1. The decision of the District Judge can only be supported on the view that he intended to find as a fact that an implied contract to go on paying the Ayan rate existed between the landlord and the tenants. But we cannot think that the District Judge found anything of the sort; for (1) he does not specifically say so, (2) no such contract was pleaded and (3) not a single patta was produced on the defendants' side to support such a plea.
2. The failure to produce a single patta was especially significant in view of the fact that the single patta (Exhibit D) produced by the plaintiff (or was it a muchilika as the Head Assistant Collector found?) contained an express clause reserving the right of the then landlord to levy a crop-war rate. Even if there had been a finding as to an implied contract in favour of the tenants it would have been necessary to determine the further question how far such contract was binding on the present landlord. Vide the last clause of Section 11 of Act VIII of 1865.
3. The Head Assistant Collector, in the absence of any plea regarding a contract and in the absence of any evidence of a survey having been effected by the British Government before the 1st January 1859, proceeded to determine the proper rate of rent under Clause 3 of Section 11 of the Act. He found that the crop-war rate claimed was the faisal rate and that the lands of the adjacent village belonging to the same zamindary paid crop-war rates and sadal-war at the present day. This decision, if warranted by the evidence, was in accordance with the rules prescribed in Section 11, whereas the decision of the District Judge does not appear to be in accordance with those rules.
4. We request the District Judge to remit a fresh finding on the facts from the evidence on record as to what is the proper rate of rent if determined in accordance with Section 11.
5. The finding should be returned in six weeks, and seven days are allowed for filing objections.
6. In compliance with the above order the lower Court submitted the following.
7. I am directed to remit a fresh finding on the facts from the evidence on record as to what is the proper rate of rent, if it could be determined in accordance with Section 11 of the Rent Recovery Act.
2. Plaintiff's 3rd witness produced accounts filed herein as Exhibits B and C. He did not prepare them and was not present, when they were prepared. Exhibit C relates to the year 1884-85 and to the previous years. Exhibit B relates to the years 1893 to 1895. The evidence of plaintiff's 3rd Witness is that the above accounts were prepared for the purpose of calculating road cess. Defendants' 1st witness deposes to the same effect. Plaintiff's 3rd witness cannot state that crop-war rents were collected in accordance with the accounts. Exhibits A, B and C. He was working as Karnam before 1895, and his younger brother has been the Karnam of the village after 1895. He and his father before him never prepared a Baki Japata (statement of arrears) or Vadambadikai (agreement). He knew nothing about collections of rents and about the rates, at which they were collected. Plaintiff's 4th witness is an interested witness. He vaguely states that, apparently within his knowledge, he once paid crop-war rent about 20 years before the suits. He does not speak about any payment of rent made by the tenants, who are parties to the present litigation.
3. Defendants' witnesses Nos. 1 to 3 depose that for about 20 years before this litigation, the tenants were paying rent at fixed Ayan rates. Defendants' 3rd witness produced receipts granted to his father and filed here in as Exhibit II series. They show that the father of the witness paid to the landlord rent at Rs. 48-9-0 per annum in the years 1880-81, 1881-82, 1882-83 and. 1884-85. The witness states that he was paying rent at the same rate till the year for which the plaintiff is seeking to enforce acceptance of pattas. Exhibit II series are proved by defendants' 5th witness.
4. Exhibit D is a patta for 1886-87 alleged to have been granted to one Subba Reddi, who is now dead. Ayan rates were therein charged, but the landlord inserted therein a provision reserving for himself a right to levy crop-war rent for future faslis. But, there is no evidence at all to show that any landlord had actually recovered rents at that rate from any of the defendants herein during twenty years before these suits, or at any previous period. Therefore, the evidence discloses but one instance in 1886-87, in which the landlord merely asserted his right to claim crop-war rent and the interested statement of plaintiff's 4th witness is to the effect that he paid crop-war rent, but once about 20 years before the suits. In the mortgage deed, Exhibit III, executed by the late Shrotriemdars to one Munisami Reddi in April 1891, the only rent mentioned was the Mukta or Ayan rent and there is no reference therein to the landlord's right to collect crop-war rent.
5. In the leading Full Bench case on the point reported in Venkatagopal v. Rangappa 7 M. 365 it was held that payment of rent in a particular form or at a certain rate for fourteen years is presumptive evidence of the existence of a contract to pay rent in that form and at that rate for those years and that it is also presumptive evidence that the parties have agreed that it is obligatory on the one party to pay and the other party to receive rent in that form and at that rate, so long as the relation of landlord and tenant may continue. This presumption is liable to be rebutted by showing that the rate was paid under a mistake, or that it was fixed only for a certain term, on the expiry of which, the parties were at liberty to revert to their original rights, or that there has been an increase or diminution in the extent of the holding or an addition to its value by the creation of improvements at the expense of the landlord. No such circumstance has been referred to in the evidence adduced in these suits and there is no proof of any such special cause entitling the landlord herein to an alteration in the term heretofore subsisting between his predecessors in-title and the defendants herein. This was a decision in favour of the landlord.
6. The same principle in favour of tenants was affirmed and followed in the case reported in Krishna v. Vankatasami 8 M. 164 It was held; in the decision reported in Narasimha Naidu v. Ramasami 14 M.k 44 that an implied contract, as above described, cannot be inferred from a single lease extending over a period of five years. In the decision reported in Apparau v. Narasanna 15 M.k 47 it was observed that payment of rent at a uniform rate by the tenants for a period of six years was not sufficient to establish an implied covenant to pay rent at that rate. In a case reported in Brahamanna v. Appa Raw 2 M.L.J. 292 it was found that the District Judge inferred an implied contract in favour of a tenant to pay rent at a certain rate, when he found that the tenant had paid rent at that rate for a period of five years. The High Court held that the finding of the District Judge must be accepted, as it was on a question of fact and, as there was legal evidence, on which that finding could be supported. In the decision reported in Nallikarayana Prasada v. Lakshminarayana 17 M.k 50 payment by tenants of certain wet rates for a period of less than seven years was held to be insufficient to warrant the inference of an implied contract to pay that rate in future years.
7. In the cases before me, the evidence adduced favours a presumption that Ayan or cash rent at fixed rates were paid by tenants for a period of twenty years and more. A right to levy crop-war rent is proved to have been once asserted by the landlord in 1886-87 against a particular tenant. There is no evidence to show that such rent was ever collected from any of the defendants in the present suit at any time. An implied contract can reasonably be inferred, so far as those defendants are concerned, to pay cash rent for the year in dispute and for subsequent years.
8. It was observed by their Lordships in their order, calling upon this Court to submit a finding as to the proper rate of rent in these suits, that it would be necessary to determine, in case an implied contract was found in favour of the tenants, the further question as to how far the said contract was binding on the present landlord under the last clause of Section 11 of Act VIII of 1865.
9. In Faulkes v. Muthusami Goundan 21 M.k 503 it was found that a landlord granted in 1840 a patta to a tenant having a heritable estate in the lands included in the patta, fixing the rent at a reduced rate, which was less than the rate payable on the lands previous to the date of the patta, and it was held that the patta was granted before the Rent Act and was, therefore, binding upon the successors of the landlord, who had granted it.
10. In another case reported in Arumugam Chetti v. Raja Jagaveera Rama 28 M.k 444 the facts found were that tenants, who had constructed wells at their own cost, had been paying rent during a period extending from one to eighteen years at enhanced rate, notwithstanding the circumstance that the landlord had contributed nothing towards the improvement of their lands. It was held that such payment might be evidence of an agreement to pay at that rate and that it will not be binding as a contract for want of consideration in that particular case. This conclusion was qualified by an observation as follows: 'If in cases like the present, payments at the higher rate had continued to be made for a great many years, so as to make it unfair to the land-holder, on account of such lapse of time, to be compelled to prove the existence of some consideration when the payment commenced, it may be a question whether the Court should not presume a lawful origin for the payment, on the analogy of the lost grant principle availed of to support long possession and enjoyment.'
11. But the power to question the validity of an implied contract was not by the above decision conceded to persons in the position of the present plaintiff. When the origin of the contract to pay at a certain rate is definitely known and the rates also happened to be lower or higher than the rates, which had prevailed previous to the date of the contract the landlord or the tenant, as the case may be, can possess the right to ignore it on the ground that it was not supported by consideration. It has not been shown in the present case that the crop-war rate relied on by the plaintiff is, in every instance, higher than the Ayan rate, which has been the prevailing rate during many years. It is possible for the tenants to raise only such crop, as will entitle the landlord to claim rents, which may be less than the cash rents, which they are now prepared to pay. Therefore, a fixed cash rent, which the tenants had impliedly agreed to pay and the landlord had impliedly agreed to receive, need not be considered to be necessarily lower, in every case than the crop-war rent, which the landlord would otherwise be entitled to levy. Therefore, the question of want of consideration, as regards the implied contract, found to exist in the present case, does not arise.
12. There was an observation in a case reported in Ramanadan v. Srinivasa Murthi 2 M.k 80 that the second proviso contained in Rule 4 of Section 11 of Act VIII of 1865, applied only to leases, which, in the circumstances in which they were made, amount to a fraud upon the zemindar's power as Manager, or to alienations made for the personal benefit of the grantee and to the prejudice of his successor. But, this view was not followed in a case reported in Samarapuri Mudaliar v. Nagappa Mudaliar 17 M.L.J. 86. It was there held that the proviso above referred to was not confined to cases of fraud on the part of the landlord's predecessor-in-title, that pattas granted by such predecessor at rates lower than the rates payable upon the suit lands will not be binding upon his Successor, if the pattas were not granted on any of the grounds specified in the proviso even though the predecessor was not guilty of fraud in so doing.
13. If the faisal rates in the village were crop-war rates, as observed by the Head Assistant Collector, the land-holder can claim no rate, when a tenant leaves his land uncultivated, as the crop, that must determine the rate to be levied, would be found wanting. Moreover, as I have already observed, there is nothing on the record to show that the cash rates, which the tenants are prepared to pay must invariably be less than rents, which can be claimed by the landlord, when the tenants make up their minds to raise only inferior crops or to leave part of their holdings fallow. Probably, the Ayan rates may be ultimately more beneficial both to the landlord and to the tenants and were found to be so during a long period. And, when it is found that these were the prevailing rates in the village for more than 20 years and no instance has been shown of the levy or crop-war rates from these defendants or their predecessors-in-title at any time the exact time when payments at Ayan rates had commenced in the village cannot be ascertained and the circumstances, under which they were introduced and continued for so many years, are also not ascertainable. Therefore, I find that the second proviso to Rule No. 4 of Section 11 has no application to the present case.
14. A perusal of the whole of the leading decision on the point reported in Venkatagopal v. Rangappa 7 M.k 365 inclines me to the view that, when an implied contract to pay rent at certain rates, is inferred in accordance with the principles of that decision, such a contract could not be viewed as purely personal to the parties, between whom it must have originated, and binding only upon those who are supposed to have been those parties, and the second proviso to Rule No. 4 of Section 11 can rarely apply to that contract. I quote the following observations from the above decision in support of my view: 'We have observed that the act presupposes the existence of the relationship and the liability to a rent. The patta is, no doubt, evidence of a consensus or contract as to the rent payable for the year, but where the parties are unable to agree as to the rent payable, but still desire to continue the relationship, it must be ascertained what is the contract in respect of the nature or rate of rent, to which the one has the right to compel the assent of the other, and this right may itself be a creature of contract.' It was not contemplated that, in each year, the parties should be able to compel one another to alter the terms which heretofore had regulated their obligations. It is probable that the term 'implied' was intended to signify a contract, that could be inferred from the conduct of the parties in preceding years.'
15. The plaintiff herein became the auction-purchaser of the late Shrotriemdar's rights. He derived no interest by his birth in the Shrotriem village in question. His rights therein cannot reasonably be considered to be higher than those of the late Shrotriemdars, who and whose mortgagee, as appears from Exhibit III, have long been collecting only Ayan rates from their tenants. Plaintiff is probably not a successor of the late Shrotriemdars within the meaning of the second proviso to Rule No. 4 above referred to.
16. Therefore, my finding on the issue remitted by the High Court is that the proper rate of rent in the cases under consideration is the Ayan rate relied on by the defendants, which is supported by an implied contract between the land-holder and the tenants of the village, ascertained in accordance with principles of the leading decision reported in the case of Venkatagopal v. Rangappa 7 M.k 365.
8. We accept the finding as to the rate of rent. As regards the sadal-war there is nothing to show that the fees are charged in accordance with established usage in the village.
9. We dismiss the appeals with costs.