Jenkins, C.J:— The plaintiff in this suit seeks a declaration that there is a right on his part, in limitation of the right of Government, to hold his land, particularised in the plaint, forever on payment of assessment at the rate of 9 pies per square yard per annum, and that Government have no right to enhance the rate. On this and other grounds he seeks to have the increased assessment that has been imposed on his land set aside. The Revenue Judge has dismissed the suit with costs, and from this decision the plaintiff has appealed to this Court.
Originally, so far as the record before us shows, the land was of the pension and tax tenure. It was, however, purchased by Government from the holder, and a part of it was granted (though no deed was executed) to certain persons for the benefit of the Free Church of Scotland Mission. At the same time the Government made a grant-in-aid of Rs. 25,000. towards the erection and establishment of a school. A school house and other buildings were in due course erected.
The character of the locality, however, rendered it desirable to move the school elsewhere, so on the 29th April 1879, Dr. Mackichan on behalf of the Mission wrote to Mr. Peile, the Secretary to Government, asking for the sanction of Government to a sale of the land. On the 24th of July 1879, a reply was received, stating that His Excellency the Governor in Council was prepared to consent to the sale on certain terms mentioned in the letter. The second and third paragraphs of the letter are as follows:
I am directed to inform you that His Excellency the Governor in Council has favourably considered this request, and is prepared to consent to the sale on the same terms as those recently offered in disposing of a similar request made by the Diocesan Board. These terms were that, on Government being satisfied through the Public Works Department that the building to which they are invited to transfer their lien is as good a security as that in aid of the building of which their grant was originally made, the sale of the latter will be permitted.
I am to add that Government desire that the terms of sale which you contemplate may be submitted for approval and that when an offer is made for the purchase of the premises this also should be submitted for the consideration of His Excellency in Council.
On the 1st of October, 1884, an indenture was made between the Secretary of State for India in Council of the One part and certain members of the Mission (to whom I will hereafter refer as the trustees) of the other part, whereby a piece of land, being part of that now in question, was conveyed to the trustees, their heirs, and assigns for ever for the purposes and subjects to the covenants and conditions therein expressed. The deed contained provisions for the use of the building as a school, and for its proper management and finally provided, that in certain events the piece of ground and the buildings on it should revert to Government. On the same day a lease was executed in favour of the Mission trustees of another piece of land, also part of the land now in suit for the term of one year as from the 1st of July 1865, and so from year to year at the yearly rent of rupee one until the demise should be determined as therein provided.
On the 31st of August, 1885, Dr. Mackichan wrote to the Secretary to Government, and, after alluding to the sanction given on the 24th of July 1879, submitted for the consideration of Government an offer that had been received from Mr. Narayan Moolji, a copy of whioh was annexed. The purchase price offered was Rs. 29.000, and it was stipulated that the” land was not to be subject to any rates or taxes. The matter was reported on both by the Collector of Bombay and the Superintending Engineer, N.D and a memorandum was furnished by the Public Works Department stating that in the circumstances it did not appear desirable to resume the land. On the 4th of March Dr. Mackichan wrote to inquire as to the decision of Government, and on the 13th of March a reply came asking for further information. It seems that besides the pieces of land comprised in the two indenture I have mentioned, there was an adjoining plot of land also in the occupation of the Mission, and on the first of May Dr. Machichan by letter requested the Government of Bombay to ascertain from the Government of India on what terms his plot could be made over to the purchaser of the school property. On the 2nd of June the Collector reported that it would be worth Rs. 5,065, or Rs. 5 per square yard, if sold to the persons he indicates, and that in his opinion this might be taken as its proper valuation.
The matter was then submitted to the Government of India, who replied that they were inclined to think that the fairest arrangement would be to cause the school premises and the Government plot to be appraised as parts of one whole lot by a professional valuer, who for the purposes of valuation would take into account all the circumstances of each; that this valuation in the case of the plot should supersede the arbitrary estimate of Rs. 5 per yard; and that the Mission might be permitted to sell the whole together, paying to Government the price of the plot as valued.
Mr. Narayan Moolji's offer was for some reason withdrawn and on the 25th of August 1886, Mr. Janardhan Gopal made the following offer:
I hare this day made an offer of Rs. 32,500 (rupees thirty-two thousand and five hundred) for the purchase of the building near French Fridge known as the Free Church Boarding School, together with the site admeasuring about 1,4-50 square yards belonging to the school, and also all that piece of ground admeasuring 1,011 square yards at the near or between the school site and the Railway line.
The whole property as above described admeasuring 2,461 square-yards or thereabouts shall be conveyed to me as free-hold tenure or for a nominal Government tax.
The vendor shall make out a marketable title to the aforesaid property. In the event of their inability to do so it will be at my option to complete the contract or not. The entire expense of conveying the whole property to me by the Free Church Mission as aforesaid to be borne half and half by me and the vendors.
In case the Government refuses to sell the piece of ground admeasuring 1,011 square yards for Rs. 5 per square yard the writing to fall through.
If the final conveyance is not executed within (4) four months from this date, it should be at my option to make myself free from the contract
The final conveyance should be executed by all the proper parties.
This contract is effected through Messrs. Sorabsha and Company, and they shall be entitled on completion of the purchase, but not otherwise, to their brokerage at two per cent, on the purchase-money from the purchaser and two per cent, from the vendors.
On the same day this offer was accepted on behalf of the Mission.
On the 6th of September a Government Resolution was published, which, after referring to the letter of the 31st of August 1885, and the letter of the Government of India and to the intervening events I have narrated, proceeded: “To be communicated to the Collector of Bombay, with a request that be will carry out the instructions of Government of India in consultation with the Public Works Department and the Secretary to the Free Church Mtssion.” A copy of this Resolution was forwarded to the Mission. Mr. Campbell, Architect and Surveyor, then, on instructions from the Collector, inspected the property, and reported as follows:
Having been requested by the Collector of Bombay in his letter No. 2280 of 20th November 1886, to value the property of the Free Church Mission at the foot of French Bridge consisting of 1,644 square yards and a two storeyed school-house building on same and also the piece of ground at back of the above premises to the, west between same and the B.B & C.I Railway, which is now held by the Free Church Mission from the Government at a nominal rent of Re. 1 per annum and consists of 1,011 square yards of land without any erection on same.
I have carefully inspected, both plots of land and found that the plot containing 1,484 square yards belonging to the Free Church Mission fronts on the east side of Breach Candy Road, while on the south side it is shut in by the high-level French Bridge, on the West by the plot of land held by the Free. Church Mission at a nominal yearly rent of Re. 1 per annum, and on the north side by the property of Keshowjee Madhowjee.
The plot to the west between same and the Railway line containing 1,011 square yards is enclosed on the south side and partly on the west by the French (high level) Bridge and partly on the west by the B.B & C.I Railway line, on the east by the free Church Mission property, and on the north by two properties belonging to Keshowjee Madhowjee and Babaji Gopal. At present there is no access to this plot of land except through the Free Church Mission compound.
There are only three properties to which this plot of land could be of any possible use, vis. the Free Church Mission, Keshowjee Madhowjee and Babaji Gopal's, which two latter abut upon it on the north side, and under these circumstances the plot can hardly be said to hare any market value as it would be of no use at all except to one of the three parties whose properties surround it.
I find that a piece of waste land a little further on northwards, bounded on the west side by the Railway, and abutting on Mr. Babaji Gopal's land, and to which there is access by a road running out of Breach Candy Road, was sold to him by the Collector at Rs. 3 per square yard, and I am of opinion that under the circumstances half this rate or Re. 1-8-0 per square yard will be a fair rate to allow for the plot of 1,011 square yards at the back of the Free Church Mission property to the west between same and the B.B C.I Railway
The present value of the school building itself I take at
Rs. 23,000
1,484 square yards I value at Rs. 5 per square yard …
Rs. 7,420
The land at back of above ground to the west and between same and the Bailway, 1,011 square yards, I value at Rs. 1-8-0 per square yard … … …
Rs. 1,516
Making a total …
Rs. 31,936
This report was forwarded to Government by the Collector with a request for early instructions, and on the 18th of December was published a Government Resolution that “the land should now be sold in accordance with the instructions of the Government of India in their letter No. 228 of 31st July last embodied in Government Resolution No. 1420 of September 1888, the Free Church Mission paying the price of the plot as valued.” A copy of this Resolution was forwarded to the Mission.
On the 15th January, 1887 Dr. Mackichan wrote to the Acting Secretary to Government as follows:
In continuation of our correspondence with reference to the sal® of the Free Church Boarding School, Girgaum, I have the honour to state that the Free Church Mission on receiving the Government Resolution in the Educational Department sanctioning the sale of the piece of ground in the rear of the school to the Mission at Be. 1-8-0 per square yard according to the rate fixed by the professional valuators, agreed to accept the offer of Mr. Janardhan Gopal, who has agreed to pay Rs. 32,500 for the whole property including the piece of ground behind the school, for which the sum of Rs, 1,515-8-0 is to be paid by us to Government.
This piece of ground is now being transferred to us and the sura stated is being paid. I have now to request that Government will be pleased to sanction the sale of the building to the abovenamed purchaser and take the necessary steps to transfer the property, releasing it from the lien which at present rests upon it as a building erected for educational purposes.
The present line of Government is to be transferred to other premises which we may acquire for the school, and I have the honour to request that in determining this lien Government may be pleased to fix it at Rs. 30,000 instead of Rs. 32,500 as formerly estimated, in view of the fact that the net proceeds of the most favourable offer which we can obtain will not aggregate more than Rs. 30,000.
On the 26th January, 1887, the Solicitor to Government wrote to the Under-Secretary to Government, Public Works Department but his letter has no material bearing on the ease except so far as it is therein stated that “the trustees of the Free Church Mission have with the assent of Government sold both properties for Rs. 32,500.” On the 11th February, 1887, Messrs. Ardeshir, Hormasji and Dinshaw, who were acting as Solicitors both for the purchaser and the Mission, submitted to the Collector for the approval of Government two draft conveyances, one being an assurance to the trustees of the land not previously conveyed to them, and the other being a conveyance by the trustees to Mr. Janardhan Gopal of all the school premises.
On the 15th February, 1887, the following Government Resolution was published:—
The correspondence should be sent to the Director of Public Instruction with a request that he will, after consultation with the Secretary, Free Church Mission, and, if necessary, the Solicitor to Government, report to Government the proceedings necessary to carry out the transfer of the Government lien to the new property of the Mission.
Copy of these orders should be sent to the Secretary with copy of the letter of the Government Solicitor that the conveyance may be prepared as advised in Mr. Little's paragraph 4.
A copy of this Resolution was forwarded to the Mission. On the 28th February, 1887, the draft conveyances were returned with certain alterations. These drafts have unfortunately been lost; but from the letter of the 19th March, 1887 (Exhibit V), it appears that the alterations were to the effect that the property should be subject to taxes, assessments, &c. In this letter it was stated by the purchaser's attorneys that it had been understood at a previous interview with the Collector that the alteration bad reference only to municipal taxes, and it was proposed the alterations should be so modified as to make this clear by express mention, and to exclude Government rights also by express mention. The drafts were modified by Messrs. Ardeshir and Co. accordingly.
On the 31st May, 1887, the Secretary to Government wrote to Dr. Mackichan: “I am to add that in the absence of any order of Government sanctioning the conveyance of the land to Mr. Janardhan Gopal free of liability to assessment to the land revenue, the Solicitor to Government has rightly assumed that no such exemption was contemplated.” Thereupon Dr. Mackichan wrote on the 21st June 1887, to Government as follows:
With reference to your letter No. 894 of 1887 regarding the sale of the Free Church Boarding School near the French Bridge, Girgaum, I have the honour to state that a provisional agreement was come to in August last between the trustees of the Free Church Mission and Mr. Janardhan Gopal, and that it has been with a view to the completion of this agreement that questions concerning the property have been since that date before the Government of India and Bombay.
It was not the understanding or intention of the Mission that the agreement was binding on Government. And neither the Mission nor the purchaser expected a complete exemption of the land referred to in the agreement from assessment to land revenue. What the Solicitors, Messrs. Ardeshir, Hormasji and Dinshaw, point out is that the price offered by the purchaser, viz., Rs. 32,600 for the property, was on the understanding ex-pressed in the agreement for sale that the purchaser would not be required to pay to Government more than a nominal Government tax. We understand that what the purchaser asks is that the amount charged may not exceed what is payable in respect of land of pension and tax tenure in the locality.
Having regard to the fact (1) that the piece of land containing 1,484 square yards has been held by them free from assessment to land revenue, and (2) that they pay only one rupee per annum on account of the vacant land, the trustees believe that even in the event of the sale of the same and the consequent change in the ownership of it, Government would not place a heavy assessment on it, that at any rate they would not assess it in excess of what the land was subject to before it was let to the Mission or of what Pension and Tax land in its neighbourhood is liable to pay.
It is the earnest desire of the Mission that this contract be completed.
Under the circumstances we hope that Government will be good enough to state or ask the Collector of Land Revenue to say what the land will be assessed at for purposes of the land revenue, it being assumed that the land was of the Pension and Tax tenure The completion of the sale depends on the determination of this question, as also on the question whether a small piece of land which though not included in the original grant has been used as a portion of the school premises (which question is already the subject of correspondence between Messrs. Ardeshir Hormasji and Dinshaw and the Collector) shall be included in the sale to Mr. Janardhan, and I hare to state that the Mission will feel greatly obliged to Government for an early disposal of the matter.
On the 29th of June, 1887, the drafts were returned to Messrs. Ardeshir & Co.
On the 11th July, 1887, a Resolution of Government in reference to the letter of the 21st June was published. The Resolution runs:
It of course, does not follow that because Government allowed the land to be free of assessment or to be assessed at only a nominal amount as long as it was occupied for the purposes of an educational institution they will continue that exemption when the land passes for other purposes into other hands. It would not be fair to the general taxpayers for Government to do so.
The land in question will be liable in the purchaser, Mr. Janardhan Gopal's hands, to be assessed under the rules ordinarily applicable to land of the same description. The Collector should be desired on the application of either the Secretary of the Free Church Mission, or of the purchaser, Mr. Janardhan Gopal, to state what the assessment of the land revenue will be and what are the rules affecting the amount of the assessment, and the Secretary should be informed that the Collector his been so desired.
Acting on this Resolution Messrs. Ardeshir Hormusji & Co. on the 14th July 1887 wrote to the Collector:
In a letter addressed by the Acting Chief Secretary to Government to the Secretary, Free Church Mission, in reference to the claim for exemption from land revenue made by the purchaser of the above property, the latter has been informed that you had been requested on the application either of the Free Church Mission or the purchaser, Mr, Janardhan Gopal, to state what the assessment of the land revenue will be and what are the rules affecting the amount of the assessment. We have therefore, as attorneys for both the Mission and the purchaser, to request that you will be so good as to furnish us with the desired information.
We understand that the whole of the land was of the Pension and Tax tenure prior to its having been taken over by Government for the purpose of the Mission school.
On the 25th July, 1889, the Collector replied:
In reply to your letter of 14th instant on the subject of the assessment of the land occupied by the Girgaum Mission school, I have the honour to inform you that the land will be assessed at the rate of 9 pies per square yard per annum. This is the rate of assessment which is charged for Government land in this locality in accordance with a scale of Varying rates in different localities which was laid down by Mr. Jacomb when Collector and which has been followed for the last six years.
The fact that the land was of the Pension and Tax tenure before it was taken up by Government does not affect the assessment now to be levied as the Pension and Tax tenure ceased when the land was bought up by Government.
On the 20th December, 1887, an indenture was executed to which the Secretary of State for India in Council as representing the Government was a party of the one part and the trustees of the Mission of the other part. It was thereby recited that the trustees with the approval of Government had resolved to sell the pieces of land therein comprised, and that the Government with a view to facilitating the sale had agreed to grant to the trustees all their reversion and estate in the premises, and that the trustees had agreed with Janardhan Gopal for the absolute sale to him of the pieces of land. In the operative part the Government granted all their reversion and estate in the pieces of land to the trustees, their heirs, executors, administrators and assigns for ever, but subject to the payment of taxes, rates charges, assessments leviable or chargeable in respect of the premises or anything for the time being thereon. Then followed a covenant by the Secretary of State that the premises should at all times remain and be to the use of the trustees, their heirs and assigns and be quietly entered into and upon and held and enjoyed and the rents and profits thereof received by them accordingly without any lawful eviction, in eruption, claim or demand whatsoever from or by the Secretary of State or any person claiming through or in trust for him,
On the 16th January, 1888, the conveyance to the purchaser, Mr. Janardan Gopal, was executed. The parties to it were the trustees of the Mission of the first, part, the Secretary of State of the second part and Mr. Janardhan Gopal of the third part. After reciting that the trustees had entered into an agreement with Mr. Janardhan Gopal for the absolute sale of the pieces of land, the trustees with the knowledge and consent of Government conveyed the same to Mr. Janardhan Gopal, his heirs, executors, administrators, and assigns forever subject to the payment of all rates, taxes, charges, assessments leviable or chargeable m respect of the premises or anything for the time being thereon. And the Secretary of State did thereby for himself and bis successors acquit, release and forever discharge Janardhan Gopal, his heirs, executors, administrators, and assigns of and from all manner of rights, powers, authorities and privileges to him and his successors reserved in respect of the premises thereinbefore firstly described in and by the indenture of the 1st of October 1884 and from all conditions, limitations and obligations by the said indenture imposed upon the use and enjoyment of the premises.
In 1893 the property became vested under a partition in the plaintiff Mr. Janardhan Gopal's son. Up to 1899 the assessment of nine pies per square yard was paid, but on the 24th August in that year the Collector of Bombay wrote to the plaintiff:
I hereby on behalf of Government give you notice that, under section 8 Bombay Act II of 1876, I have fixed the assessment for land revenue for marginally noted land in your possession at Re. 0-6-6 annas six and pies six per square yard per annum. This assessment will come into force on 1st October, 1899 and is guaranteed for fifty years from that date.
Locality Girgaum; area of land 3,072 sq. yards; Collector's new No. 16912. New Survey No. 1-2 & 3/7962.
This was done without any inquiry of Mr. Janardhan as to the circumstances under which the property was acquired from Government, without even a word of warning, and the result was that having regard to the terms of the Bombay City Land Revenue Act the only course open to the plaintiff was at once to commence this suit, and that he did on the 26th of September, 1899.
On the 6th January 1900, a Resolution of Government was published ratifying what the Collector had done.
It has been urged before us, and not without reason, that the action, of the Collector in increasing the assessment to about nine times its original amount practically comes to confiscation. Mr. Janardhan has stated the result in his evidence as follows:—
If 9 pies per square yard would be Rs. 144 per annum, this sum capitalized would at 20 years' purchase, make 8,300 or at 26 years' purchase “Rs. 3,600 addition to the purchase-money. I had this in my mind at the time. Government have now increased the assessment to 6 annas and 6 pies per square yard which represents Rs. 1,248 6-0 per annum; that sum capitalized at 25 years' purchase comes to Rs. 31,200, If this assessment holds good my property will be leased in value by Rs. 31,000 or rather the difference between Rs. 31,200 and 3,560. The maximum rent of the property is Rs. 150 per mensem, and after paying taxes of Rs. 104 per mensem it would leave a rental of Rs. 46 per mensem, and then calculating with the municipal rates and taxes and money expended on rspairs at 10 per cent, there would be Nothing left over. A little to the bad. Had I known this I would not hare purchased the property. I have spent Rs. 14,000 more on the property and now only produce Rs. 150 as rent.
Before us it has been urged (1) that the action of the Collector was invalid as he did not obtain the previous sanction of Government: (2) that there was no such settlement as is required by section 9 of the Act: (3) that the plaintiff is not a superior holder and therefore does not come within the operation of the Act: (4) that the assessment is unreasonable and therefore open to revision’: and (5) that a specific limit to enhancement has been established and preserved. In support of the first two contentions it has been urged with great force that unless some such limitation is imposed as the arguments imply, the Collector is clothed with an arbitrary power which it is difficult to suppose the Legislature intended to vest in him.
In the view, however, that I take of the case it is unnecessary to deal with these points, for I think on the merits there is a valid objection to what the Collector has done.
I have set out at length the history of the case, but it will be convenient here to recapitulate briefly the salient facts. One plot of land was conveyed to the Mission trustees, “their heirs and assigns forever” subject no doubt to a right of resumption, but without any mention of assessment. Resumption in the opinion of the Public Works Department was desirable and in the conveyance to Mr. Janardhan the right was renounced in his favour. The other two plots of land were also conveyed to the Mission trustees, “their heirs, executors, administrators and assigns forever,” but in this case it was expressed to be “subject to the payment of all taxes, rates, charges, and assessments leviable or chargeable in respect of the premises or anything for the time being thereon.” These words appear also in the conveyance to Mr. Janardhan, the assurance to whom is expressed to be to him “his heirs, executors, administration and assigns for ever.”
We are then met with the question, what assessments are leviable or chargeable in respect of the premises? When Mr. Janardhan sought information on this point prior to the completion of the purchase, he was referred by Government to the Collector, by whom he was told that the land would be assessed at the rate of 9 pies per square yard. Though the Collector was requested to state not only what the assessment would be, but also what were the rules affecting the amount of the assessment, he never so much as hinted that there would be a right to enhance in the future. But this silence, the defendant now suggests, practically amounted to a reservation of that right. I could understand that suggestion, had Mr. Janardhan been taking the premises as an occupant or a tenant from year to year; but it appears to mean reasonable in relation to a purchase out and out of the property for its full value; and here it must be remembered that Government took an expert opinion as to the value and learnt from it that Mr. Janardhan was paying for the property at its full value Surely to such a purchaser the intention to reserve the right to enhance assessment should in all fairness have been clearly disclosed, and I cannot bring myself to believe that Government or the Collector were acting in the disingenuous manner that the defendant's counsel would now have us ascribe to them. It is in my opinion beside the point to cite the maxim that a man must be taken to know the law. Government undoubtedly had the power to fix the amount of assessment, and the only question here is whether it did not do so, and that is not a master within the maxim. I think the meaning that a reasonable man would under the circumstances ascribe to the Collector's reply is that a specific limit of 8 pies per square yard per annum was established within the meaning of section 8 of the Act. if that be so, are not the Government and the Collector now bound? If the Government be bound, there can be now no question that the Collector is: this was not disputed in the argument. But whether it be put on the ground of collateral contract or of estoppel it seems to me Government is bound. There was ample consideration to support a contract fixing the assessment permanently; for the Government not only received Rs. 2,383-8-0, but the balance of Rs. 30,616 went to furnish security to Government for the amount advanced as a grant-in-aid While if the matter be regarded from the point of view of estoppel the legal result is the same. In my opinion the conduct of Government, coupled with the statement of the Collector made on their behalf for the purposes of the purchase, was, under the circumstances, such as to create and encourage in the purchaser as a reasonable man the belief that he was purchasing property substantially worth Rs. 33,000, and that Government were not silently reserving to themselves an unfettered right to destroy the value of that property and practically to confiscate that which had been sold.
The facts appear to me to bring the case within section 115 of the Evidence Act. If the defendants' counsel are right in their contention, then it was open to the Collector on the very next day to raise the assessment to the figure at which he now has purported to fix it, or even to a greater amount. Such a conclusion appears to me to be opposed to what is reasonable, to what is probable, and to what is fair. That such an idea never entered the purchaser's mind is clear from the fact that he not only completed the sale paying full value for the property (and by that I mean its value unincumbered), but has also since spent Rs. 14,000 on it. On this point we have, too, the clear evidence of the plaintiff's father, Mr. Janardhan, to which I have already referred, and on which I do not hestitate to rely, and I can only attribute to Government the knowledge that Mr. Janardhan completed the sale in the belief induced by the Collector's letter that the specific limit of his liability in respect of land assessment was 9 pips per square yard.
It has been argued that as Government is concerned we should apply a different canon of interpretation to their words and act, and construe them adversely to the grantee. Even supposing this rule to have any place in a transaction such as the present, it would not, in the view I take, alter my conclusion. In my opinion, therefore, the decree of the Revenue Judge should be reversed, and a decree passed in the plaintiff's favour in the terms of the first part of paragraph (3) of the prayer of his plaint and the enhancement should be set aside. The plaintiff should get his costs throughout.
Chandavarkar, J.:— I am of the same opinion. The facts °‘have been fully set out in the judgment just delivered by my Lord, and I will not recapitulate them. The question as to the right of Government to increase the assessment of the land to the land revenue must turn upon the intention of the parties—upon what in fact was in their contemplation when they entered into the contract.
At the outset we have the fact that this was an out-and-out sale by Government to the plaintiff's father, Mr. Janardhan Gopal, of all their rights as proprietors, subject, indeed, to the payment by him and those claiming under him of “all taxes, rates, charges, assessments, leviable or chargeable” in respect of the premises sold “or anything for the time being Ihereon.” In other words, it was not a mere transfer of occupancy rights—where Government without parting with their property in the soil let the land for certain defined purposes on certain conditions for a prescribed number of years and the transferee does not become its owner but a mere “oooupant” or “tenant”—a term well understood by lawyers.
Now, while the negotiations for the sale of the land to Mr. Janardhan Gopal were going on, he proposed that Government should sell the property either free of assessment or for a nominal Government tax. Government would not agree to that, but said :—“The land in question will be liable in the purchaser Mr. Janardhan Gopal's hands to be assessed under the rules ordinarily applicable to land of the same description.” They did not make clear what they meant by “land of the same description.” From the previous correspondence it would appear that both Mr. Janardhan Gopal and his immediate vendors—the Free Church Mission—had at first assumed that the land forming the subject of the sale was of the Pension and Tax tenure, but it was subsequently pointed out to them by the Collector that the assumption was erroneous. In other words, Government treated it as land absolutely vested in them Which they could dispose of as they liked under, section 25 of Bombay Act II of 1878, Moreover, Government referred to certain rales. It has, however, been conceded at the Bar that as a matter of fact there were no rules. Had there been any rules and had those rules, brought to the notice of the purchaser, provided that the assessment to the land revenue was liable to be enhanced at the discretion of Government, the property would have, after the purchase, become liable in his hands to such enhancement. From the words above quoted, therefore, no irresistible inference arises that Government intended to tell the purchaser that the sale was to be subject to the liability on his part of paying enhanced assessment whenever Government should choose to enhance it. Had that been their intention they would have said so in clear terms.
But it was urged that though there were no rules and though Government did not in so many words say that the purchaser was to take the land subject to the right of Government to assess it to the land revenue from time to time according to their discretion, the purchaser was well aware of that right and in the absence of any waiver of it by Government he must be taken to have bought the property subject to that right. But because he knew that, was he bound to assume that Government intended to reserve to themselves that right without any limit in an out-and-out sale in the absence of clear and unmistakeable language conveying that intention, especially when the land was fully valued and he was paying the full price of the property of both the land and the buildings thereon? They were owners of the property and could dispose of it in such manner as the thought fit under section 25 of Bombay Act II of 1976. They could propose any terms they liked to the purchaser restricting his right, and if he accepted them he would be bound, provided those restrictive terms, cutting down the proprietary title they were granting, were worded in language reasonably and sufficiently clear. As observed by Knight Bruce, V.C, in Seaton v. Mapp “When a vendor sells property under stipulations which are against common right, and places the purchaser in a position less advantageous than that in which he otherwise would be it is incumbent on the vendor to express himself with reasonable clearness; if he uses expressions reasonably capable of misconstruction, if be uses ambiguous words, the purchaser may generally construe them in the manner most advantageous to himself.” Now, here Government tell the purchaser that he will be liable to pay the assessment under the rules “ordinarily applicable to land of the same description.” That in itself leaves the matter ambiguous at the best. But assuming that we should construe it in favour of Governments what followed does not show that Government intended to reserve to themselves the right of enhancing the assessment at their discretion. The intention to be gathered from it seems rather to have been to fix the assessment once for all without any condition of variation. After saying that the land will be liable as above stated, Government desire the Collector “to state what the assessment of the land to the land revenue will be and what the rules are for fixing its amount. If Government intended to hold the purchaser responsible for an assessment liable to be enhanced at any time at their discretion, where was the necessity of ascertaining the amount then, when they could have simply said in plain terms that he must take it subject to their paramount right to assess it to the land revenue whenever they chose?
The Collector, in accordance with the direction of Government informed the purchaser that the land could not be treated as of the Pension and Tax tenure as it had become vested in Government: and that it “will be assessed at the rate of 9 pies per square yard per annum,” Neither the Collector nor Government said a word at any time during these negotiations that the amount so fixed was liable to be increased. What should the purchaser understand from all that? To any reasonable man not accustomed to the subtle refinements of a lawyer, and looking at the transaction from a common sense point of view, the whole transaction must, I think, be clear as one in which Government virtually said to the purchaser: “You ask as to sell this land either free of assessment or for a nominal Government tax. We are not willing to do that; but we sell all our rights in this property which is vested in us, subject to the payment by you as assessment of 9 pies per square yard per annum.” That would be the construction put upon it had it been a contract between one private individual and another, and the vendor in that case who, after the purchaser had accepted those terms and the sale had been completed, claimed more than 9 pies would be at once Out of Court on the ground that he had not clearly stipulated for that. Why should a different principle apply because one of the contracting parties selling the property as his happens to be Government? As held by Sargent, C.J, in The Secretary of State for India v. Sheth Jeshingbhai Hathising, where an agreement is effected by way of proposal and acceptance between Government and a private individual, it “is subject to the ordinary rules applicable to contracts.” It was indeed contended both by the learned Advocate-General and Mr. Krikpatrick, who argued the case for Government, that a different rule of construction should apply here because here it is a grant from the Crown, and certain observations of Westropp, C.J, in the Kanara Land case (Vyakunta Bapuji v. The Government of Bombay were relied upon. But those were observations made with reference to a case in which the right of Government to enhance the assessment to the land revenue of land held by occupancy tenants under the ryotwari tenure was in dispute. It was not a case of a contract of an out-and-out sale by Government of land vested in them as proprietors. On the other hand, in the Conservator of Forests v. Nagardas(3) the rule of construction adopted by Westropp, C.J, was that “upon a question of the meaning of words, the same rules of common sense and justice must apply, whether the subject-matter of construction be a grant from the Crown or from a subject,” and that “it is always a question of intention to be collected from the language used with reference to the surrounding circumstances.” Fulton, J., followed the same rule in Re Antaji Keshav Tan.be(4).
Here it appears to me that when we have regard to the nature of the transaction, viz., that Government was selling the property out-and-out as any private proprietor—when we look to the whole of the language used and the acts done in accordance with it during the negotiations, to the intimation conveyed to the purchaser that the land would be assessed at the rate of 9 pies per square yard per annum without any warning that that J amount was liable to be enhanced and to the fact that upon the faith of it all he paid Rs. 32.500 as its price after both the land and the buildings had been fully valued by Government and (heir price fixed in accordance with that valuation, the intention of the parties upon a reasonable construction must be taken to have been that the purchaser was to be liable to pay the amount of 9 pies per square yard per annum then levied as assessment and no more. To hold otherwise would be to say that in purporting te sell their property to the purchaser as they did Government intended without using apt language to express that intention to reserve to themselves the right to turn round at any time afterwards—perhaps the very next day after the sale—and so enhance the assessment as to practically nullify the purchase and confiscate the property. I do not think we should draw the inference of any such intention in the absence of clear evidence.
The under standing, then of the parties was that the purchaser should be clothed with all the proprietary rights of Government subject to the payment by him and those taking under him of 9 pies per square yard per annum as assessment to the land revenue. It is with reference to that understanding that the deed of sale between the parties must be construed. When that deed says that the property was sold “subject to the payment of all taxes rates, charges, assessments leviable or chargeable,” it leaves the question open as so what the taxes, &c., are which are “leviable or chargeable.” Extrinsic evidence of that is admissible, for it neither contradicts nor varies the terms of the deed, but explains the sense in which the parties understood the words of he deed which, taken by themselves, are capable of explanation: see Bank of New Zealand v. Simpson. The understanding in question furnishes that evidence. It is also evidence of a collateral agreement outside the deed of sale, admissible as the deed itself does not express the whole of the terms regarding the taxes, &c. which are “leviable or chargeable see De Lassalle v. Guildford.
In this view of the case the other points which have been argued do not arise, and I concur both in the judgment delivered and the decree proposed by my Lord.
Deeres reversed.
Attorneys for the plaintiff—Messer. Ardeshir, Hormasji, insha & Co.
Attorney for the defendant—Mr. E.F, Nicholson, Government Solicitor.