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1972 DIGILAW 114 (KER)

SUBHADRA THAMPATTY v. MUHAMAD ALIAS KUNJAN HAJI

1972-06-09

K.BASKARAN

body1972
Judgment :- 1. The revision petitioners are the respondents (landlords) in O. A. No. 42 of 1971 on the file of the Land Tribunal, Manjeri (originally filed as O.A. No. 184 of 1971 on the file of the Land Tribunal, Tirur). The respondents herein as petitioners filed the said application before the Land Tribunal for fixation of fair rent of the holding held by them under the revision petitioners herein. Various contentions were raised before the land Tribunal. We are not concerned with all the contentions raised except the one relating to the quantum of contract rent on the basis of which the fair rent has been fixed under S.27 of Act 1 of 1964 as amended by Act 35 of 1969. 2. I do not know whether the lease deed has been produced before the Land Tribunal. From the appendix to the order of the Land Tribunal I do not find that any document has been exhibited either on the side of the petitioners or on the side of the respondents. All what is marked is Ext. C-1 which is the report of the commissioner appointed in the matter. That the lease deed is not available for perusal has handicapped to some extent in construing the document calculated at the rates specified in Schedule III applicable to the class of lands comprised in the holding, whichever is less;" in question. It would have been better if the Land Tribunal before proceeding with the matter directed the petitioners before him to produce the document under which they claim their right particularly in view of the fact that what was seriously in dispute is the contract rent that was payable. Anyway, going by what has been stated in the petition before the Land Tribunal, I find that the contract rent was 60 paras of paddy. It is also found that there was a munpattom of Rs. 100/-, that the tenants were allowed to deduct 8 paras of paddy towards the interest on the munpattom and that actually the tenants were paying only 52 paras of paddy per annum. 3. The dispute before the Land Tribunal was whether 52 paras of paddy or 60 paras of paddy was to be treated as contract rent for fixation of fair rent under S.27 of the Act. 3. The dispute before the Land Tribunal was whether 52 paras of paddy or 60 paras of paddy was to be treated as contract rent for fixation of fair rent under S.27 of the Act. Repelling the contentions of the revision petitioners herein the Land Tribunal treated 52 paras of paddy as the contract rent and accordingly fixed fair rent at 26 paras, being half the contract rent, though the fair rent if fixed in terms of Schedule III to the Act would have come to 29 paras 8 edangalies and 3 nazhies of paddy. 4. Aggrieved by the order of the Land Tribunal the revision petitioners took up the matter in appeal, A. A. No. 972/70, before the appellate authority (Land Reforms), Kozhikode. As before the Land Tribunal, various contentions were raised before the appellate authority also. In this revision we are however concerned only with the question of contract rent for the purpose of fixation of fair rent, which point alone has been argued before me. The appellate authority confirmed the order of the Land Tribunal and dismissed the appeal. 5. Sri. P. C. Balakrishna Menon, learned counsel for the revision petitioners, contended that the decision of the Land Tribunal and the appellate authority in so far as it relates to the contract rent for the purpose of fixation of fair rent is erroneous and is devoid of legal basis whatsoever. The learned counsel has taken me through the relevant provisions of Act 1 of 1964 as amended by Act 35 of 1969 which have bearing on the question in issue. 6. The term "contract rent" has not been defined in the Act. However, the term "rent" has been defined in S.2 (49) as follows: It "rent" means whatever is lawfully payable in money or in kind or in both by a person permitted to have the use and occupation of any land to the person so permitting and includes michavaram, but does not include customary dues;" The above definition of rent makes reference to michavaram which has been defined in the Act under S.2 (36) as follows: ""michavaram" means the money or produce or both specified as michavaram in the document evidencing the transfer by a person of an. interest in specific immovable properly to another person, and includes the balance of money or produce or both payable periodically under the document evidencing such transfer after deducting from the money or produce or both due to the transferor, the interest due on the amount advanced to the transferor, but does not include customary dues," 7. The definitions of rent and michavaram read as a whole lead me to the conclusion that rent really means whatever is paid to the landlord excluding customary dues, but including michavaram. S.27(2) (a) reads as follows: "In the case of nilams, 50 per cent of the contract rent, or 75 per cent of the fair rent determined under any law in force immediately before the 21st January, 1961, or the rent 8. The Land Tribunal though, on the basis of the evidence before it, found that the fair rent at the rate stipulated in the III Schedule to the Act would come to 29 paras 8 edangalies and 3 nazhies fixed the fair rent at 26 paras, that according to the Tribunal being the half the contract rent, which is Jess than the fair rent arrived at in terms of Schedule III. 9. By virtue of S.72 of the Act and the notifications-issued by the Government in pursuance thereof, all rights, title and interest of the landowners and intermediaries in respect of holdings held by cultivating tenants entitled to fixity of tenure under S.13 are vested in the Government free from all encumbrances created by the landowners and intermediaries and subsisting thereon as on 11 1970. 10. S.72A provides for the determination of payment of compensation to landlords for vesting of their rights in Government. S.72A (2) reads as follows: "(2) The compensation payable to the landowner and intermediaries under subsection (1) shall be the aggregate of (a) sixteen times the fair rent of the holding or part thereof the right, title and interest in respect of which have vested in the Government, (b) the value of structures, wells and embankments of a permanent nature belonging to the landowner and the intermediaries, if any; and (c) one-half of the value of timber trees belonging to the landowner and the intermediaries, if any:..." S. 72F deals with the procedure, like the issue of notice etc., to be followed by the Land Tribunal in determining the compensation and the purchase price. S.72G deals with apportionment of compensation by the Land Tribunal. Sub-section (4) of that section reads as follows: "Where the right, title and interest of the landowner or an intermediary in respect of the holding were subject to any encumbrance, or charge for maintenance or alimony, the value of such encumbrance, maintenance or alimony shall be deducted from the compensation payable to the landowner or the intermediary, as the case may be, and the landowner or the intermediary shall be entitled only to the balance amount; " The learned counsel submits that if for the purpose of S.27 the contract rent is construed to be the rent stipulated for the land minus the deduction allowed towards the interest payable on the munpattom, he would be put to double jeopardy inasmuch as out of the, compensation fixed under S.72A he would be asked to set off the encumbrance, if any, which had subsisted on the land in terms of S.72G (4) of the Act, out of such compensation found payable or awarded to the landlord, munpattom being an encumbrance on the land. 11. In my opinion, there is considerable force in this argument of the learned counsel. As has rightly been held by Vaidialingam J. in Krishnankutty Menon v. Chirukandan (1958 KLJ. 36), "what is fixed as a fair rent is for the land as such and not for individual tenants or landlords. Even if the property changes hands, the fair rant fixed under S.16 will be binding on all parties who acquire an interest in the land." The above decision was rendered with reference to fixation of fair rent under the relevant provisions of the Malabar Tenancy Act. However, the principle underlying the decision should hold good for the purpose of this case also. Fair rent has to be fixed with reference to the extent of the land held, the fertility of the land and other relevant factors of the land. It should not be influenced or affected by the mode in which the rent is to be discharged by the tenant. In the case on hand, from the averment in the petition itself it is found that the stipulated rent for the land is 60 paras of paddy. A deduction of 8 paras is allowed, because the landlord owed the tenants interest on the munpattom. In. In the case on hand, from the averment in the petition itself it is found that the stipulated rent for the land is 60 paras of paddy. A deduction of 8 paras is allowed, because the landlord owed the tenants interest on the munpattom. In. other words, the tenants are allowed to set off the interest against a portion of the rent that was due from them to the landlord. 12. The learned counsel has also drawn my attention to the decision of Ansari C. J. in Kunhi Vdayi alias Velayudhan v. P. K. Velayudhan (1961 KLT. 449) Dealing with the question of the tenant's claim to deduct interest on munpattom from rent due it has been held as follows: "It is clear that the view is incorrect; for, obligations arising from contracts can be discharged under given circumstances, and the tenant's right to deduct has been conferred by the contract. Under S.16 of the Malabar Tenancy Act the obligation to pay rent is variable, but that power does not extend beyond, and the right to deduct interest on account of munpattom is not so intimately connected with the fixation of fair rent as to be governed by the section. Therefore permission for deduction would not be varied by exercise of powers under the section, not, as a matter of fact, any such order been given in this case. It follows that the right of the tenant has not been lost unless the landlord claims impossibility of performance or frustration. But then, changed conditions, under all circumstances, are not sufficient ground for discharging the obligation. In Davis Contractors, Ltd. v. Fareham U. D. C., ((1956) A. C. 696) Lord Radcliffe observed, at page 729, the rule in these words: 'Frustration occurs whenever the law recognises that without default of either party. a contractual obligation has become incapable of being performed because the circumstances in which performance is called for would render it a thing radically different from what which was undertaken by the contract.' It follows that, should the terms of the contract, when construed and in the light of the circumstances existing at the time it was made, show that it cannot be held to apply to the changed situation, which had unexpectedly occurred, the contract should be discharged; and mere hardship or inconvenience would not justify such discharge. In other words, hardship or inconvenience or material loss itself would not call the principle of frustration into play, but there must be as well such a change in the significance of the obligation that the thing undertaken would, if performed, be a different thing from that contracted for. Though by fixation of fair rent, the landlord's benefits been substantially reduced, yet it cannot be said that the right has become radically different. The right to receive the rent is there; and so is the advance amount with the landlord. It is true the obligation has become more burdensome; but, on that ground alone, contractual rights cannot be eliminated. In such circumstances, the lower court has erred in denying the tenant the right to claim the deduction;" If the tenant's right to claim interest on the munpattom survives, it goes without saying that while reckoning the contract rent, the rent stipulated for the land should be treated as the contract rent for the purpose of S.27, and it will be wrong to deduct the interest on munpattom from the stipulated rent for arriving at the "contract rent" for the purpose of this section. 13. Sri. T. L. Viswanatha Iyer, learned counsel appearing for the respondents, has strenuously contended that the view taken by the appellate authority as well as the Land Tribunal is perfectly in order and that it calls for no interference by this Court acting within the limited jurisdiction under S.103 of the Act. The contention of the learned counsel is that the net amount payable after deducting the interest on the munpattom alone need be taken as the contract rent for the purpose of S.27 of the Act. In as much as the issue raised is whether the decision of the lower courts is erroneous or not, this Court is within its jurisdiction to interfere with the decision of the lower courts if found necessary. I do not also agree with the other contentions raised by the learned counsel with respect to what the contract rent is for the purpose of S.27 of the Act. In support of his contention the learned counsel has cited before me the following passage of the Division Bench ruling of this Court in Ram aji Rao v. Chindan Nair (1968 KLT. 918). In support of his contention the learned counsel has cited before me the following passage of the Division Bench ruling of this Court in Ram aji Rao v. Chindan Nair (1968 KLT. 918). "The plea that the contract under the lease deed has been discharged on account of the doctrine of frustration and that therefore the landlord is not liable for any interest on the premium amount received under the lease deed cannot be accepted. Apart from the question of the applicability of the doctrine of frustration to agricultural leases it is not possible to hold that the supervening legislation has rendered the contract evidenced by the lease deed totally impossible of performance. The rule of frustration cannot operate merely because the circumstances in which the contract was made are altered. The supervening events should destroy the foundation of the contract and that has not happened in this case." I do not know how this supports the contention of the respondent. In the last paragraph of the judgment it has been held as follows: "Though we have held that it is not open to the defendant to claim reduction of the interest out of the fair rent it will be inequitable if the plaintiff is relieved of his liability to pay interest on the sum of Rs. 200/- due to the defendant. In view of the valuation of 14 mudra parahs of paddy at Rs. 24 8 0 in Ext. B 1, it is clear that the parties intended to provide for interest only at the rate of 7 per cent annum on the sum of Rs. 200/- which is only a reasonable rate of interest on the, amount advanced. We therefore modify the decree and judgment of the court below and grant a decree to the plaintiff for the recovery of the value of 161/2 mudra parahs of paddy being the fair rent due for the year 1140 M.E. after deducting the interest due to the defendant on the sum of Rs. 200/ at the rate of 7 per cent per annum." The concluding part of the judgment referred to above gives the clue for a correct decision. The fair rent has to be fixed on the basis of the gross contract rent without prejudice to the right of the tenant to get deduction for the interest that is payable on the munpattom. The fair rent has to be fixed on the basis of the gross contract rent without prejudice to the right of the tenant to get deduction for the interest that is payable on the munpattom. In other words, the fair rent has to be fixed with reference to the rent stipulated for the land, and the liability of the landlords to pay interest on the munpattom received by them would,"survive. I think this would be the reasonable and fair way of looking at this issue, 13. On the basis of the foregoing discussion, I hold that for the purpose of S.27 of Act 1 of 1964 as amended by Act 35 of 1969 the Land Tribunal should take the rent stipulated for the land as the contract rent. The tenants will be entitled to receive interest on the munpattom. 14. I, therefore, allow this revision petition and set aside the judgment of the appellate authority confirming the order of the Land Tribunal. It is not considered necessary to remand the matter to the Tribunal or to the appellate authority. I fix the fair rent payable for the holding at 29 paras 8 edangalies and 3 nazhies of paddy as found payable at the rate stipulated in Schedule III to the Act, as that is less than half the contract rent (half of 60 paras). In order to avoid further disputes over the rate of interest on munpattom, I fix it at 6% per annum on the amount advanced. In the result, the impugned order of the Land Tribunal is modified as follows:- The fair rent of the holding is 29 paras 8 edangalies and 3 nazhies of paddy per annum; the tenants shall be entitled to get interest at 6% per annum on the sum of Rs. 100/- advanced by them to the landlords by way of munpattom; this interest at the option of the tenants may be deducted from the fair rent while making payment of the rent; and the fair rent is to be paid in two instalments, the first half being payable before the last day of Thulam, and the second half being payable before the last day of Makaram every year. There will be no order as to costs in this revision petition.