Smt. Madhabilata Debi v. Butto Kristo Roy And Others

Manohar Lall, J.:— This is an appeal by the plaintiff who is dissatisfied with that portion of the decision of the learned Subordinate Judge by which he refused to grant her a decree for arrears of rent and royalty against defendant 22. The principal question for determination is the liability of this defendant if he is an assignee of the interest of the lessee.

2. The facts are these. In the year 1900, the Raja of Jharia now represented by defendant 24, granted a lease of coal land some 39½ bighas on certain terms of payment of commission and royalty in village Fularibad to the ancestors of defendants 25 and 27, and in the year 1908, another 25 bighas was settled on certain terras with defendant 30. In the year 1914, 2½ bighas was also settled with defendants 26 and 32. These defendants also took settlement of surface lands about 51 bighas. These lessees and one Ambika Charan Laik, who is the predecessor-in-interest of the Laik defendants—defendants 1 to 6 and 10 to 25—began to work the colliery under the style and name of Fularibad Colliery. By certain transfers, when, it is unnecessary to state here, several defendants transferred their interest to defendant 23, Ramjash Agarwalla. The terms of the original lease were varied as the result of a compromise in a suit instituted by the predecessor of defendant 24 in the year 1918. Before this in the preceding year Makund Lal Laik, son of Ambika Charan Laik, then deceased, executed a deed of trust with respect to a number of properties. Item 45 in the schedule attached to the deed of trust shows that he included in the trust his three annas, equal to 7½ bighas, more or less in 39½ bighas of coal land which, as I have stated above, was taken in settlement in the year 1900 from the Raja. In or about 1925 one Butta Krishna Roy and his coaharers obtained a money decree against Jugal Kishori Devi, the widow of Ambika Charan Laik, and his co-lessee Sastikinkar Banerji, with regard to the arrears of rent and royalty which fell due on some other coal land situated in village Pandedih. In execution of that decree the rights of Jugal Kishori Devi were sold in 66 bighas and 11 kathas of land in village Fularibad and a sale certificate was granted on 28th July 1926 to the auction-purchaser which is Ex. A at p. 43, the question of construction of this sale certificate is a serious question between the parties. It will be noticed that this 66 bighas and 11 kathas is made up of the three areas which were settled by the Raja in 1900, 1908 and 1914. Defendant 22 is Butta Krishna Boy, the auction-purchaser under this document.

3. On 22nd August 1937, defendant 24 by a registered sale deed sold the arrears of rent, royalty and commission which were due to him from the Aswin kist of 1336 B.S to Chaitra kist of 1343 B.S for this 66 bighas and 11 kathas of land as well as the surface rent to the plaintiffs. The plaintiffs instituted the suit giving rise to this appeal on 13th January 1939 and asked for a personal decree against a number of defendants including defendant 22 who was made a party defendant as an assignee of the interest of defendant 4 which is given in the plaint as Mukunda Madhusudan Sampat Trust Estate. Defendants 5 and 6 are the daughters of Makunda Lal Laik. At the trial defendant 22 took the plea that the plaintiffs are the benamidars of defendants 25 to 28 and 30 to 33; but this question was decided in favour of the plaintiffs and no challenge is made to this finding. The learned Subordinate Judge decreed the suit against all the defendants ex parte but on contest against defendant 23 whose defence also was that there was no privity of contract or of estate between him and the plaintiffs. The suit was dismissed against defendant 22 because the learned Subordinate Judge held that all that Butto Krishna Roy purchased under the sale certificate was merely the rights of Jugal Kishori Devi to receive the minimum royalty etc. in respect of the coal land from Fularibad Colliery and Ramjash Agarwala, and, therefore, he was not an assignee of the interest of the trust estate, that is to say, not an assignee of the lease hold interest. In appeal Mr. R.S Chatterji, who appears for the plaintiff, strongly contended that the learned Subordinate Judge was in error in construing the sale certificate. He draws attention to the wording of that certificate where it is provided in the schedule that the judgment-debtor's right and interest to receive minimum royalty, commission and rent etc. are being sold and then follows the description of the land: “All that piece or parcel of land measuring 66 bighas 11 cattas of land in mouza Fularibad” and the adjoining boundaries are given. He also draws attention to the fact that actual delivery of possession was given at the spot as evidenced by Exs. 1, 1(a) and 1(b) in February 1927. The oral evidence is to the same effect. He, therefore, argues that what was purchased was not merely the right to receive royalty etc., but interest in the 66 bighas 11 kathas of land. Dr. Mitter who appears on behalf of defendant 22, on the other hand, contended that all that was purchased by the auction-purchaser was merely the right to receive minimum royalty up to the date of the auction sale, that is to say, up to 15th June 1926, and that this defendant although he is admittedly in possession of the land is not liable to pay any rent or royalty either to the original lessor or to the plaintiff. He also argues that as the plaintiff has not obtained any interest in the lease-hold premises there can be no privity of estate and far less any privity of contract between him and this defendant.

4. I first consider what passed under the sale certificate. A large number of cases has been brought to our notice which deal with the question as to how such a sale certificate where the right, title and interest of a widow has been sold should be construed. In my opinion, however, the proper way to construe such a sale certificate is laid down by their Lordships of the Judicial Committee in 11 I.A 66.1 Sir Barnes Peacock, who delivered the judgment of their Lordships observes at p. 73 that in the case of a widow it is necessary as required by the Code of Civil Procedure that the proclamation shall make the statement that the sale extends only to the right, title and interest of the defendant in the property specified therein and then states:

“But then there are many cases in which when the right, title, and interest of the widow is sold the whole interest in the estate passes. In other cases the whole interest does not pass. The case depends upon the nature of the suit in which the execution issues. There are many authorities to that effect. It is unnecessary to recapitulate them—they are referred to by the Chief Justice in his judgment in the High Court. If the suit is simply for a personal claim against the widow, then merely the widow's qualified interest is sold, and reversionary interest is not bound by it. If, on the other hand, the suit is against the widow in respect of the estate, or for a cause which is not a mere personal cause of action against the widow, then the whole estate passes. In many of the cases, although the right, title, and interest of the widow had been sold, the whole interest in the estate was held to have passed and the reversionary heir to be bound by it.”

5. Their Lordships then proceeded to consider as to what was sold under the expression right, title and interest of the widow in the case before them and held that not only the widow's right but the whole interest in the estate passed under the sale in execution of the decree.

6. Applying the principle of this decision to the facts of the present case, it is obvious in the first place that the decree which was being put into execution was a decree for arrears of rent due from the estate in possession of Jugal Kishori Devi. The arrears had fallen due during the life-time of the husband. The claim was, therefore, not based on a cause of action which was only personal against the widow. Although the plaintiff has not put in either the judgment or the decree or the sale proclamation of the money suit 748/24 which resulted in the decree in execution whereof the sale certificate was obtained, but the matter admits of no doubt: see p. 88, Part in, lines 4 to 10. The sale certificate itself shows that the auction-purchaser purchased the right, title and interest of the judgment-debtor in 66 bighas and 11 kathas of land. Towards the end of the document it is stated that the share of the judgment-debtor is 3 pice, the annual profit is mentioned as Rs. 209 and then the value is given at Rs. 2000, that is to say, very nearly ten times the annual profit. How can it be argued that although the arrears of rent which were due to the judgment-debtor up to 15th June 1926 would amount to a few 100 rupees at the very highest yet the auction purchaser was paying Rs. 2000 for it? In my opinion, upon a proper construction of the sale certificate, it must be held that Butta Krishna Roy purchased the interest which was represented by Jugal Kishori Devi in 66 bighas 11 kathas of land and not merely the right to receive rent and royalty. Jugal Kishori Devi represented the trust estate also which had 3 pice share in 39½ bighas of land in village Fularibad, that is to say, about 7½ bighas.

7. Mr. Chatterji relied strongly on the case in 45 ALL. 613.2 The learned Subordinate Judge has referred to the case in 38 I.C 4513 of this Court, but these cases merely apply the principle laid down by their Lordships of the Judicial Committee in 11 I.A 66 to the facts of the case then under consideration. Reference may also be made to the case in 14 M.I.A 6054 and the case law collected in 9 C.L.J 3465 at p. 353. Dr. Mitter drew attention to the case in A.I.R 1936 Pat. 572.6 In that case one of the questions for decision was whether by a certificate of sale (Ex. E-2) the property itself was sold or merely the right to receive rent. At p. 577 the certificate was stated to be in these terms:

“The certificate debtors' right to receive royalty and commission from Babu Gobardban Das Manishankar Das in 100 bighas of coal land known as Basudih Colliery B plot situated at Mauza Parbad.”

8. Mohamad Noor, J., who delivered the judgment of the Division Bench, Rowland, J., agreeing, observed:

“Now there is a good deal of difference between the sale of a plot of land and a right to receive royalty from the lessee of that land. What was attached and sold was the ‘right to receive the royalty,’ and not the land itself. A right to receive money can only be attached and sold as a debt and the debt must be existing, and not the money which is to come into existence at some future date….. In this case it is obvious that though the minimum royalty was a fixed sum, the commission depended upon the happening of circumstances….. In this view of the matter and considering the description of the property sold, in my opinion what was actually Bold was the money which had already become due on the date of the sale, that is on 25th July 1925.”

9. I do not see how this case helps the respondent. The case was decided on the result of the view that what was attached and sold was the right to receive royalty. In this case, as I have shown above, what was sold was not the right to receive royalty, but the interest in the land which produced the royalty.

10. In a number of cases, it has been decided that upon a proper construction of a document of conveyance it may be held that what was intended to convey was not merely the interest in the salamis and royalties but also the interest in the coal land, itself, although what was nominally stated in the deed was that the rents and royalties or the right to receive rents and royalties was being transferred (see the collection of cases on this point in 19 Pat. 4337 at pp. 455 and 471). An unreported case, second Appeal no. 743 of 1940, decided on 9th January 1942 by Rowland, J., was relied on by Mr. Chatterji, but on a perusal of the judgment I find that there is no discussion whatsoever in the judgment beyond stating that the High Court saw no reason to interfere with the finding of fact arrived at by the Courts below. For these reasons I am of opinion that what was transferred to defendant 22 was not the mere interest to receive rent and royalty up to a certain date but the interest in the property itself.

11. It is also to be observed that witness Rammoy Roy on behalf of defendant 22 admitted in his cross-examination that he went to take delivery of possession of the property purchased by his master Batuk Babu and took actual delivery of possession on behalf of his master. He also admitted that Batuk Babu, had brought a suit for rent against Jugal Kishori Devi and obtained a decree there-under. Defendant 22 thus having obtained title to and possession of 7½ bighas in 39½ bighas of coal land the serious question which now arises for decision is whether he is personally liable to pay the entire arrears of rent and royalty claimed by the plaintiff. Learned counsel on his behalf cannot have and has no objection if the decree is passed against the entire demised land including the 7½ bighas out of 39½ bighas.

12. It will be convenient to consider first whether Raja, if he had been the plaintiff, could have obtained a personal decree against defendant 22. Unfortunately, the document by which the transfers were made by the original lessees in favour of Ambika Charan Laik has not been produced, but it appears to have been assumed throughout the trial that he was in possession of some share as a transferee from the original lessees and not as a sub-lessee.

13. The question whether a transferee in possession of the entire or partial interest in the demised premises is liable to pay rents and royalties to the superior landlord has been the subject of conflicting decisions. But the identical question has been decided by this Court recently in 19 Pat. 433. I am reading from the head-note at p. 435 which correctly represents the decision which is founded on the case in (1923) 1 K.B 4698:

“An assignee of a portion of the lease-hold holding with other tenants under the terms of the original lease is liable jointly with those other tenants for the whole rent. He has interest in the whole of the land leased, though it is only partial interest; this estate extends all over the whole of the estate leased. Tenants in common, therefore, should not be in a position different from joint tenants as regards liability for rent or royalty. Each of the tenants in common has privity of estate with the landlord in the whole of the land leased.”

14. At page 463 in the judgment of Pazl Ali, J. (now my Lord the Chief Justice) a number of cases are cited where the observations of Greer, J. in (1923) 1 K.B 469 have been applied. It may be useful to quote from the observation of Greer, J. at page 472:

“Tenants who take a lease-hold interest by assignment are not under any contractual obligation to perform the covenants of the lease. The original lessees and their representatives continue liable under the lease, but the law imposes upon the assignees while they are assignees a liability to perform the covenants contained in the lease by reason of what is called “privity of estate,” that is to say, inasmuch, as they take under the original lease they are liable to perform the covenants for the benefit of any person who succeeds to the title of the original lessor. Where the assignee is a single person who takes the whole of the leased property no difficulty arises. Where the leased property has been physically divided amongst two or more assignees, it is clear that the obligations of the lease, so far as they affect the assignees, become separate, and each of the assignees is liable, while he is assignee, to perform the covenants so far as they affect his divided part of the leased property….., (1914) 2 Ir. R. 411.9 in the latter case Kenny, J. after referring to a number of cases …. says this at page 430: ‘But while many of those cases turned on points of pleading, it will be found that throughout all of them the principle was recognised that, in order to free the assignee of part of the lands from payment of the entire rent, he must hold the part in physical severalty. When he does so there is no privity of estate, as between him and the reversioner, in the entire of the lands. If the share be not held in severalty — whether it be held jointly or in common with others — he is owner with those others of the whole estate, and would be liable accordingly for the whole rent.’ I have looked at the Irish cases and they seem in my judgment to support the view expressed by Kenny, J. in the words quoted; though it does not seem to me quite accurate to say that a tenant in common is an owner with others of the whole estate. Unlike a joint tenant, he is not a joint owner of the whole estate, but inasmuch as he has a share of every part of the estate, it seems to me to be true to say that there is privity of estate between him and the landlord in the whole of the leased property. The view expressed by Kenny J. concerns a covenant to pay rent which in its nature is apportionable, and, of course, applies, if right, a fortiori to a covenant to repair which in its nature is not apportionable.”

15. Greer, J. (as he then was) then goes on to consider some of the English cases and observes that there is what seems at first sight decisive authority for the proposition that in England at any rate an assignee who is a tenant in common is only liable for his due proportion of the rent and then after examining a number of cases makes these observations at page 476:

“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.”

16. The present case is much simpler in view of the finding arrived at by me already that defendant 22 is in possession of specific 7½ bighas of land out of 39½ bighas. It follows in my opinion, that he was not liable for the entire rent but only to that portion of the rent which could be apportioned to this area in his exclusive possession. It may be observed that if I had taken the view that defendant 22 is in possession of an undivided share in 39½ bighas of land even then he could not be held liable for the entire amount of rent and royalty due to the Raja because his interest does not extend to the whole of 66½ bighas but only to a part of 39½ bighas which was obtained in settlement from the Raja by a separate document of the year 1900.

17. The appellant referred us to the case in 60 Bom. 39410 but that was a case of assignment to defendant 2 of the whole of the interest in the demised house. Defendant 2 had not appealed against the decree making him liable, and defendant 1 was held liable by the High Court on the ground of privity of contract.

18. Such then being the position that defendant 22 is only liable for a portion of the rent and royalty, can an apportionment be made by us in appeal? Section 37 of the Transfer of Property Act, has no application to this case as it deals with apportionment of a benefit of obligation on severance. Section 109, to which attention was drawn on behalf of the appellant, equally has no application because it deals with a situation when the lessor transfers the entire property or a part thereof and then provides that

“the lessor, the transferee and the lessee may determine what proportion of the premium or rent reserved by the lease is payable in respect of the part so transferred and in case they disagree, such determination may be made by any Court having jurisdiction to entertain a suit for the possession of the property leased.”

19. Although I do not find any express provision in the Transfer of Property Act for apportionment of rents and royalty which must be paid by the assignee of a portion of the land, but as the lessee is authorised by S. 103(j) to transfer a lease absolutely or in part, I do not see any reason why the principle provided in the latter part of S. 109 should not be applied, that is to say, the lessor, the transferee and the lessee may determine what proportion of the rent reserved by the lease is payable in respect of the part so transferred by the lessee, and in case they disagree such determination may be made by the Court having jurisdiction to entertain a suit for the possession of the property leased. In this case there is no agreement between the parties as to what is the proportion of the rent and royalty which should be payable by defendant 22, and we have no materials before us to determine this question. The plaintiff has never asked for a determination of the proportion which should be fixed upon defendant 22. For these reasons, I am of opinion that if the Raja had been the plaintiff he would not have obtained a decree for the entire rent against defendant 22.

20. But the rights of the plaintiff to sue have been further challenged on the ground that all that he has obtained is a transfer of a right to sue for arrears of rent and royalties for certain years without obtaining a transfer of the estate from the Raja, and therefore it is argued how can the doctrine of privity of estate be at all applied in such a case? The plaintiff has not obtained a mere right to sue but transfer of an actionable claim. The transfer in the present case comes within the definition of “actionable claim” given in Section 3 of the Transfer of Property Act. The arrears of rents and royalties due to the Raja are a debt and a debt can be transferred apart from the security. See the case in 58 I.A 32311 where Lord Atkin in delivering the judgment of the board observes at page 330:

“The debts may be secured either on immovable property or on merchandise: they may be wholly secured or partly secured: the security may have been given when the debt was created or later; but in any case, the debts exist as moveable property: and do not, if secured, become identified with the security or transformed into land in the one case or merchandise in the other. The separation between debt and security is well established; the creditor is entitled to take a judgment for the debt without having recourse to his security. There would, therefore, appear to be no reason in principle why a creditor should not be able to charge his moveable assets, the debts due to him, even if he be unsuccessful by reason of statutory restrictions in tranferring the security.”

21. Again at page 331:

“It appears to have escaped notice that the definition of ‘actionable claim’ also excludes debts secured by hypothecation or pledge of moveable property; and it would appear very remarkable if in India merchants are unable to secure credit by disposing of their available book debts unless at the same time they re-hypothecate or repledge the merchandise which they may happen to hold. The effect of the a amendment is to restrict the statutory rights on transfer, such as the right to sue in the transferees' name etc., to such transfers as are transfers of actionable claims as defined. There appears to be no difficulty in a transfer of a debt without the security; the original debtor can always redeem: the relations between him and his original creditor are not altered: indeed, in the present case it would appear that the Imperial Bank can only enforce the debt in the name of the respondent bank which, no doubt, the latter bank must permit. The transferee takes no further interest than the transferor was able to give him. The rights of the parties are further declared by the amended Section 134 of the Transfer of Property Act, which would appear to apply to their case.”

22. In 59 I.A 4112 the transfer was by way of assignment of the right to recover the instalments which were due from the lessee. Lord Salvesen who delivered the judgment of the board observed at page 45:

“In their Lordships' opinion what was assigned to the appellant was not a mere right to sue but a claim for a definite sum of money which the lessee was bound by his contract with Banerji to repay him. This would, their Lordships think, be an actionable claim to which S. 130 of the Act would apply.”

23. As a contrast see the case in 35 C.W.N 1034 where it was held that a transfer of mortgage debt and security by an unregistered document will not vest any right in the transferee, but only the original mortgagee can sue. The plaintiff thus has a valid right to sue for the arrears of rent and royalty, and by S. 130 all the rights and remedies, which the transferor had, have vested in him. The plaintiff would, therefore, be entitled to a money decree against the lessees defendants, and he has been granted such a decree. How can he have a money decree for the full amount against defendant 22 who has never contracted to pay him or the Raja any rent and who is merely in possession of a piece of land, a part of the entire demised land, as a result of an involuntary transfer. There was never a privity of contract between the Raja and defendant 22 and the transfer in his favour of the actionable claim does not give him any privity of contract either. If the rent and royalty could be apportioned, I would have granted a decree to the plaintiff for that amount against defendant 22.

24. It was also seriously contended by Mr. Chatterji that the question as to the liability of defendant 22 is res judicata by reason of the decision in Mortgage Suit No. 41 of 1929. That was a case instituted on 19th August 1929 by Sachindra Mohan Ghose against a number of defendants asking for a mortgage decree to be passed in favour of the plaintiff for arrears of rent and royalty for the period 1333 Sawan B.S to Asarh 1336 B.S The plaintiff sued as receiver of this Jharia Raj appointed by the Calcutta High Court from December 1927. The defendants who were impleaded in the action were the original lessees and it was stated in para. 4 that defendants 2 to 4 had transferred their interest in the property to defendant 5 and defendants 11 to 20 had sub-let their share of the property to defendant 21. On 28th January 1930, the plaintiff brought in a petition that he should be allowed to add Butto Krishna Roy as a party to the suit to meet the objections raised by the appearing defendants. The plaint was accordingly amended by adding Butto Krishna Roy. He was defendant 22 in that action also. Summons was served upon him, but he did not appear and accordingly a decree was passed on 21st November 1936. In 1938 the proceedings began before the learned Subordinate Judge to determine the substitution sought to be made by a transferee of the decree-holder. Notice of this application was served amongst others to defendant 22 but as no objection was made the substitution was ordered to be made. Then on 16th May 1938 the substituted decree-holder applied for the preparation of the final decree. Notices of this were also issued to all the defendants including No. 22 who appeared on 11th June 1938 and applied for time to file objection. On 24th June 1938 defendant 22 applied under O. 9, R. 13 of the CPC, to set aside the ex parte decree which had been obtained against him. After some adjournments, the advocate on behalf of this defendant informed the Court on 3rd September 1938 that he was not going to press the application under O. 9, R. 13 which was accordingly dismissed for default. The application for preparation of final decree was then taken up. Defendant 22 took time to raise objection but ultimately he did not appear and the final decree was ultimately passed on 15th February 1939. By that decree it was declared that unless the defendants paid the sum due under the decree the mortgaged properties including the land in possession of this defendant would be sold. It was argued before the learned Subordinate Judge that this decision is conclusive between the parties and this determines the liability of defendant 22 for all times. The learned Subordinate Judge however overruled the contention and held that as the former suit was a suit for obtaining a charge decree, and as only a charge decree was passed in that suit, no question of personal liability of Batu Babu was ever gone into therein and hence he can still question the right of the decree-holder to realise the decree personally against him at the proper time, and as in the present suit the question of personal liability at once arises as it is not a mortgage suit but a money suit, the decision is not res judicata. In my opinion this is the correct view.

25. For these reasons, although they are different from those which commended them-selves to the learned Subordinate Judge, I am of opinion that the suit has been rightly dismissed against defendant 22. The appeal must be dismissed with costs.

Reuben, J.:— I agree.

K.S

26. Appeal dismissed.