1. This is a second appeal by the defendant arising out of a suit for declaration of tide and confirmation of possession or in the alternative, recovery of possession over 0.79 acre of land forming the western part of plot 1027 situate in village Kitadih. The facts of the case lie in short compass. The disputed land along with other lands constituted occupancy holding of Bikram and Ganesh Manjhi who were full brothers and was recorded jointly in their names, but with a note of their separate possession over different plots in the Remarks column of me khatian (exhibit 6), since they were separate. Bikram was also the Pradhan (landlord) of the village. On his death, his son Dasmath became the Pradhan. Ganesh owed Rs. 300 to plaintiff 1. He defaulted in re-payment of the loan, but by mutal agreement between them expressed in a registered instrument dated 15-12-44, he was allowed time for payment of the loan by Magh of 1351 fasli. This agreement (exhibit 1) provided that if he failed to pay by the appointed day, he would surrender a portion of the plot in suit to the landlord, that is to say, to his nephew Dasmath, and cause it to be settled with plaintiff 1. Default occurred again, and the loan was not paid off by the appointed day.
2. Pursuant to the agreement he surrendered the disputed land to Dasmath by means of a registered deed of surrender dated 28-3-45 (exhibit 4), and on the same day the landlord in his turn settled the disputed land with plaintiff 1 by a registered patta (exhibit 2). Plaintiff 1 obtained this patta benami in the name of his wife, plaintiff 2. The plaintiffs had to pay a premium of Rs. 400 for this settlement, out of which Rs. 300 was set off towards their debt due from Ganesh, and Rs. 100 was paid to the landlord Dasmath.
3. The plaintiffs alleged that the aforesaid arrangement was effected with the prior consent of the landlord and that the latter had agreed to settle the disputed land with plaintiff 1. The plaintiffs further alleged that they were Put into possession of the land but on 12-8-48 there was interference with their possession by defendant 1 which resulted in a criminal proceeding under section 447, Indian Penal Code. It, however, ended in acquittal of defendant 1.
4. In the criminal proceeding defendant 1 produced a hukumnama showing settlement of the suit land with him by Ganesh on 19 Jeth 1943. The plaintiffs asserted that hukumnama was forged, and the settlement was a sham transaction and defendant 1 was never in possession of the suit land. Defendants 2 and 3 are the sons of defendant 4, the widow of Ganesh Majhi.
5. Defendant 1 alone contested the suit. Defendants 2 and 4 filed a written statement supporting him. His defence in the main was that the plaintiffs had neidier title to nor possession over the disputed land and that he had acquired valid title by virtue of the said settlement.
6. Both the Courts accepted the plaintiffs' version as correct and concurrently held that they had acquired valid title to the disputed land by virtue of the settlement of Dasmath. They were, however, of the opinion that the plaintiffs were not in possession and consequently they gave the plaintiffs a decree for possession of the suit land. Now, the defendants have come up in Second Appeal.
7. The facts appearing from the plaint and the facts found by the Courts below, about which there is now no longer any controversy are as follows. Ganesh Majhi and plaintiff 1 agreed by a registered instrument that in the event of default by Ganesh to repay his loan by Magh of 1351 fasli, he would surrender a portion of the plot in suit to the landlord, his nephew, and further cause it to be settled with plaintiff 1.
8. When the loan was not repaid by the appointed date, Ganesh pursuant to the aforesaid agreement surrendered the land to the landlord by a registered deed of surrender dated 28-3-45 (exhibit 4), and on the same day the landlord settled the same with plaintiff 1 by a registered patta (exhibit 2). This arrangement was effected with prior consent and agreement of the landlord. The premimum fixed for this settlement was Rs. 400 out of which Rs. 300 was set off against the plaintiffs' dues and Rs. 100 was paid to the landlord. Now, the question is whether this arrangement was legal and can be given effect to.
9. Mr. Lalnarain Sinha appearing for the appellant contended that this unusual transaction which purported to have taken place between the outgoing tenant, the landlord, and the incoming tenant was one which was illegal and which was, in effect, in contravention of the provisions of section 46 of the Chota Nagpur Tenancy Act. This section incorporates a statutory prohibition against alienation by raiyat of his occupancy holding except in the manner laid down therein. It provides:
“46(1) No transfer by a raiyat of his right in his holding or any portion thereof:
(a) by mortgage or lease, for any period, expressed or implied, which exceeds or might in any possible event exceed five years, or
(b) by sale, gift or any other contract or agreement, shall be valid to any extent:
10. Mr. Lalnarain Sinha has contended that in essence this was a transfer of the disputed land by Ganesh to the plaintiffs and since direct transfer was forbidden by section 46, they acting in concert with one another resorted to the said device with the set object of circumventing the provisions of this section. His contention is that any agreement or contract by whomsoever or for whatsoever reason brought about should not be countenanced by the Court if it amounts to infraction of the mandatory provision of section 46.
11. Mr. B. Mukharji appearing for the respondents contended that the surrender and the settlement were two independent acts and the surrender was perfectly valid under Section 72 of the Chota Nagpur Tenancy Act and after surrender the landlord was fully competent to settle the land with whomsoever he liked. Under section 72 of the Act, as in force in 1944, it is lawful for a raiyat to surrender his holding to his landlord.
12. After surrender the land becomes bakasht of the landlord, and as provided in sub-s. (4) of section 72 the landlord having received the surrender by his tenant is perfectly at liberty to resettle the holding so surrendered by that tenant with some other person or take the land into cultivation himself. There is no doubt about this right of the tenant. Viewed separately and individually these two steps, namely, surrender by the tenant to the landlord and resettlement by the landlord with another person, are intrinsically perfectly sound.
13. But, in this case on the plaintiffs' own showing they were not independent acts. The entire arrangement consisting of series of acts constituted one whole agreement, and on the plaintiffs' own showing the landlord was also a party to this arrangement. In fact, it was with his prior consent that the entire scheme was designed and agreement reached. Considered separately such a series of transactions may appear perfectly legal, but when taken together they amount to one transaction, the main object of which was to by-pass the statutory provision contained in section 46 of the Act.
14. There is no doubt that the transaction was itself intrinsically invalid and to lend countenance to such a practice would really mean judicial recognition of fraudulent contravention of S. 46. I gravely doubt whether a Court will approve of such a course, though the acts considered separately may have the appearance of legality. There is no direct authority on this point. The case of Moti Chand v. Khwaja Ikram Ullah Khan, 26 Cal LJ 24 : (AIR 1916 PC 59) (A), though not strictly in point throws considerable light on this question.
15. The facts of that case shortly put are as follows: The defendants sold certain zamindari to the plaintiffs and in the sale deed the defendants contracted to relinquish their sir and Khudkasht lands and give possession thereof to the plaintiffs or in default the defendants would be liable to damages. In pursuance of the agreement contained in the sale deed the defendants executed a deed of relinquishment in favour of the plaintiffs of their claim and right in all their sir lands in the mauzas conveyed. They, however, refused to file the deed of relinquishment in the Revenue Court and refused to quit possession of the sir lands of which they continued in possession as ex-proprietary tenants.
16. In respect of that refusal to file the deed of relinquishment or to quit possession of the sir lands, this suit for damages and for breach of the covenant was brought. The question was whether the agreement to relinquish and surrender their sir lands was lawful. The defendants refused to deliver possession of such lands to the plaintiffs who brought the suit to recover damages for breach of the covenant.
17. Sub-section (1) of section 10 of the North Western Provinces Tenancy Act (U.P Act II of 1901) provided that on transfer of the proprietary rights by inter alia sale the ex-proprietor shall become a tenant with a right of occupancy in his sir lands and in the land which he has cultivated continuously for twelve years at the date of the transfer and shall be entitled to hold the same at a rent determined in the manner laid down therein. By sub-s. (4), such a tenant was described as “ex-proprietary tenant.”
18. Section 20 of Act II of 1901 prohibited transfer of the interest of an ex-proprietary tenant in execution of a decree of a Civil or Revenue Court or otherwise than by voluntary transfer between persons in favour of whom as cosharers in the tenancy, such right originally arose, or who have become by succession co-sharers therein. Section 83 of the said Act conferred up on the tenant a right to surrender his holding to the landlord at the end of an agricultural year.
19. Sub-section (3) of section 83 provides that nothing in this section shall affect any arrangement by which a tenant and his landlord may agree to the surrender of the whole or any portion of the holding. On a proper construction of these provisions in the light of the facts found in that case their Lordships of the Privy Council observed as follows:
“Their Lordships cannot regard the agreement for relinquishment by the defendants in the sale deed of 2-5-1903 and the execution by the defendants of the deed of relinquishment of 5-5-1903, as separate and distinct transactions. The execution of the deed of relinquishment on 5-5-1903, was merely a step taken towards giving effect to the agreement for relinquishment which was contained in the sale deed of 2-5-1903, and was not an arrangement between a tenant and his landlord.
20. The relation of landlord and tenant did not exist between the plaintiffs and the defendants at the time when the sale deed of 2-5-1903, was executed. It appears to their Lordships that it cannot be doubted that the policy of Act II of 1901 is to secure and preserve to a proprietor whose proprietary rights in a mahal or in any portion of it are transferred otherwise than by gift or by exchange between cosharers in the mahal a right of occupancy in his sir lands, and in the land which he has cultivated continuously for twelve years at the date of the transfer and that such right of occupancy is by the Act secured and preserved to the proprietor who becomes by a transfer the ex-proprietor, whether he wishes it to be secured and preserved to him or notwithstanding any agreement to the contrary between him and the transferee.
21. The policy of the Act is not to be defeated by any ingenious device, arrangements or agreements between a vendor and a vendee for the relinquishment by the vendor of his ‘sir’ land or land which he has cultivated continuously for twelve years at the date of the transfer for a reduction of purchase money on the vendor's failing or refusing to relinquish such land, or for the vendor being liable to a suit for breach of contract on his failing or refusing to relinquish such lands. All such devices, arrangements and agreements, are in contravention of the policy of the Act and are contrary to law and are illegal and void, and cannot be enforced by the vendee in any civil court or in any court of revenue.”
22. It will be noticed that the policy of the Legislature in enacting section 46 is, more or less, the same namely to secure to the tenants inhabiting the area to which the Chota Nagpur Tenancy Act applies their rights in their occupancy holdings and to protect them from the avaricious money-lenders.
23. Unsophisticated as the people of that area are, but for the legislation, they would have been wiped out by people with superior intellect and bigger purse. Here also, the main object of the arrangement was to effect a transfer of the disputed land to the plaintiffs in satisfaction of their debts, and since this could not have been done directly because of the prohibition contained in S. 46 of the Act they took recourse to this circuitous arrangement. Their object is too patent to be discussed. In my opinion, such a transaction amounts to a clear circumvention of section 46 of the Chota Nagpur Tenancy Act and cannot be legally given effect to.
24. Mr. Mukharji however referred to a decision of this Court in Bario Santhal v. Fakir Santhal, AIR 1924 Pat 793 (2) (B). This case seems to support his contention. Bucknill, J., sitting singly has laid down that it is open to a tenant to surrender his holding to the landlord even for a pecuniary consideration and even where a third party had paid consideration to a tenant as a result of which the tenant had agreed with the landlord to surrender his holding whilst the landlord had agreed to resettle the property with the person who had given the consideration to the outgoing tenant, the arrangement was not illegal since surrender is not a transfer within the meaning of section 46.
25. With great deference to the learned Judge I differ from him. Section 46 prohibits transfer by a raiyat of his right in his holding or any portion thereof not only by a sale or gift but also by means of “any other contract or agreement”. Strictly speaking, surrender is not a transfer within the meaning of section 46. At the same time, the impugned arrangement does not amount to a contract or agreement to transfer the raiyati holding so as to attract the provisions of that section. It is wholly immaterial for the application of this section whether a contract or agreement operated to effect a direct transfer or an indirect transfer through the medium of surrender.
26. Here, on the allegations in the plaint itself the entire arrangement was conceived deliberately to evade the provisions of section 46, and in my considered judgment it was wholly illegal and cannot be upheld.
27. Mr. Mukharji, however, contended that in such plea had been taken in the courts below and the defendants should not be permitted to raise this question in Second Appeal. His contention is that if on the facts found or alleged two points of law arise and if only one of those points was agitated in the Courts below, then, after the first point failed the second point of law cannot be permitted to be raised afresh.
28. He pointed out that in the courts below the surrender was impugned on the ground that it was partial. Now, the question raised is that it amounted to a transfer within the meaning of section 46. He contended that the appellant should not be permitted to take up the alternative stand. I am unable to agree to his contention. In the first place, the Court cannot ignore a dishonest stratagem engineered by all the interested persons to evade a statutory provision by giving it a legal garb.
29. It is the duty of the court to unravel the mask and to expose the illegality of the transaction. If it were not so, the very object of enacting section 46 will be easily frustrated and the legislative policy behind it thwarted to the great detriment of the people of that area. As observed by their Lordships of the Privy Council in Surajmall Nagoremull v. Triton Insurance Co. Ltd., AIR 1925 PC 83 at p. 84 (C):
“No court can enforce as valid, that which competent enactments have declared shall not be valid, nor is obedience to such an enactment a thing from which a court can be dispensed by the consent of the parties, or by a failure to plead or to argue the point at the outset. The enactment is prohibitory. It is not confined to affording a party a protection, of which he may avail himself or not as he pleases”.
30. The question which was raised before the Privy Council was whether an oral contract was valid to create a contract to grant a policy of Sea Insurance and their Lordships applied the provisions of section 7 of the Stamp Act (2 of 1899) though the point had not been taken in the lower courts. Their Lordships permitted the question to be raised because what acts were necessary to create a valid contract was a pure question of law. Secondly, when the question of law arises on the facts alleged by the plaintiff or on the facts found by the Court and no fresh investigation of fact is necessary there is no reason why it should not be permitted to be raised in Second Appeal.
31. In the case of Yeshwant Deorao v. Walchand Ramchand, AIR 1951 SC 16 (D) the appellant urged before the Supreme Court that section 18 of the Limitation Act, applied to the facts and that the right to apply accrued to the appellant when the fraud by the judgment-debtor became known to him in 1945. No reliance was placed on section 18 of the Limitation Act in the court below and no reference to it was made in the grounds of appeal to the Supreme court. It was, however, mentioned for the first time in the appellant's statement of the case. On this part of the argument their Lordships of the Supreme Court observed as follows:
“If the facts proved and found as established are sufficient to make out a case of fraud within the meaning of section 18, this objection may not be serious, as the question of the applicability of the section will be only a question of law and such a question could be raised at any stage of the case and also in the final court of appeal. The following observations of Lord Watson in Connecticut Fire Insurance Co. v. Kavanagh, 1892 AC 473 (E) are relevant.
32. He said: ‘When a question of law is raised for the first time in a court of last resort upon the construction of a document or upon facts either admitted or proved beyond controversy it is not only competent but expedient in the interests of justice to entertain the plea. The expediency of adopting that course may be doubted when the plea cannot be disposed of without deciding nice questions of fact in considering which the court of ultimate review is placed in a much less advantageous position than the courts below’”.
33. This ruling of the Supreme Court affords a sufficient answer to the contention of Mr. Mukharji. It is wholly immaterial whether more than one point of law arose on the same set of facts, nor is there any reasonable basis for Mr. Mukharjee's contention that when two points of law arose and when only one was pressed the other could not be allowed to (be) raised in second Appeal. When questions of law arose on the facts proved or admitted, it is wholly immaterial whether all or any of them was raised in the court below or not. It is always open to the parties to raise a question of law even if it was not raised in the Courts below.
34. In the case of Byomesh Mukharji v. Madhabji Mepa Maru, 20 Pat LT 124 : (AIR 1939 Pat 421) (F) a plea that the suit was barred by time was permitted to be raised in the High court even when the limitation was not pleaded and the point was never taken in the Court below nor any issue was raised on that point, nor any reference to it was to be found in the judgment of the court below. Mr. Mukharji, referred to the decisions of the Privy Council in Manindra Chandra Nandi v. Raja Durga Prashad Singh, AIR 1917 PC 23 (G) and Raghunandan Ram Sahu v. Ramsunder Das, AIR 1931 PC 309 (H) and also to a decision of the Allahabad High Court in Ramkinkar Rai v. Tufani Ahir, AIR 1931 All 35 (1). These cases are distinguishable and have absolutely no application to the facts of the present case. The contention of Mr. Mukharji therefore must be overruled.
35. It was next contended that defendant 1 did not acquire a valid title by virtue of a settlement with him of the suit land by Ganesh and that his possession was that of a trespasser. Both the courts have found that the plaintiffs are out of possession. It is, therefore, wholly immaterial to investigate the nature of possession of defendant 1. He is in possession of the suit land and the plaintiffs cannot recover possession unless they proved their title. This contention is equally without substance. It follows that the plaintiffs were not entitled to a decree in the suit. The appeal is accordingly allowed with costs, the judgments and decrees of the Court below are set aside and the suit is dismissed with costs throughout.
M.K.S
36. Appeal allowed.