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Raja of Sivaganga, Sole Hereditary Trustee of the Sivaganga Devasthanam by Agent S. Jayarama Iyer Vs. State of Madras by Secretary, Revenue Department and anr. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtChennai High Court
Decided On
Reported in(1958)2MLJ65
AppellantRaja of Sivaganga, Sole Hereditary Trustee of the Sivaganga Devasthanam by Agent S. Jayarama Iyer
RespondentState of Madras by Secretary, Revenue Department and anr.
Excerpt:
- p. rajagopalan, o.c.j.1. in anticipation of the abolition of the zamindari estates and other estates as defined by madras act i of 1908 the madras legislature enacted the madras estates land (reduction of rent) act, 1947 (xxx of 1947) to relieve immediately the tenants in the estates of the burden of what were considered to be the excessive rents they were then paying the landlords. subsequently the madras estates (abolition and conversion into ryotwari) act, 1948 (xxvi of 1948) provided for the abolition of the estates themselves and for bringing those areas under the ryotwari system. a number of religious, educational and charitable institutions, 1 to which we shall hereafter refer comprehensively as institutions or religious institutions, owned such estates, which had been granted in.....
Judgment:

P. Rajagopalan, O.C.J.

1. In anticipation of the abolition of the zamindari estates and other estates as defined by Madras Act I of 1908 the Madras Legislature enacted the Madras Estates Land (Reduction of Rent) Act, 1947 (XXX of 1947) to relieve immediately the tenants in the estates of the burden of what were considered to be the excessive rents they were then paying the landlords. Subsequently the Madras Estates (Abolition and Conversion into Ryotwari) Act, 1948 (XXVI of 1948) provided for the abolition of the estates themselves and for bringing those areas under the ryotwari system. A number of religious, educational and charitable institutions, 1 to which we shall hereafter refer comprehensively as institutions or religious institutions, owned such estates, which had been granted in in am for the upkeep and main I tenance of these institutions. Special provisions were made in both the Acts to main I tain what was considered by the Legislature to be a just balance between the interests 1 of such public institutions and those of the tenants in the estates they owned. While 1 the interests of the tenants were safeguarded on the same lines as those of the tenants in other types of estates, a more favourable treatment was accorded to the institutions, which owned inam estates, than to the landholders of the other abolished ' estates, obviously to provide against any undue diminution of the annual income which the institutions had been entitled to get from those inam estates before these Tenancy Laws were enacted. Section 5 of the Rent Reduction Act and Section 38 of the Abolition Act were amongst such legislative provisions. It is enough to note at this stage that these provisions were not identical in their scope. Section 5 of the Rent Reduction Act, which applied also to estates other than inam estates was in force till the estates were notified and taken over by the Government under the Abolition Act. Section 38 of the Abolition Act which was confined to inam estates came into play after the estates vested in the Government.

2. The common question that arises for determination in this batch of applications preferred under Article 226 of the Constitution, for the issue of a writ of mandamus in each case to the Government to discharge their statutory obligations, is, what is the scope of Section 38 of the Abolition Act and what is it that is payable to the institutions thereunder.

3. The petitioner in W.P. No. 296 of 1957 was the erstwhile landholder of the Rama-nathapuram zamindari estate. He was also the hereditary trustee of the religious and charitable institutions set out in Schedules A and B appended to that petition. The inam estates owned by each of the institutions were also enumerated in these Schedules. The petitioner filed a separate application with reference to each of the institutions and they formed the batch W.P. Nos. 296 to 363 of 1957. W.P. No. 1031 of 1956 was filed by the Raja of Sivaganga who was the hereditary trustee of the eighty four religious and charitable institutions which were set out in the Schedules to that petition together with the inam estates each of these institutions owned. It was common ground that the rents in these estates were reduced, and that the notifications under the Rent Reduction Act were issued in 1949-50. These notifications however took effect from 1st July, 1947, in fasli 1357, as directed by Section 3(3) of the Rent Reduction Act. It was again common ground that all these estates were notified under the Abolition Act. Most of them vested in the Gov-vernment with effect from 1st October, 1951, in the course of fasli 1361.

4. Section 5 of the Rent Reduction Act was amended by Madras Act XXIX of 1956, Section 1(2) of which directed that the amended Section 5 schould be deemed to have come into force on 7th January, 1948, when the Rent Reduction Act itself came into force. In view of that it may not be necessary to examine the difference between the scope of Section 5 as it was originally enacted, and that of Section 5 as it was amended. Section 5 as it now stands runs:

5. State Government to make good income lost by religious, educational or charitable institutions : - (1) Where, by reason of the foregoing provisions, the net income derived by any religious, educational or charitable institution from any estate or part of an estate belonging to it, in the fasli year 1357 or in any subsequent fasli year until the commencement of the fasli year in which the estate may finally be taken over by the State Government, becomes less than the net income which the institution would have derived in such fasli year if the rates of rent had not been reduced under this Act, the State Government shall pay the difference to the institution at the end of the fasli year in question.

(2) The net income derived in each of the fasli years beginning with the fasli year 1357 and the net income which the institution would have derived in each fasli year as aforesaid shall for the purposes of Sub-section (1), be determined by such authority, and in such manner, as may be laid down in the Rules made by the State Government.

(3) In determining the net income in both the cases aforesaid, all amounts which accrued to the institution concerned during the relevant fasli year shall be taken into account whether the amounts were actually collected or not.

5. The effect of Section 5 can be summed up thus. The rates of rent were reduced only for the ryoti lands in the estate. Those reduced rents, cesses and the items of miscellaneous revenue constituted the beriz or the demand of the estate village. The demand under the head of rents would be comparatively static, while the demand under the heads of miscellaneous revenue were liable to variation from year to year. That beriz could not obviously include the income of the institution which the landholder got from its private lands. No rent was payable at all on those lands, and no question of reduction of rent could arise. The items of miscellaneous revenue and the rates therefor were also left untouched by the Rent Reduction Act. So the result of Section 5 was that the difference between what constituted rent from the ryoti lands calculated on the basis of what could be conveniently called the contract rates which prevailed before the Rent Reduction Act, and the rent as reduced under the Rent Reduction Act became payable to the institution which owned that estate. We can leave out of account the deductions for which Section 3(4) of the Rent Reduction Act provided. In other words, with reference to each village which constituted an estate the difference between the actual beriz based on the reduced rents and the notional beriz computed on the assumption that the rents were not reduced under the Rent Reduction Act, was ascertained and that became payable to the institution as the landholder of the estate. That payment was a statutory liability imposed on the State, obviously to be met out of its consolidated fund. It did not come out of anything which the Government could collect in the estate under the terms of the Rent Reduction Act. It was a payment in addition to what was payble under Section 3(4) of the Rent Reduction Act, which could be correlated to what the Government could collect from the tenants in possession of the ryoti lands in the estate. The religious institution as the landholder was entitled to this additional payment up to the commencement of the fasli year in the course of which the estates were taken over by the Government under the Abolition Act. As we pointed out earlier, most of the inam estates involved in. these proceedings were taken over in the course of fasli 1361.

6. Obviously there can be no real dispute about what was payable to the institution under Section 5 of the Rent Reduction Act. It was a sum which could be computed with comparative ease.

7. What the institution as the landholder of an inam estate is entitled to after that estate vests in the Government under the Abolition Act is regulated by Section 38 of the Act, the relevant portion of which runs:

38. Payment oftasdik allowance and additional compensation to institutions : (1) Where an inam estate or part thereof was held immediately before the notified date by any religious, educational or chari' table institution, the Government shall pay to the institution every year as a tasdik allowance - (a) in the case of an entire inam estate, the basic annual sum ;

* * * * * *(2) Where the tasdik allowance so payable is less than the difference between-

(a) the average net annual income derived by the institution from all sources in the estate... as calculated in the prescribed manner during the five complete fasli years immediately preceding the notified date or during that portion of those fasli years in which the estate... was held by the institution, and

(b) the income as calculated in the prescribed manner which the institution may be expected to receive from the lands in respect of which it is entitled to a ryotwari patta,

the deficiency shall be made good to the institution by the Government every year.

(3) All amounts which accrued due to the institution during the period referred to in Sub-Section (2), clause (a), shall be taken into account, whether the amounts were actually collected or not...

8. Section 54 of the Abolition Act provides for the interim payments to the institutions till the quantum of the tasdik allowance payable under Section 38 is finally determined.

9. Instead of a lump sum compensation payable in instalments, which the landholders of even other inam estates were entitled to under the Abolition Act, religious and other institutions which owned inam estates became entitled to the recurring annual payment which was styled a tasdik allowance. The grant of a tasdik allowance to such institutions in lieu of the income they had enjoyed before was not a new concept. The basis of calculation of that allowance as compensation for the loss of the inam estates was new and was furnished by Section 38. The primary constituent of that tasdik allowance was the 'basic sum' to be ascertained in accordance with the provisions of Section 31 of the Abolition Act. What was payable under Section 38(1) of the Abolition Act corresponded to some extent to the payments the institutions were entitled to get under Section 3(4) of the Rent Reduction Act. Section 5(1) of the Rent Reduction Act provided for an additional payment to the institution. Something akin to that was the provision for additional allowance under Section 38(2) of the Abolition Act. But the schme of Sub-sections (1) and (2) of Section 38 of the Abolition Act was very different from that of Sections 3(4) and 5(1) of the Rent Reduction Act.

10. While Section 3(4) of the Rent Reduction Act was linked up with the rents payable on ryoti lands reduced under that Act, the statutory concept of the basic annual sum in Section 31 of the Abolition Act was linked up with the land revenue payable on what had been really ryoti lands in the estate after the contemplated ryotwari settlement was carried out. There was a reasonable certainty that the landholder's income from the ryoti lands would suffer a diminution, often a drastic diminution,, after the rents were reduced under the Rent Reduction Act. It was that diminution that was provided against by Section 5(1) of the Rent Reduction Act. It is. true the exact rates of ryotwari settlement to be introduced in the inam estates taken over under the Abolition Act could not be visualised when Sections 31 and 38(1) of that Act were enacted. It should however be remembered that Sections 2 and 3 of the Rent Reduction Act had directed in effect the adoption of the ryotwari rates in the neighbourhood as the standard. Just as Section 3(4) of the Rent Reduction Act did not take into account the income of the institution from such private lands as it owned in the inam estate, that income was left out in calculating the basic annual sum under Section 31 of the Abolition Act. It should be more convenient to refer to that as income from private lands, though the statutory provision in Section 31 of the Abolition Act was for the exclusion of the ryotwari demand on the lands for which the landholder was entitled to a ryotwari patta which statutory right might be of larger ambit in many cases than the right to a patta for private lands. While Sections 31 and 38(1) of the Abolition Act excluded in effect the income from the private lands, Section 38(2) made that income from the private lands, one of the items to be taken into account in calculating what an institution could get in addition to' the tasdik allowance it was entitled to under Section 38(1). To that extent it radically differed from Section 5(1) of the Rent Reduction Act, which as we have pointed out, left out of account the income from private lands even as Section 3 (4) of the Rent Reduction Act did.

11. Except that both Section 5(1) of the Rent Reduction Act and Section 38(2) of the Abolition Act provided for an additional payment, one has no resemblance to the other. Unlike Section 5(1) of the Rent Reduction Act Section 38 of this Abolition Act was confined to Inam estates. What was payable under Section 5 of the Rent: Reduction Act ceased when the inam estate was taken over by the Government. What was payable under Section 38(2) of the Abolition Act had to be computed on a wholly different basis.

12. Factually, religious institutions did get in addition to the beriz of the estate based on the reduced rent, reduced under the Rent Reduction Act, the additional sum for which Section 5(1) of that Act provided. That was also part of the income of the institution in the fasli years for which that additional sum was payable. Did Section 38(1) or Section 38(2) of the Abolition Act or both provide for trie inclusion of that item of income in the* annual tasdik allowance payable to the religious institution after it was divested of its inam estate, is the main question, for determination in these proceedings.

13. What is payable under Section 38(1) of the Abolition Act is the basic annual sum. The computation of the basic annual sum is provided for under Section 31 of that Act. What was payable under Section 5 of the Rent Reduction Act cannot be brought within the scope of items (i) and (ii) of Section 31 of the Abolition Act. It may not therefore be necessary to set out these provisions. Item (iv) of Section 31 of the Abolition Act runs:

the whole of the average net annual miscellaneous revenue derived from all other sources in the estate specified in Section 3, clause (b), but not including lands in respect of which the landholder is entitled to a ryotwari patta, as ascertained under Section 34.

14. Section 34 specified the years for which the average was to be taken. The relevant portion of Section 3(b) to which reference was made in Section 31(iv) of the Abolition Act runs:

the entire estate (including all communal lands and porambokes, other non-ryoti lands, waste lands, pasture lands, lanka lands, forests, mines and minerals, quarries, rivers and streams, tanks and irrigation works, fisheries, and ferries...)

15. Miscellaneous revenue was a known revenue concept with a fairly precise connotation both in the ryotwari and the estate villages. What were the sources of miscellaneous revenue were also unknown. It was really that that was given statutory recognition in Section 3(b) of the Abolition Act. What was payable under Section 5(1) of the Rent Reduction Act during the interim period between fasli 1357 and fasli 1360, that is, up to the commencement of fasli 1361 in which most of the estates were notified, cannot, in our opinion, be brought within the scope of the miscellan-ous revenue, for the inclusion of which in the basic annual sum Section 31(iv) of the Abolition Act provided.

16. As we said, Section 38(1) read with Section 31 of the Abolition Act was to a considerabale extent analogous to Section 3(4) of the Rent Reduction Act. Both provided for the payment to the landholder of what was the beriz of the village which constituted the inam estates. They included the rents, or land revenue lawfully payable for the time being on what were or had been ryoti lands the cesses thereon and the miscellaneous revenue. What was payable under Section 5 (1) of the Rent Reduction Act was no part of the beriz, either for purposes of Section 3(4) of the Rent Reduction Act or for those of Section 38(1) of the Abolition Act.

17. The next question is whether the additional sum payable under Section 5(1) of the Rent Reduction Act can be taken into account for computing the additional payment for which Section 38(2) of the Abolition Act provided.

18. The factors to be taken into account for Section 5 of the Rent Reduction Act were (1) the net income factually derived by the religious institution from the estate in fasli 1357 and in each of the following fasli years ; and (2) the net income the institution would have derived from that estate in the given year if the rates of rent had not been reduced, that is, if the Rent Reduction Act had not been enforced.

19. The expression 'net income derived from an estate' in item (1) mentioned above obviously refers to the net income calculated on the basis of Section 3(4) of the Rent Reduction Act. What was payable under Section 5(1) of that Act could obviously have no place in the net income or in the notional net income referred to in item (2) mentioned above. That net income was in the words of the Rent Reduction Act 'the net income derived by any religious institution from any estate.'

20. The language employed in Section 38(2) of the Abolition Act is not identical. The situation and the context were different from those for which Section 5(1) of the Rent Reduction Act had to provide. Section 38(2) of the Abolition Act refers to the 'average net annual income derived by the institution from all the sources in the estate'. We shall presently advert to the significance of the average based on the figures of five years. One feature to be considered is whether the expression in Section 38(2) of the Abolition Act ' the net annual income derived from all the sources in the estate' is of wider amplitude in its context than the stautory expression in Section 5(1) of the Rent Reduction Act, ' the net annual income derived from the estate.' The submission of the learned Counsel for the petitioners was that Section 38 (2) of the Abolition Act included within its scope what was payable under Section 5(1) of the Rent Reduction Act. Factually it was part of the income of the religious institution in the relevant years. The learned Advocate-General, who appeared for the State submitted that the sources specified in Section 38(2) of the Abolition Act were sources (i) to (iv) mentioned in Section 31 of that Act and that in effect both Section 5(1) of the Rent Reduction Act and Section 38(2) of the Abolition Act had reference to the same set of sources for computing the net income of the landholder.

21. At first sight there might appear to be little practical difference between the two statutory expressions ' income derived from the estate 'and' income derived from all the sources in the estate'. It should however be clear that every expression must be given the meaning the context warrants.

22. We shall explain the point by an illustrative example. Income from the private lands owned by the religious institution in an inam estate is certainly income derived from the estate as well as income derived from one of the sources in the estate. Yet that that income was outside the ambit of Section 5(1) of the Rent Reduction Act never admitted of any controversy. The further requirement in Section 5(1) 'if the rates of rent had not been reduced under this Act 'makes that clear. We have pointed out that in the case of private lands there was no rent and no occasion for any reduction of the non-existent rates of rent. The income from private lands would appear to be equally outside the scope of Section 38(2)(a) though that was the only item included in Section 38(2)(b) of the Abolition Act. If such an income had to be included in calculating the average net income for Section 38(2)(a) only to deduct it under Section 38(2)(b) the result would be totally different from what Section 38 as a whole was intended to achieve. The additional allowance the institution has to get is not the difference between the basic annual sum and the average net annual income during the five years that preceded the notified date. To arrive at what is payable under Section 38(2) we have first to arrive at the difference between the average net annual income and computed income from the private lands. The next step is to see if the basic annal sum is-less than that difference; if it is, that deficiency is to be made up under Section 38(2). If the income from the private lands is put in under Section 38(2)(a) and taken out under Section 38(2)(b) we would be left only with the average net income from all the sources other than the private lands which could in effect only lead us to the essence of the basic annual sum that was payable as land revenue on what had been ryoti lands in the estate. Of course the basic annual sum is the gross ryotwari demand on such lands less the 3 1/2 per cent, which has to be deducted for maintenance of sources of irrigation under Section 32(2) of the Abolition Act. We pointed out earlier that the rates of rent payable on ryoti lands reduced under the Rent Reduction Act might not eventually accord in every case with the rates finally determined at the ryotwari settlement which was to follow the vesting of the estate in the Government. Still we cannot forget the assumption that underlay the scheme of the Rent Reduction Act especially Sections 2 and 3 thereof, that the rents would be reduced to bring them to the extent possible in conformity with the prevalent ryotwari rates in the neighbourhood of the estate. It is apparently on this basis that the beriz or demand, based on the reduced rates of rent, furnished the main factor for the computation of the interim payment under Section 54 of the Abolition Act subject to final adjustment when the ryotwari demand was ascertained after the settlement. If the Legislature had in view that the eventual ryotwari demand on what had been ryoti lands would not be very different from the beriz or demand worked out on the basis of reduced rents under Section 3(4) of the Rent Reduction Act, what was it the Legislature intended as compensation to the religious institutions that had owned inam estates in addition to the basic annual sum payable as tasdik allowance? Of course, the intention of the Legislature has to be gathered primarily from the words of the statute, in this case the words used in Section 38, and in particular those in Section 38(2)(a) of the Abolition Act.

23. The policy that underlay Section 5 of the Rent Reduction Act was obviously to stabilise at least for the interim period the income of the religious institution at the levels that prevailed in fasli 1356 and before, when the original and the contract rates of rents applied to the ryoti lands. As we said the rent from the ryoti lands was a comparatively static factor in the annual income of the institution. The B other main item, income from the private lands, was left out of consideration and remained unaffected by the Rent Reduction Act. Does the scheme that can be gathered from the words of Section 38 of, the Abolition Act give any indication that B that principle was abandoned even with reference to the inam estates alone to B which Section 38 was confined? Was it the intention of the Legislature, unequivocally expressed in Section 38 of the Abolition Act, that the tasdik allowance should I be lower than the lawful income in fasli 1356. These are among the aspects of the question to be considered.

24. The prominent feature of Section 38(2) of the Abolition Act was that, while I Section 5 of the Rent Reduction Act in effect wholly ignored the income from the I private lands, Section 38(2)(b) directed that the income from private lands should I be one of the factors for determining the quantum of the additional allowance. I Under the Rent Reduction Act a religious institution could get (i) the beriz of I the estate based on the reduced rates of rents for ryoti lands, (ii) the I income from the private lands, and (iii) if the beriz calculated on the I original and contract rates of rent which were those that prevailed I in fasli 1356, was higher than the reduced beriz in item (i) above, I then the difference between the two. All this at least factually constituted the I annual income of this institution. What the institution can get under the Abolition Act is; (1) the basic annual sum which in effect is the reduced beriz, the beriz made up of the ryotwari demand of what had been ryoti lands computed on the basis of the ryotwari rates introduced after settlement operations had been carried out, which were necessarily expected to be lower than the fasli 1356 level of rents; (2) the income from the private lands for which the landholder was entitled to a ryotwari patta, which in effect meant that, instead of holding those lands free of all rent, the landholder would have to pay land revenue, thereby diminishing his net income from the private lands, and (3) the additional allowance for which provision was made in Section 38(2) of the Abolition Act. If the expression 'average net annual income derived from all the sources in the estate' in Section 38 (2)(l) meant in effect only the basic annual sum, it would have been easier for the Legislature to have said so. The difference between the beriz of the village excluding the demand of the land revenue payable on what had been private lands which would be the basic annual sum computed on the basis of Section 31 and the beriz calculated on the basis of the reduced rents in Section 3(4) of the Rent Reduction Act would have, in most cases, been negligible, and would not have necessitated recourse to the elaborate formula of 'average net income derived from all the sources in the estate '.

25. The five year period for which the averages had to be taken was from fasli 1356 to fasli 1360 in the case of the inam estates taken over in fasli 1361. We should remember that the expectation was that all the inam estates would be taken over in the course of fasli 1361. Of these years, the beriz for fasli 1356 alone was based on the original rates of rent. Apart from the income from the private lands that was the main income of the institution. The income for the next four faslis was made up of the beriz based on the rates reduced under Section 3(4) of the Rent Reduction Act and the allowance in Section 5(1) of that Act, which brought up the amount to the normal beriz, e.g., the beriz of fasli 1356.

26. The very concept of average appears to us to be a clear indication of the intention of the Legislature which enacted Section 38(2)(a) of the Abolition Act, that what it had in view was the factual income of the religious institution in the five faslis that proceded fasli 1361, the fasli year in which the estate was notified under the Abolition Act. Averaging again is not a new concept in tenancy legislation. Averages are taken of years which have much in common with each other, in other words, of years normal but for ordinary seasonal fluctuations. From the point of view of the institution whose interests the Legislature intended to protect, there can be little in common between fasli 1356 and each of the four succeeding faslis, when the rates of rent were reduced, and often drastically reduced, by operation of law. The guarantee against the loss expected by that statutory reduction was the provision in Section 5(1) of the Rent Reduction Act. Unless that amount also is taken into account, the average for which Section 38(2)(a) of the Abolition Act provided can have little meaning.

27. It is against this background we have to determine the scope and content of the statutory expression in Section 38 (2)(a) of the Abolition Act 'the average net annual income derived by the institution from all the sources in the estate', which was obviously and designedly different from the expression in Section 5(1) of the Rent Reduction Act, and further which was to provide for a wholly different situation.

28. The learned Advocate-General pointed out that the additional allowance for which Section 5(1) of the Rent Reduction Act provided was only a statutory right from the view point of the institution and a statutory liability imposed on the Government and he urged that it could not be viewed as income from any source in an estate. It is true that payment which the Government undertook did not come out of anything the Government itself could collect from the estate under Section 3(4) of the Rent Reduction Act, and that it had to come out of the consolidated fund of the State. But that appears to be of little relevancy in deciding what the Legislature intended to signify by the expression 'income from all the sources in an estate '. The right and the corresponding liability created by Section 3(4) of the Rent Reduction Act were also statutory though it imported the fiction of a statutory agency. So was the liability imposed by Section 39(1) of the Abolition Act. For at least four of the five year period specified in Section 38(2)(a) of the Abolition Act, the right to receive the income was statutory and the liability of the Government to pay that amount was also statutory. All the payments had to be made by the Government out of the consolidated fund. It should be remembered that the liability of the Government to pay was independent of the collections it made, either under the Rent Reduction Act or, under the terms of the Abolition Act. The receipts went into the consolidated fund. The statutory payments were out of that fund. Both Section 5(3) of the Rent Reduction Act and Section 38(3) of the Abolition Act made the accrual and not the actual receipt the basis for computing the net income of the institution. In our opinion the real test is, would the institution have been entitled to any of these payments had it not owned the estate? First the right to collect rents vested in the Government under the Rent Reduction Act. Next the estate itself vested in the Government mder the Abolition Act. The right of the institution as the landholder to receive any amount as income was thereafter only a statutory right. That was a right that flowed from the ownership of the estate. Independent of the ownership of that estate the institution could have no right to receive any payment from the Government. Once again we have to emphasise that factually what the institution was entitled to receive under Section 5(1) of the Rent Reduction Act was its income. Equally factually it was income that the institution became entitled to because it owned that estate. In the context of Section 5(1) of the Rent Reduction Act, the additional allowance paid under that Sub-section stood excluded from ' the income derived from the estate '. The context of Section 38(2)(a) of the Abolition Act demands, in our opinion, the inclusion of that allowance in the net income derived by the institution during the four relevant faslis. Otherwise the scheme and policy that underlay Section 38 of the Abolition Act can have no real significance. We may point out that, if the intention of the Legislature was, as the learned Advocate-General contended it was, to limit 'all the sources in the estate ' as the expression stands in Section 38(2)(a) of the Abolition Act, to the sources specified in clauses (i) to (iv) of Section 31, it could easily have said so, even as the Legislature referred to Section 3(b) when it referred to the sources of miscellaneous revenue in Section 31(iv) of the Abolition Act.

29. Despite the definition of 'estate' in Section 2(3) of the Abolition Act, to construe that expression and to confine it strictly to the geographical or territorial unit in the context of Section 38(2)(a) would be really to ignore the realities. The estate as such ceased to exist in the eye of law on the date it was notified, and section 38 provided for what was (b follow. The income from the sources in the estate at that stage could not mean income directly springing from the soil of the territorial unit that had been an estate. Even before the date of that notification under the Abolition Act to the institution 'the estate' represented to a considerable extent only the right to receive the statutory payments for which Section 3(4) and Section 5 of the Rent Reduction Act provided. Payments under Section 3(4) were substituted for the rents which of course could be strictly called income from a source in the estate. If income received under Section 3(4) could be viewed as income from a source in an estate, it is doing no violence to the language employed in Section 38(2)(a) of the Abolition Act to look upon the payment under Section 5(1) of the Rent Reduction Act also, as 'income from sources in the estate', the main right at that stage in the estate, inclusive of all the sources of income, being only the right to receive payments out of the consolidated fund for which the statute provided. As we said the real test should be, was it a payment which became a receipt of income in the hands of the institution, correlated to the ownership of what was an estate as defined by the Estates Land Act. That test, in our opinion, was satisfied by what was payable under Section 5(1) of the Rent Reduction Act.

30. Though the ultimate result of the construction placed on the relevant statutory expression may have no bearing on the process of construction itself, we shall set out the results that would follow in the case of one of the inam estates by the adoption of the construction each side suggested of the statutory expression in Section 38(2)(a) of the Abolition Act. The data sheets for Vethioor and some other villages were furnished to us. In the case of Vethioor the total income derived by the institution during all the five years that preceded fasli 1357 when the Rent Reduction Act came into force was the unreduced beriz, i.e., Rs. 38,869-10-1. The unreduced beriz of fasli 1356 and the reduced beriz of the next four faslis the five-year period for which Section 38 (2)(a) of the Abolition Act provided---amounted to Rs. 16,020-14-5 of this, the beriz for fasli 1356 alone was Rs. 8,234-4-0 more' than half the total. During the four years faslis 1357 to 1360, the additional allowance payable under Section 5(1) of the Rent Reduction Act amounted to Rs. 26,070-14-0. Certain allowances for the statutory deductions had to be made from 16,020-14-5. Thereafter the total net income for the five years fasli 1356 to fasli 1360 amounted to Rs. 12,599-13-0 which was without taking into account the additional allowances paid for four of the fasli years under Section 5(1) of the Rent Reduction Act. If that was also taken into account, the income the institution was actually entitled to during the five years was Rs. 38,670-11-0, what we referred to -earlier as the factual income. That corresponded in reality to the total of the five years that preceded fasli 1357. Taking into account the payments both under Section 3(4) and Section 5(1) of the Rent Reduction Act the average-net annual income, the factual income was Rs. 7,734-2-2. If, however, the income factually received under Section 5(1) of the Rent Reduction Act is left out, the average would work out only to Rs. 2,519-15-5. For the interim payments permitted under Section 54 of the Abolition Act what was payable as tasdik allowance under Section 38(1) of the Abolition Act was computed as Rs. 2,017-14-1. That as the data sheet showed bore a close resemblance to the reduced beriz during each of the fasli years 1357 to 1360. On the assumption that the amounts payable under Section 5(1) of the Rent Reduction Act should be ignored for computing the additional allowance payable under Section 38(2) of the Abolition Act that additional allowance was computed at Rs. 455-1-9. Thus the interim payment was made up of Rs. 2,017-14-1 plus Rs. 455-1-9. Instead of Rs. 455-1-9 that was computed as allowance permissible under Section 38(2) of the Act, a sum of Rs. 5,716-4-1 would have to be paid, were the additional payments under Section 5(1) of the Rent Reduction Act to be taken into account. This made a difference of Rs. 5,261-2-4 each year to the institution. That would be the loss tested by the factual income derived by the institution in the period that preceded fasli 1361, when the estate was notified and that would be 'the' extent 'of this loss in the fasli years that followed the notification of the estate. We find it difficult to accept that such a drastic reduction in income was what the Legislature contemplated when it enacted Section 38(2) 1 of the Abolition Act.1

31. Both in the affidavit in support of the petitions, and during the course of the I arguments of the learned Counsel for the petitioners reliance was placed on the 1 wording of the Forms which formed part of the Rules framed by the Government j to give effect to Section 38(2) of the Abolition Act. During the course of arguments J the learned Counsel realised that the wording of these Forms was changed with re j trospective effect by a subsequent amendment of the Rules. Neither the original set of Forms nor the amended set of Forms can be of any real significance in defining the statutory concept of 'income derived from all the sources in the estate' as embodied in Section 38(2)(a) of the Abolition Act.

32. In the counter-affidavits filed on behalf of the Government, a preliminary objection was taken to the maintainability of these applications under Article 226 of the Constitution for the issue of a writ of mandamus. That objection was not persisted in and the learned Advocate-General represented to us that the Government also would welcome an adjudication of the real questions at issue between the parties in these proceedings.

33. One feature of the case we have to point out at this stage. Though we have discussed so far the scope of Section 38 of the Abolition Act, what is payable at this stage to the institutions which the petitioners represent is the interim payment for which Section 54 of the Act provides. As Section 54 itself directs, the interim payment has to correspond at least on a rough calculation to the payment for which Section 38 of the Abolition Act provides. As a basis for that rough calculation the beriz arrived at under the Rent Reduction Act provisionally took the place of the anticipated ryotwari demand for which provision was made in Section 31 of the Act. The other sources of income had also to be taken into account for computing the interim payments under Section 54 of the Act.

34. Admittedly the Government declined to take into account the payments to which the institutions were entitled under Section 5(1) of the Rent Reduction Act in computing, even on a rough calculation, the amounts payable to each of these institutions under Section 38(2) of the Abolition Act. It was a statutory duty imposed on the Government by Section 38(2) read with Section 54 of the Abolition Act. To discharge that statutory duty the amounts lawfully due to the institutions have to be correctly computed. That obligation can be enforced by the issue of necessary directions by this Court.

35. The rule in each of these cases is made absolute, and there will be a direction in each of these cases, to the Government to compute on a correct basis the amount lawfully payable to each of these institutions under Section 38(2) of the-Abolition Act in the light of the observations in this judgment. There will be no order as to costs.


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