Judgement Consolidated Appeals from decrees of the High Court (September 26, 1904, and January 19, 1905) in second appeals which arose out of certain suits instituted by the appellant in the Court of the Deputy Collector of Kistna under Madras Kent Recovery Act, 1865, s. 9. Law. Rep. 37 Ind. App. 110 ( 1909- 1910) Raja Parthasarathi Appa v. C hevendra Venkata Narasayya 45 These suits were brought on August 15, 1900, and sought for decrees directing the respondents respectively to accept certain pattas which the appellant had tendered for the current agricultural year and to execute muchalkas corresponding thereto. The appellant is a zemindar and the respondents are some of the tenants of lands comprised in the village of Chevendra, part of the appellants estate. Up to the fasli year 1266 the tenants in Chevendra collectively delivered to the zemindar by way of rent a fixed share of the produce of the land in grain. In that year this system of produce sharing (known as asara) fell into abeyance, and for three years the tenants collectively paid rent in cash under an instrument therein described as a veesabadi cowle. In fasli 1270 this arrangement was renewed for a period of five years at enhanced rates of rent. Subsequently, and (except in faslis 1285 and 1286) down to fasli 1299, the tenants held under separate leases and paid rent in cash in respect of the different parts of their holdings at various rates which were altered from time to time. In faslis 1285 and 1286 the original asara system was again followed. In fasli 1299 the zemindar visited the village, and after some discussion with the tenants he offered them pattas for five years, the rate of rent in some but not all the pattas being Rs.5 per acre; these pattas were accepted and corresponding muchalkas were executed by the tenants. On the expiry of this period the like terms were again offered, and the tenants having accepted them, they were in force till fasli 1308. In that year there was a dispute, and on June 22, 1900, the appellant tendered to the tenants pattas for the next fasli, stipulating (save as to land under certain named crops) for rent in kind, being a share of produce according to the original asara system. The tenants refused to accept these pattas and to execute corresponding muchalkas. In that year there was a dispute, and on June 22, 1900, the appellant tendered to the tenants pattas for the next fasli, stipulating (save as to land under certain named crops) for rent in kind, being a share of produce according to the original asara system. The tenants refused to accept these pattas and to execute corresponding muchalkas. The pattas tendered required the tenants respectively to deliver to the zemindar by way of rent a specific share of certain crops grown on irrigated land comprised in their holdings, and to pay rent at the rate of Rs.2.12 per acre for land on which " dry " crops are raised. The question on these appeals was whether or not the zemindar was bound to insert in the patta the same terms as to rent as were contained in leases granted by him for the period of five years in fasli 1299. The respondents in two of the suits so brought, out of which these appeals arose and which were dealt with together throughout, denied in their written statements that the asara system was according to custom and alleged as follows "(4.) Up to fasli 1277, joint money-rents system continued to be in force; in fasli 1278, individual money-rents were arranged, and in fasli 1280, taram cists (classification cists) were charged. According to these taram (classification) rates, cists were paid from fasli 1281 to fasli 1298. Afterwards in fasli 1299, as the plaintiff came to the village of Chevendra, stayed there for one month, sent for and told the defendant and the other ryots of the village that the extent of lands bearing lower rates was very large, and that the extent of lands bearing higher rates was very small, and that some uniform rate for all the lands should be arranged permanently; all the ryots approved of it and an arrangement was entered into between both parties to the effect that a uniform rate at Rs.5 per acre should be permanently paid in respect of all kinds of lands in the holding of individuals." "(7.) Moreover, the veesabadi system has been in force for a long time continuously up to date, whereby cists continue to be paid in the form of money. Therefore, the intention and understanding of the parties is to pay the cists only in the form of money; besides, it is an implied contract. Therefore, the intention and understanding of the parties is to pay the cists only in the form of money; besides, it is an implied contract. Nor does the custom of paying grain rents prevail in the village. It is not disclosed in the plaint that such custom exists. For these reasons also plaintiff has no right to give up the mamool veesabadi rates and ask for grain rents." The issues material in these appeals are the third and sixth and are set out in their Lordships judgment. Law. Rep. 37 Ind. App. 110 ( 1909- 1910) Raja Parthasarathi Appa v. C hevendra Venkata Narasayya 46 The Deputy Collector of Kistna on January 22, 1901, found that both as regards the division in grain between zemindar and tenant of the produce of irrigated lands and also as regards the rates of money rent chargeable on dry lands the rates contended for by the appellant were the proper rates. That finding was not afterwards disturbed. But he found on the sixth issue that there was a special contract between the parties " to pay and receive at the rate of Rs.5 an acre as an unchanging rent, and that this is binding now." The District Judge of Kistna in appeal reversed the finding as to special contract and found that it had not been proved that Rs.5 an acre had been accepted by the parties as a permanent rate of rent. After remand another district judge held that, as the pattas tendered were such as required amendment, the suits must be dismissed. Second appeals were thereupon made to the High Court, which held, following previous decisions, that it was open to the Court to direct that the pattas tendered be modified, and after deciding that they required modification in certain other respects immaterial to these appeals, they called upon the District Judge for " a finding upon the evidence on record with reference to the question of implied contract to pay at the rate of Rs.5 per acre, with reference to the observations made above respecting the matter." In the course of their observations the learned judges expressed the view that in certain circumstances the payment of a fixed money rent for nine years may be quite sufficient to prove a contract that the rate was agreed upon as the permanent rate. The " observations made above " in the judgment of the High Court were as follows " On the question of the implied contract to pay a fixed rent of Rs.5 per acre, it is clear that the District Judge has proceeded on entirely wrong grounds and his finding such as it is cannot be accepted and must be set aside. The matter is dealt with quite shortly in paragraph 12 of his judgment. The first ground stated Now in the first place the payment of a fixed money rate for nine years does not prove a contract that the rate was agreed upon as the permanent rate.* Whether from such payment a contract to pay is to be implied or not depends upon the facts of each case. In certain circumstances such payment may be quite sufficient to prove such a contract, in others it may not be sufficient. Whether having regard to the circumstances of the present case an implied contract should be taken to have been established is a point to which the judge has not addressed himself— as nothing more is added by him to the general proposition stated in the passage quoted above. The next ground taken by the judge is ‘when from the past history it is evident that rents were fluctuating the mere fact that Rs.5 was the rate for nine years does not raise any presumption that it is a permanent rate. " The question for determination was, having regard to what transpired in fasli 1299, when the uniform rent of Rs.5 in respect of the whole of the lands in the village was agreed to instead of the different rates for different lands that obtained before, and having regard to the fact that from that time for nine years continuously that rate was paid, whether that rate should be taken as impliedly assented to as the rate to be paid in future, and this was a question to be determined uponthe evidence adduced, and to which reference is made at length under the issue of express contract in the judges judgment. There was no question of presumption, and the circumstance that prior to fasli 1299 rent was paid at fluctuating rates and sometimes in kind and sometimes in money was quite immaterial with reference to the determination of the said question of implied contract. There was no question of presumption, and the circumstance that prior to fasli 1299 rent was paid at fluctuating rates and sometimes in kind and sometimes in money was quite immaterial with reference to the determination of the said question of implied contract. As to the third and last ground stated by the judge, again the defendants having failed to prove the express contract that Rs.5 was agreed upon as the permanent rate cannot be allowed to put forward the plea of an implied contract to the same effect, it is difficult to understand why defendants were so precluded. These Law. Rep. 37 Ind. App. 110 ( 1909- 1910) Raja Parthasarathi Appa v. C hevendra Venkata Narasayya 47 being all the reasons given for holding that there was no implied contract, the finding must be treated as unwarranted by law." Upon this remand the District Judge found that there was an implied contract between the parties that the rate of Rs.5 an acre was a fixed rate and should be continued in perpetuity. He said " The reason given by the plaintiff himself (plaintiffs first witness) for establishing the fixed rents was the inconvenience felt by the ryots under the existing system of constantly fluctuating rents which placed them at the mercy of the Karnams. He says that there was no question at the time as to whether the rates so fixed should be subject to subsequent alteration. He denies that there was any understanding that the rates should be permanent. His witnesses, plaintiffs witnesses 5, 6, 7, 8, and 9, all say that it was understood at the time that the rents were permanently fixed at Rs.5. It is urged that these witnesses, although they were examined for the plaintiff, are defen dants in one or other of the rent suits. Plaintiffs ninth witness is, however, not a defendant, and plaintiffs sixth witness is the zemindars own peshkar. Rs.5 per acre is a considerably higher rate than those prevailing at the time it was fixed. There must have been some inducement to make the ryots consent to pay higher rates. The plaintiff says that, under the new system, the tenants acquired an occupancy right in the lands. This, however, they had before. It is probable that permanency was the real consideration. There must have been some inducement to make the ryots consent to pay higher rates. The plaintiff says that, under the new system, the tenants acquired an occupancy right in the lands. This, however, they had before. It is probable that permanency was the real consideration. For four years after the term of five years originally fixed had expired, the plaintiff continued to offer pattas at the same rate of Rs.5. Rents at the same rate continued to be paid by the tenants for this period without any question on either side. This state of things appears to me to be strongly in favour of the presumption that there was an understanding on both sides that the rate of Rs.5 an acre was not to be altered. It is urged for the plaintiff that no muchalkas were executed during this period of four years. I do not know what inference I am expected to draw from this. The most natural inference seems to me to be that both parties were so convinced in their minds that Rs.5 had been fixed as a permanent rate that the formal execution of muchalkas was considered superfluous. My finding is that there was an implied contract to pay a fixed rate of Rs.5 an acre." The High Court accepted this finding, " as meaning that the rates settled in the pattas of fasli 1299 were intended to be permanent/ and held that the pattas tendered should be modified accordingly. Formal decrees giving effect to this judgment were drawn up, against which two of these appeals were preferred. During the litigation, namely, on August 15, 1900, the appellant, having tendered to the same tenants, who are the respondents, pattas in the same form as before, for a subsequent year, filed the two other cases now in question, namely, summary suits Nos. 18 and 113 of 1902. The High Court eventually decreed them in the same terms as in the previous cases. De Gruyther, K.C., and Kenworthy Brown, for the appellant in the four consolidated appeals, contended that the High Court was in error in finding that a contract relating to fixity of rent and binding upon zemindar and tenants could be implied from the transactions between them in 1299. De Gruyther, K.C., and Kenworthy Brown, for the appellant in the four consolidated appeals, contended that the High Court was in error in finding that a contract relating to fixity of rent and binding upon zemindar and tenants could be implied from the transactions between them in 1299. There was a written contract between the parties which settled the relations between them for ten years, and if there had been any intention to settle them permanently it should have been so expressed, and a fresh term could not be added by implication. There was no evidence which in law could support the finding of the High Court. An express agreement to pay a fixed rent for a definite period could not be extended by implication to pay a fixed rent permanently. At the close of the definite period the parties were free to make some other engagement, and not having done so, the only alternative was that the rates of rent should be determined by the Court in accordance with the rules Laid down in Madras Rent Recovery Act (VIII. of 1865), s, 11, clause 3. Reference was made to ss. 3, 7, 9, and 11 of that Act and to Evidence Act (I. of 1872), s. 91. Further, the finding of the District Judge of Kistna to the effect that a permanent rate of rent had not been agreed upon was final, and there was no jurisdiction under s. 584, C. C. P., to direct a new trial of that issue. Law. Rep. 37 Ind. App. 110 ( 1909- 1910) Raja Parthasarathi Appa v. C hevendra Venkata Narasayya 48 The respondents did not appear. The judgment of their Lordships was delivered by MR. AMEER ALI. These are consolidated appeals from certain decrees of the High Court of Madras made on September 26, 1904, and January 19, 1905, respectively. The suits which gave rise to the appeals were, along with a number of others, instituted by the appellant zemindar on August 15, 1900, against his tenants of the village of Chevendra, in the Madras Presidency, under s. 9 of the Madras Rent Recovery Act (VIII. of 1865) to enforce the acceptance of pattas tendered by him and the execution of muchalkas corresponding thereto. Although this litigation has passed through several Courts in India, the matter in controversy lies within a small compass. Act VIII. of 1865) to enforce the acceptance of pattas tendered by him and the execution of muchalkas corresponding thereto. Although this litigation has passed through several Courts in India, the matter in controversy lies within a small compass. Act VIII. of 1865 requires landholders specified in s. 3, to which category the plaintiff belongs, to enter into written engagements with their tenants; and no suit or legal proceeding to enforce the terms of a tenancy is sustainable unless pattas and muchalkas have been exchanged or " unless it is proved that the party attempting to enforce the contract had tendered such a patta or muchalka as the other party was bound to accept " (s. 7). In case of a refusal to accept a patta such as the landholder is entitled to impose, he can proceed under s. 9 by a summary suit before the Collector to enforce its acceptance. Sect. 11, which lays down the rules to be observed in the decision of suits involving disputes regarding rates, is important. It declares that— "(i.) All contracts for rent, express or implied, shall be enforced. "(ii.) In districts or villages which have been surveyed by the British Government previous to January 1, 1859, and in which a money assessment has been fixed on the fields, such assessment is to be considered the proper rent when no contract for rent, express or implied, exists. "(iii.) When no express or implied contract has been made between the landholder and the tenant, and when no money assessment has been so fixed on the fields, the rates of rent shall be determined according to local usage, and when such usage is not clearly ascertainable, then according to the rates established or paid for neighbouring lands of similar description and quality. Provided that if either party be dissatisfied with the rates so determined, he may claim that the rent be discharged in kind according to the warum, that is, according to the established rate of the village for dividing the crop between the Government or the landlord and the cultivator. Provided that if either party be dissatisfied with the rates so determined, he may claim that the rent be discharged in kind according to the warum, that is, according to the established rate of the village for dividing the crop between the Government or the landlord and the cultivator. When the warum cannot be ascertained, such rates shall be decreed as may appear just to the Collector after ascertaining if any increase in the value of the produce or in the productive power of the land has taken place otherwise than by the agency or at the expense of the ryot." The rest of the section is not material to the present cases. The pattas tendered by the appellant required the tenants respectively to deliver to him by way of rent a specific share of certain crops grown on what are called " wet " or irrigated lands comprised in their holdings and certain money rent for land on which "dry crops" were raised—his case being that the Law. Rep. 37 Ind. App. 110 ( 1909- 1910) Raja Parthasarathi Appa v. C hevendra Venkata Narasayya 49 asara or sharing system was the mamool or customary mode of payment in the village of Chevendra, and that the tenants had refused to accept the asara pattas for fasli 1309; hence the suits. The tenants denied that the asara system was in force in their village, and alleged inter alia that money rates had prevailed there for a considerable number of years " continuously up to date," and were the proper rates; and that by a specific arrangement entered into in fasli 1299 ( 1889) a uniform rate of Rs.5 per acre had been settled in perpetuity for the lands held by them respectively. They also took exceptions to the " rules, conditions, and items " in the asara pattas as being improper and illegal. The two material issues framed by the First Court are 3 and 6, which are as follows "3. Whether the system of payments of rental in money or whether the system of payment of rent in grain is the proper cist of payment ? "6. The two material issues framed by the First Court are 3 and 6, which are as follows "3. Whether the system of payments of rental in money or whether the system of payment of rent in grain is the proper cist of payment ? "6. Whether there was a special contract in F. 1299 between the parties as to the rates and what were the terms of the contract and whether such contract is still binding?" At the trial before the Deputy Collector it was admitted that money rents at varying rates had been in force in the village since fasli 1266 ( 1856), with the excption of two years (fasli 1285 and 1286= 1875 and 1876), when rent in kind was paid under circumstances regarding which the parties are not agreed; that in fasli 1299 an arrangement was come to by which the varying money rates prevailing in Chevendra were replaced by a uniform rate of Rs.5 per acre, and pattas and muchalkas were exchanged on that basis for a term of five years, and that the same arrangement continued for the next four years; that in fasli 1309 the plaintiff, wishing to revert to the asara system, tendered to the tenants asara pattas, which they refused to accept on the grounds already stated. On the third issue, namely, " whether money rent or rent in kind was the proper cist of payment," the Deputy Collector, principally on the fact that the veesabadi or cash system (as opposed to the asara) had prevailed in the village, with a short break, over more than forty years, held that payment in money was " the proper form of payment of rent." On the question whether the rate of Rs.5 was in 1889 fixed in perpetuity, he found, for reasons set out in his judgment, “that there was a special contract between the parties to pay and receive at the rate of Rs.5 an acre as an unchanging rent." He accordingly directed that the pattas tendered by the plaintiff should be modified in conformity with his finding and that the defendants should execute muchalkas in accordance therewith. On appeal by the plaintiff, the acting District Judge agreed with the First Court that " money rents alone were the proper mode of payment." With regard to the question whether the rates settled in 1889 were permanent, he held that the tenants had not succeeded in establishing their allegation. And he added " The defendants, having failed to prove the express contract that Rs.5 was agreed upon as the permanent rate, cannot be allowed to put forward the plea of an implied contract to the same effect.....Having found that there has been a contract that the rent has to be paid in money, but that there has been none as to how much it is to be, I hold that under s. 11, clause (iii.), of the Rent Recovery Act the plaintiff is entitled to be paid rent according to the established warum of the village." In this view the District Judge remanded the cases to the First Court for the purpose of finding the proper warum rates. In his judgment on remand the Deputy Collector stated that he had already found on the evidence the warum rates in force in the village when the asara last prevailed there; but as the Law. Rep. 37 Ind. App. 110 ( 1909- 1910) Raja Parthasarathi Appa v. C hevendra Venkata Narasayya 50 asara system ceased many years ago, the warum rates recognized then could not be considered the proper warum rates for the present time. On the return of the above finding the cases came before another District Judge, who was of opinion that, as money rent had been found to be the proper form of payment and no attempt had been made before him to disturb that finding, the tender of warum pattas was wrong, and that the suits should be dismissed on that ground. On second appeal by the plaintiff, the learned judges of the High Court appear to have dealt with the judgments of the Lower Appellate Court both before and after the remand. In the first place, they held that, " even if it be found that the proper rates were only money rates," the tender of a warum patta was no objection to a suit being sustained under the Rent Recovery Act. In the first place, they held that, " even if it be found that the proper rates were only money rates," the tender of a warum patta was no objection to a suit being sustained under the Rent Recovery Act. Dealing with the judgment of the first District Judge, they were of opinion that it was not open to the Courts " to imply from the mere circumstance that the rent had been paid in money for a series of years, but at varying rates, an agreement to pay money rent." On the question of an implied contract to pay a fixed rent of Rs.5 per acre, they considered the District Judges finding to be unwarranted by law, and they set it aside and remanded the cases for a fresh finding, with the following observations— "The question for determination was, having regard to what transpired in fasli 1299, when the uniform rent of Rs.5 in respect of the whole of the lands in the village was agreed to instead of the different rates for different lands that obtained before, and having regard to the fact that from that time for nine years continuously that rate was paid, whether that rate should be taken as impliedly assented to as the rate to be paid in future, and this was a question to be determined upon the evidence adduced and to which reference is made at length under the issue of express contract in the judges judgment. There was no question of presumption, and the circumstance that prior to fasli 1299 rent was paid at fluctuating rates and sometimes in kind and sometimes in money was quite immaterial with reference to the determination of the said question of implied contract. As to the third and last ground stated by the judge, again the defendants having failed to prove the express contract that Rs.5 was agreed upon as the permanent rate cannot be allowed to put forward the plea of an implied contract to the same effect, it is difficult to understand why defendants were so precluded. These being all the reasons given for holding that there was no implied contract, the finding must be treated as unwarranted by law." The matter on remand came before a third District Judge, who found in favour of the implied contract. These being all the reasons given for holding that there was no implied contract, the finding must be treated as unwarranted by law." The matter on remand came before a third District Judge, who found in favour of the implied contract. On the return of the cases to the High Court, the second appeals came on for final hearing on September 26, 1904, when the learned judges accepted the last finding of the Lower Appellate Court as meaning that the rates settled in 1299 were intended to be permanent. They accordingly reversed the decrees of the Courts below, and directed that the terms of the pattas tendered by the .plaintiff should be in conformity with the terms of the pattas of 1299, subject to certain corrections they had already pointed out in their previous judgment. Other suits, under s. 9, brought by the plaintiff in 1902, have been disposed of by the High Court in accordance with the above decision; and these consolidated appeals have been preferred by the plaintiff to His Majesty in Council against the several decrees of the High Court. As the respondents do not appear, the cases have been heard ex parte, and it has hence been necessary to refer at some length to the history of the litigation and the contentions of the parties. Law. Rep. 37 Ind. App. 110 ( 1909- 1910) Raja Parthasarathi Appa v. C hevendra Venkata Narasayya 51 It is clear that in 1299 different rates of rent prevailed in the village of Chevendra; some were higher than Rs.5, others lower in that year a uniform rate of Rs.5 per acre was introduced by mutual agreement between the landlord and tenants, and leases were exchanged on that basis for a term of five years. The defendants allege that the plaintiff at that time expressly agreed that the rate of Rs.5 should be permanent. The Courts in India have disbelieved the story of an express agreement to that effect. An implied contract, however, has been inferred from the fact that rents at the same rate were paid and received for four years after the expiration of the term fixed by the leases of 1299, This circumstance is regarded as explainable only on the hypothesis of an understanding that the rate of Rs.5 should continue for ever, and as rendering probable the existence of an implied contract. Their Lordships are unable to concur in that view, or to hold that alongside, of the express contract embodied in the leases exchanged between the parties there was a collateral implied agreement relating to fixity of rent. The plaintiff denies any understanding of the kind alleged by the defendants; their explanation as to the reason why such an important arrangement was not reduced into writing or incorporated in the pattas and muchalkas of 1299 is that the plaintiff told them that perpetual leases would require to be stamped, and they therefore rested content with his verbal assurance. The Courts in India do not appear to have placed reliance on this statement, nor are their Lordships prepared to accept it. However much they regret this protracted litigation, they do not find themselves in a position to decide the cases finally. The theory of an implied contract on which the High Court has rested its decrees is, in their Lordships judgment, untenable; there is thus no decision on the real question between the parties, namely, whether the pattas of fasli 1309 are such as the plaintiff is entitled to impose on the tenants. Sect. 11 of Act VIII. of 1865 lays down the rules for deciding disputes as to rates of rent. Clause (iii.) deals with the mode of determining the rate when no contract exists. It being found that there is no express or implied contract, the question must be decided in accordance with the rules contained in clause (iii.)- Their Lordships are disposed to agree with the High Court in the view that it is not open to Courts to imply from the mere circumstance that the rent has been paid in money for a series of years an agreement to pay money rent. But they see no reason why the fact that money rent has prevailed in a particular locality for a considerable number of years may not form an element in the consideration of the question of usage. On the whole their Lordships are of opinion that the judgments and decrees of the High Court should be set aside and the cases sent back in order that they may be remitted to the proper Court to determine in accordance with the provisions of clause (iii.), 8. On the whole their Lordships are of opinion that the judgments and decrees of the High Court should be set aside and the cases sent back in order that they may be remitted to the proper Court to determine in accordance with the provisions of clause (iii.), 8. 11, of the Rent Recovery Act the rates the plaintiff is entitled to receive, and their Lordships will humbly advise His Majesty accordingly. In the circumstances their Lordships think the appellant should bear his costs of these appeals ; the costs in the lower Courts will be in the discretion of the High Court.