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1916 Supreme(SC) 88

PRIVY COUNCIL [ON APPEAL FROM THEEAST INDIES]
LORD PARKER OF WADDINGTON, LORD SUMNER, SIR JOHN EDGE, AND SIR LAWRENCE JENKINS.
MOTI CHAND - Appellant
Versus
IKKAM ULLAH KHAN - Respondents
On Appeal from The High Court at Allahabad.
Decided On : December 11, 1916.

Advocates:
Solicitors for appellants:T. L. Wilson & Co. Solicitors for respondents: Truefitt & Francis.

Agreements to relinquish occupancy rights in sir lands upon the transfer of proprietary rights, including agreements to pay damages for failure to relinquish, are void and unenforceable as they contravene the statutory policy of preserving such rights for the ex-proprietor.

Headnote:(A) North-Western Provinces Tenancy Act, 1901 - Section 83(3) - Transfer of proprietary rights - Occupancy rights in sir lands - Agreement to relinquish rights - Validity of agreement for damages - The policy of the Act is to secure and preserve to a proprietor whose proprietary rights in a mahal or any portion of it are transferred (otherwise than by gift or exchange between co-sharers) a right of occupancy in his sir lands - Such right of occupancy is secured and preserved by the Act regardless of whether the proprietor wishes it to be so preserved and notwithstanding any agreement to the contrary between the vendor and the transferee - Any device, arrangement, or agreement for the relinquishment of such lands, or for the vendor being liable to a suit for damages on failing to relinquish such lands, is in contravention of the policy of the Act and is illegal and void. (Paras 10-11)

Facts of the case:
By a sale deed, the respondents sold proprietary lands to the appellants. The deed included an agreement that the vendors would execute a deed of relinquishment of their rights in the sir lands and pay damages at a specified rate per bigha if possession was not delivered. Although a deed of relinquishment was subsequently executed, the vendors refused to file it in the Revenue Court or vacate the lands. The purchasers instituted a suit claiming damages as provided by the agreement.

Findings of Court:
The court found that the agreement for relinquishment contained in the sale deed and the subsequent execution of a deed of relinquishment were not separate and distinct transactions, but steps taken to give effect to the original agreement. Furthermore, the relationship between the parties at the time of the agreement was that of vendor and purchaser, not tenant and landlord.

Issues: Whether an agreement between a vendor and vendee to relinquish occupancy rights in sir lands, including a provision for damages for breach of such agreement, is valid and enforceable under the North-Western Provinces Tenancy Act, 1901.

Ratio Decidendi: The court ruled that the statutory policy of the Act is to protect the occupancy rights of an ex-proprietor upon the transfer of proprietary rights. This protection is mandatory and cannot be defeated by contractual agreements, ingenious devices, or penalties for non-relinquishment. Consequently, any agreement to the contrary is contrary to law and cannot be enforced in any civil or revenue court.

Result: Appeal dismissed with costs.

Legal Category Hierarchy

Judgement

Appeal from a judgment and decree of the High Court (May 24, 1911) reversing a judgment and decree of the Subordinate Judge of Azamgarh (October 13, 1909).

By a sale deed executed on May 2, 1903, the respondents sold to the appellants three mauzas of which they were the proprietors within the meaning of the North-Western Provinces Tenancy Act, 1901. The sale purported to include the sir and khudkasht lands and ex-proprietary rights. The deed contained an agreement by the vendors to execute a deed of relinquishment of the sir lands, and to pay to the purchasers damages at the rate of Rs.16 per bigha should possession not be given of any portion of the sir and khudkasht lands.

The respondents executed a deed, dated May 6r 1903, by which they purported to give up possession of their ex-proprietary holdings in performance of the agreement, and this deed was subsequently registered. The respondents, however, refused to give the appellants possession, and the latter instituted the present suit claiming Rs.16 per bigha damages, as provided by the agreement, together with interest.

The respondents by their written statements contended (inter alia) that the agreement was invalid and void.

The Subordinate Judge held that, since under s. 83, sub-s. 3, of the North-Western Provinces Tenancy Act, 1901, a tenant may agree to surrender any part of his holding, it was lawful for the plaintiffs to claim damages upon the defendants failure to perform their agreement. He accordingly made a decree in favour of the plaintiffs.

The High Court (Karamat Hossein and Chamier JJ.) reversed the decision. Upon a consideration of previous decisions of the High Court they held that, whether the transaction was regarded as an attempted sale of ex-proprietary rights or as an agreement to relinquish those rights when they should arise, it was unlawful under the above-mentioned Act, and that the claim for damages was consequently not maintainable. The judgment Is reported at I L. R. 33 Allah. 695.

1916. Nov. 16. De Gruyther, K.C., and Dube, for the appellants. It is conceded that a sale of ex-proprietary rights to a person who is not a co-sharer is invalid under the North-Western Provinces Tenancy Act, 1901. The Act, however, by s. 83, sub-s. 3, allows ex-proprietary rights to be relinquished to the landholder, and an agreement to so relinquish is equally valid.

[LORD PARKER OF WADDINGTON. When the agreement was made the parties were vendor and purchaser and not tenant and landholder.]

If the agreement is inoperative the appellants are entitled under s. 65 of the Indian Contract Act, 1872, to recover so much of the consideration as was paid in respect of the sir lands. The agreement as to damages indicates the amount so paid. [ Dipan Rai v. Ram Khelawan (( 1910) I. L. R. 32 Allah. 383.) and the cases mentioned in the judgment of the High Court were referred to.]

Abdul Majid, for the respondents, was not called on.

Dec. 11. The judgment of their Lordships was delivered by

SIR JOHN EDGE. This is an appeal from a decree, dated May 24, 1911, of the High Court of Judicature at Allahabad, which set aside a decree of the Subordinate Judge of Azamgarh and dismissed the suit of the plaintiffs. The suit was brought to recover damages for an alleged breach by the defendants of an agreement contained in a sale deed of May 2, 1903, by which the defendants had agreed to execute und file a deed of relinquishment of their rights in their sir lands in mauzas Khorant, Daulsapur, and Bharthipur, in the district of Azamgarh. The mauzas in question are mahals within the meaning of the North-Western Provinces Tenancy Act, 1901 (Act II. of 1901).

The defendants, who were the proprietors within the meaning of that Act of mauzas Khorant, Daulsapur, and Bharthipur, and had in those mauzas. considerable sir lands in their occupation to which the Act applied, by their deed of May 2, 1903, transferred by sale to the plaintiffs the three mauzas and all the rights appertaining to

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Judicial Analysis

1916 Supreme(SC) 88

PRIVY COUNCIL [ON APPEAL FROM THEEAST INDIES]LORD PARKER OF WADDINGTON, LORD SUMNER, SIR JOHN EDGE, AND SIR LAWRENCE JENKINS.MOTI CHAND - AppellantVersusIKKAM ULLAH KHAN - RespondentsOn Appeal from The High Court at Allahabad.Decided On : December 11, 1916.

Agreements to relinquish occupancy rights in sir lands upon the transfer of proprietary rights, including agreements to pay damages for failure to relinquish, are void and unenforceable as they contravene the statutory policy of preserving such rights for the ex-proprietor.

Legal Category Hierarchy

Judicial Analysis

PRIVY COUNCIL [ON APPEAL FROM THEEAST INDIES]
LORD PARKER OF WADDINGTON, LORD SUMNER, SIR JOHN EDGE, AND SIR LAWRENCE JENKINS.
MOTI CHAND - Appellant
Versus
IKKAM ULLAH KHAN - Respondents
On Appeal from The High Court at Allahabad.
Decided On : December 11, 1916.