Gagan Bihari Das and Another vs Sri Sarabhuj and Others

Ray, J.—This revision petition is filed by the plaintiffs in a suit for recovery of Rs. 36-4-0 from the defendants, auction-purchasers of an occupancy holding as mutation fee u/s 31(B), inserted into the Orissa Tenancy Act (1913) by Section 8, Orissa Tenancy (Amendment) Act (VIII of 1938). The plaintiffs are co-sharer-proprietors in the estate within which the transferred holding is situate with a share of 6 annas 8 pies therein. The other co-sharers have not been impleaded as party defendants nor there is anything on record to show what their attitude is in relation to the subject-matter of the suit.

The plaintiffs claim that by virtue of the provisions of Section 31(B) read with Section 250 of the Act, they are entitled to maintain the suit and to recover the mutation fee, the sum claimed being their share in proportion to their interest in the proprietary right, of 25 per cent. of the consideration money for which the holding in question has been transferred. The defendants resist the suit impugning the suit as non-maintainable and pleading that no fees were lawfully payable by them at the time of the transfer which took place on 10-12-36, within the meaning of Section 31(B).

Section 31(B)(1) invoked in aid of the suit reads as follows:

Notwithstanding anything contained in this Act, any transferee, who obtained a transfer of an occupancy holding or a portion or a share thereof, before the commencement of the Orissa Tenancy (Amendment) Act 1938, shall be liable to pay the fees lawfully payable by him at the time of the transfer, within three years from the coming into force of that Act or the date of the landlord''s knowledge of the transfer whichever is later, but he shall not be liable to ejectment on the ground that the landlord has not given his consent to the transfer.

According to this section, the period of limitation provided for enforcement of the liability is three years from the coming into force of the Orissa Tenancy (Amendment) Act, 1938, or the date of the landlord''s knowledge of the transfer whichever is later. There is nothing in the judgment of the trial Court to show when the plaintiffs came to know of the transfer in issue. The question of limitation seems to have been completely lost sight of in the Courts below. The lower appellate Court in setting out the facts of the case says:

On 10-12-1936, the defendants purchased a a holding in Civil Court sale. The plaintiff who is his landlord in respect of the holding came to know of the sale after the Orissa Tenancy Act was amended in in 1938, and demanded mutation fee at 25 per cent. of the consideration money proportionate to his share. The defendant refused to pay.

On the facts as set out, it is difficult to say if the suit was in time or out of time. It is not clear if the plaintiff''s knowledge of the transfer was in 1938 or later. In case it was in 1938, the suit would have been barred by three years rule of limitation.

The question, therefore, that remains to be decided is whether the claimed fees were lawfully payable by the defendant at the time of the transfer. This takes me back to ascertain what the law was with regard to the transferee''s liability to pay the fees before the commencement of the Orissa Tenancy (Amendment) Act, 1938. At the relevant time, Sections 31 and 250 of the Orissa Tenancy Act, 1913, (Bihar and Orissa Act XI of 1913) were the law in force on the subject. Section 31 of the Act deals with the position of the transferees of occupancy holdings visa-vis the landlord of the holding. Till this Act came into force, occupancy holdings in Orissa were non-transferable. Some change in this respect was effected by the Act. They were declared not liable to ejectment by the landlord except in execution of a decree for ejectment passed on the grounds: (a) that he has used the land comprised in his holding in a manner which renders it unfit for the purposes of the Tenancy or (b) that he has broken a condition consistent with the provisions of this Act, and on breach of which he is under the terms of a contract between himself and his landlord liable to ejectment (see Section 29 of the Act). With regard to the transfer, it was provided in Section 31(4) that:

Save as provided in this section and Sections 95 and 96, no transfer of an occupancy holding or portion of a holding otherwise than by succession or by sale in execution of a decree for arrears of rent shall be valid against the landlord of the holding unless and until he has consented thereto.

The opening words of the Sub-section "Save as provided in this section and Sections 95 and 96" lead us to examine the provisions referred to there in their applicability to transfer of an occupancy holding. Section 95 prescribes some restrictions on transfer by sub-letting and Section 96 on transfer by usufructuary mortgage. Any transfer by sub-letting or usufructuary mortgage for any period, express or implied, which exceeds or might, in any possible event, exceed 9 years, were considered invalid. The provisions in Section 31 referred to in Sub-section (4) of the section are to the effect that in case of transfer of an occupancy holding or a portion thereof by private sale the transferee or his successor was entitled to apply to the landlord for registration on payment of the maximum fee equal to 25 per cent of the consideration or 6 times the annual rent of the holding or portion whichever was greater, and on the landlord''s refusal to accept the fee, he was entitled to appeal to the Collector who should in the absence of good and sufficient reasons enumerated in Explanation to Sub-section 3 of the section, cause the said fee to be delivered to the landlord declaring the transfer to be duly registered. Such a transfer according to Sub-section 3 referred to above was binding against the landlord. The combined effect of Sub-sections 1 to 3 and 4 of Section 31 is that transfer by private sale registered in the manner prescribed in the section, transfer by succession, transfer by sale in execution of a decree for arrears of rent and transfers by sub-letting or usufructuary mortgage within the restrictions prescribed in Sections 95 and 96 were the only transfers which were considered valid against the landlord. Other transfers were not valid against him unless and until he had consented thereto (vide last portion of Sub-section (4) of Section 31). The question arises whether the transfer of the disputed lands in favour of the defendant in execution of a mortgage decree by civil court sale was a valid transfer within the meaning of sub-s (4) of Section 31. It is quite plain that the transfer, in question, is not a transfer by private sale, nor is it one in execution of a decree for arrears of rent, and as such it was not valid against the landlord before the commencement of the Orissa Tenancy (Amendment) Act, 1938, far less at the time of the transfer. It was particularly so as it was not consented to by the time the Act came into operation. It should be borne in mind that no amount of custom or usage could make the transfer valid inasmuch as it would be inconsistent with the provisions of Section 31(4) (vide Section 237, Orissa Tenancy Act 1913). The only event in which the transfer could be valid against the landlord was that of landlord''s consent which, as I have said, was never given before the commencement of the Orissa Tenancy (Amendment) Act 1938.

The validity of a sale of the kind we are concerned with in this case is not so much before us as the payability or otherwise of any fees in respect thereof; but I have dealt with the question of validity inasmuch as the landlord''s right to levy fees must always co-relate to a transferee''s right to validation of the transfer in his favour. In the case of a private transfer the transferee''s right to validate the transfer in the manner prescribed in Section 31 is made co-extensive with the landlord''s right to levy fees mentioned therein by the process of law. It has been so provided in Section 250 of the Act which provides that the provisions of the Act applicable to arrears of rent and suits and proceedings for the recovery thereof shall, as far as may be, apply to anything payable in respect of any registration fees prescribed in Section 31. It is quite plain that the law on one hand enforces registration of the transfer in order to its validation and on the other, enforces the recovery of fees by the landlord on such registration. While in the case of transfers, otherwise than by private sale, neither the one nor the other is enforceable on the mere happening of a transfer either by the landlord or by the transferee, Section 31(4) by providing that such transfers are not valid against the landlord unless and until he has consented thereto leaves the matter in the arena of contractual adjustment between the parties. It is optional with the landlord to give his consent or not. This optional character enables the landlord to pitch his demand of consideration for consent as high as he chooses. Law does not intervene to put any limit to it. On the other hand, the same is the position with the transferee. He may or may not seek the landlord''s consent. No registration can be forced upon him by law for validating the transfer so as to create a right in the landlord to recover fees from him. It is only when both parties enter into a bargain and settle payment of certain fees in lieu of landlord''s consent to the transfer, the latter on fulfillment of his part of the promise may base an action thereon under general law demanding performance of transferee''s part of the contract by payment of agreed fees. Such fees, if payable under circumstances just delineated, is payable not by virtue of any law but on account of a completed contract between the parties. For recovery of such contracted fees, the provisions of Section 31(B) need not be invoked nor does the section contemplate such fees to be lawfully payable at the time of transfer.

Mr. Das Gupta strenuously contends that payment of fees by a transferee at a Court sale on recognition of his transfer by the landlord is not unlawful though such payment and registration were not enjoined by law and the Legislature by taking away the landlord''s right of re-entry on ejectment of the transferee in the event of an unauthorised transfer must be taken to have meant the fees referred to in Section 31(B) to be such fees as could be settled by contract between the transferee at Court sale and the landlord. That this is so, he urges, is manifested by the amendment of Section 250 by Section 3. Orissa Tenancy (2nd Amendment) Act (6 [VI] of 1941) which provides that Section 31(B) shall be substituted in Clause (E) for Section 31.

An adequate answer to this contention consists in pointing out that the plaintiff does not base his case on any completed contract accomplished before the Amendment Act, and, secondly, that it must be a fee payable at the time of transfer only if on the happening of a transfer, the landlord could acquire a right, though after registering the transfer to levy and recover any fees.

Mr. Das Gupta further argued that in any view the meaning that the words of the section bear in their plain grammatical sense must be given effect to. He says that the word "lawfully" should mean "not unlawfully" or "not illegally" and "payable" should mean "what may be paid" and "at the time of transfer" should mean "at any time prior to the Amendment Act and subsequent to the transfer." True that the words used by the Legislature must be interpreted in their plain grammatical sense but if any word bears more than one such sense, the one that will lead to an absurd result which it cannot be conceived that the Legislature could have in view, cannot be attributed to it in interpreting the statute.

The contention of the learned Counsel may now be tested in the light of the aforesaid well-known principle of law. As pointed out above, the landlord and the transferee were free to come to any terms with regard to the amount of fees for the purpose of consenting to the transfer for its validity. There was nothing in the Act, or in any custom having the force of law putting a limit thereto. As my learned brother pointed out in course of argument that in that view, it would be considered lawful for the landlord to claim 250 per cent of the consideration money or even more. To such a claim nobody can point out any provision of law by way of challenging that the demand was unlawful. It can be predicated beyond any possibility of doubt that such could never be the intention of the Legislature. The legislation under consideration was brought on the statute book to relieve the transferee from ejectment on the ground that the landlord had not given his consent to the transfer. This relief would be reduced to nullity or rather the law would turn out to provide a machinery for exaction by the landlord reducing the intended relief to an infliction of hardship. In this view of the matter, the line of reasoning of Mr. Das Gupta cannot be adopted as it would lead to absurd result. The only sense that can be attributed to the word "lawfully" is "in accordance with law" and to the word "payable" ''what must be paid or what is due". As I have shown above, nothing was due in the sense that it could be recovered by process of law from such a transferee as in the present case by the landlord under the provisions of the Orissa Tenancy Act, in its pre-amendment form.

Secondly, it may be argued with some force that the phrase"law fully payable" may also mean "fees due in accordance with custom having the force of law". I wish to pursue this argument also to its logical consequence. This argument may bear fruit to the petitioners if they would show that the landlord as a matter of right independently of any contract could enforce payment of any fees against a transferee of a transfer at court sale. Any such custom has not been pleaded, far less proved. Besides, such a custom is not conceivable under circumstances prevailing in Orissa in relation to transfer of occupancy holdings both before and after the Orissa Tenancy Act, 1913, till the amended Act came into operation. Mr. J.F.W. James (later Justice James) in his Final Report on the Revisional Settlement of Orissa (1906-1912 A.D.) published in 1914 in paragraph 72 thereof, gives a historical review of the position tracing it from the time of Mr. Maddox''s Settlement Report of 1898 up to the enactment of the Orissa Tenancy Act. Perusal of that paragraph leaves no room for doubt that prior to the revisional settlement a custom of transfer without the landlord''s consent was in the making, but to use the words of Mr. Macpherson as quoted in that paragraph this quiet evolution of custom had been checked by the revision operations and the landlords who had winked at or taking no steps to interfere with the numerous transfers that had occurred in the past 10 years were demanding the most exorbitant price for the purchase of their consent. It is clear, therefore, that demand and payment of fees for consent of transfers commenced during revision operations and in order to prevent blackmailing by the landlords, it was considered to be a question (again to use the words of Mr. Macpherson as quoted) which concerned the welfare of the cultivators and was determined by the state by enactment of Section 31, Orissa Tenancy Act, 1913. As to fees, Mr. Macpherson said:

What the proprietor is justly entitled to is such a fee as to compensate him for the trouble of making alterations in his zamindari books and possibly for the trouble of making collections from two persons instead of one. I think he is also entitled to refuse to have as tenant any given transferee for good and sufficient reason, viz., a criminal whom he does not want to have in his village or a known defaulter.

Section 31 of the Act was enacted by way of giving effect to this suggestion. It left, as I have shown above, the relations between the transferee at court sale in execution of money or mortgage decrees and the landlords to be adjusted as between them by contract. In view of Sub-section (4) of Section 31 no custom of transferability could grow in the case of such transfer because of the statute. In the absence of any right on the part of the transferee to have the transfer validated by registration, to permit a right to force registration upon him by the landlord and to demand a price for the purchase of his consent at his own sweet will, would, as a matter of custom, be not only uncertain but highly unreasonable. Even if such a custom was pleaded and sought to be proved, it could be ruled out as unreasonable, uncertain and too modern to have the force of law.

Under the circumstances, the petitioner, in my judgment, has not been able to make good his contention that the fees claimed by him, "are lawfully payable at the time of transfer" within the meaning of Section 31-B, Orissa Tenancy Act. In the result the rule is discharged. The petition is rejected with costs; hearing fee one gold mohur.

Meredith, J.

I agree. I was at first inclined to think that "lawfully payable" might mean "not unlawful" but since hearing Mr. B.N. Das''s able argument I have come round to the view that "lawfully payable" in Section 31-B can only mean "payable under some law or custom having the force of law."

Were the other interpretation adopted it would mean that any sum, however exorbitant, a landlord chose to claim would be lawfully payable and so realisable under the section. The landlord could claim a thousand per cent of the purchase price, and say it was realisable because it was lawfully payable within the meaning of Section 31-B and so realisable under the amended Section 250. This could never have been what the law intended.

Apart from that, the wording is "lawfully payable by him at the time of the transfer." As my learned brother has shewn, nothing was payable at the time of the transfer, because the landlord was not bound to recognize the transfer. His remedy lay then in ejecting the transferee. Nor can it be said that anything was payable by custom at the time of the transfer, because the only allegation is that there was a custom for payment as consideration for recognition. It would only be upon recognition that any fee would be payable. In the present case, there was mo recognition at the time of the transfer, or at any time before the enactment of Section 31-B, Recognition did not take place until 1942. It "would be useless, therefore, to remand the case to consider whether anything was payable by custom at the time of the transfer in 1936. If anything was payable, it was a payment for recognition and not on the transfer as such, which the landlord, as the law then stood, was not compelled to recognize.