INTEREST ON INTEREST & COMPOUND INTEREST

(Philip K. Thayil B. A , M. L., Advocate, Ernakulam)

There is probably no matter into which more totally unnecessary complications are imported than the matter of interest for a debt which was not paid according to the promise. Is compound interest the same as interest on interest? Is compound interest essentially different from simple interest? Is realisation of interest on interest or compound interest a contravention of the provisions of the usurious Loans Act? Is the right to realize compound interest a legally protected interest? These are interesting questions of interest and are attempted to he answered briefly hereunder in the light of balance of authorities.

Is compound interest the same as interest on interest? There is a bewildering diversity of judicial opinions on this. One of these opinions is this;- "compound interest is not interest on interest; it is interest on a sum or sums which were interests but which on default or liquidation immediately become principal", see Shamsunder & others v. Harban Singh A.I R.1915 Lahore, P. 346 per John stone and Shah Din JJ. In this case their Lordships upheld the right of the plaintiff to compound.interest.

Another judicial opinion is that compound interest and simple interest are not two kinds of interests. Mr Hallifax A.C.J observed in Kishenlal v. Bapu 94 I. C. 971, that simple interest and compound interest are not two kinds of Interests. His Lordship maintains that the only difference between them is that one is paid regularly and the other is not, meaning thereby that simple interest on unpaid simple interest is compound interest But his Lordship nevertheless maintains that simple interest and compound interest are not two kinds of interests.

Still another judicial opinion is found in the Privy Council decision 8. R. M.S. 0. Chettiar v. Loo Thon Poo 1940. P. C. 60 Here their Lordships discussed and considered the question "whether the charge of compound interest, that is to say, interest on interest ought to be allowed". Compound interest is here explained as interest on interest. This Privy Council decision and a long series of English decisions like R.S. Lylee v. Chappet 1932 I K. B. 691 lay down that it ought not to make any difference to the validity of a transaction by way of a loan whether the parties go through the form of payment by the borrower of the whole amount and redelivery of the same amount by the money lender, or the transaction is carried out without any such payment by treating the amount of the principal and interest still due as a debt acknowledged by the borrower to the amount of the agreed debt. It is only just that because of the default of the debtor to pay the amount of interest at the stipulated time the creditor must not be made to lose his interest on that amount. It is again only just that the defaulting debtor must not be rewarded with the privilege of a fresh advance without interest.

The difference between interest on interest on the one hand and capitalized interest on the other is interesting to note. To say that one is compound interest and the other is not is to attach too much importance to a quibble on words, a verbal controversy devoid of legal consequences. Yet there is in essence difference between interest on interest and interest on capitalized interest. The former is interest on interest, the latter is interest on capital and the latter is legally protected right of the money lender. There is the dam up law that interest must not exceed the principal and there was a section in the Travancore Civil Procedure Code that interest must not exceed 50% of the principal. There is now in the Indebted Agriculturists Debt Relief Act (Act 111 of 1956 a provision in S. 5 to the effect that the amount of the interest payable by an agriculturist shall not exceed one half of the principal amount outstanding at the commencement of that Act. There is no statutory prohibition of the capitalization of the defaulter interest. When interest is added to the principal, according to Romer L. J in Inland Revenue Commissioners v. Holder (1931) L. K B 81 and Lord Inglis in Reddie v. Williamson 1. Macph. 228 not only becomes principal but thereafter ceases to be dealt with as principal-see also 1943 Mad. 157 which also does justify the capitalization of defaulted interest, and realizing interest on such consolidated amount If interest is added on to interest alone the interest thus accumulated may easily be hit by the damdupat law or the above mentioned Act 111 of 1956 (S. 5), or the usurious Loans Act. In Khimji v. Chunilal Ambaidas A. I. R. 1919 Bom 131, the amount sought to be recovered was for the most part made up of interest which largely exceeded the principal-a manifest contravention or flagrant violation of the damdupat law-and there was an agreement in writing in this case whereby the debtor agreed to pay interest upon interest. It was decided in this case that there was nothing to prevent the court from awarding the full sum claimed both as a matter of natural inference from the agreement and as a matter of Hindu law. The rule of damdupat it was held in this case does not prevent an agreement between the debtor and the creditor to capitalize interest at a stage when the interest does not exceed the principal. All Smrithi writers and commentators, this judgment says, are agreed that there must be an agreement between the debtor and the creditor to capitalize interest in order to justify the calculation of interest in future on the sum made up of the principal and interest thus agreed to be capitalized. If interest is added on to interest which is not capitalized the law of damdupat and S. 5 of the Act 111 of 1956 will be easily contravened or violated.

Interest on capitalized interest is legally recognized and protected by a catena of decisions even of the House of Lords and the Privy Council There is the overwhelming preponderance of judicial authorities of the Indian High Courts in its favour. In Holder V. Inland Revenue Commissioners, 1932 A. C. 264 (affirming Inland Revenue Commissioners V. Holder (1931) 2 K. B. 81) the Court of Appeal approved the statement of Lord Cowan in Reddie V. Williamson (1863) 11 Macph. 228 "that the periodical interest at the end of each year is a debt to be then paid and which must be held to have been paid when placed to the debit of the account as an additional advance by the bank for the convenience of the obligants". The case went to the House of Lords and the decision was confirmed, see 9, Halsbury's statutes 443. In Paton V Inland Revenue Commissioners 1938 A. C.341 however the point was dealt with by Lord A kin one of the most outstanding luminaries in the judicial horizon in the following terms: "The question is whether when the charges are added to the existing indebtedness at the end of one half-year and the whole sum brought down is a debit item at the beginning of the next half year, so that interest is charged on the last half-year's interest, the charges have been paid. The ordinary man would, I think, say that so far from being paid, they are added to the ordinary indebtedness because they are not paid; and I see no reason why the law should say anything different". His Lordship then quoted Russel L, in Re Jauncy B ird v Arnold (1926) Ch. 471, with approval that the contention that the interest must be deemed to have been paid would really amount to a travesty of the actual facts; because in the case of such a provision as is contained in the present deed which enables the interest to be capitalized the interest is not capitalized because it is in fact paid, but because it has not been paid.

His Lordship (Lord Atkin) further referred to the "'system adopted by the bank.........for the purpose of giving them compound interest without perhaps flaunting the fact before their customers.

Capitalization of defalted interest and realizing interest on such consolidated amount is an age old custom of bankers. This customary right of the bankers is legally recognized and protected by manifold pronouncements of very high iudicial authorities. For example see (a) 1907 2 ch. 448; (b) 1922 1 ch. 126; (c) 1B&B 420; (d) 32, L J. ch. 540-545; (e) 1898. 2. Q. B. 467; (f) Exparte Bevan. 9. Ves. 223' (g) 5. B & Aid. 34; (h) 1931. 2. K.B. 89; (i) 1932. 1. K. B 6; (T) 1938. A. C. 341; (k) 1932. A. C. 264; (1) 1940. P. C. 60; etc.

A series of Privy Council decisions have recognized and protected this right of the lender to realize interest on the defaulted interest. In Venkata Rao Garu v. Gade 1936 P. C. 283, a mortgage suit, this interest on capitalized interest was called compound interest and it was laid down here also that compound interest is in itself perfectly legal but compound interest on the principal moneys being in excess of and outside the ordinary and usual stipulation may well be regarded as in the nature of a penalty. The plaintiff in this mortgage suit was allowed compound interest (interest on the defaulted interest) at the same rate as the simple interest.

In S. R. M. S. C Chettiar v. Loo Thon Poo 1940 P. C. 60 also the Privy Council recognized and upheld the right to realize interest on the capitalized interest. The true view in the above House of Lords and the Privy Council decisions is that periodical interest when becomes due is a debt to be then paid (ie. at each rest) and which must be held to have been paid when placed to the debit of the account as an additional advance by the bank. The effect of the mode of dealing between banker and customer is, according to the long standing usage governing their relations to treat the interest accruing at each rest as discharged by borrowing an equivalent sum from the bank in precisely the same way as if the customer had given the bank a cheque upon the account for the amount in question with which the bank extinguished the interest and then placed the amount of the cheque to the debit of the account as an ordinary draft-see also P. Mudaliar v. N. Ayyar 1943. Mad. -157 & (1932) I. K. B. 691 which also upheld the right of the money lender to realize interest on capitalized interest. In this Madras case his Lordship Patanjali Sastri observes thus: "It will be seen that the mode of dealing adopted by the parties is what is u ually followed, between banker and customer; and it is well established that the effect of this system is to capitalize the interest at the end of each year and treat it as a fresh advance by the bank; in other words according to the usage prevailing between bankers and customers it is an implied term of their dealing that the banker is to be treated as having made an advance to the customer at the end of each year or half-year as the case may be of a sum equivalent in amount to the interest accruing during that period so as to enable the customer to discharge the interest increasing the principal of his debt by a corresponding amount.........This usage which has been adopted by bankers in England for over a century had its origin as a device to secure compound interest by circumventing the usury laws under which agreement for charging compound interest was usurious and illegal". This observation of his Lordship Patanjali Sastri is based on very unshakably deep-rooted catena of decisions for over hundred years in England and several decades in India.

But an observation diametrically opposed to this is found in Anthony v. Mala Catholic Union Bank Ltd., 35 Cochin 542 by Krishna Menon J. This was a suit by a bank for the balance due under an over draft account. There was an agreement between the plaintiff and the defendant for capitalization of defaulted interest and for realizing interest on such consolidated principal. The learned District Judge observed that there was an implied term, in the agreement to the effect that the bank should be considered to have made an advance to the customer at the end of each quarter of a sum equivalent in amount to the interest accrued within that quarter so as to enable the customer to discharge the interest pertaining to that period. This observation of the learned District Judge is based on a series of House of Lords, Privy Council and Indian decisions. More over it is in conformity with the opinions of the most eminent writers on Banking Law, like Paget, Tannan, Hart, Sheldon, Grant and Davar etc. But his Lordship Krishna .Menon says that the observation of the learned Districi Judge that there is such an implied term is an 'absolute fallacy'.!here is no such implied term according to Krishna Menon,J. It may interestingly be noted here that Lord Atkin, the Lord of the Privy Council, and his Lordship Patanjali Sastri and a long series of High Court judges in India have recognized and upheld this implied term.

Another almost unique feature about this Cochin decision is that counter interest is allowed to the small payments made by the debtor towards the discharge of the large debt due to the bank. The payments thus made by the debtor are treated by his Lordship as open payments. When a debtor makes payment to a creditor and when the paid amount is appropriated towards the bigger debt due by the payer to the creditor how can there be open payments? Further when a debtor who owes a large sum to a creditor makes a payment to the creditor the natural presumption is that it is to be adjusted towards the debt and not mere open payments, for the well known maxim is "Debtor non proeumitur donare'. Anyway this decision is contrary to the well known authorities of the system of account keeping See Devaynis v Noble Clayton's case (1816) 1 Mer. 529 the principles deducted from which have been enacted in Ss.59,60, and 61 of our Indian Contract Act (1872). "The appropriation is made by the very act of setting the two items (credit and debit items) against each other. Upon that principle all accounts current are settled and particularly cash accounts"-see Clayton's case. The balance is struck after appropriation and the suit in the Cochin Case was for the balance due under over draft accounts

Interest on capitalized interest is allowed in a very long series of decisions of the Indian High Courts-eg (a) A, T. R. 1915. Lahore 346; (b) 94 I C. 971; (c) 1919. Bom. 131; (d) A. I. R.1929 All. 59; (e) 1904. 31 Cal. 233;(f) 1946. Mad. 35; (g) 1935. Mad. 165; (hi 1943. Mad. 157; (i) 1919. All. 1; (j) 17.1. C. 9; (k) 119.1. C. 468; (1) 111. I. C. 694; (m) 1918. A. C. 372; (n) 1943. Mad. 158.

Capitalization of defaulted interest and realizing interest on such capitalized interest is recognized by a series of Travancore Full Bench decisions also, Among these 1948 T, L. R. 847 may be specially noted. It was held in this case that there is nothing opposed to law in enforcing the right to interest on capitalized interest. But if defaulted interest is not capitalized, interest on non-capitalized interest is not countenanced See Raman Pillai v.Neelakanta Iyer 194f. T. L. R. 716. In Philippose v. Geevarghese Kathanar 29. T. L. J, 1275 (F B.) the right to realize interest on capitalized interest was recognized and legally enforced. In Meenakshi v. Lakshmi 31. T. L. J. 528, interest on capitalized interest at every quarterly rest was allowed In Eapen v. Kochugovindan 10 T. L. J. 367, this right was recognized. See also Smkara Pillai v. Kunjulakshmi 1944. T. L. R. 324.

The right to compound interest was recognized by "Kunjulakshmi Amma v. Narayan Pattar 33. Cochin 448, Even the Agriculturists' Act (XVIII of 1114) does not affect the right to compound interest even when the debt is secured.

The right to interest on interest was considered and upheld by the Kerala High Court (D. B,) in A. S. 26 of 1955 (an unreported decision) judgment pronounced on 23-3-1956. This was a suit to recover money lent on security. Their Lordships held thus: "We do not think that there is anything in the Cochin Agriculturists' Relief Act (Act XVITI of 1114) or in any other law which prohibits parties from agreeing to treat arrears of interest as principal......Here the defendant agreed to have arrears of interest treated as principal and to pay " interest on such principal as if he paid the interest to the bank and the bank advanced it to him as a fresh loan. We therefore hold that the plaintiff is entitled to have arrears of interest treated as principal and to claim interest on such principal."

In Venkateswara Iyer Harihara Iyer v. Mathew George and others 1951 K. L T. 353 interest on capitalized interest is upheld. This is a Full Bench decision. This was also a case of secured debt. By Varghes Ouseph v. Lakshmi Amrnal Pichi Ammal and another 1951 K. L. T. 382, also the right to capitalize defaulted interest is recognised as not affecting Sn. 31 C.P.C. of Travancore. But when interest is not capitalized and interest is calculated on such non-capitalized interest the accumulation of such unqualified interest alone will be easily hit by Sn, 31 C. P. C. of Travancore. In Norayana Kochu kunju and another v. John Joseph and others 1950 K. L.T. 487 interest on capitalized interest is allowed subject to Sn. 31 of the Travancore C. P. C. This code is not in force now and there is no corresponding section in the code now in force:

Further authorities for compound interest (interest on capitalized interest) is found in:-

(I). Paget's Law of Banking 5th Edition P. 67 and 68.

(II). Sheldon Practices & Law of Banking (V. P. Sheldon) 5th Edition (1946) P. 204 and 205.The banking practice of adding interest to principal to enable the bank to realize compound interest is dealt with by Sheldon. Sheldon says:- "Money advanced on mortgage to secure a fluctuating balance may be merged in the general account and compound interest charged".

(III). Tannan's Banking Law & Practice in India 7th Edition P. 241 and 242. He recognizes quarterly rests and compound interests. He also states the grounds to justify this compound interest.

(IV). Bashyam & Adigar, Negotiable Instruments Act iy50 Edition P. 278.

(V). Pollock & Mulla, Contract Act 1957 Edition at P. 490. Sundar Koer v. Eaisham Krishnan 1906. 34. LA. 9 at P. IS. Here it is held thus"Compound interest is in itself perfectly legal but compound interest at a rate exceeding the rate of interest on the principal moneys being in excess of and outside the ordinary and usual stipulations may well be regarded as in the nature of penalty". This Privy Council decision is quoted at P. 490 of Pollock & Mulla Contract Act, 1957 Edition.

At P. 492 of the same book we find thus: "A stipulation that interest in arrear shall be capitalized and added to the principal sum and that the whole shall carry interest at the contract rate is not by way of penalty" See also Sarya Prased v. BeniMadho (1883) All. W. N. 20S.

(VI) Grant on Bank & Banking. At P. 135 of this book it is found that taking of mortgage to secure fluctuating balance does not preclude ,'the banker from continuing to charge the customer with compound interest.

(VI1) Lee on Roman Law opines that Justinian was absurd in not allowing interest on interest.

(VIII) Hart's Law of Banking (Fourth Edition) P. 234, Compound interest, says Hart may become payable although the debt is the balance of a current account secured by mortgage. "In merchants' account when an annual account is made upon accounts current and a balance struck comprising both principal and interest due up to a certain day and that balance is carried to a new account bearing interest, compound interest is given in effect". See Attwood v. Taylor (1840) 1 M & G. 27. See also Exparte champion (1792). 3. Bro. C. C. 436 at 440; Parr's Banking Co v Yates [1898] 2. Q. B. 460. Where a mortgage is made by way of collateral security for such balance as may eventually be due from a customer to his bank it is no objection to charging the land with such balance that it has been partly composed of interest turned into principal by rests and interests on that interest according to the course of dealing between the two. See Lord Chancarty v. Latouche (1810) 1. Ball tfe BA20; Bufford v. Bishop (182A) 5. Mules 346.

(IX) Davar's Law & Practice of Banking 3rd Edition P. 228. Davar says that right to compound interest is based on special agreement or is acquired by acquiescence.

Lastly this right to compound interest will be lost by death or bankruptcy of either. -See Williamson v. Williamson (1869) 7. Eq. 542.

Fuddlled Crimination

(M. Marcus M. L., Advocate, Kottayam)

"Men only feel the smart but not the vice........."

"And certain laws by sufferers thought unjust..."

(Imitations of Horace by Alexander Pope)

The law makes provision for the admission of confession in evidence in "Criminal Proceeding" due to its anxiety to catch at the hilt of guilt. The presumption of innocence of an accused is deep rooted in law, that is why it ordains that the proof of guilt must be established "beyond the shadow of reasonable doubt" by permitted and legal means. The whole" frame work of the law of evidence is designed to ensure this legal proof.

The basis of admissibility of confession in "Criminal Proceedings" is that every person is the best guard of his own interests and therefore any statement made by a person against himself must contain truth. This is the reason why courts hold the view that a voluntary confession is best proof of guilt.

The Indian Evidence Act in S. 24 declares that a confession caused by inducement, threat or promise from person in authority and having reference to the charge against the accused is irrelevant in criminal proceedings if it "appears" to the court that the confession was precipitated in any of the aforesaid forbidden modes. The word "appears" gives the scope for judicial discretion in determining the voluntary nature of a confession. The quantum of proof evidencing inducement is lesser and it is brought forth in Re Ahmad AIR. (37) 1950 Mysore where their Lordships Ramayya and Mallappa observed: "S. 24 does not conte­mplate such strict proof as required by S. 3 for holding that a confession was caused by inducement, threat. Or promise". The same note is struck in a Calcutta Case Emperor v. Thakurdas Mala (ILR. 1943-1 Cal-467) holding "it is not necessary that it should be proved that the confession was brought about by improper inducement. It is quite sufficient if the circumstances are placed before the Court which would make it appear that the confession was so induced". These rulings are sufficient to indicate the caution with which a court would admit a confession in evidence. As a correlative of this principle the burden of proving that a confession is voluntary is saddled on the prosecution. S. 164 Clause 3 of the "Code of Criminal Procedure" while prescribing the mode of recording confession by a Magistrate makes it imperative that the Magistrate should have ''reason to believe" that the accused made the confession voluntarily. This prin­ciple is expressed by saying "it is only when an accused person speaks with animus confident that his utterance becomes a confession" page 152, Principles and Digest of the Law of Evidence by M. Monir. The Indian Penal Code while defining "reason to believe" says "a person is said to have reason to believe a thing if he has sufficient cause to believe that thing but not otherwise".

Various types of inducements used to eke out confessional statements are mentioned in the books but we are concerned with the specific case of inducement caused by supply of intoxicants to the accused and it is difficult to hold the view that a drunken confession could be admitted in evidence even if the liquor was administered to the accused without reference to the charge, Taylor in his "A Treatise on the Law of Evidence" 2nd Edition at Page 595 mentions the case of R. v. Spilsbury—7c—P.187 saying that a confession is admissible even if the prisoner is made drunk since the administration of liquor may not have any reference to the charge. In this connection it is pertinent to refer to "A treatise on the System of Evidence in Trials at Common law" Vol. I by Prof. Wig more at Page 922 where he observes "notice here, first that a confession in the language of Lord Hale is a conviction or in Sergant Hawkin's phrase "the highest conviction that can be made".

I do not think that we can with propriety make any discrimination between cases of liquor inducement made with or without reference to the charge. The modern development in mental science has revealed that the pronounced effect of alcohol is the lifting of the curtain of inhibition in man so much so his voluntary act of inhibiting a thing is struck at the root. In this circumstance how can we say that the confession of a drunk accused is voluntary simply because the inducement of drink was made without reference to the charge. It follows therefore that we cannot fix any hard and fast rule on the point. "Roscoe's Criminal Evidence" 15th Edition Page 41 treating of inducement of a temporal nature reveals "on this point there are but few authorities". Sexton in 1882 said "if you will give me a glass of gin I will tell you all about it" and the glass of gin was given to him. He then made the confession which Best J. refused to admit in evidence. Thus the pivot of a confessional statement is its voluntariness which is well illustrated by Phipson in his work on Evidence 8th Edition Page 249 explaining the principle to the effect that the voluntary act of confessing a crime is a "willful' act. When we examine the willfulness in the confession of a drunken accused we appreciate the fallacy of the strict interpretation of law on confession with the legal quibble that liquor offered to an accused without reference to the charge against him is productive of a blemish less confession. It may be mentioned that all other modes of inducement do allow the accused to use his intelligence to succumb to it or not but inducement by liquor stands on a different footing since liquor banished the reason of the accused. Let us cast an eye on Muslim Law on this matter. Principles of Mohammedan Jurisprudence by Abdur Rahim Page 362 reads "an admission must however be unconditional and it must be voluntary so that if obtained by coercion it is not binding nor if made in jest". I am more concerned with the terminal portion of the lines quoted. The drunken accused may even speak in a tone of jest and the Magistrate might not feel it as planted emotion. He may not find visible facial expression of fear in the accused but none-the-less the accused is incapacitated by the drink to appreciate what he speakes and its real consequence since his inhibition is wiped away by alcohol.

"The General Hindu Jurisprudence^” (Tagore Law Lecturers) by Priyanath Sen treating of the adjectival law on Page 373 observes 'A decision obtained by fraud, or force is liable to be vacated on proof that it was so obtained so also a litigation against a person not in sound state of mind by reason of intoxica­tion is void and is to be annulled."

To conclude it suffices to say that the state of law regarding inducement by liquor to confess as it exists today is liable to destroy the safety of an accused in a criminal trial lam of the opinion that legislative interference should take place to enable the medical examination of an accused including his blood test to appraise the quantum of alcohol in him with reference to his liquor tolerance prior to the recording of his confession by a Magistrate. This will avert unknowing injustice at the hands of judicial officers and at the same time give more moral support to a conviction by him. This will be a practical devise ensuring the safety of the prisoner at the dock and stability of judicial integrity. That is why Prof. G. D. Nokes of the University of London says "an admission must be a conscious act and if it is not it will have very little weight. The effect of anesthetics and drugs remain to be decided in England" 'An Introduction to Evidence' 2nd Edition Page 262.

The curt utterance of Justice Harlan Stone "The law itself is on trial in every case as well as the cause before it" (Barness and Teetters in their "New Horizons in Criminology") is most applicable to this state of Law of Evidence touching inducement of a temporal nature leading to confession of guilt, by the drunken accused 

GLEANINGS AND RAMBLINGS

(K.K. Sreedharan, B. Sc, B. L., Mavelikara)

With the most modest and sincere excuses for adopting this title which has found its place in some of the previous pages of this journal, I would try to tender the following few facts which really captivate the attraction of even an ordinary spectator in the profession. The writer would be greatly gratified if these lines are capable of successfully supplementing the original article under the title (1957 K. L. T. 73-75).

The point is beyond even the tinge of a doubt that the recent past has due to cyclonic channels of thought in spheres of law, politics and sociology mainly, produced a torrent of legislation which has left afloat manifold novel notions substantially transforming the foundations of law in many a field. True it is that in order to seek out the pearls of truth and justice among the deep wilderness as it seems of the realm of laws, many a naughty knot has to be untied and nobody can deny that the pressing necessity for extremely intimate and sincere cooperation between the Bench and the Bar in their joint quest of the illustrious treasure of justice is manifestly self-evident. Not only the lawyer, legislator and Judge but humanity in general it must be admitted stand on the verge of a transition and the need for adaptation to environments which is the essence of success is undeniable. But, can we say that the buoyancy of this transition has not already made its practical repercussions on the already existing relation between the lawyer and the Judge in the conduct of legal business? To my humble self, it seems that a remarkably ostentatious transformation has already settled in and as matters stand at present there is greatly existent the melody of the harmonious march of the Bench and the Bar hand in hand. The extreme formalities of humility, caution and distant respect which a counsel was wont to exhibit before the Bench is now no more than an indistinct, evanescent vision of the distant past. To realise the real existence of this harmony we must for a moment think of the extent and character of the cooperation and cordiality expected to exist as between the two and the practical scope and intent of Lord Lindhursts ''gentlemanliness" which he opines to be the most praiseworthy attribute of a Judge, even overriding good knowledge of law.

What really and in essence is this cooperation? What cooperation does the lawyer, the high priest before the temple of Justice expect of the Judge, the presiding deity? Is it a smiling face and exhibition of pleasant sentiments or dancing to his tune cajoled by his etherial eloquence, apparent fervour or coaxing demeanour? We would all unanimously agree in the negative. Does the austerity on the countenance of the poor Judge imply any want of cooperation? Nay, not in the least. We have only to give a moment's thought to comprehend the real position. The duties, nature and course of business of the Bar and the Bench are unmistakably diverse and practically divergent. Bubbling with enthusiasm to bring home to the Judge his standpoint, aided by blessed advocacy to array the facts and interpret the laws in support of his cause, swayed by the ardency of the profession, enamoured of success in his engagement, the lawyer on either side gives the most emphatic & impressive expression to his ideas, inevitably indulging in a little extravagance & endowing his case with dexterous and to some degree artificial colour and flavour. It is only too natural that, in spite of ordinary caution and diligence, the Judge at the consummation of the arguments on both sides finds himself fetched far away from the root of the case. It is for him to separate the grain from the chaff, digesting the complicated stuff as the case proceeds, duly exercising his best intellectual gifts in the meanwhile. Considering this severe aspect of the affair, it would be a more charitable and gentlemanly construction on our behalf to assimilate the gravity of the Judge's countenance to serenity rather than interpret it as inhumanity or lugubriousness and exhibition of non-cooperation.

The real and essential cooperation between the Bar and the Bench is born exactly at the point where advocacy and justice meet. Sincerity must be the life and soul of every enterprise. And so it is with the work of the Judge also. Sincerity here means the bold and unflinching tenacity of adherence to the belief which he had been able to conjure up before his inner eye, unperturbed by the influence of any individual prejudices or considerations which circumstances and surroundings have precipitated in his way.

It is not infrequent now-a-days that some of the younger generation of our lawyers either inadvertently or intentionally indulge themselves in the catastrophe of identifying themselves with the bench as though in compensation for their extricating themselves from the often impeached fault of identification with the party which has been vehemently protested against by the legal world. It may well be noted that the former is the graver offence against the sworn duties of a member of the bar, imposing upon the Bench erroneous suggestions creating unwholesome prejudices, not to speak of the unwelcome impressions which they might generate in the co-workers and parties in general. Such on authorised transgressions and trespasses into the Judges estate are naturally liable to be prevented by mild injunctions and repremands on the part of the party aggrieved. It is our duty to forget and forgive such reformatory reproof rather than endorse on it the colour of inhumanity or want of cooperation.

We must not forget that, groundless as the charge may be, many a presiding officer throws the blame of meagre disposals on the non-cooperation of the Bar. To whatever diverse other reasons it may be attributed, it is our duty to see that we partake not of the fault. In this era of general awakening, when reduction of litigation is one of the primary motives of all channels of political thought, it is a shame to the bar -- the bed of all well founded thought & leadership, the reins of all revolution and reformations, the mouthpiece of all cry for justice & humanity -- to stand in the way of achieving such ends, merely actuated by the trifling desire for individual advancement. Let us fully extricate ourselves from this undeserved charge. We will endeavour our best to bring about a just and speedy end to all pending litigation lending the warmest co-operation with the Judges whose sincerity we will put to the touchstone.

THE KERALA AGRARIAN RELATIONS BILL, 1957

(Memorandum by Kerala Advocates' Association)

The Kerala Agrarian Relations Bill, 1957 envisages a very important piece of legislation with momentous impacts on the economic, social and cultural life of Kerala. Throughout the long centuries that have rolled on in the known history of Kerala, land has been the most cherished form of property and probably the most significant institution of Kerala national life. Therefore the members of this Association conceive it to be a paramount and inescapable duty to make their own contribution to the shaping of the proposed legislation.

2. The Association as representing the legal profession in the State has absolutely no vested interests in the subject-matter of land; and this report is entirely free of any political, partisan or sectarian views. While we appreciate the attempt of the State Government to initiate a progressive land legislation, so essential for the makeup of the welfare State conceived by our Constitution, we should at the same time sound a note of warning and point our fingers at the writing on the wall that elementary principles of economic and social justice and man's fundamental rights should not be ignored, And may we add in all humility that this warning comes from a profession which by its long and arduous experience in courts of justice is all too familiar with individual misery and national calamities associated with ill-conceived legislation.

3. The Association decided at its meeting held on 31-1-1958 to appoint a small committee consisting of leading lawyers of the State to consider the Bill. The Committee held several meetings to consider the provisions of the Bill and drafted a memorandum to be placed before the general body of the Association. The Association after considering the Memorandum on 19-2-1958 adopted it and decided to submit the same to the Government and place it before the public.

4. In this memorandum, as is only proper, the association has not gone into details and has only dealt with the broader aspects and the fundamentals involved.

MEMORANDUM

From the nomenclature of the Bill one would expect that it is one intended to regulate the relationship of landlord and tenant. But a scrutiny of the provisions of the Bill would disclose that it is one which is expropriatory in character having as its effect the liquidation of the present land-owning classes in Kerala and the creation in their stead of a new set of landowners. In the guise of fixing ceiling on lands and giving fixity of tenure to the tenants, the bill practically deprives the present landowning classes of all their property without any fair or reasonable compensation with the result that they would be thrown into the streets without any means of livelihood and they would become a menace to peace and order in the State. The Bill has the effect of making co­-existence for the various classes in Kerala impossible and depriving certain classes of all means of existence. The definition of permanent tenant is so wide and comprehensive as to include all classes of tenants in Kerala and they would all become the owners of land on the peasants' day as envisaged in the bill and the present landowning classes will cease to have any interest in the land. The provision for-resumption is framed in such a way as to exclude the possibility for even small landowners to resume lands for their own personal cultivation.

2. It is said that the Bill implements the recommendations of the Plan­ning Commission which have as their main object the increase in production. On an examination of the provisions of the Bill we have come to the conclusion that far from increasing food production, the Bill, if enacted into law, will have just the opposite effect of decreasing the productivity of the land and of the lands themselves lying fallow for some years. The Bill will also have deleteriuos consequences in the economy of the State as the large number of Banking Institutions and Chitties which are a special feature of the State of Kerala will be seriously affected by the provisions of the Bill. It is well known that the numerous Banks in Kerala including Land Mortgage Banks advance money on the security of landed property and as it is undoubted that the value of lands will fall on account of the provisions of the Bill, many of the Banks will have to face serious difficulties and several of them may have to be liquidated. The number of Chitties now run in Kerala will come to several thousands and the security they take for future subscriptions before advancing prize amounts to subscribers is generally landed property and if that security falls in value, there will be serious repercussions throughout .the State which anybody acquainted with the state of things in Kerala can easily foresee. If the persons connected with the numerous banks and chitties in Kerala are faced with financial ruin, rural economy is sure to be upset resulting in social unrest and chaos and the economy of the State itself will be in jeopardy.

3. Ceiling cannot be imposed in Kerala with a view to give land for every agriculturist. It has been estimated that if cultivable land is distributed amongst them, an individual will not get more than 13 cents of land. This extent of land will not satisfy anybody. So ceiling for the purpose of equitable distribution of land is unthinkable in this State which has the highest density of population in the world. Ceiling can be imposed only if it will have the effect of increasing production. We are definitely of opinion that ceiling will retard pro­duction as it will necessarily lead to fragmentation of holdings and as the tenant who becomes the owner will not have the means to improve the land or to cultivate the same in a husband like manner.

4. The main provisions of the Bill deal with --

(i) imposing a coiling on land holdings and getting surrender of excess lands and distribution of them by the State to the landless;

(ii) granting fixity of tenure to tenants, resumption by landowners under certain circumstances and purchase of the landlord's interest and

(iii) fixation of fair rent. We shall consider those subjects seriatim.

5. CEILING, SURRENDER AND DISTRIBUTION.

Many entertain doubts as to the advisability of imposing a ceiling on land alone without placing any restriction on owning and possessing other kinds of property. It is true that we have set before ourselves the goal of a socialistic pattern of society but in the implementation of it we shall have to face very serious difficulties. Any person who bestows thought on the subject would be convinced that it is impossible to create a society the members, whereof are financially in the same state. Gradations of wealth are sure to exist. It is said that even in Soviet Russia there are gradations of wealth as exist in Britain, Germany or France and that at one end of the scale some of the poor people are living ten to a room and at the other end the scientists, statesmen, industrial managers, technocrats, artists, and musicians enjoy the comforts of a house in town and a Villa in the country. If that is the state in Soviet Russia after several years of communist rule, itis only an idle dream to think of a society where no inequality of wealth exists. However that may be, we fail to see the wisdom of imposing a ceiling on landed gentry alone who, it must be remembered, form the backbone of the Society in every country and set the tone for the entire population. The imposing of a ceiling on land alone will reduce the landed gentry to an inferior position in the social scale with no means at all to maintain a standard equal to that of the industrialists, merchants, Government servants or persons engaged in the learned professions. The biggest farmer would be brought down to the level of a low grade government official or a small shop-keeper with the inevitable result that men of intelligence, ambition and capital would leave agriculture and migrate in to urban areas in search of better occupations which would enable them and their children to lead a life of greater comfort. We shall now proceed to examine the provisions of the Bill concerning ceiling.

6. The bill fixes the ceiling area at 15 acres of double crop nylon or its equivalent of 22^1/2 acres of single crop nylon or 15 acres of garden land or 30 acres of paramba without any regard to quality, fertility or irrigational facilities of the land. There is no rational basis for fixing the ceiling on the basis of the extent alone. It is well known that the yield of paddy from nilams varies from three-fold to fifty-fold and the yield of cocoanuts varies to the same extent in different parts of Kerala. The yield from parambas generally is negligible except from parambas where commercial crops like groundnut, ginger, etc., are grown. Irrigation facilities will also affect the yield considerably. To fix the ceiling on the basis of the acreage alone without reference to other considerations would work manifest injustice and therefore is unacceptable The only rational basis for fixing the ceiling can be on the basis of income from the land.

7. The income from the land must be sufficient to enable the agriculturist to lead a life of comparative comfort. He must be able to educate his children and must be able to meet medical expenses and other extraordinary expenses which it is absolutely unnecessary to detail here. Children will have to be sent to schools and expenditure will have to be incurred for sending one child at least in a family for higher education or for professional studies. To maintain a proper standard for an agriculturist family of not more than five members it would therefore be necessary to have a net income of at least Rs. 500/-a month or Rs. 6,000/-a year. We. are therefore of the view that if ceiling is to be imposed, it must be only over an extent of land which would give to the landowner an income of at least Rs. 6, 000/- a year or in the alternative an extent of 30 acres of double crop lands or its equivalent.

8. In this connection we wish to point out that the definition of family k likely to cause hardship. As it stands, the definition includes members of joint family entitled to a share on partition. The definition should be modified as to include a person, his wife and minor children. We also think that if any member of a family opts to hold property on his or her own account he or she may be allowed to do so up to the limit of the ceiling.

9. Under the Bill ceiling is made applicable to all lands except

(i) lands owned by Government or any local authority,

(ii) lands belonging to public religious or charitable institutions, and

(iii) lands comprised in Mills and Factorieis, etc.

These exemptions should stand. Provision is also made in the Bill to exempt from ceiling plantations measuring more than the ceiling area provided the owner does not hold any other land except the site of his dwelling house and the land required for the convenient enjoyment of the dwelling house. As every holder of a plantation except European Planters will have in his possession some other land, the provision will in practice exempt only European planters. Perhaps, the framers of the Bill would not have intended that result. Anyhow, the provision must be amended so as to include all plantations whether the owners thereof own other lands or not.

10. The word 'plantation' is defined as land used immediately before 18th December 1957 for growing tea, coffee, rubber or cardamom or such other special crop as may be specified by the Government by notification. Plantations are excluded apparently on the ground that they entail a large initial expenditure and that they begin to give a proper return only after years of patient waiting. If that is the ground on which they are excluded we do not see why pepper plantations are dealt with" differently in the Bill. Pepper gardens require great initial capital outlay & have to be looked after with great care and attention. So pepper plantations also have to be exempted. There are some plantations in Kerala of fairly large extent where Vettiver and lemon grass are grown and it would be folly to place a ceiling on them especially so as they are grown only in Kerala and are earning dollar and other foreign currencies. We think that cashew nut plantations also should be excluded as they can be made profitable only if they are fairly large in extent. All the crops above mentioned are commercial crops of immense national importance and every step should be taken to increase their production It is also our considered view that efficiently managed farms which consist of compact blocks on which heavy investment or permanent structural improvements have been made and whose breakup is likely to lead to a fall in production should be exempted as recommended by the Planning Commission. In the case of cocoanut and areca nut planta­tions, the recommendations of the expert committees appointed by the Central Government should not be ignored and legislation should be on the lines recommended By them.

11. There is a provision in the Bill that for the purpose of calculating the ceiling area, lands which are not cultivable by ordinary processes of husbandry shall be excluded. The authors of the Bill, perhaps intended by this provision to exclude lands such as Kayal and kole lands But it is desirable to place the matter beyond doubt by expressly excluding such areas.

12. If there are any lands at all which ought to be excluded from the ceiling provision they are the extensive forests owned by private individuals in Malabar. It is surprising that no provision is made for this though the legislature has passed an enactment recently empowering the Government to take possession of private forests. Express provision must be made for the exclusion of forests as their existence is very essential for the good of the country.

13. It would be noticed that in the definition of plantation only those in existence on the 18th December 1957 are included. We fail to see the reason which actuated the framers of the Bill to restrict the exemption clause only to those plantations which were in existence on the 18th December. The considerations which influenced the authors of the Bill from excluding plantations in existence on 18th December 1957 must really apply to plantations that may be made in future also. Further, the restriction would prevent the formation of plantations hereafter and that would affect economic stability of the State. It has to be remembered that the plantations are mostly of crops which are earning dollar and other foreign currencies and without which the exchange problem will become most difficult for the Indian Union. In this connection it is noteworthy that the Central cocoanut, areca nut and cashew nut committees as also the Rubber Board have encouraged owners of waste lands to plant them with such trees and have advanced monetary help to such farmers. The Chairman of the Rubber Board recently stated that the Kerala Agrarian Relations Bill had come as a stumbling block to the proper expansion of the industry and that the industry would be crippled if the Bill was passed into law without proper saving provisions. We are therefore of opinion that the date mentioned in the clause defining plantation ought to be deleted.

14. Sec. 63 of the Bill prohibits all alienations by way of sale or gift effected by persons having more lands than the ceiling area after the 18th December 1957 and S. 64 provides that any land in excess of the ceiling area shall be surrendered to Government. We are of opinion that the absolute prohibition of transfers is not in consonance with the fundamental rights guaranteed by the Constitution. That apart, there does not seem to be any justification for imposing such restrictions on one's right to dispose of property The provisions for fixing, and payment of, compensation, for assignment of lands to landless persons and the payment of purchase price by them, and for the management of surrendered lands till assignment are very complex, will lead to favoritism and corruption and entail bickering and quarrels amongst persons throughout the country. Above all, the distribution of lands will take considerable time, say four or five years, and during this period food production will be impeded; and ceiling which is imposed mainly with the object of increasing food production will result in seriously impairing it if the cumbersome procedure envisaged in the Bill is followed. We therefore suggest that the landowners may be allowed two years within which time they may make any transfers or adjustments with the tenants or other persons that they deem proper & that the ceiling provisions may operate only on lands in their possession in excess of the ceiling area after the specified period. Such a provision will enable persons interested in the lands to make equitable adjustments between themselves and avoid friction and misunderstanding to a great extent.

15. Compensation provided for excess land is meagre and absolutely inadequate. The Bill provides that the compensation shall be 16 times the maximum fair rent. The lands are taken away from persons who are in actual possession and therefore in all equity and fairness the compensation that they are entitled to should be a multiple of the net income that they enjoy. The net income will be the income that one gets from the land minus the rent that he has to pay to his landlord if there is any. The multiple of the fair rent is the compensation that the landlord is entitled to and should have absolutely no relation to the compensation which the person in possession is entitled to get. The absurdity of the provision is shown in all its nakedness by the following illustration. A person is in possession of some wet lands which he himself has converted from dry lands and he is also in possession of the same extent of lands which the landlord has converted from dry into wet. The maximum rent that he has to pay for the former set of lands is 1/6 of the gross produce and for the latter 1/4 of the gross produce. On surrendering the lands to Government the compensation that he would get under the provisions of the Bill for the former would be much less than the compensation that he would get for the latter; or, in other words he would get less compensation for the land that he has himself made arable than for the land that the landlord has converted. It would be clear from the above that the authors of the Bill have bestowed little or no thought in fixing the compensation. Compensation should not be fixed as a multiple of the fair rent.

16. In fixing the compensation we think it best to fix it at a multiple of the gross produce. In the case of lands surrendered by the landlord the compensation shall be ten times the value of the gross produce and in the case of lands surrendered by the tenant the compensation shall be the same and to be apportioned between the landlord and tenant in proportion to the benefits derived from the land by each. The compensation based on a slab system as provided in the Bill appears to be inequitable as many of the persons in possession of lands are persons who have purchased lands paying the full market value. Our Chief Minister Sri. Nambudiripad has himself stated in his dissenting minute to the Malabar Tenancy Committee Report, 1940 that an amount of about Rs. 160 lakhs is being invested every year on land by new owners in Malabar. It would be an act of grave injustice to deprive them of such lands without any reasonable compensation.

17. The payment of compensation must be as follows:-- For persons eligible for Rs. 5,000 or less, 50% immediate cash payment and for the rest negotiable Government Bonds carrying interest at 4°o redeemable within 10 years. For persons eligible to get more than Rs. 5,000 for Rs. 5,000 as above, and for the balance negotiable Government Bonds of the nature above mentioned.

Fixity of Tenure, Resumption and Purchase of the Landlord's Interest

18. The next subject for our consideration is fixity of tenure. The lands transferred by a landlord for planting tea, cardamom, coffee or rubber or any other special crop specified by the Government, leases of buildings, and leases of land for commercial or industrial purposes are not within the purview of the Bill So also transactions relating to usufruct of trees. We find that lands transferred for felling timber are not specifically excluded from the Bill. They ought to be specifically excluded as was done in the Malabar Tenancy Act of 1929.

19. With the exceptions above mentioned fixity of tenure has been granted to all tenants who are in bonafide possession of lands. But the definition of the word 'tenant' given in the Bill is made to include a person who is a mere licensee. Thus an Odacharthdar who is stated to be only a licensee to cut bamboo, a punam or Kumri cultivator and a licensee in Kuttanad taluk and a varamdar are incuded in the definition. Odacharthdar and a licensee in Kuttanad taluk are mere licensees as the Bill itself states. A varamdar cannot be regarded as having any higher right. Punam or Kumri cutivation is defined in the Bill as fugitive or intermittent cultivation of waste lands in Malabar. Persons in such temporary possession of lands cannot be said to be tenants in bonafide possession. They are mere licensees and there is no necessity to give fixity 1o such persons.

20. As every bonfire tenant has got fixity under the provisions of the Bill, we do not see any necessity to classify certain tenants as permanent tenants and the provisions regarding permanent tenants should therefore be omitted from the Bill.

21. Resumption of land from a tenant is allowed under the Bill (i) for the extension of a temple, mosque, church or other place of public religious worship, (ii) for constructing a building for the landlord's own residence or for that of any member of his family and (iii) for the landlord's own cultivation or for the cultivation of any member of his family up to the ceiling extent.

22. There ought not to be any distinction made between persons in Malabar and those in T. C. area. The law respecting landlord and tenant must be the same throughout Kerala. Though the Bill gives a qualified right of resumption, the right is rendered absolutely illusory as it cannot be exercised against a person who before 11th April 1957 has been continuously cultivating the holding for not less than five years if the holding is in Malabar or ten years if the holding in any other part of the State. We understand that in Malabar eviction has been stayed since 1951 and therefore every tenant would have been continuously cultivating for more than five years and the provision for resumption therefore becomes absolutely illusory. In T. C. territory also most of the tenants would have been continuously in possession for 10 years as a result of the tenancy laws, in existence there. The five year plan categorically states that on general grounds resumption of lands for personal cultivation should be permitted. It says that tenancy legislation should operate to the advantage of the small owner where the economic conditions of the owner and the tenant are the same It also says that owners with very small holdings would be permitted to resume the entire area. The Bill has not attempted to give effect to the direct­ives of the plan.

23. We consider that there is absolutely no necessity to declare that on the appointed day referred to as the Peasants' day every permanent tenant shall be deemed to have purchased from his landlord the land held by him as tenant. (S. 40 (1). Nor is there any valid reason for declaring that where no application has been made for resumption of a holding or if any such application has been made and rejected, a tenant of that holding shall also be deemed to have purcha­sed. (S. 40(2). We feel that there is no justification for making a tenant a purchaser of his landlord's interest even without his consent. The purchase must be a voluntary act of his and should not be thrust on him. It may be that the tenant may find that it is to his advantage to continue as a tenant and it is difficult to understand why even in such circumstance the legislature should make him a purchaser and make him pay compensation. It is true that there is a provision for the tenant to make a statement on service of notice to him that he is not willing to purchase the land. It should be the other way about. The tenant should be allowed to purchase only if he expresses a desire to purchase the landlord's interest. To make a tenant a purchaser of his landlord's interest even without his consent is to disturb the amicable relationship subsisting between the parties and to create bad blood between them. In our view S. 40 should be deleted altogether and instead a provision may be made to enable every cultivating tenant to purchase the landlord's right on payment of reasonr able compensation, say twenty times the income that the landlord is at present getting from the land.

Fixation of Fair Rent

24. The question of fixing fair rent pales into insignificance when compared with the other matters dealt with in the Bill. If the landowner is asked to surrender lands in excess of the ceiling area and if the cultivating tenants are given the right of purchase, fair rents will have to be fixed only with respect to a comparatively small number of holdings. In our view fair rent should be 1/4 of the gross produce in respect of wet land converted into wet by tenant's labour and in respect of other wet lands 1 3rd of the gross produce. In respect of gardens containing cocoanut trees planted by the tenant the rent of 1 /8th of the gross produce would be fair. In case of cocoanut gardens raised by the landlord it will be equitable to fix the rent at 1/3 of the gross produce In the case of other gardens also the fair rent should be fixed in the manner above stated with some variations regarding hilly tracts like Wynad where a larger proportion of the yield will' have to be given to the tenant. There does not seem to be any valid reason for fixing maxima or minima for fair rents as shown in schedule I of the Bill or for empowering the Government by notification to fix the rates of fair rent applicable to lands in any local area subject to the maxima or minima specified in schedule I.

PORTUGESE POCKETS IN INDIA

A Study in International Law

(C. John Mammen)

Flash back into history—In 1948 A. D. Vasco da Gama arrived at Kozhikode and secured certain trading facilities from the Zamorin. By 1509 with Alfonso de Albuquerque at the helm they embarked on a policy of territorial conquest, fully exploiting the political intrigues among the South Indian Rulers. Albuquerque conquered Goa on November 25, 1510 and by the middle of the sixteenth century it became the established capital of "Portugese India".

Title by Conquest:—The Portugese claim of title to Goa by conquest is untenable. At the time of the conquest the 'Just War Principle' was current in International Law. Ayala basing himself on Roman Law advocates that the party waging an unjust war could acquire legal ownership in the men and materials captured. ''Though the Romans never began war save on just causes, their enemies who could not have just cause (for both sides could not have it) became owners even by Roman Law, of the property conquered by their enemies (Ayala De Jure et Official Bellini et Discipline Militari Libri III, I, II, 34, Pp. 22-23. Classics of International Law Ed. James Brown Scott, London, 1912.) "'. The fallacy of this view can easily be established. ''Just Cause" is a matter of opinion in the majority of cases, and ordinarily two parties go to war each with a 'just cause'. History has a knack of upholding the victor's cause as the just one, unless it is so prominent by its absence as in the case of Portugese Conquests. Still another facet of this 'Roman Illustration' that they conceded the men and materials captured by the enemy with an 'unjust cause is that they being the vanquished could not help it. At this point they were intelligent enough to impart the necessary flexibility to the law, so that they would not have had to watch in helplessness their law being ignored and disgraced by their victorious enemies.

Grotius opposes Ayala's view. He observes"............If the cause of war should be unjust all acts which arise there from are unjust from the point of view of moral injustice"(Grotius. De Jure Belli ac Pacis Libri Tres Vol. II Book III Ch. X. Classics of International Law, Ed. J. B. Scott. Pp. 718-19, London,1925.). He further points out that Ayala's views "not only lacks a rational basis but also incite men to wrong doing"(Giotius De Jure Praedae. Vol. I, Ch. XII, Pp. 112, Classics of International Law, Ed. J.B. Scott, London,1950). Oppenheim holds that territorial acquisitions in violation of an existing rule of customary or conventional International law are "tainted with invalidity and incapable of producing legal results beneficial to the wrong doer in the form of a new title or otherwise".(Oppenheim International Law, Vol. I. Pp. 142, 8th Ed. London 1955) But he proceeds further to observe that such an invalidity fan be condoned if other states recognize that territorial acquisition How the initial illegality could be wiped out by the complicity of other states -- even with the implied complicity of the victimized state -- is a point unintelligible.

Kelsen maintains that an annexed territory forms part of the victor's territory even if the war waged by the victor, against the vanquished was anillegal war. This principle is alleged to be based on "Effectiveness"(Kelsen, Principles of International Law, Pp. 214, London, 1953). If this view is accepted the doctrine of Prescription becomes superfluous and the International Code of conduct will turn out to be in accordance with the dictum 'Might is Right'. Also it is against the Charter of the U. N. which ordains that "All members shall refrain from the threat or use of force against the territorial integrity or political independence of any state"(Art. 2 (4) U N. Charter).

The only possible reasons the Portugese can advance for waging war are (a) for trading facilities and (b) for the propagation of Christian faith.

Since they were given ample concession and facilities by the hospitable native rulers, wars on that ground are ruled out. And waging war for religious conversion was unjust even according to International Morale of the sixteenth century

On grounds aforesaid the Portugese title to Goa was bad at the time of the conquests. But India cannot dwell at length on that point because this invalidity was corrected by long and continuous display of Portugese Sovereignty in Goa (See the Island of Palma's Case. Permanent Court of Arbitration (192S) No XIX. Extracted in Green's International Law Through the Cases, Pp. 350, London, 1951). The Government of India cannot raise the contention that the prescription did not run against the new Republic of India which is of recent origin, for the important ingredient in prescription is time and not the party against whom it runs.

Cultural and Religious Influences. --Sixty one percent of the population in 'Portugese India' profess the Hindu faith, only thirty six percent are Catholics (Portugese Official Statistics, Lisbon, 1951, quoted by Mr. Nehru, The Hindu, Pp. 5, Col, 8, July 26, 1955.). Even this percentage of Catholics is principally the fruit of -- or rather the result of -- the missionary works of St Francis Xavier, S.J. and others backed by the sceptor of sovereign political power. In spite of all this "These Christians of Goa still largely adhere to caste distinctions, claiming to be j Brahmins, Kshatriyas and Low Castes who do not intermarry"(W. W. Hunter, Imperial Gazetteer of India, Vol. XII, Pp. 258, Oxford, 1908.)

The Pope has agreed with Mr. Nehru at the Vattican that the Goan Problem had nothing to do with religion. (Keesing's Contemporary Archives 1955-56 (14372-A).

Pretensions to stick on to Goa for safeguarding the religions and cultural heritage of the population are flimsy since the Constitution of India specifically guarantees the religious and cultural interests of the minorities (Constitution of India. Arts. 29 (lj and 30 (1)).

INDIAN CLAIMS

I. Geographical Contiguity.—Dr. Salazar proclaims "we hold a nation to be distinct and separate social aggregate regardless of their geographical position.... We area judicial and political unit" (Dr Antonio de Oliveira Salazar, Doctrine and Action Pp.178, Lisbon,1939). Ordinarily a state is composed of a single block or adjacent blocks of territories. But to have another state right in between two parts of a state is an unusual phenomenon. So is the case with Pakistan with India dividing it, and Prussia just after World War I, with the Polish Corridor running right through its territory dividing it into two. It was but a narrow strip of land. Yet as to Germany's eastern frontiers with the Polish Corridor she refused to accept it as final. It has been a bone of contention between Poland and Germany (Greenan and Gathany, Units in World History. Pp. 558 & 75s London,1946). So the general concept is that various provinces of a state are almost invariably to be found adjacent or at least very close to each other. But to have thousands of miles between a province and the state is a preposterous notion, and to maintain that Goa is part of the Metropolitan Territory of Porugal and not her colony -to avoid the provi­sions of the Charter which brings the colonial world generally within the sphere of International responsibility(Journal of the General Assembly No. X, Pp. 249. New York, 1955) -- is fantastic. It is against all concepts of geographical contiguity and symbolises nothing but the diplomacy of Power Politics. In fact these enclaves represent age old ulcers on the geographical entity of India. It is a task ahead to cure it.

2. Nationality.-- Ethically Goans are undoubtedly of Indian stock and Portugal is tactful enough to leave that issue untouched. In 1955 the U. S. Secretary of State pronounced "All the world regarded Goa as a Portugese Province" and that he believed "they were under the Constitution of Portugal and the residents of these areas enjoyed the full rights of Portugese citizens"(John Foster Dulles The Hindu. Pp 6, Col 5, December 7 1955). Conceding his wisdom and honesty on consideration of the ratio population between Portugal and her over sea colonies about fifty-five percent of the seats in the Portugese Legislature should go to representatives from overseas(World Book, Vol II, Pp 3505, New York, 1954). This is hardly the case. So conferring of Portugese nationality on the natives of the colonies is no, better than a farce.

3. Security.-- Portugal like Pakistan is a member of various military alliances. She is a member of the NATO. In a situation of International emergency, Goa might overnight be transformed into a military base of a group of foreign states. In this age of ballistic and nuclear weapons, no state can reasonably contemplate such a contingency with complacence. It is a matter vital to the self-preservation of India. The crux of the issue is that tolerance of these pockets might create a situation of great insecurity for India.

4. Economic Implications -- If Portugese Goa is militarily a potential danger to India, economically it has been a perpetual parasite. Goa is a bootlegger's paradise. Large scale smuggling is a "big industry" over there. The prohibition in Bombay is jeopardized by Goa. Exorbitant smuggling defeats Indian interests and adversely affects the economy of the state.

Dr. Salazar asserts that Portugal's claims of sovereignty over her colonies was guaranteed by the Anglo-Portugese Treaty of 1373 and also by Art. 4 of the North AtlanticTreaty ''This engagement (Anglo-Portugese Treaty) has lasted now for nearly six hundred years and is without parallel in history'"(Winston S. Churchill, The Second World War, Vol V, Pp 147, London,1952 Article 1 of the treaty of 1373 runs as follows:-

"In the first place we settle and covenant that there shall be from this day fonvard...........true, faithful, constant, mutual and perpetual, friendships, unions, allian­ces, and deeds of sincere affection, and that astrue and faithful friends, we shall hence­forth, reciprocally be friends to friends, and enemies to enemies, and shall assist, maintain and uphold each other mutually by sea and land against all men that may live or die").The fact is this is an outdated and time-worn Royal treaty devoid of all its life and luster. As late as on November 14, 1957, the High Commis­sioner of U. K. in India stated "...............though Portugal is a member of the NATO, U. K. is not bound to help her in her quarrel with India. No such provision existed in the Pact"(Malcolm Mac Donald, Speech at Kozhikode, The Hindu, Pp. 9, Col. 4, Nov. 171957). In 1954 Mr. Nehru pointed out that NATO has no application to Goa since it was an alliance for the Atlantic Communities (Mr Nehru, Loksabha Proceedings, May l5, 1954; Loksabha Debates, Vol. V, Pp 7508 (Loksabha Secretariat Publication) New Delhi, 1954).

India attempted to solve the issue by peaceful negotiation. But when it was actually felt that Portugal does not see the writing on the wall, and is reluctant to copy the example of France in conceding their Indian territories, India closed her legation in Lisbon, and subsequently demanded the closure of Portugese legation in Delhi. Meantime Nationalist movements in Goa gathered strength. The Nationalists liberated two small enclaves Dadra and Nagar Haveli. Consequently the Portugese suppressed civilian rights and began a reign of terror and persecution in Goa. India more than once declined to accede to requests from local authorities to take over the liberated enclaves. They are being administered at present by authorities organized by the local population (M.C. Setalvad, at the International Court of Justice, the Hague, Hindu, Pp. 4, Col 5, Oct. 9, 1957) But India refused Portugal the right of way to her liberated enclaves And against this Portugal instituted a suit at the International Court of Justice. The suit is still pending.

The Indian Defence Minister declared in the U N. General Assembly.

"......Inhabitants of India cannot be Portugese any more than a tiger can be a vegetarian. It is an insult to the intelligence of the Assembly to suggest that parts of foreign occupied territories can be an integral part of the Metropolitan country.....There is no question of these men having rights of ordinary human beings in Goa........ Goa is the last remnant of imperialism in Asia.........the dictatorship of Portugal will fall before the onslaught of freedom. For us it is a social nuisance being the last smuggling centre (V. K. Krishna Menon, Speech at the U. N. General Assembly, The Hindu, Pp. 4,Col. 4, Oct 10,1957).

The concept of Law and Justice changes with the times. Divine right of Kings and notions similar, are being discarded by all civilized states- The doctrine of Social Justice and the Socialistic Pattern of Society is gaining ground. Only the consolidated weight of world opinion seems to be the possible kick to wake up Portugal into the latter half of the twentieth century.