & Co., and that So long as they were partners they never objected rather consented to all transactions that were entered into by Seddon and Rasaraj on behalf of the firm.
93. Mr. Das in support of his contention that the compromise entered into by Seddon could not bind Rasaraj, Dakshina and Kishori relied on Lindley on Partnership, Edn. 10 p. 345; Halsburys Laws of England, Vol. 24, p. 426, para. 822; Henry Munster v. Richard Cobden Cox (1885) 10 AC 680; Ram Bharose v. Kallu Mai (1900) 22 All 185; Ram Niwas v. Diwan Chand AIR (1933) Lah 618 and Section 19, Clause 2(c), Partnership Act (9 of 1932). Though this last mentioned Act is not applicable to the present case because the compromise decree in question was passed in 1923 the law must be taken to be, as stated in Lindley on Partnership at p. 345 that
In an action against a firm...one partner has to authority to bind the firm by consenting to an order for judgment against it.
94. This statement itself suggests that it will apply where the judgment is called in question by the other partners. Where the other partners have raised no objection it is difficult to understand on what principle the party himself in whose favour the judgment has been given can question its binding effect. In all the decided cases cited above the question was raised by the other partners and at their instance it was held that the compromise effected by another partner without their consent was not binding on them. In (1854) 10 E E 7962 a judgment having been obtained by consent against R.J. Rialton sued as R.J. Rialton & Co., the plaintiff subsequently asked for leave to amend the judgment by striking out the words "E. J. Rialton sued as" so that the judgment might be against the firm of R.J. Rialton & Co. and as such enforceable against R.J. Cox, a partner in that firm. Cox objected to the amendment which was accordingly refused. In Ram Bharose v. Kallu Mai (1900) 22 All 185 a suit was brought by a firm through its managing partner Udai Ram to recover a debt due to the firm. By a reference to arbitration to which the other partners of the plaintiff firm were not parties the suit was disposed of.
95. All the partners then brought a fresh suit to recover the debt alleging that the firm was not bound by the result of the previous suit. The defendant pleaded the previous decision as a bar, but this plea was overruled on the ground that one .partner had no authority to bind the firm by a submission to arbitration. In Ram Niwas v. Diwan Chand AIR (1933) Lah 618 the question was raised in a proceeding under Order 23,R. 3, Civil P.C., in which a compromise said to have been effected on behalf of a firm by one of its partners was repudiated by an-other partner and it was held that the compromise in order to be lawful within the meaning of Order 23, Rule 3 must be assented to by all the partners. The above stated proposition of law therefore has no application to the present case which has special features of its own. On all these considerations I am not prepared to hold that the compromise decree is ineffective so far as the parties to it are concerned.
96. Point 4(c).--In view of my decision on the point (3) this question does not arise. But as it was argued at length on both sides it is better that I should express my opinion on it. The appellant contended that quite irrespective of the deed of assignment (Ex. 5) the decree itself created a valid title to the two annas share of the leasehold properties in favour of Mugniram Bangar and Kedarnath Daga. The respondents, on the other hand, contended that the decree did not and could not create any new title and in any event it could not take effect as an assignment. Mr. Das argued that a decree can never be the root of title. In support of this contention he relied on Gopal Iyengar v. Mummachi Reddier AIR (1923) Mad 392 . In that case the plaintiff who got a decree in the trial Court declaring his title to certain properties made some payment to protect his rights to that property while an appeal from the decree was pending.
97. The appeal was eventually allowed and the decree was set aside. In a subsequent suit brought by the plain, tiff to recover the money paid by him, the defence taken was that the payment was voluntary. The plaintiff contended that the decree of the trial Court on the strength of which he made the payment gave him title to his property. This contention was overruled on the ground that the decree could not be the root of the plaintiffs title. This decision was undoubtedly right so far as the facts of the case were concerned. If however it intended to lay down the broad proposition that a decree which is final and conclusive between the parties can never be the root of title I must with all respect express my dissent from the decision. Decree, as defined in Section 2, Clause 2, Civil P.C., means
the formal expression of an adjudication which, so far as regards the Court expressing it, conclusively determines the rights of the parties with regard to all or any of the matters in controversy in the suit.
98. No doubt the parties to a suit set up. their respective rights and the Court has to adjudicate on those rights, but once the Court makes an adjudication it not only sets at rest the controversy between the parties but creates in favour of the successful party a new title though in many cases it may be in affirmance of a pre-existing title. It is therefore a fallacy to say that a decree cannot be the root of title.
99. The question however whether a decree operates as an assignment of certain property is quite different. It depends upon the nature of the decree. In this particular case the decree which was passed on compromise merely declared the plaintiffs title which was based on the assignment of 31st March 1921. Upon the terms of the compromise petition it is impossible to hold that one party was assigning to the other two annas share of the leasehold properties. I am therefore of opinion that the decree could not operate as an assignment of two annas share of the leasehold properties. It had the effect merely of confirming the title that was already created by the deed of assignment of 31st March 1921.
100. Point 5.--Mugniram Bangar and Kedarnath Dag, as I have already held were assignees of two annas share of the leasehold properties. Now the question is whether defendants 7 and 9 as assignees are liable for royalties by reason of privity of estate. Mr. Das on behalf of the respondents contended that the doctrine of privity of estate does not apply under the Indian law. He argued that a lease is made transferable u/s 108, Clause (j), T.P. Act, but there is nothing in that Section to make the transferee liable for the burdens of the lease. 01. (j) however provides that:
The lessee shall not, by reason only of such transfer, cease to be subject to any of the liabilities attaching to the lease.
101. This itself suggests that the transferee "will be subject to the liabilities though the lessee shall not necessarily cease to be so subject. In other words, the lessee will still remain liable by privity of contract, whereas the transferee will be liable by reason of the transfer. The matter is concluded by the decision of the Judicial Committee in Ramkinkar Banerjee v. Satya Charan, AIR (1989) PC 14 in which their Lordships held that:
By English law and by Indian law an assignee of a lease is liable by privity of estate for all the burdens of the lease, burdens which are imposed upon him by the mere assignment whether he enters into possession or not.
Their Lordships further observed that the assignor having no longer any interest cannot be liable by privity of estate though he still remains liable by contract if he was party to the original lease.
I accordingly hold that defendants 7 and 9 are liable for the plaintiffs claim by privity of estate.
102. Point 6.--Sir Manmatha Nath Mukherji on behalf of the appellant contended that defendants 7 and 9 are liable jointly and severally with the other defendants to pay the entire royalty claimed. Mr. Das, on the other hand, argued that they are liable only to the extent of their share in the leasehold properties. Sir M. N. Mukherji in support of his contention relied on Norval v. Pascoe, (1864) 34 LJ Ch 82; United Dairies Ltd. v. Publio Trustee, (1923) 1KB 469; Kailash Chandra Mitra Vs. Brojendra K. Chakravarti and Others, ; Musafkanni Ravuthar v. Doraisingham (1927) 14 AIR Mad 931 and Moti Lal v. Kartar Singh, AIR (1930) Lah 515. Mr. Das, on the other hand, relied upon Stevenson v. Lambard, (1802) 102 ER 490; Gamon v. Vernon, (1835) 83 ER 832, Ex parte Smyth, (1818) 36 ER 412 and Merceron v. Dowson, (1826) 108 ER 179, Halsburys Laws of England, Vol. XX, para. 436; Roa on Landlord and Tenant, Edn. 6, p. 469 and Woodfall on Landlord and Tenant pp. 331 and 521. The question is one of some difficulty, and it appears from an examination of the English cases cited on both sides that there is no definite decision on the precise point even in England. However, the latest of those oases is that in United Dairies Ltd. v. Public Trustee, (1923) 1KB 469.
103. Greer J. who decided that case referred to and explained the earlier cases and though the case before him was for damages for breach of a covenant to repair he observed as follows:
It seems to me on the authorities that it has never been conclusively established that an assignee holding with other tenants under the terms of the original lease is not liable jointly with those other tenants for the whole rent. He has an interest in the whole of the land leased, though it is only a partial interest; his estate extends over the whole of the land leased; and I see no valid reason why tenants-in common should be in a position as regards liability for rent different from that of joint tenants. I am inclined to think that each of the tenants-in-common has the privity of estate with the landlord in the whole of the land leased.
104. The view thus expressed by Greer J. has been followed by High Courts in India in the cases in Kailash Chandra Mitra Vs. Brojendra K. Chakravarti and Others, , Musafkanni Ravuthar v. Doraisingham AIR (1927) Mad 931 and Moti Lal v. Kartar Singh, AIR (1930) Lah 515. The position however is different where the assignee holds the assigned share of the leasehold property in physioal severalty. In such cases he has no interest in the remaining part of the property and has therefore no privity of estate with the landlord in the whole of the property. He cannot be liable for the entire rent. This difference has been pointed out by Greer J. in Kunnisow v. Parkum Mulloli Chathu AIR (1916) Mad 768 and on this ground he distinguished the earlier eases such as Stevenson v. Lambard, (1802) 102 ER 490 and Musafkanni Ravuthar v. Doraisingham AIR (1927) Mad 931 . This also distinguishes the statements in Halsbury, Roa and Woodfall to the effect that an assignee of part of the land cannot be charged in an action of debt with the whole rent, but only for a proportionate part thereof.
105. I am inclined to adopt the reasoning of Greer J. stated above and hold that defendants 7 and 9 are liable jointly and severally with the other defendants for the plaintiffs entire claim. Upon the above findings the appellant is entitled to judgment against all the respondents except respondent 8, for the amount decreed by the Court below. But for the reasons given by my learned brother the decree against respondents 7 and 9 (defendants 7 and 9) should be subject to the conditions set forth in his judgment. I accordingly agree that the appeal should be allowed in part as against respondents 7 and 9 and dismissed against the other respondents.