Secretary of State vs Sarat Chandra Sen Gupta

Wort, J.—This appeal relates to a plot of building land in Daltonganj held by the defendant from the plaintiff at a rent of Rs. 26-2. The Judge in the Court below has granted a decree to the plaintiff for ejectment, but has proceeded to order that the defendant should execute a fresh lease at an annual rent of Rs. 38-2-6 within two months in default of which the plaintiff was to have possession. I have already dealt with the question of jurisdiction of the Judge to make a bargain between the parties in First Appeal No. 27 of 1933 Secy. of State v. Rajendra Prasad reported in AIR 1937 Pat 391, and I propose to make no further observation in this case with regard to that matter excepting to repeat that the Judge had no jurisdiction to make such an order. The only question that remains therefore is whether the plaintiff was entitled to eject the defendant.

By way of preliminary objection Mr. Sushil Madhab Mullick, who appears on behalf of the defendant contended that the appeal was incompetent. It is said that it appears from the decision of the Court below that, even succeeding on the question of ejectment the plaintiff was not desirous of ejecting the defendant so long as he paid a fair rent to be fixed by the Court; and it is said that by letter the defendant''s father agreed to execute a lease at the rent so fixed. This is tantamount (so it is contended) to a compromise of the action in which event the appeal does not lie. From a perusal of the judgment, however, it is quite clear that not only the Court but the plaintiff and the defendant were under the impression that the Court had jurisdiction to settle rent for the parties. In this connection it appears that the Judge in trying these cases had in mind Rule 28, Clause (8), of the Bihar & Orissa Government Estates Manual of Instructions to Government Officers, with regard to suits of this kind in which they are ordered, in dealing with khas mahal properties, to claim ejectment, and, in the alternative, the settlement of a fair rent. This is wholly misleading and has misled the Judge in the Court below as he appears to be of the opinion that this is binding on the Court. The parties and the Court, as I have said, were under the impression that the Court had jurisdiction and the matter is referred to in these terms:

It has been suggested by both the parties that a fair rent may be fixed by the Court and an opportunity be given to the defendant by way of equitable relief against forfeiture to take a lease from the plaintiff with a stipulation to pay the said rent.

There appears to be a confusion of thought in this matter. There was no question here of forfeiting a lease; it was a question of the term having expired by a notice to quit in which event there could be no question of a relief against forfeiture. It is under this misapprehension that the Court has acted, and in my view it was not a question of the compromise of the action but the exercise of an assumed jurisdiction. In my judgment there is no substance in the contention that the appeal is not competent as the plaintiff is entitled to appeal if in fact the Judge purported to exercise jurisdiction in giving the alternative form of relief.

The facts of the case were these. By an order of 9th December 1901, the Deputy Commissioner gave possession to the defendant of a block of land known as plots 608 and 601 at a rent to be fixed. In addition the defendant purchased plot 590 adjoining the land under settlement by Government. This was amalgamated with the other plots, and a rent of Rs. 26-2-0 was fixed by Government for the whole. The purchase to which I have made reference was from one Lal Mohammad Khan in the year 1902. A notice was issued on the defendant in 1926 to execute a lease by 20th January 1927 at an enhanced rate. This the defendant failed to do. Thereupon Government served a notice dated September 1928, calling upon the defendant to quit on 31st March of the following year.

An issue was raised as to whether Section 139, Chota Nagpur Tenancy Act applied. The defendant contended that as a portion of the disputed land was occupancy land, the Court of the Deputy Commissioner, and not the civil Court, had jurisdiction in ''this case and that, in addition, the defendant had occupancy rights by reason of Section 78 of the Act. The Judge in the Court below has held against this contention and -also held that the Crown Grants Act (15 of 1895) did not apply, and has held that the Transfer of Property Act applied to the case. The Judge in this case has also held contrary to the defendant''s contention that the Deputy Commissioner settling this land did not induce the defendant to ''take possession on the footing that the lease was a permanent one. The argument of the defendant in the Court below was put in a somewhat different form, namely, that the Deputy Commissioner induced the defendant to take settlement of the land and never suggested that the settlement should be a temporary one. The Judge has come to a conclusion against the defendant on the footing that there was nothing to show that the Deputy ''Commissioner had given the defendant to understand that the lease was permanent. He has rightly held in my judgment that as the origin of the tenancy was known there could be no inference that there was a permanent tenancy. The position of the defendant is that as no term was fixed, the defendant obtained such a tenancy as regards its term as the law implied in the case.

Reliance, both in the Court below and in this Court, was placed also upon the rule of equitable estoppel and the case in AIR 1925 146 (Privy Council) was quoted. The facts of that case are entirely different. In that case ''there was a definite representation that the lease which had been obtained by Forbes was of a permanent character and it was in those circumstances that their Lordships of the Judicial Committee of the Privy Council held that the landlord was estopped. In this case apart from the fact that the defendant was allowed to use the land for the purpose for which it was let out, there could be no suggestion that the necessary facts in order to establish an estoppel were proved, and, as I have already pointed out, there was no room for any inference contrary to what we know the origin to have been. Nor was it established as the defendant contended that there was some local usage or custom by which persons acquiring homestead land had a permanent right therein. The defendant further relied upon the fact that he obtained a loan from Government to the extent of Rs. 2,000 for the purpose of building on this land. That in itself adds nothing to the terms of the original grant, that the land was for the purpose of building, and from that fact it cannot be held to be established that there was any representation by Government in granting the loan as a result of which the defendant''s conduct was influenced. It appears that the defendant in the Court below relied upon the decision in AIR 1931 79 (Privy Council) . But this case is against the defendant. That was a case in which the tenant went into possession of the land on the understanding that he was to have a permanent lease. He went into possession in 1913 and expended large sums of money on the land by way of building. Ultimately the plaintiff brought an action based on a notice to quit, alleging that the defendant to be a mere monthly tenant. The appellate Court relying on Gregory v. Mighell (1811) 18 Ves 328 and Kamsden v. Dyson (1866) 1 HL 129 held that the landlord was estopped. The High Court also relied upon the decision in Walsh v. Lonsdale (1883) 21 Ch D 9 in holding that it was part performance of an oral agreement.

Their Lordships of the Judicial Committee of the Privy Council held both these pleas to be unfounded and doubted whether the English equitable doctrine of part performance affecting the provision of an English statute could by analogy be applied to such a statute as the Transfer of Property Act. I mention that part of their decision by reason of the argument which has been advanced that the decision in Ariff''s case AIR 1931 79 (Privy Council) depended upon those considerations and not so much on the question of the application of the doctrine of equitable estoppel. But their Lordships'' decision was clearly in two parts: first as regards the doctrine of part performance, and secondly the question of equitable estoppel. As regards the latter, their Lordships made this observation:

This is no case of money being expended by the respondent in any mistaken belief as to his legal lights, or of the appellant knowing of the existence of any such mistaken belief, or encouraging the respondent by abstaining from asserting a right inconsistent with the acts of the respondent (landlord).

Their Lordships then proceeded to note the facts of the case and observed that having gone into possession upon a verbal agreement for the grant of a perpetual lease he could have sued for, and obtained, a registered instrument to enjoy the property in perpetuity. But the time for such an action had elapsed. In this case also it cannot be said that the defendant was under any mistaken belief as to his legal rights. He had a lease apparently for no fixed term and a lease for the purposes of building. The mere fact that the land was to be used by agreement between the parties for the purpose of building does not in itself give any permanent right in the land; and as I have said there could be no suggestion that there is any representation either by word or by act which would have led the defendant to have supposed his rights to be any other than those stated in the agreement. In those circumstances we have to see what was the position in law of the defendant. The case is not governed by the Transfer of Property Act as the Grown Grants Act of 1895 applies, see Secy. of State v. Nistarini Anne Mitter AIR 1927 Pat 819 otherwise by Section 107, the interest which the ''tenant would have would be a tenancy from month to month. We must in those circumstances apply the rule of the Common law as the rule of justice, equity and good conscience. The position of the defendant therefore would be that of a tenant from year to year.

The other contention of the defendant was that he was governed by the Chota Nagpur Tenancy Act and had occupancy rights. In this case the defendant raised this point in his written statement and an issue was framed in these terms: "Has the civil Court jurisdiction and is the suit barred by Section 139-A, Chota Nagpur Tenancy Act?" That is a broad issue, the question arising thereunder being whether the Court of the Subordinate Judge or the Court of the Deputy Commissioner had jurisdiction. The contention of the defendant was that Lal Mohammad Khan, from whom the defendant purchased a part of the, land on 23rd February 1902 was recorded as a non-occupancy raiyat having been in possession as such for six years, that the defendant having been in possession for more than six years, occupancy rights had accrued. That however in my judgment does not lead to the conclusion that the defendant acquired occupancy rights on that part of the land which was admittedly let to the defendant for the purposes of building. As we have seen the two blocks of land were amalgamated after the purchase in February of 1902 and settled with the defendant on a rent of Rs. 26.2-0. There is abundant authority for the proposition that the tenancy Acts apply to agricultural lands and not to non-agricultural lands: see the cases in Bishnath Singh v. Mt. Bibi Ayeeba AIR 1980 Pat 224 and Purusottam Mahesri v. Panchanan Mazumdar AIR 1926 Cal 878. In those circumstances the tenancy being from year to year, the question was whether the notice expiring on 31st March 1929 was a valid notice. It does not clearly appear at what time the rent, Rs. 26-2-0, was fixed for the amalgamated holding. The fixing of the rent and the agreement by the defendant to pay that rent implied from the fact that he did pay it, would constitute a new letting. Possibly it was in those circumstances that the defendant''s contention in the Court below as to the validity of the notice was confined to the question whether the notice was issued by the proper authority, and no question arose as to the expiration of the notice on 31st March 1929 as a notice expiring on the anniversary of the commencement of a tenancy. As no question arises in this Court as to the validity by reason of the authority issuing it, the notice must be held to be valid. For the reasons which I have already stated: the decision of the learned Judge in the Court below assessing a rent of Rs. 38-2-6 must be set aside and the parties must be left to make their own bargain in the matter. In those circumstances the judgment of the Court below granting the plaintiff''s prayer for ejectment will stand. The appeal has in substance succeeded, but there will be no costs.

Dhavle, J.

This appeal arises out of a suit for ejectment from land let for house building and gardening'' in the town of Daltonganj in the Palamau Government Khas Mahal. The plaintiff''s case was that the land was leased to the defendant for non-agricultural purposes, without any registered instrument, and carried an annual rent of Rs. 26-2-0 payable by the official year ending the 31st of March. In 1924 the plaintiff had a survey made of the town and fixed certain new rates for various classes of land in view of the growth of trade and rise in local values. A new lease with the relevant rate was offered to the defendant. But as the defendant did not accept the offer he was served with a notice to quit, and on his failure to comply, this suit was filed for his ejectment, with a prayer in the alternative that a rent of Rs. 83-11-0 per year for 2.44 acres in accordance with the rates fixed by the plaintiff be declared payable by the defendant "for a period of 30 years or till next settlement." The defendant denied that he was a tenant from year to year as alleged by the plaintiff, and claimed a permanent tenancy on various grounds. He also assailed the new rates of rent fixed by the plaintiff, and denied the jurisdiction of the civil Court to try the suit on the ground that the land was homestead land governed by the Chota Nagpur Tenancy Act. There were other defences taken, which it is not material to state. The lower Court found that the tenancy was governed by the Transfer of Property Act and that the civil Court had jurisdiction to try the suit. It held that the defendant had not acquired any permanent right to the land, and that the plaintiff was, therefore, entitled to eject him. As regards the plaintiff''s alternative prayer for enhancement the learned Subordinate Judge said:

It has been suggested by both parties that a fair rent may be fixed by the Court, and an opportunity be given to the defendant by way of equitable relief against forfeiture to take a lease from the plaintiff with a stipulation to pay the said rent. The learned pleader for the plaintiff has conceded that the plaintiff has no intention to turn, out tenants who would be ready and willing to pay the rent to be fixed by the Court. I therefore deem it necessary to assess rent in respect of the disputed holding on the materials placed by the parties in this suit.

The plaintiff had fixed a rate of Rs. 60 an acre for 35 acre of land and of Rs. 30 an acre for 2.09 acres of another class of land, and the Subordinate Judge allowed instead a rate of Rs. 25 an acre for the ''35 acre and Rs. 15 an acre for 1''96 acres only, which a Commissioner appointed in the case had found to be in the possession of the defendant. This gave a total rent of Rs. 38-2.6 and the Subordinate Judge decreed that the defendant do take a fresh lease of the disputed land on this rent within two months, with ejectment in default. The plaintiff appeals, and contends that the lower Court has mis appreciated his position and wrongly decreed ejectment only in the event of the defendant failing to take a lease on the rent fixed by the Court. A ground was also taken in the memorandum of appeal that even assuming that the plaintiff''s pleader had conceded the plaintiff''s case on the point of ejectment (i.e. ejectment by reason of the termination of the tenancy), the lower Court should have ordered the defendant to pay at the rate of Rs. 83-11-0 a year for a period of 30 years or till next settlement. Mr. Sushil Madhab Mullick for the defendant-respondent urged at the outset that the plaintiff is not entitled in appeal to ask that the lower Court should have passed an unconditional decree for ejectment since this point was given up below. He argued that the relief asked for, in the plaint consisted of two independent alternatives, viz. (1) ejectment and (2) rent of Rs. 83-11-0 per annum. But it is obvious that on the plaint as framed no question of fixing a new rent could arise unless it was held that the plaintiff was not entitled to ejectment as on the termination of a terminable tenancy. The Government pleader says that even now, as in the similar case in Secy. of State v. Nistarini Anne Mitter AIR 1927 Pat 819, the plaintiff has no intention of turning out the defendant if he should agree to take a fresh lease upon the terms proposed by the appellant and he points out how this is very different from saying that the plaintiff gives up the claim to ejectment and leaves the rent to be fixed by the Court.

We were informed, after enquiry, that there was no talk below between the parties of a compromise at all. It is also clear that the plaintiff''s pleader below could not really have given up the claim to ejectment, since the lower Court has recorded an elaborate finding on the non-permanent character of the defendant''s tenancy and his consequent liability to ejectment, which would have been quite unnecessary if the point had been given up. The learned Subordinate Judge must therefore have misunderstood the plaintiff''s position, and we overruled the contention advanced by Mr. Mullick by way of preliminary objection. Mr. Mullick also said that the respondent had put in no cross-objection on the question of ejectment because this ''claim had been given up by the plaintiff in the lower Court. This however plainly confuses a cross-objection with an appeal. The misunderstanding such as it was, and the decree passed by the lower Court, may have prevented the respondent from appealing as regards ejectment irrespective of a fresh agreement, but on the appellant''s memorandum of appeal, it was clearly open to the respondent, if he so chose, to take up that point by way of cross-objection.

This, however, was not the only confusion in the case. As was observed by Dawson-Miller, C.J. in Secy. of State v. Nistarini Anne Mitter AIR 1927 Pat 819, already referred to, the Court had no power to impose upon the parties a bargain not of their own making in a suit relating to land which was not agricultural land governed by (the Bengal or) the Chota Nagpur Tenancy Act. In the present case both parties apparently proceeded on the footing that the Court below had jurisdiction to fix a fair and equitable rent by way of relief against forfeiture (as if there could be any "forfeiture" to speak of when a terminable tenancy is put an end to on proper notice). Mr. Mullick did not, however, argue that the lower Court had any jurisdiction to fix a rent, and the Government pleader conceded that there was no such jurisdiction, even though the plaint itself contained the alternative prayer for what the rule in accordance with which the suit was brought, Rule 28(8) of the Government Estates Manual, calls enhancement of the old rent. It cannot be seriously contended that the misunderstanding of the parties and the lower Court about jurisdiction to enhance the rent or assess a new rent by way of relief against the supposed forfeiture sufficed to turn the Court into an arbitrator. If it did, no appeal would lie at all. In these circumstances we held that there was no ''question of enhancement of assessment of a fair rent for our decision, and as the finding as regards the permanency of the tenancy was against the respondent, we allowed Mr. Mullick to argue the point, even though he had neither appealed nor put in a cross-objection.

The facts upon which this point turns are (1) that the respondent, who was then posted at Daltonganj as the senior Deputy Magistrate, received in December 1901 a notice or parwana from the Deputy Commissioner of the district, stating that certain plots had been settled with him since 1901-1902, that he may build a house thereon and that the rent of the land shall be fixed after the measurement of the land; (2) that in February 1902 the defendant purchased an adjoining plot from one Lal Muhammad Khan, who had been recorded in Bunder''s settlement as a "non-occupancy (raiyat) for six years"; (3) that the defendant proceeded to erect a pucca building on the land including a portion of the plot purchased from Lal Muhammad, and (i) that in July 1902 he mortgaged the land together with the structures then being erected thereon to Government as security for a house-building advance of Rs. 2,000 which was to be repaid by the deduction of monthly instalments from his salary. It does not appear when exactly the land was measured, but it was measured as one holding and a sum of Rupees 26.2-0 a year was fixed as rent. No document, such as a patta or kabuliat, was however executed throwing any light on the duration of the term intended. The settlement was for non-agricultural purposes, and there is no dispute before us that the lower Court erroneously overruled the defence contention that the case was governed not by the Transfer of Property Act but by the Crown Grants Act (Act 15 of 1895). That point is concluded by the express ruling in Nistarini''s case Secy. of State v. Nistarini Anne Mitter AIR 1927 Pat 819 already referred to. It was stated in para. 12 of the written statement of the defendant that settlements of land in Daltonganj made by the plaintiff for house building are by local usage permanent, heritable and transferable.

The learned Subordinate Judge held that this plea was without any foundation, and Mr. Mullick has not been able to assail this finding. But Mr. Mullick has urged that the consent of the landlord to the erection of the building (which was the very purpose of the settlement) should be taken to supply the absence of any term agreed to between the parties. Mr. Mullick did not advance this contention as a matter of law but urged that it was the proper inference of fact in the circumstances of the case, and in support of such an inference he relied on Duraisawmy Chettiar v. Kuppusawmi Padayachi (1909) 1 IC 802 Promada Nath Roy v. Srigobind Chowdhry (1905) 32 Cal 618. Forbes v. Hanuman Bhagat, AIR 1924 Pat 88 and Ray Monmotha Nath Mitter Vs. Rajeswar Rai Chowdhury and Another, . The learned Subordinate Judge referred to Abdul Hakim Khan Chaudhuri Vs. Elahi Baksha Sha and Others, for the "principles of law governing a case like the present one," though in an earlier part of his judgment he had expressly adverted to the fact that in the present case the origin of the tenancy of the defendant is known. But whether the origin be known or unknown, the question whether a tenancy is permanent or precarious is (except where nothing more is required than the construction of a document) "a legal inference from facts and not itself a question of fact," an observation of the Judicial Committee in AIR 1927 102 (Privy Council) which was considered by Rankin, C.J. in Kamal Kumar Datta and Another Vs. Nandalal Dubey, . The learned Chief Justice pointed out that now

we cannot confine ourselves to saying (as was said by Garth, C.J. in Gungadhur Shikdar v. Ayimuddin Shah (1882) 8 Cal 960) that ''under these circumstances we think that the Courts below were at liberty to presume, if they thought fit, that the grant itself was of a permanent character.''

The question in such cases is whether the legal inference from the facts is that the tenancy is permanent or precarious, the burden of proof being on the tenant.

From this point of view the cases relied on by Mr.Mullick must be treated as decided on their own particular facts. It cannot be said as a matter of law that a tenancy must be permanent because it was created for building purposes. This is obvious from the fact that non-permanent building leases are not uncommon. In Ismail Khan Mohamed v. Jaigun Bibi (1900) 27 Cal 570 a case where the kabuliat specified no term, Banerjee, J. found that:

Upon the authorities a permanent tenancy may ... be inferred from the length of possession by the tenant and his predecessors, from the fact of the tenure having been made the subject of transfer to the knowledge of the landlord, and from the fact of pucca buildings having been erected on the land with the knowledge of the landlord.

This was referred to in Promada Nath Roy v. Srigobind Chowdhry (1905) 32 Cal 618 one of the cases cited by Mr. Mullick which in its turn was followed by Jwala Prasad, J. in Forbes v. Hanuman Bhagat AIR 1924 Pat 88 , a case of a lease for the purpose of gola business and building houses with a provision for building pucca structures with the permission of the landlord. The learned Judge held that "the inference is not unreasonable that the lease in question was meant to be of a permanent character and not from year to year;" but the decision of the case was apparently rested on the "firmer ground" of an estoppel which was read into the permission granted by the landlord. It will be seen from Rankin, C, J.''s observations in Kamal Kumar''s case Kamal Kumar Datta and Another Vs. Nandalal Dubey, that the question now would be not whether such an inference is "not unreasonable" but whether it is a necessary inference. Even if the contrary were, however, to be held, the defendant in this case was not a stranger to the landlord, As the senior Deputy Magistrate, he could hardly have been altogether ignorant of the Government Estates Manual when he applied for a lease of Khas Mahal land. As the learned Subordinate Judge has pointed out, the Deputy Commissioner had no authority to grant a permanent lease, and it is impossible to accept the suggestion of the defendant that he was given to understand that the lease would be permanent, The land was let to him without a term, and though this was for building purposes an inference of permanency is contra-indicated by the known circumstance of the transaction. Failing an inference of permanency Mr.Mullick has urged the plea of equitable estoppel. He has referred to & AIR 1925 146 (Privy Council) but that was a case of estoppel founded on a definite representation by the landlord that the tenancy was permanent, Mr. Mullick has asked us to infer a similar representation from the house-building advance made by the plaintiff on the security of the premises, But the advance merely helped the expressly stated purpose of the tenancy, and cannot be taken to point to a permanency in view of the fact that it was to be repaid by deductions from the defendant''s salary in a not very long period familiar to those who have had to work on the Civil Account Code. Mr. Mullick has also referred to Ariff''s case. AIR 1931 79 (Privy Council) But it was pointed out in that very case as regards equitable estoppel that:

If a Court of equity is to enforce a title to land against the person who at law is the, owner thereof the title must nevertheless be based either upon contract, express or implied, or upon some statement of fact grounding an estoppel.

Lord Russell of Killowen again expressed the same view shortly afterwards in Canadian Pacific Ry. Co. v. The King AIR 1982 PC 108 as follows:

Whether there can be any estoppel which is equitable as distinct from legal and whether equitable estoppel is an accurate phrase, their Lordships do not pause to enquire. The foundation upon which reposes the right of equity to intervene is either contract or the existence of some fact which the legal owner is estopped from denying.

The mortgage advance is neither an implied representation founding an estoppel nor a circumstance sufficient to justify the legal inference that the plaintiff had by plain implication contracted that the right of tenancy should be or become a perpetual right of occupation: Beni Ram v. Kundan Lal (1899) 21 All 496. The only other point raised by Mr.Mullick was that the defendant had an occupancy right in the plot purchased by him from Lal Muhammad and partly built over. But no occupancy right had accrued to Lal Muhammad himself by the time of his sale to the defendant, and the plaintiff''s settlement with the defendant was for non-agricultural purposes. The defendant also admits that he did not use the land for agricultural purposes, nor is it pretended that be was a raiyat so as to make Section 78, Chota Nagpur Tenancy Act, applicable to his tenancy of the homestead. His tenancy of the plot was neither agricultural nor such as at any time to support an occupancy right. The suit was therefore not excepted from the cognizance of the civil Court.

The view of the lower Court that the tenancy was not permanent is, accordingly, right. There was a letting without any mention of or agreement about the duration of the term, and this meant a tenancy-at-will, which became converted by payment of rent into a tenancy from year to year. This tenancy has been terminated by a proper notice to quit, and the plaintiff was entitled to ejectment in accordance with the first and second prayers of the plaint. I would allow the appeal and in lieu of the relief given by the lower Court decree the suit as indicated above. As to costs, I would make no order in view of the circumstance that the appellant himself contributed so largely to the confusion regarding ejectment and the jurisdiction of the Court to assess a fair and equitable rent.