Then, there were negotiations extending over several months, a good deal of companyrespondence and personal discussions, and eventually on 29 7 1914 the terms were finally agreed upon, and on 26 3 1915 the deed of prospecting license was actually executed.
They also held that it was number binding on the Raja, firstly because its terms were number beneficial to him, secondly because it had been obtained by Messrs Bird and Co., on false representation, and thirdly because Mr. MacGregor, the then manager of the Court of Wards, was acting in his own interests and adversely to those of the minor ward, and the Court of Wards had been misled by him into entering into the transaction.
The learned Judges agreed with the Subordinate Judge that the Court of Wards was companypetent to grant a prospecting license, but they were of opinion that it had number applied its mind to certain important aspects of the transaction, that the interests of the ward bad suffered in companysequence, and that the deed dated 26 3 1915 was therefore number valid.
He accordingly prayed for a declaration that the three deeds aforesaid were void, and for possession of the properties companyprised in the leases, with mesne profits, past and future.
Against this judgment, the Raja preferred appeals to the High Court of Patna, F. A. No.
82 of 1940 in the Sub Court, Hazaribagh, and therein, he pleaded that the deed dated 26 3 1915 was void, because the Court of Wards had numberpower to grant a prospecting license and also because it had acted with gross negligence in granting the same and that the deeds dated 23 11 1917 and 1 6 1937 were bad, because there was numbersanction therefor as required by section 18 of the Bengal Court of Wards Act IX of 1879, hereinafter referred to as the Act, and also because they were number for the benefit of the estate.
127 125 of 1943 arising out of the decrees dated the 30th day of April 1943 of the Court of Additional Subordinate Judge, Hazaribagh in Suits Nos.
28 of 1940.
This proposal was accepted by the Court of Wards, and on 1 6 1937 a deed was executed providing in modification of clause 6, as it stood in the deed dated 23 11 1917, that the minimum royalty for the areas in excess of 10,000 bighas was number to become payable by the companypany until railway facilities for transport of the companyl from the mouth of the pit were available or from 26 3 1951, whichever happened earlier.
The appellant applied to modify this term by postponing the date of payment by a further period of 12 years.
40 per bigha, the payment to companymence either when railway facilities were available for transport of companyl from the mouth of the pit or after a lapse of six years after the period of the license, that is to say, after 26 3 1927, whichever was earlier secondly, royalty was to be paid on companyl, dust and companye at rates specified therein, subject to a minimum of Rs.
There is one more deed to which reference must number be made.
Clause 6 of the deed dated 23 11 1917 provides that the minimum royalty on areas in excess of 10,000 bighas taken on lease would number be payable till 26 3 1939.
82 of 1940 a declaration was made that the deeds dated 26 3 1915, 26 11 1917 and 1 6 1937 as well as the leases granted pursuant thereto were void and a decree passed in favour of the Raja for possession of the demised properties with mesne profits, past and future.
These are the three transactions, which form the subject matter of this litigation.
As a result of these, findings, be granted a decree for specific performance in Title Suit No.
Appeal from the judgment and decree dated the 27th October 1949 of the Patna High Court in Appeals from the Original Decrees Nos.
28 of 1940 in the companyrt of the Subordinate Judge of Hazaribagh for companypelling specific performance thereof.
Both these suits, which were really cross actions involving the determination of the same points, were heard together by the Subordinate Judge of Hazaribagh, and by his judgment dated 30 4 1943 he held that the deeds dated 26 3 1915 and 23 11 1917 were intra vires the powers of the Court of Wards, that they were beneficial to the estate, and were therefore valid, and he accordingly upheld the six leases granted pursuant to those deeds.
Atul Chandra Gupta and Ganpat Rai, for respondents Nos.
127 of 1943 against that in Title Suit No.
While under the prospecting license dated 26 3 1915 a minimum ground rent of Rs.
50,000 per annum at Rs.
This proposal was subjected to close scrutiny, and there was prolonged companyrespondence between Messrs Bird and Co., and the Court of Wards on the expedi ency of extending the period of license and on the terms on which such extension should be granted.
On 14 7 1920, the appellant Company was registered under the provisions of the Indian Companies Act, and it took over the interests of Messrs Bird Co., under the license dated 26 3 1915 as modified by the deed of variation dated 23 11 1917.
He, however, held that the deed dated 1 6 1937 was number valid, both because the Court of Wards had number sanctioned it and also because it was number for the benefit of the estate.
This amount was number to carry interest and was to be discharged by adjusting the royalties which would become payable under the leases.
Thereafter, the appellant would under this clause become liable to pay a minimum royalty for an area in excess of 10,000 bighas.
C. Setalvad, Attorney General for India, N. C. Chatterjee, S. Chaudhry, S. N. Mukherji and B. N. Ghosh, for the appellant.
Under the terms of the deed dated 23 11 1917 the appellant would be entitled to extension of the licence from 26 3 1939 for the third period of 12 years only if it had taken lease of at least 20,000 bighas before 26 3 1939.
Then, as regards the deed dated 1 6 1937, the learned Judges agreed with the Subordinate Judge that it was invalid on both the grounds given by him.
The appellant in turn sent a numberice on 14 5 1940 calling upon the Raja to execute a lease in respect of 250 bighas in accordance with the deeds dated 26 3 1915, 23 11 1917 and 1 6 1937, and followed it up by instituting on 8 6 1940 Title Suit No.
192 of 1953 against the decree in F.A. No.
9 lakhs as loan to the estate.
The terms of the leases which were to be granted in pursuance of the license were firstly, the lessees were to pay a salami at Rs.
The decision in Gulabsingh v. Seth Gokuldas 1 was relied on in support of this position.
Accordingly, it applied for and obtained three leases on 2 8 1937 companyering an area of 2,461 bighas, thus making up along with the six leases mentioned above, the minimum area of 20,000 bighas.
1,00,000 was paid as salami.
8,000 was payable from the second year, under the deed dated 23 11 1917 a minimum ground rent of Rs.
125 of 1943.
Though the questions that were agitated by the parties in the companyrts below ranged over a wide area, many of them have been abandoned in the argument before us, and the scope of the companytroversy in these appeals has been companysiderably narrowed down.
82 of 1940 and F.A. No.
As companysideration for the grant of the license, Messrs Bird and Co., were to advance Rs.
125 of 1943 were dismissed.
On 9 8 1940 the Raja filed Title Suit No.
Title Suit No.
Atul Chandra Gupta and I. N. Shroff, for respondents Nos.
Against this judgment, the present appeals have been preferred by the companypany, C.A. No.
82 of 1940 he awarded reliefs companysequential on the invalidity of the deed dated 1 6 1937.
There was a further pro vision that if before 26 3 1939 the licensees took leases of at least 20,000 bighas, the period of the license would be extended by another term of 12 years, i.e., up to 26 3 1951.
5 per bigha on the companyenanted number of 10,000 bighas was payable from the seventh to the twelfth year.
Of these, the Karanpura companyl fields are the largest being of the extent of 550 sq.
28 82 of 1940 respectively.
On 10 8 1937 the Raja became, as already stated, a major, and assumed management of the estate.
2, 4, 5, 6 13.
5 per bigha payable after the first year of the lease and thirdly, the lessees were to pay the cesses payable under the law by the occupier or tenant of the land.
The licensees were to pay a minimum ground rent of Rs.
On 9 3 1939 he sent a numberice to the appellant repudiating the license dated 26 3 1915 and the two deeds of variation dated 23 11 1917 and 1 6 1937 as number binding on him.
A sum of Rs.
28 of 1940 and in Title Suit No.
Raja Lakshminarain Singh, the ward, became a major on 6 4 1919, and died shortly thereafter on 10 4 1919 leaving him surviving a minor son, Raja Kamakshya Narain Singh, the main respondent in these appeals.
miles, of which about 415 sq.
Lal Narain Sinha, Bajrang Sahai and R. C. Prasad, for respondent No.
In pursuance of these deeds, the Company took six leases companyering in all an area of 17,539 bighas on divers dates between 17 7 1922 and 17 7 1933.
The companypany also filed cross objections in F.A. No.
If numberleases were taken and the license was abandoned, then the amount of the loan was to carry interest at 4 1/2 per cent per annum from that date and it had to be repaid in half yearly instalments such that the entire debt would be discharged within a period of six years.
Its main terms were as follows It was to be in force for a period of six years.
CIVIL APPELLATE JURISDICTION Civil Appeals Nos.
28 of 1940 instituted by the appellant for specific performance and the cross objections filed by it in F.A. No.
Sanjib Chaudhry and Ganpat Rai, for respondent No.
The Court of Wards accordingly companytinued in management of the estate on behalf of the Raja until 10 8 1937, when he became a major.
Thus, the appellant does number challenge the companyrectness of the decision of the companyrts below that the deed dated 1 6 1937 is number binding on the estate.
A mortgage bond was executed on the same date as the prospecting license embodying these terms.
It was then provided that if within this extended period the licensee took a lease or leases of mines of the extent of at least 10,000 bighas, then the period of the license would be extended by a second term of 12 years i.e., up to 26 3 1939.
125 of 1943.
The Judgment of the Court was delivered by VENKATARAMA AYYAR J. These appeals raise questions as to the validity of a prospecting license granted on 26 3 1915 in favour of Messrs Bird and Co., by the Court of Wards as representing the Ram garh Estate and of two deeds dated 23 11 1917 and 1 6 1937 executed by the Court of Wards modifying the terms of the license dated 26 3 1915.
3,7 8.
April 10.
These are the salient features of the license as revised by the document dated 23 11 1917.
He was also negotiating for a similar license in respect of the Karanpura companyl fields vide Exhibit 155 b dated 1 12 1912 , but before anything was companycluded, he died on 26 1 1913 leaving him surviving his widow, Rikinath Kaur, and a minor son, Lakshminarain Singh.
On 20 5 1913 the Court of Wards took over the management of the estate, and its first companycern was to relieve it from the pressure of creditors, and for that purpose, to arrange for a loan on easy terms.
Under this deed, the period of license was extended in the first instance from 6 to 12 years that is to say, it would expire on 26 3 1927 instead of on 26 3 1921 as originally fixed.
8 to Rs.
11 lakhs including salami, etc.,
It was at this juncture that Messrs Bird and Co., made an application for a prospecting license for the Karanpura companyl fields, and in reply thereto, the manager of the Court of Wards informed them on 4 9 1913 that the estate being involved and anxious to pay off the debts, one of the companyditions of the lease would be an advance of about Rs.
Ganpat Rai, for respondents Nos.
Dealing next with the deed dated 23 11 1917, they held that it was void, because the Court of Wards had number sanctioned it.
191 192 of 1953.
Ultimately, on 23 11 1917 the manager of the Court of Wards executed a deed modifying the terms of the deed dated 26 3 1915.
Sanjib Chaudhry and R. R. Biswas, for respondent No.
On the authority of this letter, the Court of Wards executed a mortgage on the 10th December 1891.
The next phase of the transaction begins on 3 8 1915 with Messrs Bird and Co., applying to the Court of Wards for extension of the period of the license on the ground that as the result of war companyditions, new and unexpected difficulties bad cropped up and that to achieve the purpose of the license, is was necessary to extend the period of six years fixed therefor.
It has three companyl fields, Bokaro Jharia, Bokaro Ramgarh and Karanpura.
127 of 1943 and C.A. No.
In view of this finding, he held that the clause in the lease deeds dated 2 8 1937 based on the deed dated 1 6 1937 postponing the payment of minimum royalty was bad, but that the leases themselves were other wise valid.
8,000 per annum companymencing from the second year of the license, and if the leases were actually taken by the licensees, this amount was to be adjusted towards royalties payable thereunder.
9 lakhs.
On 26 11 1907 Raja Ram narain Singh, the proprietor of the estate, granted in favour of Messrs Anderson Wright Co., a prospecting license in respect of the Bokaro Ramgarh companyl fields, referred to in these proceeding as the Bokaro license.
191 of 1953 being directed against the decree in F.A. No.
to the estate on the same terms as advanced by the Bokaro and Ramgarh Company.
125 of 1943 against the decree in Title Suit No.
At the time of his death, the debts owing by the estate amounted to about Rs.
The Ramgarh Raj is an ancient principality situate in Bihar.
miles belonged to the estate.
The first respondent in these appeals is the Raja of Ramgarh, the other respondents being transferees from him, and he will be referred to in this judgment as the respondent.
There, the Deputy Commissioner had sent to the Commissioner a proposal to borrow Rs.
