1. The only question involved in this appeal is, whether the plaintiff-landlord is entitled to interest tip overdue instalments at the rate of 75 per cent, per annum.
2. The Court of Appeal below has found that interest at 75 per cent, is an unusual and exorbitant rate and that it was an unconscionable bargain at its inception. It accordingly followed simple interest at 12 1/2 per cent, per annum.
3. The plaintiff has appealed to this Court and it is contended that as the kabuliyat was executed in May 1882 before the passing of the Bengal Tenancy Act, the defendant is liable to pay interest at the rate stipulated in it.
4. No doubt, the kabuliyat having been executed prior to the passing of the Bengal, Tenancy Act, the provisions of Section 67 are not applicable to the case; but the defendant purchased the holding at a sale for arrears of rent held at the instance of the landlord, the plaintiff. As a purchaser at the rent sale, the defendant purchased it with the ordinary incidents of a tenancy.
5. It was pointed out by Banerji, J. in the case of Kali Nath Sen v. Trailokhya Nath Roy 26 C. 315 : 3 C.W.N. 194 : 13 Ind. Dec. (N.S.) 45 that 'a stipulation for the payment of interest et an unusual and an exorbitant rate cannot be supposed to be an incident of a tenancy which would attach to it even after a sale for arrears of rent;' and again 'the distinction between usual and unusual term of a contract of tenancy is a distinction which should be taken into consideration in determining whether the incident in question continues to attach to the tenancy, notwithstanding its sale for arrears of rent, and it is a distinction which has been given effect to by this Court in certain cases, of which I may refer to the following, namely, Deendyal Paramanick v. Juggeshur Roy Marsh 252 : 2 Hay 21 and Alim v. Satis Chandra Chaturdhurin 24 C. 37 : 15 Ind. Dec. (N.S.) 690.'
6. On behalf of the appellant, we have been referred to the case of Raj Narain Mitter v. Panna Chand Singh 30 C. 213 : 7 C.W.N. 203 where the auction-purchaser of a dur-putni tenure was held to be bound by the stipulation contained in the dur-putni lease as to the payment of interest on arrears of rent, such a stipulation where there is nothing unusual in it being part of an ordinary incident of a tenure. It was also held that the auction-sale of a tenancy does not involve any new contract between the auction-purchaser and the landlord, a question upon which an opinion was expressed by one of the Judges (Rampini, J.) in the case of Kali Nath Sen v. Trailokhya Nath Roy 26 C. 315 : 3 C.W.N. 194 : 13 Ind. Dec. (N.S.) 805; the other Judge Banerji, J., expressing no opinion on the point. As stated above, however, in the case of Raj Narain Mitter v. Panha Chand Singh 30 C. 213 : 7 C.W.N. 203, the tenancy was a dur-putni, i.e., a permanent tenure and not a raiyati holding and it was upon that ground that Banerji, J., distinguished the cases Alim v. Satis Chandra Chaturdhurin 24 C. 37 : 12 Ind. Dec. (N.S.) 690 and Kali Nath Sen v. Trailokhya Nath Roy 26 C. 315 : 3 C.W.N. 194 : 13 Ind. Dec. (N.S.) 805.
7. It is unnecessary to refer to cases relating to permanent tenures, because the holder of a permanent lease may not be entitled to the indulgent consideration which might be extended to a raiyat. So far as cases governed by the Bengal Tenancy Act are concerned, Section 179 expressly provides that nothing in this Act shall be deemed to prevent a proprietor or a holder of a permanent tenure in a permanently settled area from granting, a permanent mukarrari lease on any terms agreed on between him and his tenant.
8. The learned Pleader for the appellant also relied upon the cases of Tiluk Chandra Roy v. Jasoda Kumar Roy 11 C.W.N. 215 and Madhumala v. Alafzaddi Kazi 2 Ind. Cas. 415 : 13 C.W.N. 962 : 10 C.L.J. 45.
9. These cases, no doubt, related to raiyati holdings but the defendants in both 'the cases were private purchasers from the original tenant; and, apart from the provisions of the Bengal Tenancy Act, they would be bound by the contract in the same way as the original tenant was.
10. We were also referred to the case of Abdul Hamid v. Abdul Miji 32 Ind. Cas. 710 where the original kabuliyat which was executed prior to the passing of the Bengal Tenancy Act provided for interest at the rate of 75 per cent, on overdue instalments and there was subsequently a solenama between the landlord and the tenant by which there was some variation of the rent. The question was whether the solenama created any new contract of tenancy. It was held that the solenama did not create any new contract of tenancy and the plaintiff was entitled to get interest at the rate stipulated. But there the defendant was the original tenant and there was no question of purchase at a sale for arrears of rent at the instance of the landlord.
11. It is contended by the learned Pleader for the appellant that no distinction should be drawn between the case of a private purchaser and a purchaser at a rent-sale.
13. But there is a distinction between these two cases. In the case of a private transfer, the transferee can and should call for the title-deed of the vendor; and if there is a lease providing for interest at a high rate, the purchaser becomes aware of such a contract before his purchase. He, therefore, purchases with full knowledge of the terms of the lease and he cannot, in these circumstances, complain that the rate of interest is an exorbitant one. In the case of a rent-sale, on the other hand, the purchaser ordinarily cannot have any knowledge of the terms of the contract between the landlord and the tenant unless the landlord chooses to specify in the sale proclamation any incident of the tenancy or refer to the contract under which the tenancy is held.
14. In these cases, we may observe, there was no such notification by the landlord. Many agricultural tenancies in this country are held without any written contract at all and if the landlord does not in the sale proclamation refer to any written contract under which interest at a very high rate is payable, the purchaser has no means of knowing the terms of the contract: and when a holding is put up to sale at the instance of the landlord himself without any such notifications, the purchaser may be justified in purchasing the holding on the assumption that the ordinary rate of interest is payable, interest under the Bengal Tenancy Act being payable at 12 1/2 per cent and before the passing of the Bengal Tenancy Act at 12 per cent, under Act VIII of 1869. For reasons stated above, we think that the decision of the lower Appellate Court is correct and that the appeal must be dismissed with costs.