Charles A. Turner, Kt., C.J., Innes and Kindersley, JJ.
1. One Subbaraya Mudali was a tenant of lands in a Srotriem village, having a saleable interest in his holding. This interest he mortgaged to another Subbaraya Mudali, the respondent, who had obtained a decree for the enforcement of his mortgage when the Srotriemdar, alleging that default had been made in payment of rent, brought the tenant's interest to sale under the provisions of Section 38 of the Rent Recovery Act. The appellant became the purchaser. The respondent in execution of his decree procured the attachment of the property, and the appellant has failed to procure the removal of the attachment. It appeared that the existence of the arrear had been contested, and a decision passed in appeal in favour of the tenant. The Munsif held that the right of the mortgagee had been lost, because proceedings were not taken in the Revenue Court to set aside the sale within the period allowed for that purpose. He therefore decreed the claim. The Judge considered that, as no arrears existed, the sale was a nullity, and reversed the decree. The Division Bench considered the sale under the Rent Act could not be treated as a nullity, in that it had not been set aside in due course, but that the question remained whether a sale of the saleable interest of a tenant under Section 38 of the Rent Recovery Act defeated existing incumbrances.
2. The section is as follows:
When arrears due to any of the landholders specified in Section 3 may not be liquidated within the current revenue year, and when by express contract or by the usage of the country the defaulter may have a saleable interest in the land on which the arrear is due, it shall be lawful to such landholder to sell such interest in satisfaction of the arrears.
3. It may doubtless be argued that a sale of such interest means a sale of the tenure and not merely of what property in it at the time existed in the tenant. But an examination of the Regulations and Acts for the recovery of revenue and rent appears to show that, where the Legislature intended a sale for arrears to have the effect of annulling interests created in a holding or its fruits by the defaulter, it has used very clear language to indicate its intention, and that, while it makes a sale of the holding itself efficacious to annul interests created by the tenant for the purpose of satisfying the claims of Government, it has not gone to that length when it authorizes a sale to satisfy an arrear due to proprietors and farmers.
4. Regulation XXX of 1802 expressly declared that, on the sale of an estate or part of an estate for arrears of rent or revenue due to the Government, with the exceptions mentioned in Section 15, pattas granted by the former proprietor should cease to have effect at the end of the Fasli in which such land should be sold.
5. Seeing that, by what may be termed the common law of India, all land is subject to the payment of land revenue, and that this liability is constituted a first charge on the land, it was not unreasonable that the Legislature should recognize the rights of the State when giving to its officers summary powers for the collection of the revenue.
6. Before the passing of Regulation XXVIII of 1802, I do not find that proprietors possessed any right to bring to sale a tenure free from incumbrances. They were entitled to institute a suit for the arrears of rent, and on obtaining a decree to bring the tenure to sale in the same manner as it would be brought to sale for any other debt.
7. The Regulation following the Bengal Regulation VII of 1799 was intended to afford proprietors summary remedies for the recovery of arrears. It conferred on proprietors and farmers holding directly under Government power to distrain and sell without notice to a Court crops and other personal property belonging to tenants and raiyats for arrears of rent and revenue, but declared them incompetent to distrain and sell the lands of these tenants and raiyats--Section 3. It also empowered them, when the arrear could not be satisfied by distraint, to apply to the Judge of the Zillah Court to arrest the defaulter; and, if the defaulter when arrested failed to discharge the arrear, it empowered them to attach his holding and collect the arrear from the rents, if any, payable by subtenants (Section 34, Clause 6), and, if the arrear was not liquidated in the current year, to make such arrangements for the receipt of rents from the lands tenanted by the defaulter as they might judge proper consistently with the rights of other persons concerned; and it was further enacted that, if the defaulters were holders of other tenures, which by the title-deeds or by the established custom of the country were transferable by sale or otherwise, the proprietors and farmers should have power to bring such transferable tenure to sale by application to the Court of Adalat in satisfaction of the arrear of rent or revenue, and it was declared that the purchaser should become the tenant of such transferable tenure. It was also provided that, when the defaulters were leaseholders or other tenants having right of occupancy only during payment of certain rents, the proprietors of whom such tenures were held or the farmers should have the right of ousting the defaulting tenants from their tenure.
8. It will be noticed that, in allowing the proprietor or farmer to make arrangements for the receipt of rents, it was declared that the power was to be exercised consistently with the rights of other persons. If the tenants held other tenures, by which, on reference to the Bengal Regulation it will be seen was meant larger interests in the holding than that of tenants at will, the proprietors were at liberty to bring them to sale, and the purchasers would become tenants of the tenures; but it is not said they were to acquire any higher rights than subsisted in the defaulters at the time of sale; and in view of the express provision preserving the rights of other persons interested in an attachment, it would be unsafe to infer that it was intended to free the purchaser from incumbrances any more than he would have been freed from them had the sale been made in execution of a decree obtained in the ordinary course.
9. At the commencement of the Revenue Recovery Act (Madras Act II of 1864) we find a declaration that the land, the buildings upon it, and its products shall be regarded as the security of the public revenue. The fifth section empowers the Collector to realize arrears by the sale of the defaulter's moveable and immoveable property. Rules are then declared for the distraint and sale of moveable property. Then follow provisions empowering the Collector to attach and sell the land of the defaulter; and in the thirty-second section it is declared that all charges and incumbrances upon attached lands shall be postponed to the payment of the public revenue.
10. The thirty-fifth section enables a person claiming an interest in the land to obtain its release on payment of the arrear, authorizes tenants to deduct any sum so paid from the rent then or thereafter to accrue due, and declares that if the payment is made by a bond fide incumbrancer it shall be a charge on the land, but shall only take priority over other charges according to the date at which the payment was made. The thirty-ninth section provides for a proclamation of the lawful succession of the purchaser to all the rights and property of the former landholder in the lands, and Section 42 expressly declares that all lands brought to sale on account of arrears of revenue shall be sold free of all incumbrances.
11. It will be seen that, where the legislature intended that arrears of revenue should form a charge on the land and that a sale should defeat prior incumbrances, their language has gone beyond the requirements of the case in its explicitness.
12. The Rent Recovery Act (VIII of 1865) expressly declares that claims to crops upon the ground and gathered products of the ground attached in the possession of the defaulter, whether founded on a previous sale, mortgage or otherwise, shall not bar the prior claim to rent due from the ground upon which such crop or product may have grown--Section 32.
13. But when we come to the provision, which we are called on to construe, we find no such declaration. Nor do we find, as in the Revenue Recovery Act, provisions enabling any person claiming an interest to discharge the arrear or any mortgagee who discharges it to treat the equivalent of the amount paid to satisfy it as a charge on the interest. No doubt payment by a mortgagee would have that effect as would also be the case in respect of sums paid to discharge an arrear of revenue. But when we find in the Revenue Acts express declarations and provisions on these points and an express declaration in the Rent Recovery Act respecting crops on the land, the absence of such declarations and provisions regarding the saleable interest in the land affords strong grounds for holding that it was not the intention of the Legislature that the interest of the tenant should be sold free of incumbrances.
14. A similar conclusion was arrived at by a Full Bench of the High Court, Calcutta, in Shahaboodeen v. Fatteh Ali 7 W.R. 260 and although the authority of that case may be somewhat impugned by the observations of a Bench of three Judges of the same Court, Sham Chund Koondoo v. Brojonath Pal Chowdhry 21 W.R. 94 the same point was not before the Court. In the latter case the point decided was that a deed not registered as required by the Act could not be recognized as an incumbrance.
15. The referring Bench should he informed that the sale did not pass the tenant's interest free of the incumbrance.
Muttusami Ayyar, J.
16. I held on a former occasion that the words such interest 'in Section 38 meant the saleable interest which the tenant originally had either by express contract or usage. Looking, however, to the intention of the Legislature as shown by the Regulation of 1802 and by Section 31 of Act VIII of 1865 and the language used when prior incumbrances are rendered inoperative, as in Section 32 and in Section 42 of Act II of 1864, I think that the interest authorized to be sold is the saleable interest of the tenant as it existed at the date of the sale subject to prior incumbrances and not as it existed at the date of the contract and free of all incumbrances. I therefore agree with the majority of the Court.