Krishna Menon vs Kunhippa Haji

V.R. Krishna Iyer, J.—The sole point agitated at the bar in the above C.R.P. is as to whether the landlord is entitled, in a suit for rent against the tenant, to collect what he claims is the market price for paddy even when such price is in excess of the controlled price as defined in the Kerala Paddy (Maximum Prices) Order 1965. The learned Munsiff has held that what he calls the gazette publication price must prevail but has not gone into the question of the impact of the ''Maximum Prices Order'' on the right of a landlord to demand the price of paddy payable to him under the rent deed. Section 36 (1) of the Kerala Land Reforms Act, Act 1 of 1964, lays down that where the rent is payable in kind, it shall be paid either in kind or in money, at the option of the tenant. Clause 2 of that Section is not attracted to the present case since there has been no determination u/s 31 nor agreement u/s 33 thereof. Therefore, the tenant has to pay the rent in money, since he is not inclined to pay in kind. In such cases, the principle laid down in the ruling reported in State of Kerala v. Sankaran Nambiar & others (1964 K.L.J. 987) will apply. Velu Pillai J., speaking for the Court observed, with reference to a lease deed where paddy was payable by way of rent.

The document as we interpret it gave no option to the tenant to pay in cash, the money value of the specified commodity. If so, he is liable to pay the market value of the commodity as on the date on which it was to be delivered.

Therefore, the market value of the paddy is what is payable in a case to which Section 36 (1) applies. What then, is the market Value? Paddy is an "essential commodity" and the various orders promulgated under the Essential Commodities Act regulate the price of this foodgrain. Kerala Maximum Prices Control order fixes the maximum price beyond which it is unlawful to sell paddy or to buy it. This order was challenged, in vain, as unconstitutional and the observations of his Lordship Mr. Justice Madhavan Nair in the Full Bench decision reported in State of Kerala v. Thankamma (1968 KLT 390) may usefully be quoted here:

By the Maximum Prices Orders made on September 3, 1965 the State Government has fixed maximum prices at which rice or paddy might be sold by any person in the State. When such an order has been issued any violation of it becomes a wrong punishable u/s 7 (1) (a) (ii) of the Act with a prison term--which may extend to 5 years and with fine. When such fixation of maximum price is in force, the market price cannot rise above it. It may be anything equal to or less "than the maximum price. Any sale at a price above it will not be lawful and therefore cannot afford a standard for ''just equivalent'' for the commodity. The word ''just'' in ''just equivalent'' seems to repeal consideration of any illegal transaction as its standard. If dealings with racketeers or other anti-social elements in black market are to rule the price of paddy procured for equitable distribution, the object of the Act and the Levy order'' for securing availability at fair prices'' is certain to be defeated. They cannot afford a standard for governmental action or judicial consideration.

The learned judge refers to racketeers and other anti-social elements crossing the price barriers fixed by the law. It is seen from the evidence in the present case that there are ignorant tenants and shrewd landlords who also break the legal barrier in regard to maximum prices by paying and collecting amounts in excess of legal limits. Obviously courts cannot take note of illegal transactions as evidencing the market price, which concept can cover only legally permissible market prices. If on the sly, a landlord has been able to collect a higher sum it cannot become licit, open or leviable through a Court. It is a principle of public policy that a court of law cannot grant decrees based on violations of the law. Therefore, any price which any landlord can collect, so long as the, ''Maximum Prices Order'' is on the statute book, is the maximum price notified thereunder. Assuming in favour of the landlord that there is always an upward pressure on the price line, the market price may perhaps be equated with the maximum price available under the said Order. I therefore, hold that the landlord, in this case, will be entitled to a decree working out the price of the paddy due to him by way of rent at the controlled price which, by definition, is the maximum price notified under the Maximum Prices Order. The learned Munsiff has referred in his judgment to the price published in the gazette; presumably, the reference is to Section 43 of the Land Reforms Act and the Prices published thereunder. It may well be that in practice such prices will coincide with the maximum prices notified under the ''Maximum Prices Order''. But it would be more legal and, perhaps, more logical to make the tenant pay the maximum price under the order, as the landlord will have to pay that price if he wants to buy rice or paddy and Section 43 of the Land Reforms Act does not in terms apply in the present context. Therefore, I substitute the price notified under the ''Maximum Price Order, to whatever might have been notified in the gazette u/s 43 of the Act. To this extent if at all it means any difference, the judgment of the lower court will stand modified. Counsel for the respondent submits that there is really no difference between the price relied upon by the learned Munsiff and the price notified as the ''controlled price''. That is a matter which can be verified by the trial Court when passing an appropriate decree. The Civil Revision Petition is allowed to this limited extent. There will be no order as to costs.