Court Holds Defendants Liable for Breach of Lease Covenants, Adjusts Damages and Costs

The court found Defendants 5 to 9 liable for damages for breach of covenants in the head lease due to constructive notice of the covenants. It determined that the mortgages were not English mortgages, absolving the defendants from liability for rents and royalties. The Dagas were not held liable for rents and royalties, as there was no privity of estate with the plaintiff. The defense of estoppel and waiver was rejected. Damages were recalculated with deductions for coal severing. Interest on damages was upheld, and costs for dewatering mines were deleted. The final decree against Defendants 5 to 9 was varied, adjusting the total decretal amount.

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Issues Involved:

1. Liability of Defendants 5 to 9 for damages for breach of covenants.
2. Whether the mortgages dated 26th February 1923 and 17th December 1926 were English mortgages.
3. Liability of Defendants 5 to 9 for rents and royalties.
4. Estoppel and waiver regarding breaches of covenants.
5. Calculation and award of damages, including deductions for severing and bringing coal to the pit's mouth.
6. Award of interest on damages.
7. Costs of dewatering the mines.

Issue-wise Detailed Analysis:

1. Liability of Defendants 5 to 9 for damages for breach of covenants:
The court considered whether Defendants 5 to 9 (the Dagas) were liable for breaches of covenants contained in the head lease, specifically regarding the maintenance of coal pillars. The court found that the Dagas were bound by the covenants in the head lease despite being sub-lessees, as there was constructive notice of these covenants. The court applied the principle that restrictive covenants run with the land and are binding on sub-lessees. The court also noted that the breaches were committed by the Dagas during their occupation and that they had admitted liability for damages caused during their tenure.

2. Whether the mortgages dated 26th February 1923 and 17th December 1926 were English mortgages:
The court determined that the mortgages in favor of the Dagas were not English mortgages. The mortgages were by way of sub-lease for the residue of the term less two days, which did not create privity of estate between the lessor (plaintiff) and the sub-lessee (Dagas). Therefore, the Dagas were not liable for rents and royalties as there was no absolute assignment of the leasehold interest.

3. Liability of Defendants 5 to 9 for rents and royalties:
The court held that the Dagas were not liable for rents and royalties as there was no privity of estate between them and the plaintiff. The Sarkars (Defendants 2 and 3) remained tenants of the lessor and were liable for the rents despite the Dagas being in possession.

4. Estoppel and waiver regarding breaches of covenants:
The court addressed the defense of estoppel and waiver raised by the Dagas, who argued that the breaches of covenants were done with the knowledge and consent of the plaintiff. The court rejected this defense, finding no evidence of waiver or acquiescence by the plaintiff. The court noted that the plaintiff had repeatedly requested access to inspect the mine, which was denied by the Dagas.

5. Calculation and award of damages, including deductions for severing and bringing coal to the pit's mouth:
The court reviewed the calculation of damages and allowed a deduction of Rs. 2 per ton for severing the coal and bringing it to the pit's mouth, as recommended by the commissioners. The court referred to the decision in Currimbhoy v. L.A. Creet, which established that expenses incurred in getting the coal, bringing it to the bank, and marketing it should be deducted from the gross value. The court adjusted the damages awarded to the plaintiff accordingly.

6. Award of interest on damages:
The court upheld the award of interest on damages, noting that the definition of "mesne profits" in the Civil Procedure Code includes interest. The court found that interest was rightly allowed from the date of the suit up to the date of the final judgment.

7. Costs of dewatering the mines:
The court reviewed the award of costs for dewatering the mines and found no evidence that the flooding of the mines was the result of depillaring by the defendants. The court deleted the direction to award Rs. 16,834-14-3 for dewatering costs from the preliminary and final judgments.

Conclusion:
The court varied the final decree against Defendants 5 to 9 by reducing the damages for coal raised and adjusting the total decretal amount. The court awarded interest on the adjusted decretal amount from the date of the final decree until realization and included costs for logs and timbering. The appeal was partly allowed, and costs were to be in proportion throughout.

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