( 1) The fair rent in respect of a holding shall be the rent payable by the cultivating tenant to his landlord and it shall be the rent calculated at the rates specified in Schedule III applicable to the class of lands comprised in the holding or the contract rent, whichever is less.
Explanalton.-Where the fa1r rent in respect of a holding has been determined under any law in force immediately before the 21st january, 1961, the fair rent so determined shall be deemed to be the contract rent for the purposes of this sub-section.
(2) Notwithstanding anything contained in sub-section ( 1), the fair rent m respect of a holding, where the cultivating tenant or an intermediary is holdmg under a small-holder, shall, at the option of the small-holder, be-
(a) the rent calculated at the rates spec1fied in Schedule III applicable to the class of lands comprised in the holding; or 28
(b) where the fair rent in respect of the holding has been determined under any law in force Immediately before the 2Istjantiary, 1961, such fair rent, or, where fair rent has not been so determined, 75 per cent of the contract rent :
Provided that the fair rent payable by a cultivating kanamdar or a cultivating customary verumpattamdar shall not exceed the micha varam payable by such kanamdar or the rent payable by such custo mary verumpattamdar, as the case may be.