Patanjali Sastri, J.
1. These are connected appeals arising out of a Suit brought by two plaintiffs against the Maharaja of Pittapuram (hereinafter referred to as the defendant) for an account and payment of the rents and profits and other sums collected by him from a Zamindari estate known as Gollaprolu and situate in the Godavari District, during a period of about 11 years and "8 months from the 12th January, 1924 up to the 7th September, 3935. The plaintiffs estimated the amount due at Rs. 7,38,000 which they seek to recover with interest at nine per cent. per annum from the respective dates of collection. The main defence, was one of limitation in regard to sums received more than three years prior to the suit. The Court of the Subordinate Judge of Coeanada which tried the suit overruled the plea and passed a preliminary decree, dated 4th March, 1937, directing the defendant to render an account of all sums received by him during the whole period but disallowing the claim for interest. The accounts were taken in due course and a final decree was passed on the 25th March, 1938. Appeal No. 252 of 1937, has been brought by the defendant against the preliminary decree challenging the decision on the question of limitation and Appeal No. 246 of 1937, is a cross-appeal by the plaintiffs raising the question of interest and certain other minor objections in regard to the same decree. Appeals Nos. 330, 364 and 365 of. 1938, are appeals preferred against the final decree by the defendant, the first and second plaintiffs, respectively.
2. The suit is an offshoot of an earlier litigation which after a protracted and somewhat, chequered career culminated in His Majesty's Order in Council, dated the 15th July, 1935, in P.C.A. No. 44 of 1930, adjudging in effect that the present first plaintiff is the lawful proprietor of the said Gollaprolu estate. It is unnecessary for the purposes of these appeals to state the facts relating to that litigation except in brief outline. The present defendant brought that suit in 1915 for a declaration that the first plaintiff's adoption by Rani Ramayamma, the Zamindarini of Gollaprolu (hereinafter called the Rani), was invalid and he (the defendant) was the nearest reversioner entitled to succeed to the estate on her death. The District Court, Rajahmundry, after an elaborate trial decreed the suit in October, 1920, declaring the adoption to be invalid. While an appeal against that decree preferred by the present first plaintiff was pending, the Rani died on the 24th October, 1923. Thereupon the defendant herein filed an application before the Collector of Godavari for the registry of the estate in his name as the proprietor thereof after the death of the Rani, the adoption having been held to be invalid by a Court of law. He also filed an application before that officer under Section 3, C1. (5) of the Madras Estates Land Act (I of 1908) for 'recognising' him as the 'landholder' of the estate for the purposes of that Act. The present first plaintiff filed a counter-petition claiming that the estate should be registered in his name on the allegations that the District Court's decision declaring his adoption invalid could not be regarded as final, as he had appealed therefrom, and that, since the date of his adoption,. he had been in possession of the estate jointly with the Rani till her death and thereafter jointly with the second plaintiff, to whom the Rani had devised by her will her half share in the estate which was given to her absolutely under an ante-adoption agreement. Two other persons who also set up rival claims to the estate made a similar application for recognition as landholders. These disputes were settled by the Collector by an order, dated the 12th January, 1924, wherein he 'recognised' the defendant as the landholder for the purposes of the Act, and the defendant accordingly entered upon possession of the estate .and began to collect the rents and profits thereof. It may be mentioned here that an attempt was made in the Court below to show that the defendant had taken possession of the estate after the Rani's death by getting the tenants to attorn to him even before the Collector's order, but the learned Subordinate Judge found against him on the point and that finding has not been questioned before us.
3. The appeal preferred by the first plaintiff against the decree of the District Court, Rajahmundry, declaring his adoption to be invalid was in due course heard by a Division Bench of this Court in October, 1926, and as the Judges differed, an appeal was filed under the Letters Patent which was heard and disposed of by a Bench of three Judges in March, 1928, where again there was a difference of opinion, the majority finding against the validity of the adoption and confirming the decree of the Court below. The first plaintiff thereupon preferred an appeal to His Majesty in Council which was heard in 1933 on the question whether certain evidence relating to the sonship of the defendant which had been excluded as inadmissible in the Courts here was admissible or not. Their Lordships held that it was admissible and had been wrongly excluded, and remitted the case for a fresh finding on the question after taking that evidence also into consideration. In April, 1934, this Court submitted its finding, on a consideration of the whole evidence, that the defendant was an aurasa son of his father, and their Lordships finally disposed of the appeal in June, 1935, holding that the first plaintiff's adoption by the Eani was valid and dismissing the defendant's suit. The formal Order in Council was issued, as already stated, in July, 1935. On application subsequently made by the plaintiffs, the Collector of Godavari cancelled the order whereby he recognised the defendant as the landholder, and directed the registry of the estate in the names of the plaintiffs recognising them as the landholders thereof. This was on the 7th September, 1935. The plaintiffs having thus obtained possession of the estate brought the suit now under appeal in October, 1935, for recovery of the rents and profits received by the defendant during the period of his possession and management of the estate in pursuance of the Collector's order, dated the 12th January, 1924.
4. The learned Subordinate Judge was of opinion that the defendant having entered into possession of the estate in pursuance of the Collector's order subject to the ultimate decision of the pending litigation between the parties, was, during the period of his possession as 'landholder', in the position of a quasi trustee coming under Section 94 of the Indian Trusts Act, analogous to that of a party interim receiver in a suit or the holder of a succession certificate granted under Section 373 of the Indian Succession Act. He held accordingly that the receipt of profits by the defendant was not wrongful and that Article 109 of the First Schedule to the Indian Limitation Act on which the defendant relied was not applicable to the case.
5. The learned Advocate-General, who appeared for the defendant in these appeals challenged the correctness of this conclusion and contended that as the defendant was denying the plaintiffs' title to the estate and setting up a rival claim as the nearest reversionary heir entitled to succeed thereto, there could be no question of any fiduciary relationship between the parties, and that inasmuch as he received the rents and profits under an adverse claim of title which he ultimately failed to establish, such receipt was wrongful within the meaning of Article 109 of the Limitation Act. This Article prescribes for a suit for the profits of immovable property belonging to the plaintiff which have been wrongfully received by the defendant a period of three years from the time when the profits are received. This being a suit for the profits of immovable property belonging to the plaintiffs, the Article would apply if the profits could be said to have been wrongfully received by the defendant, and the claim for rents and profits received more than three years before the suit would be clearly barred. The main debate at the Bar accordingly centred round the question whether, having regard to all the circumstances of the case, the defendant's receipt of the rents and profits was wrongful, the plaintiffs endeavouring to show that it was not, while the defendant maintained that it was.
6. The learned Advocate-General drew our attention to the previous history of the Article and contended that in the Limitation Acts of 1871 and 1877, the language used in the third column of Article 109, read with the first column clearly indicated that the receipt of profits by a person in possession Under a decree of Court which was subsequently set aside on appeal was considered to be wrongful. He submitted that this position was in no way altered under the present Act notwithstanding the omission from the third column of the words 'or where the plaintiff had been dispossessed by a decree afterwards set aside on appeal, when he recovers possession', as the omission was merely due to the enactment of the Civil Procedure Code in the same year providing an exclusive remedy for restitution in such cases by way of an application under Section 144. Reference was made to several decisions including the decision of the Privy Council in Mian Feroz Shah v. Mohammad Akbar Khan (1939) 43 C.W.N. 897 (P.C.) which no doubt support this view. It seems to us, however, that it does not follow that the receipt of the profits by the defendant as landholder recognised by the Collector for the purposes of the Madras Estates Land Act should also be considered to be wrongful. In our opinion, the true nature of such receipt has to be determined with reference to the scope and effect of the Collector's order having regard to the relevant provisions of that Act.
7. It will be convenient here to call attention to these provisions. Section 3, Clause (5) says:
3. In this Act, unless there is something repugnant in the subject or context:
(5) 'Landholder' means a person owning an estate or part thereof and includes every person entitled to collect the rents of the whole or any portion of the estate by virtue of any transfer from the owner or his predecessor-in-title or of any order of a competent Court or of any provision of law.
Where there is a dispute between two or more persons as to which of them is the landholder for all or any of the purposes of this Act or between two or more joint-landholders as to which of them is entitled to proceed and be dealt with as such landholder, the person who shall be deemed to be the landholder for such purposes shall be the person whom the Collector subject to any decree or order of a competent Civil Court may recognise or nominate as such landholder in accordance with rules to be framed by the Local Government in this behalf.
Rule 2 of the rules framed under this section provides:
In cases, of disputes between persons claiming against each other the ownership of the estate or the part thereof in question or any smaller interest therein conferring a right to present possession, the Collector shall make a summary inquiry into their respective claims and recognise as landholder the claimant who in his opinion is prima fade entitled to the present possession of the estate or part thereof in question, and Section 67 provides:
Where rent is due to a landholder, the receipt for any payment on that account of the person recognised or nominated under Sub-section (5) of Section 3 as landholder for the purpose of receiving rent [or of the person authorised to receive the rent] shall be a sufficient discharge for the rent, and the person liable for the rent shall not be entitled to plead in defence to a claim by a person so recognised or nominated that the rent is due to a third person. But nothing in this section shall affect any remedy which any such third person may have against the landholder so recognised or nominated.
It is manifest that the object underlying these provisions is to provide machinery for the smooth, management of an estate pending settlement of disputes relating thereto by a competent Civil Court so as on the one hand to enable the rents falling due during the pendency of the disputes to be duly collected without being allowed to get time-barred and, on the other to enable the tenants to obtain a valid discharge on payment of the rent, whichever party may ultimately succeed in establishing his claim in the Civil Courts. For this purpose, the Collector is empowered to make a summary enquiry under the rules made in that behalf and recognise as landholder the person who is prima facie entitled to the present possession of the estate, and the person so recognised is authorised to demand and collect the rent giving a valid discharge therefor. In other words, the person who is 'recognised' by the Collector as 'landholder' for all or any of the purposes of the Act becomes thereby clothed with full authority to do all acts required to be done for such purpose or purposes, and such acts are made binding upon whichever party is ultimately held by a Civil Court to be entitled to the possession of the estate. And if it is found that the person so recognised is not entitled to possession, he will be liable to deliver possession of the estate and pay over the rents and other sums received by him, subject to all just allowances, to the person who is declared by the Civil Court to be so entitled. In other words, he will be liable to account for the rents and profits received as if he were a trustee (see Sections 94 and 95 of the Indian Trusts Act), although there can be no question of trust or strict fiduciary relationship between parties who claim the estate adversely one to the other. This, we conceive, is the position under an order made by the Collector recognising a person as landholder for the purposes of the Madras Estates Land Act, and it is essentially different from the case of a person who takes possession under colour of a decree of Court which is afterwards reversed; for, the latter cannot be regarded authorised to collect the rents on behalf of the rightful claimant as he cannot give a valid discharge, and the receipt of the profits by him, however bona fide and excusable, cannot be regarded as other than wrongful.
8. We are therefore of opinion that the receipt of the profits by the defendant under the Collector's order, dated the 12th January, 1934, was not wrongful and that Article 109 of the I Schedule to the Limitation Act does not apply to the facts of this case. No other Article having been suggested as being applicable, the suit must fall within Article 120, under which the time begins to run when the right to sue accrues.
9. The question accordingly arises as to when the plaintiffs' right to sue for the profits received by the defendants accrued. It must be remembered that the defendant was setting up title to the estate in himself and his claim had been held to be valid by a competent Court. It must also be borne in mind that the Collector's order recognising him as landholder was based upon that adjudication, though an appeal had been preferred therefrom. It is thus clear that the defendant throughout received the rents and profits of the estate in his own alleged" right and not in acknowledgment of the plaintiffs' right. No doubt we have expressed the view that having regard to the provisions of Section 67, the legal effect of the Collector's order recognising the defendant as landholder of the estate was to make his receipt binding on the plaintiffs and, therefore, lawful and not wrongful even in the absence of the legal title in the defendant, but this is subject to the important proviso contained in that section itself that any remedy which the true owner may have against the landholder recognised by the Collector shall not be affected. The result is that the plaintiffs could have sued the defendants for an account of the profits received from the estate whenever such profits were received, the Collector's order notwithstanding. In other words, a right to sue accrued to the plaintiffs each time the defendant received the rents and profits as landholder, and it follows that the plaintiffs' claim to recover the profits received more than six years before the suit is barred by time. The bar will apply both to receipts and to the various claims for expenses.
10. In support of the view taken by the lower Court that no portion of the suit claim is barred, Mr. Venkatarama Sastri, the learned Counsel for the plaintiffs, advanced two lines of argument. Firstly, he urged that the plaintiffs could not have successfully maintained a suit for the profits so long as the decision of the trial Court in the previous litigation negativing their title to the estate stood unreversed, and as the plaintiffs' title was upheld only in their appeal to the Privy Council, their right to sue for the profits received by the defendant in the interim accrued once for all only after His Majesty's Order in Council was issued in July, 1935. Reliance was placed on the following observation of their Lordships of the Judicial Committee in Bassu Kuar v. Dhum Singh (1888) L.R. 15 I.A. 211 : I.L.R. 11 All. 47 at 56 (P.C.):
It would be an inconvenient state of the law if it were found necessary for a man to institute a perfectly vain litigation under peril of losing his property if he does not.
That was a case where a debtor entered into an arrangement with his creditor whereby certain villages were to be sold to the latter and the debt was to be set off against the price but the arrangement fell through, a suit for specific performance by the debtor having been ultimately dismissed. When the creditor subsequently sued for the debt within three years of this decree, but more than three years after the debt became due, the debtor who was previously insisting that the debt had been paid by virtue of the contract pleaded, the bar of limitation. Their Lordships overruled the plea holding that the decree imposed a new obligation on the debtor to pay the amount of the debt either under Section 65 of the Contract Act by way of restoring the advantage received tinder the agreement of sale which was discovered to be void or as money paid upon an existing consideration which afterwards failed. Their Lordships pointed out that it was common ground to both disputants that there was a contract made between them for the sale of the villages and the retention of the debt by the debtor as part payment of the price, their difference having related to other matters, and they accordingly took the view that until the agreement had been ultimately brought to an end by a decree of Court, the creditor was in the position of a person whose claim had been satisfied by the substitution of the land for the debt. In such circumstances it might have been a "perfectly vain litigation" if the creditor had filed a suit on the basis of the old debt due on dealings between the parties; for, if the contract was upheld he could only have the lands and if, as it happened, it was found to be unenforceable, he would be entitled to recover the amount due on a new and distinct basis. We are therefore of opinion that the observations relied upon must be understood with reference to the facts of the particular case and not as laying down a general rule that whenever a person finds an impediment in the way of his successfully asserting his right to relief, his cause of action is suspended and the course of time interrupted until such impediment is removed or that a fresh cause of action arises on its removal. The other decision, M. Ranee Surno Moyee v. S. M. Burmonia (1868) 12 M.I.A. 244, relied on by Mr. Venkatarama Sastri is more or less of the same type. A patni taluk was sold for arrears of rent but the sale was subsequently set aside for some irregularity and the landlord had to refund the amount realised to the purchaser. He subsequently sued for the same arrears and their Lordships held that the suit was not barred though instituted beyond the prescribed period computed from the original cause of action for the rent, the ground of decision being that the original claim for rent having been satisfied by the patni sale, there was a fresh cause of action on the setting aside of the sale and the refund of the purchase money, in respect of which the landlord was entitled to a fresh "period of limitation. These decisions, do not, in our opinion, support the general proposition contended for before us, that where the rights of parties have been subjected to adjudication by a competent Civil Court, limitation for other suits based on such rights should be computed from the date of their final determination. On the other hand, their Lordships have more than once pointed out that Courts have no power, on considerations of hardship or equity, to invent new grounds of exemption from the bar of limitation, not recognised by the statute see Soniram v. Karihaiya Lal (1913) 25 M.L.J. 131 : L.R. 40 I.A. 74 : I.L.R. 35 All. 227 (P.C.), Maqbul Ahmad v. Pratap Narain Singh (1935) 68 M.L.J. 665 : L.R. 62 I.A. 80 : I.L.R. 57 All. 242 at 250 (P.C.) Muthu Korakkai Chetty v. Madar Ammal (1919) 38 M.L.J. 1 : I.L.R. 43 Mad. 185 (F.B.) and Sundaramma v. Abdul Khadar (1932) 64 M.L.J. 664 : I.L.R. 56 Mad. 490 (F.B.) where the subject is more fully discussed.
11. In the present case there is nothing to warrant the view that His Majesty's Order in Council dismissing the defendant's previous suit 'brought about a new state of things and imposed a new obligation' on the defendant. It did no more than declare the first plaintiff's pre-existing title to the estate by holding his adoption by the Rani to be valid and it cannot be said that this adjudication gave rise to a fresh cause of action for the plaintiffs to sue for the entire profits received by the defendant. It is true that any suit for profits brought by the plaintiffs during the pendency of the previous litigation could not be decreed so long as the decision of the District Court, Rajahmundry, upholding the defendant's title to the estate stood unreversed, and would have been stayed under Section 10 of the Code of Civil Procedure pending the final determination of the question of title in the earlier litigation; but to suggest--as learned Counsel for the plaintiffs did--that the plaintiffs were not bound to institute such a futile suit would seem rather to beg the question; for it could hardly be regarded as futile when it was necessary under the law to institute such suit, if only to be stayed, in order to save the plaintiffs' claim from the bar of limitation.
12. The next contention of Mr. Venkatarama Sastri was that, having regard to the circumstances under which the defendant was recognised by the Collector as landholder, he must be regarded as having assumed management of the estate as an interim receiver during the pendency of the previous litigation on the understanding that he Should account for the rents and profits received in the course of such management in case the plaintiffs' title was upheld, or, in other words, that the defendant was liable on the basis of a contract, to render an account of the profits received by him during the whole period of his management. The learned Counsel urged that the defendant having alleged in paragraph 9 of his application to the Collector (Ex. B-l), "that it is just that he should be recognised as the landholder for the purposes of the Madras Estates Land Act subject to the ultimate result of the litigation now pending", and the Collector having nominated him as landholder on the basis of such allegation, the defendant must be deemed to have been placed in management on the terms that he should account for the profits at the termination of the litigation in case it went against him, and cited the decision of one of us reported in Sitarmiaswami v. Mahalakimamma A.I.R. 1936 Mad. 170. In that case, the parties to a pending litigation regarding the validity of a will agreed that the defendant who was already in possession of the land in dispute should retain possession till the termination of the litigation-and then deliver possession to the plaintiff with mesne profits in case the latter's claim to the property under the will was upheld. The plaintiff having succeeded in establishing his title, brought a suit for an account of the profits and, on a plea of limitation being raised, it was held that Article 120, applied and the right to sue accrued only on the adjudication of the Court on the question of title. This decision would no doubt have application here if it was established that the defendant entered upon management of the estate under an arrangement that he should collect the rents of the estate and render an account of such collections to the plaintiffs if the latter succeeded in the pending litigation. But we do not consider that the defendant undertook any such liability in this case, when he got himself recognised as landholder by the Collector. The statement in paragraph 9 of Ex. B-l as to the recognition as landholder being subject to the ultimate result of the pending litigation amounts to nothing more than a reference to the proviso contained in Section 3, Clause (5) itself which expressly provides that the Collector's order shall be subject to any decree or order of a competent Civil Court. Whether the defendant said so or not, the Collector's order (Ex. F) could operate only subject to the result of the pending litigation, and we are unable to spell out of the allegations in Ex. B-l any undertaking by the defendant to account for the profits Deceived by him as landholder. Nor can we import into the Collector's order, even reading it with the defendant's application as we were asked to do, any implied terms as to such accounting. The decision cited has therefore no application to the facts of this ease. On the other hand, the Nagpur High Court held in Shri Mahadeoji v. Baldeo Prasad A.I.R. 1941 Nag. 181 that even in the case of a person who was placed in management of certain properties under an express agreement that possession should be delivered back after the conclusion of a litigation then pending, the right to sue for an account of the profits arose under Article 120 of the Limitation Act not at the termination of the litigation but at each receipt of the profits, and that the claim for profits received more than six years prior to the suit was barred. However that may be, there is no basis here, as we have already observed, for the suggestion that there was an undertaking by the defendant to render an account of the profits on the termination of the previous litigation in favour of the plaintiffs, and we accordingly reject this contention.
13. In the plaintiffs' cross-appeal, only two questions were argued before us. In the first place, it was urged that the learned Subordinate Judge erred in disallowing the plaintiffs' claim to interest on the profits collected by the defendant. The learned Subordinate Judge held that as the plaintiffs did not sue for 'mesne profits' which as defined in the Civil Procedure Code, would include interest, but sued only for an account of the rents and profits received by the defendant, they were not entitled to claim interest under the Interest Act (XXXII of 1839) and he relied on Nanchappa Goundan v. Ittichathara Mannadiar (1929) 59 M.L.J. 358 : I.L.E. 53 Mad. 549 in support of that view. There was considerable divergence of opinion in the Courts in India as to when interest could be awarded independently of the provisions of that Act which contained a proviso to the effect that "interest shall be payable in all cases in which it is now payable by law". It is now settled, however, by the decision of the Privy Council in Bengal Nagpur Railway Co. Ltd. v. Ratanji Ramji (1938) 1 M.L.J. 640 : L.R. 65 I.A. 66 : I.L.R. (1938) 2 Cal. 72 (P.C.), that the proviso authorizes the Court to award interest in cases in which the Court of equity exercises jurisdiction to allow interest. Their Lordships quote the observations of Lord Tomlin in Maine and New Brunswick-Electrical Power Co. Lid. v. Hart (1929) A.C. 631 at p. 640 where he said:
In order to invoke a rule of equity it is necessary in the first instance to establish the existence of a state of circumstances which attracts the equitable jurisdiction as, for example, the non-performance of a contract of which equity can give specific performance.
The test would therefore seem to be whether in the particular case a Court of equity would recognise the claim for interest. We have already held that having regard to the provisions of Sections 94 and 95 of the Indian Trusts Act, the defendant is under a liability to account for the profits received by him as if he were a trustee for the plaintiffs. The plaintiff's claim therefore attracts the equitable jurisdiction of the Court to award interest in such cases and we hold accordingly that the plaintiffs are entitled to interest at six per cent. per annum on the net profits received by the defendant.
14. The next point argued relates to the allowance of ten per cent. of the collections made by the defendant as expenses of management. It was contended that such a consolidated allowance without reference to the actual expenses of management shown in the defendant's accounts is unwarranted, and that an account should be taken of actual charges. It was, however, represented by the plaintiffs' learned Counsel that his clients were prepared to accept this allowance if it included what are called law charges' which the defendant claims separately in his appeal from the final decree, and as we are holding that the bulk of the law charges, namely, all those relating to the proceedings for recovery of rent must be regarded as covered by this percentage allowance, the point loses much of its importance. It appears, however, that though a separate establishment was maintained for the estate in question, its management was supervised and controlled by the higher officers of the defendant's own Pittapur Zamindari such as the Dewan, Engineer, etc. The learned Subordinate Judge has, apparently in view of the difficulty of working out a just allocation of the salaries of those officers which were borne entirely by the Pittapur Zamindari and in order to avoid a protracted enquiry into the various items of expenses shown in the accounts, fixed a percentage allowance to cover all expenses of management including such supervision charges as a matter of administrative convenience. Reference was made in this connection on behalf of the defendant to Secretary of State for India in Council v. Saroj Kumar Acharjya Choudhury (1934) 68 M.L.J. 580 : L.R 62 I.A. 53 at p. 62 : I.L.R. 62 Cal. 499 (P.C.) where in dealing with a case arising in Bengal their Lordships observed that a ten per cent. allowance for expenses of collection was customary in ascertaining mesne profits and that it was not necessary to adduce evidence regarding the actual expenses of collection. We are of opinion that, having regard to all the circumstances of the case, the course adopted by the learned Subordinate Judge has much to commend it and we are not prepared to interfere with his discretion as it has not been shown to have been exercised arbitrarily or unreasonably.
15. Turning now to the appeals preferred against the final decree, we find that though the two plaintiffs have filed separate appeals, they raise the same questions for consideration while the defendant has raised certain other objections to the final decree in his appeal. We will now proceed to deal with the various points argued in these appeals.
16. The first point raised relates to a sum of Rs. 17,408-12-7 representing the arrears of rent which fell due prior to the death of the Rani. The learned Advocate-General contended that this amount though collected by the defendant under colour of the Collector's order stood on a different footing from the collections made in respect of rents falling due subsequently to such order, as the Collector's order had no retrospective operation over such arrears, and that the suit so far as it relates to this sum must be deemed to be one for profits wrongfully received by the defendant within the meaning of Article 109 of the Limitation Act. It is not necessary to enter into this question in view of our decision that the plaintiffs are not entitled to claim profits received more than six years prior to the suit as admittedly the whole of this amount was collected before that period.
17. The next point relates to what has been called the 'law charges'. In the course of his possession and management of the estate, the defendant had to file suits from time to time for recovery of the rents due from tenants and thus to incur various expenses incidental to Court proceedings. The defendant had also occasion to institute suits of a special character, one against a railway company for damages due to floods caused by the railway embankment and the other against certain persons called the Chelikani family for a declaration that the lower rate of rent fixed by a previous landholder in respect of the lands in their possession was not binding upon the defendant under Section 26 of the Madras Estates Land Act. The suit against the railway company resulted in a decree for the payment of Rs. 4,164-15-4 by the company which was duly recovered and it appears that a sum of Rs. 1,127 was paid out of the amount recovered to certain tenants as their share of the compensation for the damage caused to their holdings. The defendant's accounts show that the expenses incurred in connection with the first of these litigations amounted to Rs. 2,355-9-0 and that those relating to the second amounted to Rs. 7,438-8-3. There is no dispute about these figures. The plaintiffs, while they claim the rents recovered through Court as well as the sum of Rs. 4,164-15-4 referred to above less Rs. 1,127 paid to the tenants, contend that the defendant is not entitled to the deduction of the expenses incurred in connection with the rent suits and the two litigations referred to above on the ground that all these expenses must be deemed to be included in the ten per cent. deduction for expenses of management allowed under the preliminary decree.
18. The judgment under appeal is by no means free from obscurity in regard to this item. In one place (paragraph 29) the learned Subordinate Judge would seem to disallow the claim for these expenses, but in another place (paragraphs 32 and 47) he would seem to allow their deduction to the extent of the amounts realised through Court. Both parties are, however, agreed that the effect of the decree of the lower Court is to allow the expenses relating to the rent suits and to disallow those relating to the other litigations, the plaintiffs' claim for the amount recovered from the railway company being also disallowed, and it was on this footing that the question under this item has been argued before us. As already observed the plaintiffs contend that all these expenses must be deemed to be covered by the ten per cent. allowance for expenses of management, and they also claim the amount recovered by the defendant from the railway company, while the defendant maintains that the entire law charges should be allowed as a legitimate deduction in addition to the management expenses. We consider that neither view can be accepted as entirely correct. Suits and other proceedings for recovery of rent are a normal feature of Zamindari administration and it will not be unreasonable to regard the expenses relating to them as expenses of management of the estate. And a deduction on a percentage basis having been allowed for such expenses, it seems to us that the defendant cannot claim a further deduction on account of rent suits under the head 'law charges'. The expenses relating to the litigation connected with the railway company and the Chelikani family would, however, seem to stand on a different footing. They are litigations occasioned by some special 'circumstances and the expenses relating to them cannot be regarded as expenses ordinarily incidental to the management of a Zamindari. It is not disputed that these litigations were instituted on justifiable grounds and proved beneficial to the estate. We consider therefore that the defendant is entitled to credit for the expenses shown in the accounts to-have been incurred in respect of these litigations so far as the claim is not barred by limitation. He will have of course to-account for the amount recovered from the railway company less Rs. 1,127 paid to the tenants as aforesaid.
19. The defendant next claims a sum of Rs. 2,516-8-7 as expenses, relating to the survey and record of rights carried out by him in respect of the estate. It is objected on behalf of the plaintiffs that this deduction not having been provided for in the preliminary decree which, in addition to the percentage allowance for expenses of management, specifically provides for certain other items of deduction, it is not open to the defendant to claim this sum in the appeal against the final decree as he has not challenged the preliminary decree in regard to this matter in his appeal against that decree. We see no force in this technical objection as all these appeals have been heard together and the points raised can be dealt with as arising in one or other of them as may seem appropriate. Apart from this, it is urged that this sum must also be regarded as included in the ten per cent. allowance for expenses of management and could not be claimed separately. We cannot agree. Survey and preparation of record of rights cannot be regarded as acts ordinarily done in the course of the management of a Zamindari. They are special operations carried out once and for all and result in great benefit to the estate. The expenses relating to them are in the nature of capital expenditure incurred for the benefit of the estate and there is no apparent reason why the defendant should not be allowed credit for such expenses, so far as the claim is not barred by limitation.
20. The next item is a claim by the defendant for expenses incurred by him for the construction of certain common calingulas or irrigation weirs which serve both the Pittapur and Gollaprole estates. Under an arrangement with the previous proprietor of the Gollaprole estate providing that the* expenses relating to the calingulas should be borne by the proprietors of both estates in certain proportion, the defendant claims a sum of Rs. 5,173-2-0. In the lower Court Rs. 7,028-6-6, was claimed under this head but the defendant now admits that Rs. 5,173-2-0 is the correct sum due. The learned Subordinate Judge has refused to go into this matter on the ground that it was reserved for determination in a separate suit by consent of parties embodied in a memorandum filed in Court. In paragraph 18 of the preliminary judgment it is stated that "the dispute regarding the keys and kalingas referred to in the memos will have to be decided in a separate suit as desired by learned Counsel on both sides". This statement is not correct as the memorandum refers only to the dispute regarding the keys of the calingulas. That the learned Judge below has fallen into an error is now conceded on behalf of the plaintiffs who agree, to this claim being allowed to the extent to which it is established. The actual amount due will have to be ascertained in the lower Court.
21. The last point raised relates to a sum of Rs. 5,102-1-4, which the plaintiffs claim as interest actually received by the defendant on investments made out of the rents collected. This claim is put forward only as an alternative to the plaintiffs' general claim for interest on all sums collected by the defendant as landholder, and it is urged that if it is held that the defendant is not chargeable with interest on the profits received by him, he should be held accountable at least for this sum as it was actually received by him. The learned Subordinate Judge has held that the preliminary decree having generally disallowed interest, this claim could not be entertained in the final decree proceedings. As we have held that the plaintiffs are entitled to interest in respect of all the collections made by the defendant, this claim calls for no consideration.
22. In the result the appeals are allowed in part and the decree will be modified in accordance with the directions contained in this judgment. The parties will pay and receive proportionate costs throughout.
23. These appeals having been set down to be mentioned, this day, the Court made the additions marked with asterisks and the following
24. As the materials are not available here for drafting the amended final decrees, the cases will be remitted to the lower Court for this purpose. The lower Court will also apportion the costs between the first and second plaintiffs.