1. The only question raised in this appeal is what is the rate of interest on arrears of rent payable by the defendants to the plaintiff. The plaintiff-appellant has brought the present suit for arrears of rent against the defendants charging interest at the rate of 150 percent per annum in accordance with the terms of the kabuliyat dated 1874. Both the Courts below have held that the plaintiff is not entitled to recover interest at such a high rats as 150 per cent. per annum on the ground that the rate of interest was hard and unconscionable. They further held that the stipulation as to payment of interest was penal and was inserted by way of threat and was not intended to be acted upon and was never acted upon. In this view they held that the stipulation was in the nature of penalty and fixed the rate of interest at 25 per cent. per annum.
2. The plaintiff appeals and argues that there is no evidence on the record to show that the bargain was hard and unconscionable or brought about by undue influence on the part of the plaintiff. We think that this contention is right. According to the recent decisions of the Judicial Committee [Aziz Khan v. Duni Chand A.I.R. 1918 P.C. 48 and Lal Balla Mall v. Ahad Shah A.I.R. 1918 P.C. 249], it is clear that where a contract is challenged as providing a very high rate of interest; it is necessary to prove that one party had undue advantage over the other in the matter of settlement of the rate of interest. As regards the stipulation being of a penal character, there is nothing to support it; and we do not think that it will be right to hold that in every case where there is a stipulation for payment of interest on non-payment of rent within a certain time it must be taken to be penal. The ground upon which the decision of the Courts below is based is therefore unsustainable.
3. Hence we have to consider the question raised before us in the light of the documentary evidence produced by the parties. The claim is based upon a kabuliyat executed by the defendant's predecessors in favour of the plaintiff's predecessors so long ago as 1874. It is headed as a raiyati kabuliyat. The lease is not for any term. It lays down the mode of calculation of rent which is a progressive one from 1881 to 1886. Some of the terms of this lease are that the tenant and his heirs will have no right to transfer the holding by gift or sale, or will nor will it be attached in execution of a decree against the tenant or his heirs. There is a condition that if the rent is not paid according to the instalments fixed in the document every month, interest will be charged at the rate of 2 annas in the Rupee per month. The learned Vakil for the appellant argues that the tenancy having been before the Bengal Tenancy Act came into operation, it is governed by the terms in the kabuliyat as to the rate of interest and is not affected by the Bengal Tenancy Act. In the first place, it is contended that the kabuliyat creates an occupancy right; and secondly, it is argued, that it creates a permanent heritable raiyati lease. As we understand the scope of the lease, we take it to be a lease creating raiyati tenancy without fixing any period of the lease. There is no word in the lease signifying permanency nor are there any expressions which can be taken to mean that it was intended to be heritable. The use of the word heir in connection with the restriction of the rights of transfer does not necessarily mean that the lease is a heritable one. It is possible that the landlord anticipating that he might not have any occasion to eject the tenant inserted the above condition that it could not be transferred by the tenant himself or any one succeeding him. Such being the character of the lease, the next question that arises for consideration is how far it is to be governed by the Bengal Tenancy Act. The Bengal Tenancy Act came into operation when the tenant had not acquired the right of occupancy. As we have said, there was no period fixed for the lease. It must therefore be considered to be a lease from year to year. In 1885 when the Bengal Tenancy Act came into force the tenant had the status of a raiyat holding the land from year to year. The consideration therefore which influenced the decision in the case of Chandra Nath Sarma v. Sheikh Inamdi A.I.R. 1921 Cal. 300, would in our judgment weigh in this case also. In that case there was a lease executed before the Bengal Tenancy Act for a certain period which had terminated before the Act came into operation. It was held that the tenant in that case was holding over and must be supposed to be a tenant from year to year, and if rent is claimed for any period after the termination of the lease, the claim must be governed by the provisions of the Bengal Tenancy Act. We think the same principle will apply to the present case. Under Section 67, Bengal Tenancy Act the plaintiff is not entitled to recover more interest than is fixed by that section. In this view of the matter we think that the plaintiff has been awarded more than what he would be entitled to under the law, and this appeal must be dismissed with costs.