Hymayun Reza Chaudhary and Another vs Harendra Nath Das and Others

Pande, J.—This is an appeal against the decree, dated 13th October 1943, of the Additional District Judge of Santal Parganas which reversed the decree, dated 7th May 1941, of the Subordinate Judge of Rajmahal. The suit is for reimbursement in respect of cess under the Cess Act, Bengal Act 9 of 1880, for which the plaintiff became liable between the year 1341-1346 (three quarters) and which the plaintiffs have paid. The claim is for Rs. 1325-3-0 plus interest Rs. 588-13-6 at 24 per cent, per annum. The plaintiffs are mutwallis of Kotal-pukur Wakf Estate, which is proprietor of 6 as. 8g. share in Mahal Ashila Mohabatpur, Touzi No. 110/l of the Dumka Collectorate. The defendants are holders of a patni tenure within the said touzi under registered patta and kabuliat of the year 1871 at an annual rent of Rs. 4800. The defendants are said to be liable to pay the entire cess for the estate under covenants of the patni lease. The defendants contend that they are liable to pay cess on the amount of valuation assessed for the patni tenure less a deduction at one-half of the rate of cess as provided in Section 41(2) of the Act. The first Court allowed the plaintiffs'' entire claim for cess with reduced interest at 6 1/4 per cent, per annum. The lower appellate Court upholding the defendants'' contention reversed the decision of the lower Court. The plaintiffs have preferred this appeal. The question for determination is whether the defendants are liable for cess assessed on the annual valuation for the estate, or for the patni tenure only, less the deduction provided in Section 41(2) of the Act.

The patni tenure is not conterminous with the entire estate, touzi No. 110/l. Certain Nij Jote lands, Chakrarn lands and the lands which had been diluviated before the creation of the patni were reserved by the landlord. The annual valuation of the estate for the years 1341-1345 B. S. was Rs. 11,042 odd and that for the patni tenure at Rs. 10,559. The annual cess payable for the estate in those years was Rs. 661-12-0. In 1346 B. S. the cess was reduced to Rs. 616-13-9. In the year 1935, there was a difference between the parties as to the amount of cess payable by the defendants. In a proceeding u/s 8 of the Patni Regulation, the Deputy Commissioner of Santal Parganas held that the patnidar was liable to pay Rs. 514-12-6 only as against the proprietor''s demand of Rs. 661-12-6, a year. This decision was followed in subsequent years. The defendants paid cess for 1341-1344 B. s. at the amount held by the Deputy Commissioner and Rs. 387-4-0 only for 1345. No payment was made for cess in 1346 B.S. The plaintiffs claimed reimbursement of the difference in the amount paid and that payable by the defendants for cess during the said period. The learned advocate for the appellants conceded that the patnidars are liable to pay cess on the annual valuation assessed for the patni tenure only and not for the entire estate. He, however, urged that under the covenants of the lease the patnidars are liable for the entire amount of cess payable annually for the patni tenure In other words the defendants are not entitled to the benefit of deduction of half the rate of cess as provided in Section 41(2), Cess Act. The relevant covenants in the patni lease are:

The pay of the mail runners, and of postal muharrir and postal cess and tax etc. which has been now fixed in the Collectorate and will be fixed in future will be realised from us the patnidars and our representatives in proportion to the fixed jama besides the jama of the said mahal. In case of nonpayment it will be set off against our chalani money. If any plea or objection be put forward it will be void and illegal.

It is argued for the appellants that by the term of the covenants the lessee undertook to pay and discharge all taxes, assessments and impositions whatsoever being in the nature of public demands which are or may be charged, assessed or imposed on the estate within which the patni tenure lies. In support of the contention reference is made to the decision of the Privy Council in AIR 1938 243 (Privy Council) and to three unreported decisions of this Court in P.A. No. 98 of 1938 and s. A. Nos. 523 of 1942 and 344 of 1942.

The cases cited for the appellants relate to coal mining leases. The lease transaction in each of those cases took place long after the enactment of the Cess Act, 1880. The Bengal Coal Company, Limited, lease is of the year 1915 and of the three other cases of the year 1907. The parties to the lease in each of those cases must be presumed to be well aware of thek'' rights and liabilities under the Cess Act. In none of those cases the lessees claimed a deduction at one-half of the rate of cess for every rupee of the rent payable by them for the tenure. Those cases were decided mainly on the terms of covenants as embodied in the lease instrument. The only question for deter, mination in each of those cases was whether the cess leviable under the Bengal Cess Act of 1880 was payable by the lessee or by the lessor. The decision of the Privy" Council in the Bengal Coal Co. Ltd., was followed in the other cases referred to. In 65 I. A. 3541 the lessees'' covenants were in the following terms:

The lessees shall pay the royalty and royalties reserved by this lease at the time and in the manner above appointed in that behalf and shall also pay and discharge all taxes, rates assessments and impositions whatsoever being in the nature of public demands which shall from time to time be charged, assessed or imposed upon the said mines or any part thereof by authority of''-the Government of India or the said Local Government or otherwise except demand for land revenue and shall also pay interest at the rate of 12 per cent per annum on all arrears of such royalty or royalties from the due date thereof.

Their Lordships of the Judicial Committee were of the opinion that the words in the relevant provisions of the Cess Act

are to the effect that the cess is levied on the immovable property and that the immovable property is liable to pay it. It is assessed differently as regards lands and mines--in the case of lands it is assessed on annual value, and in the case of mines on the annual net profits.

Their Lordships quoted the following observation of Lord Macnaghten in Payne v. Esdaile (1888) 13 A. C. 613:

The liability to the payment falls upon the occupier or taker for the time being by reason of his occupation. The land carries the liability as a burthen from taker to taker. Beyond all doubt that liability subtracts something from the profitable enjoyment of the land; it must be taken into account on the occasion of a sale, a mortgage, or a lease. An intending purchaser would give so much less purchase-money; an intending mortgagee would strike the amount off the rental in calculating the value of the proposed security, and an intending lessee would offer so much less rent. It seems to me that according to the ordinary understanding of mankind that is a charge upon land whioh cannot be dissociated from the land and which charges the occupier in respect of the land.

and pointed out that the particular illustration of an intending lessee did not apply to the case owing to the special nature of demand in question and that the other illustrations (intending purchaser, intending mortgagee) which were applicable added point to the circumstance that the remedy is given against the land itself. Accordingly, it was held that under the term of the covenants the lessees were liable to pay the cess. The terms of covenants in the lease of the other three eases in effect are similar to that in the case referred above. The decisions are substantially on the same Qne. It, therefore, seems unnecessary to refer here to the facts in those cases. The facts of the present case are clearly distinguishable from the case just referred to. Here the lease was executed in the year 1871, that is, nine years prior to the enactment of the Cess Act. At the time of creation of the lease, the parties could have no notion, whatsoever, as to the nature of future impositions, assessments or tax that may be levied in respect of the property by the Government; nor any notion of the rights and obligations of the contracting parties in regard to such future impositions of" taxes to be levied on the property. It is open to the parties to a transaction to con, tract themselves out of the provisions of a statute: Gour Chandra v. Sarat Kumari A. I.R. 1935 Pat. 305, Ashutosh Dhur v. Amir Molla (06) 3 C. L. J. 337 and Narendra Kumar Ghosh v. Gora Chand Joddar (06) 33 Cal. 683. But it must be clearly and satisfactorily established, not only that the parties did intend that their liability should be different from that created by the statute, but also that they intended the variation to go to the extent as suggested here by the appellants. In the present case the appellants in effect claim exemption from their statutory liability under Sub-section (1) of Section 41 to pay the cess as the holder of the estate within which the patni tenure lies and seek to saddle the entire cess leviable for the estate, or, for the patni tenure, contrary to the provisions of Sub-section (2) of Section 41. This may be permissible if the terms of the covenants expressly so pro-vide without possibility of any doubt. There is no express covenant in the lease to such effect. Therefore, the question has to be determined on a construction of the terms of the covenants quoted above. The terms of the covenants should be interpreted on two well established principles: (1) the contract under which exemption is claimed must be strictly construed against the claimant and it must appear from its terms, beyond the possibility of any dispute, that the parties intended to vary the liability as imposed by the statute and (2) that the construction to be placed on a deed ought to be such as to render it reasonable rather than unreasonable and will make it just to both the parties rather than unjust to one of them: Mahanand Sahai v. Sayedunnissa Bibi 12 C. W. N. 154.

In the present case, there is no express term in the contract to justify the appellants'' contention that the parties intended to vary the liability as imposed by the statute. It cannot reasonably be contended that the construction which the appellants seek to put on the terms of the covenants is just to both the parties. Certainly it is unreasonable to saddle the respondents for the entire cess of the patni tenure contrary to the provisions of Sub-section (2) of Section 41 of the Act. In my opinion, the reasonable interpretation of the covenants is that the lessee undertook to pay and discharge all impositions, assessments and taxes that may be levied from time to time by the Government in due discharge of his liabilities for such impositions according to the provisions of the statute that may be enacted from time to time. In the present case the statute provides for the levy of the cess of the patni tenure calculated on the annual value of the land comprised in the tenure at the rate of one anna in the rupee less a deduction to be calculated at one-half of the said rate for every rupee of the rent payable by him for the tenure. There seems to be absolutely no reason why the respondents should be made liable to pay the entire cess leviable for the tenure and be deprived of the benefits to which they are entitled u/s 41(2) of the Act. Therefore, I am of opinion, that on a proper interpretation of the terms of the covenants of the lease the respondents have in no way contracted themselves out of the benefits of Section 41(2), Cess Act. In other words, the respondents are liable to pay the cess calculated on the basis of the annual valuation of the patni tenure less a deduction at one-half of the rate for every rupee of the rent payable for the tenure.

The learned advocate for the respondents in support of the decision under appeal referred to a recent decision of a Division Bench of this Court in Sri Balwant Rao Naik Kalia and Others Vs. Biswanath Missir and Others, (decided on 6th March 1945 -- not reported). In that case the proprietors of an estate sued the holder of a mokarari tenure for the recovery of arrears of cess for a certain period. The mokarari tenure was created by registered kabuliat and patta in the year 1900. The rent fixed under the lease was Rs. 70 per year. The covenants in the lease of the mokarari tenure regarding cess were in the following terms:

Yah he malguzari mai cess, road cess, dak cess adaye kama zimme ham zamidaran ke hai : Mokaridaran se koi wasta wo sarokar nahin hai wo hoga wo agar wo agar koi abwab jadid sarkar bahadur kayem ho to usko bhi ham zamindaran adaye karenge.

The mokararidar pleaded exemption from the liability of payment of cess under the terms of covenant in the lease.The mokararidar''s contention prevailed in the lower Courts. His Lordship Sinha J. (with whom my Lord the Chief Justice agreed) on an examination of the terms of the covenants in the lease, quoted above, came to the conclusion that there are no words in the lease which could be construed as exempting the lessees from all liability, present and future, under the Cess Act. The mokararidar''s contention was accordingly rejected. The present case is much stronger as the lease was created prior to the enactment of the Cess Act when the parties to the instrument oi lease could have no idea as to the nature of their rights and obligations in regard to future impositions, assessments or tax that may be levied from time to time by the Government and there are no express words in the covenants to justify exemption of the holder of the estate from payment of his quota of the cess according to the provision of Sub-section (1) of Section 41 of the Act. It is thus clear that the appellants'' contention cannot be accepted. Therefore the appeal must fail. I would accordingly dismiss the appeal with costs.

Sinha, J.

I agree.