Litigation and the Emergence of Nakarattar Zamindars , 1850–1900

As the world economy changed and Crown government replaced Company rule, Nakarattar investments typical of late eighteenth-and early nineteenth-century Madras became increasingly risky or unprofitable. The East India Company restricted and, in the end, all but abolished a system of government loans to agriculturalists (takkavi loans) that had secured many credit transactions during the first half of the century (Sarada Raju 1941: 142–145). Simultaneously, land also became more risky as collateral (albeit potentially more profitable; see below). It was seldom alienable in an unrestricted fashion, and "landowning" peasants generally did not own any land outright. Instead, they possessed a legally ambiguous and hence conflict-generating share in their joint-family estate. Under changes in the evolving legal system, the time required to settle legal disputes over ownership and enforce a mortgage foreclosure lengthened. Thus, only local residents, who had extralegal sanctions available to them, could safely accept land as security.^[22] In Tirunelveli, the cotton trade was becoming increasingly competitive as Nadar traders developed an edge through their connection with Nadar cotton cultivators (Hardgrave 1969)—an edge not duplicable by the more highly specialized Nakarattars. Meanwhile, for reasons that are not clear, Marwaris came to dominate the credit needs of cotton traders in Coimbatore.^[23] All opportunities for Indian participation in shipping were outlawed by the colonial government; at the same time, Europeans were moving to develop and monopolize new arenas of investment: notably, railroads, military supplies, and sugar (Bagchi 1972; Habib and Raychaudhuri 1982; Mahadevan 1976; Ray 1979). Finally, beginning in 1843 with the founding of the Presidency Bank of Madras, Europeans

established their own exchange banks, thereby excluding Nakarattars and other indigenous moneylenders from the market in mercantile finance and currency exchange for private European firms and the market for quasi-governmental treasury functions for the East India Company.^[24]

These dramatic changes in opportunities for investment had major ramifications for Nakarattar business practice. In the Madras Presidency itself, they ruled out virtually every area of investment. As a consequence, almost the only possibility for profitable investment remaining was, ironically, to invest in or convert bad debts into land ownership. The irony lies in a reversal of the agricultural commodities market in Madras. The agricultural depression that had contributed to the credit hunger of the first half of the nineteenth century at last began to relinquish its hold on the South Indian economy. Between 1823 and 1853 the value of good, wet land in Tanjavur District had risen from Rs. 12 to Rs. 39 per acre. Then between 1853 and 1868 it rose dramatically, to Rs. 151 per acre (Raghavaiyangar 1892, cited in Mahadevan 1976: 44). Between 1878 and 1903 the value of land throughout Madras rose from Rs. 245 per acre to Rs. 458 per acre (Kumar 1965: 142). Moreover, this rise in land value was fueled and surpassed by rises in the prices of grain. According to David Washbrook, for example, prices of dry grains between 1880–87 and 1918–20 rose between 50 percent and 70 percent, and went even higher during the shortages of 1918–20.^[25] Meanwhile, Fort St. George raised its tax assessments on dry land only from 7 percent to 12 percent (Washbrook 1973: 158).

It is not clear that these rising prices increased the profitability of investment in land and agriculture to the extent that they compensated for investment opportunities foreclosed by British interests. Moreover, as noted above, serious legal obstacles often lay in the path of anyone seeking to wrest a clear title away from members of a landowning joint family. Nevertheless, land was sufficiently attractive so that wealthy Nakarattar families, with sufficient economic leverage over their zamindar clients, used this leverage, along with extensive litigation, to acquire considerable lands.

One of the most notable cases is described by Pamela Price (1979). In her account, the story begins with a transaction in which the Setupati of Ramnad leased twenty-four villages in the vicinity of Devakottai to a Devakottai Nakarattar named Al. Arunachalam. The date on which this lease occurred is not clear. But from at least the 1860s on, these villages were not to escape control of Arunachalam's family until the Zamindari Abolition Act of 1947.^[26]

The loans that secured these leases for Arunachalam—or, more accurately, the loans for which these leases stood as security—were not suffi-

cient to solve the setupati 's long-term financial problems. During the 1860s and 1870s, he found it necessary to mortgage additional villages, almost on a wholesale basis, to Arunachalam's family and to two other Nakarattar families as well.^[27] Other, unspecified portions of Ramnad were leased to Arunachalam's son, Ramasami, and to his nephew, Pethuperumal. Two additional villages went to two brothers from a separate lineage, Chidambaram and Subramaniam. The villages from an entire two and a quarter "divisions" (taluks ?) were leased to their father's brother Ramanadhan. And another three divisions went to two cousins from a third lineage, Me. Ar. Narayan and Me. Ct. Vairavan.^[28]

In the 1870s the setupati was unable to meet the interest payments on loans obtained from these three families, even after the income from their leased lands was taken into account, and the entire gang of Nakarattar creditors took him to court. According to Price, only his early death saved the zamin from being completely divided. Instead, it was placed in the hands of a court-appointed manager until his son Baskara reached his majority in 1889. It is not clear how the Court of Wards satisfied the Nakarattars. But whatever solution was reached, it was only temporary. In the 1880s, Baskara's mother borrowed Rs. 80,000 from Ramasami to arrange a second and secret wedding for Baskara.^[29] In 1889, Baskara assumed the title of setupati . His estate was solvent, with a revenue of Rs. 900,000 and a cash balance, at that time, of Rs. 300,000. Three days after his "rendition," Baskara gave or leased two additional "mahanams " (divisions of land: mahanadus ) containing twenty-four villages to Ramasami. It is not clear what he received in return. Ten weeks later, L. Ar. Rm. Ramanadhan (by his initials, a different Ramanadhan Chettiar than the previously mentioned Nakarattar) induced Baskara's younger brother to sue for partition of the zamin and extended Rs. 127,000 to cover legal costs. Ultimately, the court ruled that Ramnad, as a traditional kingdom, had a special status and was not subject to division under laws concerning the Hindu joint family. However, Baskara was forced to pay his younger brother an allowance of Rs. 2,000 per month plus a lump sum payment of Rs. 250,000 to cover back allowance.

Price describes many different kinds of expenses incurred by the young setupati . But for our purposes, it is perhaps enough to note that by 1890 Baskara had borrowed Rs. 486,000 from Ramasami. In 1891, in return for a lease on most of Hanamanthagudy Taluk, he borrowed Rs. 800,000 from V.A.R.V. Arunachalam and S. Rm. M. Rm. Muthia (grandfather of Raja Sir Annamalai Chettiar). In the same year, he also borrowed an additional Rs. 750,000 from the British-owned Commercial and Land Bank of Madurai. By 1892, Ramasami, still Baskara's chief

creditor, had permanent or term leases on 255 villages (at one time he had held title to 500, and his relatives to another 80). In 1893 Baskara's total deficits were Rs. 763,000. By 1894, he owed Ramasami alone Rs. 837,035, against which Ramasami secured a mortgage deed on the entire zamin of Ramnad. In that same year, Ramasami's lease to 24 villages near Devakottai was made permanent. By July of 1895, Baskara had given his various creditors 306 villages on permanent leases and 294 villages on term leases. The villages still paying revenues to Baskara's estate had diminished from 1,011 to 439. His total debt was estimated at Rs. 2 million. In 1896 Al. Ar. Ramasami was officially installed as the Zamindar of Devakottai with a domain fissioned out of Ramnad consisting of the 24 Devakottai villages and containing forty thousand acres of wet land and sixty thousand acres of dry land.^[30] In 1901, Baskara was removed from the managership of Ramnad and replaced by Ramasami. In 1903, Baskara died at the age of thirty-five.

The case of the Setupati of Ramnad and the Zamindar of Devakottai illustrates events that occurred many times and with many different zamindars and Nakarattar creditors. It was unusual in its scale and in that only one other Nakarattar besides Al. Ar. Ramasami ever had the title zamindar conferred on him by the British, namely, S. Rm. M. Chidambaram, Zamindar of Andipatti.^[31] But several other Nakarattars acquired permanent leases or foreclosed on mortgages secured by zamins and assumed the title (see Table 1). In addition, other Nakarattars acquired similar, but generally smaller, inam holdings. My informants estimate that perhaps two hundred Nakarattars in all were able to obtain such minor titles.