JHARIA WATER BOARD Vs. JAGDAMBA LOAN CO LTD

JUDGEMENT

(1.) This is an appeal by the Jharia Water Board, defendant 1. The suit was for a declaration that assessments of royalty cess under the Jharia Water Supply Act, 1914, made by the appellant Board on three sums of money were ultra vires and for a permanent injunction against their realization.

(2.) The plaintiff, the Jagdamba Loan Co. Ltd, admitted receipt of two of these sums, but claimed to have received them only as mortgagee from the owner of the coal lands (represented by the pro forma defendants), the mortgage bond making the mortgagor liable to pay all taxes, rents, etc. and that the assessments were also illegal because no notice was served upon the plaintiff company under Section 58 of the Act. The receipt of the third sum was denied, and the denial was upheld by the trial Court; this part of the decision was not challenged in the lower Appellate Court and does not any longer concern us. As regards the other two sums of money both the lower Courts have held that the Company is not entitled to exemption from assessment because of the mortgage set up by it.

(3.) The trial Court also held that the assessment was not rendered invalid by reason of the failure of the Board to serve the notice under Section 58, but the District Judge held that the notice was imperative, with the result that the suit was decreed in respect of these sums also. The only contention advanced on behalf of the appellant Board is that the notice referred to in Section 58 of the Act is for the benefit not of the assessee but of the Board and that the failure to serve it does not render the assessments invalid. It has been contended on behalf of the plaintiff-respondent on the other hand that the notice goes to the rootof the jurisdiction of the Board to assess, and that therefore the two assessments in question were invalid.