Oldfield, J. — The respondent plaintiff an inamdar, holds from 2nd defendant, a Zamindar, under the sannad, Ex. A, and has assigned an interest in his holding to 1st defendant the appellant, under Ex. V. In 1912 the Revenue Officer engaged in the preparation of a record of rights for 2nd defendant's estate under Ch. XI, Madras’ Estates Land Act (1 of 1908), entered 1st defendant, as occupancy ryot in respect of the holding instead of plaintiff. The question is whether he did so correctly. The answer to this question depends on (1) whether Ex. V is a mortgage with possession or a lease (2) whether in the latter alternative 1st defendant is a ryot, as the term is defined in Sect 3, Cl. (15), Estates Land Act, and (3) whether the inam is pre-settlement and therefore an estate and plaintiff a land-holder under Sect. 3 Cls. (2) and (5).

Ex. V. dated 20th January, 1913, is described as a Thirmanam document and provided that in accordance with a prior agreement, Ex. H, the property, which had been placed in 1st defendant's; possession in 1910-1911, should remain in it until the end of the year 1917-1918 in consideration of a cash payment of Rs. 160 at the date of Ex. H and other subsequent payments on plaintiff's behalf, in all, Rs. 1,280 that 1st defendant should pay all dues other than extra taxes, which might be levied hereafter; and should at the end of the term surrender without any separate relinquishment. These, the essential provisions of Ex. V, are prima facie in accordance with the definition of a lease in Sect. 105 of the Transfer of Property Act, the payments referred to being the price paid or premium. Plaintiff however argues that those payments must not be so regarded, because they were advances, for which either the property, the possession of which was transferred, or the right to that possession was the security; and that is alleged with reference to the description of the document and the suggestion that advances’ prior to its execution were in question.

This argument is unsustainable. For, although etymologically a Thirmanam document may mean one executed in discharge, the term Thirmanam, as my learned brother with his extensive knowledge of the Telugu districts agrees, has acquired a wider meaning, as importing merely a settlement; and it may be observed, although no details are in evidence, that as Ex. H shows, the previous enjoyment of the property was under a document similarly described. There is no evidence of any advances prior to those enumerated in Ex. V and it was never alleged in the lower Courts that there were any. Those in Ex. V and the cash payment of Rs. 160 were made, after and when the agreement, Ex. H was executed, and the former after possession had been given; and they cannot be regarded as prior debts, which the transfer was intended to secure. There is no power of sale and no provision for accounting. Transfers, such as this, for a premium instead of a periodical rent, are no doubt unusual, in this Presidency. But, under the description of Zur-i-peshgee transactions, they appear to be well known in North India and are probably what the portions of the Transfer of Property Act definition, relating to price paid and to premium, were meant to apply to. That the distinction between transactions of that kind, which are leases and those which are mortgages will be difficult, is illustrated by the statement in Macpherson's Law of Mortgages 5th Ed. p. 8, adopted in the judgments in Basant Lal v. Tapeshri Rail, that the mortgage character is established:

“only when there is a power of redemption reserved to the lessor either expressly or impliedly, so that it distinctly appears that the parties themselves intended the transaction to be of the nature of a mortgage.”

Plaintiff relies on the fact that, although no such power was reserved in the documents in Bengal Indigo Company v. Roghobur Das the transfers there were regarded by the Privy Council as being:

“not mere contracts for the cultivation of the land let; but intended also to constitute and as having constituted a real and valid security to the tenant for the principal sums which he had advanced and the interest therein. The tenants’ possession under those transfers was, in part at least, not that of cultivators only, but that of creditors operating repayment of the debt due to them by means of their security.”

But the documents there construed contained what Ex. Where does not, stipulations for interest on the principal sums paid by the transferees, consistently with those sums being loans; there was as the judgment of the High Court shows “provision about the satisfaction of the money lent” and in fact, whatever the exact intention with which these references to security were made, the conclusion against the transferees was not based on the mortgage character of their transfers, but on a section of the Bengal Tenancy Act independently of it. In a later case Nidha Sah v. Murli Dhar(3) in which although the document was described as a mortgage and was given for prior advances, its provisions resembled those of Ex. V more closely, the Privy Council held that there was no mortgage but “simply a grant of land for a fixed term free of rent in consideration of a sum made up of past and present advances”. In accordance with this decision and with Sect. 105 of the Transfer of Property Act, the application of which there is here nothing to exclude, the finding must be that Ex. V is a lease.

The question is next whether 1st defendant is a “ryot” within the meaning of Sect. 3 (15), Estates Land Act; and as the contention that he holds as mortgagee, not for the purpose of agriculture has been disallowed, we have to decide first whether the payments in consideration of which Ex. V was given, were “rent” within the meaning of Sect. 3 (11). The objection taken to their being so is that these provisions refer to rent as “payable” and to the ryot as holding “on condition of paying” the implication being, it is alleged, that the only payments contemplated are those to be made in future after the beginning of and in the course of the relation between ryot and landholder. No authority has been adduced in support of this construction and it is neither reasonable nor convenient. For it entails, even in the ordinary cases, in which rent is payable periodically, that, if it has been paid on the due date, nothing more being payable for the remainder of the year, the relation of ryot and landholder will be suspended until more rent falls due. The preferable construction and that, by which such anamoly can be avoided, is that “payable” means “payable according to the terms of the contract between the parties to it,” and that Sect. 3, Cls. (11) and (15) are applicable whatever the stage or stages at which those terms, so far as they relate to payment for the use of the land, have to be or have been fulfilled.

The remaining matter in dispute in connection with the application of Sect. 3 (15) is whether plaintiffs' inam is an estate within the meaning of Sect. 3 (2) and plaintiff is a landholder under Sect. 3 (5) of the Estates Land Act. This it is not disputed in this Court, depends on whether the inam was created before or after the permanent settlement in 1802. The grant, as Exs. A and B show was in 1800; and as I agree with my learned brothers’ treatment of this part of the case, I need say only that no other year is suggested as that, in which the grant was really made, and that in the absence of any such special considerations as those arising from the terms of the grantor Zamindar's sannad in Secretary of State v. Raja of Venkatagiri, there is no reason for refusing effect to Sect. 4, Regulation XXV of 1802, and in view of its unqualified terms no relevancy in the enquiry whether the inam was in fact included in the assets of the Zamindari, on which the peshkush was fixed with regard to the circuit committee's accounts prepared before 1786.

As the inam is not an estate and 1st defendant is therefore not a ryot, the second appeal fails and is dismissed with costs on that ground.

Ramesam, J:—The respondent plaintiff an inamdar within the ambit of the Pittapur estate, sues for declaration that the 1st defendant is not an occupancy tenant of his inam. The Zamindari of Pittapur was constituted a Zamindari by a sannad issued in 1802 under the Regulation XXV of 1802 (see Sri Raja Rao Venkata Surya Mahipati Rama Krishna Rao Bahadur v. The Court of Wards). The grant of the suit inam to the plaintiffs' ancestors was made by the then Zamindar of Pittapur under a sannad (Ex. A.) and a chekunama (Ex.B) dated 22nd June, 1800. It was made free of kattubadi and therefore purported to be Sarvadumbala or absolute.

The first question that arises for decision is whether the Estates Land Act applies to the inam. If the inam is part of the Pittapur estate, the Act applies to the inam (Brahmayya v. Achiraju), apart from the question whether the first defendant is a ryot. The Courts below are of the opinion that the land was part of the Pittapur estate and on the question whether the first defendant is a ryot they differed.

On the facts found, I am of opinion that the land is not a part of the Pittapur estate but a pre-settlement Inam excluded from the assets of that Zamindari. The question turns upon Sect. 4 of Regulation XXV of 1802. That Section excludes from the scope of the permanent settlement “lakhiraj lands (or lands exempt from the payment of public revenue) and all other lands paying only favourable quit rents”. In respect of these, the Government reserved to itself the entire exercise of discretion in continuing or abolishing them. Mr. A Krishnaswami Aiyar who appeared for the appellant conceded that what was meant by the words in Sect. 4 above quoted is lands in respect of which the Zamindars purported to make grants either absolute or subject to a small kattubadi, though, later on, he adduced arguments somewhat inconsistent with this concession and contended that where a grant, though purporting to be absolute, was not binding on the Government, the land was not excluded from the assets of the Zamindari.

If a grant, whether absolute or subject to a small kattubadi, was made under circumstances binding on the Government, there was an end of the matter and there was no meaning in the Government reserving to itself the entire exercise of discretion in continuing or abolishing it. It was because almost all such grants were not binding on Government that they reserved to themselves the exercise of discretion in continuing or abolishing them. This is clear from the preamble to Regulation XXXI of 1802 which was relied on by the appellant, but which on close examination is really against him. This preamble to that regulation shows that it was meant to deal with lands “alienated by the unauthorised encroachments of the present possessors, by the clandestine collusion of local officers, or by other fraudulent means.” The preamble then proceeds to say “whereas the permanent settlement of the lard tax has been made exclusive of alienated lands of every description.” There can be no better statement of the objects and reasons of the Regulation XXV than this, by the legislature which enacted both the regulations in the same year, remembering that lands granted on condition of paying rent or heavy kattubadi cannot be regarded as alienated at all, it is clear that all alienated lands were intended to be excluded from the scope of the settlement. Such lands would consist of (1) lands granted on condition of rendering public service, hereditary village service inams; (2) Sarvadumbala Inams; (3) Inams granted on favourable quit rent. The first class was dealt with by Reguations XXIX of 1802 and VI of 1831 and now by Madras Act II of 1894 and III of 1895. A portion of the second class were recognised by Regulation XXXI of 1802 i.e, those granted prior to 1768 but their enfranchisement was effected in the Inam Settlement of 1860. The rest of the lands in the second class as well as those in the third class were both recognised and enfranchised in the Inam Settlement of 1860. It is because these were all executed from the scope of the settlement that karnams were required to keep lists of them with the purpose for which they were granted; Vide Sect. 2 of Regulation XXIX of 1802 the second clause of it dealing with the first class above mentioned, the third clause dealing with the second class above mentioned and the 8th and 10th clauses dealing with the third class above mentioned among others. The decision in Suryanarayana v. Patanna did not lay down that only Inams prior to 1768 could be recognised as Inams and that all Inams granted after 1768 though before 1802 should be regardrd as included in the assets of a Zamindari. The Judicial Committee referred to Regulation XXXI of 1802 merely for the purpose of narrating the facts which finally led to the preparation of Oakes Register in which the subject of the grant was described and their Lordships held that grant of the village meant grant of the soil in addition to revenue. This is also clear from Secretary of State v. Raja of Venkatagiri where their Lordships describe Regulation XXXI of 1802 as one referring entirely to procedure. The main argument of the appellant that as the accounts on which the peishcush was fixed were those of circuit committee appointed in 1784 all grants after that date were intended not to be recognised, shows the fallacy of the argument based on the Regulation XXXI of 1802, for, if the latter argument is correct, what becomes of lands granted between 1768 and 1784?

As to the use of the circuit committee accounts they were the accounts nearest in date, available to the State for the purpose of settlement. If the lands alienated after the accounts of the circuit committee were prepared, were intended to be excluded from the settlement, the Regulation would have expressly provided for it. Both the Regulation and the sannads issued under it, as they stand speak from their dates (1802) and all grants prior to 1802 were prima facie excluded from the permanent settlement.

Some reference was made by the appellant to Rajah Venkatarangayya v. Appalarazu. That case related to an inam granted on condition of rendering private service to the Nuzvid Zamindar. The lands in the Nuzvid Zamindari held on condition of rendering private service to the Zamindar were all dealt with by Mr. Taylor at the Inam Commission and held to be included in the assets of the Zamindari; (see Sri Raja Sobhanadri Appa Rao Bahadur v. Sri Raja Venkata Narasimha Rao Bahadur. It is true that the statement that they were resumable was not acted upon by the Courts Sri Raja Sobhanadri Appa Rao Bahadur v. Sri Raja Venkata Narasimha Rao Bahadur affirmed by Vencata Narasimha Appa Rao Bahadur v. Sobhanadri Appa Rao Bahadur, but whether resumable or irresumable that they were included in the assets of the Zemindari follows from dictum of Sir Barnes Peacock in Raja Nilmoney Singh v. The Government(4), approved in Raja Nilamoney Singh v. Bakranath Singh(5). It is on these principles that the decision in Raja Venkatarangayya v. Appalarazu, rests. Obviously the land was not lakhiraj. I am not able to agree with the other reasons given in it for holding that the land was not lakhiraj. The case in Secretary of State for India v. Kirtibas Bhubati Harichandan Mahapatra(6), merely lays down a presumption regarding lands within the ambit of a Zamindari and does not help the appellant where the facts are definitely known and rebut the presumption. If the land was excluded from the assets of the Zamindari it cannot fall under Sect. 3 (2) (d) as it is not a whole village.

It cannot be contended that, apart from the Estates Land Act the defendant has any occupancy rights. Starting with the position that there is no presumption in favour of the Inamdar (Sivaprakasa Pandara Sannadhigal v. Veerama Reddi(7) or against him Suryanarayana v. Patanna(8), it is impossible that the defendant in this case who was let into the land under Ex. V on condition that he should give up the land at the end of the term see Suryanarayanana v. Patanna can have any of the occupancy rights whatever the original grant might be. When the last tenant surrendered the land in 1908, the land came to the possession of the plaintiff who had both varams at his disposal and then, the defendant entered on condition of giving up the land at the end of nine years which is a very important condition in all cases not governed by the Estates Land Act, Suryanarayana v. Patanna and Upadashtra Venkata Sastrulu v. Divi Seetaramudu. The case in Sivaprakasa Pandara Sannadhigal v. Veerama Reddi, was a case where the tenants have been holding the land continuously for over 75 years at unvarying rents, were mortgaging and selling their holdings, and partitioning them among themselves, and where there were no muchilikas by tenants stipulating that the land should be surrendered at the end of a particular term, the only muchilikas purporting to contain such terms being found to be forgeries and the tenants obtained compensation from Government when the holdings were acquired.

I therefore hold that the plaintiff is entitled to the declaration prayed for. In this view it is unnecessary to discuss the other questions arising in the case.

But I may add that I agree with my learned brother's construction of Ex. V. In my opinion Ex. V evidences a loan and a lease. In the sense that a simple method of recovering the loan was also provided by it. It may be said that Ex. V also furnished some security to the creditor (lessee). But there is no security either in the sense that Ex. V amounts to a simple mortgage on which a suit for sale can be maintained or in the sense that Ex. V amounts to usufructuary mortgage. Anyhow there was certainly a lease. Probably their Lorships were using the word “security” in this sense in Bengal Indigo Company v. Roghobur Das the decision in which ultimately turned on a special definition of “rayat” in the Bengal Tenancy Act.

I agree that the Second Appeal should be dismissed with costs.

K.V.SAppeal dismissed..