KUMAR KAMALARANJAN ROY vs SECRETARY OF STATE

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1938 Supreme(SC) 31

PRIVY COUNCIL [ON APPEAL FROM THEEAST INDIES]
LORD WRIGHT, LORD ROMER, LORD PORTER, SIR SHADI LAL, AND SIR GEORGE RANKIN.
KUMAR KAMALARANJAN ROY - Appellant
Versus
SECRETARY OF STATE - Respondents
On appeal from the High Court at Calcutta.
Decided On : Oct. 17. 1938.

Important Points

A charge on an under-tenure ceases to exist when the tenure is annulled. Liability for settlement costs is a personal debt of the certificate debtor and does not shift to a subsequent purchaser of the estate upon the annulment of the under-tenure.

Subject

Property Law - Land Revenue

Act Referred

BENGAL LAND REVENUE SALES ACT: S.37
BENGAL TENANCY ACT: S.114, S.1, S.3

Headnote

(A) Land Revenue Sales Act, 1859 - Section 37 - Tenancy Act, 1885 - Section 114 - Public Demands Recovery Act, 1913 - Sections 7, 8, 43 - Liability for settlement costs - Purchaser of an estate acquires it free from encumbrances imposed after settlement and can annul under-tenures - If settlement costs are a charge on an under-tenure, the annulment of such tenure causes the charge to cease, as a charge cannot exist without the underlying interest - Liability for costs under the Tenancy Act is a debt against the specific person identified in the certificate and does not automatically shift to a subsequent purchaser upon annulment of the tenure.

(B) Administrative Manuals - Rules in a survey and settlement manual that lack statutory authority cannot impose liabilities, and terms like "abandonment" cannot be extended to include "annulment" of tenures.

Facts of the case:
A purchaser of a zemindari estate sold for recovery of land revenue arrears annulled several under-tenures. Prior to the purchase, settlement costs for the preparation of a record of rights had been apportioned to the holders of those under-tenures. Some balances remained unpaid, and the government attempted to transfer these certificates of debt to the purchaser. The purchaser paid under protest and sought repayment.

Findings of Court:
The purchaser is not liable for the unpaid settlement costs previously apportioned to under-tenure holders whose tenures were annulled. The certificates of debt cannot be transferred to the purchaser of the estate.

Issues: Whether the government had the power to transfer the debt for settlement costs from the under-tenure holders to the purchaser of the estate upon the annulment of the under-tenures.

Ratio Decidendi: When an interest charged is avoided and determined, the charge upon it must also cease; there cannot be a charge upon nothing. Furthermore, the statutory liability for settlement costs creates a debt against a specific person (the certificate debtor) and does not constitute a shifting liability that passes to a new landlord unless expressly provided by statute.

Result: Appeal allowed.

Legal Category Hierarchy

Advocates:
Solicitors for appellant :W. W. Box & Co. Solicitor for respondent: Solicitor, India Office.

Judgement

Consolidated Appeals (No. 68 of 1937) from two decrees of the High Court (March 27, 1936) reversing two decrees of the District Judge of Murshidabad (July 17, 1933), which in turn had reversed two decrees of the Subordinate Judge of Murshidabad (February 28, 1933).

The main question in these consolidated appeals was whether the appellant, as purchaser of a zemindari estate sold under the provisions of the Bengal Land Revenue Sales Act, XI. of 1859, for the recovery of arrears of land revenue, and who upon his purchase had annulled the patnis of certain patnidars on the estate, was liable for portions of the expenses of certain settlement operations in connection with the preparation of the record of rights, carried out under Chapter X. of the Bengal Tenancy Act, VIII. of 1885, before the purchase, which portions the Local Government before the purchase had duly determined should be paid by such patnidars. The patnidars had in fact paid a part of the amounts apportioned on them, but some balances remained unpaid at the date of the sale, and the question was whether the appellant was liable to the Government for those sums.

Certificates under the Bengal Public Demands Recovery Act, Beng. Act III. of 1913, showing the amounts due by the defaulting patnidars had been signed by the Certificate Officer and filed in his office. After the purchase of the estate by the appellant the Certificate Office then purported to transfer the certificates in regard to the patnidars who were still in default to the name of the appellant, and made a demand on him for payment. Having paid under protest the amounts demanded, the appellant instituted on September 7, 1931, and February 15, 1932, the two suits out of which the present appeals arose, claiming cancellation of the certificates, aggregating in both actions Rs.3519-14-0, and repayment of that amount, with interest at 12 per cent, per annum from the dates on which he had paid.

The facts and the relevant statutory provisions appear from the judgment of the Judicial Committee.

The Subordinate Judge dismissed the suits, which were tried together, but appeals by the appellant to the District Judge were allowed.

On further appeal by the respondent, the Secretary of State, the High Court (S. N. Guha and Bartley JJ.) reversed the decision of the District Judge and dismissed the suits.

1938. July 14, 15. A. M. Dunne K.C., Sir Thomas Strangman K.C. and C. E. Bagram for the appellant. The only question is whether the Government had power to transfer the debt in respect of the settlement costs from the patnidars to the purchaser of the estate, the appellant. It has been held that the costs, on apportionment, are a personal debt. There was no provision in any Act or in any rule having the force of law which imposed a liability on the appellant to pay the amounts he paid under protest. [Reference was made to the Bengal Land Revenue Sales Act, XI. of 1859, s. 37; the Bengal Tenancy Act, VIII. of 1885, as amended to September 1, 1933, s. 114, sub-ss. 1, 3 ; the Bengal Survey and Settlement Manual, 1917, r. 414 ; and the Bengal Public Demands Recovery Act, Beng. Act III. of 1913, ss. 7, 8, 43.] Upon the proper construction of s. 37 of the Land Revenue Sales Act, 1859, the estate was bought free from all encumbrances, and that means free from any charge whatever. Rule 414 of the Survey and Settlement Manual, 1917, is not a statutory rule and has not the force of law, and even if it had, it has no application to this case in that it is not suggested that any of the patnidars in question either died or transferred his interest or abandoned his tenancy. [Reference was made to Raja Bejoy Singh v. Hem Chandra (( 1920) 33 Cal. L. J. 349.) ; Maharaja Surja Kanta Acharjya Bahadur v. Sarat Chandra Roy Chowdhuri (( 1914) 18 Cal. W. N. 1281.) ; Narayan Das Khettry v. Jatindra Nath Roy Chowdhury (( 1927) L- R. 54 I- A. 218.); and Raja Sashikanta v. Raja Sarat Chandra . (( 1921) 34 Cal. L. J. 415.)]

J. M. Tucke