Sahebzada Mohammad Kamgar Shah vs Jagdish Chandra Deo Dhabal Deo

Rewritten Version Notice: This is a rewritten version of the original judgment.

Court: Supreme Court of India

Case Number: Civil Appeal No. 81 of 1956

Decision Date: 21 April, 1960

Coram: K.C. Das Gupta, P.B. Gajendragadkar, K.N. Wanchoo

In this matter the Supreme Court of India delivered its judgment on 21 April 1960. The case was styled Sahebzada Mohammad Kamgar Shah versus Jagdish Chandra Deo Dhabal Deo and others. The judgment was authored by Justice K C Das Gupta, who sat with Justices P B Gajendragadkar and K N Wanchoo. The petition was filed by Sahebzada Mohammad Kamgar Shah and the respondents included Jagdish Chandra Deo Dhabal Deo together with additional parties. The citation for the decision is reported in 1960 AIR 953 and 1960 SCR (3) 604, with subsequent references appearing in later Supreme Court reports. The operative issue concerned the interpretation of two leases granted over the mineral‑rich Dhalbhum estate, one executed in 1900 by the proprietor of the estate and the other in 1919 by the Official Receiver of the estate of Prince Mohammad Bakhtyar Shah. The earlier lease conveyed permanent mining rights for certain metals and minerals to Prince Mohammad Bakhtyar Shah. During the lifetime of that proprietor, the administration of the estate was assumed by the Deputy Commissioner of Singhbhum under the Chotanagpur Encumbered Estates Act. After the proprietor’s death, the manager of the estate, acting on behalf of the Official Receiver, issued a second lease in 1919 covering the same mining area. The first respondent, Jagdish Chandra Deo Dhabal Deo, instituted the present litigation to recover rents and royalties under the second lease from the heirs and representatives of Prince Mohammad Bakhtyar Shah’s estate and also from the appellant in his capacity as Receiver of that estate. The resolution of the dispute required the construction of the two leases dated 1900 and 1919. The trial court and the Patna High Court had both decided in favour of the plaintiff‑respondents. The appellant appealed the decision on a certificate of appeal granted by the High Court. In its analysis the Court held that the intention of the parties to a dispositive document must be derived from the language actually used by the parties, and that those words are to be understood in their strict grammatical sense. The Court further observed that when the statements made in the earlier part of a document are irreconcilable with those made later, the earlier part must prevail. In instances of ambiguity the Court must consider the entire document to ascertain the parties’ intention, and if ambiguity persists, the document must be interpreted strictly against the grantor and in favour of the grantee. The Court also addressed the meaning of the phrase “duly authorised” in Explanation 11 of Section 19 of the Indian Limitation Act, 1908, concluding that the expression includes authorisation either by the act of the indebted party or by force of law or a court order. The judgment referred to several earlier authorities, namely Annapagonda v. Sangadiappa (1901) Bom. L.R. 221 (F.B.), Rashbehari v. Anand Ram, 43 Cal. 211, Ramcharan Das v. Gaya Prasad, 30 All. 422, Lakshumanan v. Sadayappa, A I R 1919 Mad. 816, and Thankamma v. Kunhamma, A I R 1919 Mad. 370, as well as Currimbhai v. Ahmedali, 58 Bom. 505 and Lakshmanan Chetty v. Sadayappa Chetty, 35 M.L.J. 571, which were considered in reaching the conclusion.

In this matter, the Court considered Civil Appeal No 81 of 1956, which challenged a judgment and decree dated 24 September 1952 issued by the Patna High Court in a first appeal from Original Decree No 2 of 1947. That original decree arose from a judgment and decree dated 31 August 1946 rendered by the Special Subordinate Judge, Chaibassa, in Money Suit No 3 of 1941. Counsel for the appellant included L K Jha, B K Saran, S T Hussain, S K Jha and K L Mehta, while counsel for respondent No 1 comprised H N Sanyal, the Additional Solicitor‑General of India, J C Das Gupta and R C Prasad. The appeal was decided on 21 April 1960, and the judgment was delivered by Justice Das Gupta.

The subject of the dispute was the Dhalbhum estate, an area exceeding one thousand square miles that straddles the districts of Midnapur and Singhbhum and is noted for its rich mineral resources. In the year 1900, the then proprietor of the estate, Raja Satrughan Deo Dhabal Deo, who was the predecessor‑in‑interest of the first respondent Jagdish Deo Dhabal Deo, executed a permanent lease granting mining rights for certain metals and minerals to Prince Mohammad Bakhtyar Shah of Tollygunge, located in the 24‑Parganas district. Raja Satrughan Deo Dhabal Deo died in 1916. Prior to his death, however, the estate’s management had been transferred to the Deputy Commissioner of Singhbhum under the provisions of the Chotanagpur Encumbered Estates Act. During the period of this official administration, the estate’s manager on 1 September 1919 granted the Official Receiver of Prince Mohammad Bakhtyar Shah’s estate an additional lease conferring further mining rights over the same area.

The present suit was instituted by the first respondent with the objective of recovering rents, royalties and other incomes arising from the second lease. The suit sought recovery both from the heirs and representatives of Prince Mohammad Bakhtyar Shah’s estate and from the appellant, who acted as Receiver for that estate. According to the terms of the lease, the lessor was entitled to one‑half of the receipts derived from rents, royalties and any other income generated by the demised minerals. Because the exact income could not be ascertained until the lessee produced accounts, the defendant requested a decree for the production of accounts dating from 1 January 1926 and, based on those accounts, a decree for the sum determined to be due.

The suit was filed on 12 August 1941, which meant that any claim relating to the period prior to 12 August 1935 would, on its face, be barred by the limitation period. The plaintiff argued that the limitation was saved by acknowledgments of liability that had been made intermittently by the then Receiver of the estate. The Receiver, who was the sole defending party, raised two distinct defences. The first defence contended that the lessor had dispossessed the Receiver of a portion of the leasehold property, thereby warranting a complete suspension of rent and royalty obligations. The second defence concerned the claim for the period preceding 12 August 1935, challenging the legal effect of the purported acknowledgments and arguing that, because those acknowledgments were made by a court‑appointed Receiver rather than by an agent of the parties, they could not operate to save the claim from limitation.

In the appeal the defendant contended that the letters which the plaintiff relied upon as acknowledgments of liability did not, under law, constitute an acknowledgment of liability. The defendant further argued that even if the letters were regarded as acknowledgments, they were made by the Receiver, who acted as an officer of the court rather than as an agent of either party, and therefore such acknowledgments could not be used to save the claim from the operation of the limitation period. The written statement filed by the plaintiff did not specifically describe the nature of the lessee’s dispossession from the leased land. However, the factual position established at trial was that the dispossession concerned minerals which had been expressly excluded by clause 16 of the earlier lease dated 1900. The defendant claimed that those same minerals were later included in the lease executed in 1919.

One of the principal questions framed for consideration on appeal was whether the minerals that had been excluded in clause 16 of the 1900 lease were, in fact, demised to the lessee by the later 1919 lease. The appeal was limited to two specific issues arising from the two defenses raised by the Receiver. The first issue was whether the defendant was entitled to a suspension of rents and royalties as claimed. The second issue was whether any portion of the plaintiff’s claim was barred by the limitation period.

The Subordinate Judge, after construing the 1919 lease, concluded that the lease did not incorporate the minerals that had been specifically excluded by clause 16 of the earlier lease. Because the only dispossession from the leasehold property involved those excluded minerals, the judge held that the defense of suspension of rent and royalty could not succeed. The judge also rejected the limitation defense, holding that the Official Receiver possessed the authority to make acknowledgments on behalf of the estate and that, in fact, acknowledgments of the plaintiff’s liability existed within the meaning of section 19 of the Limitation Act. Regarding the period from August 12 1935 to August 12 1941, for which no limitation issue arose, the Subordinate Judge decreed that an account should be rendered and that the plaintiff should be paid the amounts determined by the Commissioner on that accounting.

Based on the finding that an acknowledgment of liability in the sum of Rs 67,459‑3‑3 existed for the obligations under the two leases up to the year 1935, the judge noted that there was no documentary evidence in the record to ascertain the precise amount due under the second lease for that period. Consequently, the judge issued an order directing the defendant to assess and state, within two months of the order, the portion of the Rs 67,459‑3‑3 that corresponded to the plaintiff’s dues under the lease, using the accounts of his office. The order further provided that, should the defendant fail to comply within the stipulated time, a Commissioner would be appointed to take accounts and determine the amount due to the plaintiff, and the defendant would be liable for the costs of that proceeding. The contesting defendant appealed against this decree.

The Receiver filed an appeal before the Patna High Court. In that appeal two separate questions were put forward. The first question contended that, if the lease dated 1919 were properly construed, the minerals that had been expressly excluded by clause sixteen of the earlier 1900 lease should be considered to be included in the 1919 lease; consequently, because the lessor had granted other leases for those minerals within the same area, the lessee ought to be entitled to a suspension of rent. The second question asserted that, as a matter of law, there was no acknowledgment that could preserve a claim against the limitation period for any cause of action existing before 12 August 1935. The Patna High Court, after hearing the appeal, affirmed the findings of the trial judge. Regarding the first question the court held that the minerals excluded by clause sixteen of the 1900 lease were not brought within the scope of the 1919 lease, and therefore no ground for rent suspension existed. Moreover, the court observed that even setting aside the issue of construction, a lessee could not claim suspension of rent unless the landlord’s conduct was either forcible or tortious, conditions that were not satisfied in the present case. Concerning the second question, the learned judges concluded that the letters relied upon by the plaintiff did, in law, constitute acknowledgments; such acknowledgments, made by the Receiver who himself was bound to pay rent to the superior landlord, fell within the meaning of section nineteen of the Limitation Act, and the appeal was accordingly dismissed.

The present appeal has been filed by the contesting defendant, the Receiver, on the basis of a certificate issued by the High Court under article one hundred thirty‑three of the Constitution. Both defenses that were raised before the appellate court are again presented for consideration. The alleged dispossession that forms the basis of the first defense, namely a right to suspension of rent, relates solely to the minerals that are specifically mentioned in clause sixteen of the earlier 1900 lease. Accordingly, the Court must first determine whether those minerals enumerated in clause sixteen of the 1900 lease have been incorporated into the 1919 lease. If the lower courts were correct in finding that such minerals were excluded from the later lease, the question of rent suspension does not arise. If, however, they were found to be included, further legal and factual inquiries would be necessary to decide whether the defendant’s claim of rent suspension can succeed. To resolve this primary issue, the 1919 lease must be interpreted, and for that purpose reference must be made to several provisions of the earlier 1900 lease. The operative portion of the 1900 lease opens with the clause stating: “That you shall prospect, raise, purify, melt and sell gold, silver, copper, lead, zinc, iron, mercury, mica, sulphur, copper sulphate, coal, chalk, redearth, etc., mati slate stone and all kinds of precious stones such as diamond, ruby, emerald, topaz, crystals, etc., lying on the surface and subsoil of Ghatsila otherwise called pargana Dhalbhum, mentioned in Schedule excluding the two mouzas Narsinghgarh and Ghatsila and the Dibkulis mentioned in Schedule below.”

In the earlier lease, a clause enumerated iron, mercury, mica, sulphur, copper sulphate, coal, chalk, red‑earth, mati slate stone and all kinds of precious stones such as diamond, ruby, emerald, topaz and crystals, describing them as lying on the surface and sub‑soil of Ghatsila, also called pargana Dhalbhum, and recording the description in the Schedule. The same clause expressly excluded the two mouzas Narsinghgarh and Ghatsila and the Dibkulis mentioned in the Schedule. It is noticeable that this clause does not refer to stones, lime‑stones, ghuting or ballasts. Clause 6 of the lease, however, provided that the lessee was competent to take stones, lime‑stones, ghuting and ballast which might be required for constructing buildings, bungalows and pathways, and that such materials could be taken free of cost and without payment of rent. Clause 16 dealt with further provisions concerning these items. By virtue of the patta, the lessee was prohibited from offering any obstruction to the lessor or any authorized person in raising stones used for utensils, or stones, lime‑stone and ghuting for buildings that were not covered by the patta. The clause also barred the lessee from selling the same to the lessor or tenants for the purpose of digging bandh, tanks, canals or wells, while affirming that the terms of the patta would continue to apply to underground minerals lying beneath such wells. From this lease document two points emerge clearly. First, mining rights were expressly granted for gold, silver, copper, lead, zinc, iron, mercury, mica, sulphur, copper sulphate, coal, chalk, red‑earth and certain precious stones such as diamond, ruby, emerald, topaz and crystals. Second, stones intended for utensils, limestone, ghuting and ballast for buildings were expressly excluded from the lease.

The later lease of 1919, however, gave the lessee mining rights in respect of certain minerals that were not granted by the earlier lease. The principal issue therefore was whether the later lease, in addition to minerals not named in the earlier grant, also covered those minerals that had been specifically excluded by the earlier lease. The operative clause of the later lease states that, in consideration of the rent reserved and of the covenants and conditions contained therein, the Manager grants to the Receiver all metals and minerals of any kind or description other than those specifically comprised in and granted by the principal lease. The clause further provides that the rights, privileges and powers granted to Prince Mohammad Bakhtyar Shah by the principal lease are incorporated insofar as they do not contradict any provision of the present lease and remain capable of taking effect. The covenant thereafter requires the Receiver, at the time and in the manner provided for in the principal lease, to pay the rent or royalty reserved and to comply with all conditions applicable to these presents as if such conditions had been inserted in the later lease.

The later lease required the Receiver to discharge and comply with all the provisions and conditions contained in the principal lease, to the extent that they applied to the present lease, as if those provisions had been expressly inserted in the later instrument. The document further contained an agreement that the Receiver would be entitled to grant under‑leases, provided that such under‑leases satisfied certain stipulated conditions and provisions. One of the conditions stipulated that all such under‑leases would be subject to special terms concerning particular minerals, as may from time to time be prescribed by the Government Rules relating to Mining Leases, and that they would also be subject to the provisions of clause 16 of the principal lease. The lease terminated with a clause stating, “Provided always and it is hereby agreed that nothing herein contained shall be deemed to show that the Pottah of the tenth day of January one thousand nine hundred made between Raja Satrughan Deo Dhabal Deo, son of Gopinath Deo Dhabal Deo, deceased and the Hon’ble Prince Mohammad Bakhtyar Shah, son of Prince Mohammad Anwar Shah, deceased is not still valid and subsisting.” In seeking to demonstrate that the later lease conveyed rights to the minerals specifically excluded by clause 16 of the earlier lease, Mr Jha relied upon several well‑established principles of statutory construction. The first principle, which he cited, holds that the intention of the parties to a grant must be discerned primarily from the words of the disposition clause, interpreting those words in their ordinary grammatical sense, and that once the intention is clear from that clause, the court should not consider statements made elsewhere in the instrument. The second principle maintains that if later clauses appear to limit or diminish the effect of an earlier clause that disposes of property, the earlier clause must prevail. The third principle provides that any ambiguity in the disposition clause, when read in isolation, should be resolved in favour of the grantee, because grant documents are to be construed strictly against the grantor. The fourth principle asserts that when the operative portion of the document can be understood without reference to the preamble, the preamble should not be consulted. The authority of these principles is so well settled by case law that a detailed exposition was unnecessary. The task before the Court was to ascertain the parties’ intention, and jurisprudence dictates that such intention must be gathered from the language actually employed by the parties, presuming that the parties used the words in their strict grammatical sense. If and when the parties have first expressed themselves in one way and then go on saying something, which

In situations where a later provision conflicts with an earlier clear disposition, the courts have developed the principle that a grant that has already been made cannot subsequently be withdrawn, and that a clear earlier clause will not be overridden by a later one. When a document contains an ambiguity, the court’s duty is to examine every part of the instrument in order to determine the true intention of the parties. Even in doing so, it must be remembered that the document originates from the grantor, and therefore it must be construed strictly against the grantor and in favour of the grantee. Keeping these established principles in mind, the Court turned its attention to the lease dated 1919 in order to ascertain what the parties intended to convey by that lease. The clause dealing with disposition, which has already been quoted, reads as follows: “The Manager hereby grants demised unto the Receiver all and singular all metals and minerals of whatsoever kind or description other than those specifically comprised in and granted by the principal lease.” Counsel for the appellant advanced the argument that if the total quantity of metals and minerals present in the leased area is represented by the symbol X, and the portion that was already granted under the earlier lease is represented by the symbol Y, then the language of the clause indicates that the present lease was intended to convey “X minus Y.” The Court, however, found this characterization to be an over‑simplification that must be rejected. While it is correct that the literal grammatical meaning of the words must be given effect, it is also true that words and phrases are not always used by parties in a uniform or constant sense. As eminent judges have repeatedly emphasized, the intent of parties cannot be gleaned by considering isolated words in abstraction. In the present lease, when the grantor employed the words in question, both parties were fully aware of the existence of the earlier agreement, referred to it as the “principal lease,” and consistently stressed that the terms and conditions of that principal lease would continue to be valid and operative to the extent that they were not contradicted by the present lease. A material feature of the earlier lease is that it expressly granted certain metals and minerals while expressly excluding others. In interpreting the disposition clause of the 1919 lease, the Court noted that there is no specific reference to the exclusion provision of the earlier lease. Consequently, the question that must be resolved is whether the omission of any explicit reference to the earlier exclusion clause indicates that the parties intended to render that exclusion clause ineffective. The appellant’s contention centred on this very issue.

The appellant contended that the phrase “grants demised unto the Receiver all and singular all metals and minerals of whatsoever kind or description other than specifically comprised in and granted by the principal lease” necessarily implied that the exclusion clause of the earlier lease was itself being excluded. While that interpretation was not impossible, the Court could not agree that, without further analysis, the wording of the granting clause of the earlier lease and the language used therein made it clear and unambiguous that the earlier lease’s exclusion provision was being wholly set aside. In the Court’s view there was equally ample room to argue that, because the exclusion clause was not expressly mentioned, it would continue to be valid and operative, just as there was room for the appellant’s argument that the language demonstrated an intent to exclude the exclusion clause. Whenever a document contains ambiguity, it is proper for the court tasked with its construction to examine the various parts of the document in order to discover the true intention of the parties. In this case assistance could be drawn from the fourth condition of the conditions imposed by the lease with respect to the grant of sub‑leases. That condition provided, inter alia, that all such under‑leases to be granted by the lessee shall be subject to the provisions of clause 16 of the principal lease. In other words, the sub‑lessees would not be competent to obstruct the head lessor or any other person authorized by the head lessor to raise stone for utensils, stones, lime‑stone, ghuting, or similar materials for building purposes, nor would they be able to hinder any person authorized by the lessor in digging bandh, tank, canal, wells, and the like. Although this provision dealt expressly with under‑leases, a question arose as to why such a term would be imposed on under‑lessees if, in the absence of any under‑lease, the lessee himself would not be bound by the provisions of clause 16 of the principal lease and would be free to obstruct the head lessor in the matters mentioned in that clause. The Court found it implausible that the parties would include a clause regulating the conduct of sub‑lessees unless they also intended that the lessee himself be bound by clause 16 of the principal lease. This inference was reinforced by the concluding words of the later lease, which essentially declared that, notwithstanding anything in the later lease, the principal lease would remain valid and subsisting. It would be pointless to affirm the continued existence of the principal lease only with respect to the minerals that had been specifically granted by that lease; the concluding clause therefore signified a broader intent that the principal lease, including its exclusion provisions, would continue to operate.

The Court observed that the later lease referred to minerals that had been specifically granted by the principal lease. It held that there was no doubt that the principal lease bound the parties with respect to those minerals, and therefore the concluding clause of the 1919 lease would have been unnecessary and meaningless if it merely repeated that effect.

Regarding the metals and minerals that are excluded by clause 16 of the principal lease, the Court recognised that there might be some scope for argument about which provision would prevail. It noted that, had the grantor not been apprehensive—perhaps because of clause 6—there could have been a difference of opinion concerning the metals and minerals mentioned in clause 16 of the earlier lease, and in that circumstance the inclusion of the same clause in the principal lease might have been unnecessary. The Court explained that the concluding sentence of the later lease was inserted as a safeguard against such uncertainty.

Consequently, the Court found it reasonable to conclude that of the two possible meanings of the words in the disposition clause, the meaning intended by the parties was that the minerals excluded by clause 16 of the principal lease were not to be covered by the present grant and would remain excluded. The Court therefore accepted that interpretation.

The Court further noted that it had not previously referred to the preamble of the document, and that a relevant portion of the preamble assists in construing the lease. The preamble records that the Manager, representing the estate of Sri Sri Satrughna Deo Dhabal Deb, and the Receiver, representing the estate of the late Prince Mohammad Bakhtyar Shah, had recently been involved in disputes concerning the construction of the principal lease and the minerals comprised therein. To settle those disputes, prevent litigation and avoid loss to both estates, the parties, subject to the consent and approval of the High Court, agreed that the Manager would grant to the Receiver a lease of all minerals other than those specifically mentioned in the principal lease.

The Court also referred to a statement in the judgment of the Trial Court that the dispute which had arisen concerning the construction of the principal lease concerned whether the mineral wolfram was included in the lease of 1900. The Court observed that the correctness of this observation, based on statements made at the bar, had not been challenged before it. If that was indeed the dispute, the Court reasoned that the object of the second lease was clearly to include, for the purposes of the granting clause of the first lease, those minerals that had not been included in the original grant. The Court further found that the nature of the dispute, as the Trial Court believed, was supported by the use of the words “other than those specifically mentioned” in the preamble of the later lease.

The Court observed that the phrase “other than those specifically mentioned” appeared in the preamble of the second lease. It explained that the dispute centered on determining which minerals were expressly mentioned in the granting clause and which were not. Consequently, the purpose of granting the second lease was to incorporate, by way of a supplementary grant, those minerals that had not been listed in the original granting clause. The Court noted that the parties had never contemplated including in the second lease any mineral that had been deliberately excluded by the first lease. It further pointed out that no evidence showed that, before the second lease was executed, any controversy had arisen concerning the operation of the exclusion clause identified as Clause 16 of the principal lease. By examining the preamble, the Court concluded that the later lease could not be interpreted as conferring rights over minerals that Clause 16 had expressly excluded. This interpretation, the Court held, reinforced the view that the second lease did not grant any mineral rights that had been barred by the principal lease’s sixteen‑th clause.

The Court then turned to the disposition clause of the second lease and affirmed that, when construed in the manner required, the clause did not conflict with the subsequent clauses of the instrument. Accordingly, the doctrine advanced by counsel Mr. Jha—namely that when two parts of a deed are contradictory, the earlier part prevails and the later is rejected—had no application in this case. The Court also rejected any suggestion that the language should be strictly construed against the grantor, emphasizing that such a rule would only be employed where the meaning of the document was otherwise ambiguous. Because a proper construction of the entire document clearly showed that the parties intended the minerals excluded by Clause 16 of the principal lease to remain excluded in the later lease, no benefit could accrue to the lessee under the principle that deeds are construed strictly against the grantor and in favour of the grantee. Accordingly, the Court affirmed the lower courts’ finding that the minerals listed in Clause 16 of the principal lease were not conveyed by the subsequent lease. The appellant’s claim for suspension of rents, based on the allegation that those minerals were covered by the later lease, therefore failed. The Court deemed it unnecessary to consider whether, had the appellant’s construction been accepted, the suspension plea would have been viable, and it refrained from commenting on the High Court’s views regarding the circumstances in which a rent‑suspension plea may succeed. The remaining issue for determination was the question of limitation concerning the period of the claim.

On the point that the limitation period extended to August 12, 1935, the learned counsel for the appellant advanced a two‑fold contention before the Court. First, he asserted that the alleged acknowledgments were conditional, the condition being that the statements of account attached to the letters, which were said to constitute the acknowledgments, had to be accepted as correct. To support this argument, counsel referred to the wording used in Exhibit 2(1) dated March 7, 1931, which illustrated the nature of the acknowledgments in the other letters relied upon by the plaintiff. The letter in question was addressed by the Official Receiver to Raja Jagdish Deo Dhabal Deo and read as follows: “Sir, I have the honour to send herewith two statements of account showing an aggregate sum of Rs. 4,993‑6‑1 as royalty due to the Dhalbhum Raj by the above estate from 1st January to 31st December, 1930. On your accepting the statements as correct a cheque for the said sum of Rs. 4,993‑6‑1 will be sent to you. Besides the above, there is lying to the credit of the Dhalbhum Raj the sum of Rs. 31,944‑8‑3 being the royalty upto the end of December, 1929. I shall be obliged if you will kindly let me know whether you are prepared to accept the same and on hearing from you I shall be glad to forward to you a cheque in payment thereof.” According to counsel, the first statement concerning the sum of Rs. 4,993‑6‑1 due for the year 1930 was not a clear and independent statement of the dues but was made subject to the condition that this amount be accepted as correct. Likewise, he argued that the statement in the subsequent paragraph relating to the sum of Rs. 31,944‑8‑3 for the year ending December 1929 was also not an independent declaration of liability but was likewise conditioned upon the acceptance of that amount.

The Court held that such a reading of the letter was not appropriate. In the opening sentence of the letter, the Receiver plainly stated that a sum of Rs. 4,993‑6‑1, as shown in the enclosure, was, in his view, due to the Dhalbhum Raj for the year 1930 on account of royalty. The second sentence then added that, upon acceptance of this statement as correct, a cheque for the said sum would be dispatched. The Court emphasized that this second sentence did not render the initial statement of the amount due contingent upon acceptance; rather, it indicated that if the claim of due royalty were not accepted, further discussion would be necessary before any payment could be made. Consequently, the Court concluded that the second sentence could not, by any stretch of imagination, be construed as a condition attached to the first sentence. Similarly, the Court interpreted the first sentence in the second paragraph, which referred to the sum of Rs. 31,944‑8‑3 as royalty up to the end of December 1929, as an independent statement not subject to the subsequent sentence. Accordingly, the argument that these acknowledgments were conditional was rightly rejected.

The Court observed that the first sentence of the letter could not be understood as being made conditional upon the second sentence. In the same way, the opening sentence of the second paragraph, which referred to a sum of Rs 31,944‑8‑3 as royalty due up to the end of December 1929, was read as an independent statement that was not dependent on the subsequent sentence. Consequently, the High Court correctly dismissed the argument that these acknowledgments were conditional acknowledgments. The second contention raised by counsel was that an acknowledgment made by the Receiver of an estate does not constitute an acknowledgment by an agent of the estate owners who is “duly authorised in this behalf” within the meaning of Explanation II of section 19 of the Limitation Act, and therefore such an acknowledgment would not fall within section 19(1) of that Act. Counsel further contended that the phrase “duly authorised in this behalf” in Explanation II should be understood to mean “duly authorised by the debtor” and should not be extended to include authority given by law or by a court order. The Court found no support for this narrower interpretation in any authority or principle. Explanation II to section 19, which states that for the purposes of the section “signed” means signed either personally or by an agent “duly authorised in this behalf”, does not impose any limitation on the manner in which such authority may be conferred. The Court referred to the decision of a Full Bench of the Bombay High Court in Annapagonda v. Sangadiappa (1901) Bom L.R. 221 (F.B.), where it was held that “duly authorised” includes authority either by the act of the indebted party or by operation of law or a court order. This interpretation has also been adopted by other High Courts in cases such as Rashbehary v. Anand Ram, Ramcharan Das v. Gaya Prasad, Lakshumanan v. Sadayappa and Thankamma v. Kunhamma, and the Court considered it to represent the correct state of the law.

Mr Jha then argued that, irrespective of the foregoing, the law does not empower a Receiver of an estate to make acknowledgments of debts owed by the estate. He relied on the Bombay High Court decision in Currimbhai v. Ahmedali, where it was held that an acknowledgment made by an official assignee does not amount to an acknowledgment by an agent of the debtor. Although that case did not deal directly with the position of a Receiver, Mr Jha cited its reasoning to support his contention. The Court noted that counsel for the respondent, Mr Sanyal, drew attention to a contrary view expressed in Lakshmanan Chetty v. Sadayappa Chetty. Mr Sanyal argued that, with respect to a debt due from the estate, the Receiver fully represents the owners of the estate, and that once it is established that the Receiver had authority to pay the debt, any acknowledgment of the debt made incidentally in the performance of the Receiver’s duties must also be within that authority. Accordingly, he maintained that an acknowledgment by a Receiver should be treated as an acknowledgment by a duly authorised agent of the debtor.

In this case, counsel for the respondent, Mr. Sanyal, contended that because the Receiver was duly empowered to discharge the debt, the Receiver also possessed authority to acknowledge the debt as a matter incidental to his duties of payment. Accordingly, he asserted that any acknowledgment made by a Receiver must be treated as an acknowledgment by a properly authorized agent of the debtor. The Court noted that these submissions summarise the arguments advanced on either side of Mr. Jha’s position that a Receiver lacks authority to acknowledge debts on behalf of the estate. The Court further observed that it was unnecessary to determine, for the purpose of the present appeal, whether a Receiver functions as an agent of the owners of the estate for the purpose of acknowledging a debt under s. 19 of the Limitation Act. The cited authorities included (1) 43 Cal. 211, (2) 30 All. 422, (3) A.I.R. 1919 Mad. 816, (4) A.I.R. 1919 Mad. 370, (5) 58 Born. 505 and (6) 35 M.L.J. 571. In the facts before the Court, the suit was founded on the second lease dated 1919, which had been executed in favour of the then‑acting Receiver. The acknowledgments relied upon to save limitation were executed by a former Receiver of the estate, through whom the appellant, who is now the Receiver, derived his liability to pay the debt. Consequently, the acknowledgments fall within the scope of s. 19 because they were signed personally by those previous Receivers, and the plaintiff need not refer to the second part of Explanation 11. The Court observed that Mr. Jha had conceded this position, agreeing that it was unnecessary to decide whether a Receiver is, by virtue of his office, an agent of the estate owners authorised to make acknowledgments under s. 19. The Court found no doubt that the acknowledgments relied upon by the plaintiff constitute acknowledgments within the meaning of s. 19 of the Limitation Act and therefore save limitation for the period preceding 12 August 1935. Accordingly, the lower courts were correct in rejecting the defendant’s plea of limitation. Since both contentions advanced before the Court fail, the appeal was dismissed with costs.