The circumstances which gave rise to the litigation out of which the present appeal arises may be shortly stated as follows:— On the 20th September 1881, the Defendant-Respondent took a perpetual mokurari lease of the entire Mouzah. Zakhim Salempore from the Plaintiffs-Appellants. A sum of Rs. 6,340 was paid as bonus and the rent payable was fixed under the lease by a clause which runs thus:— “At varying jamas, to wit, on an annual uniform jama of Rs. 1,580 from 1289 to 1291 (Fasli) and at an annual uniform consolidated jama of Rs. 1,585 of the current coin from 1292 (Fasli) together with abwab, such as, selami for Dusserah and Holi, Purkha, Sair, Road cess, Public works cess, & c., all of which are included in that very sum of Rs. 1,585.” This is the covenant as embodied in the kabuliyat which was produced in the Courts below. In this Court, a certified copy of the lease was allowed to be produced and an examination of it shows that the corresponding covenant in that document is expressed in identical language.
At the time when the lease was granted the amount of cesses levied by Government from the zemindar was Rs. 97. Since then, as the annual value of the land has gradually increased, there has been a corresponding increase in the demand of the State. In 1889, the cesses were levied from the zemindar at the rate of Rs. 108-1-1 per year and in 1902 the amount was increased to Rs. 174-4-3. The Plaintiffs-Appellants commenced the present action for declaration that they were entitled to recover from the tenure-holder Defendant the amount of cesses of Rs. 97 which they had been called upon to pay by the Government and also for recovery of the sums paid. The claim was resisted by the Defendant on the ground that the amount payable by her in respect of this tenancy had been unalterably fixed by the terms of the contract of the 26th September 1881 and that the burden of all new impositions by the State must be borne by the Plaintiffs zemindars. The Court of first instance overruled this objection and made a decree in favour of the Plaintiffs. Upon appeal the District Judge has reversed that decision.
The Plaintiffs have now appealed to this Court, and, on their behalf, it has been contended that, upon a true construction of the lease of 1881, the Defendant is liable to bear the burden of the increase in the amount of cesses payable. Whether this contention is valid or not, must depend upon the terms of the contract between the parties. But, before we consider the question of true construction of the lease of 1881, it is desirable to point out that it was open to the zemindar and the tenure-holder to contract themselves out of the provisions of sec. 41 of the Bengal Cess Act of 1880 [see Surnomoyee v. Paresh Narayan(1), Shumbhu Nath v. Hurrosundari(2), Ashutosh Dhur v. Amir Molla(3) and Narendra Kumar Ghose v. Gora Chand Joddar(4)]. The question, therefore, reduces itself to this, to what extent have the parties contracted themselves, out of the provisions of sec. 41 of the Cess Act, because to that extent only will their rights and liabilities be governed by the contract and, beyond that, the statute must prevail.
The lease is described as a perpetual mokurari lease which implies that the tenancy was permanent, heritable and transferable and that the rent was fixed in perpetuity. From this it was argued on behalf of the Defendant-Respondent that the sum of Rs. 1,585 was the only sum payable by the tenant to the landlord during the whole period of the continuance of the tenancy. It was pointed out that the lease describes this sum as the uniform annual jama which includes abwabs of various descriptions and Road cess and Public works cess, and it was contended that this implied whatever might be the amount levied by the Government from time to time as Road cess and Public works cess, the tenant could not be called upon to pay anything more than Rs. 1,585 annually; in other words, it was argued that the effect of the agreement between the parties was that the tenant should take upon herself to pay the whole of the cesses payable at the time of the contract and that, if the amount payable was subsequently increased, the burden of the excess should fall upon the landlord.
After a careful examination of the terms of the contract, we are clearly of opinion that the contract did not provide that if the cesses were increased in future the additional burden should fall upon the landlord. The only reasonable interpretation of which the covenant in question is capable is that the amount annually payable by the tenant, namely, Rs. 1,585, included abwabs, Road cess and Public works cess. No doubt it was a consolidated amount, but the contract does not provide for the contingency which has happened, namely, an increase in the amount of cesses levied by the State. Much stress was laid on behalf of the Respondent upon the words “yell sab shamil usi pundrah sao pachasi rupea menhai bil mokhata” and it was suggested that this means that Rs. 1,585 was the only amount which could, however the circumstances might alter, be legitimately demanded by the landlord from the tenant. In our opinion, there is no foundation for the interpretation suggested. The word “bil mokhata” is well known, it means “according to agreement, stipulated, fixed or consolidated.” In Wilson's Glossary, p. 87, a “bil mokhata jama” is stated to mean ‘stipulated assessment’ and a ‘bil mokhata pottah’ is stated to mean a lease for a gross aggregate rent; one in which the land taxes and other cesses or abwabs are consolidated. The position of the word ‘bil mokhata’ in the sentence in the lease before us might even justify a literal translation “according to agreement” (that is, the lease), instead of the derivative rendering ‘consolidated’ and this interpretation considerably weakens the contention for the Defendant-Respondent.
The clause in question in the leases now before us seems, therefore, to imply nothing more than this, that Rs. 1,585 was the total amount inclusive of abwabs and cesses. There is nothing to show that the parties contemplated a possible increase in the amount of cesses leviable by Government, and they do not appear to have provided for this particular contingency. If so, the obvious result is that the rights and liabilities of the parties must be regulated by the statute, only except in so far as the contract has made provision to the contrary. How far, then, has the contract in this case made express provision contrary to the statute. In our opinion, the effect of the contract is that the tenant undertakes to pay the whole of the cesses which were levied at that time, inclusive of the share payable by her under the statute as also the share the burden of which would otherwise have to be borne by the landlord himself. If any additional cess is imposed or if the amount of cess is increased, the incidence of the new burden must be regulated according to the statute.
In support of the interpretation which we put upon the contract, reliance may be placed upon two well-established principles. In the first place, it is indisputable that when an exemption is claimed from statutory liability, the contract under which exemption is claimed, must be strictly construed against the claimant and it must appear from its terms, beyond the possibility of any dispute, that the parties intended to vary the liability as imposed by the statute. This rule is especially applicable where exemption is claimed from taxation imposed by the State. No doubt, in this particular instance, it was open to the parties to contract themselves out of the provisions of the statute. But it must be clearly and satisfactorily established, not only that the parties did intend that their liability should be different from that created by the statute, but also, that they intended the variation to go to the extent now suggested on behalf of the Respondent. In the second place, it is well-established that the construction to be placed on a deed ought to be such as will render it reasonable rather than unreasonable and will make it just to both the parties rather than unjust to one of them [see Attwood v. Emery(5), Rawlinson v. Clarke(6)]. In other words, as stated by Phillips, J., in McElroy v. Sloope(7), a Court should always prefer that construction, consistent with the language of the deed, which will prevent one of the parties from obtaining an unconscionable advantage over the other.
Now, in the case before us, if the contention of the Respondent prevails, what is the obvious result? Under the Bengal Cess Act, the amount of cesses payable is assessed upon the annual value of the land, which means the total rent actually payable or assessed as reasonably payable during the year, by all the cultivating raiyats of the land. Consequently, as the total amount of rent payable increases, there must be a corresponding increase in the amount of cess leviable. It follows accordingly, that the greater the diligence and success of the Defendant in the enhancement of rent payable by the cultivating raiyats, the larger will be the amount of cesses demandable by the State. The contention of the Respondent, therefore, amounts to this—that the greater the profit she makes by increasing the rent payable by her tenants, the greater will be the additional burden thrown upon the landlord; and it is quite conceivable that if in course of time, the annual value of the land, that is, the annual profits of the Defendant, continuously increases, the increase in cesses might reach a figure which would absorb the whole of the rent receivable by the Plaintiffs. If the contract between the parties had expressly stated that their relative position was to be of this description, a Court might feel itself compelled to enforce the terms of the agreement. But when the lease does not expressly make a provision to this effect and when a different interpretation is possible and is consistent with the language of the deed, we must decline to accept the construction suggested on behalf of the Respondent, the result of which would be manifest injustice to one of the contracting parties. We must adhere to the just rule of interpretation that the words of a contract should be given a reasonable construction, where that is possible, rather than an unreasonable one, and we must endeavour to give a construction, most equitable to the parties, which will not give one of them an unfair or unreasonable advantage over the other [Clay v. Ballard(8)]. We feel no doubt whatever, that the interpretation which, the Respondent now put on her contract, is an after-thought, and is not the interpretation put upon it by the parties when it was executed.
The learned vakil for the Respondent suggested that at the time when the lease was granted, it was executed by way of a compromise of a dispute, and that there was an agreement between the parties that future alteration in the cesses should in no way disturb the jama mentioned in the lease. In support of this view he cited the 8th paragraph of the written statement. It is obvious, however, that this can be of no assistance to the Respondent. It cannot be disputed that under the Indian Evidence Act, no evidence of extrinsic circumstances is admissible to add to, contradict, vary or alter the terms of a deed, and as was observed by Lord Denman, C.J, in Gross v. Lord Nugent(9) “if there be a contract which has been reduced into writing, verbal evidence is not allowed to be given on what passed between the parties, either before the written instrument was made or during the time that it was in state of preparation, so as to add to or subtract from or in any manner to vary or qualify the written contract.” If evidence of negotiations was admissible to contradict the terms of the written contract the very object which the parties had in view in reducing the terms of the agreement into writing, would be completely defeated. No doubt, as stated in Meriam v. United States(10), it is a fundamental rule that in the construction of contracts, Courts may look not only to the language employed but to the subject-matter and the surrounding circumstances, and may avail themselves of the same light which the parties possessed when the contract was made, but this may be done with a view to interpret the contract and not to contradict it [Inglis v. Buttery(11), Macdonald v. Longbottom(12)]. In the case before us, if we advert to the subject-matter of the lease and the surrounding circumstances at the time of its execution, it is clear that the parties did not intend and could not very well reasonably have intended that the burden of all additional impositions should be borne by the landlord, especially if this imposition was due to an event, the entire profit of which would be enjoyed by the tenant. We must consequently hold that, so far as the additional amount of cesses is concerned, the rights of the parties must be regulated by the statute.
The question next arises as to the amount which may be legitimately claimed by the Plaintiffs from the Defendant. The effect of the contract was, as we have already stated, that the tenant undertook to pay to the landlord not only what was at the time legitimately demandable from her as tenure-holder under sec. 41 of the Bengal Cess Act, but also the amount the burden of which would otherwise have to be borne by the landlord as zemindar. If we examine the provisions of sec. 41 of the Bengal Cess Act, we find their ultimate effect to be this: The cess is calculated upon the annual value at a certain rate, which, in the present case; is one anna in the rupee. The zemindar, in the first instance pays to the Government the amount assessed, that is, 1/16 of the annual value, subject to a deduction proportionate to the Government revenue, which turns out to be 1/32 of the revenue. But the zemindar collects from the tenure-holder 1/16 of the annual value subject to a deduction of 1/32 of the rent paid and the tenure-holder, in his turn, collects from the cultivating raiyats 1/32 of the annual value. The net result of this operation is that if the total amount of cesses be taken to be 1/16 of the annual value, the Government bears 1/32 of the revenue; the zemindar bears 1/32 of the difference between the rent he collects from the tenure-holder and the revenue he pays to Government, the tenure-holder bears 1/32 of the difference between the rent he collects from the cultivating raiyats and the rent he himself pays to the zemindar; and the cultivating raiyats bears 1/32 of the rent he pays to the tenure-holder. It is obvious, therefore, that if the rent payable by the tenure-holder to the zemindar is, as in this case, constant, the amount of cesses which the zemindar has ultimately to bear is a constant quantity and it is this amount which under the contract in this particular case, the tenant herself undertook to bear. The tenant also undertook to pay the amount then payable by her under the statute which would vary with the annual value. As the annual value has now increased, it is this item alone which has increased and the whole of the increase had to be paid by the tenant. It has been found that the amount of cesses payable at the date of the contract was Rs. 97, and this was included in the consolidated sum of Rs. 1,585. The amount of cesses now payable is Rs. 174-4-3. The difference, therefore, namely, Rs. 77-4-3, which has been levied by the Government from the zemindar, is payable by the Defendant tenure-holder, and this is the rate at which the claim is laid in the plaint, although the calculations by which this amount is determined are not very intelligible. The Plaintiffs further claimed damages at the rate of 25 per cent. The Court of first instance, however, allowed damages at 12 per cent, only, which seems to us to be fair. It is clear, therefore, that the total amount which was decreed by the Court of first instance is legitimately recoverable by the Plaintiffs from the Defendant.
The result is that this appeal must be allowed, the decree of the District Judge reversed and that of the Court of first instance restored. This order will carry costs throughout.
S.C.S
Appeal allowed.