Sunil Kumar Roy Vs. M/S. Bhowra
Kankanee Collieries Ltd. & Ors  INSC 252 (15 December 1970)
15/12/1970 GROVER, A.N.
CITATION: 1971 AIR 751 1971 SCR (3) 232 1970
SCC (3) 565
Indian Registration Act, 1908-Registered
lease-Document which varies essential terms such as amount of rent must be
The appellant purchased machineries etc. from
the Eastern Coal Co. Ltd. and also took on lease the land on which the
buildings stood. One of ,the terms of the lease which was dated May 17, 1946
was that royalty would be paid by the appellant at the rate of Re. 1/- per ton
on despatches of coke. In 1950 another arrangement was arrived at by which
royalty on breeze coke was to be paid at 2 As. per ton. In December 1951,
.according to the appellant, another arrangement was made by which the royalty
on hard coke was reduced to 8 As. per ton The Eastern Coal Co. sold the
collieries to Respondent no. 1 with effect from January 1, 1955. Respondent no.
1 claimed royalty on all despatches of coke including breeze coke at the rate
of Re. 1 per ton.
The appellant paid only at the rate of 8 As.
per ton on hard coke and 2 As. per ton on breeze coke. Respondent no. 1 filed a
suit for the balance at the rate ,,of Re. 1 per ton. The trial court held that
document Exp. A-4 on which the appellant relied to prove the agreed reduction
of rates was admissible in evidence although not registered, and dismissed the
suit. The High Court did not consider the question of the admissibility of Ex.
A-4 but decreed the suit on the finding that the appellant had failed to prove
that the reduction in the rate of royalty had been. given effect to from July
1952 as claimed. In appeal by certificate to this Court,
HELD : Even on the assumption that a mutual
arrangement or agreement as evidenced by Ex A-4 was arrived at between the
appellant and the Eastern Coal Co. Ltd. it could not be accepted that any
reduction in royalty could have been effected by means of Exh. A-4 which had
not been registered under the provisions of the Indian Registration Act. It is
well settled that a document which varies the essential terms of the existing
registered lease such as the amount of rent, must be registered. [234 E-F]
Durga Prasad Singh v. Rajendra Narain Bagchi, I.L.R. 37 Cal.
293 and Latit Mohan Ghosh v. Gopal Chuck Coal
Co. Ltd., I.L.R. 39 Cal. 284, approved.
Obai Goundan v. Ramalinga Ayyar, I.L.R. 22
Mad. 217, disapproved.
CIVIL APPELLATE JURISDICTION: Civil Appeal
No. 2428 of ;1966.
Appeal from the judgment and decree dated
October 9, 1964 of the Patna High Court in Appeal from original decree No. 459
B. Seh and Sukumar Ghose, for the appellant.
M. C. Chagla, S. C. Banerjee and A. K. Nag,
for respondents Nos. 1 and 2.
233 The Judgment of the Court was delivered
by- Grover, J.-This is an appeal by certificate from a judgment- of the Patna
High Court. The facts may be shortly stated.
By a registered indenture of lease dated
December 18, 1900 the Eastern Coal Co. Ltd. was granted a lease by the Zamindar
of Jharia of certain land in mauza Gourkhanti in pargana Jharia. The Eastern
Coal Co. erected buildings for manufacture of coke and also constructed office
and the quarters for the staff and the labourers. On May 17, 1946 the Eastern Coal
Co. sold the machineries on the demised land to the appellant and also granted'
a lease of the land on which the buildings stood to him. One of the terms of
the lease was that royalty would be paid by the appellant at the rate of Re 1
per ton on despatches of coke. The rate was subjected to being revised from
time to time by mutual arrangement between the parties "as may be
justified by market condition." According to the appellant the Eastern
Coal Company came to an arrangement in 1950 with him by which royalty on breeze
coke was to be paid at the rate of 2 As. per ton. In. December 1951 another
arrangement was arrived at by which royalty on hard coke was to be paid at the
reduced rate of 8 As. per ton instead of Re. 1 per ton stipulated in the lease
dated May 17, 1946. This arrangement was to be given effect to from,July 19,
On January, 5, 1955 the Eastern Coal Company
informed the appellant that the colliery had been sold to, the Bhowra Kankanee
Collieries Ltd.-respondent No. 1, the sale being effective from January 1,
1955. Respondent No. 1 claimed royalty on all despatches of coke including
breeze coke, at the rate of Re. 1 per ton,. The appellant took up the position
that by mutual agreement Eastern Coal Company had agreed' to the royalty being
payable on hard coke at the rate of 8 As. per ton and on breeze coke at 2 As.
The appellant paid to respondent No. 1 the
amount calculated according to the above rates.
On January 31, 1956 respondent No. 1
instituted a suit against the appellant claiming a sum of Rs. 23,287-4-3 on
account of royalty on all kinds of coke despatched during the period January
1955 to November 1955 at the rate of Re.
1 per ton. The Company further claimed
damages at 6% per- annum amounting to Rs. 1212-11-9. The appellant contested
the suit, his main plea being that by virtue of the 'arrangement arrived at
with the Eastern Coal Company in accordance with the terms of the lease dated
May 17, 1946 the royalty was payable at the rate of Re. 1 per ton for hard coke
and 2 As. per ton for breeze coke. The trial court accepted the plea of the
appellant about reduction of the rates of royalty in terms of the arrangement
arrived at with the Eastern Coal Company., It was 234 further held that the
document Exh. A-4 in which this agreement or arrangement was incorporated did
not required registration compulsorily and was admissible in evidence.
The suit was dismissed. Respondent No. 1
preferred an appeal to the High Court. Although the point with regard to the
admissibility of Exh. A-4 for lack of registration was raised before the High
,Court it did not give 'any decision on it. The judgment of the High Court
rested on the finding that the appellant had failed to prove that the reduction
in the rate of royalty had been given 'effect to from July 1952.
Mr. B. Sen for the appellant sought to raise
the question .about the admissibility of Exh. A-4 for want of registration. In
the first place this contention cannot be entertained so long as the finding of
the High Court on the only point which was canvassed before it about the
reduction of the rate of royalty is not set aside. The High Court had held
after 'an examination of the evidence that it had not been proved that there
was any change in the market condition in July or in December 1953 to call for
a reduction in the rate of royalty or that there was any mutual arrangement or
agreement between the lessor or the lessee for such a reduction which was to
become effective from July 1952. No attempt was made by Mr. Sen to persuade us
to reverse this conclusion. Even on the assumption that a mutual arrangement or
agreement as evidenced by Exh. A-4 yas arrived at between the appellant and the
Eastern Coal Co. Ltd. we are unable to agree that any reduction in the rate of
royalty could have been effected by means of Exh A-4 which had not been
registered under the provisions of the Indian Registration Act. It is well
settled by now that a document which varies the essential terms of the existing
registered lease, such as the amount of rent, must be regis- tered : See Durga
Prasad Singh v. Rajendra Narain Bagchi(1) which was approved by the Full Bench
in Lalit Mohan Ghosh v. Gopal Chuck Coal Company Ltd. ( 2 ) . The decision of
the Madras High Court in Obai Gounden v. Ramalinga Ayyar(3) taking a contrary
view has not been followed by the High Courts in India and the consistent view
that has been taken is that registration ,of an agreement is necessary which
reduces the rent of an existing registered lease : See Mulla on Indian
Registration Act, 7th Edn. pp. 75-76.
The other contentions faintly raised before
us arising. Out of issue No. 3 and that Exh. A-4 had been acted upon do not
survive in view of the conclusions arrived at by the High Court and (1) I.L.R.
37 Cal. 293.
(3) I.L.R. 22 Mad. 217.
(2) I.L.R. 39 Cal. 284.
235 the view that we have taken about the
admissibility of the aforesaid document. The Civil Miscellaneous Petitions
which were filed in this Court shall stand dismissed as, in our opinion, no
ground has been made out for admitting additional evidence or for impleading
the Oriental Coal Co. Ltd. as a party respondent here.
The appeal fails and it is dismissed with
G.C. Appeal dismissed.