KAMAKSHYA NARAIN SINGH Vs. ARJUN LAL AGARWALA

JUDGEMENT

(1.) This appeal by the plaintiff--the present proprietor of the Ramgarh Raj--arises out of an action for reimbursement for the amounts of cess, income-tax and interest paid by the appellant and which he claims in accordance with the stipulations in a coal mining lease from his lessees and their transferees. The principal question for determination is whether upon a true construction of the relevant terms of the lease the defendants are liable to pay cess on the royalties received by the lessors. The defendants also challenged the correctness and legality of the assessment of cess made by the assessing authorities which they say was in violation of the provisions of the Cess Act and the amended Bihar Act, and, therefore, suggest that the payments made by the plaintiff were voluntary. There is also a cross appeal by the defendants. On 28 July 1908, the grandfather of the plaintiff granted a coal mining lease with respect to 1000 bighas of land in village Sijuwa to Bokaro Jharia Coal Fields Limited for a period of 999 years. This company transferred their right, title and interest in 384 bighas out of these lands in favour of defendant 1 on 24 January 1921. This transfer was recognised by the Manager of the Ramgarh Raj, which was then under the Court of Wards. The transferee agreed to pay to the Ramgarh Raj royalty for all coals despatched from this area and also to be bound by the terms and conditions of the indenture of 1908. Defendant 1 sold his right, title and interest to defendant 2, Gunendra Nath Rai, on 22 August, 1928, and defendant 2 in his turn sold his purchased rights to defendants 8 and 4 on 6 January 1931.

(2.) The plaintiff's case was that after the death of his grandfather the Ramgarh estate was taken charge of by the Court of Wards and was released on 10th August 1987, upon his attaining majority. For some reason or another, the Court of Wards did not realise from the defendants any cess and income-tax which were assessed and imposed upon or in respect of the above 884 bighas of land and which the Court of Wards had to pay. The plaintiff, therefore, instituted the suit on 8 December 1989, to be reimbursed on account of the cess and income-tax which had been paid by the Court of Wards and by the plaintiff since 1937, and which the defendants were liable to pay. He also claimed interest on these sums. In a tabular statement printed at page 5 an account of the cess income-tax and interest for a number of years is shown as due from the defendants. The plaintiff compromised the suit with defendants land 2. As defendants 3 and i came on the scene on 6 January 1931, they would have been liable from that date were it not that these defendants had admitted in their written statement that they took possession from 80 June 1930, that is, just over six months before the date of the assignment in their favour. The claim of the plaintiff, therefore, from the year 1922-23 right up to 1929-80 was no longer in subject of controversy after the compromise. The controversy is confined only to the years 1930-81 up to 1987- 88.

(3.) The defence of the contesting defendant was that upon a proper construction of this indenture of 1908 the claim of the plaintiff for road cess and income-tax was not-maintainable. They denied that the plaintiff or the Court of Wards ever paid any cess or imposition in respect of the disputed property, and further, that if the plaintiff was assessed with assessment it had nothing to do with toe coal land in question upon which no assessment was ever made. The further material defence was that the Court of Wards have granted receipts to these defendants for all the dues of the estate from time to time; with the result that the payment to the Court of Wards which had full statutory power to act for and represent the estate of the plaintiff operated as full discharge and acquittance of the defendants liability, and that if the Court of Wards, upon a mistaken view of the law, namely, of their rights to demand cess from the defendants, failed to do so, the plaintiff now cannot recover those sums. The same objection was taken with, regard to the period when the plaintiff came in possession after the release of the estate from the Court of Wards.