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Bhusan Chandra Paul And Others v. M/S. Bengal Coal Co. Ltd. .
Structured Summary of the Opinion (Tarapada Mukherji, J.)
Factual and Procedural Background
This is an appeal by the defendants against a judgment and decree of a Subordinate Judge at Asansol in a suit for ejectment (khas possession) and recovery of arrears of rent and royalties with interest. The respondents (Messrs Bengal Coal Company) had granted a sub-lease in 1948 covering a coal mining area to appellants 1–4 (who operated as a partnership firm called "Gazadhar Coal Company", appellant No. 5). The lease contained an express covenant (clause VI(6) of Exhibit 1) that if rent, royalty or any other sum became in arrear for six calendar months after the due date, the lessor could re-enter the premises.
The plaintiff alleged default by the defendants in payment of rents and royalties, served a notice determining the tenancy in November 1952, and thereafter instituted the present suit claiming possession and recovery (schedule B amounts). The defendants denied liability for arrears and denied receipt of the notice. The Subordinate Judge found that the defendants had defaulted, that the lease was forfeited and that notice under Section 111(g) of the Transfer of Property Act had been duly served. The trial court accordingly decreed khas possession (ejectment) and recovery of the amounts in schedule B with interest.
During trial the defendants additionally contended that intermediary mining interests had vested in the State under the West Bengal Estates Acquisition Act, 1953; the trial court held that the defendants had been trespassers before the Act and that vesting did not bar the relief claimed. After arguments the defendants filed a petition offering to pay arrears with interest and costs within 15 days and prayed for relief against forfeiture under Section 114 of the Transfer of Property Act; the trial court refused that relief because the offer did not comply with the statutory requirements. The defendants appealed; this opinion is the appellate decision dismissing the appeal.
Legal Issues Presented
- Whether the lease was validly forfeited for non-payment of rent and royalty (clause VI(6) of the indenture) and whether the plaintiff was entitled to re-enter.
- Whether relief against forfeiture under Section 114 of the Transfer of Property Act should have been granted to the defendants (i.e., whether their post-argument offer complied with Section 114).
- Whether notice determining the tenancy under Section 111(g) of the Transfer of Property Act was duly served on all defendants, in particular defendants 3 and 4.
- Whether the vesting of intermediary mining interests in the State under the West Bengal Estates Acquisition Act, 1953 (Section 28 as discussed) prevented the plaintiff from obtaining khas possession or otherwise affected the remedy.
Arguments of the Parties
Appellants' Arguments
- The trial court erred in holding there was a forfeiture of the lease; the defendants contended amounts had been paid and thus no forfeiture was justified.
- The defendants contended they were entitled to relief against forfeiture under Section 114 of the Transfer of Property Act by offering to pay arrears within 15 days.
- It was urged that notice under Section 111(g) of the Transfer of Property Act had not been served on defendants 3 and 4.
- The defendants argued that, under the West Bengal Estates Acquisition Act (W.B. Estates Acquisition Act of 1953), intermediary mining interests vested in the State and therefore the plaintiff was not entitled to recover possession.
Respondent (Plaintiff) Arguments and Evidence
- The plaintiff led oral evidence to prove non-payment of rents and royalties; no defendant was examined and no documentary evidence was produced by the defendants to prove the alleged payments.
- The plaintiff relied on clause VI(6) of Exhibit 1 (the indenture) and Section 111(g) of the Transfer of Property Act to establish forfeiture and the right to re-entry.
- The plaintiff produced Exhibits showing registered-post service (postal receipts and acknowledgments) addressed to the address given in the indenture (clause IX(iii) of Exhibit 1) and relied on the presumption arising from those postal documents to prove service on defendants 3 and 4.
- The plaintiff argued that the defendants' post-arguments offer to pay within 15 days was not a payment or tender nor a furnishing of security as required by Section 114, and therefore did not entitle them to relief against forfeiture.
- The plaintiff contended that even if intermediary interests had vested in the State, a decree for khas possession would still be relevant evidence entitling the plaintiff to compensation under the Act and that refusing a decree might deprive the plaintiff of the right to full compensation.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Harihar Benerjee v. Ramshashi Roy, ILR 46 Cal 458 (AIR 1918 PC 102) | Rule concerning modes of service: vicarious tender or delivery must occur at the residence of the person intended to be bound; service by registered post to the correct address with an acknowledgment is prima facie proof of delivery; service on one joint tenant is prima facie evidence of service on other joint tenants when notices are sent to the correct address. | The court applied the principle to hold that registered-post notices directed to the address in the indenture and acknowledged were prima facie proof of service on defendants 3 and 4; this shifted the onus to the defendants to disprove receipt. |
| Bejoy Chand Mahatab v. Kali Prasanna Seal, AIR 1925 Cal 752 | Statement that service on all joint tenants in terms of Section 106 of the Transfer of Property Act is necessary in order to determine a tenancy. | The court cited this authority to acknowledge the general proposition but proceeded on the factual and legal basis that service by registered post to the address in the indenture supplied prima facie proof and that defendants had not discharged the onus of denying service. |
| Kanji Manji v. Trustees of the Port of Bombay, AIR 1963 SC 468 | Broad proposition cited that notice served on one of joint tenants can be sufficient to terminate a lease. | The court invoked this authority to support the view that notice served on one joint tenant may suffice to terminate a lease and to buttress the finding that notices to defendants 3 and 4 were effective. |
| Katras Tharia Coal Co. Ltd. v. State of West Bengal, 66 Cal WN 304 (AIR 1960 Cal 646) | Addressed vesting of intermediary mining interests under the West Bengal Estates Acquisition Act; held (in that case) there had been no vesting for non-service of notice under Section 4 after amendment. | The court acknowledged the case but held that the question of vesting was not dispositive of the plaintiff's entitlement to khas possession: even if the plaintiff's interest had vested, the plaintiff would be entitled to compensation and the decree for khas possession would be evidence of the right to compensation; thus the W.B. Estates Acquisition Act did not prevent granting the decree in this suit. |
Court's Reasoning and Analysis
The court proceeded on the following key analytical steps, strictly as stated in the opinion:
- Forfeiture and non-payment: The plaintiff adduced oral evidence (including D.W.1 Krishnaprosad) and showed that no evidence was produced by the defendants to substantiate the payments they alleged. The court accepted that the amounts in question had remained unpaid since the end of 1949 and that the relevant lease clause (clause VI(6) of Exhibit 1) provided for re-entry on arrears. Given these facts, the court concluded that breach of the covenant entailed forfeiture under Section 111(g) of the Transfer of Property Act.
- Relief under Section 114 (relief against forfeiture): The court emphasized the statutory requirement that to obtain relief under Section 114 the lessee must, at the hearing, either pay or tender to the lessor the rents in arrear with interest and full costs, or give sufficient security with an undertaking to make payment within 15 days. The defendants filed a petition after arguments offering to pay within 15 days, but the court found this was not a payment, not a tender, and no security was furnished or undertaking given as contemplated by Section 114. The offer was therefore not strictly in terms of the statute, and the court properly exercised its discretion in refusing relief.
- Service of notice under Section 111(g): The indenture (clause IX(iii) of Exhibit 1) required notices to be sent by registered post to the address of the lessees as given. The plaintiff produced Exhibits 3–4 showing registered-post receipts and acknowledgments addressed to the address in the indenture (Domohoni, Charanpur Post Office area). Two acknowledgments (Exhibits 4(c) and 4(d)) showed delivery by Karmatar Post Office after apparent redirection. The court treated service by registered post to the contractually specified address, corroborated by postal receipts and acknowledgments, as prima facie proof of effective service and placed the burden on the defendants to rebut service. The defendants (particularly Nos. 3 and 4) did not come forward to deny service or examine the person whose signature appeared on the acknowledgment (Bhatu Mahato) — the defendants also failed to produce company books that their witnesses said would have shown who worked for them — and therefore the court sustained the trial judge's finding that notices were duly served on defendants 3 and 4.
- Effect of the West Bengal Estates Acquisition Act (vesting of intermediary interests): The court considered that even if the plaintiff's intermediary interest had vested in the State under Section 28 of the Act, the plaintiff would be entitled to compensation and a decree for khas possession would be evidence of the right to compensation assessed by revenue officers. The court reasoned that refusing to grant a decree solely because it might be (in practice) unexecutable could deprive the plaintiff of the right to full compensation; thus the change in law pending the suit did not bar the plaintiff from obtaining a decree. The court found the trial judge's rejection of the defendants' objection about vesting to be justified.
- Reliance on authorities: The court invoked the cited cases (Harihar Benerjee, Bejoy Chand Mahatab, Kanji Manji) to support the approach to proof of service by registered post and the consequences of service on joint tenants; it cited Katras Tharia to explain the law about vesting under the W.B. Estates Acquisition Act while distinguishing its effect on remedies in the present suit.
Holding and Implications
Holding: The appeal is dismissed; the judgment and decree of the Subordinate Judge are affirmed. The court expressly upheld the trial court's findings and decrees.
Core Ruling: The appeal is dismissed and the trial court's judgment and decree are affirmed (with costs).
Implications:
- Direct effect on the parties: The plaintiff (Bengal Coal Company) is entitled to khas possession of the leasehold premises; the defendants are to be ejected. The plaintiff is also entitled to recover the amounts specified in schedule B of the plaint with interest (six percent per annum from the date of the decree until realization), as decreed by the trial court.
- Relief against forfeiture under Section 114 requires strict compliance with the statutory modes (payment or tender, or sufficient security with an undertaking to pay within 15 days); a mere post-argument offer to pay within 15 days without payment, tender or security does not satisfy the section.
- Service by registered post to the address specified in the contract, supported by registration receipts and acknowledgments, gives rise to a prima facie presumption of service and places the burden on recipients to rebut actual non-receipt.
- The court treated the question of vesting under the West Bengal Estates Acquisition Act as not being a bar to granting a decree for khas possession in the particular factual circumstances of this case, because a decree can operate as evidence for the plaintiff's right to compensation even where the interest has vested in the State.
- No broader, novel legal principle was created by this opinion beyond the application of existing rules on forfeiture, service by registered post, relief under Section 114, and the procedural effect of statutory vesting on remedies; the court affirmed the trial court's disposition on the facts and law presented.
Concurring: A.C. Sen, J. — concurred. Result recorded: "22. Appeal dismissed." (per the opinion.)
Tarapada Mukherji, J.:— The defendants in a suit for ejectment on the ground of forfeiture have come up on appeal against the judgment and decree passed by a Subordinate Judge at Asansol. The suit was by a lessor against the lessees for khas possession on ejectment of the latter from the leasehold property on the ground of forfeiture by the breach of an express condition in the lease providing that on breach thereof the lessor would be entitled to re-enter.
2. Messrs Bengal Coal Company who are the respondents in this appeal gave a sub-lease in respect of a coal mining area in the year 1948 to appellants 1 to 1 who carried on business in the name of a partnership firm named “Gazadhar Coal Company”, which is appellant No. 5 in this appeal. The indenture of lease provided that,
“if any rent, royalty, or any other sum of money reserved and made payable or any part thereof shall be in arrear or unpaid for the space of six calendar months next after the day whereon the same ought to be paid…..it shall be lawful for the lessors at any time thereafter to re-enter into and upon the said premises or any part thereof………….”
3. It was alleged that the defendants-appellants defaulted in the payment of rents and royalties, etc., as stipulated in the indenture and thereby their lease became liable to forfeiture. The said lease was determined by service of notice in November, 1952 and thereafter the present suit was instituted. The plaint also included a prayer for recovery of rents and royalties, etc. with interest thereon.
4. The defendants filed a joint written statement denying that any amount was due from them on account of arrears of rent or royalty, the same having been paid to the plaintiff in due course. The defendants also denied receipt of any notice determining the tenancy as alleged. The learned Subordinate Judge found that there was nothing to prove that the defendant paid any amount beyond what was admitted by the plaintiff Company and was credited to the account of the defendants in schedule B of the plaint. He found that the defendants had made default in payment of rents, royalties, etc. in terms of their lease and that because of a breach of an express condition in the covenant which provided for a right of re-entry on breach thereof, the plaintiff Company was entitled to forfeit the lease and to reenter the leasehold premises. On the question of service of notice under section 111(g) T.P Act he found that the same was duly served on the defendants.
5. During the trial the defendants raised a plea that the plaintiff was not entitled to khas possession in view of the vesting of intermediary interests in mining rights in the State Government under the provisions of the West Bengal Estates Acquisition Act of 1953. The learned Subordinate Judge considered this contention and found that considering the position of the parties at or about the time when the cause of action for the suit arose and without allowing extraneous matters to crop up it would appear that the defendants were already trespassers on the leasehold property before the Act of 1953 came into operation and that such unlawful possession of trespassers which kept the plaintiff out of khas possession of the property would not disentitle them to the relief claimed in the suit. In other words he found that in the circumstances of the case there was no vesting of the plaintiffs interest in the disputed coal mining property in the State Government in terms of the W.B Estates Acquisition Act.
6. After the conclusion of arguments in the suit the defendants filed a petition offering to pay to the plaintiff Company the rents in arrears with interest and cost of the suit within 15 days and praying for relief against the forfeiture. The learned Subordinate judge considered the prayer in his judgment, but refused to give the relief prayed for.
7. As a result of its findings the trial court granted a decree for khas possession after ejecting the defendants from the leasehold property and a further decree for recovery of the amount as detailed in schedule B of the plaint together with further interest at the rate of six per cent per annum from the date of the decree till realisation.
8. Against this decree the defendants have come up on appeal. Mr. Chittatosh Mookerjee appearing on behalf of the appellants urged that the trial court erred in finding that there was a forfeiture of the lease as claimed and that the defendants were not entitled to any relief in view of section 114 of the Transfer of Property Act. He contended that on the materials on record the trial court should have found that there was no service of notice under Section 111(g) of the Transfer of Property Act on defendants 3 and 4 and further that it should have been held that the plaintiff Company was not entitled to recover possession in view of the vesting of their intermediary interest in the State Government under the provisions of the W.B Estates Acquisition Act.
9. On the question of forfeiture, the plaintiff adduced oral evidence to prove non-payment of rents and royalty. None of the defendants were examined in the suit, and no evidence was adduced in support of the plea of payment that was raised in the written statement. According to D.W 1 Krishnaprosad the defendants have their books of accounts and receipts showing payments, but these were not produced in the suit. As a matter of fact no evidence was adduced to prove the payments alleged and on the evidence on record there is no escape from the conclusion that the amounts claimed in the suit as arrears of rent, royalty, etc. are due and payable and have remained unpaid since the end of 1949. The relevant term in the indenture of lease regarding payment of rent and royalty, etc. and the provision regarding the landlord's right of reentry on failure to pay the same is embodied in cl. VI(6) of Exhibit 1, the purport whereof has been noted earlier in the judgment. There is no question, that breach of the covenant in this regard did entail forfeiture of the lease in terms of Section 111(g) of the Trans of Property Act.
10. The question is whether the defendants are entitled to relief against the forfeiture for non-payment of the rent in arrears in terms of section 114 of the Transfer of Property Act. The granting of the relief under the section is a matter within the discretion of the court. The petition filed by the defendants in this regard is printed at page 13 of the Paper Book. The offer that was made was not an unconditional one. The defendants still denied that the plaintiff Company was entitled to re-enter and stated that in case the court was inclined to pass a decree for ejectment they would be agreeable to pay the rents in arrears with interest and the full costs of the suit within fifteen days. What section 114 of the Transfer of Property Act contemplates is payment or tender to the lessor or the giving of such security as the court thinks sufficient for making such payment within 15 days. In the present case the offer that was made after conclusion of the arguments was neither a payment nor a tender to the lessor nor was any security furnished to the court with an undertaking to make the payment within 15 days. The offer, thus, was not strictly in terms of section 114 of the Transfer Property Act, and that is virtually what the court has found while rejecting the defendant's prayer in this connection. In order to get the benefit of relief against forfeiture under the section the lessee is required at the hearing of the suit either to pay or to tender to the lessor the rent in arrear together with the interest thereon and the full cost of the suit or to give sufficient security with the undertaking to make the necessary payment within 15 days. A simple offer to pay the requisite amount within 15 days would not be in compliance with the requirements of the section and on the strength of such offer relief against forfeiture cannot be claimed. We find that the defendant's prayer for relief has been rightly rejected.
11. So far as the question of service of notice under section 111(g) on the defendants is concerned, it is not in dispute that the same was duly served on defendants 1, 2 and 5. Ex. 2 is the notice which was served. Clause IX(iii) to the indenture Exhibit 1 provides as follows:
“Every notice requiring to be served hereunder shall be sufficiently and properly served if sent by registered Post to the address of the Lessees as given before……….”
12. The address given before is the address in paragraph 1 or Exhibit 1 and is village Domohoni, Thana Baraboni Sub-Division Asansol in the District of Burdwan.
13. Exhibits 3 to 3(d) are the postal registration receipts which show that the notices on the defendants were sent to the address above which is within Charanpur Post Office. Exhibits 4 to 4(d) are the postal acknowledgments. Exhibits 4(c) and 4(d) are the acknowledgments in respect of the notice addressed to defendants 3 and 1. In the former the address as originally given is as per the terms of cl. IX(iii) of the indenture (Exhibit 1). But the same appears to have been penned through and another address was substituted thereof so far as Exhibit 4(d) acknowledgment is concerned the address thereon is as required in the clause above. The postal seal on these two acknowledgments show, however, that they were actually delivered by the Karmatar Post Office in Santhal Parganas. The two notices whereof Exhibits 4(c) and 4(d) are the acknowledgments must have been redirected after they had been registered and posted by or on behalf of the plaintiff Company. Where or by whom this was done has not come out in evidence; but the notices must have been redirected by the postal authorities on some instruction given by or on behalf of the addressees. Exhibit 4(d) was delivered by the Karmatar Post Office although the address of the addressee on it is Domohoni within P.S Charanpur in the District of Burdwan. Apparently, the redirected address was noted on the envelope containing the notice and the address on the acknowledgment was not corrected accordingly. Whatever that be, the position stands that the notices were directed to the address as given in the indenture Exhibit 1 in terms of Cl. IX(iii) thereof and in accordance with those terms the giving of the notice by registered post to that address is to be treated as sufficient and proper service thereof. It was for the defendants to prove that the notices were not duly served, but neither defendant No. 3 nor defendant No. 4 came forward to deny the service.
14. In the case Harihar Benerjee v. Ramshashi Roy, ILR 46 Cal 458: (AIR 1918 PC 102) was involved a question similar to the one raised in this suit. It was held
“the personal tender or delivery may take place anywhere: the vicarious tender or delivery must take place at the residence of the person intended to be bound by the notice. In the case of joint tenants, each is intended to be bound and it has long ago been decided that service of a notice to quit upon a joint tenant is prima facie evidence that it has reached the other joint tenants”.
15. In dealing with service by registered post it was stated.
“………. but it is an entire mistake to suppose that the addressee must sign the receipt for a registered letter himself or that he cannot do so by the hand of another person or that if another person does sign it on the addressee behalf, the presumption is that it never was delivered to the addressee's himself mediately or immediately.”
16. The statements above lay down a rule governing the mode of proof relating to service and says in effect that service by registered post of a notice directed to the correct address is prima facie proof if the acknowledgment receipt comes back with the signature of somebody thereon and further that service of such a notice upon one joint tenant is prima facie evidence of service on the others when similar notices on all the joint tenants are sent by post to the correct address.
17. We were further referred to the case Bejoy Chand Mahatab v. Kali Prasanna Seal, AIR 1925 Cal 752 which says that service on all joint tenants in terms of Section 106 of the Transfer of Property Act is necessary in order to determine a tenancy, but that is a proposition with which nobody will quarrel.
18. On behalf of the respondent Company we were further referred to the case Kanji Manji v. Trustees of the Port of Bombay, AIR 1963 SC 468 which lays down that notice served on one of the joint tenants is sufficient to terminate a lease. The question involved does not appear to have been discussed in detail as it was not necessary in view of the fact that the learned Advocate concerned conceded the position, but even apart from the broad proposition of law laid down in the case, there is ample justification in the materials on record in the present case in support of the trial court's finding in favour of the service of notice on defendants 3 and 4. The notices on these two defendants were sent by registered post to the address mentioned in the indenture of lease Exhibit 1 as per cl. IX(iii) thereof. So far as the lessor is concerned he did what he was required to do in terms of the contract and proper service of the notice is to be deemed to have been effected. Further, in view of the fact that the notices were sent by registered post, as evidenced by postal receipts Exhibits 3(b) and 3(d), there would be a presumption of effective service, and the further fact that the acknowledgements of the notices directed to the address given in the indenture Exhibit 1 came back with the signature of somebody would provide prima facie evidence of service. All these taken together would throw the onus on the defendants to prove that they did not in fact receive the notices and that onus remains undischarged. Evidence was adduced to show that Bhatu Mahato whose signature appears on the acknowledgments of Exhibits 4(c) and 4(d) never worked for the defendants concerned. But the best evidence in support of the denial is wanting because of the non-examination of Bhatu Mahato and of the defendants concerned and because of the non-production of the books and registers of the Company which according to the two witnesses for the defendants examined in the case would show the names of all the persons working for the defendants concerned. The evidence on behalf of the plaintiff was that Bhatu Mahto works under these defendants. On a consideration of the evidence and of the legal position involved we find that the notices under Section 111(g) of the Transfer of Property Act were duly served on defendants 3 and 4 as well.
19. Coming now to the question of vesting of the mining interest of intermediaries in terms of Section 28 of the W.B Estates Acquisition Act, thie question came up for consideration in the case Katras Tharia Coal Co. Ltd. v. State of West Bengal, 66 Cal WN 304: (AIR 1960 Cal 646) wherein it has been held that there has been no such vesting for non-service of notice under S. 4 of the Act after amendment of the definition of the term ‘intermediary’ by including within the same the interests of intermediaries in mining interest. We find, however, that the question of vesting is not relevant for the purpose of determining the right of the plaintiff Company to khas possession as claimed. If’ the interest of the plaintiff Company had vested in the State Government, it would be entitled to receive compensation in respect thereof and a decree for khas possession though it may not be executable would be evidence of plaintiff's right to receive compensation in respect thereof and would entitle it diereto in terms of the Act.
20. The principle that the Court should not pass a decree which would be unexecutable would not be attracted to the case as in any case the decree confers on the decree-holder some legal right of which he would otherwise be deprived. In this view of the matter we are of the view that the provisions of the W.B Estates Acquisition Act would not in the facts of the case stand in the way of the plaintiff getting a decree in the suit. On the facts proved the plaintiff Company was entitled to a decree if the W.B Estates Acquisition Act had not been passed. The Court would certainly take into account changes in the law pending the suit that might affect the rights of the parties which are being canvassed therein. But when the right to pet khas possession is substituted as a result of the subsequent change in the law by a right to get compensation which would be assessed by the Revenue Officers a refusal by the Court to giant a decree for khas possession would deprive the plaintiff of the right to get full compensation and this is an aspect of the matter which the Court must consider while considering the change in the law pending the suit. In this view of the matter we find that the trial court was amply justified in rejecting the objection taken in this regard by the defendants.
21. In view of the above discussion the suit must be held to have been correctly decreed. The appeal, accordingly, fails and is dismissed with costs. The judgment and decree appealed against are affirmed.
A.C Sen, J.:— I agree.
JI/AGJ/R.G.D
22. Appeal dismissed.
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