1916 JTR(SC) 88
1916 AIR(PC) 59 ; 1916 44 LawReportsInd.App. 54 ; 1917 15 AllLJ 150 ; 1917 21 CWN 616 ; 1917 5 LW 388
PRIVY COUNCIL [ON APPEAL FROM THEEAST INDIES]
LORD PARKER OF WADDINGTON, LORD SUMNER, SIR JOHN EDGE, AND SIR LAWRENCE JENKINS.
MOTI CHAND - Appellant
Versus
IKKAM ULLAH KHAN - Respondents
On Appeal from The High Court at Allahabad.
Decided On : December 11, 1916.
Agreements to relinquish occupancy rights in sir lands upon the transfer of proprietary rights, including agreements to pay damages for failure to relinquish, are void and unenforceable as they contravene the statutory policy of preserving such rights for the ex-proprietor.
Act Referred :NORTH WESTERN PROVINCES TENANCY ACT: .
(A) North-Western Provinces Tenancy Act, 1901 - Section 83(3) - Transfer of proprietary rights - Occupancy rights in sir lands - Agreement to relinquish rights - Validity of agreement for damages - The policy of the Act is to secure and preserve to a proprietor whose proprietary rights in a mahal or any portion of it are transferred (otherwise than by gift or exchange between co-sharers) a right of occupancy in his sir lands - Such right of occupancy is secured and preserved by the Act regardless of whether the proprietor wishes it to be so preserved and notwithstanding any agreement to the contrary between the vendor and the transferee - Any device, arrangement, or agreement for the relinquishment of such lands, or for the vendor being liable to a suit for damages on failing to relinquish such lands, is in contravention of the policy of the Act and is illegal and void. (Paras 10-11)
Facts of the case:
By a sale deed, the respondents sold proprietary lands to the appellants. The deed included an agreement that the vendors would execute a deed of relinquishment of their rights in the sir lands and pay damages at a specified rate per bigha if possession was not delivered. Although a deed of relinquishment was subsequently executed, the vendors refused to file it in the Revenue Court or vacate the lands. The purchasers instituted a suit claiming damages as provided by the agreement.
Findings of Court:
The court found that the agreement for relinquishment contained in the sale deed and the subsequent execution of a deed of relinquishment were not separate and distinct transactions, but steps taken to give effect to the original agreement. Furthermore, the relationship between the parties at the time of the agreement was that of vendor and purchaser, not tenant and landlord.
Issues: Whether an agreement between a vendor and vendee to relinquish occupancy rights in sir lands, including a provision for damages for breach of such agreement, is valid and enforceable under the North-Western Provinces Tenancy Act, 1901.
Ratio Decidendi: The court ruled that the statutory policy of the Act is to protect the occupancy rights of an ex-proprietor upon the transfer of proprietary rights. This protection is mandatory and cannot be defeated by contractual agreements, ingenious devices, or penalties for non-relinquishment. Consequently, any agreement to the contrary is contrary to law and cannot be enforced in any civil or revenue court.
Result: Appeal dismissed with costs.
Facts of the case:
By a sale deed, the respondents sold proprietary lands to the appellants. The deed included an agreement that the vendors would execute a deed of relinquishment of their rights in the sir lands and pay damages at a specified rate per bigha if possession was not delivered. Although a deed of relinquishment was subsequently executed, the vendors refused to file it in the Revenue Court or vacate the lands. The purchasers instituted a suit claiming damages as provided by the agreement.
Findings of Court:
The court found that the agreement for relinquishment contained in the sale deed and the subsequent execution of a deed of relinquishment were not separate and distinct transactions, but steps taken to give effect to the original agreement. Furthermore, the relationship between the parties at the time of the agreement was that of vendor and purchaser, not tenant and landlord.
Issues: Whether an agreement between a vendor and vendee to relinquish occupancy rights in sir lands, including a provision for damages for breach of such agreement, is valid and enforceable under the North-Western Provinces Tenancy Act, 1901.
Ratio Decidendi: The court ruled that the statutory policy of the Act is to protect the occupancy rights of an ex-proprietor upon the transfer of proprietary rights. This protection is mandatory and cannot be defeated by contractual agreements, ingenious devices, or penalties for non-relinquishment. Consequently, any agreement to the contrary is contrary to law and cannot be enforced in any civil or revenue court.
Result: Appeal dismissed with costs.
Consideration - Referred to by the appellant's counsel in the context of recovering consideration paid for sir lands under section 65 of the Indian Contract Act, 1872, if the agreement is inoperative.
Solicitors for appellants:T. L. Wilson & Co. Solicitors for respondents: Truefitt & Francis.
Judgement
Appeal from a judgment and decree of the High Court (May 24, 1911) reversing a judgment and decree of the Subordinate Judge of Azamgarh (October 13, 1909).
By a sale deed executed on May 2, 1903, the respondents sold to the appellants three mauzas of which they were the proprietors within the meaning of the North-Western Provinces Tenancy Act, 1901. The sale purported to include the sir and khudkasht lands and ex-proprietary rights. The deed contained an agreement by the vendors to execute a deed of relinquishment of the sir lands, and to pay to the purchasers damages at the rate of Rs.16 per bigha should possession not be given of any portion of the sir and khudkasht lands.
The respondents executed a deed, dated May 6r 1903, by which they purported to give up possession of their ex-proprietary holdings in performance of the agreement, and this deed was subsequently registered. The respondents, however, refused to give the appellants possession, and the latter instituted the present suit claiming Rs.16 per bigha damages, as provided by the agreement, together with interest.
The respondents by their written statements contended (inter alia) that the agreement was invalid and void.
The Subordinate Judge held that, since under s. 83, sub-s. 3, of the North-Western Provinces Tenancy Act, 1901, a tenant may agree to surrender any part of his holding, it was lawful for the plaintiffs to claim damages upon the defendants failure to perform their agreement. He accordingly made a decree in favour of the plaintiffs.
The High Court (Karamat Hossein and Chamier JJ.) reversed the decision. Upon a consideration of previous decisions of the High Court they held that, whether the transaction was regarded as an attempted sale of ex-proprietary rights or as an agreement to relinquish those rights when they should arise, it was unlawful under the above-mentioned Act, and that the claim for damages was consequently not maintainable. The judgment Is reported at I L. R. 33 Allah. 695.
1916. Nov. 16. De Gruyther, K.C., and Dube, for the appellants. It is conceded that a sale of ex-proprietary rights to a person who is not a co-sharer is invalid under the North-Western Provinces Tenancy Act, 1901. The Act, however, by s. 83, sub-s. 3, allows ex-proprietary rights to be relinquished to the landholder, and an agreement to so relinquish is equally valid.
[LORD PARKER OF WADDINGTON. When the agreement was made the parties were vendor and purchaser and not tenant and landholder.]
If the agreement is inoperative the appellants are entitled under s. 65 of the Indian Contract Act, 1872, to recover so much of the consideration as was paid in respect of the sir lands. The agreement as to damages indicates the amount so paid. [ Dipan Rai v. Ram Khelawan (( 1910) I. L. R. 32 Allah. 383.) and the cases mentioned in the judgment of the High Court were referred to.]
Abdul Majid, for the respondents, was not called on.
Dec. 11. The judgment of their Lordships was delivered by
SIR JOHN EDGE. This is an appeal from a decree, dated May 24, 1911, of the High Court of Judicature at Allahabad, which set aside a decree of the Subordinate Judge of Azamgarh and dismissed the suit of the plaintiffs. The suit was brought to recover damages for an alleged breach by the defendants of an agreement contained in a sale deed of May 2, 1903, by which the defendants had agreed to execute und file a deed of relinquishment of their rights in their sir lands in mauzas Khorant, Daulsapur, and Bharthipur, in the district of Azamgarh. The mauzas in question are mahals within the meaning of the North-Western Provinces Tenancy Act, 1901 (Act II. of 1901).
The defendants, who were the proprietors within the meaning of that Act of mauzas Khorant, Daulsapur, and Bharthipur, and had in those mauzas. considerable sir lands in their occupation to which the Act applied, by their deed of May 2, 1903, transferred by sale to the plaintiffs the three mauzas and all the rights appertaining to the zamindari property. By the deed the defendants also purported to sell to the plaintiffs the zamindari property " together with sir and khudkasht lands, and ex-proprietary tenancy right without the exception of any thing or right"; declared that "we, the executants, have relinquished our claims and interest in respect of all the sir and khudkasht lands " ; and agreed that " we shall execute a deed of relinquishment of claim in respect of the sir lands, and shall file an application surrendering the holding. If we should make a delay in or take any objection to the filing of an application surrendering the holding or to the execution of the deed of relinquishment of claim in respect of the sir lands, or should we, the executants, our heirs or representatives or successors, keep in our possession any portion of the sir and khudkasht lands, then we and our heirs and representatives and successors shall pay damages in respect thereof at the rate of Rs.16 per bigha. In case of nonpayment, the vendees shall have power to bring a suit in a competent Court and to realize the amount of damages at the above rate from the person and property of us the executants, and our heirs and representatives and successors. We, the executants, shall have no objection to pay it."
At the time of the execution of the sale deed of May 2, 1903, the plaintiffs were not, nor were any of them, proprietors, landholders, or co-sharers in the mauzas or in any of them.
On May 5, 1903, and in pursuance of the agreement in that respect contained in the sale deed of May 2, 1903, the defendants executed a deed of relinquishment in favour of the plaintiffs of their claim and right in all their sir lands in the three mauzas; they, however, refused to file the deed of relinquishment in the Revenue Court, and on July 14, 1903, refused to quit possession of the sir lands, of which they have since then continued in possession as ex-proprietary tenants. In respect of that refusal to file the deed of relinquishment or to quit possession of the sir lands this suit for damages was brought in the Court of the Subordinate Judge of Azamgarh on July 3, 1909. The damages claimed were at the rate of Rs.16 per bigha, amounting to Rs.9468.8, with interest thereon at the rate of 8 annas per centum per mensem from July 14, 1903, to July 3, 1909. The total amount of the claim, including interest, was Rs. 12,837.5.9.
The Subordinate Judge gave the plaintiffs a decree for the amount claimed, with costs, and interest thereon at the rate of 8 annas per centum per mensem to the date of realization. The High Court, on appeal, holding that the transaction as to the sir lands, whether it was to be regarded as an attempted sale of ex-proprietary rights or an agreement to relinquish those rights when they should arise, was unlawful, decided that the claim for damages for breach of the agreement could not be maintained, and dismissed the suit. There was abundant authority for that conclusion to be found in the decisions of the High Court on the effect of Act II. of 1901 and of the previous Act XII. of 1881.
[Their Lordships judgment, after setting out those portions of Act II. of 1901 appearing in the note on
p. 59, continued as follows ] The Subordinate Judge apparently considered that s. 83, sub-s. 3, had some bearing upon the facts of the case. Their Lordships cannot regard the agreement for relinquishment by the defendants in the sale deed of May 2, 1903, and the execution by the defendants of the deed of relinquishment of May 5, 1903, as separate and distinct transactions. The execution of the deed of relinquishment on May 5, 1903, was merely a step taken towards giving effect to the agreement for relinquishment which was contained in the she deed of May 2, 1903, and was not an arrangement between a tenant and his landlord. The relation of landlord and tenant did not exist between the plaintiffs and the defendants at the time when the sale deed of May 2, 1903, was executed.
It appears to their Lordships that it cannot be doubted that the policy of Act II. of 1901 is to secure and preserve to a proprietor whose proprietary rights in a mahal or in any portion of it are transferred otherwise than by gift or by exchange between co-sharers in the mahal a right of occupancy in his sir lands, and in the land which he has cultivated continuously for twelve years at the date of the transfer, and that such right of occupancy is by the Act secured and preserved to the proprietor, who becomes by a transfer the ex-proprietor, whether he wishes it to be secured and preserved to him or not and notwithstanding any agreement to the contrary between him and the transferee. The policy of the Act is not to be defeated by any ingenious devices, arrangements, or agreements between a vendor and a vendee for the relinquishment by the vendor of his sir land or land which he has cultivated continuously for twelve years at the date of the transfer, for a reduction of purchase-money on the vendors failing or refusing to relinquish such lands, or for the vendor being liable to a suit for breach of contract on his failing or refusing to relinquish such lands. All such devices, arrangements, and agreements are in contravention of the policy of the Act and are contrary to law and are illegal and void, and cannot be enforced by the vendee in any civil Court or in any Court of Revenue.
Their Lordships will humbly advise His Majesty that this appeal should be dismissed with costs.