(1) This is a defendant's appeal from the appellate decree of the learned District Judge, Ferozepore, granting a preliminary decree for redemption to the plaintiff in respect of suit property which consists of a shop on payment of Rs. 3500/- on or before the 28th of February, 1961.
(2) A shop situated in Fazilka was mortgaged with possession by Uttam Chand with the appellant Sardari Lal on 24th of August, 1955. As a decision of this case turns very largely on the terms of the mortgage deed, Exhibit D. 1, of the 24th of August, 1955, its essential terms may be reproduced. It appears that some years prior to the execution of this deed, Sardari Lal had been a tenant of this shop under Uttam Chand. The term of the mortgage was one year and the sum of Rs. 3500/- was paid before the Registrar. The possession of Sardari Lal as a tenant was to be converted into possession as a mortgagee and be was entitled thereafter either to live there himself or to have some other tenant. Uttam Chand was not entitled to receive any rent nor was any interest to be received by Sardari Lal as a mortgagee. The rent and interest were to equalise each other. After the expiry of the year, the mortgagor Uttam Chand could get the shop redeemed any time he liked. If Uttam Chand, however, failed to redeem the shop the mortgagee could recover the mortgage amount by sale of property and also by a personal decree against the mortgagor.
(3) Uttam Chand died on 30th of December, 1959, and his legal representatives, who are parties to this litigation, thereafter sold the equity of redemption to Ram Lal respondent subject to the mortgagee rights of Sardari Lal. Ram Lal did not take long to file a suit for recovery of the shop whose equity of redemption he had purchased. This suit was brought on 9th of February, 1960 for redemption of the shop on payment of Rs. 3500/-. Though the suit was resisted on other grounds by Sardari Lal, the principal line of defence was that being a tenant he could not be ousted from the shop in a suit for redemption. The trial Judge, while decreeing the suit of the plaintiff for redemption on payment of Rs. 3500/-, directed that he shall be entitled only to symbolical possession of the shop. Ram Lal went up in appeal before the District Judge who granted a preliminary decree for redemption on payment of Rs. 3500/- and actual possession was to be delivered to the plaintiff. The condition with regard to the symbolical possession did not find a place in the decree of the District Judge, Ferozepore.
(4) In the appeal preferred by Sardari Lal, it has been contended by his learned counsel, Ch. Rup Chand, that the mortgage did not have the effect of destroying his tenancy rights which only remained dormant for the duration of the mortgage and could be re-asserted on redemption. Reference has been made to clause (d) of Section 111 of the Transfer of Property Act, by which a lease of immovable property is determined when.
'the interests of the lessee and the lessor in the whole of the property become vested at the same time in one person in the same right.'
It is conceded that if the property had been sole the rights of tenancy would have come to an end under the doctrine of merger by which the lesser estate is merged in the greater. It is, however, argued by Mr. Rup Chand that the mortgage with possession under Exhibit D. 1 was in effect another form of enjoyment of the estate and did not lead to any submergence of the tenancy rights of the appellant. Reliance has been placed on a Division Bench authority in Kallu v. Diwan, ILR 24 All 487 in which it was held by Blair and Aliman, JJ. that when a tenant takes a mortgage of land comprised in his holding from his landlord this does not by itself extinguish the tenancy by merging the rights of the tenant in those of the mortgagee.
It was held in that case that the effect of such a mortgage on the tenant's rights would be merely that they would be in abeyance and the landlord would not be entitled to get possession of the land except by ejecting the tenant in due course of law. In that case the holder of an occupancy tenancy had lent money to his landlord and was given mortgagee rights in respect of the same holding. The Judge of the Allahabad High Court were swayed by the consideration that
'if the defendants were not occupancy tenants when they entered into the mortgage they were at all events agricultural tenants, who had certain rights including the rights to retain possession of their holding until ousted in due course of law.'
For this reason they held that
'the effect of the mortgage was not to destroy the tenancy, but only to suspend the obligation of the tenant to pay rent to the landlord while the mortgage subsisted.'
The consideration by which the Judges of the Allahabad High Court in ILR 24 All 487 were guided does not, in my opinion, apply in the present instance where the suit property consists of a shop and not agricultural land. Under the East Punjab Urban Rent Restriction Act, 1949, 'landlord' means any person who for the time being is entitled to receive rent while the 'tenant' is one on whose account rent is payable. By the terms of the mortgage deed, Exhibit D. 1., no rent was payable for the duration of the mortgage and it would be a misnomer to call the appellant a tenant of the premises. We have to look at the terms of Exhibit D. 1 which make it clear that the possession of the appellant from the date of its execution was to be that of a mortgagee. It was mentioned in Exhibit D. 1 that before its execution the appellant was a tenant. Neither any rent was payable from that date by the appellant nor was Uttam Chand liable for any interest. It seems to me that the estate of the appellant as a tenant came to be merged into a mortgage and the leased came to an end. In the context of this case, it would be inapposite to grant to the appellant the same security and protection which are accorded under the Tenancy Legislation to agricultural tenants.
(5) The terms 'redemption' and 'equity' of 'redemption' are indicative of the fact that the estate which has been forfeited will be reconveyed. Redemption without possession would be meaningless. Redemption, in other words, is a buying back by the mortgagor of the legal estate after it has passed of the mortgagee. The plaintiff has asked for redemption on payment of the entire mortgage debt and it would be no relief to grant him only a symbolical right to get back the land which he is entitled to redeem. The decree of the trial Judge, in my opinion, is obviously erroneous and has been rightly modified by the learned District Judge in appeal. This view finds support in Corpus Juris Secundum, Volume 76, p. 177 where is something to be redeemed, something lost to be gotten back and indicate a change of in interest in the thing to be redeemed. Reference is also made to the definition of redemption as 'the right of redeeming and re-entering into possession.'
(6) There is another way of looking at the matter. The appellant having entered into a new relationship of a mortgagee with Uttam Chand in pursuance of Exhibit D. 1 impliedly renounced his rights as a tenant. That amounts to a surrender resulting in determination of the lease deed.
(7) In the view I have taken, it is not necessary to decide the preliminary objection which has been raised by Mr. Sarin, the learned counsel for the respondent, that the memorandum of appeal is insufficiently stamped. The suit of the plaintiff-respondent was brought as one for redemption on which court-fee is payable under clause (ix) of section 7 of the Court-Fee Act. The amount of court-fee which was paid by the plaintiff was Rs. 247.60 nP. The same amount was paid by the plaintiff in the appeal preferred to the District Judge. In the appeal instituted by the defendant to this Court a court-fee of Rs. 40/- has been paid. It is not clear how this court-fee has been computed. Mr. Rup Chand says that on an objection raised by the office he said that the court-fee had been paid on the annual rent of the suit premises.
Mr. Rup Chand contends that he is not challenging the right of the plaintiff to redeem the property and, therefore, he is not liable to pay a court-fee which is required under clause (ix) of section 7 of the Court-fees Act. He has only questioned the liability of the appellant to be dispossessed in the disguise of a redemption suit. In my view the right of the plaintiff to possession of the suit shop by way of redemption is in reality under challenge and the court-fee payable is that which is proved for by Section 7(ix) of the Act. An appeal is only a continuation of a suit and the court-fee affixed by the counsel for the appellant is manifestly insufficient being short of that which is required under clause (ix) of Section 7. Moreover, even according to the computation of the appellant's counsel the court-fee of Rs. 40/- is not payable on the memorandum of appeal. It should be much less.
(8) In my opinion, this appeal must fail and is accordingly dismissed with costs. The shop should be vacated by the appellant within three months.
(9) Appeal dismissed.