Case: STATE OF BIHAR (NOW ST.OF JHARKHAND) THROUGH THE SUB DIVISIONAL OFFICER Vs. TATA IRON

committed an inadvertent error in the calculation of interest payable under Clause (xii) in the year 1985 which was corrected later.11. Mr. Gopal Jain, learned Senior Counsel for the Respondent, argued that the High Court was right in its interpretation of Clause (xii) and Clause (xv) of the Lease Deed by taking into account the intention of the parties. He submitted that the revised demand made in the year 1994 was a unilateral decision of the Government contrary to the terms of the Lease Deed. The demand made by reading the words ?per annum? into Clause (xii) of the Lease Deed is wholly impermissible.12. The well known rule of interpretation of Contracts is that the deed ought to be read as a whole in order to ascertain the true meaning of its several clauses and a word of each Clause should be so interpreted as to bring it into harmony with the other provisions of the deed, if that interpretation does no violence to the meaning of which they are naturally susceptible. Chamber Colliery Ltd. v. T wyerould (Note) (1893) (1915) 1 Ch. 268, per Lord Watson.13. Lord Hope speaking for the Supreme Court of the United Kingdom stated the principles of interpretation as follows Multi-Link Leisure Developments Limited v. North Lanarkshire Council (Scotland) [2010] UKSC 47 :?The court?s task is to ascertain the intention of the parties by examining the words they used and giving them their ordinary meaning in their contractual context. It must start with what it is given by the parties themselves when it is conducting this exercise. Effect is to be given to every word, so far as possible, in the order in which they appear in the clauses in question. Words should not be added which are not there, and words which are there should not be changed, taken out or moved from the place in the clause where they have been put by the parties. It may be necessary to do some of these things at a later stage to make sense of the language. But this should not be done until it has become clear that the language the parties actually used creates an ambiguity which cannot be solved otherwise.?14. The well known principles of interpretation of a contract were correctly appreciated by the High Court. The question that falls for our consideration in this case is whether the demand of interest made by the Certificate Officer for the arrears of rent payable under Clause (xii) of the Lease Deed was valid or not.15. It is relevant to refer to Section 7D and Section 7E of the BLR Act. The Agreement dated 01.08.1984 and the Lease Deed dated 01.8.1985 was entered into pursuant to the abovementioned provisions of the BLR Act. Clause (xii) of the Lease Deed pertains to lands which have been developed by the Respondent by establishing industries and other civic amenities whereas Clause (xv) relates to lands which were being used for commercial purposes. The Respondent was making money from the use of lands that were covered under Clause (xv) for which reason the ?jama? was also fixed for the lands falling under Clause (xv) for five years at a time. Interest being calculated on a yearly basis as per Clause (xv) is clearly due to the lands being used for commercial purposes wherefrom the Respondent was getting returns. The exclusion of the words ?per annum? in Clause (xii) was intentional and the Appellant cannot be permitted to read those words into Clause (xii) for the purpose of issuing a demand of additional amount towards interest. A plain reading of the Lease Deed as a whole would make it clear that the payment of interest on rent chargeable under Clause (xii) is essentially different from that under Clause (xv). The principle of Expressio Unius Est Exclusio Alterius is squarely applicable to the facts of this case. For the above reasons, we are in agreement with the finding of the High Court that the District Collector, Jamshedpur was not right in issuing a demand for payment of Rs.5.97 Crores towards interest on the arrears of rent for the lands covered under Clause (xii) of the Lease Deed.16. However, the conclusion of the High Court that the demand does not fall within the sweep of the Public Demands Act is not correct. Being aware of the earlier decision of the High Court on this point, an error was committed by the High Court in taking a completely different view. If the High Court was not in agreement with the earlier decision, the only course open to it was to refer the matter to a larger Bench. That apart, in Clause (xx) of the Lease Deed, the Respondent and the Appellant agreed that recoveries of arrears of rent may be affected under the Public Demands Act. It is not open to the Respondent to contend that the demand made for payment of interest under the Lease Deed as not a public demand in view of Clause (xx) of the Lease Deed. ?Public demand? has been defined in Section 3(6) of the Public Demands Act as under:"3. Definitions. … … (6)?Public demand? means any arrear or money mentioned or referred to in Schedule I, and includes any interest which may, by law, be chargeable thereon upto the date on which a certificate is signed under Part II.?Item No.7 of Schedule I of the Public Demands Act is as follows:?Any demand payable to the Collector by a person holding any interest in land, pasturage, forest-rights, fisheries or the like, whether such demand is or is not transferable, when such demand is a condition of the use and enjoyment of such land, pasturage, forest right, fisheries or other things.?17. Item No.7 of Schedule I covers any demand payable by a person holding any interest in land. Therefore, interest on rent payable for the lands would, in our opinion, be recoverable under Item No.7 of Schedule I read with Section 3(6) of the Public Demands Act.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]A plain reading of the Lease Deed as a whole would make it clear that the payment of interest on rent chargeable under Clause (xii) is essentially different from that under Clause (xv). The principle of Expressio Unius Est Exclusio Alterius is squarely applicable to the facts of this case. For the above reasons, we are in agreement with the finding of the High Court that the District Collector, Jamshedpur was not right in issuing a demand for payment of Rs.5.97 Crores towards interest on the arrears of rent for the lands covered under Clause (xii) of the Lease Deed.16. However, the conclusion of the High Court that the demand does not fall within the sweep of the Public Demands Act is not correct. Being aware of the earlier decision of the High Court on this point, an error was committed by the High Court in taking a completely different view. If the High Court was not in agreement with the earlier decision, the only course open to it was to refer the matter to a larger Bench. That apart, in Clause (xx) of the Lease Deed, the Respondent and the Appellant agreed that recoveries of arrears of rent may be affected under the Public Demands Act. It is not open to the Respondent to contend that the demand made for payment of interest under the Lease Deed as not a public demand in view of Clause (xx) of the Lease Deed.Item No.7 of Schedule I covers any demand payable by a person holding any interest in land. Therefore, interest on rent payable for the lands would, in our opinion, be recoverable under Item No.7 of Schedule I read with Section 3(6) of the Public Demands Act.