K. Jagannatha Shetty, J.
1. The defendant in suit for redemption of a possessory mortgage, claiming to be the tenant of the land earlier to the mortgage, challenges in this appeal the decree for khas possession made against him.
2. The facts are these:-- The land S. No. 113 of Kommaghatta Village, measuring 3 acres and odd was the property of the family of one Bhadramma, Channaveeraiah, the eldest son, leased the land to the defendant on wara basis. Channaveeriah, died in the year 1948. The property thereafter was divided between the surviving brothers, and the disputed one half came to the share of Revanna. Revanna leased his share to the defendant on gutta basis for eight years. It was an unregistered lease. The annual rent reserved therein was three pallas of paddy. After the expiry of the period, the lease was renewed for a further period of ten years, but that deed was also unregistered. When the defendant was thus in possession of the land Revanna for his personal necessity mortgaged the land for Rs. 500/- under Exhibit D-7 dated 16-12-1956 in favour of the defendant. He died on 11-3-1961. Thereafter, Siddamma the widow of Revanna offered to redeem the mortgage as seen from the notice Exhibit P-2 dated 2-4-1964. She also remitted the mortgage amount. The defendant contended that he has no objection for the redemption but he cannot be dispossessed from the land as he has been a tenant even from the period earlier to the mortgage.
3. Siddamma apparently was not financially sound. She without prejudice to her dispute as to the tenancy claimed by the defendant, offered to sell the land for Rs. 7,000/- to him as in law it was obligatory for the landlord first to offer it to his tenant. The defendant said that the price was excessive and did not purchase. Siddamma sold the same for Rupees 6,995/- to the plaintiff who brought the suit for redemption against the defendant, also impleading Siddamma as the second defendant.
4. The defendant quite naturally resisted the suit for actual delivery of possession. His main contention was that he was a tenant long prior to the mortgage in his favour and automatically the said tenancy revives after the redemption of the mortgage and as a tenant he was entitled to the protection available under the Mysore Tenancy Act, 1952, and now under the provisions of the Mysore Land Reforms Act (Act No. 10 of 1962). The plaintiff pleaded in the alternative:
(1) that there was no antecedent tenancy before the mortgage:
(2) that the right of the tenant, if any was merged in the mortgage right which was a superior right, and
(3) that on accepting the possessory mortgage, there was an implied surrender of the leasehold rights.
5. The learned Munsiff held that the defendant was not a tenant of the land before the mortgage but became only a mortgagee with possession under Exhibit D-7. Consequently, he decreed the suit directing khas possession. In the appeal preferred by the defendant the learned Civil Judge held that the defendant was a tenant under Revanna, before the mortgage. But, he held that there was an implied surrender by operation of law when Exhibit D-7 was executed. He, therefore, dismissed the appeal.
6. The first question for consideration in this second appeal is as to whether the defendant was a tenant antecedent to the mortgage. The second question is whether or not the tenancy was terminated with the coming into existence of the mortgage, either by the principles of merger of lessee's interest in the mortgagee's right which is a superior interest or by the acceptance of the possessory mortgage resulting in the implied surrender of the leasehold rights.
7. On the first question, the evidence was that the defendant was in possession of the land ever since 1942 end it was followed by two lease deeds in his favour, one dated 14-6-1942 executed by Channaveeriah for a period of eight years and another dated 12-2-1956 executed by Revanna for a period of ten years. But these deeds were excluded from consideration by the courts below for want of their registration. There is no other legally recognisable written lease in favour of the defendant. If the lease is unregistered, which is required to be registered under law, all other evidence to prove the terms of the lease should be shut out under Section 49 of the Registration Act. That is also the contention of Mr. C.N. Ramamurthy, learned counsel for the plaintiff, supported by the decisions in Baldeoprasad v. Dashrathlal, AIR 1955 Nag 27; and Ram Nath Mandal v. Jogan Mandal, : AIR1964Pat1 (FB). Reference was also made to the decision in Anand Sarup v. S. Taiyab Hasan : AIR1943All279 .
8. The principles are well settled that where under a written agreement the parties reserve yearly rent, a lease in pursuance of it can only be created by the execution of a registered instrument inasmuch as a lease is a transfer of property and not a mere agreement or contract. If the person is in possession of a land under the unregistered lease, he may be treated as a licensee, but not as a tenant. That is the view expressed by Allsop, J. in Anand Sarup's case : AIR1943All279 . A Bench decision of the High Court of Calcutta however, held that the tenant under an unregistered lease deed which ought to be registered, becomes a tenant at will. (See Ramachandra Agarwala v. Syameswari Dasya : AIR1925Cal1171 . These decisions are of little assistance in these days when there is statutory protection from eviction to the persons who are legally in occupation of the land or shop.
9. In my opinion, the Courts below are right in excluding from consideration the two unregistered lease deeds dated 14-6-1942 and 12-2-1956, to prove the terms of the tenancy claimed by the defendant. But, that does not mean that the defendant cannot rely upon other documentary proof of his tenancy. There is enough proof in the present case to hold that be was a tenant even before the execution of the said unregistered lease deeds. At first, he was a tenant on wara basis and from 14-6-42 on gutta basis, on the payment of Rs. 50/- per annum. After the death of Channaveeriah in 1948. one half of the property fell to the share of Revanna and the defendant continued to remain in possession of this portion as a tenant under Revanna. His tenancy was evidenced by the entries, in many phonies Exhibits D-9, D-10 and D-11 for the years 1952-53, 1954-55 and 1955-56. Earlier to that it was corroborated by the receipts he possessed for the payment of rents to Channaveeriah, Exhibits D-1 to D-6 for the years 1942 to 1947. It was for this reason that Siddamma, of course, without prejudice to her contentions, first offered to sell the land to the defendant for Rs. 7,000/-The defendant, however, did not purchase it as the price quoted was, according to him excessive. The land was then sold to the plaintiff for a sum of Rupees 6,995/- under the registered sale deed dated 8-7-1964. This led to the filing of the suit for redemption out of which the present second appeal arises.
11. Apart from that, the plaint averments apparently proceeded on the ground that the defendant was a tenant before the mortgage. In paragraph 5 of the plaint, it is stated:
'The plaintiff also submits that there is no substance in the claim out forward by the 1st defendant that he hag got tenancy rights in the schedule property and as such, that he cannot be evicted therefrom as whatever rights he might have had prior to the mortgage, the same ceased to have any force, the moment he became a mortgagee: his possession thereafter could be attributed only to the mortgage and not to any previously existing tenancy. There was in law and fact a complete surrender of the tenancy which became incapable of the ing revived after the redemption of the mortgage.'
(underlining is mine)
This shows that the stand taken by the plaintiff was that on the execution of the mortgage, there was a determination of the tenancy by complete implied surrender and it could not revive after the redemption.
12. On these materials, the learned Civil Judge cannot be said to be wrong when he concluded that the defendant was a tenant before the mortgage. I agree with his conclusion.
13. Before proceeding to consider the second question, I must take note of the coming into force of the Mysore Tenancy Act (Act No. XIII of 1952). The said Act came into force on 1-1-1954, On that day there was no mortgage in favour of the defendant. It was only on 16-12-1956 that the possessory mortgage was executed by Revanna as per Exhibit D-7. Section 5 of the Act provides:--
'5. NO tenancy to be for less than five years: (1) No tenancy of land shall be for a period of less than five years. All tenancies in force on the date of commencement of this Act shall be deemed to be tenancies for a further period of five years from the date of commencement of this Act.
(2) Notwithstanding any agreement usage or law to the contrary, no tenancy shall be terminated before the expiry of a period of five years except on the grounds mentioned in Section 15;
Provided that with the consent of the landlord any tenancy may be terminated by a tenant before the expiry of a period of five years by surrendering his interest as a tenant in favour of the landlord.
Provided further that such surrender is made by the tenant in writing and is admitted by him before, and is made in good faith to the satisfaction of. the Tahsildar and is registered in the office of the Tahsildar, in the prescribed manner; (The last proviso is omitted as unnecessary).
The section was amended by Mysore Act No. 16 of 1957 incorporating the abovesaid second proviso, providing for an express surrender by the tenant. Earlier to that, there was no such provision.
14. Let me now come to themerits of the second question. The mortgage in question was executed earlier tothe abovesaid amendment to Section 5of the Tenancy Act. A transaction hasto be interpreted according to the lawexisting on its date. The law as it then,stood was that a lease of an immoveableproperty could be determined underSection 111(f) of the Transfer of Property Act by implied surrender. Thelearned counsel for the plaintiff, therefore, urged that the tenancy of the defendant was incompatible with his statusand position as a possessory mortgageeand the mortgage came into effect onlyon the surrender or termination of theearlier tenancy.
The above submission is based on the principle of implied surrender provided by Section 111(f) of the Transfer of Property Act. It may be by the creation of a new relationship or by relinquishment of possession if there is no inhibition by any other statutory provision. To put it more precisely, it can be said as stated by Subramania Iyer, J. in Velu v. Lakshmi AIR 1953 Trav-Co 684:--
'Whenever a certain relationship exists between two parties in respect of a subject-matter and a new relationship arises as regards the identical subject-matter if the two sets of relationships cannot co-exist as being inconsistent and incompatible, that is to say, if the latter can come into effect only on termination of the earlier that would be deemed to have been terminated in order to enable the latter, to operate.'
This was also the view expressed by Ramaswamy, J. in Meenakshi Amma v. Kishakke Valath Narayani, : AIR1957Mad212 and both these decisions were followed by S. Vellu Pillay, J. in a later decision of the Kerala High Court in Godasankara Valya Raja v. Tharappan Vareed, : AIR1961Ker293 .
15. The basis of these decisions appears to be the principle enunciated in a very early case in England in Peter v. Kendall (1827) 6 B & C 703 at p. 710 = (108 ER 610 at p. 612) where Bayley, J. said:
'I think this case does not admit of any doubt. The first objection is, that the plaintiff was out of possession, and that this action ought to have been brought by Brown, who was entitled to possession as tenant under the demise. To that there is a very satisfactory answer. It appeared at the trial, that when Brown found that he could not keep the ferry Article 141 per annum, he said to the plaintiff. Will you allow me to be your servant? They settled afterwards upon that footing and Brown became the servant instead of the tenant of the plaintiff, and the latter received the profits of the ferry and paid Brown wages for his services as boatman. A new relation, which in regard to this property was wholly inconsistent with that of landlord and tenant, then took place with the consent of boh parties. That operated as a surrender by operation of law of the tenant's interest in the ferry.'
16. There is another view of the matter. Mr. B. V. Srinivasamurthy, learned counsel for the defendant placed strong reliance on the decision of the High Court of Allahabad in Kallu v. Diwan, (1902) ILR 24 All 487 where it was held that the fact of a tenant taking the mortgage of a land comprised in his hold-tog from his landlord does not by itself exextinguished the tenancy by merging the rights of the tenant with those of the mortgagee. The effect of such a mortgage on the tenant's rights would be merely that they would be in abeyance. When the landlord redeemed the mortgage, the parties would revert to their former position and the landlord would not be entitled to get possession of the land except by ejecting the tenant in due course of law.
This decision was not noticed by Subramania Iyer, J. in Velu's case. AIR 1953 Trav-Co 584. But Ramaswami, J. in Meenakshi Amma's case, : AIR1957Mad212 distinguished the case on facts and refused to follow the ratio therein.
The decision of the Rajasthan High Court in Dhulilal v. Pannalal, has however made a little departure to the rule laid down in Kallu's case. (1902) ILR 24 All 487. In Dhulilal's case. . I. N. Modi, J. said thus:--
'This rule seems to be subject to an exception and that is that where a tenant possesses rights of a more or less permanent character the loss or extinction thereof is not favoured in law, and in this type of case, it has been held that there will be a suspension of such tenancy rights and no surrender thereof and the tenancy right will, as it were be revivified when the other relationship does come to an end.'
17. Before reaching my own conclusions. I need refer. I think only to two other cases. The first is Kurimi Naidu v. Padmanabham, : AIR1964AP539 . Ananthanarayana Ayyar, J. while dealing with a similar question, has stated:--
'The question whether the tenancy continues after execution of a mortgage depends upon the question whether it can co-exist with usufructuary mortgage and it has to be decided with reference to the provisions of the documents particularly the usufructuary mortgage.'
This view was reiterated in a later decision of the same High Court in Varada Bongar Raju v. Kirthali Avathabam, : AIR1965AP86 . The learned Judges in the said case went further and said that:--
'Even assuming that the mortgage and the lease could not co-exist, the lease which was dormant would spring into active life 9n the mortgage being redeemed, since it is not shown that the lease was either expressly or impliedly extinguished.'
The above principle is. of course, based on the decision of the High Court of Allahabad in Kallu's case. (1902) ILR 24 All 487.
The subject-matter of the case in Varada Bonsar Raju's case, : AIR1965AP86 was a shop premises and not an agricultural lease but the ratio of the decision was applied to the case of an agricultural lease by Bhimiah, J. in an unreported decision of this Court in Dasegowda v. Chaluve Gowda, S. A. No. 233 of 1967 decided on 16-4-1971 (Andh Pra). I should not think it necessary to refer In detail to that case beyond saying that the learned Judge after a careful scrutiny of the recitals in the mortgage deed came to the conclusion that there was no express or implied surrender of the tenancy on the execution of the mortgage and the two together were capable of co-existing and in fact co-existed.
18. Upon these authorities. It seems to me that the following principles are fairly clear:--
(1) There cannot be a presumption that a lessee's right whether durable or otherwise is lost for ever, by implied surrender merely on Ms becoming a possessory mortgagee:
(2) The question whether there was an implied surrender of lessee's rights on the execution of a un futurity mortgage, must be decided with reference to the protection afforded to the tenant by legislation, if any.
(3) The question of co-existence of tenancy with usufructuary mortgage has to be decided by the terms of the deeds of mortgage and lease; and
(4) The tenancy rights of the possessory mortgagee would remain in abeyance during the period of mortgage and the parties would revert to their former positions after the redemption.
19. In my judgment, it is not necessary to scrutinise the present case to find out whether it falls into one or the other of the said four principles. I rest my conclusion on the last principle which is supported by the decision of the Allahabad High Court in Kallu's case. (1902) ILR 24 All 487 and I respectfully agree with that view. It is true that one person cannot be a tenant and also a mortgagee in possession in respect of a common property and therefore it would be proper to hold that the lessee's right, like the tenancy rights, must be held to have remained in abeyance for the larger right to come into effect. When the larger right, like the mortgagee's right is put an end to that person should be restored with his antecedent tenancy rights, in the absence of any contract to the contrary in the deed of mortgage. It is clear that no such contract adverse to the restoration of the tenancy rights of the defendant is found in the mortgage deed in question. If I am right, that is sufficient to dispose of this appeal; but in case I am wrong. I Pass on to consider one other question. 20. The tenancy of the defendant was in force on the date of the coming into force of the Mysore Tenancy Act, 1952 (Mysore Act No. XIII of 1952). To recall, the Act came into force on 1-1-1954. By the operation of law. the tenancy of the defendant was deemed to have continued for five years till 1-1-1959. It was in between that period, that is, on 16-12-1956 that the mortgage was executed. When the statute makes it obligatory for the continuance of the tenancy for a period of five years from the date of the commencement of the Act, there was no question of termination of the tenancy by implied surrender, on the execution of the mortgage in 1956. As already noted, provision for express surrender was incorporated in the Act only by the amending Act (16 of 1957) that is. during the subsistence of the mortgage. It is not the case of the parties that there was an express surrender after the mortgage. Therefore, there was an abeyance of the tenancy and it would spring into active life on the redemption of the mortgage.
21. The learned counsel for the appellant made an attempt to challenge the sale deed in favour of the plaintiff. But for want of pleadings and an issue on the point, I decline to go into that question.
22. In the result. I allow the appeal in part. The decree under appeal to the extent it directs the delivery of actual possession of the suit land to the plaintiff and that relating to the mesne profits, is set aside. In other respects, it is kept undisputed.
23. Under the circumstances, the appellant shall get his costs from respondent 1 in this appeal.