Case: Mangan Lal Deoshi Vs. Mohammad Moinul Haoque &amp; Others

This appeal arises out of a suit brought by the respondent in the court of the Subordinate Judge, Dhanbad, for recovery of arrears of royalty and cess from the appellant and another alleged to be due under a compromise decree passed on the 6th March, 1923, in a previous suit between the predecessors in interest of the parties. The only plea which is material for the purpose of this appeal is that the compromise decree not having been registered was inadmissible in evidence. The courts below held that the document did not require registration and gave effect to its terms in decreeing the suit. The second defendant has preferred thisfacts are not now in dispute and may be briefly stated. On 11th March, 1921, one Kumar Krishna Prasad Singh (hereinafter referred to as Kumar) granted a permanent lease of the right to the underground coal in 5, 800 bighas of land belonging to him to Shibsaran Singh and Sitaram Singh (hereinafter referred to as the Singhs) by a registered patta stipulating for a salami of Rs. 8, 000 and royalty at the rate of 2a. per ton of coal raised subject to a minimum of Rs. 8, 000 and for certain other cesses and interest. On 7th June, 1921, Kumar executed another permanent patta leasing the right to the coal in 500 bighas out of the 5, 800 bighas referred to above to one Prayagji Ballavji Deoshi and his son Harakchand Deoshi (hereinafter referred to as the Deoshis). By this document the Deoshis agreed inter alia to pay royalty at the rate of 2a. per ton on all classes of coal raised subject to a minimum of Rs. 750 a year. The Singhs feeling themselves aggrieved by the latter transaction brought a title suit (No. 1291 of 1921) in the Court of the Subordinate Judge of Dhanbad for a declaration of their title and for possession of the 500 bighas leased to the Deoshis under the aforesaid patta of 7th June,To that suit Kumar was made a party as defendant No. 3, the Deoshis being defendants 1The suit was however compromised on 6th March, 1923, by all the parties and a decree based on the compromise was also passed on the same day. The interest of the Singhs was brought to sale in 1938 in execution of a decree obtained against them and was purchased by the plaintiff who instituted the present suit on 3rd October, 1942, claiming the royalty and cesses payable under the compromise decree for the period from Pous 1345 to Asadh 1349 B.S. from defendants 1 and 2 as the representatives of the Deoshis who entered into the compromise of March,order to appreciate the contentions of the parties, it is necessary to set out the relevant terms of the compromise decree which are as followsplaintiffs (the Singhs) within two months from this date shall pay Rs. 8, 000 as salami to defendant No. 3 (Kumar). Otherwise all the terms of the compromise will stand cancelled and the plaintiffs shall not be competent to claim any right to or possession over the land covered by the patta dated 11th March,.. The patta which defendant No. 3 executed in favour of the plaintiffs in respect of 58, 00 bighas of coal land in village Rahraband shall remain in force, and the plaintiffs will get a decree of declaration of their right and title to the 500 bighas of coal land in dispute but defendants 1 and 2 (the Deoshis) shall hold possession as tenants. Besides the terms mentioned below, defendants 1 and 2 shall remain bound by all the remaining terms under which they took settlement of the 500 bighas of coal land from defendant No. 3 under patta and Kabuliyat, and both the defendants 1 and 2 shall possess the same under the plaintiffs from generation to generation and all the terms of the said patta and Kabuliyat shall remain effective and in force between them. Both the defendants 1 and 2 shall remain bound to pay to the plaintiffs commission at the rate of 2a. 6p. per to on all sorts of coal instead of 2a. a ton as stated before in the patta of 5, 800 bighas of land settled with the plaintiffs... The plaintiffs shall pay to defendant No. 3 in future the minimum royalty of Rs. 6, 000 instead of Rs. 8, 000 as stipulated in the original patta of 11th March 1921 and commission at the rate of la. 9p. a ton in place of 2a. a ton as stipulated in the patta of March... Unless the plaintiffs pay to the defendant No. 3 Rs. 8, 000 within 2 months from this day they shall not be competent to take out execution of this decree, nor shall they be competent to take possession of the land in dispute. The defendants 1 and 2 within one month from the date of payment of Rs. 8, 000 as aforesaid to defendant No. 3 shall execute a new Kabuliyat in favour of the plaintiff in respect of the modified terms stated above, i.e., on the condition to pay commission at the rate of 2a. 6p. per ton.. In the new patta which defendant No. 3 will execute in favour of the plaintiffs he shall embody the condition that the annual minimum royalty will be Rs. 6, 000 instead of Rs. 8, 000 and commission will be at the rate of 1a. 9p. per to in place of 2a. per ton as mentioned in the aforesaid patta. If the defendant No. 3 does not execute the patta on the aforesaid modified terms in favour of the plaintiffs within the time aforesaid and both the defendants 1 and 2 also do not execute a kabuliyat on the aforesaid modified terms, then this very rafanama shall be treated as the patta and kabuliyat, and the plaintiffs in accordance with the terms of the rafanama shall pay to defendant No. 3 Rs. 6, 000 only as minimum royalty and commission at the rate of 1a. 9p. per ton with respect to 5, 800 bighas and shall continue to realise commission at the rate of 2a. 6p. per ton from defendants 1 and 2 who shall remain bound to pay the same."

Court's reasoning:
We are unable to share this view. It oversimplifies the compromise transaction which, in our opinion, involves much more than a mere alteration of the royalties stipulated for in the previous pattas executed by Kumar. Nor can we accept the suggestion ofMr. Chatterjee for the respondents that the compromise operated as an assignment to the Singhs by Kumar of the latters reversion under the "lease granted to the Deoshis and all that the latter did was to acknowledge the Singhs as their landlords and attorn to them.On this view it was said that the transaction would not fall under clause (d), although it would fall under clause (b) but then would be saved by the exception in clause (vi) of sub-section (2). The argument, however, overlooks that Kumar had leased the area of 5, 800 bighas to the Singhs by his patta dated 11th March, 1921, and the compromise by providing that the Singhs should pay the reduced royalty of 1a. 9p. per ton in respect of the whole area preserved Kumars reversion intact. He could not therefore be deemed to have assigned any part of his interest in 5, 800 bighas as landlord to the Singhs who continue to hold the entire extent as tenants under him. What the compromise really did was, as stated already, to bring the Singhs and the Deoshis into a new legal relationship as under-lessor and under-lessee in respect of 500 bighas which were the subject-matter of the title suit; in other words, its legal effect was to create a perpetual underlease between the Singhs and the Deoshis which would clearly fall under clause (d) but for the circumstance that it was to take effect only on condition that the Singhs paid Rs. 8, 000 to Kumar within 2 monthscompromise decree expressly provides that unless the sum of Rs. 8, 000 was paid within the stipulated time the Singhs were not to execute the decree or to take possession of the disputed property. Until the payment was made it was impossible to determine whether there would be any underlease or not. Such a contingent agreement is not within clause (d) and although it is covered by clause (b), is excepted by clause (vi) of sub-section (2).