Cherukuru Krishnaiah vs Rajah M.A. Muthiah Chettiar

Kumarayya, J.—This appeal raises a question of importance as to whether the appellant Kavimeradar, in respect of his mera for future years, ranks as a creditor within the meaning of section 45 of the Estates Abolition Act or as a person whose right or interest has ceased and determined as u/s 3 (c) to be dealt with u/s 44 of the said Act.

The facts so far as necessary for appreciation of the rival contentions may be shortly stated. As far back as about the year 1690, the Rajah of Karvetnagar had granted to his poet by way of Kavimera a small fraction of his melwaram interest in several villages in Karvetnagar Zamindari. The grant was made by a formal deed; but that was subsequently lost during Hyderali''s invasion. The loss was reported in about the year 1810 and was proved to the satisfaction of the authorities concerned.

Loss of the deed which was the root of title indeed meant extinction of direct evidence to support the right. But the long years that had elapsed since the grant did not fail to create adequate circumstantial evidence in favour of the right. Not only long and continuous user or exercise of right and the conduct of the parties in that behalf was sufficient to raise the presumption of lost grant but also the village records ever since 1832 and other documents, may even the course of litigation that ensued thereafter coupled with other circumstances furnished ample material for ascertaining the origin and precise nature of the kavimera and the rights and liabilities of the parties in relation thereto.

So late as in the year 1938, when this matter in Cherukur Krishniah Vs. Sowcar Lodd Govinda Doss Krishna Doss, came up for consideration before the Madras High Court, the learned Judges having discussed the material on record made their observations in relation to the origin and nature of this right. The result is that the origin, nature of kavimera and the scope of the rights and liabilities of the parties no longer admit of any controversy. It is now settled that kavimera is a grant carved out of melwaram interest in certain villages.

It is a heritable right accruing due at the end of each fasli year. It is paid in cash though collected in kind. The sum representing kavimera is not a definite and fixed amount. The rate at which it is collected varies from village to village and the method of calculation in each village is also different. In some villages it is based on the extent of the area cultivated; in others it is based on the zamindar''s share of yield in the wet land. The calculation is made on the beriz-demand and the karnam maintains a chitta for kavimera as also for the net beriz payable to the zamindar.

Though it is a portion of melwaram interest, no right is conferred on the kavimeradar to collect the same from the ryot. He is only entitled to recover it by way of deduction from the melwaram collected. The melwaramdar is bound to feed the grant and appropriate the balance for himself. His position is virtually that of an agent so far as collection and payment of kavimera is concerned. His liability to pay does not rest on any personal obligation created by the grant but is wholly due to the fact that it is to be paid out of the income of the village which he is entitled to collect.

So long as a person is in possession of the village, be he a zamindar, mortgagee or maintenance-grantee on the ground that he is entitled to collect he is liable to make payment. Thus the liability is by virtus of the tenure and not independent of it. But that does not mean that he has no personal obligation even though he has failed "to collect or has withheld payment in spite of collection. Thus what we call kavimera is a hereditary right to be paid out of the melwaram interest and so long as the melwaramdar is in possession and is entitled to make collection he is bound to make payment of the same.

That is the nature and liability that the grant of the Raja in the past has created. The natural and probable consequences of this right, would follow so long as the integrity of the grant remains inviolate by any legislative interference and the estates continue to exist. But of late, there has been legislative interference which has not only affected the grant but also abolished the estate itself. These are Madras Act XXX of 1947 and Act XXVI of 1948.

The former sought to bring down the rents almost to the level of ryotwari villages and the latter abolished the estates and transferred them to the Government. Under S. 2 of the Madras Estates Land (Reduction of Rent) Act XXX of 1947, a special officer was appointed by the Government for recommending fair and equitable rate of rent for the ryoti lands in the district. Based on this recommendation, the Provincial Government fixed the rates of rent payable in respect of the same,

The Act further provided that the fixation of equitable rent shall take effect from the commencement of fasli year 1357. What is mo(sic) significant, the zamindars were precluded from making collections and the ryots were apprai(sic)ed of the fact that they are not bound to make any payment exceeding the revised rates i(sic) such estates. The estates in fact were takes over by the Government and the rent was collected by them and paid to the landholder after deducting the necessary costs of recover in accordance with the rules made by the Provincial Government.

Thus the zamindars could neither get the melwaram interest at the rate they used collect nor have they any longer power to collect the same at any rate. This enactment was followed by Act XXVI of 1948 which provident for the very abolition of the estates and the conversion into ryotwari villages. The object this Act seems to be that there should be (sic) intermediary between the tillers of the land a(sic) the Government.

It provides inter alia that with effect from the notified date the entire estate should sta(sic) transferred to the Government and vest in the free of all encumbrances and that all right and interests created in or over the esta(sic) before the notified date by the principal or a(sic) other landholder shall as against the Government ment cease and determine and that the Government may forthwith take possession of the estate. Of course all this acquisition could r(sic) be made without compensation.

As a matter of fact the enactment provided a complete code for determination of the aggregate compensation and its apportionment amongst the various interests. In this case in others, the compensation was fixed and w(sic) deposited with the Estates Abolition Tribunal for the purpose of apportionment after determination of the rights of the persons interest therein. The kavimerdar applied to the tribunal that he is entitled to arrears of his mera(sic) relation to the years 1357 to 1359 Fasli at the full rate unaffected by Act XXX of 1947, the he is also entitled to mera for future years per the grant and that if the award of the sa(sic) is not possible, he may be declared entitled the value of his right capitalised at 30 tin(sic) the average annual mera and paid from a(sic) out of the compensation, deposited.

The respondent in his counter denied t(sic) there were any arrears still left unpaid a(sic) questioned the validity of his claim for capitation at 30 times the average annual kavime He even pleaded that since the kavimera rig have ceased and determined by virtue of legation the appellant is not entitled to any rel(sic)

Though the appellant at the outset his petition did not claim, at the stage of arguments, he put forward a claim that he is creditor within the meaning of S. 45 of Estates Abolition Act and is entitled to whole claim out of the compensation amo(sic) the Tribunal disallowed the contention of the appellant that he is a creditor within the meaning of Act XXXVI of 1948 and found that his interest has ceased and determined by virtue of 3 (c) and that he is entitled only to a share the condensation amount under S. 44.

They also negatived the contention that his are in the compensation could be capitalised 30 times the annual average kavimera and (sic)rther disallowed the claim that Act XXX of 17 did not apply to his case so far as the (sic)rears are concerned. It is against this order (sic)t the appellant has come in appeal before

The arguments in the court below cen(sic)d round the provisions of both the Acts. But far as the arrears of mera are concerned, the (sic)rned counsel on behalf of the respondent has (sic)imated, that the payment has already been (sic)de. So then the only point that is seriously (sic)ed before us relates to the question whether kavimeradar is a creditor within the meaning S. 45. of Act XXVI of 1948 so as to be entitled his entire future-mera.

The term ''creditor'' postulates indebtedness, (sic)re should be a debt, and an existing debt (sic)ch falls due at present or in future. As al(sic)dy stated, though kavimera accrues due at end of every fasli year, it is not a definite ascertained sum. It all depends upon the (sic)re and extent of future cultivation, its yield also the calculation on the basis of the (sic)ous rates fixed. Besides it can be claimed (sic) against the person who is in possession of estate at the time and is entitled to make (sic)ction.

Evidently the zamindar is no longer in position of the estate. He is not entitled to make collection so that the liability to pay the mera out of the collections made may de(sic)e on him. Besides, the mera claimed for (sic)re years cannot be deemed to be a debt, only because it is not a definite and ascertained sum but also on account of the fact that liability is contingent on several circumstances. A debt is an obligation to pay a liqui(sic)d or a certain sum of money which is payment in present or will become payable in future (sic)eason of present obligation i.e., debitum in (sic)enti solvendum in future.

It may be either owing or accruing, legal (sic)quitable but must be a debitum. Evidently mera which falls due in future only in the (sic)t of possible collection and ascertainment (sic)terest is not a debt owing or payable in (sic)enti Is it then an accruing debt? In order (sic)e an accruing debt, there must be a present although it may be payable in future. It be a debt not yet actually payable but one (sic)h is represented by an existing obligation mere fact that most probably there will be (sic)t is not sufficient.

That is what has been held in Jones v. (sic)pson, (1858 ) 27 LJQB 234 (B). That is the view of the Allahabad High Court in Singh v. Sri Ram, ILR 30 All 246 (C), where the profits which would become due to the judgment-debtor but were not due at the time were sought to be attached. In Webb v. Stenton (1883) 11 QBD, 518 (D) the question for consideration was whether a sum payable to a judgment-debtor under a trust deed but which had not yet become due could be attached in the hands of trustees as a debt either owing or accruing within the meaning of O, 45 R. 2 of the English Rules of Practice.

The observations of Brest M.R. are to the effect that a debt within the meaning of that provision should be a debt known to the law and which the law has always recognised; that the law has always recognised two kinds of debts; a present debt and debitum in presents solvendum in future and. that an accruing debt is of latter description. He further observed that what was "sought to be attached was not a debt either in legal or equitable sense for in the circumstances of the case all that was probable was that money would come into the hands of the trustees which if it does come into their hands, they will be bound to pay over to the cestui que trust.

There will then be an equitable debt but until then there will be no debt. Lindley L.G. agreed with this opinion and observed that the word ''debt'' includes ''equitable debts'' and that the trustee was not a debtor to his cestui que trust and could not be so until he has money in his possession which it is his duty to hand over. He observed in conclusion:

You may attach all debts whether legal or equitable but only debts owing or accruing and money which may or may not become payable is not a debt.

Fray L. J. was of the same view. He did not agree with the construction which contemplates that the debt extended not only to the money actually in the hands of the receiver if there was any at the time when the order was made but to future payments as well He agreed with, the construction adopted by the Court of Queen''s Bench in (1858) 27 LJQB 234 (B) and Tapp V. Jones, (1875) 10 QB 591 (E) and came to the conclusion that the words in the rule only apply to the debts payable at present or in future and that the trustees in the case were not equitable debtors to their cestui que trust until they had money in their hands which they are bound to pay over or until they are made liable for breach of trust or for default in the performance of their duties as trustees.

In Israelson v. Dawson (1933) 1 KB 301 (F) which was a decision under O. 45 R. 2 of the English Rules of Practice it was held that the amount which became payable under a policy as a result of the accident specified therein having occurred, was not a debt which could be attached under this rule before the compensation had been determined by the arbitrator in accordance with the condition of the policy.

This decision however relates to insurances matters; but the authority can be availed of in so far as it brings out the implication of the term ''debt'' within the meaning of O. 45 R. 2 of the English Rules of Practice. It follows therefore that a contingent liability cannot be a debt. The question whether an indefinite and unliquidated sum or a sum which may for may not fall due in future is a debt or not has been the subject matter of decision of the Indian High Courts under various laws.

In Sabju Saheb v. Noordin Saheb, ILR 22 Mad 139 (G), the point was whether the amount which may be found due on taking accounts connected with the partnership to which the suit related is a debt within the meaning of Succession Act. There was a difference of opinion. The Judge to whom the matter was referred held on the dictum in Johnson v. Diamond, (1855) 11 Ex. 73 (H) that liability arising from an obligation of accounting is not a debt as it is not in respect of a liquidated sum.

This was followed in a Pull Bench case Doraisami Padayachi and Another Vs. Vaidyalinga Padayachi (dead) and Others, (I). The point for consideration in that case was whether a promise to pay what may be found due by the arbitrator on taking accounts of the partnership is a debt within the meaning of S. 26 of the Contract Act. It was held that it was not a debt. In another case, Palikandy Mammad v. Keloth Valiappa, ILR 40 Mad 302 : (AIR 1917 Mad 79 (2) ) (J), a mere right to receive maintenance in future under the agreement at a certain rate was held to be not a debt within the meaning of S. 60, C P.C.

The same was the view in ILR 30 All 246 (C). We think it unnecessary to discuss other authorities on the subject. Suffice it to say that to become a creditor, there should be a debt, legal or equitable, owing or accruing. It must be an actual debt which means a definite ascertained sum of money which is now payable or will become payable in future by reason of present obligation. It should not be a conditional or contingent one.

In the present case, as already observed, the kavimera is payable on condition that it accrues reason of the cultivation made in the particular year and further the person against whom it is claimed is in possession of the melwaram and is entitled to collect the same. So long as this condition is not fulfilled, it cannot be said that the zamindar has a present or existing obligation to pay what may be ascertained or fall due in future.

It is next argued that since kavimera based as it is on lost grant is carved out of melwaram interest in perpetuity, it is an annuity being a charge on the estate and that annuity of this kind even in relation to the sum falling due in future is in fact a debt. The learned counsel has referred us to Rajah of Ramnad v. Sundarapandiyaswami Tevar, ILR 42 Mad 581: (AIR 1918 PC 156) (K), Dowager Rani Lalitha Kumari Devi and Others Vs. The Raja of Vizianagaram and Others, Sri Neelakanta Rajendra Patro Vs. Balaji Patro Mondolo and Others, and Raja Rajeswari Ambal of Sri Dattatreya Mandiram v. District Board, Tirunelveli, 70 Mad LW 342 : (AIR 1958 Mad 105) (N). We do not see any force in this argument.

The authorities cited are distinguishable even as the sums involved therein were definition and ascertained. In the last mentioned ca(sic) there was a pre-existing liability to pay a fixe(sic) amount charged upon the village and the chou(sic) try was the creditor. The right, title and int(sic) rest of the zamindar was put to sale subject to the condition that the auction purchaser w(sic) pay these amounts, namely, Rs. 1150/- toward vallam and Rs. 650/- towards sivandanur f(sic) the support of choultry. A question was raised that this is only a maintenance amount and n(sic) a debt.

But the learned Judges repelled this contention on two grounds: firstly, the expression maintenance in S. 45 of the Estates Abolition Act contemplates the maintenance of only natural persons, and, secondly since the purchase acquired the village subject to the charge l(sic) position of the choultry as creditor would main unaltered. The claim therefore was its nature a debt and it remained so even af(sic) the sale. Again the case in 46 Mad LW 44 Sri Neelakanta Rajendra Patro Vs. Balaji Patro Mondolo and Others, relates to a special payment in kind.

It was pleaded that the payment being a voluntary nature did not create any le(sic) obligation. On the evidence it was found the payment was customary and was attached to the office and that it being payable by vir(sic) of tenure there was legal obligation on office-holder to pay. The facts of the pres(sic) case are evidently distinguishable. The ot(sic) rulings also do not take the case of the ap(sic) lant further. As pointed out in Lakshmi V(sic) kayamma v. Suryarao Bahadur, 1956 And 37 : (AIR 1957 Andh Pra 215) (O), an annual is a yearly payment of a certain sum of mo(sic) granted to another for life or for some year and chargeable only on the person of the g(sic) tor." Annuity as defined in Halsbury''s Law(sic) England (2nd editfon - Lord Hailsham) p(sic) 321 at page 175 as:

a sum of money payable yearly, or at rate periodically, from a source which is expansively or at any rate primarily personal estat(sic)

The same author in para 312 at page states :

The right created by an instrument ((sic)ther deed, will, codicil or statute) to receive definite annual sum of money is an inte(sic) which may be, strictly speaking, either a charge'' or an ''annuity''. If the only source money was directed to be paid was pers(sic) estate, other than leaseholds, the interest annuity and in the nature of personal estate It is therefore clear that like a debt the anr(sic) must necessarily be a definite or certain We have already observed that the future (sic) is not of the kind. The contention there that a kavimeradar is a creditor must fall.

Now the position is that the kavi(sic) being a grant by the landholder of a fra(sic) of melwaram which is an interest in the im(sic) able property falls clearly within the amb(sic) S. 3 (c) of Act XXVI of 1948. It is inde(sic) right or interest in or over the estate as con(sic) ated by the said clause. Section 3 reads as follows:

With effect on and from the notified date (sic)d save as otherwise expressly provided in the (sic)t :

(a)...

(b) the entire estate, (including all commu(sic)l lands and porambokes, other non-ryoti lands; (sic)iste lands; pasture lands; lanka lands; forests; (sic)nes and minerals; quarries; rivers and (sic)eams; tanks and irrigation works; fisheries; (sic)d ferries) shall stand transferred to the Government and vest in them, free of all encum(sic)mces; and the Madras Revenue Recovery Act, 64, the Madras Irrigation Cess Act, 1865, and other enactments applicable to ryotwari areas all apply to the estate;

(c) all rights and interests created in or (sic)er the estate before the notified date by the municipal or any other landholder shall as against (sic) Government cease and determine; (sic)w though the right and interest of the kavi(sic)radar in the immovable property has ceased operation of law, it is difficult to comprehend (sic)t there will be no compensation for the inte(sic)t thus ceased. Of course, S. 45 which relates impartible estate does not in terms make any revision for persons other than creditors, (sic)rers and maintenance-holders but the said provision is not exhaustive in the matter of apportionment of compensation. The material provisions relating to award of compensation sections 25, 27, 37 and 44.

Section 25 provides that the compensation the estate shall be determined for the es(sic)e as a whole and not separately for each of interests therein. Section 27 lays down that the case of a zamindari estate, the basic (sic)ual sum shall be aggregate of the sums speci(sic) in various sub-sections. It includes l/3rd he net average miscellaneous revenue derived m all other sources in the estate specified in Section 3 (b) and the scale of compensation is (sic)d u/s 37.

Section 42 (1) provides that every person (sic)ming the compensation so deposited or any (sic)tion thereof, including the principal or any (sic)er landholder, members of his family claim(sic) any portion of such compensation, whether (sic)way of a share or by way of maintenance or otherwise and creditors whether their debts secured or not, shall apply to the Tribunal (sic)in six months from the date on which the (sic)unt was so deposited or within such fur(sic) time as the Tribunal may, in its discretion, (sic)w.

This section gives right to all persons claim(sic) the compensation. The term every per(sic) is not limited only to the category of per(sic) (sic) named in the section but is wide enough (sic)over all persons who set up a claim for com(sic)ation by virtue of any interest or right there Sections 43 and 44 (1) read thus: "43. The Tribunal shall, after giving notice (sic)i persons who have applied u/s (sic)nd to any others whom it considers to be (sic)rested, make inquiry into the validity of the (sic)ns received by it, and determine the persons who, in its opinion, are entitled to the compensation deposited and the amount to which each of them is entitled.

44 (1). As a preliminary to such determination, the Tribunal shall apportion the compensation among the principal landholder and any other persons whose rights or interests in the estate stand transferred to the Government u/s 3 clause (b) or cease and determine u/s 3 clause (c), including persons who are entitled to be maintained from the estate and its income, as far as possible, in accordance with the value of their respective interests in the estate.

These sections remove all doubts that the persons who apply for allotment of compensation cannot only be the persons who are specifically named in section 42 but also those described in section 3(b) and (c).

The kavimeradar is a person coming within section 3(c) as his interest in the estate has been created by the landholder before the notified date. This interest in or over the estate, of course, is distinct from the one Contemplated by section 3 (b) and does not amount to ownership and need not be so to come within the said provision. A combined reading of sections 44 and 45 would show that not only the claims of persons such as creditors, sharers and maintenance holders falling within section 45 should be satisfied but also there would be allocation of compensation for other interests specified in section 44 (1).

The language of section 44 is indeed clear and unambiguous in this behalf. Thus the kavimeradar as the person whose interest has ceased u/s 3 (c) of the Act is entitled to compensation u/s 44.

The question next "to be considered is, what should be the basis for calculation of his right. The appellant has claimed that the value of his interest should be calculated at 30 times the average annual mera. The Tribunal has refused to adopt this basis as it was neither just nor equitable. The allocation of compensation among various persons holding interest, subject to the rules laid down, is within the discretion to be exercised in accordance with principles of justice, equity and good conscience.

The rules framed under Sections 44 and 45 do not provide any clear basis in relation to interests u/s 3 (c). However the value of such interest should bear an equitable proportion to the main interest in the estate. Having regard to the provisions of sections 27 and 37 it is plain that the aggregate compensation fixed by the Director of Settlements which cannot be called in question by the Tribunal would be less than the capitalized amount of the real annual rental of the estate.

The basis of calculation itself is the reduced rate of rentals. Under these circumstances it cannot be claimed with any fairness or sense of justice that kavimera interest should be valued on the basis of average annual rental and capitalised at a rate higher than that of the whale interest in the estate adopted by the Director. As a matter of fact, kavimera being but a fraction of melwaram, bound to stand or fall with it, must only be allowed to bear the same relative proportion as before.

That is what the Tribunal has done in apportioning the compensation. The view of the Tribunal seems to have been that when the claim of the landholder itself has been reduced, the share of the persons who are entitled to be paid out of the income of the estate must also be reduced in such a manner that the landholder and all persons entitled to be paid out of the income, get a proportionate share in the compensation. The tribunal in assessing the compensation for the right of the interest of the kavimeradar has capitalised the income at the same rate as was the basis for the compensation amount itself. In our opinion, this is a sound and equitable basis and cannot be interfered with.

So far as the arrears are concerned, as already, pointed out, they have been paid to the appellant. The tribunal''s decision in that behalf also seems to be equitable and just and no interference is warranted.

In the result, the appeal stands dismissed with costs.