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Judgment
These appeals raise a number of questions of importance to landholders and ryots in the Madras Presidency. The appellant is the Zamindar of
Sivaganga, which is one of the important Zamindaries of Southern India. Before 1922 it was the custom of the tenants to pay their rent in kind, but
in that year the Court of Wards, which was then in charge of the estate, formulated a scheme for the permanent commutation of rent in kind to re at
in money. The scheme provided for the tenants signifying their acceptance in writing of the proposal and for the ? exchange of pattas and
muchilikas drawn up on the new basis. At the time the scheme was viewed with favour by the tenants. Practically all of them signed consent
statements and many of them accepted pattas which stipulated for the payment of the rent in money, but owing to the large number of tenants it
was not possible to complete the arrangement by the issue of pattas to all of them while grain prices remained stable, and some tenants refused to
accept the pattas tendered when their turns came, because prices had fallen. In 1928 the appellant filed a number of suits for the recovery of
money rents on the footing that there had been a valid commutation. Some of the suits were defended on the ground that the appellant was not
entitled in law to payment of rent in money. In other cases the appellant had distrained and had taken proceedings for the sale of the holdings for
the nonpayment of rent in money. The question of the legality of the demand for rent in money having been raised, sortie of the tenants filed suits
contesting the right of the appellant to distrain or to sell. In September, 1930, there were pending in the Revenue Court 2310 suits in which the
appellant or tenants were, the plaintiffs. These suits were tried by three Deputy Collectors, but for the purposes of this appeal it is only necessary
to refer to the judgment of one of them, namely, that of Mr. Amiritaswami Pillai, which was delivered on the 15th September, 1930. In 94 cases
appeals were filed in the Court of the District Judge of Ramnad, who dealt with them in one judgment. Second appeals were filed in 50 cases and
47 of these appeals are now before us. The learned Counsel engaged in the appeals have agreed that this Court can also conveniently deal in one
judgment with all the questions raised.
Before referring to the judgments below it is necessary to examine the terms of the consent statements signed by the tenants, the terms of the
pattas which were issued in pursuance of those statements, and certain of the provisions of the Madras Estates Land Act, 1908. There were two
forms of consent statements. These have been marked as Ex. A and Ex. A-1 respectively. Ex. A reads as follows:
When the Settlement Officer inspected the said lands for the levying of cash theerva for the undermentioned nanjas and punjas relating to division
by waram which pertain to my patta aforesaid and which are in my enjoyment in the said village, I was also present. As regards those lands I have
agreed to the tharamwar division having regard to the nature of the lande set out below. I consent to the levying of compound theerva cash theerva
per acre per annum for both crops inclusive of the winter and summer crops according to the rate fixed against them. As regards the bundle of
sheaves kaipichai (alms) and mason and carpenter bundles to be given usually to the village servants, I shall give them personally. Besides these, I
agree to pay the rate fixed per rupee in respect of the undermentioned cash theerva, magamai, swatantaram, and road cess in connection with the
melwaram due to the Zamindar. If cash theerva is fixed in that manner, I am willing to obtain patta.
The word ''Magamai'' means contribution for charity and the word ''Swatantaram'' the charge made on tenants in respect of services rendered
by village officers. While this statement clearly contemplates the fixing of rent on a cash basis it cannot, by reason of the concluding sentence, be
read as being anything more than an undertaking by the tenant to accept a patta if a patta be drawn up in accordance with the terms mentioned in
the statement signed by him. In other words, it is merely an offer by the tenant and not a completed agreement. The agreement could only be
completed by the tender to the tenant of a patta drawn up in accordance with his offer.
The consent statement in the form of Ex. A-1 is very differently worded. It says:
In view of the advantage resulting from the conversion of waram, varisai, etc., taxes fixed for my lands in my holding and specified in the schedule
below, into cash tax, the Estate Officer has inspected the said lands to fix a reasonable and proper cash theerva having regard to the nature of the
land and the facilities and otherwise thereof, and fixed the tharam and also the rate against each land; and I have agreed to the same being satisfied
with the fairness thereof. Hence I agree to pay for ever from fasli 133 to the land-holder the theerva due according to the same in each fasli.
Further I agree to pay to the landholder, magamai, swathantaram, etc., at pies per rupee and land cess and stone tax, etc., and sheaves, alms, covil
virappu, mason and carpenter bundles, etc., usually due to the village servants. As regards theerva due for each land now, I have hereby agreed to
pay, for ever, the same in each fasli whatever kind of crop is raised and whatever may be the number of crops raised in each fasli. Exchange of
pattas and muchilikas as soon as they are prepared as shown in the reverse hereof, is hereby agreed to.
This goes far beyond an offer. It constitutes a definite-agreement to pay rent for ever in accordance with the figures set out in the document.
The Madras Estates Land Act, 1908, was amended in 1934 and again in 1936, but all these cases arose before the amendment in 1934, and,
with the possible exception of Section 187, regard can only be had to the sections of the Act as they stood in 1908. Therefore unless otherwise
mentioned in this judgment the statements of the various provisions of the Act do not embody the amendments. Section 50(2) states that every ryot
shall be entitled to call upon his landholder to grant him a patta for any current revenue year and every landholder shall be entitled to call upon his
ryot to give him a muchilika for any current revenue year in exchange for a patta. Section 51 sets out what the patta and the muchilika shall contain.
Section 52 says that pattas and muchilikas may be exchanged for periods of one or more revenue years, but no landholder shall be bound to
tender and no ryot to accept, a patta for a period of more than one revenue year. Pattas and muchilikas accepted, exchanged or decreed for any
revenue year shall remain in force until the commencement of the revenue year for which fresh pattas and muchilikas are accepted, exchanged or
decreed: provided that where a patta or muchilika has continued in force for more revenue years than one, no fresh patta or muchilika for the same
holding shall take effect until the commencement of the revenue year next succeeding that in which it is tendered, accepted, exchanged or decreed.
Section 53 states that no landholder shall have power to proceed against a ryot for the recovery of rent by distraint and sale of his movable
property or by sale of his holding unless he shall have exchanged a patta and muchilika with the ryot or tendered him such a patta as he was bound
to accept or unless a valid patta or muchilika continues in force. Section 55 provides that when a landholder, for three months after demand, fails
to grant a patta in such terms as the ryot is entitled to receive, it shall be lawful for the ryot to sue for a patta before the Collector. Section 56 gives
the landholder the same right to sue for the acceptance of a patta by a ryot when the ryot for one month after tender fails to accept the patia
tendered to him and to give a muchihka in exchange. In suits arising u/s 55 or Section 56 the Collector is given by Section 57 the power to settle
the terms of the patta and the muchihka. Therefore where a patta has expired the tenant, if he remains in occupation, continues to hold under the
terms embodied in the expired patta unless a new patta is granted by the landholder or settled by the Collector u/s 57.
Section 40 of the Act provides that where a ryot pays rent in kind or on the estimated value of a portion of the crop, or at rates varying with the
crop, or partly in one of these ways and partly in another, or partly in one or more of these ways and partly in cash, either the ryot or the
landholder may sue before the Collector to have the rent commuted to a definite money rent. Section 187(1)(e) states that nothing in any contract
between a landholder and a ryot made before or after the passing of the Act shall take away the right of a landholder or an occupancy ryot to sue
for a commutation of rent u/s 40. By the Madras Estates Land (Amendment) Act, 1934, the word ''apply'' has been substituted for the word ""sue
in Section 187(1)(e). Inasmuch as this section applies to a contract before and after the passing of the Act it has been suggested that the amended
section applies to the present appeals. But the question is not of importance because nothing really turns on whether the right is ""to sue"" or ""to
apply"" for commutation of rent. The main question is whether an agreement between the appellant and a tenant for the commutation of a grain rent
to a money rent is rendered unlawful by reason of Section 187(1)(e). The appellant says that where a tenant has agreed to pay rent in money
instead of in kind Section 40 has no application. For the tenants it is said that Section 187(1)(e) renders the agreement void and the tenant is
entitled to apply at any time u/s 40 for commutation of rent payable in grain to a definite money rent.
The Revenue Court''s findings may be summarised as follows : (1) A consent statement whether in the form of Ex. A or of A-1 does not require
to be stamped or registered, and this applies also where a patta and a muchilika have been exchanged; (2) the mere tender of a patta by the
appellant toa tenant in pursuance of the terms of a consent statement does not amount to a completed agreement and the appellant is not entitled to
sue for rent on the basis of a mere tender of patta; (3) where a patta has been accepted and a muchilika exchanged the arrangement for the
payment of a money rent is binding on the tenant who is not entitled to apply for commutation of rent u/s 40; and (4) a patta which has been
accepted, exchanged or decreed continues in force by virtue of Section 52(3) notwithstanding that the period for which it was issued has expired.
On these findings the Revenue Court held that the appellant was only entitled to file rent suits in cases where pattas and muchilikas were exchanged
and that the tenants were entitled to have the proceedings by way of distraint or for sale of holdings set aside in all cases where the landholder had
relied merely on the signing of consent statements or on the signing of such statements followed only by the presentation of pattas.
The findings of the District Judge were these: - (1) There is a right to contract apart from the Act, but this right does not affect the force of
Section 187(1)(e) and in spite of a completed agreement for the payment of rent in money the tenant has the right of applying to the Revenue Court
for the fixing of a money rent u/s 40; (2) the appellant had taken advantage of the trust of his tenants; he had created new tenancies under new
rates and upon new terms which were entirely unfavourable to the tenants and he had been guilty of ''legal fraud''; (3) even where paltas and
muchilikas has been exchanged the appellant had not regarded himself as being bound by their terms; and (4) in as much as the consent statements
had not been stamped there could be no contract, even where a patta and. a muchilika had been exchanged.
I will first deal with the questions of stamping and registration. A consent statement in the form of Ex. A obviously does not call for stamping or
registration, being merely an offer, and the position is not altered by the presentation of a patta in accordance with the offer or the exchange of a
patta for a muchilika. None of the pattas tendered was for more than one year. Agricultural leases which do not exceed the term of one year are
exempt from stamp duty and registration (Article 35 of the Stamp Act and Section 17 of the Registration Act). A consent statement in the form of
Ex. A-1 is, however, on a different footing, as it amounts to an agreement to pay rent in money instead of in grain and contemplates a permanent
tenancy at a definite money rent. An agreement which varies the rent payable by the lessee requires registration. See Subramanian Chettiar v.
Arunachalam Chettmr (1902) 12 M.L.J. 479 : L.R. 29 IndAp 138 : ILR 25 Mad. 603 and Durga Prasad Singh v. Rajendra Narain Bagchi I.L.R.
(1909) 37 Cal. 293, affirmed on appeal to the Privy Council in Durga Prasad Singh v. Rajendra Narain Bagchi (1913) 26 M.L.J. 25 : L.R. 40
IndAp 223 : ILR 41 Cal. 493 . Therefore in those cases in which the consent was in the form of Ex. A-1 stamping and registration were necessary
before the statement could be put in evidence and as the requirements of the Stamp and Registration Acts were not complied with, the statement
could not be proved. In such a case the appellant could not rely on the mere presentation of a patta and the agreement could only be proved if a
patta and a muchilika were actually exchanged. If they were exchanged they could be put in evidence without stamping or registration because they
did not purport to create a tenancy for more than one year. It has been contended that as the pattas actually issued stated that the rents were not
liable to any alteration except for reasons contemplated in Section 41 of the Madras Estates Land Act and as the pattas were intended to bind the
tenants, their heirs and assigns registration was necessary. But this contention cannot be accepted. The governing factor is that each patta was for
one year only. The fact that a patta contains statements which are intended to bind the tenant if he happens to remain in occupation for a longer
period will not turn the patta into a lease for more than one year.
There is no justification whatever for the findings of the District judge that the new arrangement in all cases had resulted in enhancement of rent
and that the landholder had acted unfairly. The District Judge based these sweeping statements upon an examination of one case. Section 24 of the
Act provides that the rent shall not be enhanced except as provided by the Act, but on the printed record there is no indication that there has been
general enhancement. The arrangement for the payment of rent in money was made while the estate was under the control of the Court of Wards.
As a preliminary to the introduction of the system a survey was carried out by the Madras Survey Department. The lands were classified and the
money rents were based on the average income for a number of years. While there is no reason to suppose that the calculations were not fairly
made the Act does not permit of a standard rent being charged where it would mean an increase in the rent. Therefore each case will have to be
considered on its merits. If it is shown that in any particular case the rent fixed is higher than before, the tenant will not be bound to pay it, even
where a patta has been accepted and a muchilika exchanged because the arrangement would be illegal u/s 24.
The finding of the District Judge that the appellant has not regarded himself as being bound even where pattas and muchilikas have been
exchanged also cannot be accepted. His finding here was based on his view of the evidence in two suits only. In each case the suit was for the war
am because the paltas and muchilikas had been lost. There is no justification whatever for the District Judge''s opinion that the appellant has resiled
from agreements made by him or on his behalf.
Turning now to the question whether Section 187(1)(e) renders an agreement to pay rent in money instead of in kind unlawful it is to be
observed that this Court has recognized the right of the landholder and the tenant to agree to the permanent commutation of a grain rent into a
money rent. In P. Varada Reddi and Others Vs. Srinivasa Mudaliar, , it was held that a landholder was entitled to revert to the waram system
unless the tenants established that it had been superseded permanently as the result of a contract, express or implied, for the payment of rent in
money. Similar decisions were given in Ayyamperumal Odaiyan v. S.R.M.A.R. Ramaswami (1915) 29 M.L.J. 362, and in Muthiah Chettiar v.
Periyan Kone (1919) 11 L.W. 311. In none of these cases, however, was the question of the effect of Section 187(1)(e) considered. As I have
pointed out, Section 40 gives the right to the landholder or the ryot to apply to the Collector to have rent payable in kind commuted to a money
rent. Mr. Sitarama Rao has conceded that where a permanent arrangement for the payment of rent in money was entered into before the Act a
tenant would not have the right to apply u/s 40, but he says that Section 187(1)(e) prevents him from entering into any such contract after the
passing of the Act. If before the Act a tenant could agree to change the waram for a money rent I fail to see how Section 187(1)(e) alters the
position. Section 187 expressly applies to contracts made before and after the passing of the Act. Therefore, if the section has the effect which the
respondents say it has it would render void any contract of this nature made before the Act came into force, but it is admitted that it does not apply
to contracts entered into before the Act was placed on the statute book. The Act does not prohibit the landholder and the tenant agreeing to
change the basis of the rent provided that it does not lead to an enhancement of the rent, and I consider that Section 187(1)(e) means that where
rent is payable in kind a tenant shall not be bound by a contract which prevents his applying for an order u/s 40. He can agree to pay his rent in
money and if he does so there is no need for an order of commutation. The position contemplated by Section 40 no longer exists. If the money rent
agreed upon turns out to be unfair to the tenant he is not without his remedy. Sections 55 and 57 provide ample safeguards.
The suits out of which the appeals have arisen and are now before us will be remanded to the Revenue Court for reconsideration and decision
in accordance with the following directions:
Rent suits filed by the appellant.
The appellant will, subject to a qualification which follows, be entitled to decrees for rent in those cases in which the tenants have signed
consent statements in the form of Ex. A and to whom pattas have been presented in accordance with such statements. The appellant will also be
entitled to decrees in which pattas and muchilikas have been exchanged and have remained in force. He will not be entitled to decrees in those suits
in which consent statements in the form of Ex. A-1 have been signed unless pattas and muchilikas have been exchanged. But in no case will he be
entitled to a decree where the money rent exceeds the value of the grain rent which applied before the new system was introduced. Where the
appellant cannot claim rent in money he will be entitled to the grain rent provided he amends his plaint.
Suits by tenants for setting aside distraints and proceedings for sales.
The tenants will be entitled to decrees in cases where there were no consent statements signed unless they accepted pattas. In cases where the
consent statement was in the form of Ex. A and pattas were tendered the suits will not lie. Where pattas were accepted the tenants will still be
entitled to succeed if the money rents exceeded the value of the grain rents ruling before the commutation.
These directions will only apply to the suits in which decrees have been passed and are now under appeal. Where no appeal has been filed the
decree of the Revenue Court or of the District Court as the case may be must stand.
The appellant having succeeded in the main he is entitled to his costs, and we fix the advocates'' fee in each case at Rs. 10.
The appellant is entitled to the refund of the court-fee paid on the memoranda of second appeals u/s 13 of the Court-Fees Act.