http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 3  

PETITIONER: SUNIL KUMAR ROY

       Vs.

RESPONDENT: M/S.  BHOWRA KANKANEE COLLIERIES LTD. & ORS.

DATE OF JUDGMENT: 15/12/1970

BENCH: GROVER, A.N. BENCH: GROVER, A.N. SHAH, J.C. HEGDE, K.S.

CITATION:  1971 AIR  751            1971 SCR  (3) 232  1970 SCC  (3) 565

ACT: Indian  Registration  Act,  1908-Registered   lease-Document which varies essential terms such as amount of rent must  be registered.

HEADNOTE: 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]

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 3  

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.

JUDGMENT: 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 of 1959. 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,  1952. 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. per  ton. 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

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 3  

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 costs. G.C.                    Appeal dismissed. 236