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Girdharlal Harilal Pandya Vs. Liladhar Amthalal - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtMumbai
Decided On
Case NumberCivil Revision Application No. 124 of 1930
Judge
Reported in(1931)33BOMLR1123
AppellantGirdharlal Harilal Pandya
RespondentLiladhar Amthalal
Excerpt:
.....50-lis pendens-mortgagor in possession--second mortgage--decree on mortgage-execution proceedings-lease by mortgagor pending execution-auction-purchaser in execution sale- auction purchaser not affected by lease-purchaser can claim compensation for use of land from lessee-notice does not affect lis pendens.;a mortgagor, who was in possession of the mortgaged property, executed a second mortgage on the property. after the second mortgagee obtained a decree for sale on his mortgage and applied to execute his decree, the mortgagor leased the property for a term of three years to the defendant and took the rent in advance. at the court sale that followed in the execution proceedings, the property was purchased by the plaintiff. the plaintiff having failed to obtain possession of the..........of authority on the point. it was held in thakur prasad v. gaya sahu i.l.r. (1898) all. 349 that a lease of property made by a judgment-debtor against whom a decree for sale had been made under section 88 of the transfer of property act for sale of that property, came within the purview of section 52 of the transfer of property act. that was a case of a mortgage of a four pies share in a village, and not a mortgage with possession. the learned judge said (p. 350): 'the lease was executed undoubtedly during the active prosecution of a contentious suit....the transfer under this lease, which is for a period of no less than eleven years, undoubtedly must affect the rights of the auction purchaser'. it appeared to him that a lease of property made by a judgment-debtor against whom a decree.....
Judgment:

Baker, J.

1. [His Lordship after stating the facts proceeded:] The Judge of the Small Cause Court at Ahmedabad held that the question to be decided was whether the plaintiff was entitled to recover rent or damages for loss of rent for the period daring which he continued to be the owner of the equity of redemption from the defendant who had already paid the rent to the original owner the mortgagor, and he considered that defendant was not liable to pay the rent twice over, because at the time the defendant took the property on rent for three years by payment of rent in advance on June 24, 1925, the original mortgagor was entitled to sublet the property, he being in actual management of the same as a tenant of the first mortgagee with possession, and there was nothing to show that the first mortgagee objected to the arrangement, the grant of the lease between the mortgagor and the defendant, The second mortgagee, the mortgagee of the equity of redemption, filed his application to have the equity of redemption sold subsequently to the tenancy of the defendant, and the sale to the plaintiff took place nearly a year after the creation of the tenancy. The plaintiff purchased the property with his eyes open and with full knowledge of the defendant's possession and presumably with knowledge of the terms of the registered rent-note. There was, therefore, no equity in his favour. The mortgagee of the equity of redemption had no right to the possession of the property. The mortgagor was in rightful possession, and if anybody could object to his possession, it was the first mortgagee, and although the first mortgagee never objected, the second mortgagee's rights cannot be enhanced, and he cannot be held to be entitled to the possession of the property. The mortgagor should be held to be entitled to continue in possession as owner. The omission to join the defendant who was in actual possession all along in any of the proceedings taken in connection with the property in question by the original mortgagee of the equity of redemption, i.e., the second mortgagee, the assignee of the decree obtained by him, and the plaintiff who became the purchaser at the Court sale, and the omission of the plaintiff to take any steps to recover possession of the property purchased by him from the defendant, go to show that none of the previous proceedings could be held to be binding on the defendant, and that the plaintiff cannot be held entitled to recover rent which was already paid by the defendant to the person who was at the time entitled to take the same, Therefore, the plaintiff had no right to claim any rent from the defendant who had already paid the same to his landlord the original mortgagor and to make him to pay the same twice over. The suit was, therefore, dismissed.

2. The principal argument raised by the learned advocate for the applicant is that the lease to the defendant is dated June 24, 1925, at which time the execution proceedings in the suit of 1917, filed by the second mortgagee, were pending. Therefore, the transaction is affected by Section 52 of the Transfer of Property Act and by the doctrine of lis pendens and it is contended that the mortgagor cannot pass a lease during the mortgage to the detriment of the mortgagee or persons claiming under him. It is further contended that the doctrine of lis pendens is independent of notice, so that the lease is not binding on the plaintiff. The plaintiff does not ask for possession, but only for damages for failure to give him possession. It is further contended that independent of lis pendens the lease is bad, The mortgagor could not create a lease so as to bind the mortgagee, much less the auction purchaser. The suit of the second mortgagee was previous to the lease, the decree being obtained in 1918, and the lease to the present defendant was on June 24, 1925, when the darkhast was pending to execute the decree. Section 52 of the Transfer of Property Act lays down that during the active prosecution in any Court of a contentious suit or proceeding in which any right to immoveable property is directly and specifically in question, the property cannot be transferred or otherwise dealt with by any party to the suit or proceeding so as to affect the rights of any other party thereto under any decree or order which may be made therein, except on the authority of the Court and on such terms as it may impose. It has been conceded by the learned counsel for the opponent that if the second mortgage had been one with possession or if the argument had been raised on behalf of the first mortgagee who was the mortgagee with possession, the position could not be disputed. But as the second mortgagee was only owner of the equity of redemption and not entitled to possession at all, the mortgagor does not lose the right to sub-let. There is a certain amount of authority on the point. It was held in Thakur Prasad v. Gaya Sahu I.L.R. (1898) All. 349 that a lease of property made by a judgment-debtor against whom a decree for sale had been made under Section 88 of the Transfer of Property Act for sale of that property, came within the purview of Section 52 of the Transfer of Property Act. That was a case of a mortgage of a four pies share in a village, and not a mortgage with possession. The learned Judge said (p. 350): 'The lease was executed undoubtedly during the active prosecution of a contentious suit....The transfer under this lease, which is for a period of no less than eleven years, undoubtedly must affect the rights of the auction purchaser'. It appeared to him that a lease of property made by a judgment-debtor against whom a decree had been made under Section 88 of the Transfer of Property Act for sale of that property comes within the purview of Section 52 of that Act. The lease executed by the judgment-debtor, whatever its object, could not but have the effect to some extent of defeating the auction purchaser of that property. A similar view was taken by the Calcutta High Court in Kiran Chandra Bose v. Butt & Co. (1924) 29 C.W.N. 94 where a mortgage suit had been instituted and a receiver appointed. During the pendency of the suit the mortgagor granted a lease of the premises to the defendant firm for a period of five years at a monthly rent of Rs. 175, taking an advance of seventeen months' rent. It was held that the lease was affected by the doctrine of lis pendens laid down in Section 52 of the Transfer of Property Act. The learned counsel for the opponent has referred to the case of Subbaraju v. Seetharamaraju I.L.R. (1914) Mad. 283 which holds a contrary opinion, as it lays down that the creation of a lease for one year after a suit and decree on mortgage is not affected by the doctrine of lis pendens enunciated in Section 52 of the Transfer of Property Act, as such a lease is an ordinary incident of the beneficial enjoyment of a mortgagor allowed to remain in possession. A reference is made in that case to the case already quoted, Thakur Prasad v. Gaya Sahu I.L.R. (1898) All. 349 but states that the proposition is stated too broadly in that judgment as it ignores the ordinary incident of the beneficial enjoyment which a mortgagor who is allowed to remain in possession is entitled to have the benefit of. The view of the Madras High Court, therefore, appears to differ from that of the Allahabad and Calcutta High Courts. In this Court it was held in Macleod v. Kissan I.L.R. (1904) Bom. 250 6 Bom. L.R. 995 that if a mortgagor left in possession grants a lease without the concurrence of the mortgagee, the lessee has a precarious title, inasmuch as, although the lease is good as between himself and the mortgagor who granted it, the paramount title of the mortgagee may be asserted against both of them. This case was followed in the recent case, Rustomji v. Keshavji : (1926)28BOMLR1162 , in which it was held that in the absence of any express power of leasing given in a mortgage deed or by other express agreement between the mortgagor and the mortgagee, the mortgagor has no power to grant a lease of the mortgaged property so as to be binding against the mortgagee, and a tenant under such a lease has no right as against the mortgagee to rent paid in advance to the mortgagor, and Section 50 of the Transfer of Property Act does not enable him to recover such rent from the mortgagee. The learned counsel for the opponent has referred to the case of Green v. Rheiriberg (1911) 104 L.T. 149 but the facts of that case are entirely different since the lease there was prior in date to the execution of the mortgage, and was passed at a time when no mortgage was in existence. It is not, therefore, necessary to consider it. On the rulings of the Allahabad and Calcutta High. Courts which have been followed in Rustomji v. Keshavji, it appears that after the institution of the suit by the subsequent mortgagee and the obtaining of the decree, the grant of a lease by the mortgagor to the defendant, would, under Section 52 of the Transfer of Property Act, be affected by the doctrine of lis pendens, and cannot affect the rights of the present plaintiff, who stands in the shoes of the second mortgagee. The question of notice which is referred to in his judgment by the learned Judge of the Small Cause Court does not make any difference, as the doctrine of lis pendens is independent of notice, as has been held by this Court in Krisknabai Pandurang v. Sawlaram Gangaram I.L.R (1926) Bom. 37 29 Bom. L.R. 60 At p. 43 it is stated by Fawcett J, that the doctrine of lis pendens is not based on the equitable doctrine of notice, but on the fact that it is necessary for the administration of justice that the decision of a Court in a suit should be binding not only on the litigant parties, but on those who derive title from them pen-dente lite, whether with notice of the suit or not. There is a similar decision in Basappa Budappa v. Bhimangowda Shhid-dangowda I.L.R. (1927) Bom. 208 30 Bom. L.R. 102 where it is observed that it was immaterial whether alienees pendents lite had or had not notice of the pending proceedings, for if this were not so, there would be no certainty that the litigation would ever come to an end.

3. It is further contended that independent of lis pendens, the lease is bad. The mortgagor could not create a lease so as to bind the mortgagee, much less the auction purchaser, as laid down in Macleod v. Kissan I.L.R. (1904) Bom. 250 6 Bom. L.R. 995 and Bustomji v, Keshavji : (1926)28BOMLR1162 . In the latter case it was expressly held that the tenant could not take advantage of Section 50 of the Transfer of Property Act with regard to rent paid in advance. That answers the view of the Judge with regard to the defendant being made to pay the rent twice over. As a matter of fact the present suit is not one fir rent, but for compensation, and compensation was awarded in Rustomji v. Keshavji. That disposes of the argument that the defendant can rely on Section 50 of the Transfer of Property Act. The main argument of the learned counsel for the opponent was that if this had been a case of a mortgage with possession, so that the mortgagee and those claiming under him had right to possession, then the lease executed after the commencement of the proceedings in the suit on the mortgage by the second mortgagee would no doubt be affected by the doctrine of lis pendens, and the lease would be voidable at the option of the plaintiff, who claims under the second mortgagee, but the second mortgagee being a mortgagee only of the equity of redemption, and the mortgagee himself not being entitled to possession, the plaintiff cannot take advantage of the doctrine of Us pendens, but the decisions to which I have referred above are decisions in which the mortgage was not with possession. The mortgagee remained in possession after the first mortgage. There was a tenant, and it is doubtful if the second mortgagee can be said to be a mortgagee of the equity of redemption only. Neither in Thakur Prasad v. Gaya Sahu I.L.R. (1898) All. 349 nor in Kiran Chandra Base v. Dutt & Co. (1924) 29 C.W.N. 94 is the mortgage with possession, and it does not appear that the principle of lie pendens is confined to mortgages with possession. I have already referred to Section 50 of the Transfer of Property Act not being any answer to the plaintiff's claim, and the plaintiff does not claim rent, but damages or compensation.

4. In these circumstances, having regard to the state of the authorities on this point of law, I think that the view of the learned Judge of the Small Cause Court at Ahmedabad is not correct, and cannot be supported. It will, therefore, be necessary to set aside the decree, and direct that the plaintiff's suit be decreed with costs throughout. Rule made absolute.


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