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Case Number

Appeal from Original Decree No. 58 of 1899, against the decree of Babu Chandra Kumar Roy, Subordinate Judge of Backergunge

Advocates

Dr. Rash Behary Ghosh (with him Babu Atul Krishna Ghosh), for the appellants.
Babu Lal Mohan Das (with him Babu Bidhu Bhusan Ganguli), for the respondents.

Judges

Sir Francis W. Maclean
K.C.I.E, C.J
Banerjee, J.

Acts

clause (d) of s. 2 of the Transfer of Property Act prevents the application of clause (d) of s. III of that Act
SECTION 111 TRANSFER OF PROPERTY ACT
TRANSFER OF PROPERTY ACT
clause (d) of s. III of the Transfer of Property Act
clause (d) of s. III of the Transfer of Properly Act,
s. 2, clause (d), of the Transfer of Property Act
s. 111 of the Transfer of Property Act
clause (c) of s. 2 of that Act,

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Smart Summary

Structured Summary of the Opinion (Maclean, C.J.; Banerjee, J.)

Factual and Procedural Background

The relevant facts, as set out by the court, are these. On 1 June 1884 predecessors in title of the present appellants granted certain putni leases of properties. In 1888, the predecessors in title of the appellants, then zemindars, purchased the putni leases in execution of a decree for arrears of rent. By that purchase the putni rights became vested in the zemindars. In May 1896 the present plaintiffs bought at a revenue sale the zemindari rights of the appellants in lands included in the putnis. On 30 March 1898 the plaintiffs instituted the present suit seeking an apportionment of rent payable under the putnis in respect of the zemindari interest they had purchased and payment of the amount found due, together with consequential relief.

The appellants (defendants in the suit) defend on the basis that the putni leases determined (merged) when their predecessors purchased the putni leases in 1888, and they invoke sub-section (d) of section 111 of the Transfer of Property Act. The appeal arises from the decision below and the court was asked to determine whether the putni leases had indeed been determined by merger.

Legal Issues Presented

Whether the purchase in 1888 by the zemindars, whereby the interests of lessee (putnidar) and lessor (zemindar) in the whole property became vested in the same person in the same right, brought the case within sub-section (d) of section 111 of the Transfer of Property Act (i.e., whether merger occurred and the putni leases thereby determined).
Whether a putni lease is a "lease for agricultural purposes" within the meaning of section 117 of the Transfer of Property Act, thereby excluding it from the operation of section 111.
Whether clause (d) of section 2 of the Transfer of Property Act — which provides that nothing in the Act shall be deemed to affect any transfer by operation of law or by or in execution of a decree or order of a Court — prevents the application of clause (d) of section 111 to a transfer effected in execution of a decree (i.e., whether a transfer by order of a Court is outside the operation of section 111).
Whether the appellants' subsequent conduct (allegedly asserting the putni interest, realising rent, and acting as if the putni subsisted) prevented the operation of section 111 or otherwise kept the putni alive.

Arguments of the Parties

Appellants' Arguments

The primary defence: when the predecessors of the appellants purchased the putni leases in 1888 (as zemindars), the interests of the putnidar (lessee) and zemindar (lessor) became vested at the same time in one person in the same right, and therefore, under sub-section (d) of section 111 of the Transfer of Property Act, the putni leases determined (merged into the reversion).

Plaintiffs' / Respondents' Arguments

That putni leases are leases "for agricultural purposes" and so the provisions of chapter concerning leases for agricultural purposes (section 117) apply, excluding application of section 111 in the manner contended by the appellants.
That because the 1888 purchase was made in execution of a decree (a sale under Regulation VIII of 1819, by order of the Collector's Court), clause (d) of section 2 of the Transfer of Property Act operates to exclude the application of provisions of the Act to transfers by order of a Court — and thus section 111(d) cannot be applied to make the putni merge.
It was also urged that after the 1888 purchase the appellants treated the putnis as existing and undetermined (they asserted putni interest, realised rent from undertenants, and made statements and instruments referring to a continuing putni), and that such conduct prevented or rebutted the conclusion of merger.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Jibanti Nath Khan v. Gokool Chunder Chowdry	Cited by respondents to support the proposition that the doctrine of merger does not apply where putni and zemindari interests become united.	The court held that the cited case was decided without reference to the Transfer of Property Act and was inapplicable here because the putni in that case had been created before the Act came into force; accordingly the decision in that case did not prevent application of section 111(d) to the present facts.

Court's Reasoning and Analysis

The court's analysis proceeded in a series of focused steps, applying the text of the Transfer of Property Act to the facts before it and addressing the objections advanced by the plaintiffs:

The court first characterized clause (d) of section 111 as a codification of the law of merger — "introducing the principles of the English law of merger" into Indian law — providing that a lease determines when the interests of lessee and lessor in the whole property become vested at the same time in one person in the same right. Given the admitted fact that when the predecessors purchased the putni leases in 1888 the interests of the putnidar and the zemindar became so vested, the case prima facie fell within the statute.
On the first plaintiff objection (that a putni lease is a lease for agricultural purposes within s.117), the court rejected this classification. The court explained that putni leases are generally granted to a middleman for sub-letting (the tenants, not the putnidar, take land for agricultural purposes). The particular putni leases here conferred broad powers on the putnidar (holding and enjoying properties, transfer by sale or gift, settlements, levelling, converting to dwelling land, preparing gardens, building houses, etc.), which were inconsistent with labeling the instrument a lease "for agricultural purposes." Therefore s.117 did not exclude the putni from section 111.
On the second objection (that s.2(d) — excluding transfers by operation of law or in execution of a decree — prevents s.111(d) applying), the court analyzed the meaning of "affect" in s.2(d). The court reasoned that s.111 does not "affect" the transfer (i.e., does not validate or invalidate the transfer or change its mode); instead it states the legal consequence that follows when the event (unity of interests) occurs. The court rejected importing an exception into s.111 that would limit its effect to transfers by act of parties, observing that such a reading would produce anomalous results (e.g., merger applying in some sequences of events but not when the same interests unite by operation of law or by execution of a decree). Consequently s.2(d) did not prevent the operation of s.111(d) in this case; the merger rule still governed the legal consequence of the 1888 purchase.
The court considered the appellants' post-purchase conduct (asserting the putni interest, realising rents, pleading putni rights in rent suits, and issuing receipts and a lease referring to the putni). The court found the evidence slender and held that these acts did not conclusively show an intention to keep the putni as a subsisting tenure. The Chief Justice observed that explicit statutory provision as to legal consequence cannot be defeated by private acts purporting to keep the tenure alive. Banerjee, J. noted that, apart from equitable estoppel which was not raised, such conduct would not prevent the operation of section 111(d). The court also accepted that, while estoppel could in some cases bar a zemindar from denying a putni where third parties were prejudicially influenced, no such case or evidence was made here.
On the authority relied upon (Jibanti Nath Khan v. Gokool Chunder Chowdry), the court observed that the case was decided without reference to the Transfer of Property Act and was inapplicable because the putni there predated the Act; thus it did not control the present matter under the Act.

Weighing these points together, the court concluded that the putni leases were determined by operation of section 111(d) when the putni and zemindari interests became united in the zemindar by the 1888 purchase.

Holding and Implications

Holding: The appeal was allowed and the suit was dismissed with costs. The court held that the putni leases were determined by merger under sub-section (d) of section 111 of the Transfer of Property Act when the interests of the lessee (putnidar) and lessor (zemindar) became vested at the same time in one person in the same right as a result of the 1888 purchase.

Implications:

Direct effect on the parties: The plaintiffs' suit for apportionment of rent and related relief was dismissed; the appellants succeeded on the merger point and recovered costs.
Statutory application: The court applied section 111(d) as a codified rule of merger and held that (a) putni leases of the character described are not leases "for agricultural purposes" within section 117 so as to exclude section 111; and (b) section 2(d) (non-application to transfers by operation of law or in execution of a decree) does not prevent section 111(d) from producing its legal consequence (merger) when the relevant event occurs.
On precedent: The court treated the previously-cited case (Jibanti Nath Khan v. Gokool Chunder Chowdry) as inapplicable to the statutory question because it predated the Transfer of Property Act and was decided without reference to it; the opinion does not purport to lay down a novel general principle beyond the application of the statute to the present facts.

Disposition in the opinion: "Appeal allowed." (S.C.G; Appeal allowed.)

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Promotho Nath Mitter v. Kali Prasanna Chowdhry

Maclean, C.J:— The facts to which it is necessary to refer for the purpose of our decision may be concisely stated as follows. The predecessors in title of the present appellants, on the 1st of June 1884, granted certain putni leases of certain properties, the details of which it is unnecessary to enter into; in 1888, they in execution of a decree for arrears of rent due under the putni leases, purchased the putni leases, they being at that time the zemindars of the property. The putni rights by this purchase became vested in the Zemindars. In May 1896, the present plaintiffs bought at a revenue sale the zemindari rights of the appellants in the lands which, with other lands, were included in the above putnis, and on the 30th of March 1898, the present suit was instituted to have an apportionment of the rent payable to them under the putnis in respect of their zemindari interest so purchased, for payment to them of the amount which might be found due upon such apportionment and for other and consequential relief.

The defence, in short, of the present appellants is, that the putni leases have determined, inasmuch as by the purchase by their predecessors in title of the putni leases in 18; 8, the leases merged in the reversion. They rely upon sub-section (d) of section 111 of the Transfer of Property Act. That is substantially the only point that has been seriously argued before us; and if the appellants are successful upon that point, there is admittedly an end of the suit in their favour.

The question then is, whether this case falls within the provisions of the section of the Transfer of Property Act, to which I have referred, which runs as follows, “A lease of immoveable property determines…………in case the interest of the lessee and the lessor in the whole property becomes vested at the same time in one person in the same right.” This appears to me to be a section codifying the law upon a particular subject: in effect introducing the principles of the English law of merger, into the system of Indian law. It has not been contested, that, when the appellants predecessors' bought up the putni leases in 1888, the interest of the lessees under those putni leases, and the interest of the lessor, the zemindar in the whole property, did become vested at the same time in the zemindar in the same right, J prima facie then, the case falls within the statute. But the plaintiffs take two objections to this view, and their contention is, that the case is not within the Act, because putni leases are leases “for agricultural purposes” and they rely on s. 117 of the Act which says that, “one of the provisions of this chapter apply to leases for agricultural purposes” and further they say that, inasmuch as the transfer in 1888 was one in execution of a decree, the Act does not apply, having regard to sub-section (d) of s. 2 of the Act, which says: “Nothing herein contained shall be deemed to affect……………any transfer by operation of law, or by, or in execution of a decree, or order of a Court of competent jurisdiction,”

I will deal with these two objections in the order in which I have stated them. First, is a putni lease a lease for agricultural purposes? There is no authority for such a proposition, and so to hold, would, I think, come as a great euprise to the people of Bengal. A putni lease is generally granted to a middle man with a view to his sub-letting, which he generally does. It is not thy putnidar, but his tenants who take the land for agricultural purposes, and, if we look at the particular putni leases in the present cases, it will be seen that the object of the leases was to enable the putnidar “to hold and enjoy according to our pleasure the properties covered by the pottahs with power to transfer the same by sale or gift, to make settlements, etc., thereof, by owning and holding the same, levelling lands and filling up hollow places, converting lands into basti lands (dwelling places), preparing gardens, and building kutcha and pucca houses, on payment of the full amount of rent on the day fixed for payment of each of the instalments year by year according to the kistibundi given below.” It would be difficult to say that this was a lease for agricultural purposes.

Now I pass to the second objection. How does s. 111 “affect the transfer” under the execution of the decree in 1888? That section is a codified statement of the law as to the result to ensue upon the happening of a certain event, that is to say, the event of the interest of the lessee and the lessor in the whole property becoming united at the same time in the same person, in the same right. There is nothing in s. III which “affects”—a term which perhaps may mean validate or invalidate—the transfer: it only says what the result in point of law is to be on the happening of a certain event which may result either from transfer by act of parties, or by operation of law, or in execution of a decree. There is nothing in the section to indicate that the result in law there stated is only to ensue in the case of transfer by act of parties. We are virtually asked to introduce into the section after the word vested, “otherwise than by transfer by operation of law or in execution of a decree.” It is difficult to appreciate why the legislature should desire to draw a distinction, quâ the law of merger, between the result of a transfer by act of parties and one by operation of law. Such a view would lead to strange anomalies, though, if the language of the statue be clear and explicit, we are bound to follow the language and not regard the anomalies it may produce. For instance, a zemindar grants a putni to his son; he dies intestate and his son as his heir succeeds him as zemindar; he is also putnidar; the transfer of the zemindari interest is by operation of law; according to the contention of the plaintiffs, there would be no merger, s. 111 being inapplicable. But if A, as zemindar, granted his son a putni, then granted him the zemindari interest, and died the next day, there would be a merger. The Legislature can scarcely have intended this. I do not think the language of s. 2 compells us to put a construction on the Act which would lead to such anomalous results, and that the true view is that s. III merely codifies the law as to the law of merger as between landlord and tenant and does not “affect” the transfer itself. S. 2, sub-sec. (d) appears to me to mean that the various provisions in the Act regulating and codifying the law as to the actual transfers by act of parties shall not affect transfer by operation of law, & c. The latter are to remain unaffected by those provisions. The putni leases then must be regarded as determined.

It was also urged that the appellants subsequently to the purchase in 1888 had treated the putnis as existing and undetermined. But I doubt whether in the face of the explicit words of the statute, any act of the parties could prevent the conclusion of law which the section defines. “We are not dealing with the extinguishment of a charge under s. 101. However, the evidence on this point is very slender and scarcely bears out the conclusion of the Court below.

On these grounds I think that the appeal must be allowed with costs and the suit dismissed with costs.

Banerjee, J.:— I am of the same opinion. I only wish to add a few words upon three of the points that have been raised in the argument before us, namely, first, whether clause (d) of s. 2 of the Transfer of Property Act prevents the application of clause (d) of s. III of that Act to this case by reason of the transfer by which the interest of the lessee, the putnidar, became vested in the lessor, having been a transfer by order of a Court, that is a sale held under Regulation VIII of 1819; second, whether the fact of the lease being a putni lease prevents the application of clause (d) of s. III of the Transfer of Property Act to this case; and third, whether the defendants, appellants, asserted their putni interest after their purchase of the putni, and whether, if they did so, that would prevent the operation of clause (d) of s. III of the Transfer of Property Act in this case.

Upon the first question the argument on behalf of the plaintiffs respondents was this: That as s. 2, clause (d), of the Transfer of Property Act provides that nothing contained in the Act shall be deemed to affect any transfer by order of a Court of competent jurisdiction, and as the transfer, by which the interest of the lessee, that is the putnidar, became vested in the lessors, the appellants, was a transfer by a sale under Regulation VIII of 1819 which was a transfer by an order of the Collector's Court, which was a Court of competent jurisdiction, the provision of clause (d) of sec. Ill, which is a “provision contained in the Act, can not affect the transfer so as to make the putni merge in the zemindari.

The argument is ingenious, but is it sound? As has been pointed out in the judgment of the learned Chief Justice, to give effect to an argument like this would lead to very anomalous (results. For if clause (d) of s. 2 controls clause (d) of s. III, a case in which the lessee's interest beootnes vested in the lessor by inheritance would be a case to which the rule of merger cannot apply, for that would be a one of transfer by operation of law. But such a result could not have been intended. To apply clause (d) of s. III to the case may be to modify the after effects of the transfer. That cannot, in my opinion, be considered as effecting the transfer, that is, affecting either its validity or the mode of effecting it. The first question raised must, therefore, be answered against the respondents.

Then as to the second question. Two reasons were assigned in support of the contention that a putni lease is outside the scope of clause (d) of s. III of the Transfer of Properly Act, one of these being that a putni lease is a lease for agricultural purposes, within the meaning of s. 117 of that Act, and the other being that according to what for want of a better name may be called the common law of the country, it has been held that the doctrine of merger does not apply to a case where the interests of the putnidar and zemindar become united in the same person; and in support of the second branch of this contention the case of Jibanti Nath Khan v. Gokool Chunder Chowdry(1) was cited.

As to the first branch of the contention, I have nothing to say in addition to what has been said in the judgment of the learned Chief Justice.

As to the second branch of the contention, I would observe that there is nothing peculiar to a putni lease which would make (clause (d) of s. 111 of the Transfer of Property Act inapplicable to it. And as for the case of Jibanti Nath Khan v. Gokool Chunder Chowdry it is enough to say that case was decided without any reference to the Transfer of Property Act, and was a case to which the provisions of the Transfer of Property Act were inapplicable by reason of clause (c) of s. 2 of that Act, the putni lease in that case having been granted and the putni having been created before the Transfer of Property Act came into operation.

As to the third question raised, the evidence upon which the Court below has come to the conclusion that “for several years after the purchase the defendants asserted their putni interest and realised rent from the undertenants in that right,” has been placed before us; and 1 do not think that points conclusively to the defendants having by their, acts and conduct kept up the putni interest. No doubt, in the plaints filed by them in their rent suits against their tenants, in receipts granted by them to their tenants, and in a lease granted by them to their lessee for a term of years, they make mention of the fact that their then subsisting interest accrued by reason of their purchase of the zemindari from the former proprietors and of the putni at an auction sale of the same, but these are statements that only show that they regarded themselves, not merely as zemindars with a putni standing between them and the raiyats, but as zemindars to whom the putni previously carved out of their zemindari had come back. These statements, therefore, do not, necessarily, go to show that they intended to keep up the putni as a subsisting tenure. And even if they had sought to do so, still, apart from any question of equitable estoppel that might arise in some cases, but was not raised in this case, that could not have prevented the operation of clause (d) of section 111 of the Transfer of Property Act. Of course, there may arise a case in which, by reason of a zemindar, who has unsequently acquired the interest of & putnidar under him, having given out to the world that the putni was still a subsisting tenure, the conduct of third parties might have been influenced; and where that is shown to be the case, the zemindar might be estopped from denying the existence of the putni. No such case was here made or even suggested. That being so, the questions raised on behalf of the respondents must all be answered against them.

S.C.G

Appeal allowed.

Promotho Nath Mitter v. Kali Prasanna Chowdhry

Structured Summary of the Opinion (Maclean, C.J.; Banerjee, J.)

Factual and Procedural Background

Legal Issues Presented

Arguments of the Parties

Appellants' Arguments

Plaintiffs' / Respondents' Arguments

Table of Precedents Cited

Court's Reasoning and Analysis

Holding and Implications

Promotho Nath Mitter v. Kali Prasanna Chowdhry

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