Mukteswar Trigunait and Others vs Barakar Coal Co., Ltd. and Others

Loby, J.—Mukteswar Trigunait and others appeal against the judgment and decree dated 19th November 1930, of the the Additional District Judge of Manbhum whereby that officer gave the Barakar Coal Co., (now respondent) a decree against them for ejectment from a colliery property of 200 bighas situated in mauza Kailudih, P.S. Katras Z. Manbhum.

It is common ground that Bhubaneswar Trigunait predecessor-in-interest of the appellants took settlement of the property from the Coal Co., in the year 1922 and was put in possession after paying a salami of Rs. 1,03,000 and promising to pay royalty on raisings subject to the minimum royalty of Rs. 2,000 a year.

A lease was drafted and sent to Bhubaneswar Trigunait for approval. He or his lawyer raised certain objections, as would appear from the cancellations on the draft lease (Ex. D). It would appear from his letter (Ex. 3.a) that Bhubanes. war Trigunait eventually accepted the terms proposed by the Coal Co. But no lease had been executed up to the date of Bhubaneswar Trigunait''s death which occurred in July 1923. After that his successors (now appellants) paid little or no attention to the repeated reminders issued by the Coal Co., and to this day no lease has ever been executed. The minimum royalty was paid up to January 1927 after which no more payments were made.

On 23rd August 1928, the Coal Co., filed a suit for ejectment on the ground that the lease had been forfeited, payment of the royalty being more than three months in arrears. As a matter of fact the payment was about fifteen months in arrears when the suit was filed. In the letter of proposal (Ex. 3) the Coal Co., had stipulated that the lease should reserve to the lessor the power of re-entry on non-payment of royalty or non-observance of any of the conditions or stipulations of the lease. In his reply (Ex. 3-a) Bhubaneswar Trigunait had accepted the proposal as it stood. In the draft lease (Ex. D) it was stipulated that such power of re-entry might be exercised if royalty was not paid on the due date.

This clause was struck out (presumably by the intending lessee) and restored by the intending lessor, as appears from the pencil notes of the draft. Then the intending lessee (or some one) put in "one year" as a period of grace and that was altered to "three months". In the fair copy of the lease which was sent to the Trigunaits for execution we find the re-entry clause with three months as the period of grace. But as the lease was never executed, there is no knowing whether any agreement was ever reached about the details of the re-entry clause. The Subordinate Judge who tried the suit dismissed it with costs on 24th August 1929, finding that though there was an agreement between the parties and there had been part performance of that agreement, it was not a "completed and mutually recognized agreement" so far as the re-entry on non-payment of the rent was concerned. The District Judge has reversed that order, after finding on the evidence that there was a complete agreement between the parties with regard to the forfeiture clause.

He considered that the doctrine of part performance "may now be taken as the settled law in this country" and should be applied in this case, though a registered instrument of transfer had been executed as required by law. And he relied on Section 53-A, T.P. Act, which section was added by Act 20 of 1929 and came into force on 1st April 1930. In the first place, it is very doubtful whether the new Section 53-A can be applied at all, because it came into force long after the institution of this suit and was not to be applied retrospectively to pending cases, vide Section 63 of Act 20 of 1929.

This view seems to be supported by the ruling found at Kanji and Moolji Brothers v. Shunmugam 1932 Mad 734 Another difficulty in the way of applying. Section 53-A is that we have no completed instrument of transfer, nor even a writing signed by the transferor which is the minimum requirement of the section Neither the draft lease nor the fair copy has been signed by either of the parties to the deal.

As for a complete agreement between the parties with regard to the forfeiture clause" I am afraid there is no evidence at all upon which it can be found that such an agreement ever existed. The correspondence between the parties (vide Exs. 3, 3a, 3b, 3c, and c) shows that proposal for a forfeiture clause was pressed by the Coal Co., and was eventually accepted in principle by Bhubaneswar Trigunait.

But the details of the forfeiture clause as propounded by the Coal Co., were evidently subjected to severe and prolonged criticism, and there is nothing to show that the contracting parties ever reached agreement about those details. The correspondence which has been brought into Court does not show it. The draft lease does not show it, because we do not know by whom or under what circumstances or with whose consent the various cancellations and restorations were made in the draft. And the fair copy does not prove anything because it was never approved or signed by any of the Trigunaits.

There was an agreement between the parties to give and take a lease of the property in suit for a certain consideration and Bhubaneswar Trigunait paid the salami, and the Coal Co., put him in possession, and he paid royalty for the time. It may also be said that Bhubaneswar Trigunait agreed by letter (Ex. 3 a) to have a forfeiture clause in the lease. But he and his successors-in-interest have successfully evaded execution of the lease to this day so they cannot be held to any conditions or stipulations save those which have been definitely formulated to them and unequivocally accepted by them. There is no evidence to show that they ever accepted the proposed clause about re-entry on non-payment of royalty for three months. So the suit for ejectment found. ed on that proposed clause must fail.

Regarding the doctrine of part performance I should point out that in the case of Ariff v. Jadunath Majumdar 1931 PC 79, their Lordships of the Privy Council have definitely laid it down, that such equitable doctrine cannot operate so as to nullify the statutory requirement of a registered instrument. In this connection the learned advocate for the respondent has invited our attention to certain remarks of their Lordships in the case of Abdul Aziz Khan v. Appayasami Naicker (1904) 27 Mad 131. He asks us to bold that the unexpected result of 1931 PC 79(1) should not displace the application of the previously accepted interpretation of the law to contracts made before that interpetation was reversed.

But I am unable to see how Abdul Aziz Khan v. Appayasami Naicker (1904) 27 Mad 131 can help the respondent as the circumstances of that case bear no resemblance whatever to the circumstances of the case which is now before us. In Abdul Aziz Khan v. Appayasami Naicker (1904) 27 Mad 131, their Lordships of the Privy Council were considering the question of impartible zamindaris in the Presidency of Madras, and the effect of a sale at Court auction which took place in 1873. They did not enunciate any general principle to be applied whenever and where ever "accepted law" is reversed; nor can any such general principle be deduced from their remarks.

The Barakar Coal Company, should have complied with the provisions of Section 107 of the Transfer of Property Act and had an instrument of transfer registered in due form before putting Bhubaneswar Trigunait into possession of the property. For the results of its neglect the Coal Co., has only itself to thank. We have not been told how much coal has been extracted from the property by the Trigunaits since 1922. But as the Coal Co., took the precaution of realising a large salami in advance, it is perhaps not in great need of sympathy. Any how I see no sufficient reason for stretching equity in its favour.

I would allow this appeal and set aside the judgment and decree of the District Judge and dismiss the suit, with costs of all the three courts to the defendants appellants.

Mohammad Noor, J.

I agree.