M S GOPALASWAMI CHETTIAR Vs. SECRETARY OF STATE FOR INDIA IN COUNCIL REPRESENTED BY THE COLLECTOR OF SALEM

JUDGEMENT

(1.) These are connected appeals preferred by the plaintiff and arise out of three suits filed by him against the Secretary of State for India in Council for a declaration that the collection of certain amounts from him by the defendant under Section 27, Clause (2) of the Madras Proprietary Estates Village-service Act II of 1894 was ultra vires of the Madras Legislature and for a refund of those amounts to him.

(2.) The plaintiff is the owner of three mittahs in Salem District, namely, Karamanur, Pavitram and Avatwadi. His contention is that the levy of the village- service cess from him in respect of these mittahs tantamounts to a breach of the contract concluded between the proprietors of permanently settled estates and the East India Company and contravenes the statutory provisions in the Permanent Settlement Regulation XXV of 1802, because the imposition of this tax or cess amounts to an enhancement of the peishkush already fixed. Another contention put forward by him is, that the levy of the cess in question is illegal, because the aforesaid Act II of 1894 had not been properly extended to his mittahs before the collection of the amounts in question. A third objection raised is to the effect that the plaintiff's estates do not come within the purview of Section 27, Clause (2) of the Act. He obtained a decree in his favour in each of these suits in the First Court. But on appeal, all the contentions raised by him have been negatived and his suits were dismissed with costs. In these second appeals the same contentions have been pressed for acceptance.

(3.) The first contention is whether the levy of the village-service cess under Section 27, Clause (2) of Madras Act II of 1894 is really an enhancement of the peishkush fixed at the time of the Permanent Settlement so as to amount to a breach of the engagement entered into between the Government and the proprietor at the time of the Permanent Settlement, and if so, whether Section 27 of the Act would be ultra vires of the Local Legislature, This question has been considered at some length by the learned District Judge in his able and well- reasoned judgment. The aforesaid Act was passed by the Local Legislature in order to make better provision for the appointment of the village-officers in permanently settled estates and for their remuneration and for securing better supervision and control over them as the preamble would show. Section 27, Clause (2) is to the effect that if in any estate the cost of village-establishments was provided for by a deduction from the assets of an estate before its permanent assessment was fixed, it shall be lawful for the Government to require the proprietor to pay, along with the present permanent assessment, a sum equal to that by which it would have been increased had no such deduction been made on account of the remuneration of the classes of village-officers brought within the scope of this Act, and the proprietor shall no longer be liable for the payment of such classes of village-officers. The question for consideration is whether the village-service cess levied under the aforesaid clause really amounts to an enhancement of the peishkush amounting to a breach of contract or violation of the provision contained in Section 1 of Regulation XXV of 1802. That section no doubt contains a declaration that the amount of the petehkush so fixed shall never be liable to be increased under any circumstances. In the case of estates coming within the purview of Section 27, Clause (2), what was done at the time of the Permanent Settlement is this: on a due calculation of the assets of an estate according to the recognised principles, the permanent jamma payable by the proprietor of that estate as assessment due to the Government was fixed. One of the obligations of the proprietor was the maintenance of the village-establishments in his estate the cost of which he had to meet. In consideration of his "fulfilling that obligation, a deduction was made from the assets of the estate on which the peishkush was fixed, with the result that a proportionate reduction in the peishkush payable by him was made and the balance was taken to be the permanent assessment due from him. If that obligation had not been undertaken by him, the amount of peishkush fixed as the legitimate permanent assessment for his estate would have become payable by him without any reduction whatever. If by means of this Act, the proprietor is made to pay that portion of the peishkush which was so deducted, without being relieved of the obligation of maintaining and paying for the village-establishments, it can very well be contended that an enhancement in the permanent assessment has been made resulting in a breach of the contract and violation of the declaration made in Section 1 of Regulation XXV of 1802. Such is not the case at all here. If what was deducted from the amount fixed as the proper peishkush due from the estate may be considered to be money left in the hands of the proprietor for the purpose of meeting the cost of the village- establishments, the levy of the village-service cess under Section 27, Clause (2) of the Act is virtually a demand of the amount deducted in his favour when the purpose for which that deduction was made no longer exists. The mere fact that this cess is made payable along with the present permanent assessment cannot amount to an enhancement of the amount of peishkush arrived at as the assessment properly due from the estate. It was by reason of the proprietor bearing the cost of the village-establishments that an amount less than the peishkush fixed as otherwise due from the estate came to be payable by him and it stands to reason that, when he is relieved of the obligation, he can no longer have the benefit of that deduction. The withdrawal of that deduction made in the amount fixed as the proper peishkush due on the estate, when the consideration for such deduction has ceased to exist cannot amount to an enhancement of the peishkush contrary to the contract or the statutory provision referred to above. No attempt has been made on the part of the Government Pleader to justify the village-service cess in question as a new tax which the Government may impose in exercise of its sovereign powers. His contention is that this is not an enhancement of the peishkush amounting to a breach of contract or violation of any statutory provision. It is rightly observed by the learned District Judge that the proprietor could have been made liable for an amount of peishkush higher than the present assessment at the time of the Permanent Settlement had he not accepted the obligation of maintaining and paying the village-establishment himself. I am therefore clearly of opinion that Section 27 of Madras Act II of 1894 is not ultra vires of the Local Legislature.