Judgments
Judgments
  1. Home
  2. /
  3. High Court Of Judicature at Allahabad
  4. /
  5. 1964
  6. /
  7. January

Kishan Chand vs Ram Babu

High Court Of Judicature at Allahabad|25 February, 1964

JUDGMENT / ORDER

JUDGMENT Desai, C.J.
1. This second appeal has been referred to a Full Bench because of a conflict between Manohar Lal v. Benares Bank Ltd., AIR 1947 A1I 245 and Veeravya Vandayar v. Sivagami Achi, AIR 1949 PC 319.
2. The suit giving rise to this appeal was instituted by the respondent against the appellant for the recovery of a mortgage debt. It was contested by the appellant on several grounds including the grounds that "the defendant is an agriculturist within the meaning of U.P. Agriculturists Relief Act ...... and the plaintiff did not give to him a copy of the mortgage deed and consequently he is not entitled under the law to recover interest" and that the plaintiff was a creditor and he did not keep an account and did not give to him a statement of the account and is, therefore, not entitled to costs of the suit. Neither did the respondent file a replication nor did the trial court examine the parties under Order 10 Rule 1, C. P. C. Under Rule 1 it was obligatory upon it to ascertain from the respondent or his pleader whether he admitted or denied such allegations of fact as were made in the written statement and as were not expressly or by necessary implication admitted or denied by him and to record such admission and denials. The allegations made by the appellant that he was an agriculturist, and that the respondent was a creditor, within the meaning of the U. P. Agriculturists' Relief Act No. 27 of 1934 was an allegation partly of fact and partly of law.
According to the law of pleadings the appellant's duty was to plead only the facts; be should have pleaded the facts on the basis of which be claimed the legal status of an agriculturist and assigned the legal status of a creditor to the respondent. The written statement was undoubtedly defective inasmuch as it did not allege the facts on the basis of which the status of agriculturist was claimed for himself and that of creditor for the respondent. The trial court ought to have called upon him to amend his written statement by alleging the facts on the basis of which the status was claimed for each of the parties. After requiring the appellant to allege the facts it should have called upon, as required by Order 10 Rule 1, the respondent to admit or deny them. The plaint filed by him did net expressly or by necessary implication admit or deny them; he could have filed the plaint in the form in which it was filed whether he admitted or denied the facts on the basis of which the status of agriculturist and creditor was claimed and alleged by the appellant. Even though the allegations made by the appellant about his being an agriculturist and the respondent's being a creditor were allegations partly of fact and partly of law and the trial court had failed to get the fact portion separated from the law portion, it was bound to inquire of the respondent whether he admitted or denied the fact portion of the allegations. It did not do so and the reason given by it that "pleadings are clear as the suit is on the basis of mortgage" is not only factually incorrect but also insufficient. The written statement was not clear as explained earlier, there being no statement of the facts on the basis of which the status or agriculturist and creditor was claimed and alleged. Further, even if the pleadings were clear, Rule 1 of Order 10 was mandatory and the respondent had to be asked whether he admitted or denied the claim made by the appellant in the written statement. The trial court proceeded at once to frame issues and the first issue was:
"Whether the defendant is an agriculturist and the plaintiff a creditor within the meaning of Ag. K. Act and D. R. Act?"
Subsequently it recorded evidence of the parties. The appellant himself came in the witness-box and deposed, inter alia, that he had a plot of land tor which he paid Rs. 6/13/- as rent. He was cross-examined on behalf of the respondent but not a single question was p to him about his paying income-tax or his being assessed to income-tax or his having any other income. After recording the evidence the trial court held that the appellant was proved to be an agriculturist, but the respondent was not proved to be a creditor, within the meaning of the Agriculturists' Relief Act and decreed the respondent's suit for the principal with proportionate costs. It held that he was not entitled to interest because even though the appellant was an agriculturist he did not give to him a copy of the mortgage deed as required by Section 38 of the U. P. Agriculturists' Relief Act. It seems that no question was raised before it whether the appellant could be held to be an agriculturist. "Agriculturist" is defined in Section 2(2) to mean, among other persons,--
The appellant was proved to be a person paying rent for agricultural land not exceeding Rs 500' per annum and so came within the meaning of "agriculturist" but under the Proviso he would not be deemed to be an agriculturist if he paid income-tax exceeding 5 per cent of his rent. No question seems to have been raised before the trial court about the appellant's paying income-tax exceeding 5 per cent of his rent and the trial court held that he was entitled to the benefits of the Act. An appeal from its decree was filed by the respondent and two of the grounds taken by him were:--
''4. Because the defendant respondent is not an agriculturist.
5. Because the interest ought to have been allowed to the appellant"
The appellate court allowed the appeal and held that the appellant had failed to prove himself to be an agriculturist because he had not proved that he did not pay income-tax or that if he paid income-tax it was not of an amount exceeding 5 per cent of his rent. For this view he relied upon the case of Manohar Lal, AIR 1947 All 245. He decreed the respondent's claim with interest.
3. In this second appeal the appellant has raised the question of onus of proving that the proviso quoted above excluding a person paying in-come-tax exceeding 5 per cent of his rent from the status of an agriculturist is applicable or not. He relies upon the case of Veerayya Vandayar, AIR 1949 PC 319 in which case a similar question, but under the Madras Agriculturists' Relief Act, 1938, arose before the Privy Council. The Madras Act was enacted after the U.P. Act under consideration and has borrowed some of its language. "Agriculturist" is defined in it in Section 3(2) to mean a person who has a saleable interest in any agricultural or horticultural land or who holds interest under a land-holder under a certain local Act or who holds interest in such land recognised in another local Act or who holds lease of such land from an agriculturist, "provided that a person shall not be deemed to be an agriculturist if he (A) has been assessed to income-tax under the Indian Income tax Act" It would be noticed that the relevant provisions of the two Acts, as regards the question of onus of proof are exactly similar. If the onus of proving that the proviso applies in the particular case is upon one party under the Madras Act, it is upon that party under the U. P. Act also; this was not disputed before us The Judicial Committee held that after the person, who claimed to be an agriculturist, had proved that he was an agriculturist as defined in the main part of Section 3(2) the onus was upon the other party to prove that he was assessed to income-tax and, therefore, was not to be deemed to be an agriculturist. Sir John Beaumont observed at page 320;
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 to relief unless they were deprived of the privilege by one of the provisos and the burden would lie upon any one so asserting to prove his case".
Similarly in the instant case also once the appellant proved that he paid rent for agricultural land not exceeding Rs. 500/- per annum the onus shifted to the respondent to prove that he was assessed to income-tax of more than 5 per cent of his rent and that consequently he was not to be deemed to be an agriculturist. The decision of the Privy Council was a declaration of law within the meaning of Section 212 of the Government of India Act and was binding upon all courts in India as was pointed out by the Supreme Court in Srinivas v. Narayan. AIR 1954 SC 379 at p. 387. It was the law when the Constitution came into force with effect from 26-1-1950. Under Article 225 of the Constitution the law ministered in any High Court on 25-1-1950 continued to bo the law to be administered by it subject to other provisions of the Constitution and of any law of the appropriate legislature made by virtue of powers conferred upon it by the Constitution. Under Article 372(1) also, the law in force on 25-1-1950 continued in force until altered or repealed or amended by a competent legislature or authority. The result is that even after the Constitution the law declared by the Judicial Committee in the case of Veerayya, AIR 1949 PC 319 continues to be the law. In Radharani v. Sisir Kumar, AIR 1953 Cal 524 a decision of the judicial Committee was held binding on High Courts until the Supreme Court ruled otherwise. In State of Bombay v. Chhaganlal Gangaram, AIR 1955 Bom 1 Chagla C.J. speaking for a Full Bench observed that a decision of the Privy Council continues to bind High Court even after 25-1-1950 so long as the Supreme Court does not lay down a different-law. Nothing to the contrary was said by me in Om Prakash v. United Provinces, AIR 1951 All 205.
Even apart from the fact that a faw declared by the Privy Council prior to 26-1-1950 continues to be the law under the provisions mentioned above the decision in Manohar Lal's case, AIR 1947 All 245 is no longer binding upon a Division Bench of this Court on account of its being impliedly overruled by the Privy Council decision in Veerayya's case, AIR 1949 PC 319. In Manohar Lal's case, AIR 1947 All 245 Braund and Yorke JJ. held that it is for a person claiming to be an agriculturist under the U. P. Act "to say also that he is a person who is not assessed to income-tax beyond that rate which would exclude him from the class of agriculturists" (248). The law declared by the Privy Council in Veerayya's case. AIR 1949 PC 319 being directly contain must supersede the law laid down by the learned Judges, which is no longer binding upon this Court. Even if the Privy Council decision were not binding upon (his Court now the decision in Manohar Lal's case, AIR 1947 All 245 which was not binding upon this Court prior (o 26-1-1950 does not become, binding now merely because the Privy Council decision might have ceased to be binding.
4. Even if the matter were res integra 1 would haw had no difficulty in saying that the onus of proving that the proviso applies was upon the respondent. The appellant, who claimed in defence to the suit brought by the respondent that he was an agriculturist and that consequently the respondent was not entitled to interest because he had not complied with the provisions of Section 39(1) of the Agriculturists' Relief Act, had undoubtedly the onus of proving his status and the non-compliance. The defence was in the nature of a counter-claim; the appellant claimed that admitting all that was said in the plaint the respondent was still not entitled to the interest on account of the two facts alleged by him. In respect of those two facts he was in the position of a plaintiff and he had to ' prove them in order to succeed in his defence-There was no controversy about the fact of the non-compliance and so he had to prove, and prove only, that he was an agriculturist. Since "agriculturist" is defined in Section 2(2) he had to prove that be came within the definition contained in that provision.
Now though the proviso is a part ot the sentence which contains the definition it is not a part of the definition itself. The definition ends just before the (first) proviso. What is laid down in the proviso is that though a person may be an agriculturist as defined in Section 2(2) he is not to be deemed to be, i.e. to be treated as, an agriculturist if he is assessed to income-tax exceeding a certain amount. The words "be deemed to be" are very important; they apply the legal fiction of being non-agriculturist to a person who is in fact an agriculturist; they presuppose that he is an agriculturist, that is comes within the definition. What the legislature intended by the proviso is that though the person is an agriculturist, if he pays income-tax exceeding a certain amount he shall not be entitled to the benefits conferred upon agriculturists, that is, shall not be treated as one. Since the proviso presupposes that the person is an agriculturist it follows that it is not a part of the definition; it is provision in addition to the definition clause even though contained in the same sentence. It is not an exception which prevents a person from being an agriculturist as defined in the Act. There are exceptions in the definition clause itself, for instance a thekadar of land is an agriculturist but not if the revenue payable by him exceeds Rs. 1,000/- per annum, A thekadar who pays Rs. 2,000/- revenue per annum is not a thekadar under the definition itself; so a person, who claims to be an agriculturist on the basis of his holding a theka of land, has to prove not only that he holds a theka of land but also that his land revenue does not exceed Rs. 1,000/-p.a. The requirement that his revenue should not I exceed Rs. l,000/- p.a. is part of the definition itself and thus differs essentially from the proviso which is a provision in addition to the definition.
The onus of proving that he comes within the definition is upon the person who claims the status of an agriculturist and once it is discharged he becomes entitled to the benefits conferred upon agriculturists by the Act. If in spite of his being an agriculturist he is not entitled to them because he pays income-tax exceeding a certain amount at is evidently upon the other party to prove that the proviso applies to him, i.e. that he pays income-tax exceeding a certain amount. It is he who pleads that though he is an agriculturist he is not to be deemed to be an agriculturist; if he did not plead this (and consequently did not prove it) the person would be entitled to the benefits Applying the well known test that the person who fails if the fact is not proved has the onus of proving it (laid down by the Privy Council in the leading case of Abrath v. North Eastern Railway Co., (1883) 11 QBD 440 at p. 456). I must hold that the onus of proving the payment of income-tax exceeding a certain amount was upon the respondent, who will rail if the proviso was not applicable.
5. The power of a legislature to regulate the allocation of the burden of proof in the courts is undisputed; see Smith v. California, (1959) 4 Law Ed (2nd) 205, It is open to it to impose the burden of proving one fact upon one party and to shift the onus of subsequently proving another fact upon the other party. In a situation similar to the one before us it does this by including the fact to be proved by one party in an exception and the fact to be proved by the other party in a proviso. In Jones v. Axen, 1 Lord Raynond 119 which is the leading case on the subject, Treby C. J. observed at page 120:
".... the difference is, that where an exception is incorporated in the body of the clause, he who pleads the clause, ought also to plead the exception; but when there is a clause for the benefit of the pleader, and afterwards follows a proviso which is against him, he shall plead the clause, and leave it to the adversary to show the proviso, Therefore this proviso in the present Act, being distinct, ought . to be shown by the plaintiff."
This provision was followed in Steel v. Smith, (1817) 1 B and Aid 94: 149 RR 723, Lord Ellenborough C. J. observed at page 99:
".... If there be any exception in the clause which gives the penalty, exempting certain cases from its operation, the declaration or information must show that the particular case is not within the exception. But where it comes by way of proviso in a subsequent part of the Act, it is not necessary to notice it in the declaration or information, but it is matter which the defendant must allege as a ground of defence".
In G.L. Dickinson v. United States of America, (1953) 98 Law Ed 132: 346 US 389 Jackson J. said at page 140 that "he who claims the benefit of exceptions in a statute carries the burden of establishing that he is entitled to them." Accordingly it was for the respondent, and not the appellant to notice the proviso and to plead it.
6. Whether a party pays income-tax or how much income-tax is paid by a party is within his special knowledge and evidence to prove it may not be within the other party's reach. This fact weighed with the learned Judges in the case of Manohar Lal, AIR 1947 All 245 but not only is the argument of inconvenience not relevant when the legislature has imposed the burden of proof on the other party but also the State Government has provided sufficient machinery for discharging the burden, which machinery has not been noticed by the learned Judges. In exercise of the power conferred by Section 41 of the Agriculturists' Relief Act to make rules consistent with the Act "for the purpose of carrying out the provisions of this Act" the State Government made rules in 1935, the very first rule of which is as follows:
"If in any proceeding under this Act the creditor alleges that the debtor is not an agriculturist within the meaning of the Act, because the debtor is assessed to more income-tax than that laid down in the second proviso to Section 2(2) of the Act. then
(a) If the debtor admits that he was assessee to income-tax...... the onus of proving that he was not assessed to more income-tax than that laid down in the second proviso........ shall be upon the debtor, who can discharge that onus by the production of the chalans or receipts for the income tax..
(b) If the debtor asserts that he was not assessed to income-tax ........ the court shall inquire from the income-tax officer........ whether the debtor was assessed to any income-tax ...... if the reply is to the effect that some income-tax was assessed ...... then the onus of proving that the amount was not in excess of that laid down in the second proviso ...... lies on the debtor who can discharge that onus by the production of the chalans or receipts for the income-tax. .......".
Thus under this rule all that the respondent had to do was to allege that the appellant was not an agriculturist because of his being assessed to income-tax exceeding the particular amount Only after he had alleged this the procedure laid down in Rule 1 would have to be followed and the onus of proving the exact amount of income-tax paid would have shifted to the appellant. The respondent would have discharged the onus that lay upon him under the proviso simply by alleging that the appellant paid income-tax exceeding the particular amount but here he failed to do so and, therefore, did not bring Rule 1 into application. Without his making the allegation the appellant was not required to prove the income-tax paid by him by producing the chalans and receipts. This rule confirms that it was for the respondent to notice the proviso and to make the necessary allegation. He should have filed a replication if in truth as known to him the appellant did pay income-tax exceeding the particular amount. If the appellant did not pay income-tax or did not pay income-tax exceeding the particular amount there was nothing to be alleged by the respondent and consequently there was nothing to be proved by the appellant, the proviso did not apply and the appellant was entitled to the benefits conferred upon him by the Act In Doe v White-head, (1838) 1 Ad and E 571 Lord Denman C J. said:
"The proof may be difficult where the matter is peculiarly within the defendant's knowledge; but that does not vary the rule of law."
7. This statement was approved by the Supreme Court of America in Colorado Coal and Iron Company v. United States (1887) 31 Law Ed 182: 123US 307. The legislature is free to cast the onus of proof upon a party regardless of the fact that the circumstances are peculiarly within the knowledge of the other party; the fact becomes important only when the evidence produced by him is weighed with the evidence produced by the other party. On account of it slight evidence produced by the party upon whom the burden is cast may be enough unless explained away by the other party; see Hampton Court Ltd. v. Crooks, 97 CLR 367 where Dixon C. J. observed at p. 371 that "the evidence should be weighed according to the power of the party to produce it."
8. In the result the appeal should be allowed and the decree passed by the trial court should be restored. The appellant should get his costs of the lower appeallate court and this Court.
Takru, J.
9. I concur with my Lord the Chief Justice that this appeal should be allowed and the decree passed by the trial court should be restored with costs throughout. I would prefer, however, to base my decision on one ground only, viz. that we are bound in this case by the view expressed by the Judicial Committee in AIR 1949 PC 319 until the Supreme Court ruled otherwise.
Gupta, J.
10. I have had the advantage of reading the judgment of my Lord the Chief Justice, I agree with the conclusions recorded by him and concur with the order proposed by him that this appeal should be allowed the decree passed by the lower appellate court should be set aside and that passed by the trial court should be restored, and that the appellant should get his costs of the lower appellate court and this Court.
Disclaimer: Above Judgment displayed here are taken straight from the court; Vakilsearch has no ownership interest in, reservation over, or other connection to them.
Title

Kishan Chand vs Ram Babu

Court

High Court Of Judicature at Allahabad

JudgmentDate
25 February, 1964
Judges
  • M D Takru
  • B Gupta