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Kameshwar Pandey And Others v. Deolal Barhi And Others
Factual and Procedural Background
These three appeals arise from three rent suits instituted by the same plaintiffs (the appellants here) against different tenant-defendants concerning different holdings. In the courts below the parties proceeded on the admitted premise that the plaintiffs were the tenants of the holdings and the defendants were the under-raiyats. The under-raiyats had been inducted before 1939 and had originally paid rent to the plaintiffs on the bhaoli basis.
In 1939 the defendants filed applications for commutation against the plaintiffs; compromise petitions (Exhibits B series) were filed in those proceedings and, as a result, the holdings were commuted to cash rent (nakdi). The plaintiffs received cash rents from the defendants up to 1361 Fasli. Thereafter the plaintiffs claimed default for the years 1362–1365 Fasli and sued for arrears; the original claim was on the nakdi basis.
The plaintiffs later amended the relief portion of the plaints to add an alternative prayer: if the commutation proceedings were held void, a decree for arrears should be passed on the bhaoli basis. The two principal issues contested in the courts below were (i) whether the plaintiffs were raiyats of tenure-holders and (ii) whether the commutation proceedings were void.
Both courts below held (1) that the plaintiffs are raiyats (not tenure-holders) and (2) that the commutation proceedings were void under Section 40 of the Bihar Tenancy Act. The trial court decreed on the bhaoli basis; the lower appellate court reversed that part and decreed on the cash basis. The plaintiffs appealed to this Court.
Legal Issues Presented
- Whether the plaintiffs are raiyats (under-raiyats) of tenure-holders or are themselves tenure-holders.
- Whether the commutation proceedings (resulting in cash rent) were void in law (the courts below held they were void under Section 40 of the Bihar Tenancy Act).
- Whether the compromise petitions/commutation required registration under Section 17 of the Registration Act (as argued by counsel for the appellants).
- Whether the commutation/contract was without consideration (as argued by counsel for the appellants).
- Whether there was evidence that the commutation agreement was permanent (i.e., for all time) rather than for a limited period (as argued by counsel for the appellants).
Arguments of the Parties
Appellants' Arguments (Mr. Chatterji, for the plaintiffs)
- The contract/document effecting commutation ought to have been registered under Section 17 of the Registration Act; absence of registration renders the contract void.
- The alleged contract of commutation was without consideration.
- There is no evidence that the contract of commutation was permanent (for all time) rather than for a limited period.
Respondents' / Lower Appellate Court's Position
- The lower appellate Court relied on the compromise petitions (Exhibits B series) and the fact that cash rents were accepted by the plaintiffs during 1346–1361 Fasli to conclude the parties had agreed to cash rent (nakdi) rather than bhaoli.
- The lower appellate Court also placed reliance on principles of res judicata and estoppel (though the respondent in this Court did not press these points).
- In the pleadings the plaintiffs had asserted nakdi rent in the body of the plaint and sought a decree on that basis in the relief portion; the defendants' position (as pleaded) admitted that nakdi claim, making the position one of admitted fact rather than a contractual defence.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Hara Prasad Das v. Ram Narain Choudhury, 11 Cal LJ 22 | Authority supporting that a change in the nature of rent (from bhaoli to nakdi) need not be a document creating/assigning/extinguishing rights requiring registration under Section 17. | The Court relied on this decision to hold that the compromise petitions effecting change of rent did not attract Section 17 registration requirements; this precedent supported rejecting the registration argument. |
| Rani Ghuneshwari Kuer v. Sajiwan Prasad Singh, AIR 1945 Pat 67 | Similar authority to the above on the non-application of Section 17 to such changes in rent. | The Court cited and followed this authority as a direct precedent to conclude the compromise petitions did not require registration under Section 17. |
| Rampadarath Singh v. Sohrai Koeri, 4 Pat LJ 667 (AIR 1920 Pat 602) | Authorities suggesting that documents of this nature might fall within registration requirements. | The Court noted these authorities but treated them as less direct; it preferred the Calcutta and Patna decisions cited above and did not follow Rampadarath Singh as overriding authority on the point. |
| Raja Srimathu Muthu Vijia Raghunatha Duraisingan v. Periasami Pillai, AIR 1940 Mad 379 (FB) | Another authority that in some respects suggested registration might be required. | The Court observed that, while these decisions suggest otherwise, they were not as direct as the authorities it preferred; the Court did not rely upon them to invalidate the commutation on registration grounds. |
| Raja Durga Prasad Singh v. Rajendra Narayan Bagchi, 19 Cal LJ 95 (PC) | Authority relied on by appellants as bearing on consideration/validity of agreements. | The Court held this authority did not bear on the facts of the present cases because the defence in the present cases rested on admissions (decrees/rent receipts) rather than on a contractual defence; thus it rejected its applicability here. |
| Bank of Baroda Ltd. v. Punjab National Bank Ltd., AIR 1944 PC 58 | Authority cited on consideration/contractual issues. | The Court determined the authority was not applicable to the present factual situation (which was based on admissions), and therefore it did not sustain the appellants' submission on lack of consideration. |
| Balram v. Naktu, AIR 1928 PC 75 | Another authority on contractual consideration relied on by appellants. | The Court found this precedent inapposite to the facts and did not accept it as supporting the contention that the commutation was void for want of consideration. |
| Mrs. Gladys Coutts v. Dharkhan Singh, AIR 1956 Pat 373 | Procedure where an application to set aside abatement and substitute heirs is made in second appeal; the second appellate Court should set aside the decree passed against a dead person and remand to the court where abatement occurred to decide substitution first. | The Court followed this authority to set aside the decree under appeal in S.A. 185 of 1961 (because the decree had been passed against a deceased defendant) and remanded the case to the Court of appeal to decide the application for substitution of heirs and then dispose of the appeal on merit. |
Court's Reasoning and Analysis
The Court's analysis proceeded in distinct steps:
- Res judicata / estoppel: The Court accepted the respondent's concession that the lower appellate Court's reliance on res judicata and estoppel was not tenable because the commutation proceedings had been held void by both courts below. A void proceeding produces no binding decision; therefore those decisions cannot operate as res judicata nor form a basis for estoppel. This disposed of the lower appellate Court's second ground for decreeing on a cash basis.
- Nature of the defence and admissions in pleadings: The Court observed that the defendants' defence in the rent suits was not based upon enforcing a contractual commutation; rather the body of the plaints expressly averred that the rent payable was nakdi (cash) and the reliefs sought a nakdi decree (with an alternative bhaoli prayer). Because the nakdi claim was pleaded and, as pleaded, admitted, the decision in favour of nakdi rested on that admission and the relief sought rather than on a separate enforceable contract.
- Registration argument (Section 17): The Court examined whether the change in the nature of rent (from bhaoli to nakdi) as recorded in the compromise petitions constituted a document that, by its operation, created/assigned/limited/extinguished rights in immovable property such that registration under clauses (b) or (c) of Section 17 of the Registration Act would be required. The Court concluded negatively, relying on Hara Prasad Das and Rani Ghuneshwari Kuer, and held that the compromise petitions did not require registration and therefore the registration objection failed on these facts.
- Consideration argument: The Court explained that the present defence was grounded on admissions (as evidenced by decrees and rent receipts) and not on a contractual defence; admissions do not require consideration. The authorities cited by appellants on consideration were held not to apply to the factual matrix of these cases. Hence the contention that the commutation was void for want of consideration failed.
- Permanence of the agreement: On the question whether the commutation was permanent, the Court applied Section 51 of the Bihar Tenancy Act, which creates a presumption that, unless shown otherwise, a tenant holds at the same rent and under the same conditions as in the last preceding agricultural year. Given the uncontested fact that cash rent had been received continuously from 1346 to 1361 Fasli, the Court held that those payments were sufficient to show the change to nakdi was operative for subsequent periods unless the plaintiffs proved the payments were not intended to operate for subsequent periods. The appellants did not do so; accordingly this ground also failed.
- Conclusion on the three grounds advanced by appellants: Because each of the three points raised (registration, consideration, permanence) either did not arise on the pleadings or were inapplicable on the facts, the Court held none of them sustainable in law. Consequently, the Court concluded that the lower appellate Court's finding in favour of nakdi rent (on the basis of the pleaded admissions and historical acceptance of nakdi rent) was supportable in relation to the appeals decided on the merits.
- Procedural complication in S.A. 185 of 1961: The Court found that in S.A. 185 defendant No. 1 (Shri Gope) had died before the delivery of judgment in the lower appellate Court, and an application for substitution of heirs was filed there but left undisposed. As a result the appeal was decreed against a dead person. Following the practice established in Mrs. Gladys Coutts v. Dharkhan Singh, the Court set aside the decree in that appeal and remanded the matter to the Court of appeal so that the application to set aside abatement and substitute heirs could be dealt with and thereafter the appeal decided on merit.
Holding and Implications
Core Ruling:
S.A. 183 of 1961 and S.A. 184 of 1961 are dismissed; S.A. 185 of 1961 is set aside and remanded to the Court of appeal to decide the application for setting aside abatement and substituting the heirs of the deceased defendant and thereafter to dispose of the appeal on merit.
Implications and immediate effects:
- The appellants' challenges to the validity of the commutation on the grounds of non-registration, want of consideration, and lack of permanence were rejected on the facts and pleadings before the Court.
- For S.A. 183 and S.A. 184, the effect is dismissal of the appeals (i.e., the lower appellate Court's decree in favour of nakdi rent stands as to those matters).
- For S.A. 185, because a decree was rendered against a deceased defendant and substitution was not finally dealt with below, the decree is set aside and the matter remitted for the lower appellate Court to decide substitution and then the appeal on merits.
- No order as to costs was made.
- The Court applied existing statutory presumptions (Section 51, Bihar Tenancy Act) and binding authorities; the decision rests on application of those principles to the facts and does not purport to lay down a novel general principle beyond the application of the cited precedents and statutes.
Order accordingly.
1. These three appeals arise out of three rent suits instituted by the common plaintiffs, who are the appellants here, against the different tenant-defendants for different holdings. In this Court the case has been argued or the admitted footing that the plaintiffs are the tenants of the holdings in suits and the defendants are the under-raiyats of the same. It appears that the under-raiyats were inducted into these holdings by the plaintiffs some time before 1939; and till then they had paid-rent to the plaintiffs on the bhaoli basis. But in the year 1939 applications were filed for commutation by the defendants against the plaintiffs. In the course of those proceedings ultimately petitions of compromise between them were filed; and as a result thereof the holdings were commuted on the basis of cash rent as it stated is the compromise petitions which are Exhibits B series on the record. It is not denied that since the date of that commutation the plaintiffs realised rents from the defendants up to the year 1361, Fasli on the basis of cash rent as agreed upon, between the parties. Thereafter, the plaintiffs claimed that the defendants defaulted in payment of rent. Hence the suits for the realisation of arrears for the period from 1362 to 1365 Fasli. Originally, the claim was made on the basis of Nakdi rent alone.
2. Subsequently, however, the plaintiffs got the relief portions of the plaints amended; and as a result of that amendment, there was an alternative prayer made that if the Court found that the commutation proceedings were void in law, then a decree for the arreais of rent should be passed on the bhaoii basis. In the two Courts below the main points contested between the parties were two:
1. Whether the plaintiffs were raiyats of tenure-holders and
2. Whether the commutation proceedings-were void.
3. Both the Courts below on these two points have held;
(1) that the plaintiffs are raiyats and not tenure-holders and (2) that the commutation proceedings were void in law as they were hit by the terms of Section 40 of the Bihar Tenancy Act.
4. Accordingly, the trial Court decreed the suits on the bhaoli basis. But in appeal that part of the judgment has been reversed and the lower appellate Court has decreed the suits on cask-basis. Hence these appeals by the plaintiffs.
5. The lower appellate Court in decreeing the suits on cash basis has placed reliance, firstly, on the compromise petitions, Exhibits B series and also the fact that in between the period from 1346 to 1361 Fasli rents of these holdings were realised on cash basis though sometimes through Court by means of rent suits and sometimes in the form of direct payment from hand to hand; and secondly also on the principles of res judicata and estoppel.
6. In this Court Mr. Lakshman Sharan Sinhs appearing for the defendants-respondents has not supported the judgment under appeal on the footing of res judicata and estoppel and I think rightly. As I have already stated, both the Courts below have concurrently found, that commutation proceedings were void in law; and if that be so, then the decisions given in those proceedings are nullity. Thus the decisions arrived at therein cannot operate as res judicata between the parties, nor can they be relied upon as the basis of any estoppel. This, therefore, disposes of the second ground taken by the lower appellate Court in decreeing the suits on the basis of cash rent.
7. Then comes the first ground, namely, the petitions of compromise. Exhibit B series; and the admitted fact that in between the period from 1346 to 1361 Fasli rents had been accepted by the plaintiffs either through Court or directly on cash basis. They, in the opinion of the lower appellate Court, constitute a clear proof of the fact that the nature of rent as agreed upon by the parties was cash and not bhaoli. Mr. Chatterji appearing for the plaintiffs appellants has challenged this part of the decision given by the lower appellate Court on the ground that the contract for the change of rent from bhaoli to cash was a void transaction and that for three reasons; and, therefore, that cannot be relied upon by the defendants now in respect of their case in favour of cash rental. The three grounds given by Mr. Chatterji in support of the submission made by him that the contract of commutation was void are these:
(1) that the document incorporating the contract of commutation should have been got registered under Section 17 of the Registration Act; but as it was not effected by a registered document, the contract was void in law;
(2) that the contract, even if any, was without consideration; and
(3) that there is no evidence that the contract, even if any, was a contract of a permanent character and not a contract between the parties only for a limited period.
8. In my opinion, on the facts of these cases, these three points raised by Mr. Chatterji do not arise at all for consideration, firstly, for the reason that none of these points seems to have been raised in either of the two Courts below and secondly for the reason that the defence pleaded by the defendants in support of cash rental is not based on any contract; on the contrary it is firstly based on the averments made in the plaints themselves and on the reliefs herein sought. I have already stated that in the body of the plaints it has been clearly asserted that the nature of rent payable for these holdings to the plaintiffs is cash and then in the relief portion the main prayer sought is for a decree on the basis of cash rent, though it is true that in the alternative there is also a prayer therein that in case that claim is not sustainable in law a decree on the basis of bhaoli rent should be passed. In these circumstances, if the defendants in their pleadings admitted the claim on the basis of the nakdi rental, then the decision given thereon in the light of admission cannot be said to have been rested on any contract and not on the claim as made by the plaintiffs and admitted by the defendants.
9. Then looked at from other points of view also what has been contended by Mr. Chatterji do not seem to arise on the facts of the present case. The compromise petitions, exhibits B series, are obviously not documents creating any lease but only incorporating the change in the nature of rent I from bhaoli to nakdi. That being so, the question arises whether this change in the nature of rent purports to create, declare, assign, limit or extinguish, whether in present or in future, any right, title or interest whether vested or contingent, of the value of one hundred rupees and upwards, to or in immovable property, or whether it acknowledges the receipt or payment of any consideration on account of the creation, declaration, assignment, limitation or extinction of any such right, title or interest, as provided in clauses (b) and (c) of Section 17 of the Indian Registration Act.
10. In my opinion, the answer to his question has to be given in the negative and to support it reliance may he had on the decision in Hara Prasad Das v. Ram Narain Choudhury 11 Cal LJ 22 and Rani Ghuneshwari Kuer v. Sajiwan Prasad Singh, AIR 1945 Pat 67. It is true that the authorities in Rampadarath Singh v. Sohrai Koeri, 4 Pat LJ 667 : (AIR 1920 Pat 602) and Raja Srimathu Muthu Vijia Raghunatha Duraisingan v. Periasami Pillai, AIR 1940 Mad 379 (FB), relied upon by Mr. Chatterji do in a way suggest otherwise, but the decisions, which I have just referred to above, are much more direct and specific on the points raised here, as in AIR 1945 Pat 67. I, therefore, hold that the first ground taken, by Mr. Chatterji in support of his contention that the contract was void fails.
11. In support of the second ground, reliance has been placed by Mr. Chatterji on the decision in Raja Durga Prasad Singh v. Rajendra Narayan Bagchi, 19 Cal LJ 95 (PC), Bank of Baroda Ltd. v. Punjab National Bank Ltd., AIR 1944 PC 58; and Balram v. Naktu, AIR 1928 PC 75. In answer to this point, it is enough to say that the defence raised in these cases is not based on any contract but on an admission of a fact as evidenced by the decrees and the rent receipts. In law admission does not require any consideration; secondly, the authorities relied upon by Mr. Chatterji in fact do not bear at all on the facts of the present cases. Therefore, the second ground raised by Mr. Chatterji is also equally without substance.
12. The last ground taken by Mr. Chatterji in support of his case is to the effect that there is no evidence on the record to prove that the agreement for commutation was for all time to come and not only for a temporary period. I think that this part of his submission is also without any substance. Section 51 of the Bihar Tenancy Act, which is applicable to a case of under-tenants, clearly lays down that if a question arises as to the amount of a tenant's rent or the conditions-under which he holds in any agricultural year, he shall be presumed, until the contrary is shown, to hold at the same rent and under the same conditions as in the last preceding agricultural year.
13. In the present case, as already stated, it is not denied that for the period from 1346 to 1361 Fasli rent from the defendants have been all along received on the cash basis and not on the bhaoli basis. Therefore, unless it is established by the plaintiffs that rent paid during those years was not to be held operative for the period subsequent thereto, the fact that rents were paid on cash basis during the period from 1346 to 1361 Fasli is by itself enough to show that the same was also to be paid for the period subsequent thereto. For these reasons, therefore, it has to be held that none of three points raised by Mr. Chatterji in support of his contention that the contract of commutation was void and not binding is sustainable in law.
14. Ordinarily, this finding alone would have been sufficient to dispose of finally all the second appeals. But there is some difficulty in the case of S.A 185 of 1961. It appears that in the Court below the defendants of that case including defendant No. 1, namely, Shri Gope, were the appellants; but it is said that while that appeal was still pending in that Court Shri Gope (defendant. No. 1) died on the 8th February, 1960, that means before the 17th January, 1961, when judgment in that appeal was delivered.
15. Thereafter, though an application for substitution was made on behalf of the appellants in that Court, unfortunately that application was left undisposed of with the result that the appeal decreed in that Court was also along with others against a dead person, namely, defendant No. 1. This fact was detected for the first time in this Court, and, accordingly, now, a petition has been filed on behalf of the appellants in S.A 185 of 1961 for the substitution of the heirs of defendant No. 1. A Division Bench of this Court in Mrs. Gladys Coutts v. Dharkhan Singh, AIR 1956 Pat 373 in similar circumstances held that, where an application for setting aside abatement and substituting the heirs of the dead respondent is made in second appeal, such application must be dealt with by the Court in which abatement occurred and that the proper procedure to follow for the second appellate Court is to set aside the decree of the Court of appeal below on the ground that it was passed in respect of a dead person and to remand the appeal to the Court of appeal below in order to deal with the application for setting aside abatement and substituting the heirs of the dead respondent. Accordingly, the decree under appeal in S.A 185 of 1961 is set aside and the case is remanded to the Court of appeal below to deal first with the application for setting aside abatement and substituting the heirs of the dead person and thereafter dispose it of on merit. But so far as the other two appeals, namely, S.A 183 and 184 of 1961, are concerned, they are, for the reasons given above dismissed. In the circumstances, however, there will be no order for costs.
BG/HGP/R.G.D
16. Order accordingly.
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