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TMI Blog1949 (7) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... ture if the Bengal Nagpur. Railway line is constructed and the freight of coal becomes less by 2 annas at least or more than what is fixed at present per ton, I shall pay royalty for those coals, which shall be despatched in the aforesaid manner at the said reduced freight, at 5 annas per ton on steam, steam rubble, soft coke and hard coke and 2 annas 6 pies per ton on rubble and dust for burning bricks. But if the said railway freight becomes less than 2 annas per ton, the amount which will be reduced will be enhanced on the rate of royalty at present fixed on steam, steam rubble, soft coke and hard coke and enhanced by half thereof on rubble and dust for burning coal. 2. There follows a number of other provisions for an annual minimum royalty, for interest, for hypothecation of the tenant's property at the colliery and for other matters which need not be further referred to at this point. 3. In 1898 when the lease was granted the only railway available for transport of coal from this district was the East Indian Railway, but it was contemplated that the Bengal Nagpur Railway might be extended so as also to serve this district. The Bengal Nagpur Railway was so extended a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been reduced by more than 2 annas per ton as compared with the freight in operation on the East Indian Company's line at the date of the lease. On this finding and assumption the contingency on which an enhanced royalty would become payable has become operative, but it is said that this enhanced royalty is only payable in respect of coals sent over the Bengal Nagpur line and only so far as the Bengal Nagpur Railway Company charge a differential rate less than the rate charged by the East Indian Railway Company. Their Lordships cannot find any reference to such a differential rate in the terms of the clause or any support for the argument of the appellant under this head. The decision of the Subordinate Judge is rested on evidence of the intention of the parties to the deed, but this evidence is clearly inadmissible. In construing the terms of a deed the question is not what the parties may have intended, but what is the meaning of the word which they used. Apart from any question of differential rate, it is clear from the context that the words 'coals despatched in the aforesaid manner at reduced rates ' cannot be restricted as applicable only to coals sent over ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pondence the lessor's manager wrote to the lessees on August 18, 1924, It is useless carrying on further correspondence as there is no chance of the matter being settled out of Court. If you think you are entitled to any refund you may sue for the same. 5. The contentions of the parties had been clearly stated. The lessor contended that once the higher rate of royalty had come into operation, it was permanent and not affected by a subsequent rise in the rate of freight. On this view there had been no overpayment and royalties were still payable at the higher rate. The lessee on the other hand maintained that on a true construction of the lease the higher rate of royalty was only payable on coal despatched by rail at a freight more than 2 annas below the freight at the date when the lease was entered into. On this view the higher rate of freight ceased to operate on April 1, 1921. By continuing to pay at the higher rate from that date until September 30, 1923, he had paid ₹ 63,680 more than was due, and he was entitled to retain future royalties up to this amount and thereafter to pay at the lower rates. The lessee acted on this view of his rights. He made no further ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se 1 of the kabuliyat is that on the occurrence of two events, both of which have happened, I shall pay royalty for those coals which will be despatched in the aforesaid manner at the said reduced freight at 5 annas per ton.... It has been decided that in the aforesaid manner means by either of the Railways mentioned. At the said reduced freight must refer back to if...the freight of coal becomes less by 2 annas at least or more than what is fixed at present per ton, and must therefore mean at a freight 2 annas or more below that in force at the date of the lease. The crucial question of construction can be stated thus: Do the words at the said reduced freight qualify the words those coals which will be despatched in the aforesaid manner so as to limit the obligation to pay at 5 annas etc. to coals which will be despatched at the said reduced freights ? or on the other hand do the words at the said reduced freight have some different purpose and effect so that the obligation to pay at 5 annas continues to attach to all coals despatched no matter what the freights may become in future. 10. The argument for the appellant was that the leading words of the kabuliyat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rpose and that on this matter the decision of the High Court is right. 13. As the freight for coal despatched by rail after April 1, 1921, exceeded the freight charged when the lease was made, it follows that after that date the lessee was only bound to pay royalties at the lower rate of 3 annas and 1 anna 6 pies per ton. But the lessee continued to pay royalties at the higher rates of 5 annas and 2 annas 6 pies per ton on coal despatched by rail during the perod from April 1, 1921, to September 30, 1923, and so overpaid the lessor. The High Court have held that the lessee was not entitled to set off the amount of this overpayment against the royalties which subsequently became due by him, and the cross appeal has been taken against this decision. The ground of the decision of the High Court was that the overpayment had been made because the lessee, the respondent, and his agents were unaware of their right under the lease; that this was not a mistake of fact but was a mistake of law; that the law of India in this matter is the same as the la-v of England; and- that under the law of England money overpaid in such circumstances could neither be recovered nor set off against other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... found in those authorities anything which is of material assistance in deciding the present case. The authorities which deal with the meaning of mistake in the section are surprkingly few, and it cannot be said that there is any settled trend of authority. Their Lordships are therefore bound to consider this matter as an open question. 16. Those learned Judges who have held that mistake in this context must be given a limited meaning appear to have been largely influenced by the view expressed in Pollock and Mulla's commentary on Section 72 of the Indian Contract Act where it is stated (Indian Contract and Specific Relief Acts, 1931 edn., p. 402): Mistake of law is not expressly excluded by the words of this section : but Section 21 shows that it is not included. For example in Wolf Sons v. Dadyba Khimji Co (1919) I.L.R. 44 Bom. 631 : s.c. 21 Bom. L.R. 986, Macleod, J. said referring to Section 72(p. 648): ...On the face of it 'mistake' includes 'mistake' of law. But it is said that under Section 21 a contract is not voidable on the ground that the parties contracted under a mistaken belief of the law existing In British India, and the effect o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubsisting contract, but the payment was not due under it. But there appears to their Lordships to be no good reason for so limiting the scope of the Act. Once it is established that the payment in question was not due, it appears to their Lordships to be irrelevant to consider whether or not there was a 'contract between the parties under which some other sum was due. Their Lordships do not find it necessary to examine in detajl the Indian authorities for the wider interpretation of mistake in Section 72. They would only refer to the latest of these authorities, Jagadish Prosad v. Produce Exchange Corporation [1946] A.I.R. Cal. 245 in which a carefully reasoned judgment was given by Sen, J. Their Lordships agree with this judgment. It may be well to add that their Lordships' judgment does not imply that every sum paid under mistake is recoverable no matter what the circumstances may be. There may in a particular case be circumstances which disentitle a plaintiff by estoppel or otherwise. 17. In this case there was not sufficient evidence to show why the lessee and his agents made the over payments. They may have acted on inadequate information, they may have taken a wr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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