S.T.M. Bashiam Naidu vs Corporation of Madras

Pandrang Row, J.—This is an appeal from the decree of the City Civil Judge, Madras, dated 19th December 1932, in O.S No. 776 of

1931, a suit by the plaintiff for a declaration that the defendant, the Corporation of Madras, has no right to increase the ground rent in respect of

the plaint property and for refund of the excess amount of ground rent levied from him by the defendant. The ground rent payable in respect of the

plaint property from the beginning of the tenancy was only Rs. 12 a ground. In 1931 the rent was raised by the Standing Committee of the

Corporation by 12 1/2 per cent. The plaintiff objected to this enhancement of ground rent, which he thought at the time was a tax, and intimated to

the Commissioner of the Corporation through his lawyer that he intended to prefer an appeal to the Court of Small Causes against the decision of

the Standing Committee, but at the same time sent the money demanded under protest. The suit was actually filed as threatened in the Court of

Small Causes, Madras, but that Court found that no appeal lay to it and that the plaintiff''s remedy was by way of a regular suit. Hence the present

suit which was laid in the city civil Court. The plaintiff''s main contention was that the defendant could not arbitrarily raise the rent either under

common law or under the Madras City Tenants Protection Act, to the protection of which the plaintiff alleged that he was entitled.

The defendant resisted the suit on the ground that the City Tenants Protection Act did not apply to the plaintiff, and that the enhancement of rent

was quite legal. It was also urged that the payment under protest did not entitle the plaintiff to claim a refund, because it was made under

circumstances which rendered the entering of a protest devoid of any legal consequence. The learned. Judge in the Court below framed four

issues, namely: (1) Does the plaint disclose no cause of action against the defendant? (2) Does the City Tenants Protection Act not apply to the

tenancy of the plaintiff? (3) Are the payments made by the plaintiff voluntary and therefore is the plaintiff not entitled to sue for the refund? (4) Is

the increased assessment illegal and unreasonable for the reasons set out in paras. 7 and 10 of the plaint? As regards the first and third of these

issues the findings of the trial Judge were in favour of the plaintiff; that, in other words, the plaintiff had a cause of action and that payments-made

by him were not voluntary, and that he was entitled to sue for refund. As regards issue 2 it was conceded by both sides before him that for the

purpose of the present suit it might be assumed that the plaintiff is entitled to the protection of the Madras City Tenants Protection Act; in other

words on this issue-also, the result was favourable to the plaintiff as the defendant abandoned his contention. It was only in respect of the last issue

that the trial Judge found that the increased assessment was not illegal or unreasonable and on the basis of this finding the plaintiff''s suit was

dismissed with costs. The plaintiff appeals.

The only point pressed in this appeal for the plaintiff-appellant is that the finding of the trial Court on issue 4 is wrong. It is obvious that the lower

Court has gone wrong by proceeding under the assumption that what was-complained of was an assessment, not the collection of additional rent.

It is clear from the pleadings that the present suit relates to ground rent collected1 in excess by the defendant from the plaintiff. The suit does not

refer to any tax levied by the Corporation in its capacity as a municipal body, but only to what was collected as rent in its capacity as landlord.

Apart from the question whether under the Madras City Tenants Protection Act a landlord is entitled to raise the rent in respect of any holding at

his own will and pleasure, the question really is whether even under the common law, the landlord has such a right. If under the common law the

landlord has no right to increase the rent as he thinks fit without the consent of the tenant surely it cannot be argued, that an Act like the City

Tenants Protection Act, which was meant to protect tenants, would give the landlords a right which the common law did not give them. It has not

been'' seriously argued that a landlord, whether in Madras or elsewhere, has a right to collect rent at a rate higher than the rate agreed upon by the

tenant without the tenant''s consent.

It is therefore clear that in this case the increased rent that was demanded by the Corporation was one which the Corporation had no right in

law to collect, and there can be no doubt therefore that the demand for increased rent was not legal or reasonable. The advocate for the

Corporation however contends that even if this point is found in favour of the plaintiff, the plaintiff would be entitled only to the ({declaration

prayed for by him but not to refund of the amount actually collected in excess of what was agreed upon as the rent. He contends that the excess

rent was paid by the plaintiff voluntarily, and there was no threat of legal proceedings or distress or any kind of coercion as a result of which it may

be said that the payment was made by the plaintiff. It is however seen that when the demand for additional rent was made for the first time, there

was actually a threat of distress and sale, vide Ex. C, in which a caution was given by the defendant Corporation''s Commissioner to the plaintiff

that the amount should be paid within 15 days from the delivery of the demand and that in case of default he would be liable to have his property

sold. It was an extortionate demand by a public servant colore officii. Later on, when the plaintiff found that his appeal to the Standing Committee

did not give him sufficient redress, though it reduced the increase in the tax, he sent the Corporation a notice to the effect that he was going to

appeal from the decision of the Standing Committee to the Court of Small Causes and in the meantime he sent also a cheque for the amount

claimed under protest.

In these circumstances it cannot be said that the payment was made voluntarily. I am of opinion therefore that the plaintiff is not disentitled from

claiming refund of the excess paid by him, namely because he actually made the payment under protest in the circumstances mentioned above. I

would add that even if the position in law had been different it would have been more becoming on the part of the respondent-Corporation not to

have pressed this plea in appeal. One would hardly expect that, when the amount was paid under protest and to meet a demand made in respect

of an amount that was not legally due to the Corporation, any difficulty would be made in refundiug what was wrongly collected. But the contention

has been raised and pursued with pertinacity on the side of the Corporation, and I have to deal with it. There is no decision brought to my notice

which goes to show that even when payments are made under protest to meet an extortionate demand made by a public officer or a public body

they must be deemed to be made voluntarily in the absence of any actual threat to institute legal proceedings. The phrase ""under protest"" has been

in use for many years. The only object of using that phrase is to meet a contention like this and no other, and it is a surprise to hear it urged that in

spite of the use of such a phrase for so many years with this object, that phrase really fails to secure the object, and that in spite of such a phrase,

the payment should be deemed to deprive the payer from claiming a return of what was paid under protest.

It seems hardly necessary to refer to authorities in support of the conclusion that I have come to, but in view of the lengthy argument addressed

to me on this topic, I may perhaps refer to the observation in Veerabhadrayya v. Naganna Naidu 1927 Mad 41 at pp. 212 and 21.3 to the effect

that the value of the phrase ""under protest"" is to safeguard the position of the person who makes the payment and to ensure that it may not be said

that the payment he made was a voluntary one. The trial Judge dismissed the suit not because he was of opinion that the payment was voluntary

but because he was of opinion that the increased assessment was not illegal. I have found that it is not a case of assessment, but a case of

collection of rent and that the demand for additional rent, is one that is not legal or reasonable. It follows from this that the plaintiff is entitled to a

declaration to the effect that the defendant has no right to increase the rent except with the consent of the plaintiff or by the order of a Court, and to

recover from the defendant the excess rent paid under protest, and also his costs of the suit in this Court and in the Court below.