Citation Codes

Equivalent Citations

citation codes

Case Number

Second Appeal No. 1224 of 1935

Judges

Harries, J.

Acts

provisions of Section 202, Agra Tenancy Act of 1901,
Section 271, Agra Tenancy Act,
Section 65, Civil P.C.,

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Summary of Opinion — Lala Sunder Lal v. Shyam Lal (Defendant's Second Appeal)

Factual and Procedural Background

The plaintiff, Lala Sunder Lal, sued the defendant, Shyam Lal (the lambardar), for profits for part of the year 1337 Fasli and for 1338 Fasli. The plaintiff alleged he was a co-sharer in the village of Gazipur Bharatpur and that the lambardar had not paid him his share of profits. The defendant denied entitlement to profits for parts of 1337F and 1338F on the ground that the plaintiff was not recorded as a co-sharer for part of that period, and he also contended that crops had been bad and tenants were defaulters so that he had collected as much rent as possible.

Procedurally: the plaintiff had purchased (as an auction-purchaser) the share of an admitted co-sharer on 23 April 1930; the sale was confirmed and mutation in the plaintiff's name was effected on 30 September 1930. The Assistant Collector framed an issue under Section 271, Agra Tenancy Act, and sent it to the civil court. Both the trial Court and the lower appellate Court found for the plaintiff: they held the plaintiff could claim profits for the whole period in question and that the lambardar had been negligent and therefore should account on gross rental. Both Courts allowed an 8% deduction for collection expenses. The defendant appealed to this Court (second appeal) pressing the same contentions as below.

Legal Issues Presented

Whether an auction-purchaser of a share (who bought on 23 April 1930 but whose mutation was effected only on 30 September 1930) is entitled to sue for profits from the date of sale (23 April 1930) or only from the date when his name appears in the revenue papers (30 September 1930), with specific application to profits for parts of 1337F and 1338F.
Whether the lambardar was guilty of negligence so as to require him to account for profits on the basis of gross rental.
Whether the lambardar should be allowed a deduction of 8% (as allowed below) or the customary 10% for collection expenses in calculating mesne profits.
Whether the appellant's new contention — that after 1338F he had ceased to be lambardar and was unable to realise arrears — can be entertained in this second appeal, given that it was raised for the first time in this Court and no findings below exist on it.

Arguments of the Parties

Appellant (Defendant - Shyam Lal)

Denied that the plaintiff could recover profits for any part of 1337F or for the part of 1338F prior to mutation, because the plaintiff was not recorded as a co-sharer during that period and the vendor remained recorded in the revenue papers until 30 September 1930.
Asserted that crops had been bad and tenants were defaulters, so he had collected as much rent as possible and was not negligent; his accounts purportedly showed about 60% collections.
Contended that the lambardar should not have been made to account on gross rental because he allegedly ceased to be lambardar after 1338F and could not realize arrears (this point was raised for the first time in this Court).
Contended that he should have been allowed the customary deduction of 10% for collection expenses rather than the 8% allowed by the lower Courts.

Respondent (Plaintiff - Lala Sunder Lal)

Claimed he was a co-sharer and entitled to profits; as an auction-purchaser he argued his rights vested from the date of sale (23 April 1930) and thus he could claim profits for the period after that date.
Alleged the lambardar had not paid the plaintiff his due and that the lambardar should account on the basis of gross rental because of negligence in collection.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Mohammad Abdul Jalil Khan v. Ubaid Ullah Khan, A.I.R. 1932 All. 169	Holds that an owner dispossessed and not in possession (and whose name is not recorded) cannot maintain a suit for profits against a lambardar until he obtains possession by execution of a civil decree; lambardar's liability relates to those in possession and recorded in the revenue papers.	The Court distinguished that case on the facts: here the plaintiff was not dispossessed by other claimants and was an auction-purchaser whose rights vested on the date of sale; therefore Abdul Jalil Khan did not control the present result.
Hashmat Ali v. Special Manager Mahewa Estate, A.I.R. 1918 Oudh 9	Holds that an auction-purchaser of a share in a village is entitled to claim profits from the date of the sale and not only from the date when mutation is effected in the village papers.	The Court relied on and expressly approved this view to support its conclusion that the plaintiff could sue for profits from the date of purchase (23 April 1930), despite mutation occurring later.
Secretary of State v. Sarojkumar Acharjya, A.I.R. 1935 P.C. 49 (Privy Council)	Affirms that "profit" means the difference between amount realised and expenses incurred, and recognizes 10% as the customary allowance for collection charges in mesne profits; where 10% is customary, a defendant need not adduce evidence to prove that allowance.	The Court invoked this authority to hold that the customary deduction for collection expenses is 10% and that the lower appellate Court should have granted the defendant the 10% allowance instead of 8%.

Court's Reasoning and Analysis

The Court conducted a multi-part legal analysis, applying statute and precedent to the facts before it:

Vesting of rights on sale date: The Court applied Section 65, Civil Procedure Code (quoted in the opinion) which provides that when immovable property is sold in execution of a decree, the property shall be deemed to have vested in the purchaser from the time when the property is sold. On that statutory basis the Court held that the plaintiff's rights vested on 23 April 1930 (the date of actual purchase), so the plaintiff succeeded to all the rights of the previous co-sharer from that date.
Distinguishing contrary authority: The Court addressed the appellant's reliance on Mohammad Abdul Jalil Khan v. Ubaid Ullah Khan (A.I.R. 1932 All. 169) and explained that that case concerned an owner who had been dispossessed and therefore could not sue for profits until possession was regained by execution. Here no such dispossession occurred; the plaintiff was an auction-purchaser and there were no competing claimants in possession, so Abdul Jalil Khan was inapplicable.
Supporting precedential authority: The Court endorsed Hashmat Ali v. Special Manager Mahewa Estate (A.I.R. 1918 Oudh 9) which holds that auction purchasers may claim profits from the date of sale and not only from mutation; the Court reasoned that a contrary rule would force auction-purchasers to lose an inevitable gap between sale and mutation.
Negligence and standard for collection: The Court examined the lambardar's collection figures and the findings of the lower Courts. It noted that courts of this jurisdiction had held that collections below 75% give rise to a prima facie case of negligence. The patwari's statements showed very low collections (Rs. 171 of Rs. 863 in 1337F; Rs. 257 of Rs. 756 in 1338F), and the lambardar's accounts claiming about 60% collections were not accepted by the lower Courts. Given the insufficient showing by the lambardar of any abnormal circumstances (bad season, tenants' defaults) to explain the low collections, the Court found there was material to support the lower Courts' conclusion of negligence and their decision to require accounting on the basis of gross rental.
Newly raised point on cessation of lambardarship: The appellant's contention that he had ceased to be lambardar after 1338F and was therefore unable to realize arrears was raised for the first time in this Court. The Court observed there were no findings below on this point and that it could not determine that fact without framing issues and calling for additional findings. The Court reiterated the principle that an appellant in a second appeal cannot raise a new point requiring further factual findings for the first time.
Deduction for collection expenses: The Court considered the issue of the percentage allowance for collection expenses. It noted the lower Courts had allowed an 8% deduction; however, authority (Secretary of State v. Sarojkumar Acharjya) and recent practice in this Court recognize 10% as the customary and reasonable allowance in ordinary cases. There was nothing in the record showing that 10% would be excessive, so the Court held the lower appellate Court should have allowed 10% instead of 8%.

Holding and Implications

Core Ruling: The appeal is allowed in part. The decree of the lower appellate Court is modified only to increase the allowance for collection expenses from 8% to 10%; in all other respects the decree below is affirmed.

Direct consequences for the parties:

The plaintiff is entitled to sue for profits from the date of sale (23 April 1930) and therefore recovers profits for 68 days in 1337F (from 23 April 1930) but not for the whole of 1338F prior to mutation; this aspect of the lower Courts' findings was upheld.
The lambardar was properly found to have been negligent on the evidence presented, and therefore must account on the basis of gross rental as held by the lower Courts.
The decree is modified so that the defendant (lambardar) is allowed a 10% deduction for collection expenses (customary allowance) instead of the 8% previously awarded.
The parties will pay and receive costs in this Court and in the Courts below in proportion to their success or failure. Leave to appeal under the Letters Patent is granted.

Broader implications: The opinion applies existing statutory rules (Section 65, Civil P.C.) and precedents (including the Hashmat Ali decision and the Privy Council decision in Sarojkumar Acharjya) to the facts; the judgment does not purport to establish novel law beyond applying those authorities to the circumstances of this case.

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Shyam Lal v. Sundar Lal

1. This is a defendant's appeal against concurrent decrees of the Courts below passed in favour of the plaintiff. The plaintiff, Lala Sunder Lal, brought this suit against the defendant, Shyam Lal, for profits for part of the year 1337F and for 1338 F. It was the plaintiff's case that he was a co-sharer in a village called Gazipur Bharatpur of which the defendant was the lambardar. According to the plaintiff's case there were good, crops during the year in question and the, tenants were not defaulters. It was alleged that the defendant lambardar had not paid to the plaintiff the plaintiff's due to him and he claimed in this suit that he should be paid profits for the years in suit on the basis of gross profits. The defendant contested the suit on a number of grounds. In the first place, he denied that the plaintiff was entitled to profits for any part of the year 1337 Fasli or for part of 1338 Fasli, because during that period he was not recorded as a co-sharer. The defendant has also contended that during the years in question, crops had been bad and that the tenants were wholly unable to pay any rent to the lambardar. In short, it was the lambardar's case that he had realized as much rent as could possibly have been realized from the tenants I of this village during the years in question. Both the Courts below have come to the conclusion that the plaintiff was entitled to sue for profits for the whole of the period in question, though he was not recorded as a co-sharer for a part of such period. Both the Courts have also held that the defendant lambardar was guilty of negligence and that therefore he must account for profits upon the basis of gross rental.

2. Both the Courts allowed the lambardar a deduction of 8 per cent, only in respect of collection expenses. Against the decree of the lower appellate Court confirming the decree of the Court of first instance the defendant has preferred this second, appeal and has urged before me the same contentions as were urged before the Courts below. In the first place, it has been contended that the plaintiff could not possibly recover profits for any portion of the year 1337 Fasli or for a part of the year 1338 Fasli. The plaintiff was an auction-purchaser who purchased the share of an admitted co-sharer in this village on 23rd April 1930. The sale was duly confirmed and mutation was made in the name of the plaintiff-purchaser on 30th September 1930. It is the defendant's case that the plaintiff could not recover any profits for the period between 23rd April 1930 and 30th September 1930 during which he was not recorded as a co-sharer but on the contrary his vendor was so recorded. The 1337 Fasli year ended on 30th June 1930 and if the defendant's contention be correct, then the plaintiff could not recover any profits for the year 1337 Fasli. Further, if the defendant's view be correct, he could not recover any profits for 1338 Fasli for the period 1st July 1930 to 30th September 1930. It is conceded that after 30th September 1930 the plaintiff was entitled to sue for profits.

3. This denial of the plaintiff's right to sue for profits for 1337 Fasli and part of 1338 Fasli was raised in the Court of the Assistant Collector and he in accordance with Section 271, Agra Tenancy Act, framed an issue and sent the same to the civil Court for determination. The civil Court held that the plaintiff was entitled to sue for profits for 1337 F and 1338 F and the revenue Court accepted this finding as it was bound to do. On appeal, the learned District Judge also held that the plaintiff was entitled to sue for profits from the date of the sale and therefore could claim profits for 1337 P and the whole of 1338 F. It has been urged before me that the view taken by the lower appellate Court cannot be sustained, and reliance has been placed upon the case in Mohammad Abdul Jalil Khan v. Ubaid Ullah Khan A.I.R. 1932 1932 All. 169. In that case it was held that no suit for profits against a lambardar lay at the instance of an owner who had been dispossessed by other people whose names were recorded in the revenue papers. Such owner was bound to obtain possession through the civil Court against the trespassers before he could maintain a suit for profits and the lambardar was bound only to pay him profits from the date when he obtained possession in execution of a civil Court decree, as the lambardar's liability to pay profits was to the persons who were in possession and whose names were recorded in the revenue papers. In my judgment, the present case is clearly distinguishable from the case of Abdul Jalil Khan v. Ubaid Ullah Khan A.I.R. 1932 All. 169 to which I have referred. In the present case there is no question of the plaintiff having been dispossessed by any one and no other person has made a claim to the profits. The present plaintiff is an auction-purchaser and his rights are governed by Section 65, Civil P.C., which provides:

65. Where immoveable property is sold in execution of a decree and such sale has become absolute, the property shall be deemed to have vested in the purchaser from the time when the property is sold and not from the time when the sale becomes absolute.

4. This sale having been completed, the property vested in the purchaser from the date of the sale, namely 23rd April 1930. Having regard to the terms of this section, I am bound to hold that all the rights of the previous co-sharer vested in the present plaintiff from 23rd April 1930, the date of the actual purchase and sale. In those circumstances it would be somewhat hard on the plaintiff if he could not recover profits of his share from that date. However, it has been urged that as the vendee's name remained in the revenue papers until 30th September 1930, the lambardar was bound to pay him the profits, but with that view I do not agree. If the whole of the previous owner's rights in the property had vested in the plaintiff on 23rd April 1930, then it was the plaintiff and the plaintiff only who could recover these profits. Once the previous owner had been divested of his interest in the property he had no right whatsoever to any profits. Under the old Tenancy Act where a person was recorded as a co-sharer, the revenue Court was bound to presume that he had a right to claim profits and the decree had to follow automatically, but that is no longer so, as the provisions of Section 202, Agra Tenancy Act of 1901, have been repealed and there is no similar provision in the present Act of 1926. In my view the plaintiff as the purchaser of a share in this property was entitled to sue for profits from the date of the sale, because on that date the rights of the previous owner were vested in the plaintiff and the previous owner was divested of all his rights. In my judgment the learned civil Judge who decided this issue came to a right conclusion and that being so, the finding of the lower appellate Court upon this aspect of the case cannot be disturbed.

5. The point which I am called upon to decide arose in Hashmat Ali v. Special Manager Mahewa Estate A.I.R. 1918 Oudh 9 where it was held by the learned Judicial Commissioner of Oudh that an auction purchase of a share in a village is entitled to claim profits from the date of the sale and not only from the date when mutation is effected in his name in the village papers. If this view is not the true one, an auction-purchaser of a share in zamindari property must always lose a portion of the profits. It would be impossible for an auction-purchaser to obtain mutation of names on the date upon which he purchased property at an auction, and that being so, there would inevitably be a period of time between the date of the sale and the date of mutation. Unless Section 65, Civil P.C., gives the auction purchaser a right to sue for profits from the date of the sale, such auction purchaser must inevitably lose his profits for a period of time after his purchase. In my judgment that would be an intolerable position and I find myself in entire agreement with the view taken by the Court of the Judicial Commissioner of Oudh in the case which I have cited. In my view an auction-purchaser is entitled to sue for profits from the date of the purchase, though his name is not recorded in the revenue papers until some later date. That being so, I hold that the plaintiff in this case was entitled to sue for profits from 23rd April 1930, that is, he was entitled to profits from 68 days in 1337F. and not for the whole of 1338F.

6. It has been further contended before me on behalf of the appellant that the lower Courts were wrong in coming to the conclusion that the lambardar had been guilty of negligence. The lower appellate Court points out that even if the lambardar's accounts be accepted, they only show collections amounting to 60 per cent. However, both the Courts below were not satisfied that these accounts were accurate. It has been held in this Court that where the collections are below 75 per cent., there is a prima facie case of negligence, and it might well be said in this case that the onus was upon the lambardar to show that he had not been negligent as on his own showing he had collected considerably less than 75 per cent, of the rent. According to the statements prepared by the patwari, the collections were extremely low, namely Rs. 171 out of Rs. 863 for the year 1337F. and Rs. 257 out of Rs. 756 for the year 1338F. It is true that the defendant lambardar challenged the accuracy of those figures and alleged about 60 per cent, collections, but as I have stated, his accounts were not accepted by the Court below. It is clear that the collections by the lambardar certainly fell far short of what would be expected in an ordinary year and it was for him to show that there was something abnormal during the period in question. The lower Courts have mot accepted his case that tenants were defaulters and that this was a bad season. Having regard to the circumstances of this case, I am unable to hold that there was no material before the lower Court upon which it could properly come to the conclusion that the lambardar had been negligent. That being so, the lower appellate Court was entitled to hold that the defendant should account on the basis of gross rental.

7. It has further been contended before me that the lambardar should not have been made to account on the basis of gross rental because after the year 1338F. he had ceased to be a lambardar and was unable to realise any arrears. I may observe that this point is taken in this Court for the first time and there is no finding of the Court below upon this aspect of the case. As the matter stands, it is quite impossible for me to hold that he has ceased to be a lambardar, and before I could deal with this question I should have to frame issues and direct the lower appellate Court to return findings upon them. It has been held time and again in this Court that it is not open for an appellant in second appeal to take a new point which requires further findings of fact before such point can be deter, mined. If I could determine this question upon the materials before me, I would have done so, but having regard to the fact that it is impossible for me to decide this question without calling for further findings of fact, I hold that this new point cannot be taken by the appellant at this stage.

8. It was further contended by the appellant that in any event he should have been allowed not 8 per cent, for collection expenses, but the customary rate of tenancy. There can be no question that the customary rate is 10 per cent, and this has been approved of by their Lordships of the Privy Council in Secretary of State v. Sarojkumar Acharjya A.I.R. 1935 P.C. 49 where it was held that profit always means the difference between the amount realised ,and the expenses incurred in realising it and 10 per cent, on account of collection charges being the customary allowance for mesne profits, it is unnecessary for a defendant to adduce any evidence on this subject. Apart from this case it has been held frequently in this Court of recent years that 10 per cent, is a reasonable allowance for collection expenses in ordinary cases. There was nothing to show in this case that 10 per cent, was too much and in my view the lower appellate Court should have granted the defendant the customary allowance of 10 per cent. No other point has been taken by the defendant in this second appeal. For the reasons which I have given this appeal must be allowed in part and the decree modified to this extent : that the defendant is allowed 10 per cent, for collection expenses instead of 8 per cent, given to him by the lower appellate Court. In all other respects the decree is to remain unaffected. The parties will pay and receive costs, in this Court and in the Courts below in proportion to their success or failure. Leave to appeal under the Letters Patent is granted.

Shyam Lal v. Sundar Lal

Summary of Opinion — Lala Sunder Lal v. Shyam Lal (Defendant's Second Appeal)

Factual and Procedural Background

Legal Issues Presented

Arguments of the Parties

Appellant (Defendant - Shyam Lal)

Respondent (Plaintiff - Lala Sunder Lal)

Table of Precedents Cited

Court's Reasoning and Analysis

Holding and Implications

Shyam Lal v. Sundar Lal

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