Nathuni Thakur vs Ramsaran Singh

Terrell, C.J.—This Letters Patent Appeal from the judgment of Mohammad Noor, J., first came on for hearing before two of us (Kulwant Sahay, J. and myself) and finding that it raised, a question of great importance in enhancement suits under the Bengal Tenancy Act, we decided that it should be re-heard before a Bench of five Judges.

The question is whether in a suit for enhancement u/s 30 (b), Bengal Tenancy Act, the tribunal is entitled to take into consideration u/s 35 the great economic depression with reduction in staple food crop prices which has taken place recently. Other and minor points were raised by the appeal, but this is the only question of importance. The material parts of Section 30 are as follows:

The landlord of a holding held at a money rent by an occupancy raiyat may, subject to the provisions of this Act, institute a suit to enhance the rent on one or more of the following grounds (namely): (a) that the rate of rent paid by the raiyat is below the prevailing rate paid by occupancy raiyats for land of a similar desegregation and with similar advantages in the same village or in neighbouring villages, and that there is no sufficient reason for his holding at so low a rate; (b) that there has been a rise in the average local prices of staple food-crops during the currency of the present rent; (c) that the productive powers of the land held by the raiyat have been increased by an improvement effected by, or at the expense of the landlord during the currency of the present rent; (d) that the productive powers of the land held by the raiyat have been increased by fluvial action.

It is now well recognized that the rents paid by raiyats in settled areas are not economic rents as understood in western countries. In Kamala Prasad Singh Vs. Bankey Prasad Singh and Others, --[Ed] James, J. said:

I should observe that the section as a whole is based not on economic principles but on the legal and historical principle that the landlord is entitled to a certain share of the produce of the holding. In the words of Regulation 19 of 1793:

''By the ancient law of the country the ruling power is entitled to a certain proportion of the produce of every bigha of land, demandable in money or kind according to the local custom unless he transfers his right thereto for a term of years or in perpetuity.''.

In those areas to which the decennial settlement applied, the ruling power compounding with the zamindars transferred this right to them; and except where raiyats hold at fixed rates, the landlord is entitled to a periodical revision of rent u/s 30(6), Bengal Tenancy Act, not on general economic principles but because he is entitled to a certain proportion of the produce of the land.

Now where rent is paid in kind not as a fixed rent but on the principle of division of the crops no question of enhancement can arise. But in the course of history over large areas of the country the share payable by the tenant, to the landlord has bean commuted for a money rent. Nevertheless that money rent represents the share of the produce to which the landlord is entitled, and as economic forces produce from time to time changes in the relative values of money and agricultural produce, the provisions for a re-consideration from time to time of the money rent become necessary and were at an early time recognized as necessary in the interests of both parties for the purpose of preserving the proportion between the shares of the produce taken by the landlord and the tenant respectively and to correct lack of uniformity in such proportions when uniform conditions prevail in any given area.

For this purpose those clauses in the Bengal Tenancy Act which deal with enhancement suits were framed in order to introduce certainty and uniformity of practice. To that end Section 32 institutes a uniform procedure for testing not only the uniformity of the agricultural conditions prevailing in an area but also whether there has been a rise in the average local prices of staple food-crops during the currency of the present rent. For this latter purpose it enacts that the court shall compare the average prices over decennial periods and also that the enhanced rent shall bear to the previous rent the same proportion as the average prices in the latter decennial periods beat to the average prices for the previous decennial period with which the first period is compared. These enactments make clear that the purposes of this portion of the Act is to maintain on the whole the proportions taken by the landlord and the tenant respectively and that they are not for the purpose of changing the proportions in accordance with any supposed economic or political considerations. When this is appreciated it will easily be seen that the consideration of fact most important for the tribunal is the change in the value of money relatively to staple food crops which has taken place.

For purposes of practical convenience and to avoid yearly harassment of tenants by successive suits for enhancement, it became necessary to enact, following on well-established customs, that the determination of an enhancement suit, whether in favour of the landlord or in favour of the tenant should, for a number of years, preclude the further reopening of the matter as between the landlord and the tenant, notwithstanding that within such period the value of money had changed relatively to that of food crops. Having regard to the periodicity of the fluctuations observed in records of prices and to the reasonable anticipation that such periodicity would be maintained until the Legislature might be called upon to reconsider the subject, it was enacted that the determination of an enhancement suit should conclude the amount of the money rent payable by the tenant for a period of 15 years.

Notwithstanding these provisions it was felt that in any given case circumstances might arise in which a decision based strictly upon the change in prices calculated according to the procedure laid down by Section 32 might result in a rent in which the proportions of the food products payable to the landlord and calculated in terms of money by that procedure might be disturbed. Such circumstances, unless the tribunal could take them into account, might defeat in any particular case the main purpose of the Act. Accordingly by Section 35 it was enacted that:

Notwithstanding anything in the foregoing sections, the court shall in any case decree any enhancement which is under the circumstances of the case unfair or inequitable.

The general purpose of the Act, as I have above described, makes it clear that the words "unfair and inequitable" refer to the maintenance of the proportion of the produce taken by the landlord in the form of money rent or corrections of the proportions to comply with the conditions prevailing under equal conditions within a given area. They do not refer to considerations which might properly influence the Legislature, if it so chose, to decree a change in those proportions or the adoption of another criterion. The Act has to be administered as it stands not by economists or politicians but by lawyers who have to carry out the policy laid down by the Legislature. Had it been otherwise intended, the Legislature might have left to the tribunals the question of the enhancement not only of money rent but of produce rent paid on a division of the crops, that is to decide whether it was "fair and equitable" to alter the proportions received by the landlord and the tenant respectively. We have therefore in administering Section 35 to consider only such matters as are "fair and equitable" in the sense of maintaining these proportions. Moreover I consider that the words involve the further reservation that the amount of enhancement imposed must not as such as to reduce this raiyat''s income calculated in terms of money to such an extent as to involve serious hardship.

The recent great and sudden economic change in the value, in terms of money of food-stuffs is a notorious fact. A Court which declined to take judicial notice of it would, I imagine serenely ignore an earthquake. Its effect in any particular case might be each as to render an enhancement (otherwise justifiable in the sense that the correct proportions are restored,) unfair and inequitable because the money value of the proportion left to this raiyat might be so low as to involve serious hard-ship. The precise date when that change began to take effect in any particular locality and the precise extent to which it would affect the particular circumstances of any case are matters which may oh the one hand be ascertained by the court as matters of public history from documents of public record and on the other hand are matters of evidence to be given, before the tribunal.

In other words it is incumbent upon a tenant who desires that the economic conclusion may be considered as having affected his own particular case to prove his contention as a matter of fact. It is urged on the other hand that it cannot be assumed by a court and cannot be proved by evidence that the economic catastrophe will have permanent effects, that world changes in economic conditions may well occur again and within a very short time in the opposite direction. It is contended that it would be unfair to the landlord, having regard to the fact that he is precluded from re-opening the matter for a period of 15 years, to burden him with the results of what may be a purely temporary condition. There is, no doubt, some force in this argument but it must be remembered that the very fixing by the Legislature of a period of 15 years before any individual case can be re-opened shows that the Legislature intended that justice in individual cases must be subordinated to the public convenience of maintaining periods of stability and avoiding many successive suits. One method for avoiding hardship in any particular case is provided by Section 36 of the Act:

If the court passing a decree for enhancement considers that the immediate enforcement of the decree in its full extent will be attended with hardship to the raiyat, it may direct that enhancement shall be gradual, that is to say, that the rent shall increase yearly by degrees for any number of years not exceeding five until the limit of the enhancement decreed has been reached.

It may be noted here that it is not necessary under this section that the successive yearly enhancements over the limited period of five years shall proceed by equal increment. The curve of increment may either be a straight line or convex or concave as the tribunal may in its discretion determine. Nevertheless if this method be adopted at the end of five years the full enhancement must come into force. I mention this section therefore not by way of indicating that it provides for all circumstances an adequate method of giving effect to the consideration involved in the economic depression but as providing a method which may in very many circumstances be satisfactory and enable the courts to do justice as between the parties. The discretion given by Section 35 is very wide and where it is applied on right principles, that is to say, for the purpose of maintaining the proportion of the produce allotted to the landlord and the tenant respectively it should not be a matter of interference by this Court by way of revision. Where however, it is wrongly applied, that is to say, where for example a tribunal has considered the words "fair and equitable" as giving it a right to alter these proportions in accordance with its own economic or political ideas of justice the court should and will correct the error. For the reasons which I have given above I respectfully disagree with the opinion expressed by the learned Judge before whom this case first came in second appeal. He said:

The learned Advocate has relied upon the present economic depression prevailing in the country. First of all, one cannot be sure how long this depression is going to last, and secondly if this becomes a permanent feature it will be open to the defendants to apply for reduction of rent under the provisions of Section 38 Bengal Tenancy Act.

The material parts of Section 38 enable an occupancy raiyat holding at a money rent to sue for the reduction of his rent:

(b) on the ground that there has been a fall, not due to a temporary cause, in the average local prices of staple food-crops during the currency of the present rent.

The words "not being due to a temporary cause" show very clearly that Section 38 would not given relief to the tenant from changes in the proportions due to the economic depression; for from the learned Judge''s premise that it cannot be shown that the depression, will have a permanent effect, he would be unable in any case to obtain a reduction for this cause. In my opinion therefore, it is incumbent upon the tribunal in an enhancement suit to take into consideration the fact of the great economic depression provided it is shown by evidence that in the particular circumstances of the case the economic depression will, if considered together with the proposed enhancement disturb the proportions of the profits allotted to the landlord and the tenant respectively under equal conditions within the area covered by the inquiry and measured money value up to the time of the suit. The consideration of decennial periods is a matter of procedure, compulsory it is true to the extent enacted, but it is not to be taken as being the only matter to be considered by the tribunal. Any matter which affects what is "fair and equitable," construing those words in the way I have indicated may and indeed should be considered by a tribunal u/s 35 of the Act.

The facts of this particular case however, need but brief reference. It is very clear that the rent which has prevailed even when enhanced to the maximum decreed by the Munsif represents a proportion much below that paid under equal conditions within the area and the enhanced rent cannot be considered otherwise than as fair and equitable in the circumstances. The question of the area of the tenant''s holding is purely one of fact with which, a court in second appeal is not concerned to interfere. In the result while giving expression to the law as I understand it and differing from the learned Judge in this matter I would dismiss this appeal upon the findings of fact but without costs.

Kulwant Sahay, J.

I agree.

Macpherson, J.

I agree.

Fazl Ali, J.

I agree.

James, J.

I agree.