1. Mortgage enforcement suit — Claim for relief under Madras Agriculturists' Relief Act — Dispute over status as agriculturist and applicability of tax-based exclusion provisos. (Para 2 , 3 )
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1949 Supreme(SC) 33
Privy Council At Madras
Sir John Beaumont, Lord Reid, Justice Lord Oaksey, JJ.
A. Veerayya Vandayar and others -Appellant
Versus
Sivagami Achi and another, Respondents. -Resopndent
Privy Council Appeal No. 6 of 1947
Decided On : 18-07-1949
Advocates Appeared:
Nevill, Barrow Rogers, Chapman-Walkers, A. Rahman, P.V. Subba Row, J.M.R. Jayakar, S.P. Khambatta
Nevill, Barrow Rogers, Chapman-Walkers, A. Rahman, P.V. Subba Row, J.M.R. Jayakar, S.P. Khambatta
The court held that once a person meets the general definition of an agriculturist, the burden shifts to the opposing party to prove exclusion via provisos. Additionally, tax register entries do not prove building ownership if evidence shows tenants own the superstructures.
Headnote:(A) Madras Agriculturists' Relief Act, 1938 - Section 3(2) - Definition of "agriculturist" - Provisos (C) and (D) - Exclusion from relief - Burden of proof - Aggregate annual rental value - Ownership of superstructures vs. ownership of sites - Once a person has shown that they fall within the general definition of an agriculturist, the burden of proving that they are deprived of the privilege by one of the provisos lies upon the party asserting such exclusion. (Para 4)
(B) Construction of Proviso
(C) - The term "aggregate annual rental value of such buildings and lands" refers to the cumulative value of buildings and land assessed to tax under any of the Acts mentioned in the Proviso, rather than requiring each individual assessment to meet the threshold. The intent is to distinguish between agricultural and non-agricultural properties. (Para 6) (C) Evidence of Ownership - Mere entry in an assessment register is not sufficient to bring a person within the scope of Proviso (C) if it is proved that the person is not the owner of the building. (Para 8)
Facts of the case:
A suit was brought to enforce a mortgage bond. The defendants claimed relief under an Act providing relief to agriculturists. While it was conceded that some defendants were agriculturists, the status of the appellants was disputed. The respondents contended that the appellants were excluded from the definition of "agriculturist" under Provisos (C) and
(D) of Section 3(2) of the Act. Specifically, it was alleged that the appellants were assessed to property and house taxes on non-agricultural properties with an aggregate annual rental value exceeding Rs. 600. The trial court found that the appellants owned only the land sites and not the superstructures, whereas the High Court found that the appellants owned certain houses, bringing them within the exclusion proviso.
Findings of Court:
The court found that the appellants did not own the superstructures of the properties in question, as the evidence established that the tenants were the owners of the buildings. The court rejected the High Court's finding of a conspiracy to alter assessment registers, ruling that such an inference was based on mere suspicion without direct evidence. It was held that the evidence of the tenants, which remained uncontradicted, supported the finding that the appellants owned only the sites.
Issues: Whether the appellants were excluded from the benefits of the Act under Proviso (C) of Section 3(2) based on the aggregate annual rental value of non-agricultural properties owned by them.
Ratio Decidendi: The court ruled that the burden of proving exclusion via a proviso rests on the party asserting it. It clarified that the "aggregate annual rental value" is cumulative across different tax acts. Furthermore, it held that tax register entries do not conclusively prove ownership of buildings if evidence demonstrates that the superstructures belong to the tenants.
Result: Appeal allowed.
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Table of Contents
2. Whether tax assessments under Proviso C are cumulative — Whether ownership of house sites versus superstructures excludes a person from agriculturist status. (Para 7 , 9 )
3. Assessments under Proviso C are cumulative — Mere entry in assessment registers does not prove ownership of buildings — Findings of conspiracy require evidence beyond suspicion. (Para 12 , 17 )
Sir John Beaumont:-
This is an appeal from a judgment and decree of the High Court at Madras dated 13th November 1944, modifying a decree of the Court of the Subordinate Judge of Tanjore dated 18th July 1941.
[2] The suit out of which this appeal arises was brought by Receivers appointed by the Court to collect the dues upon a mortgage bond dated 19th April 1926. The mortgage was executed by appellant 1, who was defendant 1 in the suit, on behalf of himself and his minor sons appellants 3 and 4, who were defendants 3 and 4, and by defendant 2 and members of his joint family who were defendants 5, 6 and 7. The suit, which was to enforce the mortgage, was commenced on 6th April 1937 and the plaintiffs who are respondents in this appeal, were the persons interested in the mortgage money. The defences originally raised are no longer relevant. On 22nd March 1938, the Madras Agriculturists' Relief Act, 1938 (Madras Act, IV [4] of 1938) (hereinafter referred to as "the Act") was passed with the object of giving certain relief to agriculturists as defined in the Act. The defendants filed supplementary written statements claiming relief under the Act. It was conceded that defendants 2, 5, 6 and 7 were agriculturists entitled to relief under the Act, and the principal matter in issue in the suit was, and the only question for determination in this appeal is, whether the appellants representing the other branch of the mortgagor family are also entitled to relief as agriculturists.
[3] Section 3, sub-s. (2) of the Act defines agriculturist as meaning a person who
(a) "has a saleable interest in any agricultural or horticultural land in the Province of Madras, not being land situated within a municipality or cantonment, which is assessed by the Provincial Government to land revenue (which shall be deemed to include peshkash and quit rent), or which is held free of tax under a grant made, confirmed or recognised by Government";
The other clauses of the definition are not relevant, but there are four provisos to this section which restrict the class of agriculturists. Provisos "c" and "d" are relevant and are in the following terms: - Provided that a person shall not be deemed to be an agriculturist if he
(C) has within the two years immediately preceding 1st October 1937, been assessed to property or house tax in respect of buildings or lands other than agricultural lands, under the Madras District Municipalities Act, 1920, the Madras City Municipal Act, 1919, the Cantonments Act, 1924, or any law governing municipal or local bodies in any other province in British India or any Indian State, or under the Madras Local Boards Act, 1920, in a panchayat which was a union before 26th August, 1930, provided that the aggregate annual rental value of such buildings and lands, whether let out or in the occupation of the owner, is not less than Rs. 600; or
(D) is a landholder of an estate under the Madras Estates Land Act, 1908, or of a share or portion thereof in respect of which estate, share or portion any sum exceeding Rs. 500 is paid as peshkash or any sum exceeding Rs. 100 is paid as quit-rent, jodi, kattubadi, poruppu or the like, or is a janmi under the Malabar Tenancy Act, 1929, who pays any sum exceeding Rs. 500 as land revenue to the Provincial Government."
4. It is not disputed that the appellants came within the definition of "agriculturist" contained in S. 3 (2) (a), but it is claimed by the respondents that they were taken out of the class of agriculturists because appellant 1 fell within provisos C and D. Some discussion took place before the Board as to the burden of proof, and the Judges of the High Court seem to have considered that the burden of proving that they were agriculturists entitled to relief under the Act lay upon the appellants. In the first instance no doubt the burden was upon the appellants to show that they were agriculturists. But having shown that they fell within the general definition of that word they would be entitled
