Oldfield, J.:— The appellants are defendants, tenants of an estate of which plaintiff is the Court of Wards Manager. The question is whether defendants are bound to pay plaintiff the portion of the road-cess for which they are responsible under Section 73 of the Local Boards Act (5) of 1884 amended by 6 of 1900, or can and should pay a mortgagee under Ex. 1. The lower appellate Court has held that they must pay plaintiff with reference to the terms of both Ex. I and S. 73.

2. The material portions of S. 73 provide that (1) every landholder must pay the local tax (except that leviable as water tax, which is not in question here) directly to Government, (2) the landholder can recover a specified portion of the tax from “any person, holding lands with or without right of occupancy as an intermediate landholder, or an under-tenure created, continued or recognized, by the landholder”; (3) the intermediate landholder can recover from the tenants occupying the land half the tax payable by the landholder in respect of that land. Some attempt was made to argue that the mortgagee under Ex. 1 was a transferee of the title to the mortgaged property and therefore became the landholder during the term of the mortgage. But this does not appear to have been put forward in the lower Courts. The property is part of a permanently settled zamindari and it is not alleged that it has been separately registered. In Ex. I moreover the mortgagor, plaintiff's predecessor, expressly undertook to continue the payment of peshkush. In these circumstances attention may be confined to the plea that the mortgagee is an intermediate landholder.

3. The lower appellate Court has first held generally that the mortgagee is not an intermediate landholder within the meaning of the Act, but has given no general reason for doing so. To us it is clear that a mortgagee with possession is as much a land bolder as any lessee and that he is intermediate between plaintiff and his tenants. Our difficulty is caused by the further reference to an under tenure. That expression is not defined in the Local Boards Act; nor, so far as we have been shown, is it part of the legal or revenue phraseology of this presidency. It is argued, on the one hand, that an under-tenure involves the idea of a tenancy, a holding under a landlord for rent or service, and therefore cannot include a mortgagee with possession. On the other hand if may be said that it involves only a holding of any particular description and this is in accordance with the only other use of the word in India to which we have been referred, that in Sections 3 and 5 of the Ben. Ten. Act 8 of 1885, where a tenure is defined as the interest of a tenure-holder or under tenure-holder, and a tenure holder as meaning primarily “a person who has acquired from a proprietor a right to hold land for the purpose of collecting rents or establishing tenants on it.” This definition is wide enough to cover the mortgagee in the present case, since under Ex. I he was put in possession to collect rents and profits estimated at an amount which would extinguish the debt within the term fixed. Mortgagees in possession, equally with lessees, are entitled to recover rent by summary process: Vellayan Chetti v. Tiruvakone(1), and it is a further reason for adopting defendants construction that in accordance with it the amendment to the Act in 1900 would afford a comprehensive remedy for the mischief against which that amendment would be supposed to have been directed, by protecting tenants against the landholder's separate demands for cesses in mortgaged as well as leased, estates; for no reason has been suggested for the restriction of the protection afforded to the latter. So far then as argument can be based on the wording of S. 73 the conclusion must be that the mortgagee is an intermediate landholder and defendants are entitled to pay him.

4. The learned District Judge next dealt with Ex. I, laying stress on the absence of reference to payment of cess and the exclusion of the mortgagee's liability for taxes; and, holding that assuming the mortgagee is an intermediate landholder within the meaning of S. 73, the right to receive one half of the cess from the tenant is defendant on the liability the landlord (or preumably the intermediate landholder) to pay it and his having paid the whole cess.” But in constructing Ex. 1, it is to be remembered that it is dated 1897, before any explicit liability for any part of the cess was placed on the intermediate landholder by Act 6 of 1900 and before the tenant's right to pay him was recognized by statute; and accordingly no clear recognition of that right is to be looked for in the document. One of its terms is no doubt that plaintiff's predecessor shall pay the peshkush to Government, and it is not contended that does not cover the payment of cesses payable with it. But, if the landholder is liable directly to Government for cesses under Ex. I, that is only what S. 73 provides, and his being so cannot affect the right of the tenant to pay the intermediate landholder or the landlord's duty to recover from the latter referred to later in the section. There is further underlying this argument, and that based on Exs. 3, 4 and 6 to which reference will be made, the fallacy involved in the failure to recognize that S. 73 in its amended form confers a right on the tenant. When it has been found that an intermediate landholder, such as the section contemplates, exists, that right cannot be affected by a contract, such as Ex. I, between plaintiff's predecessor and a third party, the mortgagee; nor, created (as it is) unconditionally, can it depend on any payment having been made by the former to Government or by the latter to the former. It is accordingly immaterial whether plaintiff is entitled to be reimbursed by the mortgagee the sums which (it is not denied) he has paid Government or whether, as defendants contend, he is not entitled to reimbursement under the terms of Ex. I.

5. At this point plaintiff's contention, that the change in the law effected by Act 6 of 1900 cannot modify the relation between him, his mortgagee and defendants created by Ex. I in 1897, calls for notice. It is of course the case that the rights of the parties to a contract are to be judged by their intention at its date and “by that law by which they intended or rather may justly be presumed to have bound themselves: “Lloyd v. Guibert(2). But this principle can affect only the parties. It cannot affect strangers to the contract, such as the defendants, or deprive them of statutory rights.

6. Plaintiff relies next on the fact that in Original Suit No. 54 of 1905 he was refused a decree against the mortgagee for the amount of the payments he had made to Government for cess for certain faslis prior to those now in question. It is not clear how this was relied on in the lower appellate Court. But it is not alleged that this decision is res judicata between plaintiff and the present defendants, who were not parties to it. Here argument is based on the principle stated in Sritiivasa Aiyangar v. Arayar Srinivasa Aiyangar(3) and Sayaam Ramamoorthi Dhora v. Secy. of State(4) that judgments, whether in rem or in personam establishing a relation between the parties to them, are conclusive against third parties in the absence of fraud on the latter, and that principle must be accepted by this Court, though its 1 validity was doubted in Pedri Mohun Shaha v. Durlavi Dossya(5). There is however the fundamental objection to its application to the present case that it extends only to adjudications which would be res judicata between the parties to them, and that the judgment in Original Suit No. 54 was not of that description. It has not been printed, but the lower appellate Court's account of it on which we must depend, shows that the mortgagee who succeeded could not have appealed against the merely incidental finding on the point now in question, and that finding dealt, not with defendant's statutory right, but with the existence, of an assignment to the mortgagee of the right to collect from them.

7. The existence of such an assignment, as is evidenced by Exs. 3, 4, 6, is the next matter in issue. The last-mentioned document can be dealt with shortly, because the lower appellate Court-found on the evidence that the circumstances in which it was prepared were not established. Exs. 3 and 4 are prior leases of the property, the unexpired term of the former having been transferred to the mortgagee under Ex. I. The cess was no doubt specified in them as one of the items making up the total payable by the lessee, and it is argued by defendants that this total being the basis on which the amount of rent, Rs. 2,600, to be credited annually against the mortgage debt is estimated in Ex. I, the cess must be supposed to be included in that amount and appropriated to the mortgagee, plaintiff being therefore bound to pay Government from his own pocket. The lower appellate Court was-1 think, right in holding that this inference was not justified. For the cess is only Rs. 71-1-6 per annum, whilst the total rent under Ex. 3 was Rs. 2,391-1-9 and the method by which the amount fixed in Ex. I, Rs. 2,600, a round figure, was arrived at is beyond conjecture. Plaintiff, on the other hand, relies on the lower appellate Court's statement that “the non-mention of the right to get the half-share of the cess from the tenants in Ex. I prima facie suggests that it was not included in the rights conferred on the mortgagee,” as a finding of a fact which cannot be contested in second appeal. But the very guarded language used by the learned District Judge, regarding what is really the construction of a document, precludes my taking this view; and on the merits I cannot find that anything is established in favour of either side.

8. In these circumstances the foundation of our decision must be our conclusions that the mortgagee is an intermediate landholder within the meaning of S. 73 and that the tenants' right to pay him recognized in that section cannot be abrogated by a contract to which they were not parties. The appeal must be allowed, the decision of the lower appellate Court being set aside and that of the Deputy Collector restored with costs in both Courts.

Tyabji, J.:— The plaintiff seeks to recover land cess from the defendants, claiming that he is landholder and the defendants his tenants under Section 73 of the Local Boards Act (Madras Act 5 of 1884.) The defence is that the defendants are not bound to pay the cess to the plaintiff, but to the person who has a usufructuary mortgage of the land under Ex. I dated 3rd November 1897. The material portions of S. 73 areas follows: “Every landholder shall pay to the Collector…. the local tax,… (provided that in all cases when a person holds as an intermediate landholder on an under-tenure….recognized by a landholder it shall be lawful for the landholder to recover from the intermediate landholder the whole of the tax…less one-half of the tax assessable on the amount of….quit rant payable by the intermediate landholder to the landholder) provided (also) that, in the case of lands occupied by tenants, it shall be lawful for the landholder (or the intermediate landholder, as the case may be) to collect and recover from his tenant one-half-of the amount payable by the landholder in respect of the land so occupied.” The portions enclosed in [] were inserted by Madras Act 6 of 1900 and came into force on 1st April 1901, about three and a half years after the execution of the mortgage Ex. I.

9. The scheme of the section is that though the whole of the tax is recoverable by the Collector from the landholder yet half of the tax has to be borne ultimately by the tenant and the other half either entirely by the landholder or, where there is an intermediate landholder, partly by the landholder and partly by the intermediate landholder. To effect this division between the two latter it is provided that, wherever there is an intermediate landholder, the one-half tax payable by the tenants shall be recovered by the intermediate landholder and not by the landholder.

10. It is urged, in the first place, that the plaintiff has no locus standi because the mortgagee is the landholder; that as stated in one of the grounds of second appeal, “Ex. I is in effect an absolute transfer of property for a term.” Its is admitted however that the plaintiff was prior to the mortgagee, the landholder. There does not seem to have been such a complete transfer of the ownership as to pass to the mortgagee all the rights which the mortgagor had in the property. As pointed out by my learned brother (whose judgment I have had the benfit of reading) though the property is part of a permanently settled zamindari, it is not alleged to have been separately registered and the land tax is specifically payable by the mortgagor. The deed refers to itself as khanda gutta which literally means (“fixed rent”), “deed with possession” and also a “mortgage possession.” This contention therefore cannot succeed. It does not seem to have been put forward in the lower Courts.

11. Therefore, whether the plaintiff can recover the half-cess payable by the tenants, depends solely upon whether the mortgagee answers to the description of an intermediate landholder. All the rest of the arguments addressed to us or contained in the judgments of the lower Courts centre round this one question.

12. The expression “intermediate landholder” appears from S. 73 to connote (a) the holding of land (b) as an intermediate landholder (c) on an under-tenure; (d) created, continued or recognized by a landholder (e) payability by him of kattubadi, jodi, poruppu (or) quite-rent; (f) when he exists the tenant is his tenant. The last appears from the second proviso.

13. The expression “intermediate landholder” indicates prima facie a person who is (1) landlord of the tenants; (2) a tenant of the ultimate landholder. His dual capacity is recognized in the direct reference to under-tenure, and the assumption that rent is payable by him on the one hand, and by the fact that the tenants are referred to as his tenants on the other. It is also referred to in Nellayappa Pillian v. Ambalavana Pandara Sannadhi(6) for another purpose. It is true that if no rent is payable by the intermediate landholder to the landholder, there is no unsurmountable difficulty in working out the provisions of the sections. The intermediate landholder will, in that case, have to pay the whole tax to the landholder or, in other words, bear the whole tax himself.

14. With reference to the expressin “under tenure” I have been unable to come across its use or recognition in any English or American text-books on the law relating to landlord and tenant, or anywhere else except in the Bengal Tenancy Act (Bengal Act 8 of 1885). The definition contained in that Act has been cited by my learned brother; it consists of the equivalent of (d), (a) and (f) above, with reference to which there is no dispute before us: the expression “undertenure is evidently not used in S. 73 in a sense cognate to “under-tenant” which would mean the holding of a tenant under a tenant, or an under-lease. Still inasmuch as in accordance with the strict terminology of English law even a free-holder is a tenant holding a tenement on a tenancy, and “under-tenure” may with sufficient accuracy be taken to refer to a holding under that of the landholder.

15. Five other considerations have been suggested to us, three as having some relevance to the connotation of the term ‘intermediate landholder’ and two as otherwise affecting the rights of the parties.

16. First, there is a remark of the District Judge on which a good portion of his judgment is based: “Assuming the mortgagee was an intermediate land-holder within the meaning of S. 73 the right to recover one-half of the cess from the tenant is (he says) depended on the liability of the landlord to pay it and on his actually having paid the whole cess. The remark has reference to the nature and incidents of the rights concerned. It seems to me necessary to direct attention to the component parts of the three relationships on which the section is explicitly based, and then to annex rights to the holders of the respective relationships, considered with reference to the two relationships entitling a right to claim half the tax. In the case of the landholder the District Judge's remark may be correct: the first proviso refers to the tax paid by the landholder, for payment of which the section specifically provides. But the remark is obvously inapplicable to the intermediate landholder. His right does not depend on his liability to pay the tax. He does not in any case actually pay the whole cess;” he pays the whole cess with a deduction calculated on the rent payable by him: and he pays not to the Collector, but to the landholder. The learned District Judge's remark therefore, coupled as it is with the assumption that the mortgagee is an intermediate landholder, seems to me, with the greatest respect, to be unsupportable. The Act provides for the payment of the tax and its apportionment amongst the three persons by reference to their bearing certain relationships to the land and to each other. The payment of the tax to the Government is not laid down as an element in the definition or connotation of any of those relationships and the existence of the relationships is the only condition precedent to the right to cover half of the cess. The payment has been imposed on him who bears one of the relationships, viz. that of landholder and the liability on the others is qualified by the amount paid or payable by the landholder. The recovery of half of the cess is not dependant on the landholder's liability to pay it in any sense, except that where no cess is payable the portion received from the tenant is half of nothing.

17. Secondly, in an earlier portion of his judgment the District Judge has remarked that “there is no transfer of property” (to the present mortgagee) “as in the case of an English mortgage or of a mortgage by conditional sale” and that therefore the mortgagee cannot, in the present case, be considered to be an intermediate landlord. With great respect I am unable to follow this. Assuming that there is no such transfer of property as is referred to, I do not find that as an ingredient in the notion of an intermediate landlord.

18. Thirdly, it is suggested that if it is shown that as between the mortgagor and mortgagee the former cannot recover anything from the latter, it must be decisive of the question whether the tenants must pay to the one or the other. That, in my opinion, is not the case. It is true that the law assumes that the intermediate landholder (1) recovers half of the tax from the tenants; (2) that he pays something to the landholder; and these two matters are connected with each other and (to the extent stated above) with (3) the landholder's liability to pay the whole tax to the Government. But I apprehend that by the terms of his contract with the intermediate landholder the landholder could either release to the intermediate landholder his right to recover the portion of the tax which the law empowers the landholder to recover, or reserve that right to himself, and the release or the reservation might be either express or it may be implied from the fact that all rights other than those referred to are either expressly released or reserved: Nikha Mal v. Sulaiman Sheikh Gardner(7). If the right to recover half-cess from the tenant had been purported to be reserved by the landholder to himself, there might have arisen a question whether the tenants would not even in that case be justified in paying it to the intermediate landholder. I shall refer to the legal aspect of this question under the fourth head to which I have alluded. But here I must state that, in my opinion, the contract of 1897 contained no reservation, express or implied, of the right arising from the amendment of the Act in 1900.

19. On the other hand the landholder may, it is not disputed, validly agree to allow the intermediate landholder to retain the portion of the tax recovered from the tenant and apply it towards any sum that may be due to him from the mortgagor, and that is what is alleged here on behalf of the tenants. But though the question, whether or not such an agreement, express or implied, relating to the application of the money exists between the mortgagor and mortgagee, may affect their pockets, it does not affect the question whether the tenants have to pay to the mortgagee in the first instance or directly to the mortgagor. The District Judge's omission to notice this made him consider that there was here something like an “assignment of the statutory right to contribution” alleged, whereas the question is whether the mortgagee or the mortgagor is the person to collect the tenants' contribution, and that depends solely upon whether the mortgagee became by the contract an intermediate landholder.

20. The further question whether if he became entitled to collect half of the cess in his capacity as intermediate landholder he was at liberty to retain it himself or was bound to pay it or account for it to the mortgagor, is not relevant to the rights and liabilities existing between the landholder and the tenant. This is illustrated by Ram Awatar v. Tulsi Prosad Singh(8).

21. The fourth consideration to which I referred above is whether the rights of the parties are affected by the fact that S. 73 was amended after the contract, Ex. A, was entered into. In the case last cited the statutory right of recovering the cess from the tenants came into being after the contract; in our case the incidence of a right existing at the time of the contract was (by an amendment of the law after the contract) shifted from the landholder to the intermediate landholder. I think it unnecessary to consider the general question whether this shifting can be prevented by contract, inasmuch as in the present case there is no attempt to do so. But I may point out that the shifting is brought about by the legislature and has the effect of a contractual act. It may be that the legislature intended that the parties should not be at liberty to contract themselves out of this shifting as an incident of a contract, the effect of which, apart from this particular term, would be to make one of the parties to it an “intermediate landholder and that the reason for this curtailment of the right to contract (if the right is so curtailed) is, as pointed out by my learned brother, to afford a comprehensive remdy for the mischief of the landlord's separate demands for cesses on mortgaged lands: see also Vellayan Chetti v. Tiruvakone. It may be that the legislature left no power to the parties to contract so as to bring about a relationship corresponding in other respects to that of an intermediate landholder without annexing to that relationship the rights under S. 73. The question however seems to me to be a large one and I express no opinion on it as it seems to me that it has no bearing, on the view I take of the case. My view is that the contract did not expressly or impliedly purport to prevent a shifting, of the right, which was brought about by a legislative amendment of the law made three years after the contract had been entered into.

22. Finally, some arguments before us were apparently based on the asumption (which I cannot grant) that, because? in other cases persons called or calling themselves mortgagees or lessees were or were not held to be intermediate landholders or farmers of revenue and because in the present case we speak of a mortgagor and mortgagee, therefore this case must be decided as being governed by those other cases. The decisions cited to us seem to me however to be helpful, not as direct authorities, but as showing in what way the question should be endeavored to be solved. In Vellayan Chetti v. Tiruvakone a Full Bench pointed out that the question must depend upon the terms of the particular contract giving rise to the relationship between the parties, which in that case also was a mortgage. The fact that a deed refers to itself as a mortgage, does not necessarily make it a mortgager Nidha Sah v. Murli Dar(9); nor does every mortgagee become or cease to become an intermediate landholder because one mortgagee has been held to be so or not to be so. I proceed to deal with the facts of the case and to examine whether the mortgagee answers to the description of an intermediate land-holder.

23. The mortgage deed in the present case recites: (1) that a sum of Rs. 28,000 was found payable to the mortgagee on a calculation which was no doubt satisfactory to the parties. It is then said (2) that the rents of the lands in question including therein: (a) kattubadis of inams, (b), kists of banjir lands, (c) incomes of banjir lands, (d) fishing tax, (e) etc., are fixed at Rs. 2,600; (3) that the mortgagee “is this day put in possession;” (4) that “the mortgagee” shall collect the said lease amount (i.e, the rents above recited) and enjoy the same for 25 years… bearing the profit and loss thereof; and on the expiry of 25 years put the villages and the document in the mortgagor's possession on the mortgagee recovering the amount due in respect of this bond in full.” (5) Covenants follow on the part of the mortgagor: (i) not to offer to repay the mortgage-debt prior to the expiry of 25 years, (ii) not to mortgage the villages any further, (iii) to furnish accounts and information, (iv) to transfer an existing lease (which is in evidence as Ex. 3) to the mortgagee. Then after a passage, which I shall set out below, (v) the right to sue ryots in his own name is given to the mortgagee, (vi) also to quarry; (vii) finally the mortgagor agrees to pay the peishkush and in default to pay back the mortgage amount with;interest. (6) The portion above referred to is as follows:

“As by this khanda gutta deed the Villages of Damilada and Lingalopada have been given to you for khanda gutta to be enjoyed by you for 25 years for the said sum of Rs. 28,000; you shall not plead then (i.e, at the end of 25 years) that anything more is due to you under the document nor shall we contend that the debt has been discharged earlier.”

24. It seems to me that every part of the connotation of the term “intermediate landholder” has its equivalent in the status given to the mortgagee. There Knight be some doubt as to payment of rent. But Section 105 of the Transfer of Property Act, recognizes the payment of a preminum instead of rent for a lease; and I find it difficult to distinguish from a premium the sum of Rs. 10,000 originally paid by the mortgagee to the mortgagor, which, by a calculation that the parties seem to have considered satisfactory, was taken to amount to Rs. 28,000. The relationship of a usufructuary mortgagee is always close to that of a lessee, as may be found by reference to the provisions of the Transfer of Property Act regarding them respectively, and to the numerous cases before the Courts in which it has had to be determined whether the relationship that has arisen between the parties must fall under the one description on the other.

25. I agree with my learned brother that no aid is to be obtained from Exs. 3, 4, and 6 for the reasons stated by him.

26. With reference to Original Suit No. 54 of 1905, on the file of the District Court of Ganjam, we have not the judgment before us. Its contents are however referred to in the judgment under appeal and the parties before us had to restrict their arguments on what the District Judge says regarding it. From his judgment I gather that in Original Suit No. 54 of 1905 (1) the present plaintiff contended that the mortgagee was on the mortgage liable to pay the cess and had failed to pay it; (2) the mortgagee contended on the other hand that (a) the cess was payable by the mortgagor, and (b) that the half-cess recoverable by the mortgagee from the tenants was to be reckoned as part of the income. The only part of the judgment which became res judicata was that the mortgagor was liable to pay the land cess. This is irrelevant to the question before us whether or not the mortgagee is the intermediate landholder. I hold therefore that the mortgagee in the present case was an intermediate landholder and as such he and not the mortgagor (the plaintiff), has the right to collect from the tenants the half-cess referred to in Section 73 of the Local Boards Act. The appeal will succeed with costs in this and the lower appellate Court. The order of the Special Deputy Collector that each party should pay his own costs in the Court of first instance will stand.

S.N/R.K

27. Appeal allowed.