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Judgment
Sundaram Chetty, J.—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 u/s 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.
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.
The first contention is whether the levy of the village-service cess u/s 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 u/s 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.
The next contention is, that the necessary pre-requisites for the levy of the cess in question have not been complied with and therefore the levy is
illegal. The principle enunciated in the decisions relied on by the learned Advocate for the appellant, namely, The Municipal Council, Cuddapah v.
M. &. S. M. Ry. Co., Ltd. ILR (1929) M. 779 : 57 M.L.J. 471. The Secretary of State for India in Council v. Nritya Gopal Adhikary ILR
(1900) C. 487 and Rameswar Singh v. The Secretary of State for India ILR (1907) C. 470, is to the effect that taxing enactments should be
strictly construed and the imposition of any tax would not be legal unless the conditions precedent to the imposition of that tax are strictly complied
with. There is no question of this principle applying to the present case. It has to be seen whether the pre-requisites or conditions precedent, if any,
have been sufficiently fulfilled or not. The learned District Judge has found that the requirements of the statute have been fully complied with. That
finding is now challenged in these second appeals.
For this purpose, a reference to some of the sections in the Act and also to the notifications exhibited in these suits is necessary. Section 2 of the
Act states that the Government may by notification extend this Act or any portion thereof to any estate within the Presidency of Madras, and to the
office of any classes of village-officers in such estates, namely, (1) village-accountants; (2) heads of villages; and (3) village watchmen or police
officers. Thus it is clear that, before the levy of the village-service cess u/s 27, Clause (2) of the Act, the Government should have extended this
Act to the estates in question by notification. Ex. I is the notification in the Fort St. George Gazette, dated 25th March, 1919, which runs as
follows:
Under Section 2 of the Madras Proprietary Estates'' Village-service Act, 1894, His Excellency the Governor-in-Council hereby directs that
Chapters I, II and V of the said Act shall come into force from and after 1st October, 1897, in the proprietary estates mentioned in the schedule
hereto annexed in respect of (1) karnams; (2) monegars and shroffs, and (3) thottis and tindekars who are hereby declared to come under the
class of (1) village accountants, (2) village headmen, and (3) village watchmen or police officers respectively.
The plaintiff''s three estates now in question have been included in the schedule attached to this notification. It is admitted that even the earlier
notification, dated 20th September, 1897, for which this notification was substituted, directed the extension of Chapters I, II and V of the Act to
certain estates including the plaintiff''s three estates now in question. But it is contended that, by reason of the partial extension of the Act by
applying Chapters I, II and V alone to these estates, no levy of the cess contemplated in Section 27, Clause (2) contained in Chapter III of the Act
could be legally made. In answer to this, reliance is placed by the learned Government Pleader upon the notification filed as Ex. XL It is G. O. No.
339, dated 10th August, 1909, and runs as follows:
Under Section 2 of the Madras Proprietary Estates,'' Village-service Act II of 1894, His Excellency the Governor-in-Council is hereby pleased to
direct that the said Act shall come into force from and after 1st October, 1909, in all the proprietary estates of the Presidency as defined in Section
4 of the Act to which the Act in its entirety has not hitherto been extended in respect of the village-officers appointed under the said Act.
To my mind, it should be deemed that the entire Act has been extended to the plaintiff''s estates now in question from 1st October, 1909, by
reason of this general and comprehensive notification. When the whole Act has been so extended, Chapters III and IV also should be deemed to
have been applied to these estates. In this view, the contention raised on the appellant''s side must be discountenanced. However, a strenuous
attempt was made by the learned Advocate for the appellant to show that the extension of the entire Act to all the estates in the Presidency by
mean''s of this notification should be considered to have been made only in respect of officers appointed under the said Act. If this construction be
sound, the result would be rather a startling one. If the extension of the Act is only in respect of those officers who have been appointed under the
Act, then a necessity will arise for a further extension of the Act by means of fresh notifications from time to time as vacancies arise in the estates
on account of death, resignation or dismissal of those officers in respect of whom alone the notification Ex. XI was extended. Further comment is
unnecessary to demonstrate the untenability of the construction sought to be put upon the notification by the appellant''s Advocate. What the
notification states is that to all the estates in the Presidency to which the Act has not been hitherto fully extended in respect of officers appointed
under the Act, the whole of this Act is now extended by means of this notification. It is argued that, if the notification Ex. XI should be understood
in this sense, there would be no need for issuing the subsequent notification, dated 19th March, 1919 (Ex. I). But it must be remembered that the
notification Ex. I had to be issued for quite a different purpose. Section 2 of the Act has specified three classes of village-officers. It provides that,
in case of doubt whether a village-officer in any estate falls under any of those classes, the Government shall have power to decide whether such
village-officer comes under any of the above classes and if so, under which of them. In exercise of that power, the Government issued a notification
Ex. I in 1909 declaring that karnams, monegars, shroffs, thotties and tindekars in certain estates come under the classes of village-officers specified
in Section 2 of the Act. The issue of the notification Ex. I does not in any way militate against the construction placed by me as to the meaning and
scope of Ex. XI.
Another argument put forward by the learned Advocate for the appellant is, that the requisition for payment of the village-service cess should be
made by the Government u/s 27 of the Act on or after the date notified under the provisions of Chapter III, and therefore the levy of the cess in
question would be illegal in the absence of the issue of such a notification. As Chapter III now stands, it consists only of two sections, namely, 17
and 27, the other sections having been repealed by the Amending Act III of 1914. u/s 17 the Government may enfranchise village-service-inams
by imposition of quit-rent and such enfranchisement will take effect from such date as the Government may notify. It may be that the date notified
by the Government as the date from which the enfranchisement shall take effect u/s 17 is the date contemplated in Section 27, on or after which it
shall be lawful for the Government to require the proprietor to pay the village-service cess. A perusal of Exs. A, B and XIII would show that in
respect of Karamanur and Avatwadi, the enfranchisement of the service-inams was notified u/s 17 and the date on which the revised system of
remunerating the village-establishments was introduced into each of them was also notified in 1915. Similarly in respect of Pavitram there were
notifications to the same effect as would appear from Exs. XII and I-A. There is no doubt that, before the levy of the village-service cess from the
plaintiff which is now the subject-matter of these suits, there had been an extension of the entire Act to these estates and also the publication of the
notifications as required by Sections 17 and 27 of the Act. I find that the conditions precedent or the necessary pre-requisites have been fulfilled by
the Government and the second contention put forward by the appellant should also be overruled.
Lastly, it is contended that the estates in question should be proved to have come within the purview of Section 27, Clause (2) of the Act. As to
this there is ample proof supplied by the documentary evidence which has been carefully considered by the learned District Judge in paragraph 5 of
his judgment. It is unnecessary for me to refer to those documents again, and suffice it to say that I am in complete agreement with the view taken
by the District Judge that the plaintiff''s estates do come within the purview of Section 27, Clause (2). The extract made by the District Judge from
Salem District Manual by Mr. Le Fanu and quoted in paragraph 5 of his judgment clearly shows that the peishkush or permanent assessment in
respect of these estates was the balance struck after making a deduction on account of the pay of the village-servants which the proprietor had to
meet. The figures appearing in Exs. V-A, VI-A and VIII-A appear to have been adopted by the Special Deputy Collector for assessing the
amount of the village-service cess to which the plaintiff would be liable. There is, therefore, no reason to hold that the plaintiff is now-made to pay
more than what was deducted from the peishkush on account of the obligation of maintaining and paying the village-officers.
For the foregoing reasons, I must hold that the levy of the village-service cess in question is legal and the plaintiff cannot, not, therefore, claim a
refund of the same.
As the plaintiff''s claim fails on the merits, it is unnecessary to consider the plea of limitation with respect to the amounts levied for faslis 1328
and 1329. It seems to me that, in view of the allegations made in the plaint, those payments can reasonably be deemed to have been made by the
plaintiff under protest. If so, the proper article applicable to the present suits would be Article 16 of the Limitation Act which provides a period of
one year. The claim as regards the refund of those amounts would, therefore, be barred.
In the result, these second appeals fail and are dismissed with costs.