judgement:
Appeals Nos. 1 and 2 of 1949.
Appeals from the Judgment and Decree dated the 22nd December, 1942, of the High Court of Judicature at Patna in First Appeals Nos. 10 and 1 1 of 1939 arising out of the Judgment and Decree dated the 23rd November, 1936, of the Court of the Subordinate Judge of Berhampore in Original Suit No. 11 of 1935.
D.V. Narasinga Rao and M. section K. Sastri for the appellant.
section L. Chhibber and R. 0.
Prasad for respondents Nos.
1 4, 6 9, 11 and 12. 1954.
March 9.
The Judgment of the Court was delivered by VENKATARAMA AYYAR J.
These appeals arise out of a suit instituted by the respondents to enforce a mortgage deed, Exhibit A, dated 5th April, 1923, executed by the defendant in favour of one Radha Prasad Bhagat.
The subject matter of the mortgage is an estate called the Bodogodo Zemin situated in 921 what was the District of Ganjam in the Province of Madras and now comprised in the State of Orissa, and governed by the provisions of the Madras Impartible Estates Act 11 of 1904.
The mortgage is for ' Rs. 1,25,000 and the deed recites that a sum of Rs. 12,500 was advanced to the mortgagor on a promissory note executed on 30th March, 1923, that the balance of Rs. 1,12,500 was paid to him in cash, and that the entire amount was borrowed for meeting the expenses of the marriage of his second daughter with the eldest son of the Rajah of Talcher.
The marriage, in fact, took place on 27th April, 1923.
Though the deed recites that Rs. 1, 12,500 was paid in cash, the case of the plaintiffs is that it was, in fact, paid on 14th April, 1923, on the authority of the defendant to his manager, one Mr. Henry Tapp, after the mortgage bond was registered, which was on 10th April, 1923.
In 1926 and 1927 the defendant made several payments towards the mortgage, in all aggregating to Rs. 42,000.
The mortgagee died on 18th November, 1933, and thereafter his legal representatives filed the suit, out of which these appeals arise, for recovery of the balance due under the mortgage by sale of the hypothecated property.
The defendant resisted the suit on several grounds.
He pleaded that the mortgage was supported by consideration only to the extent of Rs. 25,000, and that it had become discharged by the payments made in 1926 and 1927.
He also contended that the mortgage bond was not duly attested or validly, registered, and that it was therefore void and unenforceable.
The Subordinate Judge of Berhampur who heard the suit held that no consideration passed for the promissory note for Rs. 12,500 dated 30th March, 1923, Exhibit J, and that it was really a salami; but that the balance of Rs. 1, 1 2,500 was paid to Mr. Tapp under the authority of the defendant.
He also held that the mortgage bond was duly attested and validly registered, and a decree was passed in accordance with these findings Both the parties took up the matter in appeal to the High Court of Patna. ' The plaintiffs filed A. section 119 922 No. 10 of 1937 claiming that Exhibit J was supported by consideration, and the defendant filed A. section No. 11 of '1937 pleading that the alleged payment of Rs. 1,12,500 to Mr. Tapp was unauthorised, and that the mortgage bond was void, as it was neither duly attested nor properly registered.
The High Court concurred with the Subordinate Judge in finding that Rs. 1,12,500 was paid to Mr. Tapp under the authority of the defendant, and that the bond was duly attested and registered.
But as regards ' the promissory note, Exhibit J, it held differing from the Subordinate Judge that it was also supported by consideration.
Against this decision, the defendant appeals.
and repeats all the contentions urged by him in the courts below.
* * * * [The court held on a consideration Of the evidence that the mortgage bond was supported by consideration and that it was duly attested.] The last contention of the appellant was that the deed was not validly registered in accordance with the provisions of sections 32 and 33 of the , and that it was therefore void.
Section 32 enacts that, " Except in the cases mentioned in sections 31, 88 and 89 every document to be registered under this Act shall be presented. . . (a) by some person executing or claiming under the same,. . or (b)by the representative or assign of such person, or (c)by the agent of such person, representative or assign,duly authorised by power of attorney executed and authenticated in manner hereinafter mentioned.
" Section 33, so far as is material for the present purpose, runs as follows: 33(1) " For the purposes of section 32, the following powers of attorney shall alone be recognized, namely : (a)if the principal at the time of executing the power of attorney resides in any part of (the Provinces) in which this Act is for the time being in force, a 923 power of attorney executed before and authenticated by the Registrar or Sub Registrar within whose district or sub district the principal resides;.
Provided that the following persons shall not be required to attend at any registration office or court for the purpose of executing any such power of attorney as is mentioned in clauses (a) and (b) of this section, namely : (i)persons who by reason of bodily infirmity are unable without risk or serious inconvenience so to attend ; (ii)persons who are in jail under civil or criminal process and (iii)persons exempt by law from personal appearance in court.
(2)In the case of every such person the Registrar or Sub Registrar or Magistrate, as the case may be, if satisfied that the power of attorney has been voluntarily executed by the person purporting to be the principal, may attest the same without requiring his personal attendance at the office or court aforesaid.
(3)To obtain evidence as to the voluntary nature of the execution, the Registrar or Sub Registrar or Magistrate may either himself go to the house of the person purporting to be the principal, or to the jail in which he is confined, and examine him, or issue a commission for his examination.
The substance of these provisions is that a. document must be presented for registration either by a party to it or his legal representative or assign or by his agent holding a power of attorney executed and authenticated in accordance with section 33 of the Act.
In Jambu Prasad vs Muhammad Aftar Ali Khan(1), it was observed by the Judicial Committee approving of the decision in Ishri Prasad vs Baijnath(2) that, " . the terms of sections 32 and 33 of Act III of 1877 are imperative, and that a presentation of a document for registration by an agent. . who has not been duly authorized in accordance with those (1) 42 I.A. 22.
(2) I.L.R. 28 All.
924 sections, does not give to the Registering Officer the indispensable foundation of his authority to register ,the document.
" Where, therefore, a document is presented for registration by a person other than a party to it or his legal representative or assign or by a person who is not an agent authorized in the manner prescribed in section 33, such presentation is wholly inoperative, and the registration of such a document is void.
In the. present case, Exhibit A was presented for registration by Mr. Tapp as the agent of the defendant under a power of attorney executed by him, Exhibit B, and the question is whether that power satisfies the requirements of section 33.
Exhibit B was executed by the defendant before the Registrar at the residence of the Chief of Hindol at Cuttack and was authenticated by him.
It was argued for the appellant that the authentication was invalid on three grounds: (1) that the defendant was not residing at Cuttack at the time of the execution of Exhibit B, and consequently the Registrar at Cuttack had no jurisdiction 'to ' authenticate the deed under section 33 (1) (a); (2) that Exhibit B was presented for registration by one Sundaram who described himself as the personal assistant of the defendant, but was, in fact, a person not authorised to present the document as required by section 32, and therefore the authentication of the power based on such presentation was void; and (3) that the authentication of the power under the proviso to section 33 (1) at the residence of the defendant was bad, as he was, in fact not suffering from any bodily infirmity at that time, and that in consequence the registration of Exhibit A pursuant thereto was void.
With reference to the first contention that the defendant was not residing at Cuttack at the date of Exhibit B, and that consequently the Registrar of that place had no jurisdiction to register it under section 33 (1) (a), the finding of the courts below is that the defendant had been residing at Cuttack for a week prior to the date of Exhibit B, and that was sufficient for the purposes of section 33 (1) (a).
In 925 Sharat Chandra Basu vs Bijay Chand Mahtab(1) the Privy Council observed: " The expression 'resides ', as used in section 33, is not defined in the statute; but there is no reason for assuming that it contemplates only permanent residence and excludes temporary residence.
" It must therefore be taken as settled that even temporary residence at a place is sufficient to clothe the Registrar of that place with jurisdiction under section 33 (1) (a).
It was argued for the appellant that his permanent place of residence was at Bodogodo, that he owned no house at Cuttack, that the house where Exhibit B was registered belonged to his brother in law, the Chief of Hindol, and that he stayed there only for the purpose of registering the power, and that on these facts, it could not be held that there was residence even of a temporary character at Cuttack.
The fact that the house did not belong to the appellant is not material for this purpose; because residence only connotes that a person eats, drinks and sleeps at that place, and not that he owns it.
Whether the stay of the appellant at Cuttack was of a casual nature, or whether it amounted to residence must depend on all the circumstances proved, and is essentially a question of fact.
The appellant described himself in Exhibit B as temporarily residing at Cuttack, and there is no reason why his words should not be accepted as indicating the true position.
Then there is the endorsement of the Registrar on Exhibit B, and that runs as follows: " Having visited and examined at hi8 residence the principal Sri Sri Sri Kishore Chandra Singh Deo, son of Durga Mahtab Singh Deo, of at present Hindol House . by profession Zamindar, who is personally known to me, I am satisfied that this power of attorney has been voluntarily executed by him and I accordingly authenticate it under section 33 of Act XVI of 1908.
" In Sharat Chandra Basu vs Bijay Chand Mahtab(1) the endorsement on the power of attorney was as follows (1) 64 I.A. 77 926 Executed in my presence at the Hazaribagh Registration Office on August 8, 1916, by Sharat Chandra Basu, son of Nalinaksha Basu of Burd wan, at present of Hazaribagh in Hazaribagh, who is personally known to me and I accordingly authenticate it under section 33, Act XVI of 1908. .
In accepting this endorsement as evidence of residence, the Privy Council observed: " It is true that he (tile principal) ordinarily resiided at Burdwan, but the endorsement of the SubRegistrar on the document expressly states that he was living, at that time, at Hazaribagh.
The endorsement also shows that he was Personally known to the Sub Registrar, and it is not likely that a mistake would be made about his place of residence.
" The endorsement in the present case is even more positive, in that it refers expressly to the residence of the executant.
It is also not correct to ' say that the defendant came to Cuttack only for the purpose of executing the power, Exhibit B. He came there to complete the negotiations for raising a loan from Radha Prasad, and the execution of the power was only one and not a major incident in the business for which he came to Cuttack.
As already mentioned, he also borrowed a sum of Rs. 12,500 under Exhibit J on 30th March, 1923, while at Cuttack.
It is also in evidence that the defendant 's son was studying at Cuttack at that time, and was residing in the house of the Chief of Hindol.
Under the circumstances there were ample materials to support the finding of the courts below that the appellant was residing at Cuttack at the time of Exhibit B, and that must be affirmed.
It was next contended that as Exhibit B was preseated for registration by one Sundar am, who was neither a party to it nor an agent holding a power of attorney duly registered or authenticated, and as such presentation was void under section 32, the registration of Exhibit A under the authority contained in Exhibit B must also be held to be void.
The answer to this contention is that section 32 would apply only if a power of attorney is presented for registration, and not when 927 it is produced merely for authentication, in which case, the only requirements that have to be complied with are the set out in section 33.
The endorsements in Exhibit B show that the Registrar examined the principal at his residence and satisfied himself that he had executed it voluntarily.
Then there was the authentication which was made expressly under section 33, and then the defendant signed in the presence of the Registrar.
The defendant also admits in his evidence that the Registrar questioned him about the execution of the power, and then authenticated it, and that he thereafter signed before him.
If the matter had stood there would have been no question but that Exhibit B was validly authenticated under section 33.
But then, there is an earlier endorsement on Exhibit B that it was," presented for registration at 1 1 A.M. on the 5th day of April, 1923, at the Sadar Sub Registrar 's Office, Cuttack; by P. Sundaram.
" The contention of the appellant based on this endorsement is that as Exhibit B was presented for registration, section 32 applied, and as Sundaram was not authorised to present it was inoperative.
But the endorsement in question is clearly based on a misapprehension of the true position.
Exhibit B was obviously produced before the Registrar along with the application for attendance at the residence for authentication and not for the purpose of registration.
Rule 148 of the Bihar and Orissa Registration Manual provides both for regis tration and for authentication of a power of attorney, and prescribes separate endorsements for them.
It also requires that they should be separately charged.
Rule 157 provides that any person can present a document for authentication.
Exhibit B was, in fact, not registered but only authenticated. ' It contains only an endorsement of authentication, and the charges collected were only for authentication.
The endorsement therefore that Exhibit B was presented for registration is clearly a mistake, and must be ignored.
Moreover, even if there had been a presentation of Exhibit B for registration and that was unauthorised, that does not detract from the validity of the subsequent authentication before the Registrar, which was an 928 independent act complete in itself and valid under section 33.
In Bharat Indu vs Hamid Ali Khan(1), apower of attorney executed by a mortgagor was presented for registration by his servant but actually the Registrar registered it at the residence of the principal under section 33.
In a suit to enforce the mortgage, the contention was raised that the registration of the mortgage deed was bad, as the power of attorney in pursuance of which it was registered was presented for registration by a person not authorised.
In overruling this contention, the Privy Council observed that even though the presentation of the power for registration by the servant of the principal was bad, when it was subsequently registered at the residence of the executant in accordance with section 33 it should be deemed to have been presented by him to the Registrar, and that in that view the registration would be valid.
On the same reasoning, exhibit B should be deemed to have been presented for authentication by the defendant when the Registrar attended at his residence, and the requirements of section 33 were fully satisfied.
This objection must, therefore, be rejected.
It was finally contended that the defendant was, in fact, not suffering from any bodily infirmity at, the time of Exhibit B, that the authentication of the power by the Registrar at the residence under the proviso to section 33 (1) was therefore bad, and that the registration of Exhibit A pursuant thereto was void; and reference was made to the evidence in the case that the defendant was not ill at the time.
But there is the fact that the Registrar did, in fact, attend at the residence and authenticate the document, and that could have been only on the application of the defendant.
In evidence the defendant stated: "Perhaps an application was filed by me for private attendance of the Sub Registrar at Cuttack.
I do not remember what reasons were given for SubRegistrar 's private attendance." (1) 47 I.A. 177.
929 No application has been produced in court, and it must be presumed that when the Registrar authenticated Exhibit B under section 33 of the Act, he did so on an application setting out the proper ground, and ' that he satisfied himself that ground did exist.
Whether he was right in his conclusion that the defendant was suffering from bodily infirmity is not a matter which can be gone into in a court of law.
It is a matter exclusively within his jurisdiction, and any error which he might have committed would not affect his jurisdiction to register the document.
In Ma Pwa May vs Chettiar Firm(1) Lord Atkin observed: "In seeking to apply this section (section 87), it is important to distinguish between defects in the procedure of the Registrar and lack of jurisdiction.
Where the Registrar has no jurisdiction to register, as where a person not entitled to do so presents for registration, or where there is lack of territorial jurisdiction, or where the presentation is out of time, the section is inoperative: see Mujibunnissa vs Abdul Rahim(2).
On the other hand, if the registrar having a jurisdiction has made a mistake in the exercise of it, the section (section 33) takes effect.
" A decision of the Registrar that an applicant was suffering from bodily infirmity for the purposes of section 33 (1), proviso, clause (1), relates to a mere matter of procedure not affecting his jurisdiction, and even if erroneous, would not affect the validity of the registration.
Moreover, there is the fact already mentioned that when the Registrar came to the residence for authenticating Exhibit B, the defendant signed it once again before him, and that would, in any case, be sufficient.
There is no substance in this contention and it must be overruled.
In the result, the appeals fail and are dismissed.
As for costs, it must be mentioned that the defendant died while the appeals were pending, and that it is his legal (1) (1929) 56 I.A. 379.
(2) (1901) 28 I.A. 15.
120 930 representatives who are prosecuting them.
The property mortgaged is an estate governed by the Madras impartable Estates Act 11 of 1904.
The plaintiffs alleged in their plaint that the mortgage was binding on the estate under section 4 of the Act.
Issue 6 was framed with reference to this allegation, and the finding of the trial court was that it was not binding on the estate.
But on appeal, the High Court held that the question could not be gone into in a suit laid against the mortgagor.
It accordingly discharged the finding, and left the question open to be determined in other and appropriate proceedings.
In view of this, we direct that the parties do bear their own costs in this court.
Appeals dismissed.

summary:
The word "resides" in section 33(1)(a) of the Indian , is not defined in the statute.
It contemplates not only permanent residence but also temporary residence.
Residence only connotes that a person eats, drinks and sleeps at that place and it is not necessary that he should own it.
For purposes of section 32(c) of the Act, a power of attorney needs, in view of the provisions of section 33 of the Act, no registration but is only required to be executed before and authenticated by the Registrar.
Hance an endorsement mistakenly made on such power of attorney that it was presented for registration must be ignored and does not affect the validity of subsequent authentication by the Registrar which was an independent act complete initself and valid under section 33.
A decision of the Registrar under section 33(1) proviso (1) of the Indian that an applicant is suffering from bodily infirmity and is unable to attend the Registration Office or court without risk or serious inconvenience relates to a matter of more procedure and even if erroneous does not affect his jurisdiction.
The finding is on a matter which is within his exclusive jurisdiction, and cannot be questioned in a court of law.
Jambu Prasad vs Mahammad Aftar Ali Khan (42 I.A. 22), Sharat Chandar Basu v Bijay Chand kahtab (64 I.A. 77), Ma Pwa May vs Chettiar Firm (56 I.A. 379) and Mujiibunnnissa vs Abdul Rahim (28 I.A. 15) referred to.


judgement:
Appeals Nos. 979 and 980 of 1965.
Appeals by special leave from the judgment and orders dated November 12, 1962 and January 1, 1964 of the Madras High Court 951 in Tax Case Nos. 19 of 1961 and S.C. Petition No,. 142 of 1963 respectively.
section Swaminathan and R. Gopalakrishnan, for the appellant (in, both the appeals).
P. Ram Reddy and A. V. Rangam, for the respondent (in both the appeals).
The Judgment of the Court was delivered by Shah, J.
section S.Rajalinga Raja hereinafter called 'the appellant ' owns acardamom plantation on a fifty acre estate.
For the assessment year 1957 58 he submitted a return under the Madras Plantations Agricultural Income tax Act 5 of 1955 disclosing a net income of Rs. 5,250/ from the plantation.
On enquiry the Agricultural Income tax Officer learnt that the appellant had sold stocks of cardamom of the value of Rs. 58,375 9 9 between April 1, 1956 and March 31, 1957.
The appellant explained that those sales represented not the produce of the year of account, but accumulated stocks of the past 3 to 4 years.
That explanation was rejected by the Agricultural Income tax Officer and after allowing expenditure estimated at the rate of Rs. 120/ per acre, the balance was brought to, tax, and a penalty of Rs. 3,000/ was levied under section 20(1) (c) of the Act.
The order was confirmed in appeal to the Appellate Assistant Commissioner, both as to the levy of tax and penalty.
But the Appellate Tribunal was of the view that the average production of cardamom per acre was 40 lbs.
and that if the stocks of cardamom, sold in the year of assessment be attributed to production of the year, the yield would approximately be 134 lbs.
per acre.
Holding that.
an estimate of 40 lbs.
per acre would be a "fair estimate" and that an average expenditure of Rs. 145/ per acre should be allowed, the Tribunal directed that the assessment be modified, and the order imposing penalty be set aside.
The State of Madras then applied to the High Court of Madras in revision.
The High Court was of the view that a part of the stock of cardamom sold in the year, though not the whole, was probably accumulated stock out of previous year 's production, but since the appellant did not lay before the taxing authorities reliable evidence, his explanation was rightly rejected.
The High Court also rejected the contention of the appellant that the income from sales of ' cardamom stock of previous years was not taxable in the year of ' account because it had been subjected to tax in those previous.
years under orders compounding the tax under section 65 of the Act.
The High Court accordingly allowed the petition and restored the assessment made by the Department.
With special leave, the 1 appellant has appealed to this Court.
It is claimed by the appellant in the first instance that under the Act, agricultural produce itself is income and becomes charged to, 952 tax under the Madras Plantations Agricultural Income tax Act 1955, when it is received, and not when it is sold, used or consumed.
Relying upon this premise it was urged that even on the view expressed by them the learned Judges of the High Court ought to have directed determination of the produce which was actually derived from agriculture in the year of.
account, and ought to have brought to tax only that quantity and excluded the value of the rest from taxation under the Act.
Section 3 of the Act imposes the charge of tax upon the total agricultural income of the previous year of every person, and by section 4 the total agricultural income of any previous year of any person comprises all agricultural income derived from a plantation within the State and received within or without the State. 'Agricultural income ' is defined (insofar as the definition is relevant in these appeals) as meaning: "(1) any rent or revenue derived from a plantation; (2) any in ,am , derived from such plantation in the State :by (i) agriculture; o (ii) the performance by a cultivator or receiver of rent in kind of any process ordinarily employed by a cultivator or receiver of rent in kind to render the produce raised or received by him fit to be taken to market; or (iii) the sale by a cultivator or receiver of rent in kind of the produce raised or received by him, in respect of which no process has been performed other than a process of the nature described in paragraph (ii): Explanation 1.
Explanation 2. (3) Prima facie, section 3 of the Act read with the definition of 'agricultural income ' charges to tax the monetary return either as rent or revenue or agricultural produce from the plantation.
The expression "income" in its normal connotation does not mean mere production or receipt of a commodity which may be converted into money.
Income arises when the commodity is disposed of by sale, consumption or use in the manufacture or other processes carried on by the assessee qua that commodity.
There is no reason to think that the expression "income" in the Act has any other connotation.
A tax on income whether agricultural or non agricultural is, unless the Act provides otherwise, a tax on monetary return actual ,or notional.
Section 4 of the Act supports that view, for in the 953 total agricultural income is comprised all agricultural income.
derived from a plantation in the State.
It is not necessary, however, for income to accrue that there must be a sale of a commodity: consumption or use of a commodity in the business of the assessee from which the assessee obtains benefit of the commodity may be deemed to give rise to income.
Therefore, merely because the produce of his plantation was received in the earlier years, assuming that the appellant 's case is true, income derived from sale of that produce in the year of account is not exempt from tax under the Act, in that year.
Counsel for the appellant strongly relied upon a judgment of this Court in Dooars Tea Co. Ltd., vs Commissioner of Agricultural ' Income tax, West Bengal(1) a case decided under the Bengal Agricultural Income tax Act 4 of 1944.
It was held in interpreting the definition of section 2(1) (b) of the Bengal Agricultural Income tax Act, 1944, which is in substantially the same language as the definition under the Act that it was not predicated of the agricultural ' income that it must be sold and profit or gain received from such sale before it can be included in the definition of agricultural income.
In Dooars Tea Co. Ltd. case (1), the appellant grew bamboos, thatching grass and fuel by agricultural operations and utilized the products for the purpose of its tea business.
The claim of the Income tax authorities to tax the value of the produce was resisted on the plea that the produce was not sold.
In rejecting that plea, the Court observed at p. 13: "In terms the clause [section 2(1) (b)] takes in income derived from agricultural land by agriculture; and as we have already pointed out giving the material words their plain grammatical meaning there is no doubt that agricultural produce constitutes income under this clause.
Is there anything in the context which requires the introduction of the concept of sale in interpreting this clause as suggested by the appellant? In our opinion this question must be answered in the negative.
Not only is there no indication in the context which would justify the importing of the concept of sale in the relevant clause, but as we have just indicated the indication provided by clauses (ii) and (iii) is all to the contrary.
What this clause seems clearly to have in view is agricultural produce itself which has been used by the assessee.
" But these observations do not, in our judgment, imply that agricultural produce when received by a person carrying on agricultural operations becomes income in his hands.
The Court in that case was concerned to deal with a limited question whether a (1) ; ; 7Sup.
C.I./66 16 954 person who has raised agricultural produce instead of selling it uses that produce for his own business, can he be said to have earned agricultural income? The Court in that case held that he would be deemed to be earning income.
The decision is authority for the proposition that for agricultural income to arise, it is not predicated that the agricultural produce must be sold: user of agricultural produce for the purpose of the business of the assessee may give rise to agricultural income.
The decision in State of Kerala and Anr vs Bhavani Tea Produce Co.
Ltd.(1) on which reliance was placed by counsel for the appellant has, in our judgment, no relevance whatever in this case.
In Bhavani Tea Produce Company 's case (1) the assessee was required under section 25 of the , to deliver the coffee produced by it to the Coffee Board and the question which fell to be determined was whether such delivery constituted sale by operation of law as a result of which the assessee ceased to be the owner of the coffee, the moment it handed over the produce to the Coffee Board.
This Court held that under the relevant provisions of the Act as soon as the producer of coffee handed over the produce to the Coffee Board, it ceased to be the owner and income accrued to him at that point of time.
That case does not lay down the proposition that income accrues to a producer of agricultural produce before the date of disposal, use or sale.
The second argument raised by the appellant has also no substance.
For the years 1955 56 and 1956 57 the appellant did not submit returns of income, but applied to compound the tax under section 65 of the Act, and paid the tax determined at the rates specified in Part 11 of the Act.
Therefrom it cannot be inferred that the produce which was sold by him in the year of account to which these appeals relate had suffered tax in the earlier years.
It has to be proved that the crop sold by the appellant related to the years in respect of which he had applied to compound the tax; and on that part of the case there is no evidence.
The appeals therefore fail and are dismissed with costs.
There will be one hearing fee.
V. I P.S. Appeals dismissed.

dataset_name: IN-Abs

summary:
The appellant owned a cardamom plantation.
For the assessment year 1957 58, he submitted a return under the Madras Plantations Agricultural Income tax Act, 1955.
The Agricultural Income tax Officer did not accept the return, and 'added to the income the value of stocks of cardamom sold in the accounting year.
The High Court in revision, confirmed the assessment made by the Department.
In appeal to this Court, it was contended that: (1) the agricultural produce itself was income and became charged to tax under the Act when it was received and not when it was sold, used or consumed, and therefore, the High Court ought to have directed determination of the produce which was actually derived from agriculture in the year of account and ought to have brought to tax only that quantity and excluded the value of the rest of the produce received in earlier years, from taxation; and (2) from the fact that the appellant applied to compound the tax for the earlier years, it must be inferred that the produce which was sold by him in the year of account had already suffered tax in the earlier years.
HELD : (1) Merely because the produce of the plantation was received in the earlier years, income derived from sale of that produce in the year of account was not exempt from tax under the Act in that year.
[953 B] Section 3 of the Act read with the definition of "agricultural income" charges to tax the monetary return either as rent or revenue or agricultural produce from the plantation.
The expression "income" in its normal con notation does not mean mere production or receipt of a commodity which may be converted into money.
Income arises when the commodity is disposed of by sale, consumption or use in the manufacture or other processes carried on by the assessee qua that commodity.
It is not necessary, however, for income to accrue that there must be a sale of a commodity : consumption or use of a commodity in the business of the assessee from which the assessee obtains benefit of the commodity may be deemed to give rise to income.
[952 G H; 953 A B] Dooars Tea Co. Ltd. vs Commissioner of Agricultural Income tax, West Bengal; , , referred to.
(2) It had to be proved by evidence that the crop sold related to the years in respect of which the assessee had applied to compound the tax, but there was no such evidence.
[954 F]


judgement:
Appeal Nos. 858 to 861 of 1964.
Appeals by special leave from the judgment and order of the Andhra Pradesh High Court in Second Appeals Nos. 720 and 724 to 726 of 1957.
C.B. Agarwala and T. V. R. Tatachari, for the appellants (in all the appeals).
P. Ram Reddy and K. R. Sharma for the respondent (in all the appeals. ) The Judgment of the Court was delivered by Shelat, J.
All these four appeals by special leave raise a common question regarding interpretation of section 11(1) of the Madras Commercial Crops Market Act, XX of 1933 and Rule 28 of the Rules made thereunder and therefore can be disposed of by a common judgment.
The Act was originally enacted by the Madras Legislature.
It was a law in force immediately before the constitution of the State of Andhra Pradesh and governed the territories now forming part of that State.
By virtue of Andhra Pradesh Act of 1953 and the Adaptation of Laws Order passed on November 1, 1953 by the State Government of Andhra Pradesh it became applicable to the newly formed State of Andhra Pradesh.
By a Notification dated June 27, 1949 the then Government of Madras, in exercise of the power conferred on it by section 2(1)(a), declared coconuts and copra to be commercial crops.
Under section 4 of the Act, the State Government also declared the District of East Godavari as the "notified area" for purposes of the Act in respect of coconuts and copra.
By a further notification dated December 5, 1950 issued under section 4(a) of the Act it established a Market Com 976 mittee at Rajahmundry for the said notified area.
The said Market Committee levied the following fees, viz., (1) a licence fee under section 5(1) of the Act read with Rule 28(3); (2) a licence fee for storage, wharfage etc., under section 5(3) read with Rule 28(3); (3), a registration fee under section 18 read with Rule 37; (4) a fee on the said goods bought and sold within the notified area and under section II (1) read with Rule 28(1); and (5) a fee under the same section on consign ments of coconut oil.
Contesting the levy of fees under items 2 to 5 as being illegal on the ground that they sold coconuts and copra to customers outside the notified area and in some cases outside the State, the appellants filed various suits in the court of the District Munsif, Amalapuram for refund of the said fees collected by the said Committee at different times.
The Market Committee resisted the said suits claiming that the aforesaid provisions conferred power upon it to levy the said fees and that the said levy was valid and legal.
The said suits were tried together and the District Munsif by his judgment dated October 17, 1955, inter alia, held that the levy under section 11(1) read with Rule 28(1) though called a "fee" was really a "tax", that the said provisions empowered the Committee to impose the said tax only when the said goods were bought and sold within the notified area, that the sales effected by the appellants were to customers outside the said area and in some cases outside the State, that the Committee had no power to levy and collect the said fees ' and therefore the appellants were entitled to refund of the said fees and accordingly passed decrees in all the suits.
In appeals by the Committee, the Subordinate Judge, Amalapuram, held that though the appellants purchased the said goods within the notified area they exported them to their customers outside the notified area and outside the State and relying upon the decision in Kutti Koya vs State of Madras() he held that though section II (1) called the said levy as fee it was in substance a tax and that such a tax being oil sales completed at the places of their customers outside the State offended article 286 of the Constitution and was therefore illegal.
The Subordinate Judge, except for deleting the relief granted in respect of licence fee under section 5(3) of the Act, dismissed the appeals and confirmed the judgment and decree of the Trial Court.
The Market Committee thereupon filed Second Appeals in the High Court of Andhra Pradesh.
Before the High Court the controversy centered round the question of fee under section 11 (1) only.
By its common judgment dated November 8, 1961 the High Court relying upon the judgment of a Division Bench of that Court in Satyanarayana and Venkataraju Firm vs Godavari Market Committee(2) held that the word "fee" in section II (1) was in fact a fee and not a tax, The Division Bench also held that the said goods were pur (1) A.I.R., 1954 Mad. 621.
(2) A.I.R. 1959 Andh.
Pradesh 398.
977 chased by the appellants from producers or petty dealers within the notified area and then sold by them to customers outside the said area or the State, that the transactions which were the subjected matter of the levy under section 11(1) were transactions consisting of purchase of the said goods by the appellants and the corresponding sales to them by the producers and petty dealers and not the subsequent sales effected by them to their customers outside the notified area or the State, that therefore the transactions on which the said fee was levied were effected and completed inside the notified area and fell within the expression "bought and sold" in section 11 (1) and therefore the Market Committee rightly levied the said fee on those.
transactions.
In the result, the Division Bench allowed the appeals and dismissed the appellants ' suits.
It is this judgment and decree against which these appeals are directed.
The preamble of the Act states that the Act was passed for making provisions for better regulation of buying and selling of and the establishment of markets for commercial crops.
As stated in M.C.V.S. Arunachala Nadar vs The State of Madras(1), the Act was the result of long exploratory investigation by experts in the field, conceived and enacted to regulate the buying and selling of Commmercial crops to provide suitable and regulated markets, to eliminate middlemen and bring face to face the producer and the buyer so that they meet on equal terms thereby eradicating or at any rate reducing the scope for exploitation of the producers.
It therefore provided a machinery for regulating trade by providing a common place where facilities would be furnished by way of space, buildings and storage accommodation, and where market practices would be regularised and market charges clearly defined and unwarranted ones prohibited, where correct weighment would be ensured by licensed weighmen and all weights would be checked and stamped, where payment on hand would be ensured, where provision would be made for settlement of disputes, where daily prevailing prices would be made available to the grower and reliable market information provided regarding arrivals, stocks, prices etc., and where quality standards would be fixed when necessary and contract forms standardized for purchase and sale.
The result of the implementation of the Act would be thus to give reasonable facilities to the growers of commercial crops ensuring proper price for their commodities.
Section 4(a) (1) provides for the formation of a market com mittee for enforcing the provisions of the Act and the Rules and bylaws framed thereunder.
Sub section (2) lays down that the Committee shall establish in the notified area such number of markets providing such facilities, as the State Government may from time to time direct, for purchase and sale of commercial crops.
Section 5 (1) [1959] Suppl.
1 S.C.R. 92.
978 prohibits any person to set up, establish or use, continue or .allow to be continued any place within the notified area for the purchase or sale of commercial crops except under a licence and in accordance with the conditions thereof.
The Market Committee, however, can exempt from the provisions of this sub section any person who carries on the business of purchasing or selling any .,commercial crop in quantities not exceeding those prescribed by the Rules.
It also exempts from the provisions of this section a person selling a commercial crop which has been grown by him or a co operative society selling a commercial crop which has been grown by any of its members and also a person purchasing for his private use a commercial crop in quantities not exceeding those prescribed by the rules.
Section 6 provides that every market committee shall consist of such number of members not exceeding twelve as may be fixed by the State Government and provides for representatives of licencees under section 5 and buyers, sellers and buyers and sellers registered under the Rules prescribed in that behalf.
Section II (1) with which we are concerned in these appeals reads: "The Market Committee shall, subject to such rules as may be made in this behalf, levy fees on the notified commercial crop or crops bought and sold in the notified area at such rates as it may determine.
" The Explanation to sub section (1) provides that all notified commercial crops leaving a notified area shall, unless the contrary is proved, be presumed to be bought and sold within such area.
Sub section 2 provides that the fee chargeable under sub section(1) shall be paid by the purchaser of the commercial crop concerned provided that where such a purchaser cannot be identified the fee shall be paid by the seller.
Section 12 provides that all monies received by a market committee shall be paid into a fund and all expenditure incurred by the market committee shall be defrayed out of the said fund.
The expenditure which the committee can incur is for purposes set out in section 13 which incidentally reflect the object and purpose of the Act.
Section 18 empowers the State Government to make rules including rules for licence fee under section, 5, the registration fee and the prohibition of buying and selling ,of commercial crops in the notified area by persons not so registered and the fee to be levied on commercial crops bought and sold in the notified area.
Rule 28 lays down the maximum fee leviable on commercial crops under section 11 (I) as also the maximum fee payable for licences and registration.
Rule 28 A provides that the fees referred to in sub rule (1), that is, "fees" under section 11 (1), shall not be levied more than once on a commercial crop in a notified area.
These provisions clearly show the policy of safe_guarding the interests of the producers and of guaranteeing to them 979 reasonable return for the crops they would bring to sell without being exploited.
Mr. Agarwala raised the following contentions: (1) that the fee charged by the Market Committee under s.11(1) was on sales effected by the appellants with their customers, some of whom were admittedly outside the notified area and the rest outside the State; (2) that that was the footing on which the parties proceeded with the suits but that case was given up in the High Court and the High Court was in error in permitting the Committee to shift its case and argue that the fee was levied not on those sales but on transactions of purchase entered into by the appellants with the producers and other petty dealers.
It is true that in para 3 of their plaint the appellants averred that their business activities consisted of buying coconuts and copra in East Godavari District and selling them to customers outside the notified area and even the State and that those sales were completed at the respective places of those customers.
The appellants ' case therefore was that in respect of these sales with customers some of whom were outside the notified area and the rest outside the State, the levy of fee was in the former case beyond the ken of section II (1) and in the latter case repugnant to article 286 of the Constitution.
The written statement of the respondent committee denied these allegations.
The Committee asserted that both the purchases and sales took place in the notified area and that though the fee levied by it was on sales by the appellants and though delivery of the said goods thereunder took place outside the notified area the sales in respect thereof were made within the notified area and therefore the question of the levy under section 11 (1) being repugnant to article 286 of the Constitution did not arise.
Besides these pleadings Mr. Agarwala drew our attention to certain notices of demand and circulars issued by the Committee in which it was stated that the said fee was being levied on goods exported outside East Godavari District and that the traders were liable to pay it both on coconuts exported to outsiders and also consumed internally.
That presumably was stated because if the goods were "bought and sold" within the notified area, even if they were subsequently exported outside, section 11(1) would apply.
The practice followed by the appellants and not denied by the Committee was that they used to despatch these goods by rail to their customers.
Railway receipts and hundies were then sent to their bankers at the destination and railway receipts were delivered to the customers on their honouring the hundies Thus the goods were delivered outside the notified area and the sales effected by the appellants to their customers were also completed at places outside the notified area and in some cases outside the State.
On these facts the District Munsif held that property in the goods having passed at destination, sales took place outside the 980 notified area and therefore the fee charged by the Committee was illegal as section 11(1) permitted such a levy only on goods bought and sold within the notified area.
On appeal by the Committee, the Subordinate Judge held that the said fee was a tax, that it was a tax on sales outside the notified area and the State and was not therefore warranted under section 11 (1) and was repugnant to article 286.
It seems that in both the courts, the real issue was lost sight of, viz., whether the goods in respect of which the fee under section 1 1 (I) was levied were goods "bought and sold" within the notified area as envisaged by the section.
In the High Court however the questions convassed were (1) whethe r the fee provided in section 11 (1) was a fee or a tax and (2) even if it was a fee whether the Committee had the power to levy it in respect of goods sold by the appellants outside the notified area.
As already stated the Trial Judge and the Subordinate Judge had proceeded on the footing that the said fee was levied on sales entered into by the appellants with their customers who undoubtedly were outside the notified area.
But the real question that ought to have been dealt with by the Trial, Judge and on appeal by the Subordinate Judge was not whether the appellant 's sales were to customers outside the notified area or the State but whether the fee which was levied was valid.
The question of the validity of the levy entailed another question, viz., whether the levy was on transactions effected by the appellants before they sold those goods to their customers.
Were the appellants entitled to a refund of the fees levied on them under section II (1) ?, was the principal question in the suits.
To decide that question it was necessary for the court to go into the question whether the fee was charged on the sales by the appellants or on the transactions made between them and those from whom they purchased the goods in question.
Since neither the Trial Court nor the Subordinate Judge had gone into that question, it was necessary for the High Court to go into it not only to do justice to the parties but also because that was the real issue arising in the suits and was the crux of the litigation.
There was therefore no question of the High Court allowing the respondent Committee to make out a new case.
The question from the very inception was whether the Committee was competent to levy the fee in question under section 11(1).
To answer that question the court necessarily had to enquire on which transactions could the said fee be levied under section 11(1) and whether it was rightly levied by the Com mittee.
The High Court answered these questions by holding that it was levied, on the transactions effected by the appellants with those from whom they bought the said goods, that section 11(1) dealt with those transactions and was not therefore concerned with the subsequent sales entered into by the appellants with their customers outside the notified area.
Since, according to the High Court, those transactions were admittedly effected within the noti 981 fied area the levy was valid and warranted under section 1 1 (1).
In our view the High Court approached the question from a correct angle and therefore there was no question of its having allowed the Committee to change its case or make out a new case.
That being the position, the next question is whether the Committee could levy fee under section II (1) on the transactions effected by the appellants before they sold those goods to their customers.
Mr. Agarwala 's contention was that the fee levied under section 11(1) could only be in respect of goods "bought and sold" and not in respect of transactions where goods were only "bought" or only "sold".
According to him it is only when a person bought goods and sold those identical goods within the notified area that the fee under section 11(1) could be levied.
According to him, the transactions effected by the appellants consisted in their purchasing the said goods; they stopped at the stage of goods "bought".
Therefore, the other ingredient for a valid levy of the fee not being present the fee levied in the present case was not in accordance with the requirements of section 11 (1) and was unwarranted.
This contention raises the question as to the meaning of the words "bought and sold" in section 11(1).
At first sight they would appear to be susceptible of three meanings; viz., (1) that they mean duality of transactions where the same person buys goods and sells those identical goods in the notified area; (2) that they mean "bought" or "sold" the conjunctive "and" meaning in the context of the sub section the disjunctive "or" and (3) that they apply to a transaction of purchase as the concept of purchase includes a corresponding sale.
When a person buys an article from another person, that, other person at the same time sells him that article and it is in that sense that section 11(1) uses the words "bought and sold.
" The incidence of the fee under section 11(1) is on the goods thus "bought and sold".
This last interpretation was favoured by the High Court of Madras in Louis Dreyfus & Co. vs South Arcot Groundnut Market Committee(1) which has been accepted by the High Court in the present case.
If the construction commended to us for acceptance by Mr. Agarwala were to be correct, viz., that the appellant 's transactions stopped at the stage of goods "bought", they would not be transactions in respect of goods "bought and sold".
If the fee was levied on sales effected by the appellants with their customers its levy would not be valid under section 1 1 (1) and would also be repugnant to article ' 286 where goods were delivered outside the State.
But it is a well settled rule of construction that the court should endeavour as far as possible to construe a statute in such a manner that the construction results in validity rather than its invalidity and gives effect to the (1) 982 manifest intention of the legislature enacting that statute.
The object in passing the Act was to prevent the mischief of exploitation of producers of commercial crops such as coconuts and copra and to see that such producers got a fair price for their goods.
The mischief to prevent which the Act was enacted was the exploitation of these producers by middlemen and those buying goods from them and therefore the Act provided facilities such as market place, place for storage, correct weighment etc., so that the producers and his purchasers come face to face in a regulated and controlled market and a fair price was obtained by them.
If the construction suggested by Mr. Agarwala were to be accepted and the section were to be construed as being applicable to those transactions only which have a dual aspect, that is, buying by a dealer from a producer and the dealer selling those identical goods within the notified area, the object of the Act would be defeated, for in a large number of cases the transactions would halt at the stage of buying and the Committee in those cases would have no power to levy the fee on them.
Why is a buyer or a seller or a buyer and seller required to be registered and why does the Act prevent those who have not registered themselves from effecting transactions in commercial crops unless the object was to regulate and control transactions in those commodities at all stages and in a manner preventing the exploitation of the producer ? The legislature had thus principally the producer in mind who should have a proper market where he can bring his goods for sale and where he can secure a fair deal and a fair price.
The Act thus aims at transactions which such a producer would enter into with those who buy from him.
The words "bought and sold" used in section 11(1) aim at those transactions where under a dealer buys from a producer who brings to the market his goods for sale.
The transactions aimed at must be viewed in the sense in which the legislature intended it to be viewed, that is, as one transaction resulting in buying on the one hand and selling on the other.
Such a construction is commendable because it is not only in consonance with the words used in section 11(1) but is consistent with the object of the Act as expressed through its various provisions.
The construction on the other hand canvassed by the appellants is defeative of the purpose of the Act and should, unless we are compelled to accept it, be avoided.
The construction which we are inclined to accept acquired some support from the fact that section II makes the purchaser and not the seller primarily responsible for payment of the fee and it is only when the purchaser cannot be identified that the seller is made liable.
Mr. Agarwala at first also urged that the fee under section 11 (1) amounted to a tax and that it was in fact a sales tax.
But at the last moment he stated that he did not wish to press that contention and requested us not to express any opinion thereon.
Since the contention is not pressed we need not express any opinion on that ques 983 tion and confine ourselves to the question as to the interpretation of the words "bought and sold" in that section.
In our view the construction placed by, the High Court on section 11(1) was a correct construction and therefore the respondent committee had rightly charged the appellants with said fee.
The appeals therefore fail and are dismissed with costs.
One hearing fee.

summary:
By a notification in June 1949, the State Government, in exercise of a power under section 2(1)(a) of the Madras Commerical Crops Market Act, 1933, declared coconuts and copra to be 'commercial crops ' within the meaning of the Act.
The respondent Market Committee IL vied in respect of the declared commerical crops, a fee on the goods 'bought and sold ' within the notified area under section 11(1) of the Act, read with Rule 28(1) of the Rules made under the Act.
The appellants filed various suits contesting the levy on the ground that they sold coconuts and copra to customers outside the notified area and in some cases outside the State; consequently, they sought refund of the fees collected by the respondent committee.
The suits filed were tried together and the trial Judge held that the levy, though called a "fee", was really a "tax", and that the Committee was only empowered to impose such tax when the goods were bought and sold within the notified area.
He therefore passed decrees in all the suits .for refund of the fees collected.
The first appeal by the respondent Committee was dismissed by the Sub Judge who further held that the fee in substance being a tax, such tax on sales completed outside the State would also offend article 286 of the Constitution.
However, a second appeal to the High Court was allowed on the view that the transactions which were the subject matter of the levy under Section 11(1) were transactions consisting of the purchase of the goods by the appellants and the corresponding sales to them by the producers and not the subsequent sales effected by the appellants to their cus tomers outside the notified area or the States; therefore the transactions on which the said fee was levied were effected and completed inside the notified area and fell within the expression "bought and sold" in section 11(1).
In the appeal before this court it was contended on behalf of the appellants that the transactions effected by them consisted in their purchasing the goods and stopped at the stage of goods "bought" so that no fee could be levied in the absence of the other ingredient, i.e., sale within the notified area.
HELD : The construction placed on section II (1) by the High Court was correct and the respondent Committee had therefore rightly charged the fee.
[983 B] 975 The words "bought and sold" used in section 11(1) aim at those transactions where under a dealer buys from a producer who brings to the market his goods for sale.
The transaction aimed at must be viewed in the sense in which the legislature intended it to be viewed, that is, as one transaction resulting in buying on the one hand and selling on the other.
Such a construction is commendable because it is not only in consonance with the words used in section 11 (1) but is consistent with the object of the Act as expressed through its various provisions,, i.e., to prevent the mischief of exploitation of producers of commercial crops such as coconuts and copra and to see that such producers got a fair price for their goods.
[982 A B, E F] Kutti Koya vs State of Madras A.I.R. 1954 Mad. 621; Satyanarayana and Venkataraju Firm vs Godavari Market Committee A.I.R. 1959 Andh.
Pra. 398; M.C.V.S. Arunachala Nadar vs The State of Madras [1959] Suppl.
1 S.C.R. 92; Louis Drevfus & Co. vs South Arcot Groundnut Market Committee ; referred to.


judgement:
Appeal No. 661 of 1963.
Appeal by special leave from the judgment and order dated August 17, 1959 of the Calcutta High Court in Civil Rule No. 274 of 1958.
N. C. Chatterjee and Sukumar Ghose, for the appellant.
Sarjoo Prasad and section C. Mazumdar, for the respondent.
delivered by Sikri J.
This appeal by special leave is directed against the judgment of the High Court of Calcutta in an application under section 115 of the Code of Civil Procedure and under article 227 of the Constitution filed by the tenant, Shri Surendra Nath Bibra, now appellant before us.
Stephen Court Limited, respondent before us, hereinafter referred to as the plaintiff, filed a suit in the Court of Small Causes, Calcutta, for the recovery of rent from September 1956 to November,1956, at the rate of Rs. 350/ per mensem, and interest, against the appellant, hereinafter referred to as the defendant, alleging that the defendant was a monthly tenant by virtue of a lease dated 459 April 30, 1956, under the plaintiff, in respect of flat No. 17 at promises No. 18A, Park Street, known as Stephen Court in the town of Calcutta, and that the defendant had not paid the rent from September to November, 1956.
The defendant, inter alia, Pleaded that relying on the representation and assurance of the plaintiff that three bed rooms, two bath rooms etc. would be available to the defendant in flat No. 17 he executed a lease on April 30, 1956, for a period of 21 years, but the plaintiff put him in possession only of two bed rooms and not three, and according to him, in the circumstances he was entitled to suspend the rent altogether.
The Small Cause Court Judge, Mr. Mandal, found that the defendant had not been put into possession of one of the three bed rooms.
Purporting to follow Katyayani Debi vs Udoy Kumar Das (1) and Abhoya Charan Sen vs Hem Chandra Pal (2) he held that the defendant was entitled to suspend payment of rent to the plaintiff.
The plaintiff then preferred an application under section 38 of the Presidency Small Cause Courts Act against the dismissal of its suit.
The Full Bench of the Small Causes Court, following Ram Lal Dutt Sarkar vs Dhirendra Nath.
Roy,(3) held that the plaintiff 's claim for arrears of rent must succeed in spite of the fact that the landlord had failed to give possession of one out of the three bed rooms of the demised premises.
The Bench, however, made it clear that the "non applicability of the principle of suspension of rent in the present suit for recovery of arrears of rent for a parti cular period will not necessarily debar the tenant from claiming other appropriate reliefs against the failure of the landlord to put him In possession of the entire demised premises by way of apportionment of rent or damages. ' Accordingly, it decreed the suit.
The defendant then filed an application under section 115, Civil Procedure Code, and article 227 of the Constitution.
In the application the defendant prayed that the suit be dismissed.
In the alternative, the defendant alleged that the plaintiff was at best entitled only to a proportionate rent.
The High Court dismissed the application and the defendant having obtained special leave, the matter is now before us.
Mr. N. C. Chatterjee, the learned counsel for the defendant,.
contends that the decision in Ram Lal Dutt 's (4) case which the High Court and the Full Bench of the Small Causes Court had followed was distinguishable because in that case the tenancy was.
an agricultural tenancy and the tenant in that case had raised the point after the lapse of a number of years.
He says that the doctrine of suspension of rent should be applied to the facts of this case because the plaintiff had deliberately not given possession (1) 30 C.W.N. (P.C.) 1 (2) (3) 70 I.A. 18.
460 of one bed room.
In the alternative he contends that the Fun Bench of the Small Causes Court and the High Court should have made an order for apportionment of rent.
We are unable to agree with Mr. Chatterjee that the decision of the Privy Council in Ram Lal Dutt 's (1) case can be distinguished on the ground urged by him.
It is no doubt true that the Privy Council was concerned with an agricultural tenancy but the Privy Council decided the appeal on a matter of principle, the principle being that the doctrine enunciated, in Neak vs Mackenzie (2 ) should not be regarded as a rule of justice, equity and good conscience in India in all circumstances.
It is interesting to note that the subject matter of the lease in Neak vs Mackenzie (2) was a dwelling house and land attached to it, and it was eight acres of the land which was attached to the house that the tenant had been kept out ,of possession.
Be that as it may, in our opinion, the doctrine laid down in Neale vs Mackengie (2) is too inflexible and cannot be applied to all cases.
As observed by Sir George Rankin, the ,doctrine cannot be justified as a dependable rule to be adhered to notwithstanding hard cases.
On the one hand it does not seem ,equitable that when a tenant enjoys a substantial portion of the property of the landlord, leased to him, without much inconvenience, he should not pay any compensation for the use of the property , in other words, to borrow the language of Sir George Ranking that he should enjoy a windfall.
On the other hand it is unfair that if a tenant is not given possession of a substantial portion of the property, he should be asked to pay any compensation for the use of the property while he is taking appropriate measures for specific performance of the contract.
It seems to us that it will depend on the circumstances of each case, whether a tenant would be entitled to suspend payment of the rent or whether he should be held liable to pay proportionate part of the rent.
On the facts of this case we are of the opinion that the tenant is not entitled to suspend the payment of rent but he must pay a proportionate part of the rent.
We may make it clear that like the Privy Council in Ram Lal Dutt 's (1) case we are not deciding that the doctrine of suspension ,of rent should or should not "be applied at all to cases of eviction ,of the lessee by the lessor from a part of the land, and if so, whether it is limited to rents reserved as a lump sum, and whether it is a rigid or discretionary rule these questions will call for careful review when they are presented by the facts of a particular case.
" In view of this we need not consider cases like Hakim Sardar Bahadur vs Parkash Singh (3); Jatindra Kumar Seal vs Raimohan Bai (4); and Nilkantha Pati vs Kshitish Chandra Satati.(5) (1) 70 I.A. 18.
(2) ; (3) A.I.R. (1962) Pun.
(4) A.I.R. [1961] An. 52.
(5) 1. 461 The High Court rejected the plea of apportionment of rent on the ground that the defendant had not taken a specific plea to this effect in the written statement.
The second ground given by the High Court was that it would be unreasonable to thrust a relief on the defendant unless he himself chooses one or more of the alternative reliefs available to him.
Further, no prayer was 3 made before the High Court to amend the written statement to include this relief.
In our opinion, the Full Bench of the Small Causes Court should have remanded the case for calculation of the proportionate rent for the portion of the premises taken possession of by the defendant.
In our view, the High Court has taken too technical a view.
It would be inequitable to allow the plaintiff to recover the full rent when he has not delivered possession of the whole of the premises in question.
Mr. Sarjoo Prasad, the learned counsel for the plaintiff, urges that the defendant had paid rent voluntarily for four months this fact also is relied on by the High Court and therefore we should not remand the case.
But we find that three months ' rent was paid in advance as security deposit, and hence there is no force in the contention.
Mr. Sarjoo Prasad finally contends that as this appeal arises from an application under section 115 of Civil Procedure Code and article 227 of the Constitution, we should not interfere with the decision of the Full Bench of the Small Causes Court even though it be erroneous.
A similar point was raised before the High Court and although the High Court found some substance in the point it chose to go into the merits of the case and not dismiss the application on this ground.
It must be remembered that the application was also under article 227 of the Constitution, and although ordinarily article 227 should be used sparingly, on the facts of this case we are satisfied that the High Court was right in not throwing out the application on this ground.
In the result the appeal succeeds.
We set aside the orders of the High Court and of the Full Bench of the Small Causes Court and of the Judge Small Causes Court, and remand the case to the Court of Small Causes, Calcutta, with ' the direction that it will dispose of the suit in the light of this judgment.
The parties would be at liberty to lead evidence before the Court of Small Causes on the question of apportionment of rent.
In the circumstances of the case there would be no order as to costs.
Appeal allowed.

summary:
The appellant executed a lease for a period of 21 years, in respect of the respondents flat consisting of 3 bedrooms, at a monthly rent of Rs. 350.
As the respondent delivered possession of only 2 bed rooms, the appellant suspended the payment of rent altogether.
The respondent thereupon filed a suit for recovery of rent in the Court of Small Causes but it was dismissed.
In an application under section 38 of the Presidency Small Causes Court Act the Full Bench of the Small Causes Court decreed the suit, and the decree was confirmed in the appellant 's revision petition to the High Court under section 115 of the Civil Procedure Code and article 227 of the Constitution.
In appeal to this Court, HELD : The appellant must pay a proportionate part of the rent, because, it would be inequitable to allow the respondent, on the one hand, to recover the full rent when he had not delivered possession of the whole of the premises, and on the other, to allow the appellant to enjoy a substantial portion of the property of the landlord without much inconvenience as a windfall.
It will depend on the circumstances of each case whether a tenant would be entitled to suspend payment of the rent fully or whether he should be held liable to pay the proportionate part of the rent.
[460 D F] Ramn Lal Dutt Sarkar vs Dhirendra Nath Roy, [1943] 70 I.A. 18 applied.


judgement:
Appeal No. 708 to 1964.
Appeal by special leave from the judgment and order dated April 3, 1962 of the Punjab High Court in Civil Writ No. 394 of 1962.
Bhawani Lal and Mohan Lal Agarwal, for the appellant Gopal Singh, for respondent No. 3.
The Judgment of the Court was delivered by Subba Rao, C.J.
This appeal by special leave raises the question of the true scope of the expression "selected area" within the meaning of section 5 B of the Punjab Security of Land Tenures Act, 1953, (Act No. 10 of 1953), as amended by Act No. 46 of 1957, hereinafter called the Act.
The facts are not in dispute and they are as follows: The appellant is a tenant under respondent No. 3 since the year 1950 in respect of 49 bighas of land.
As he was in continuous occupation of the said land for a period of 6 years, he applied under section 18 of the Act and r. 23 of the Rules made thereunder in the prescribed form to the Assistant Collector, 1st Grade, Fazilka, for the purchase of the said land.
The Assistant Collector held it does not appear that the 3rd respondent questioned the right of the appellant to purchase the said land that the appellant was entitled to purchase the land and determined the price payable by the appellant to the 3rd respondent in a sum of Rs. 20,630/ and ordered that the said amount was payable in 10 equal six monthly instalments.
On appeal to the Collector, Ferozepure, the order of the Assistant Collector was confirmed.
On a revision petition filed by the 3rd respondent before the Additional Commissioner, Jullunder, the said Commissioner took the view that the said area was selected by the 928 3rd respondent under section 5 B of the Act and, therefore, the appellant had no right to purchase the same under section 18 of the Act.
On that view, he submitted the case to the Financial Commissioner, Punjab, who, agreeing with the view expressed by the Additional Commissioner, Jullunder, held that the 3rd respondent did not reserve the said area under section 5(1) of the Act and, therefore, he was entitled to select the same under section 5 B of the Act and that the appellant had no right to purchase the same, under section 18 thereof.
In the result, he accepted the revision.
The appellant filed a petition under article 226 of the Constitution in the High Court of Punjab at Chandigarh for quashing the order of the Financial Commissioner, Punjab, but the said petition was dismissed in limine.
Hence the present appeal.
The scope of this appeal should necessarily be confined to the ambit of the writ petition in the High Court.
It is, therefore, necessary for the appellant to establish that the order of the Financial Commissioner was without jurisdiction or was vitiated by an error of law apparent on the record.
As there was no question of want of jurisdiction in the Financial Commissioner to dispose of the revision, it was contended that the said order was vitiated by two errors of law on the face of the record: firstly, it was argued that the Commissioner committed an obvious error in holding that the 3rd respondent had not reserved the said land under section 5(1) of the Act when as a matter of fact he had done so; and secondly, it was said that a landlord who did not reserve any area under section 5(1) of the Act but selected the area under section 5 B of the Act, could not evict the tenant under section 9(a) of the Act and, therefore, the tenant had the right under section 18 to purchase the said land in his possession for the prescribed period.
The first question, therefore, is whether the 3rd respondent reserved the disputed land under section 5(1) of the Act.
The material parts of the relevant provisions of the Act and the Rules made thereunder read thus: Section 2(4): "Reserved area" means the area lawfully reserved under the Punjab Tenants (Security of Tenures) Act, 1950 (Act XXII of 1950), as amended by President 's Act of 1951," hereinafter referred to as the "1950 Act" or under this Act.
Section 5(1) : Any reservation before the commencement of this Act shall cease to have effect and subject to the provisions of sections 3 and 4 any land owner who owns land in excess of the permissible area may reserve out of the entire land held by him in the State of Punjab as landowner, any parcel or parcels not exceeding the permissible area by intimating his selection in the prescribed form and manner to the Patwari of the estate in which the land reser 929 ved is situate or to such other authority as may be prescribed.
The land under this sub section can only be reserved by the land owner by intimating his selection in the prescribed form and ' manner to the Patwari of the estate concerned.
Rule 3 Intimation for reservation A land owner having land in excess of the permissible area and intending to make a reservation in pursuance of the provisions of sections 3, 4 or sub section (1) of section 5 of the Act shall notify, in duplicate, his reservation to the Patwari of the Estate in which the land is situated in the form in Annexure 'B ' to these rules.
Rule 5.
The reservation by the landowner shall be deemed to have been effected as soon as the application is received by the Patwari subject to the verification of all details as hereinafter provided.
Rule 6 Procedure for dealing with reservation forms.
The Patwari shall after verifying all the particulars given in the forms, 'retain one copy and forward the other copy to the Tehsildar with his report as to the correctness of the particulars referred to. .
It will be seen from the said provisions that a valid reservation can only be made by the land owner under section 5(1) of the Act, read with the rules made thereunder, when the particulars contained in the application sent by him to the Patwari were verified by the latter.
In this case the land owner sent an application to the Patwari in the prescribed form, but there is nothing on the record to show that the Patwari verified the correctness of the said particulars.
The Financial Commissioner in his order observed: "Having examined the case carefully, I find that the Exhibit P.X. on which the learned Advocate for the respondent has relied is really no proper form as was required under section 5 of the Punjab Security of Land Tenures Act.
On the other hand, it is only a mere report.
The proper forms in this case were filed in only in accordance with the provisions of section 5 B and they are on the file.
" It has not been shown that the finding is vitiated by any error of law; indeed, as we have indicated earlier, there is no report by the Patwari verifying the particulars given by the appellant.
The second contention turns upon the relevant provisions of the Act.
It would be convenient at the outset to collect the said provisions at one place.
930 .lm15 Section 2(3): "Permissible area" in relation to a landowner or a tenant, means thirty standard acres and where such thirty standard acres on being converted into ordinary acres exceed sixty acres, such sixty acres: Section 4: "Reserved area" means the area lawfully reserved under the Punjab Tenants (Security of Tenures) Act, 1950 (Act XXII of 1950), as amended by the President 's Act of 1951, hereinafter referred to as the "1950 Act" or under this Act.
Section 2 (5 A): "Surplus area" means the area other than the reserved area, and, where, no area has been reserved, the area in excess of the permissible area selected under section 5 B or the area which is deemed to be surplus area under sub section (1) of section 5 C and includes the area in excess of the permissible area selected under section 19 B; but it will not include a tenant 's permissible area; Section 5.
(1) Any reservation before the commencement of this Act shall cease to have effect and subject to the provisions of sections 3 and 4 any land owner who owns land in excess of the permissible area may reserve out of the entire land held by him in the State of Punjab as land owner, any parcel or parcels not exceeding the permissible area by intimating his selection in the prescribed form and manner to the Patwari of the estate in which the land reserved is situate or to such other authority as may be prescribed: Section 5 B. (1) A land owner who has not exercised his right of reservation under this Act, may select his permissible area and intimate the selection to the pres cribed authority within the period specified in section 5 A and in such form and manner as may be prescribed: Provided that a land owner who is required to furnish a declaration under section 5 A shall intimate his selection along with that declaration.
Section 9.
(1) Notwithstanding anything contained in any other law for the time being in force, no land owner shall be competent to eject a tenant except when such tenant: (1) is a tenant on the area reserved under this Act or is a tenant of a small land owner.
931 Section 18(1) Notwithstanding anything to the contrary contained in any law, usage or contract, a tenant of a land owner other than a small land owner (1) who has been in continuous occupation of the land comprised in his tenancy for a minimum period of six years, or The gist of the provisions may be stated thus: "Permissible area" is defined and the landlord is empowered to demarcate a reserved area for his self cultivation out of the permissible area and intimate his selection in the prescribed manner to the Patwari of the estate.
The area other than the reserved area is defined as is surplus area".
No land owner is competent to eject a tenant unless he is a tenant in the reserved area and if he has made one or other of the defaults mentioned in section 9 of the Act.
The State Government shall be competent to utilize the surplus area in the re settlement of the tenants ejected.
The tenant who has been in continuous occupation of the land comprised in his tenancy for a minimum period of 6 years shall be entitled to purchase from the land owner the land so held by him but not included in the reserved area.
But, for one reason or other, some of the landowners did not make the reservation in the manner prescribed under section 5 of the Act and the rules made thereunder.
Presumably to give relief to such land owners section 5 B which was inserted by the 1957 Act, enabled them to intimate the selection to the prescribed authority within the period prescribed therein, i.e., within a period of six months from the commencement of the Amending Act.
If the area selected under section 5 B could be equated with the reserved area, the land owner could evict the tenant from that area for the purpose of his self cultivation.
In that event, it would not be a surplus land which could be allotted for the evicted tenants; and it could not also be purchased by the tenants at their option.
We are not concerned in this case with small holders.
On this analysis the short question that falls to be decided is whether a reserved area can be equated with an area selected by the landowner under section 5 B of the Act.
To answer the said question it is necessary to know briefly the scope and purpose of the Act.
The purpose of the Act has been neatly summarized by the Financial Commissioner of Punjab in Karam Singh vs Angrez Singh() thus: "The main purpose of that Act seems to be to (i) provide a "permissible area" of 30 standard acres to a land owner/tenant, which he can retain for self cultivation.
(1) 932 (ii) provide security of tenure to tenants by reducing their liability to ejectment as specified in section 9, (iii) ascertain surplus areas and ensure re settlement of ejected tenants on those areas, (iv) fix maximum rent payable by tenants, and (v) confer rights on tenants to pre empt and purchase their tenancies in certain circumstances.
These purposes must be borne in mind in construing the relevant provisions of the Act.
The two concepts on which the entire Act revolves are the "permissible area" and the "surplus area".
Out of the permissible area the landowner is empowered to reserve land not exceeding the said area and the balance is defined as the surplus area.
This reservation is to enable the landowner to sustain himself by self cultivation.
The object of the surplus area is to confer rights in respect thereof on the tenants.
This two fold object of the Act cannot be achieved unless the land lord has reserved some land in the manner prescribed under section 5 of the Act.
But, for one reason or other, if the reservation was not made by the land owner, section 5 B gives him another opportunity to do so.
But it is said that if that be the intention of the Act, there was no reason why the same phraseology used in section 5(1) was not used in section 5 B. Though "reserved area" has been defined, there is no definition of 'selected area '.
This indicates that the Legislature did not introduce a new concept of "selected area" in the Act.
Even a comparison of sections 5 and 5 B shows that the process of reservation and selection are almost the same.
Under section 5(1) the land owner, after making the reservation, intimates his selection in the prescribed form to the Patwari.
It is, therefore, manifest that the reservation is made by the process of selection.
So too, under section 5 B, a land owner, who has not exercised the right of reservation under the Act, may select his reserved area and intimate his selection.
The wording of section 5 B indicates that the selection therein is a selection similar to that in section 5(1) and the selection in section 5 B is because of default made in reserving by selection under section 5(1).
In terms section 5 B gives the land owner another chance, because he has not exercised his right of reservation earlier under section 5(1).
The expressions "reservation" and "selection" involve the same process and indeed, to some extent, they are convertible, for one can reserve land by selection and another can select land by reservation.
The argument based on section 9 is also without force.
It is true that under section 9(1) (1) a tenant of the area reserved under the Act can be evicted and there is no other clause enabling the land owner to evict a tenant from the selected area.
It is said that " reserved area" is defined and that "selected area" does not fall under that definition and that, therefore, the effect of section 9 is that a tenant in the selected area cannot be evicted.
But, it may be 933 noticed that under section 9(1) (1) the expression "reserved area" is not used, but instead the expression "the area reserved under the Act" is mentioned.
As we have said earlier, the land selected by the land owner out of the permissible area can legitimately be described as the area reserved under the Act.
If that be the interpretation of section 5(1), section 5 B and section 9(1), it follows that under section 18 the tenants cannot claim to purchase the land from the land owner for it is included in the reserved area of the land owner.
If the contrary interpretation be accepted, it defeats the purpose of the Act.
Tenants could be induced and they would be permitted to purchase permissible area to the grave detriment of the land owners.
The entire concept of surplus area would be eroded.
When asked what purpose sections 5 B(1) and 5 B(2) would serve, the learned counsel said that in the case of selected area the landowner can enjoy the land through the tenant for six years.
That would be an insignificant benefit for the landowner and it could not have possibly been the reason for introducing voluntary and compulsory selection of land out of the permissible area under section 5(1) and 5(2) of the Act.
It is true that under section 5(1), the landowner has to include in his reserved area certain specified categories of land, but under section 5 B, his selection is not subject to any such restrictions.
It may be that one of the objects of the amendment was to enlarge the discretion of the land owner in the matter of reservation or it may be that in the matter of selection the landowner has to conform to the provisions of section 5(1).
We leave open that question for future decision.
Our view is consistent with that accepted by Financial Commissioner, Punjab, in Karam Singh vs Angrez Singh(1) and the Division Bench of the Punjab High Court in Angrez Singh vs Financial Commissioner, Punjab Chandigarh(2).
We have gone through the two judgments and we are satisfied that the opinion expressed therein is correct.
In the result, the appeal fails and is dismissed with costs.
G.C. Appeal dismissed.
(1) (2) 64 punj.
L. R. 736.

summary:
The appellant was a tenant of the 3rd respondent since 1950 in respect of 49 bighas of land situated in the Punjab.
He applied for the purchase of those lands under section 18 of the Punjab Security of Land Tenures Act, 1953, and rule 23 of the Rules made thereunder.
The Assistant Collector allowed his application and on appeal the Collector confirmed the order.
The Additional Commissioner and the Financial Commissioner however took the view that the 3rd respondent had not 'reserved ' the land under section 5(1) of the Act but had 'selected ' it under section 5 B and therefore the appellant had no right to purchase the land under section 18.
The appellant 's writ petition against the Financial Commissioner 's order was dismissed in limine and he came to this Court by special leave.
It was contended on behalf of the appellant that (i) the Financial Commissioner had committed an error of law in holding that the 3rd respondent had not reserved the land under section 5(1) when in fact he bad not done so; and (ii) a landlord who did not 'reserve ' any area under section 5(1) of the Act but 'selected ' the area under section 5 B of the Act could not evict the tenant under section 9(1) of the Act and therefore the tenant had the right under section 18 to purchase the said land in his possession for the prescribed period.
HELD : (i) A valid reservation can only be made by the landowner under section 5(1) of the Act, read with the rules made thereunder, when the particulars contained in the application sent by him to the Patwari were verified by the latter.
In the present case the landowner sent an applica tion to the Patwari in the prescribed form, but there was nothing on the record to show that the Patwari verified the correctness of the said particulars.
In view of this it could not be said that the Financial Commissioner 's finding that there was no reservation under section 5(1) was vitiated by an error of law.
[929 E] (ii) The purpose of the Act must be borne in mind in Construing the relevant provisions of the Act.
The two concepts on which the entire Act revolves are the 'permissible area ' and the 'surplus area '.
Out of the permissible area the landowner is empowered to reserve land not exceeding the said area and the balance is defined as surplus area.
This reservation is to enable the land owner to sustain himself by self cultivation.
The object of the surplus area is to confer rights in respect thereof on the tenants.
This twofold object of the Act cannot be achieved unless the landlord has reserved some land in the manner prescribed by section 5 of the Act.
But for one reason or another, if the reservation has not been made by the land owner, section 5 B gives him another opportunity to do so.
[932 C D] Though 'reserved area ' has been defined there is no definition of 'selected area '.
This indicates that the Legislature did not introduce a new concept of 'selected area ' in the Act.
Even a comparison of sections 5 and 5 B 927 shows that the process of reservation and selection are almost the same.
Under section 5(1) reservation is made by selection of the land and under section 5 B the landowner selects his reserved area.
The expressions 'reservation ' and 'selection ' involve the same process and indeed to some extent they are convertible for one can reserve land by selection and select land by reservation.
[932 E.G] It is true that under section 9(1) (1) a tenant of the area reserved under the Act can be evicted and there is no other clause enabling the landowner to evict a tenant from the selected area.
But under section 9(1)(1) the expression used is 'the area reserved under the Act, and not 'reserved area '.
The land selected by the landowner out 'of the permissible area can legitimately be described as the area reserved under the Act.
If that be the interpretation of section 5(1), section 5 B and section 9(1), it follows that under section 18 the tenants cannot claim to purchase the land from the landowner for it is included in the reserved area of the landowner.
[932 H; 933 A] Karam Singh vs Angrez Singh, and Angrej Singh vs Financial Commissioner, Punjab, Chandigarh, , approved.