1. (govindan nair, Mathew and balakrishna eradi, Jj. Agreeing with him) : until the 20th of may 1967, S. 27 of the kerala land reforms act for short the act read thus:
"27. Fair rent. (1) the fair rent in respect of a holding shall be the rent payable by the cultivating
tenant to his landlord and it shall be the rent calculated at the rates specified in schedule iii applicable to the class of lands comprised in the holding or the contract rent, Whichever is less.
explanation. Where the fair rent in respect of a holding has been determined under any law in force immediately before the 21st january, 1961, The fair rent so determined shall be deemed to be the contract rent for the purposes of this sub - section.
(2) notwithstanding anything contained in sub - section (i), The fair rent in respect of a holding, Where the cultivating tenant or an intermediary is holding under a smallholder, Shall, At the option of the small - holder, Be
(a) the rent calculated at the rates specified in schedule iii applicable to the class of lands comprised in the holding; or
(b) where the fair rent in respect of the holding has been determined under any law in force immediately before the 21st january, 1961 such fair rent, Or, Where fair rent has not been so determined, 75 per cent of the contract rent:
provided that the fair rent payable by a cultivating kanamdar or a cultivating customary varumpattamdar shall not exceed the michavaram payable by such kanamdar or the rent payable by such customary virumpattamdar, As the case may be. "
on the 20th may, An ordinance was promulgated (ordinance 4 of 1967) by s. 8 whereof certain provisions of the act were amended. Sub - section (2) of this section said that "sub - section (2) of s. 27 shall be omitted"in other words, This sub - section of the act was repealed. (if authority were needed for the proposition that
to omit a provision from a statute is to repeal that provision, See gujarat electricity board v. Shantilal air. 1969 supreme court 239 where this was taken for granted). On the 30th july 1967, The ordinance was replaced by act 9 of 1967, Sub - section (7) of s. 10 whereof said the same thing. Neither the ordinance nor the act of 1967 betrays a different intention within the meaning of s. 4 of the (kerala) interpretation and general clauses act it may be noted that clause (3) of s. 2 of that act defines the word, "act" so as to include an ordinance and clause (10), The word, "enactment" so as to include an act and we decline to countenance the argument that both the ordinance and the act of 1967 manifest a determination to ride rough - shod over the rights of landlords, Nay, To annihilate them, And that an intention in keeping with this determination must be presumed; in other words, That that construction must be placed on the repeal which most adversely affects the interests of the landlords. The common question that arises in these petitions is whether any right had accrued to the petitioner landlords under sub - section (2) of s. 27 of the act before the repeal of that sub - section within the meaning of clause (c) of s. 4 of the (kerala) interpretation and general clauses act so as to remain unaffected by the repeal. That section so far as is material reads thus:
4. Effect of repeal. Where any act repeals any enactment hitherto made or hereafter to be made, Then, Unless a different intention appears, The repeal shall not
(a) x x x
(b) x x x
(c) affect any right, Privilege, Obligation or liability acquired, Accrued or incurred under any enactment so repealed; or
(d) x x x
(e) affect any investigation, Legal proceeding or remedy in respect of any such right, Privilege, Obligation liability, Penalty, Forfeiture, Or punishment as aforesaid, And any such investigation, Legal proceeding or remedy may be instituted, Continued or enforced and any such penalty, Forfeiture or punishment may be imposed as if the repealing act had not been passed.
the section, It will be noticed, Is the same as s. 6 of the general clauses act, 1897, And s. 38 (2) of the
(english) interpretation act, 1889.
2. A number of decisions, Both english and indian, Have been cited before us for the purpose of showing what is the true import of the words, "right accrued" within the meaning of the section. But we do not think we can do better than extract the following passage from maxwell (the interpretation of statutes, Twelfth edition, Pages 17 and 18) which puts the matter succinctly and clearly. We would lay special emphasis on the question from the judgment of lord moris of borth - y - gest in director of public works v. Ho po sang (1961) a. C. 901:
"the effect of repealing acts passed after august 30, 1889, Is now dealt with by s. 38 (2) of the interpretation act. Such repealing acts are, Unless the contrary intention appears, Not to " (b) affect the previous operation of any enactment so repealed or anything duly done or suffered under any enactment so repealed; or (c) affect any right, Privilege, Obligation, Or liability acquired, Accrued, Or incurred under any enactment so repealed; or (d) affect any penalty, Forfeiture, Or punishment incurred in respect of any offence committed against any enactment so repealed; or (e) affect any investigation, Legal proceeding, Or remedy in respect of any such right, Privilege, Obligation, Liability, Penalty, Forfeiture, Or punishment as aforesaid. "
paragraph (c) was discussed by the court of appeal in hamilton cell v. White ((1922) 2 k. B. 422). Atkin l. J. Said (at p. 431) that "that provision was not intended to preserve the abstract rights conferred by the repealed act. It only applies to the specific rights given to an individual upon the happening of one or other of the events specified in the statute". Thus a tenant's general right to compensation for disturbance would not survive the repeal of the agricultural holdings act 1908: if it were to do so, The 'repealing" would in fact be ineffective. But the court held that where a landlord, Before the repeal, Had given his tenant notice to quit, The tenant had "acquired a right" which would "accrue" when he quitted his holding the right to receive compensation. A contrasting case is abbott v. Minister of lands (1895 a. C. 425), In which the appellant claimed that as a purchaser of crown land in new south wales in 1871 he became entitled under the crown lands alienation act 1861 to make further purchases of crown land adjoining his original holding. The act of 1861 was repealed by the crown lands act 1884 which, However, Provided that notwithstanding the repeal "all rights accrued" by virtue of the repealed enactment should remain unaffected. The judicial committee held that the mere right existing at the date of the repealing statute to take advantage of the provisions of the act repealed was not a "right accrued" within the meaning of the saving clause.
more recently, The privy council has had to consider precisely similar provisions of the hong kong interpretation ordinance. It was held that the fact that the director of public works had given a crown lessee notice of his intention to grant a rebuilding certificate, Which would enable the lessee to recover vacant possession from the persons in occupation of the premises, Did not confer any right to the certificate on the lessee, Since various conditions had remained to be fulfilled before the certificate could be granted, So that the lessee had no more than a hope that it would be granted. Further, Any entitlement the crown lessee might have to have his case considered by the governor - in - council did not come within paragraph (e), Since the right there referred to is the right acquired or accrued under a repealed enactment mentioned in paragraph (c), And there was no such right here. Lord morris of borth - y - gest said:
"it may be, Therefore, That under some repealed enactment a right has been given but that in respect of it some investigation or legal proceeding is necessary. The right is then unaffected and preserved. It will be preserved even if a process of quantification is necessary. But there is a manifest distinction between an investigation in respect of a right and an investigation which is to decide whether some right should or should not be given. Upon a repeal the former is preserved by the interpretation act. The latter is not."
this passage was cited by the judicial committee in free lanka insurance co., Ltd. V. Ranasingha (1964 ac. 541). A direct claim given by the ceylon motor car ordinance 1938 to an injured person against the insurers of the other party involved ill an accident was held to survive the repeal of the ordinance. Lord evershed said (at p. 532) that the distinction between what was, And what was not, A right must often be one of great fineness; but the injured person here had
"something more than a mere hope or expectation he had in truth a right although that right might fairly be called inchoate or contingent."
3. To answer the question posed it is necessary to understand the true meaning of s. 27 of the act, As it stood before the repeal of sub - section (2) thereof, And, For that purpose, It is necessary to refer to certain provisions of the act:
"s. 2. Definitions in this act unless the context otherwise requires,
(13) "fair rent" means the rent payable by a cultivating tenant under s. 27 or s. 33; x x x
(52) "small holder" means a landlord who does not have interest in land exceeding eight standard acres or twenty - four acres in extent, Whichever is less, As owner, Intermediary, Or cultivating tenant, Or in two or more of the above capacities, So however that the extent of non - resumable land in his possession as owner, Or as cultivating tenant, Or partly as owner and partly as cultivating tenant, Does not exceed (i) four standard acres; or (ii) four acres in extent, Whichever is greater.
s. 31. Determination of fair rent by land tribunal. (1) the cultivating tenant or any landlord may apply, In such form as may be prescribed, To the land tribunal for determining the fair rent in respect of a holding.
(2) on receipt of an application under sub - section (1), The land tribunal shall issue notices to all persons interested and after enquiry, Determine by an order (i) the fair rent in respect of the holding;
s. 33. Agreement as to fair rent. Notwithstanding anything contained in the foregoing sections, It shall be competent for the landlord and the tenant to agree as to what shall be the fair rent payable in respect of the holding and, Where such an agreement signed by the landlord and the tenant is filed with the land tribunal, The land tribunal shall pass orders determining such agreed rent as the fair rent in respect of the holding:
provided that the agreed rent shall not exceed the fair rent under s. 27, In respect of the holding:
s. 34. Date from which order determining fair rent, Etc., Is to take effect. The order determining the fair rent under s. 31 or s. 33 and the rent payable by an intermediary shall take effect from the beginning of the agricultural year in which the tenant or the landlord filed the application for such determination or the agreement under s. 33. X x ~ x
s. 35. Rent payable when land tribunal has not determined fair rent. - - where in a case the rent payable in respect of a holding has not been determined by the land tribunal, Either under s. 31 or s. 33, The land lord shall be entitled to receive and the tenant shall be bound to pay the rent that was payable immediately before the commencement of this act.
4. It will be noticed that the fair rent is some thing that attaches itself to the holding under the provisions of the act itself. It is not a creature of the determination by the tribunal under s. 31 or s. 33. The determination only quantifies something that is already therefor certain, Depending as it does solely on pre - existing facts and in no sense on the determination, No more on the determination than, For example, What is due on a promissory note depends on the court's decree determining it, Whether the determination be on the evidence placed before it or on the agreement of the parties. The determination is
only a machinery for enforcing the fair rent as against both parties, The landlord and the tenant; and the fact that the, Under s. 34. The order determining the fair rent takes effect only from the beginning of the agricultural year in which the application for such determination was filed and that under s. 35 the rent payable until then is the rent that was payable immediately before the commencement of the act, In no wise affects the position. That involves only a postponement of the enforcement of the respective rights, On the one hand to receive the fair rent, And, On the other, To be liable for only the fair rent, Rights which accrued on the passing of the act, Until such time as the machinery for the enforcement has done its work. S. 27 says in as many words that the rent payable by the tenant to his landlord shall be the fair rent and proceeds to specify bow it is to be determined. This means that what the landlord is entitled to collect and the tenant is liable to pay is the fair rent, Nothing more and nothing less. The respective rights and liabilities that flow from this are conferred and imposed upon the landlord on the one hand and the tenant on the other by the act itself subject to what we shall have to say regarding the exercise of the option under the repealed sub - section, Nothing has to be done by either to attract these rights and liabilities although, As we have already remarked, Their enforcement is postponed until the fair rent is quantified by the machinery appointed for the purpose. All that the tribunal does under s. 31 or s. 33 is to determine the quantum of the fair rent, Either on the evidence placed before it or on the agreement of the parties although, In the latter case, It has to see that the rent agreed upon does not exceed the fair rent under s. 27. The point to note is that the determination as such confers no right. It is only an investigation as to the measure of the right, Not an investigation as to whether the right should or should not be given.
5. At first blush s. 27 unless otherwise indicated the reference is to the section as it stood before the repeal of sub - section (2) might lend itself to the construction that what is covered by - section (2) is taken away from sub - section (1), In other words, That the two sub - sections make independent provision, Subsection (1) for what we might call the big holder and sub - section (2) for the small holder. But, We do not think that that is the true construction. Subsection (1), By its plain language, Takes in all landlords, Whether big or small holders, And we think the small holder also is governed by that sub - section unless and until by making the option vouchsafed to him by sub - section (2) he takes himself out of sub - section (1) and brings himself within sub - section (2). Sub - section (2) comes into play only when he makes the option; until then it has no application. It is really a matter of election by the small holder as between sub - section (1) and sub - section (2), The election to come under subsection (2) being made by the exercise of the option therein, Its non - exercise at the proper time being regarded as an election to remain under sub - section (1). Unless the two sub - sections are so construed and their language is clearly capable of such a construction anomalous results would follow. If we regard sub - section (2) as an independent provision for small holders, Sub - section (1) applying only to big holders, The failure of the landlord to exercise the option under sub - section (2) would lead to this absurd result. There is nothing in the sub - section compelling him to make the option as between clauses (a) and (b) thereof, And nothing to show which clause is to be applied in cases where the small holder fails or declines to make the option. The tribunal would have to determine the rent under each clause and say that the landlord is at his option entitled to either the higher or the lower amount. This, Apart from being absurd, Would be no determination at all.
6. sub - section (1) of s. 27 being the provision that applies to all landlords, Whether big holders or small holders, A small holder who does not elect to come under sub - section (2) of the section must be regarded as having elected to remain under sub - section (1). To make the election he must exercise his option between clauses (a) and (b) of sub - section (2) ; else he remains under subsection (1). It is not enough for him to plead that he is a small holder entitled to the benefits of the act. The benefit conferred by the act on a small holder, In so far as fair rent is concerned, Is that he can, If he so chooses, By exercising his option as between clauses (a) and (b) of sub - section (2) elect to be governed by that sub - section instead of by sub - section (1). Until he makes the election by exercising his option, There is no special benefit that the act confers on him. Like every other landlord his case will be governed by sub - section (1).
7. It is obvious that the election to come under sub - section (2) must be made before the tribunal determines the fair rent; else, The small holder will be regarded as having elected to remain under sub - section (1) and the tribunal will determine the fair rent accordingly. Once that is done there can be no question of the small holder being allowed to go back on his election and choose to come under sub - section (2), And no means by which the fair rent as determined by the tribunal can be altered. The election once made must be final, And it necessarily follows that the election to come under sub - section (2) cannot be made before the appellate or revisional authorities. Indeed, The very claim for the benefits of a small
holder should be accompanied by the election to come under sub - section (2) by exercising the option therein as between clauses (a) and (b) thereof, And, Where a small holder fails to exercise the option, The tribunal should ask him to do so before it proceeds to determine the fair rent. If despite that the small holder does not exercise the option, Then as we have already said more than once, He will be deemed to have elected to remain under subsection (i) of the section and the fair rent will be determined accordingly.
8. It is said that the small holder cannot effectively exercise the option unless he knows what the alternatives are. But then all the facts necessary for working out the fair rent under clauses fa) and (b) of sub - section (2) are there for him to ascertain the tribunal does not create these facts but only ascertains them for making its determination so that he is in a position to judge which is the more favourable to him. No person entitled to elect as between two courses has the right to say that he will make the election only after the court has finally declared which is the more favourable course for him; or even only after the course of events have made it certain which is the more favourable; and we do not suppose that in giving the small holder the option as between clauses (a) and (b) of sub - section (2), The legislature contemplated a determination by the tribunal both under clause (a) and under clause (b) and a choice to the small holder to choose between the higher and the lower rent! if the option can be exercised after the determination by the tribunal under both clause (a) and clause (b), The sub - section might as well have said that the fair rent will be that under clause (a) or under clause (b) whichever is higher.
9. As we have seen, S. 27 declares in unequivocal terms that the rent payable by the tenant to his landlord shall be the fair rent as calculated in accordance with the provisions of that section. The fair rent is therefore something that accrued in respect of each holding on the passing of the act notwithstanding that s. 34 postpones its enforcement until such time as there is a determination by the tribunal whereupon it takes effect from the beginning of the agricultural year in which the application for the determination is made, And notwithstanding that s. 35 provides that where there has been no determination the rent payable is the rent payable immediately before the commencement of the act. It follows that the moment a small holder elects to come under sub - section (2) of s. 27 by exercising his option under that sub - section the right to fair rent in accordance with his option accrues to him. It is none - the - less an accrued right for its implementation being postponed until there has been a determination by the tribunal a right to damages for a civil wrong is an accrued right notwithstanding that both the right and the quantum of the damages might have to be declared by a court before the right can be enforced.
10. When sub - section (2) of s. 27 was repealed no provision was made for a review of fair rent already determined by the tribunal in accordance with the option exercised by a small holder. That seems to us a clear pointer to the correctness of our conclusion that a right to fair rent as determined accordingly accrued on the exercise of the option and that this accrued right was not taken away by the repeal, The repeal not being retroactive. Were that not so, It seems to us most unlikely that as between persons situated alike, More favourable treatment should be accorded to some merely because of the accident that in their case there had already been a determination when the repeal was effected. Such persons would be entitled to receive the more favourable rent in accordance with their option whereas those who might have exercised their option earlier and in respect of whom the applications for fair rent might have been instituted earlier, Would get only the less favourable rent merely because the applications remained pending at the time of the repeal.
11. Of the numerous decisions cited at the bar, None is on all fours with our case that, Of course, Was hardly to be expected. But the nearest to our case, Moti ram v. Suraj bhan, Air. 1960 sc. 655, Sakharam bapusaheb narayan sanas v. Manakchand motichand shah (1962) 2 scr. 59 and gujarat electricity board v. Shantilal air. 1969 sc. 239, Seem to support the view we are taking.
12. In c. R. P. No. 898 of 1966, A full bench of three judges of this court assumed without any discussion that a small holder was entitled to fair rent fixed in accordance with clause (b) of sub - section (2) of s. 27 of the act from the beginning of the agricultural year in which the application for fixation of fair rent was filed up to the 30th july 1967 when the sub - section was repealed by s. 10 of act 9 of 1967 and thereafter to fair rent as determined under sub - section (1) of the section. It would appear that the questions we have here considered were not canvassed before that bench. It is because it was felt that that decision required reconsideration that these cases have now come up before us.
13. With great respect we do not think that the view taken in that case was correct. If, As we have held, The right to fair rent in accordance with the option exercised by the small holder under sub - section (2) of s. 27 was a right that accrued on the option being exercised while it was available, And the repeal was not retroactive in its operation, It follows that the right remains unaffected if, On the other hand, No right accrued on the option being exercised, Or the repeal was retroactive, Then the effect of the repeal would be that from the date of the application for fixing the fair rent the small holder would be entitled only to fair rent fixed under sub - section (1) of the section. In any case, As we have already pointed out, There is no provision in the repealing act for a refixation of the fair rent once fixed in accordance with the option exercised by the small holder under sub - section (2) of the section.
14. We shall now proceed to consider the cases before us one by one. In all of them the application for the fixation of fair rent was by the tenant. In two, Namely, In crp. No. 865 of 1967 and crp. No. 1624 of 1968, The application was made under act 4 of 1961, But that does not matter since the applications have been heard and determined according to the provisions of act i of 1964 as required by s. 132 (4) (ii) (a) of that act. In two, Namely, In crp. No. 865 of 1967 and in crp. No. 1682 of 1967, The application was by a varamdar, And the principal contention of the landlord was that, Although a varamdar is a deemed tenant by reason of s. 8 of the act, He is not a cultivating tenant within the definition in s. 2 (8) and therefore not entitled to make an application under s. 31. This contention has, However, Not been urged before us in view of its rejection by a full bench of this court in ouso v. Helgua 1968 klt. 428.
crp. No. 865/67
15. The landlord (actually an intermediary) in crp. No. 865 of 1967 is a joint family. In this case the fair rent was determined by the tribunal on 2110 1965 in accordance with the provisions of schedule iii of the act. Although in its objection dated 23 21965, The landlord claimed that it was a small holder entitled to the benefits conferred by the act on small holders, It did not at any time before the determination opt as between clause (a) and clause (b) of sub - section (2) of s. 27 of the act and thereby elect to come under that subsection. Therefore, Although the tribunal found that the landlord was a small holder, It held that the option not having been exercised by the landlord, The fair rent had to be fixed under the provisions of schedule iii and it proceeded to fix the fair rent accordingly. The tribunal's order was affirmed by the subordinate judge on 22 91966 (the appellate authority under s. 102 of the act) on appeal by the landlord, The landlord's attempt to opt for clause (b) of sub - section (2) of s. 27 of the act at that stage being discountenanced.
16. In the view that we have taken, The landlord must be deemed to have elected to come under sub - section (1) of s. 27 of the act, The option under subsection (2) not having been made at any time before the determination by the tribunal. The tribunal rightly determined the fair rent under the provisions of schedule iii as required by sub - section (1) of s. 27, The varam payable, In other words, The contract rent, Being, On the tenant's own showing, Higher than the rent so determined. We might however observe that the tribunal's observation that there can be no contract rent in the case of a varam does not seem to be correct. It is true that the varam payable to the landlord varies from year to year being a share of the actual produce. But we think that the varam payable in a normal year must be regarded as the contract rent.
17. The appellate order confirming the order of the tribunal calls for no interference and we dismiss this petition with costs. Crp no. 15j8/67
18. The application for fixation of fair rent in crp. No. 1518 of 1967 was made in july 1964, And, In his objection filed in october 1964, The landlord claimed to be a small holder and opted for clause (b) of sub - section (2) of s. 27 by stating that the fair rent should be fixed at 75 per cent of the contract rent. The tribunal upheld the landlord's claim and fixed the fair rent accordingly. On appeal by the tenant contending that the landlord was not a small holder the subordinate judge who heard and decided the appeal in august 1967, After the repeal of sub - section (2) of s. 27, Held that, In view of the repeal, The fair rent had to be determined in accordance with the provisions of sub - section (1) of s. 27, Whether or not the landlord was a small holder. In this view he did not decide that question and he remanded the application to the tribunal for the purpose of determining the fair rent under sub - section (1) of s. 27,
19. In our view the right to fair rent in accordance with clause (b) of sub - section (2) of s. 27 was a right that accrued to the landlord when he elected to come under that sub - section by making the option thereunder. This being before the repeal of sub - section (2), The subsequent repeal of that sub - section cannot affect that accrued right. If, In fact, The landlord is a small holder, He is entitled to have the fair rent determined in accordance with clause (b) of subsection (2) of s. 27.
20. We allow this petition, Set aside the order of the learned subordinate judge, And remand the appeal to him for fresh disposal in the light of this judgment after deciding the question whether or not the landlord is a small holder. We make no order as to costs in this court. Crp. No. 1682/67
21. In crp. No. 1682 of 1967, The application for fixation of fair rent was filed in august 1962. In the objection filed by the landlord in october 1965 he did not claim that he was a small holder. The case was heard by the tribunal on 22 41966. An application made on behalf of the landlord for an adjournment for the purpose of examining him as a witness was rejected with the observation that he might file an affidavit if so chose and the case was posted to the 12th may 1966 for orders. What the landlord did was not to file any such affidavit but to make an application on the 10th may to amend his objection so as to put forward a claim to be a small holder and ask for the rent being determined under clause (b) of sub - section (2) of s. 27. On the 12th may 1966 to which date the case stood adjourned, The landlord and his counsel were absent. Therefore, The application for amendment was dismissed and orders were pronounced determining the fair rent in accordance with sub - section (1) of s. 27. On appeal by the landlord, The subordinate judge who heard the appeal in july 1967 thought it unnecessary to consider the contention that the landlord was a small holder since sub - section (2) of s. 27 had by then been repealed. He found that the determination made by the tribunal under sub - section (1) of s. 27 was correct, The landlord not having adduced any evidence in support of his case as to the normal gross produce. Accordingly he dismissed the appeal.
22. We think that the appeal was rightly dismissed although the learned subordinate judge was wrong in thinking that the repeal of sub - section (2) of s, 27 took away rights already accrued thereunder. For, In this case, No right to fair rent under clause (b) of sub - section (2) of s. 27 of the act had accrued to the landlord, Since, Before the tribunal, He had not even claimed to be a small holder. His belated application, Made after the fair rent application had been heard and orders reserved, To amend his objection so as to make such a claim, An application to prosecute which he did not even care to appear, Was rightly dismissed by the tribunal.
23. We dismiss this petition with costs. Crp. No. 1624/68
24. In crp. No. 1624 of 1968, The application for fair rent was made in march 1961. It was disposed of by the tribunal on 10 - 3 - 1967. Before the tribunal, The landlord did claim that he was a small holder, But did not exercise the option under sub - section (2) of s. 27 of the act. The tribunal found that the landlord was not a small holder and proceeded to determine the fair rent under sub - section (1) of s. 27. The landlord appealed. The appeal was heard and decided by the subordinate judge in september 1968 after sub - section (2) of s. 27 had been repealed. Taking the view that the repeal was retrospective the learned subordinate judge thought it unnecessary to decide the question whether or not the landlord was a small holder, And, Vacating the finding of the tribunal that he was not, Dismissed the appeal.
25. Before us the only contention taken has been that the subordinate judge erred in holding that the repeal of sub - section (2) of s. 27 was retrospective and that he should have decided the question whether or not the landlord was a small holder and determined the fair rent accordingly. But, As we have seen, The landlord did not exercise the option under sub - section (2) of s. 27 before the determination by the tribunal although he did put forward the claim that he was a small holder. Therefore, He must be deemed to have elected to come under sub - section (1) of s. 27 and the determination made by the tribunal under that sub - section was proper. Whether or not the landlord is a small holder is of no consequence since in either case the fair rent has to be determined under sub - section (1) of s. 27.
26. We dismiss this petition with costs.
krishnamoorthy iyer j.
1a. I regret i have to disagree. The controlling point for decision in the revision petitions is what is the legal effect of the deletion of s. 27 (2) of the kerala land reforms act, 1963 (act i of 1964) by s. 10, Subsection (7) of the kerala stay of eviction proceedings act, 1967 (act 9 of 1967), On applications filed under s. 31 of act i of 1964 for determination of fair rent by land tribunal and pending on the date of the commencement of act 9 of 1967.
s. 27 of act i of 1964 reads:
"27. Fair rent (1) the fair rent in respect of a holding shall be the rent payable by the cultivating tenant to his landlord and it shall be the rent calculated at the rates specified in schedule iii applicable to the class of lands comprised in the holding or the contract rent, Whichever is less.
explanation where the fair rent in respect of a holding has been determined under any law in force immediately before the 21st january 1961, The fair rent so determined shall be deemed to be the contract rent for the purposes of the sub - section.
(2) notwithstanding anything contained in sub - section (1), The fair rent in respect of a holding, Where the cultivating tenant or an intermediary is holding under a small - holder, Shall, At the option of the small - holder, Be
(a) the rent calculated at the rates specified in schedule iii applicable to the class of lands comprised in the holding, Or
(b) where the fair rent in respect of the holding has been determined under any law in force immediately before the 21st january, 1961, Such fair rent or, Where fair rent has not been so determined 75 per cent of the contract rent:
provided that the fair rent payable by a cultivating kanamdar or a cultivating customary verumpattamdar shall not exceed the michavaram payable by such kanamdar of the rent payable by such customary verumpattamdar, As the case may be. "
s. 10, Sub - section (7) of act 9 of 1967 reads:
"10. Amendment of kerala land reforms act, 1963. In the kerala land reforms act, 1963 (1 of 1964).
(7) sub - section (2) of s. 27 shall be omitted. "
the rule in regard to the construction of an act which has been amended was thus stated by bose, J., In shamrao v. District magistrate, Thana: air. 1952
sc. 324 at 326:
"the rule is that when a subsequent act amends an earlier one in such a way as to incorporate itself, Or a part of itself, Into the earlier, Then the earlier act must thereafter be read and construed (except where that would lead to a repugnancy, Inconsistency or absurdity) as if the altered words had been written into the earlier act with pen and ink and the old words scored out so that thereafter there is no need to refer to the amending act at all."
2a. The above observation was explained in the following manner by jagannadhadas, J., In ram narain v. S. B. & ico. : air. 1956 sc. 614
"it is perfectly true as stated therein (air. 1952 sc. 324) that whenever an amended act has to be applied subsequent to the date of the amendment the various unamended provisions of the act have to be read along with the amended provisions as though they are part of it. This is for the purpose of
determining what the meaning of any particular provision of the act as amended is, Whether it is in the unamended part or in the amended part.
but this is not the same thing as saying that the amendment itself must be taken to have been in existence as from the date of the earlier act. That would be imputing to the amendment retrospective operation which could only be done if such retrospective operation is given by the amending act either expressly or by necessary implication. "
3a. S. 4 of the interpretation and general clauses act, 1125 applicable to the state of kerala which generally corresponds to s. 6 of the general clauses act, 1897 deals with the effect of repeal of an act. It has been decided by their lordships of the supreme court in state of punjab v. Mohar singh air. 1955 sc. 84 that the said provision will be applicable even in the case of a repeal of an enactment followed by fresh legislation unless the new legislation manifests an intention incompatible with or contrary to the provisions of the repealed enactment. s. 6 of the general clauses act, 1897 or s. 4 of the interpretation and general clauses act, 1125 does not expressly state anything regarding the effect of amendment of an enactment. There was no contention on either side that the above provision will not be applicable in the case of an amendment of an act. On the other hand, The entire argument proceeded on the basis that the legal effect of s. 10, Sub - section (7) of act 9 of 1967 on pending applications under s. 31 of act i of 1964 has to be decided based on s. 4 of the interpretation and general clauses act of 1125. The line of enquiry in a case to which the said provision is applicable has to be in the words of their lordships of the supreme court in state of punjab v. Mahar singh air. 1955 sc. 84
"not whether the new act expressly keeps alive old rights and liabilities but whether it manifests an intention to destroy them."
4a. The principle is well - settled that statutory provisions affecting substantive rights are ordinarily prospective and not retrospective and they can be treated as retrospective only if the legislature has made them so either by express words or by necessary implication. In this connection it will not be out of place to recall the classical words of wright, J., In the well - known decision of athlyumney, In re. Wilson, Ex parte (1898) 2 q. B. 547 at pages 551 - 552 to the following effect:
"perhaps no rule of construction is more firmly established than this that a retrospective operation is not to be given to a statute so as to impair an existing right or obligation, Otherwise than as regards matter of procedure, Unless that effect cannot be avoided without doing violence to the language of the enactment. If the enactment is expressed in language which is fairly capable of either interpretation, It ought to be construed as prospective only."
5a. The same principle was applied in interpreting an amending statute by their lordships of the privy council in delhi cloth mills v. I. T. Commissioner air. 1927 p. C. 242. Their lordships observed:
". While provisions of a statute dealing merely with matters of procedure may properly, Unless that construction be textually inadmissible, Have retrospective effect attributed to them, Provisions which though a right in existence at the passing of the statute are not to be applied retrospectively in the absence of express enactment or necessary intendment."
6a. As a general rule an appellate court in considering the correctness of the judgment of the trial court has to confine itself to the law in force on the date of the commencement of the suit or proceeding. Normally it is not open to the appellate court to take note of the legislative change introduced subsequent to the commencement of the suit or proceeding unless the changed law has been given retrospective operation. This principle has been stated by lord blackburn in gardner v. Luccas (1878) 3 app. Cases 582 at 603 in the following words:
"now the general rule, Not merely of england and scotland, But, I believe, Of every civilized nation, Is expressed in the maxim, 'nova constitutio futuris formam imponere debt non praeteritis' primafacie, Any new law that is made affects future transactions, Not past ones. Nevertheless, It is quite clear that the subject - matter of an act might be such that, Though there were not any express words to show it, It might be retrospective. For instance, T think it is perfectly settled that if the
legislature intended to frame a new procedure, That instead of proceeding in this form or that, You should proceed in another and a different way; clearly there by gone transactions are to be sued for and enforced according to the new form of procedure. Alterations in the form of procedure are always retrospective, Unless there is some good reason or other why they should not be. Then, Again, I think that where alterations are made in matters of evidence, Certainly upon the reason of the thing, And i think upon the authorities also, Those are retrospective whether civil or criminal. "
7a. The very same principle was stated by hidayatullah, J., In dayawati v. Inderjit air. 1966 sc. 1423 at 1426 thus:
"now as a general proposition, It may be admitted that ordinarily court of appeal cannot take into account a new law, Brought into existence after the judgment appealed from has been rendered, Because the rights of the litigants in an appeal are determined under the law in force at the date of the suit. Even before the days of coke, Whose maxim a new law ought to be prospective, Not retrospective in its operation is oft quoted, Courts have looked with disfavour upon laws which take away vested rights or affect pending cases. Matters of procedure are, However, Different and the law affecting procedure is always retrospective. But it does not mean that there is an absolute rule of inviolability of substantive rights. If the new law speaks in language, Which, Expressly or by clear intendment, Takes in even pending matters, The court of trial as well as the court of appeal must have regard to an intention so expressed, And the court of appeal may give effect to such a law even after the judgment of the court of first instance. The distinction between laws affecting procedure and those affecting vested rights does not matter when the court is invited by law to take away from a successful plaintiff, What he has obtained under a judgment."
8a. The counsel for the cultivating tenant on the basis of the decision in quilter v. Mapleson (1882) 9 qbd. 672 contended that it is the duty of the court of appeal to take note of the change in law in deciding the appeal since it is only a continuation of the suit. The following observations of bowen l. J., Were particularly relied on by the learned counsel:
"the only remaining question is, Whether the court of appeal can give relief where a judgment had been obtained by the landlord before the act came into operation. I think we should be misreading the judicature rules if we held that it could not when the landlord has not obtained possession. The rules were intended to enable the court of appeal to do complete justice. If the law has been altered pending an appeal, It seems to me to be pressing rules of procedure too far to say that the court of appeal cannot decide according to the existing state of the law. I think that such is not the true construction of the rules, For order lviii, R. S, Does not merely enable the court of appeal to make any order which ought to have been made by the court below, But to make such further or other order as the case may require."
9a. The plea of the cultivating tenant was that the law as amended by act 9 of 1967 must be applied irrespective of the question whether s. 10, Sub - section (7) of act 9 of 1967 is retrospective or not. There is nothing in the decision in quilter v. Mapleson (1882) 9 qbd. 672 to support the plea of the cultivating tenant. The said decision arose out of an action by a landlord against his tenant to recover the demised premises. The suit was decreed. During the pendency of the appeal a new act of parliament was passed. It was held that the said act was retrospective and would affect pending proceedings. But a contention was raised for the landlord that since the new act had not come into operation when the action was decreed by the trial court, The court of appeal has no jurisdiction to apply the provisions of the new act even if retrospective as it could make only such orders as ought to have been made by the trial court which passed the judgment. The observations of bowen, L. J., Were therefore made in that connection. This is also clear from the observations of jessel, M. R. In the same case:
"i think, Therefore, That the sub - section is applicable to pending proceedings, And that we have jurisdiction under it, Unless the fact of this being an appeal prevents our having it.
now, When we look at order lviii, R. 2, We find it provides that'all appeals to the court of appeal shall be by way of rehearing. ' on an appeal strictly so called, Such a judgment can only be given as ought to have been given at the original hearing; but on a rehearing such a judgment may be given as ought to be given if the case came at that time before the court of first instance. This point often arose in the court of chancery where there was no strict appeal, But only a re - hearing before a superior court. It often happened that somebody had died before the re - hearing, Which made the title of one of the parties clear the court on the re - hearing could have regard to that. So also the court could have regard to conduct which made an appeal improper. Then the 5th rule of the same order gives the court of appeal power to admit further evidence, And says, That 'the court of appeal shall have power to give any judgment and make any order which ought to have been made, And to make such further or other order as the case may require. ' it was in my opinion, Intended to give appeals the character of re - hearings, And to authorize the court of appeal to make such order as ought to be made according to the state of things at the time. T am of opinion, Therefore, That the defendant is entitled to relief against the forfeiture. "
the decision in quitter v. Mapleson (1882) 9 qbd. 672 has not in any way deviated from the general principle of law enunciated by blackburn l. J., In gardner v. Lucas (1878) 3 app. Cases 582 but has only laid down the principle that the appellate court has got power to take into account an enactment passed after the decision of the trial court and made retrospective.
10a. The principles of law to be borne in mind admit of no doubt but the difficulty is in their application to the particular statute. It was contended for the small - holders that unless a clear and unambiguous intention is indicated by the legislature in the amending act 9 of 1967, No provision of the same should be given retrospective operation so as to affect vested rights. To appreciate this contention it is necessary to examine the nature of the right created by s. 27 (2) of act 1 of 1964 before it was amended by act 9 of 1967 in favour of a smallholder. There was some discussion at the bar as to whether s. 27 (1) and s. 27 (2) of act i of 1964 are independent provisions or whether the latter is only an exception to the former which is the main section. In my view, It is not necessary to resolve this dispute. S. 27 of act i of 1964 is only declaratory in that it says what fair rent is. S. 2 (13) of act i of 1964 defines "fair rent" as meaning 'the rent payable by a cultivating tenant under s. 27 or s. 33'. S. 27 of act i of 1964 only prescribes the fair rent to be determined by the tribunal under s. 31 of the act as payable by a cultivating tenant to his landlord. No enforceable right is created in favour of either a cultivating tenant or his landlord by s. 27 of act i of 1964. The provision for determination of fair rent by land tribunal is contained in s. 31 of the act. It is only by an order passed under s. 31 determining fair rent that rights accrue in favour of a cultivating tenant and bis landlord and become enforceable.
11a. S. 35 of act i of 1964 provides that when the fair rent is not determined by the land tribunal either under s. 31 or under s. 33 of act i of 1964 the landlord shall be entitled to receive and the cultivating tenant shall be bound to pay the rent that was payable immediately before the commencement of act i of 1964. S. 34 of act i of 1964 provides that any order passed under s. 31 or s. 33 of act i of 1964 will take effect from the beginning of the agricultural year in which the application is filed and any amount paid by the tenant in excess of the rent so determined till the date of determination shall be adjusted towards the payment of future rent. Both s. 34 and 35 of act t of 1964 make it clear that contract rent alone is payable until the fixation of fair rent either under s. 31 or under s. 33 though an adjustment is possible in terms of s. 34 of act i of 1964 after the fair rent is fixed.
12a. The attractive submission on behalf of the small - holder was that when the option under s. 27 (2) is exercised by him, A right accrues in his favour which cannot be divested by any subsequent legislation unless the amending act manifests an intention to destroy the same. I shall therefore even at the risk of repetition extract s. 27 (2) of act 1 of 1964:
"notwithstanding anything contained in sub - section (1). The fair rent in respect of holding, Where the cultivating tenant or an intermediary is holding under a small - holder shall, At the option of the small - holder, Be
(a) the rent calculated at the rates specified in schedule ii applicable to the class of lands comprised in the holding; or
(b) where the fair rent in respect of the holding has been determined under any law in force immediately before the 21st january, 1961, Such fair rent, Or, Where fair rent has not been so determined, 75 per cent of the contract rent:
provided that the fair rent payable by a cultivating kanamdar or a cultivating customary verumpattamdar, As the case may be. "
13a. To take advantage of s. 4 of the interpretation and general clauses act, 1125 a small - holder should have a right acquired or accrued in his favour when act 9 of 1967 came into force. Sub - sections (c) and (e) of s. 4 of the interpretation and general clauses act, 1125 on which alone support was sought by the counsel for the small - holder read:
"4. Where any act repeals any enactment hitherto made or hereafter to be made then, Unless a different intention appears, The repeal shall not
(c) affect any tight, Privilege, Obligation or liability acquired, Accrued or incurred under any enactment so repealed; or
(e) affect any investigation, Legal proceeding or remedy in respect of any such right, Privilege, Obligation, Liability, Penalty, Forfeiture or punishment as aforesaid; and any such investigation, Legal proceeding or remedy may be instituted, Continued or enforced and any such penalty, Forfeiture or punishment may be imposed as if the repealing act had not been passed. "
the right referred to in sub - section (c) is a right acquired or accrued under the repealed enactment and for the operation of sub - section (e) the existence of such acquired or accrued right is necessary.
14a. In crp. 898 of 1966 a full bench of this court to which i was a party held that the benefit under s. 27 (2) of act 1 of 1964 is available to a small - holder only till the date of act 9 of 1967 and that he could not claim the benefit on that basis. It has to be mentioned that there is no detailed discussion in the decision. The correctness of the decision was questioned before us.
15a. At one stage the counsel for the small - holder even contended that if a small - holder had exercised the option referred to in s. 27 (2) even outside a proceeding under s. 31 of act 1 of 1964 he would acquire a right thereunder. But it was abandoned and the only contention pursued was that if in an application filed under s. 31 of act 1 of 1964 the option has been exercised by a small - holder a right would accrue in his favour which by s. 10, Sub - section (7) of act 9 of 1967 cannot be dislodged.
16a. It is therefore necessary to consider whether the exercise of the option under s. 27 (2) by a small - holder will give rise to a right within the meaning of s. 4 (c) of the interpretation and general clauses act, 1125. I will at this stage cite the observations of the lord chancellor in the abbott's case 1895 appeal cases 425 to show that a right to take advantage of an enactment cannot be termed an accrued right. The lord chancellor observed:
"it has been very common in the case of repealing statutes to save all rights accrued. If it were held that the effect of this was to leave it open to any one who could have taken advantage of any of the repealed enactments still to take advantage of them, The result would be very far reaching. It may be, As windeyer j. Observes, That the power to take advantage of an enactment may without impropriety be termed a 'right'. But the question is whether it is a 'right accrued' within the meaning of the enactment which has to be construed.
their lordships think not, And they are confirmed in this opinion by the fact that the words relied on are found in conjunction with the words 'obligations incurred or imposed'. They think that the mere right (assuming it to be properly so called) existing in the members of the community or any class of them to take advantage of an enactment, Without any act done by an individual towards availing himself of that right, Cannot properly be deemed a 'right accrued' within the meaning of the enactment. "
the above principle has to be borne in mind in the interpretation of s. 27 (2) of act 1 of 1964.
17a. Two aspects arise from the submission of the learned counsel for the small - holder; (1) whether there can be any 'right accrued' in favour of a smallholder by the mere exercise of the option under s. 27 (2) without an order fixing fair rent under s. 31 of act 1 of 1964, And (2) even if any such 'accrued right' has arisen whether it will affect the fixation of fair rent on the basis of s. 10 of act 9 of 1967 for the subsequent period.
18a. Sutherland in his book on statutory construction, Volume i, Pages 527 - 28 (paragraphs 2044 & 2045) observed:
"in order to become vested, The right must be a contract right, A property right, Or a right arising from a transaction in the nature of a contract which has become perfected to the degree that the continued existence of the statute cannot further enhance its acquisition.
rights of action which are dependent upon a statute, And which are still inchoate and not reduced to possession or perfected by final judgment, Are lost by the repeal of the statute from which they stem. This rule of construction is simply a restatement of the common law principle of construction that the repeal of a statute operates to divest all rights accruing under the repealed statute and all proceedings not concluded prior to the repeal, Since inchoate rights are by definition not vested rights such as escape the common law rule of effacement. The inchoate rights are one but an incident to the statute and fall with its
repeal.
~
19a. The exercise of option by a small - holder during the currency of s. 27 (2) of act i of 1964 is only for the limited purpose of enabling the court to ascertain what fair rent is for determination under s. 31 of act 1 of 1964. By the exercise of the option can it be said that the rent in the contract of lease has become modified? no; it is still open to the small - holder to claim the contract rent. The cultivating tenant cannot compel the small - holder to accept the rent payable as a result of the option in lieu of the contract rent. Will it be open to the small - holder to enforce the payment of fair rent on the basis of the option before the determination of the same under s. 31 of act i of 1964? it has to be borne in mind that an order under s. 31 is not for recovery of fair rent based on the option of a small - holder but only fixing the fair rent. This obviously shows that s. 27 (2) merely aids the tribunal is the matter of fixation of fair rent under s. 31 of act i of 1964. The exercise of the option under s. 27 (2) is possible only in a petition under s. 31 of act i of 1964 and thus it is dependent on a proceeding under s. 31 of act i of 1964 it is merely a step in the process of determining fair rent by the tribunal. By the conferment of the option a small - holder is given only the privilege of exercising a choice which cannot under any circumstances enlarge itself into a vested right without its being accepted by the tribunal by an order under s. 31 of the act. The power of the tribunal to take into consideration the option, Must be available on the date when fair rent is fixed. The effect of the deletion of s. 27 (2) of act i of 1964 is that in respect of pending applications, The court has to fix the fair rent only in terms of s. 27 as amended by act 9 of 1967. The tribunal has no other power. What will be the position if after the exercise of the option by a small - holder the application filed by the cultivating tenant under s. 31 of act i of 1964 is withdrawn before act 9 of 1967? it was not suggested that still it will be open to the small - holder to claim the fair rent on the basis of the option exercised. It is no doubt that the option if exercised has to be recognised by the tribunal in passing an order under s. 31 of act 1 of 1964. Until it is done it is only in the realms of inchoate rights on the basis of which the small - holder can claim only a decision so long as s. 27 (2) of act 1 of 1964 is in force. In the absence of a saving clause in the repealing statute or in the absence of any clear indication to the contrary all rights dependent on the repealed provisions which had not been prosecuted to their completion are destroyed by the new act. Lord morris pointed out in director of public works v. Ho po sang (1961) 2 all e. R. 721 at p. 731.
"there is a manifest distinction between an investigation in respect of a right and an investigation which is to decide whether some right should or should not be given. On a repeal, The former is preserved by the interpretation act. The latter is not."
20a. Prior to the fixation of fair rent, The landlord whether he be a smallholder or not has got the right to receive from his tenant the contract rent. If the plea of the small - holder is accepted it will follow that besides the right to get the contract rent, A small - holder will have the right to get the rent based on the
option exercised. In my view, The right to pay the fair rent conferred by act 1 of 1964 is a right in favour of the tenant to relieve him from the obligations of the rent payable under the contract. That right is created by the statute itself which also prescribes the manner of fixing the fair rent. Supposing act 1 of 1964 is repealed after the exercise of the option by a small - holder and before the determination of fair rent by the tribunal, What is the method for enforcing the alleged vested right which arose out of the option? the only answer that can be given by the smallholder will be that it is not necessary for him to enforce the option, As he can realise the contract rent. The option available to a small - holder under s. 27 (2) is really a defence to the normal rule contained in s. 27 (1) for fixing the fair rent. Is the right resulting from the exercise of option one not to be damnified beyond 25% of the contract rent when the fair rent is fixed? it is not possible for any person to claim a vested right from being protected against further reduction when fair rent is fixed by the tribunal under s. 31. Taking the scheme of s. 27 (1) and 27 (2) of act i of 1964, It is not possible to hold that s. 31 merely investigates a right purported to have been created by s. 27 (2) of act i of 1964 in favour of a small - holder. I therefore hold that by the exercise of the option no accrued or acquired right is created in favour of a small - holder.
21a. Even if the exercise of the option under s. 27 (2) of act i of 1964 gives rise to an accrued or acquired right, The small - holder can claim the benefit of the same only till the date of act 9 of 1967. In the absence of any order fixing fair rent under s. 31, It has to be fixed in accordance with the provisions of the amended act, For the period subsequent thereto and not on the basis of the provisions deleted by s. 10 of act 9 of 1967. S. 27 (1) and (2) are in substance only definition clauses and if on the date of fixing fair rent by the tribunal s. 27 (2) is not in the statute book the tribunal has no right to fix the fair rent in accordance with its terms. Nobody can claim any right for the continuance of any enactment however beneficial it my be. In may view, The benefit arising out of the option cannot affect the fixation of fair rent under the amended act for the subsequent period.
22a. I am also of the view, That the intendment of act 9 of 1967 is even to affect rights created in favour of the landlords by act i of 1964. In rafiquennessa v. Lal bahadur chetri air. 1964 sc. 1511 at p. 1514, Gajendragadkar, C. J., Pointed out:
" retrospective operation of a statutory provision can be inferred even in cases where such retroactive operation appears to be clearly implicit in the provision construed in the context where it occurs. In other words, A statutory provision is held to be retroactive either when it is so declared by express terms or the intention to make it retroactive clearly follows from the relevant words and the context in which they occur."
act 9 of 1967 is a piece of beneficent legislation conferring benefits on cultivating tenants and in case of ambiguity the interpretation which advances the purpose of the act should be adopted. Raghubar dayal, J., Pointed out in sree rank ltd. V. Sd. Roy & co. Air. 1966 sc. 1953 that retrospective effect of an enactment can also be gathered from its language and the object and intent of the legislature in enacting it. Act 9 of 1967 is aimed at the protection of tenants and a construction which must harmonise with the context and which promotes is the fullest measure the policy and object of the legislation has to be adopted. Act i of 1964 has imposed restrictions on the landlord in realising the contract rent. The attempt by act 9 of 1967 is to impose further restrictions on the rights of the landlord. On a perusal of the several provisions of act 9 of 1967 i am satisfied that the intendment is even to reopen the decisions of the tribunal fixing fair rent which have not become final leaving along its interference with the right created in favour of the small - holder by the exercise of the option under s. 27 (2) of act i of 1964. The principle is thus stated by hidayatullah, Chief justice in sakharam singh v. Harbheji air. 1969 s. C. 1114:
"retrospection is not to be presumed for the presumption is the other way but many statutes have been regarded as retrospective without a declaration. Thus it is that remedial statutes are always regarded as prospective but declaratory statutes are considered retrospective. Similarly sometimes statutes have a retrospective effect when the declared intention is clearly and unequivocally manifest from the language employed in the particular law or in the context of connected provisions. It is always a question whether the legislature has sufficiently expressed itself. To find this one must look at the general scope and purview of the act and the remedy the legislature intends to apply in the former state of the law and then determine what the legislature intended to do."
i therefore hold that intendment of act 9 of 1967 is to make s. 10 retrospective even affecting vested rights.
i agree to the dismissal of c. R. Ps. 865 and 1682 of 1967 and crp. 1624 of 1968 with costs. But in the view that i have taken regarding the effect of the delection of s. 27 (2) of act i of 1964, I will also dismiss crp. 1518 of 1967 with costs.
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