Judgement Appeal (No. 24 of 1937) from a decree of the High Court (February 7, 1936) which reversed a decree of the Subordinate Judge of Arrah (March 7, 1935). The main question for determination in this appeal involved the interpretation of a clause in each of two leases, dated April 1, 1928, granted by Government to the respondent company. By one of the leases the Government leased to the company for twenty years the right to quarry limestone and manufacture lime in an area known as Lower Murli Hill. The second lease was of the land in Upper Murli Hill together with the right to quarry and extract limestone and manufacture lime. The company had to pay to Government royalties on the limestone and lime at rates stated in the leases. In both leases there was a clause prohibiting, without the previous assent of the Board of Revenue, the assignment of the lease, or the transfer of any right or interest acquired thereunder, or the underletting of the whole or any portion of the premises comprised in the lease. The penalty prescribed for the infraction of any of the conditions in that clause was forfeiture of the lease. In January, 1933, the company went into voluntary liquidation. By an agreement of September 30, 1933, the company, through its liquidators, contracted with one Subodh Gopal Bose for the sale to him for Rs.6ooo of the leasehold rights in the properties comprised in the two leases of April 1, 1928, subject to the sanction of the Board of Revenue of Bihar and Orissa, it being provided that the agreement for transfer should stand cancelled if such sanction was not given. The agreement was not registered. It was further provided that the prospective purchaser should act as the agent of the vendor company in respect of the leasehold rights in the quarries; that he should be entitled to work the quarries for his own profit; and that he should pay to the company the royalties and any other sums payable by the company to Government under the two leases. The Board of Revenue in fact refused their assent to the sale, and on July 18, 1934, they declared the leases to be forfeited on the ground that the company had transferred or sub-let the rights and interests under the leases to Bose in breach of the covenants therein. The Board of Revenue in fact refused their assent to the sale, and on July 18, 1934, they declared the leases to be forfeited on the ground that the company had transferred or sub-let the rights and interests under the leases to Bose in breach of the covenants therein. On September 24, 1934, the company instituted the suit out of which this appeal arose, claiming a declaration that the leases had not been validly forfeited, an injunction restraining the defendant from granting to other persons a lease in respect of the lands comprised in the two leases of April 1, 1928, and from interfering with any of the rights of the company, possessory or otherwise, over or in respect thereof, and Rs.11,000 damages. The facts and the material terms of the contract of September 30, 1933, appear from the judgment of the Judicial Committee. The Subordinate Judge held that the agreement of September 30, 1933, though purporting to appoint Bose to work the quarries as agent of the respondent company, was in substance and reality a sub-lease to him of the quarrying rights, and being without the consent of the Board of Revenue was in breach of the covenants in the leases, which had therefore been forfeited, and he dismissed the suit. On appeal, the High Court (Khaja Mohamad Noor and Varma JJ.) were of opinion that the agreement with Bose did not amount to either a sub-lease or a transfer within the covenants. They were further of opinion that if the agreement could be so construed it would be void for want of registration under s. 17 of the Indian Registration Act, 1908. They accordingly granted the respondent company the declaration and injunction claimed. The appeal is reported at ( 1936) I. L. R. 15 Pat. 460. 1937. Oct. 25, 26. Fergus Morton K.C. and Wallach for the appellant. The substance of the agreement between the company and Bose must be looked at; the rights of the company under the leases became vested in him, and he entered into possession of the quarries and worked them; he was not an agent; he was working for his own benefit. Owing to the nature of the acts done there was an admission of dispossession by the company, and in that event it is submitted that the suit was not maintainable by them; they could not sue for a mere declaration. Owing to the nature of the acts done there was an admission of dispossession by the company, and in that event it is submitted that the suit was not maintainable by them; they could not sue for a mere declaration. The High Court failed to give effect to four things the lessees must not do (a) assign; (b) transfer any right under the leases; (c) transfer any right; and (d) sub let; (h) and (c) contemplate something which is not an assignment or underletting. If the lessees have done any of those things, the leases have determined. “Transfer” is one of the widest terms, and the word was used in the leases without any technical meaning. The acts of the company coupled with delivery to Bose amount to underletting or a transfer of interest. The right to quarry is an interest created in immovable property, and the transfer of the right to Bose was a transfer of that interest in immovable property. [Reference was made to Glenwood Lumber Company v. Phillips,([ 1904] A. C. 405, 408.)] Whether the agreement is an under-lease or not, it is a transfer of a right under the lease. Prima facie, the deed is a demise of certain rights, but when the document is read as a whole it is a sublease of immovable property within the Transfer of Property Act, 1882 Horsey Estate, Ld. v. Steiger.([ 1899] 2 Q. B. 79, 92.) Before it was executed the company had the right to quarry; after it was executed Bose had that right, and the company could not turn him out. With regard to the allegation that the agreement is ineffective for want of registration under s. 17 of the Indian Registration Act, 1908, the value of the interest transferred must be more than Rs.100; here it was not proved that the value of the interest transferred was more than Rs.100, and the transfer was therefore effective without registration. There is nothing in s. 107 of the Transfer of Property Act (IV. of 1882) which requires registration of such a document as the one in question. This is a contract for sale which does not require registration this is a contract to sell a lease, subject to conditions. No evidence was given as to damages, and that amounts to abandonment. of 1882) which requires registration of such a document as the one in question. This is a contract for sale which does not require registration this is a contract to sell a lease, subject to conditions. No evidence was given as to damages, and that amounts to abandonment. L. P. E. Pugh K.C., T. F. R. McDonnell and B. Bosu for the respondents, were not required to argue on the question of the maintainability of the suit. With regard to the construction of the agreement of September, 1933, Bose was an agent remunerated in a certain, though unusual way. Bose never got possession, and the company never lost possession. The substance of the matter must be looked at Inland Revenue Commissioners v. Duke of Westminster, ([ 1936] A. C. 1, 25.) Both Bose and the company wished to avoid forfeiture; their intention was that he should hold as agent and that the company should not part with possession. There was no transfer and no under-lease, and nothing in the agreement which makes Bose a tenant under the company. It was never suggested until the argument here that the value of the interest transferred was not over Rs.100. It is the value of the concssion that has to be considered; it is immaterial whether Bose made a profit or not. The value of the interest transferred was over Rs.100 and the document not having been registered the property comprised therein was not affected Ningappa Marbasappa v. Gyanaji Pomaji (( 1926) I. L. R. 51 B. 231.) and Livingstone v. Rawyards Coal Company. (( 1880) 5 App. Cas. 25.) The Government has waived the forfeiture by receipt of sums paid. There must be notice of intention to forfeit, and that was not what was done. The company never intentionally abandoned their claim for damages, and the decision of the High Court that the trial judge had reserved the question of the amount of damages until a further stage of the suit was justified. T. F. R. McDonnell followed. Fergus Morton K.C. replied. The company may have intended to avoid forfeiture, but the question is, What was in fact the effect of the deed? Bose had none of the attributes of an agent under ss. 211 to 215 of the Indian Contract Act, (IX. of 1872). 1937. Nov. 19. The judgment of their Lordships was delivered by SIR GEORGE LOWNDES. The company may have intended to avoid forfeiture, but the question is, What was in fact the effect of the deed? Bose had none of the attributes of an agent under ss. 211 to 215 of the Indian Contract Act, (IX. of 1872). 1937. Nov. 19. The judgment of their Lordships was delivered by SIR GEORGE LOWNDES. The principal question in this appeal is whether two quarrying leases granted by the appellant to the respondents have been forfeited by reason of the breach of a covenant contained in each against assignment. The quarry lands were situated in the Shahabad district of the then Province of Bihar and Orissa. The leases were dated April I, 1928, and were for terms of twenty years. The covenant against assignment was in similar terms in each, and provided that neither the lessee (the respondent company), nor any person claiming through or under it, should assign the lease or transfer any right or interest thereunder, or underlet the whole or any portion of the premises comprised in such lease without the assent of the Board of Revenue of Bihar and Orissa first being obtained, and that the penalty for infraction of this condition should be the forfeiture of the lease. In January, 1933, the respondent company went into liquidation, and on September 30 of that year the company, through its liquidators, contracted with one Subodh Gopal Bose for the sale to him of the leasehold rights under both leases for the sum of Rs.6ooo, but subject to the sanction of the Board of Revenue; the agreement to stand cancelled if such sanction was not obtained. It was also provided that in the meantime Bose should act as the agent for the respondents in respect of the leasehold rights in the quarries; that he should pay to the company the royalties and any other sums payable by it to the Government; and that he should be entitled to work the quarries for his own profit. The contract was in writing, but was not registered. Clauses 4, 6, 7, 8 and 9, upon which the question stated above mainly depends, were as follows— "4. It is stipulated in the leases in respect of the lands "set out in the schedule that the lessees shall not assign "the leases or transfer any right or interest thereunder "without the assent of the Board of Revenue first obtained. Clauses 4, 6, 7, 8 and 9, upon which the question stated above mainly depends, were as follows— "4. It is stipulated in the leases in respect of the lands "set out in the schedule that the lessees shall not assign "the leases or transfer any right or interest thereunder "without the assent of the Board of Revenue first obtained. "The vendors shall apply for such assent, but shall not in "any way be responsible and this agreement for transfer "of the vendors leasehold right to the lands set out in the "schedule hereto shall stand cancelled if such assent be not "given by the said Board of Revenue. "6. The purchaser shall be appointed local agent of the vendors in respect of the leasehold right of the vendors to the lands set out in the schedule hereto and continue to act as such until the transfer of the leasehold right be effected or until it is finally decided that such transfer cannot be made on and after the purchasers furnishing guarantee to the vendors of regular payment of all royalties and other dues on dispatches from the Murli Centre or otherwise in respect of the lands set out in the schedule hereto and on and after his depositing with the Liquidators a sum of Rs.4000 (Rupees four thousand) in cash by way of security for such payment, such deposit bearing interest at the rate of five per cent, per annum from the date of deposit till the transfer of the said leasehold rights or final decision that the leases should not be transferred. "7. Subject to the purchasers furnishing guarantee and "depositing the said sum of Rs.4000 (Rupees four thousand) "as aforesaid the purchaser shall be at liberty to quarry, "burn, manufacture and sell lime and stone from the said "lands on his own account without being liable to the vendors "for any of the profit or loss thereof. "8. "7. Subject to the purchasers furnishing guarantee and "depositing the said sum of Rs.4000 (Rupees four thousand) "as aforesaid the purchaser shall be at liberty to quarry, "burn, manufacture and sell lime and stone from the said "lands on his own account without being liable to the vendors "for any of the profit or loss thereof. "8. During the term of his local agency the purchaser "shall— “(a) submit to the vendors plans and details of working "and monthly statement of account relating to quarrying, "despatching and selling lime and stone from the said lands "and regularly pay to the vendors the royalties and other "dues if any payable to Government; “(b) bear and pay all expenses of working the quarries, "manufacturing, despatching and selling lime and stone "and of otherwise using the said lands and shall perform "and observe the covenants and conditions contained in "the said leases under which the said lands are held; "(c) indemnify the vendors against any loss or damage "which the vendors may sustain by reason of the purchasers "working the quarries or burning, manufacturing, dispatching and selling lime and stone from the said lands or "Murli Centre. "9. If the purchaser do not take any appointment as local "agent of the vendors as provided in clause 6 aforesaid he "shall not do any work in the quarries of the lands set out in the schedule or burn or manufacture lime thereon nor "dispatch lime and stone from the said Murli Centre until "the transfer of the said leases has been accomplished.” Bose entered into possession of and worked the quarries upon the terms of this agreement, but the Board of Revenue refused their assent to the sale, and on July 18, 1934, they declared the leases to be forfeited on the ground that the respondent company had transferred or sub-let the rights and interests under the lease to Bose in breach of the covenants above referred to. On September 24 the respondent company instituted the suit out of which the appeal arises in the Court of the Subordinate Judge of Shahabad, claiming a declaration that the leases had not been validly forfeited, an injunction, and Rs.11, 000 damages. A written statement of defence was put in by the appellant justifying the forfeiture, and the case went to trial before the Subordinate judge upon the following two issues only— "1. A written statement of defence was put in by the appellant justifying the forfeiture, and the case went to trial before the Subordinate judge upon the following two issues only— "1. Whether the plaintiff has under the terms of the "indenture dated April 1, 1928, forfeited the lease by reason "of the transaction between the plaintiff and Subodh Gopal "Bose under the indenture dated September 30, 1933. "2. Is the plaintiff entitled to any damage? If so, what "amount?" The Subordinate Judge delivered his judgment on March 7, 1935. He held that the agreement of September 30, 1933, though purporting to appoint Bose to work the quarries as agent of the respondent company, was in substance and reality a sub-lease to him of the quarrying rights, and, being without the consent of the Board of Revenue, was in breach of the covenants contained in the leases, and that they had therefore been duly forfeited He accordingly passed a decree dismissing the suit with costs. The respondent company appealed to the High Court at Patna. The appeal was heard by Khaja Mohamad Noor and Varma JJ., who delivered their judgment on February 7, 1936. On the question of forfeiture the learned judges disagreed with the Subordinate Judge, holding that the agreement with Bose did not amount to either a sub-lease or a transfer within the covenants in question. They were also of opinion that if the agreement could be so construed it would be void for want of registration. They accordingly allowed the appeal and granted the respondent company the declaration and injunction which it claimed. They also dealt with the question of damages, to which their Lordships will revert later on in this judgment. From this decision the Secretary of State appeals to His Majesty in Council, seeking to reinstate the decree of the Subordinate Judge for the dismissal of the suit. Before the Board a preliminary point was taken by the appellant that the suit was not maintainable on the ground that the respondent company was out of possession at the date of filing their plaint. This question had not been raised in the trial Court, and the High Court held that the question, depending as it obviously did upon facts for which evidence would be necessary, was not open before them. This question had not been raised in the trial Court, and the High Court held that the question, depending as it obviously did upon facts for which evidence would be necessary, was not open before them. On this their Lordships are in full agreement with the High Court and have not deemed it necessary to hear the respondents counsel with respect to it. The main contention for the appellant has been that the agreement was in reality a sub-lease to Bose. The High Court coming to the contrary conclusion had relied on the judgment of Lord Russell of Killowen C.J. in Horsey Estate, Ld. v. Steiger ([ 1899] 2 Q. B. 79.), and their Lordships think that the passage cited by the learned judges is directly in point. There is, in their opinion, nothing in the agreement which points to a relation of landlord and tenant between the parties. Bose was to be appointed the local agent of the respondent company, and his right to work the quarries was dependent on his accepting this position. The Subordinate Judge thought the agency was a mere cloak to disguise a sub-tenancy, but their Lordships do not think that it should be so regarded. There may have been many ways in which Bose could have served the company as their agent, e.g., in respect of the care of buildings, plant, material, etc. No doubt he was not to be their agent in working the stone and manufacturing the lime and selling it, all of which was to be done on his own account and at his own risk. But it is not unusual to have an agency coupled with an interest, and their Lordships think that this was the real effect of the agreement in the present case. There is, however, nothing in the document to suggest that the interest which Bose took was that of a sub-lessee. For these reasons their Lordships agree with the learned judges of the High Court that there was no sub-letting by the respondent company. Their Lordships, however, are unable to agree with the High Court in their view that "the transaction does not amount to a transfer of any interest in the leasehold property.” They think it clear that pending the completion of the proposed sale the agreement purported to invest Bose with a definite interest in the quarries. Their Lordships, however, are unable to agree with the High Court in their view that "the transaction does not amount to a transfer of any interest in the leasehold property.” They think it clear that pending the completion of the proposed sale the agreement purported to invest Bose with a definite interest in the quarries. He was entitled under it to dig the stone, convert it and sell the resultant product on his own account, and this, in their Lordships opinion, if it was an effective transfer, would be a breach of the covenants in the leases to the company, and would entitle the appellant to forfeit them. The only question, their Lordships think, is whether it was an effective transfer. The judgment of the High Court continues, after the sentence quoted above (( 1936) I. L. R. 15 Pat. 473.), "assuming that it does, it is inoperative "for want of registration of the document. Being an interest "created in an immovable property of more than Rs.100 "the document was compulsorily registrable under s. 17 of "the Indian Registration Act, and not having been registered "has not affected the property under s, 49 of the Act." Reading this sentence as meaning that the interest transferred was of the value of more than Rs.100, as their Lordships think they must do, and assuming it to be correct, counsel for the appellant does not dispute the accuracy of the dictum, nor does he contend that if it was merely an attempted but wholly ineffective transfer there would be a breach of the covenants. His only answer is that there is no proof that the interest was, in fact, of the value of more than Rs.100, and if not, registration would be unnecessary and the transfer would be effective. Their Lordships do not think that it is open now to the appellant to raise this objection. There was no contention before the Subordinate Judge as to registration or as to the value of the interest transferred. But it would clearly have been open to the appellant to take the point before the High Court if the value had really been in doubt. The High Court seem to have assumed that the value was over Rs.100, but no protest or objection was made on the Secretary of States behalf either to the Court or in the application for leave to appeal from their judgment. The High Court seem to have assumed that the value was over Rs.100, but no protest or objection was made on the Secretary of States behalf either to the Court or in the application for leave to appeal from their judgment. Nor, indeed, is the point raised in the appellants printed case before the Board. If there had been any substance in the objection the value could obviously have been determined either by the High Court or by a reference back to the Subordinate Judge. But their Lordships have little doubt that it cannot have been seriously disputed in India that the value of the concession was worth more than Rs.100. The appellants contention is obviously one dependent upon proof of facts, and not merely a question of law, and their Lordships must hold therefore that it is not now open to him. It only remains to deal with the question of damages. As already stated, the respondent company by their plaint claimed Rs.11, 000 damages, and at the trial an issue was raised as to this in the ordinary form. In the judgment of the Subordinate Judge the issue is dealt with in the following words—"In view of my findings on the issue No. 1 the plaintiff is not entitled to any damage or to any other relief in the suit. In fact no evidence on the question of damage was adduced on behalf of the plaintiff." The High Court nevertheless affirmed the respondent companys right to damages and ordered the amount to be ascertained by further proceedings in the lower Court; the judgment contains the following passage (( 1936) I. L. R. 15 Pat. 479.) "The next question urged by the learned Government Pleader was that the plaintiff was not entitled to any damages for interference with the leases as it had abandoned the claim for them. I do not find any abandonment. In fact, an issue about the damages was raised, but no evidence was given as parties very rightly wanted the determination of the main issue. When dealing with the question of damages the learned Subordinate Judge has stated that the plaintiff adduced no evidence. The remark is not justified. I do not find any abandonment. In fact, an issue about the damages was raised, but no evidence was given as parties very rightly wanted the determination of the main issue. When dealing with the question of damages the learned Subordinate Judge has stated that the plaintiff adduced no evidence. The remark is not justified. Both parties seem to have agreed that "no oral evidence should be adduced and the case should be decided on the pleadings and documents." Their Lordships can find no justification for this conclusion or for the learned judges criticism of the Subordinate Judge. The order sheet of the proceedings in the trial Court is on the record of the appeal and it contains nothing to suggest that the trial of the issue as to damages was postponed, or that there was any agreement between the parties to that effect. Nor can counsel for the respondent company throw any further light on the matter. In their Lordships opinion the proper inference is that the claim for damages was abandoned, and they think that the decision of the High Court on this point was erroneous. For the reasons given above their Lordships think that the decree of the High Court, dated February 7, 1936, should be affirmed only in so far as it granted the respondent company the declaration and injunction prayed in the plaint, and that the claim for damages should be disallowed. In their Lordships opinion the respondent company was entitled to its costs against the appellant in the first Court and to half its costs in the appeal to the High Court, and the appellant to half his costs before the Board against the respondent company; they will be set off in the usual way. Their Lordships will humbly advise His Majesty to this effect.