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Tara Chand Vs. Ganga Ram and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtDelhi High Court
Decided On
Case NumberInterim Application No. 2006 of 1973 and Execution Appeal No. 28 of 1969
Judge
Reported inAIR1978Delhi58; ILR1977Delhi600
ActsCode of Civil Procedure (CPC), 1908 - Order 21, Rule 95; Transfer of Property Act, 1882 - Sections 76
AppellantTara Chand
RespondentGanga Ram and ors.
Advocates: R.M. Lal,; Arun Mohan,; T.N. Sethi,;
Cases ReferredSee Jagan Nath v. Mittar Sain
Excerpt:
(i) civil procedure code - order 21, rule 95 & rule 96--delivery of possession under--jurisdiction of court to order--when arises.; that the jurisdiction of the court to order delivery under rule 95 exists only if the property is in the occupancy of ; (1) judgment-debtor, or ; (2) of some person on his behalf, or ; (3) of some person claiming under a title created subsequent to the attachment of the property.; but a person who is in possession of the property on his own account or on account of some person other then the judgment-debtor cannot be dispossessed. the reason is that he holds the property on his own account and not on account of the judgment-debtor. the person who is in possession of the property on his own account or on account of some person other then the.....avadh behari rohatgi, j.(1) this is a very old case in our courts. its history dates back to 1928. for the last 40 years the mortgagees were trying to realise the sum secured to them under a mortgage transaction. now the auction purchaser has appeared on the scene. he claims possession. at present the case is in its execution stage. but one does not know when it will end.(2) on february 6, 1928 ganga ram, defendant no. 1, mortgaged certain immovable property with possession in favor of the plaintiffs (1) ram chand (2) bengali mal (3) sham lal and (4) chote lal for a consideration of rs. 80,000. the mortgagor executed a deed of lease in favor of the mortgagees, the rent being fixed rs. 650 per month. on march 13, 1928 a further deed of mortgage for the sum of rs. 25,000 was executed by the.....
Judgment:

Avadh Behari Rohatgi, J.

(1) This is a very old case in our courts. Its history dates back to 1928. For the last 40 years the mortgagees were trying to realise the sum secured to them under a mortgage transaction. Now the auction purchaser has appeared on the scene. He claims possession. At present the case is in its execution stage. But one does not know when it will end.

(2) On February 6, 1928 Ganga Ram, defendant No. 1, mortgaged certain immovable property with possession in favor of the plaintiffs (1) Ram Chand (2) Bengali Mal (3) Sham Lal and (4) Chote Lal for a consideration of Rs. 80,000. The mortgagor executed a deed of lease in favor of the mortgagees, the rent being fixed Rs. 650 per month. On March 13, 1928 a further deed of mortgage for the sum of Rs. 25,000 was executed by the mortgagor in favor of the same mortgagees. There was a third deed of mortgage for Rs. 45,000 executed on July 19, 1928, the secured property being the same together with a house not included in the first two mortgagee. A deed of lease was also executed by the mortgagor in favor of the mortgagees with respect to this additional house, the rent being fixed at Rs. 32 p.m. In the mortgages were included terms as regards interest and interest in default.

(3) On December 23, 1930 the mortgagees sued Ganga Ram, their mortgagor on the mortgages. On February 27, 1931, a compromise was arranged between the mortgagees and the mortgagor. But it could not be acted upon as a subsequent mortgagee who was defendant No. 2 (Bala Pershad Alopi Pershad) to the suit did not agree. But on April 29, 1931, an ex-parte decree was granted to the mortgagees. At the instance of defendant No. 2 the ex-parte decree was set aside on June 27, 1932. Ultimately, the subordinate judge granted the mortgagees a preliminary decree for Rs. 2,55,839-4-0 with costs and future interest at 9 per cent p.a. to be realised by sale of the mortgaged property under O. 34 rule 4, Code of Civil Procedure.

(4) At the instance of another secured creditor Benaras Bank Ltd. an appeal was taken to the Lahore High Court. The decision of the High Court is reported in Air 1936 Lahore 482 (Benaras Bank v. Har Pershad) (1)

(5) In so far as it concerns us at this stage the outcome of the appeal was that the High Court affirmed the compromise of February 27. 1931 and made it a part of the decree. The later litigation stems from this compromise of February 27, 1931.

(6) The compromise was this. The mortgagor agreed with the mortgagees that they, the mortgagees, will take possession of the mortgaged property and realise rent from the tenants in occupation and appropriate the same towards interest. The mortgagees were to keep accounts. The mortgagor agreed to pay the decretal sum in 2' years time. It was further agreed that during the continuance of the mortgage the mortgagees will have the right to induct and dismiss tenants and to increase and decrease rent.

(7) In exercise of this power of management of the property right from March 1, 1931 when the property was handed over to the mortgagees till September 25, 1970 when the property was sold by public auction in execution the mortgagees introduced tenants and recovered rent. But their claim was not satisfied as the rental income was meagre in comparison with the mounting arrears of principal and interest. Several commissioners were appointed from time to time to take account of the rent realised by the mortgagees and to examine the extent to which their decree was satisfied. This was done as the subsequent mortgagees were waiting for the realisation of their secured debts. A final decree was passed on May 23, 1940.

(8) In 1952 the mortgagees applied for execution. The case went on. The property was sold on February 25, 1970. On August 22, 1972, the sale was confirmed by this court.

(9) On August 17, 1973 the ction purchaser who had purchased the property at court sale for Rs. 2,32,000 made an application under Order 21 rule 95, Code of Civil Procedure. It was averred that the tenants inducted by the mortgagees had no right to remain in occupation of the property since the mortgage had come to end by the sale of the property and the mortgage and the lease being co-terminus the leases in favor of the tenants of the mortgagees had also terminated. The auction purchaser prayed for actual physical possession of the portions in the occupancy of the mortgagees' tenants.

(10) Such tenants in the property are 16. They are respondents to the petition. They all oppose the application of the auction purchaser on a variety of grounds. But the main grounds on which the claim of the auction purchaser is contested are two. Firstly, it is said that in execution proceedings under rule 95 of Order 21 they cannot be dispossessed as they are not in possession on account of or on behalf of the judgment-debtor, the mortgagor Ganga Ram. All of them are, however, willing to attorn to the purchaser and agree that symbolical possession of the property may be given to him.

(11) Secondly, it is said that though it is true that they, the tenants, were inducted by the mortgagees under the power of management conferred on them by compromise dated February 27, 1931 they are not liable to be dispossessed because the mortgagees acted in exercise of the statutory power of prudent management under s. 76(a) and (e) of the Transfer of Property Act.

(12) On the pleadings of the parties the following issues were framed :

1. Whether the auction purchaser is entitled to actual physical ssession of the premises in occupation of the respondents (OPAP)

2.Whether the application under Order 21 Rules 95 and 96 (LA. No. 2066/73) is not maintainable OPR

3.Were the mortgagees (decree-holders) acting for and on behalf of judgment-debtors OPR

4.Whether the letting out of the property by the mortgagees (decree-holders) was an act of prudent and good management If so with what effect OPR

5.Can the respondents be not ejected in view of the provisions of the Delhi Rent Control Act OPR

6.Whether this court has no jurisdiction to entertain the execution application under Order 21 Rules 95 and 96 of the C.P.C. OPR

7.Relief.

(13) The two principal objections noticed above have been argued at length. Full evidence was recorded at the instance of the parties. Elaborate arguments were advanced by a battery of counsel engaged on behalf of the respondents.

(14) During the pendency of the case the Code of Civil Procedure (Act V of 1908) was amended. The amendments came into force on February 1, 1977. So far as this case is concerned rules 95 and 96 of Order 21 on which parties rely remain unamended. Other rules have been amended. The amendments made in rules 97 to 103 apply to this case by virtue of s. 97(3) of the Civil Procedure (Amendment) Act 1976 (Act 104 of 1976). Their effect can briefly be summarised here. Under the amended rule 97(2) read with rule 101 there has to be a complete enquiry in all questions relating to right, title and interest in the property arising between the parties. Section 47, Code of Civil Procedure has also been amended which says :

'EXPLANATION11.-(a) For the purposes of this section, a purchaser of property at a sale in execution of a decree shall be deemed to be a party to the suit in which the decree is passed; and (b) all questions relating to the delivery of possession of such property to such purchaser or his representative shall be deemed to be question relating to the execution, discharge or satisfaction of the decree within the meaning of this section.'

(15) The right of a separate suit which the old Code provided in rule 103 has now been abolished. The enquiry has thereforee to be fuller. All questions 'relevant to the adjudication of the application' have to be decided. The order made under the amended rule 98 or rule 100 can be appealed from in the same manner 'as if it were a decree'. (See the new rules 101 and 103 substituted by the Amendment Act 1976).

(16) The first question is : Can the auction purchaser obtain actual possession from the mortagees' tenants in execution proceedings under O. 21 rule 95. Code of Civil Procedure

(17) The auction purchaser has formulated his claim in paragraph 17 of his application in these words :

'THATthe applicants are entitled to take vacant possession of that part of the property in suit which is in occupation of the persons who have been inducted by the mortgagees after 1-3-1931. This part of the property has been shown as red in the plan Annexure 'B'. The tenancies, if any, created in favor of the present occupants by the mortgagees from time to time after 1-3-1931, came to an end with the auction sale, and arc not binding on the applicants. These tenancies do not give any right to the tenants to continue In possession when the property has been sold in the above execution case. All these persons arc liable to hand over vacant peaceful physical possession to the auction-purchaser-applicants.'

(18) The purchaser on the strength of his sale certificate is entitled to get an order from the Court for the delivery of the property to him by any person bound by the decree. The judgment-debtor and the persons claiming under him are bound by the decree. If the person in possession is holding the property on his own account and is not bound by the decree, the application must be dismissed (See Kiron Soshi Dasl v. Official Assignee of Calcutta Air 1933 Cal 246 and Sobha Ram v. Tursi Ram Air 1924 All 495. A tenant 'holds the property on his own account. He does not hold the property on behalf of the judgment-debtor. Even a trespasser cannot be evicted under rule 95. It has no application to him and accordingly proceedings to eject him must be, not in execution, but in a suit. (See Ek Nawaz Khan v. Competent Officer, : AIR1960All626 ). The words any person' in the concluding portion of the rule have reference to the person mentioned earlier in the rule, the judgment-debtor or any person on his behalf or claiming under him.

(19) Rule 96 deals with the delivery of property in the occupancy of the tenant. He is given a special status as he does not hold the property on behalf of judgment-debtor. Symbolical possession will be ordered by the court for delivery of possession.

(20) Rule 97 deals with the obstruction or resistance in obtaining possession. If the purchaser makes a complaint of obstruction, the court issues notice to the obstructor and enquires into his claim. It docs not summarily order his eviction by force.

(21) Rule 98 deals with two cases, namely, where the obstruction is occasioned without just cause (i) by the judgment-debtor or (ii) by some other person at his instigation. No order can be made under rule 98 if the obstruction is caused by a person other than the judgmentdebtor, unless the court is satisfied that the person is acting at the instigation of the judgment-debtor. [See Ek Nawaz Khan (supra)].

(22) Thus the jurisdiction of the court to order delivery under rule 95 exists only if the property is in the occupancy of

(1)judgment-debtor, or

(2)of some person on his behalf, or

(3)of some person claiming under a title created subsequent to the attachment of the property.

But a person who is in possession of the property on his own account or on account of some person other than the judgment-debtor cannot be dispossessed. The reason is that he holds the property on his own account and not on account of the judgment-debtor. Rule 99 of the unamended Code of 1908 was quite descriptive of such claimants. They were (1) persons claiming in good faith to be in possession of property on their own account and (2) persons claiming on account of some person other than the judgment-debtor. But the law remains the same inspire of verbal changes.

(23) This then is the scheme of the Code. The person who is in possession of the property on his own account or on account of some person other than the judgment-debtor is not covered by rule 95. Such a person cannot be dispossessed in execution. The reason is that he is not bound by the decree. He does not hold the property in a representative capacity.

(24) Rules 35 and 36 of Order 21 embody the same principle. These rules deal with the mode of executing decree for possession of immovable property. Rules 95 and 96 provide for the mode of delivery of possession to the auction purchaser of the property purchased by him in a court sale. Rule 95 corresponds to rule 35. Rule 96 corresponds to rule 36. The procedure for delivery of possession is the same in both sets of rules.

(25) The case of auction purchaser is provided in rules 95 to 103. But the principle in essence is the same. The object is to evict the judgment-debtor and persons claiming under him or acting at his instigation. They are all bound by the decree. No other person can be dispossessed. Actual possession cannot be ordered except in case of these persons. A person independently claiming right to possession of the property is outside the jurisdiction of the executing court under rule 95.

(26) Now to sum up : The Code prescribes two modes of delivery of possession. If the property is in possession of the judgment-debtor or some person on his behalf, the purchaser is entitled to actual or khas possession under rule 95. If it is in the possession of tenants or other person entitled to occupy the same, the purchaser is only entitled to symbolical possession under rule 96.

(27) In the case of tenant symbolical possession is to be given. Rule 96 is specific on this point. The present respondents' case falls under rule 96. The auction purchaser's application under rule 95 is misconceived. His remedy is a suit and not an application in execution. The respondents are 'tenants' or 'other persons entitled to occupy the same', to use the words of rule 96. The reason why symbolical possession is given is that if the tenanted property is sold a purchaser becomes the landlord under section 109 of the Transfer of Property Act and a landlord desiring to terminate the tenancy and eject the tenant must do so by a regular suit.

(28) It is said that the respondents are no longer tenants though they were such during the management of the property by the mortgagees. But with the termination of the mortgage their leases also came to an end. This is the argument. Assuming it to be so the remedy is a regular suit for possession against each of the respondents. The application under rule 95 is unmaintainable as they are neither (1) judgment-debtor (2) nor persons holding on his behalf.

(29) Rule 95 comprehends three classes of cases as I have said.' In the main the scheme of the Code postulates that judgment-debtor is to be dispossessed. If any other person holds on account of the judgment-debtor e.g. a member of his family, he is also to be dispossessed. A person whose title was created subsequent to the attachment of the property has no right to occupy for after attachment no title can be created as the property passes into custodia legis. But if there is a person in whose favor a title was created prior to attachment he is protected under rule 95. To him rule 96 applies. For example as against a tenant only symbolical possession can be ordered.

(30) What is the position of the present respondents Admittedly they are not judgment-debtors. They were not parties to the suit. Counsel for the auction purchaser contends that they are holding the property on behalf of the judgment-debtor. It is said that the mortgagees were authorised by the mortgagor to induct tenants. The mortgagees acting as the agent of the mortgagor brought in these tenants and thereforee they are the tenants of the mortgagor who is the judgment-debtor. this is a circuitous reasoning. I cannot accept it. The respondents are either mortgagee's tenants or the mortgagor's tenants. If they are mortgagee's tenants their cases are covered by rule 96. Assume as mortgagee's tenants their tenancies have terminated with the termination of the mortgage. At best they are trespassers. But even, a trespasser cannot be dispossessed under rule 95. as has been held by the division bench of the Allahabad High Court.

(31) Rule 95 determines the limits of jurisdiction of the executing court. If the case of the person in occupation of the property falls within one of the three categories mentioned therein the executing court will have jurisdiction to deliver vacant possession. This is a question of jurisdiction. The executing court as in this case may refuse to issue warrant of possession in the first instance. It may issue notice to the respondent to show cause why he be not dispossessed. Resistance need not necessarily be by force but may be made by assertion of will in writing (See : Bhagwat v. Kasturi, : AIR1974MP26 and Mahabir Pershad v. Delhi Traders, : AIR1977Delhi45 . On the first submission my conclusion is that the respondents-mortgagee's tenants-do not hold the property on account of the judgment-debtors, however, precarious their right may be. Sitting as I do on the execution side I cannot order their dispossession from the property. The application under rule 95 is incompetent.

(32) I however make it clear that all that I decide here is that in execution under rule 95 the auction-purchaser cannot be given actual possession. What is his proper remedy is not for me to decide. Nor do I decide whether under the recent amendment of the Code of Civil Procedure an appeal lies from my decision. On the effect of the amendmeat of law on this execution I express no opinion as I am primarily concerned with the unamended rules 95 and 96.

(33) This brings me to the second submission of the auction purchaser's counsel. It was argued that under the compromise dated February 27, 1931 the mortgagees were given possession of the property and with it the power to induct tenants. This power was to last during the continuance of the mortgage. It was said that so long as the mortgage subsisted the mortgagees had the power to induct tenants but when the mortgagees, interest terminated the leases in favor of the tenants inducted by the mortgagees also came to an end. The term in the compromise says :

'THEplaintiffs shall have a right to increase or decrease rent and locate or dislocate tenants.'

And

'WITHeffect from the 1st March 1931 the plaintiffs shall themselves realise rent from all the tenants, and shall keep a regular account thereof The rent received shall be credited towards the interest due. The deficit shall be included in the decretal amount. For payment- of the above amount the plaintiffs have allowed the defendant 21/2 years time. If within 2' years defendant No. 1 pays the above amount with future interest to the plaintiffs, the property mortgaged shall be released by the plaintiffs who shall deliver its possession to him or to whomsoever he orders.'

(34) The general rule no doubt is that no person can confer on another a better title than he himself has. The mortgagee's interest lasts as long as the mortgage has not been paid off. thereforee, on redemption of the mortgage the title of the mortgagee comes to an end. A derivative title from him must also ordinarily come to an end with the termination of the mortgagee's title. As was said by Hidayatullah Cj in All India Film Corporation v. Raja Gian Nath, : [1970]2SCR581 .

'THEmortgagee by creating a tenancy becomes the Lesser of the property but his interest as Lesser is co-terminous with his mortgagee interest.'

(35) This general proposition of law has authoritatively been laid down in the following six decisions of the Supreme Court :

1.Mahabir Gope and others v. Harbans Narain : [1952]1SCR775 .

2.Harihar Prasad v. Deonarain Prasad Air 1956 Sc 305.

3.Asa Ram y. Mst. Ram Kali : [1958]1SCR988 .

4.Prabhu v. Ramdeo : [1966]3SCR676 .

5.All India Film Corporation v. Raja Gyan Nath : [1970]2SCR581 .

6.M/s. Sachalmal Parasram v. Ratnabai : AIR1972SC637 .

(36) Take this very case. In exercise of the power of management the mortgagees inducted tenants and evicted them. As the decretal amount was not realised the property was put to sale. The auction purchaser paid Rs. 2,32.000 to the mortgagees. The interest of the mortgagor and mortgagee united in the person of the purchaser and the mortgage ceased! to subsist. The termination of the mortgagees' interest terminated the relationship of landlord and tenant.

(37) But there is an exception to the general principle which is enacted in s. 76(a) and (e) of the Transfer of Property Act. That section says that during the continuance of the mortgage when the mortgagee takes possession of the property-

(A)'he must manage the property as a person of ordinary prudence will manage it, if it were his own.'

And

(E)'He must not commit any act which is destructive or permanently njurious to the property.'

(38) thereforee, if the mortgagee creates a tenancy during the continuance of the mortgage in exercise of the power of management conferred upon him by s. 76(a) the tenancy would be binding upon the mortgagor even after redemption. There is a duty cast upon the mortgagee to manage the property, to use -the words of the statute, 'as a person of ordinary prudence will manage if it were his own.' The requirement of prudent management makes it binding upon the mortgagor.

(39) If consequently, it is claimed that any lease which was created by the mortgagee in possession is binding on the mortgagor after redemption there must be found either a statutory power in the mortgagee to make such a lease or an express power. An express power could obviously be given by the mortgage itself.

(40) The law on the point thereforee can be summarised thus. As a general rule a person cannot transfer or otherwise confer a better right than he himself has. A mortgagee cannot thereforee create an interest in the mortgaged property which will ensure beyond the termination of his interest as mortgagee. The rule consequently is that when the interest of a mortgagee comes to an end, the lease created by him also comes to an end. To this there is an exception. Leases created either in exercise of statutory or express powers are binding on the mortgagor after redemption if it is being done in the course of prudent management.

(41) Counsel for the auction purchaser relies on the general rule. Counsel for the mortgagees' tenants rely on the exception. Who is right This is the question to be decided.

(42) The auction purchaser's counsel says that though it is true that there is an exception to the general rule that exception applies only to agricultural land and not to urban immovable property. He heavily relies on the observations of Hidayatullah Cj in All India Film Corporation's case where he said :

'THISprinciple applies ordinarily to the management of agricultural lands and has seldom been extended to urban property so as to tie it up in the hands of lessees or to confer on them rights under special statutes.'

(page 82).

(43) Then he referred me to Jagan Nath v. Mitter Sain. and Purshottam v. Madhavji Meghaji, : AIR1976Guj161 . In both these decisions it has been held that the exception enacted in s. 76(a) applies only to cases of agricultural tenancies. The full bench of the Gujarat High Court has interpreted the above observations of Hidayatullah Cj in All India Film Corporation and has said :

'INour opinion thereforee the word 'seldom' used by Hidayatullah Cj in All India Film Corporation's case (supra) while dealing with the application of the exception carved out by Section 76(a) to urban immovable property has to be read as not being extended at all and it is merely a turn of the phrase to say that this exception has seldom been extended to urban immovable property.'

(44) Counsel relies on the words 'has seldom been extended to urban property' used by the Supreme Court to mean that this exception has never extended to urban property. He says that this argument of his has been accepted by the full benches of two High Courts.

(45) Counsel for the mortgagees' tenants, on the other hand, rely I on a full bench decision of the Allahabad High Court in Tajammul Hussain v. Mir Khan, : AIR1974All234 where a contrary view has been taken. There it was said :

'Aproperty situate in an urban area is as much immovable property as an agricultural land. We, thereforee, do not find any good reasons to hold that section 76(a) of the Transfer of Property Act does not apply to urban properties.'

(page 240). Which of the two views is to be preferred

(46) With great respect to the learned judges of the full bench of Gujarat High Court I think on a plain reading of the statute there is no distinction between agricultural land and urban immovable property. Section 76(a) applies to both. The Gujarat decision founds the distinction between two kinds of properties on the ground that in agricultural land the tenant during the continuance of the mortgage uses 'inputs' and improves the quality and the fertility of the soil and thereforee it would be hard on him if land is taken away from him on redemption. This in my opinion is not a sound distinction- Urban immovable property in many cases is as valuable to the tenant as the agricultural tenancy. In a city the tenant may set up a big factory employing thousands of persons after spending lakhs of rupees over it. Will not the exception contained in s. 76(a) apply to that factory It is common knowledge that immovable property in urban areas has become very valuable in these days of shortage of accommodation and high inflation. Possession of immovable property is more valuable than the property itself. thereforee, the distinction between urban immovable property and agricultural land has no rational basis. At least such a distinction has not the support of the statute. The learned editor of Mulla's Transfer of Property Act 1973 (6th edition) page 528 has also taken this view. He says :

'THISobservation (of Hidayatullah CJ) is strictly speaking obiter, as the court found that the lease in question was neither bona fide nor prudent in view of the long term and the low rent. It is respectfully submitted that there is no warrant for limiting section 76(a) to agricultural land.'

(47) But it has been argued that even the obiter dicta of the Supreme Court is binding on this court. Suppose it is binding. But the point is : Has the Supreme Court decided this question one way or the other In my opinion the Supreme Court has left the question Open. No decision, however august, is an authority for a proposition that was not before the court. Hidayatullah Cj uses the word 'seldom'. It means that in few cases or instances the exception enacted in rule 76(a) has been applied to urban property. But the word 'seldom' does not mean 'never' in plain English. It will not be correct to say that there is an invariable rule that the exception applies to only agricultural land.

(48) There is no specific prohibition to the extension of the principle flowing from s. 76(a) to urban property- It may be that only in few cases such a principle may have been extended to urban property. But that such a principle has been extended to urban property is clear from the cases, viz., Smt. Ram Piari v. Ram Adhin, : AIR1953All472 and Hardai v. Wahid Khan, : AIR1954All16 . In those cases, the property was an urban property and the tenancy created by the mortgagee was held to ensure after redemption of the mortgage (see Gour--Law of Transfer Vol. Iii p. 3028 (8th ed.).

(49) The statute does not tie the hands of the court. Why should the court bind itself when the legislature has left us free to apply the exception to proper cases of bona fide and prudent management, irrespective of the nature of the property. In fact the observation of Hidayatullah Cj is a statement on the state of the authorities on the point.

(50) All India Film Corporation case was followed in Sachalmal Parasram's case. But in both these cases it will be seen that the question of applicability of the exception to urban property was left undecided. All India Film Corporation case was of a property situated in Jullundur. It was found that the lease was long and the rent was low. The court thereforee refused to uphold the action of the mortgagee. It was said : 'The case is thus not covered by the exception because we cannot hold that such a long lease on such a small rent was an act of prudence, whether it was a bona fide act or not, and whether the exception can apply to urban property.' (page 5 86).

(51) Similarly in Sachalmal Parasram's case there was a finding. of the district judge that the lease was not an act of prudent management. thereforee, the court held that the mortgagee's action was. not bona fide. It did not express any opinion on the question of the applicability of the section to urban property, apart from quoting the observations of Hidayatullah CJ.

(52) It cannot, thereforee, be said that the Supreme Court has positively held that the exception does not apply to urban property. The statute, as I have said, does not support such a distinction. And the statute, Lord Delvin has said recently, is the master and not the servant of the judgment.

(53) We cannot introduce arbitrary conditions or limitation in the statute : that must be left to legislation. A statute seeks to control the future. To import such a distinction is to bind the future. As has been said,

'STATUTESare designed to operate over an indefinite period of time, so they should only be approached in that time- frame.'

(Dias on Jurisprudence 4th ed. page 221).

(54) The terms of the statute are wide. There is no good reason for making a distinction between urban property and agricultural land. In a proper case if the protection given by the exception is denied to a tenant of urban property it will frustrate the policy of s. 76(a). It will work serious injustice. He will then be denied the protection of the rent control legislation. If the exception is made equally applicable to urban property the Rent Acts at once come to the aid of the tenant of urban property after the termination of the mortgagee's interest. During the continuance of the mortgage the rent control legislation does not apply. But if the tenancy is binding on the mortgagor after redemption the Rent Acts apply. This has been authoritatively settled by the Supreme Court in Prabhu v. g Ramdeo, : [1966]3SCR676 .

(55) Times change and we change in them. If s. 76(a) can apply to a rural nation it ought to apply to an industrialised society equally. Those who are charged with the high duty of administering the law should be alert to observe whether in its principles and precedents it satisfies the ever changing needs of the people. If there is no precedent, let it be made. Let justice be done.

(56) In the case in hand there are sixteen such tenants. Some of them came long ago. For instance B. R. Jain, respondent No. 10, came in 1932. That was more than 45 years ago. To deny these respondents the protection of the Rent Control Acts which were enacted in Delhi subsequent to the compromise of 1931 is to deny them justice- Some of the respondents are tenants of shops. By years of hard labour they have built a goodwill and reputation. To take away from them the place of their business is to take away the means whereby they live. In such circumstances they may well say 'You take my house, when you do take the prop That doth sustain my house; you take my life. When you do take the means whereby I live.' (Merchant of Venice-4-1-371). (Per Rich J. in Minister of State for the Army v. Dalzel 68 C.L.R. 261 and quoted by Mahajan, J. in Dwarkadas Sriniwas v. Sholapur Spinning and Weaving Co., : [1954]1SCR674 .

(57) In this case management has gone on for full forty years. If ever there was a case to which the exception contained in s. 76(a) can with justice be applied it is this. thereforee, on this much debated question my preference is for the view taken in Allahabad full bench decision of Tajamull Hussain-

(58) The next question is : Was it a prudent act of management on the part of the mortgagees when they introduced these tenants in the property There is nothing to show that their act was improvident. In 1931 when they took over the possession of the property there were no rent control laws. The houses were in plenty. There was dearth of tenants. The rents were low. Whether an act is prudent or improvident has to be decided in the light of the world of the past. It is in evidence that the mortgagees increased the rent when the rent control legislation permitted an increase. Brij Kishore and his clerk Hem Chand said this in evidence. There was no cross-examination to show that the act was in any way improvident. Notices were given to the tenants and permitted increases in rent were made. Then it has to be remembered that mortgagees created monthly tenancies and 'not permanent tenancies or tenancies for long periods. It cannot thereforee be said that they committed an act of waste or destruction to the property. The auction purchaser has not alleged in his petition nor has he stated in his evidence that the mortgagees did not manage the property as persons of ordinary prudence would have managed it, if it were their own. In truth that was never his case nor has he fought the issue on that ground. He has placed his case only on the general rule that with the termination of the mortgage the leases granted by the mortgagees came to an end. On this ground I think the auction purchaser is not entitled to succeed.

(59) Counsel for the auction purchaser argued that when the compromise was entered into between the mortgagor and the mortgagees the Transfer of Property Act did not apply to Delhi. As s. 76 was made applicable to Delhi on December 1, 1962 he said that the exception did not apply to this transaction. It is true that the section in terms did not apply but the principles underlying the section have always been applied as principles of equity, justice and good conscience. The principles underlying the section have been applied to cases arising in the Punjab where the Transfer of Property Act did not apply: See Ghulam Mohammad v. Rajeshwar, Air 1940 Lah 333 . Section 76 does not lay down any new principles; the rules laid down by the section were recognised even before the passing of the Transfer of Property Act and the provisions of the 617 section, are a mere codification of the law in existence before the passing of the Act. The principles of the clauses have been applied to cases arising out of mortgages executed prior to the Act. (See cases cited in Chitley on Transfer of Property Act Volume 2 page 1404 (4th edition).

(60) I would go further. The compromise confers express power to create leases. It shows that for all practical purposes the mortgagor consented that the leases would be binding on him after redemption. The mortgagor knew that if he did; not pay the decretal amount within 21 years time the arrangement would continue. And in fact it proved to be a long term arrangement. The mortgagor concurred in it. It was a compromise within a compromise. As the Supreme Court has said :

'TOthis again there is an exception. The lease will continue lo bind the mortgagor or persons deriving interest from him if the mortgagor had concurred to grant it.'

(All India Film Corporation case, supra).

(61) Cases of some of these respondents are ditinguishable from others. They are not liable to be dispossessed on other grounds also. I take up these special cases now.

(62) They have already surrendered the possession to the auction purchaser. No relief is claimed against them.

(63) They are the tenants of the mortgagor. The auction purchaser claims only symbolical possession from them. I, thereforee, order that symbolical possession be given to the auction purchaser in the manner prescribed in rule 96 of Order Xxi, Code of Civil Procedure.

(64) They are tenants of the mortgagor. The auction purchaser claims only symbolical possession from them. I order that symbolical possession be given to the auction purchaser in the manner prescribed in Order 21 rule 96, Code of Civil Procedure.

(65) Sheo Pershad Shambu Ram is a firm. It is in evidence of Dr. Yudhvir Singh that he saw the board of this firm as long ago as 1929. Since then this firm has continued in the same name. When the mortgagees took possession on March 1, 1931 they asked the firm 618 to execute a rent note in their favor which the firm did. The rent note dated March 2, 1931 is on the file. It is executed by one Ram Richpal on behalf of the firm in favor of the mortgagees.

(66) That this firm was started in 1928 is amply proved in evidence. The clerk from the electricity department, Nagar Mal and Tek Chand have deposed to this effect. From 1928 till today the name of the firm continues to be the same. Rent has been increased from time to time.

(67) Counsel for the auction purchaser has raised two points. Firstly, he says that the tenancy of this respondent shall be deemed to have begun from March 2, 1931 and not from 1928 as they executed a rent note and thereby surrendered their tenancy of 1928. I cannot accept this submission. The firm took the premises on rent from Ganga Ram, owner of the property. The execution of a fresh rent note by a tenant in favor of the mortgagee when he was already in possession of the premises as tenant under the mortgagor does not amount to creation of fresh tenancy by the mortgagee and the tenant cannot be said to have been inducted by the mortgagee and such a tenant cannot be dispossessed when the property is got redeemed by the mortgagor. The tenant holds the property as a tenant of the mortgagor and enjoys the protection given by the Rent Acts.

(68) No inference of surrender can be drawn if the tenant in recognition of the transfer of interest in the demised property by the mortgagor .in favor of the mortgagee executes a fresh rent note in favor of the latter. By executing a fresh rent note in favor of the mortgagee the tenant does not get a new interst in the property surrendering his rights existing hitherto when he was holding as a tenant under the mortgagor. All that is intended is that he attorney to the mortgagee and execution of a fresh note in such circumstances in the absence of any conditions showing an indication to the contrary is only an attornment in favor of the mortgagee.

(69) So far as the facts of this respondent are concerned the tenant was a tenant of the mortgagor. After the mortgage he continued to be the tenant of the mortgagees. There was no surrender by him of the tenancy they held under the mortgagor. All that happened was that they executed a fresh rent note on March 2, 1931. There is no evidence to show that they ever gave up their tenancy under the mortgagor and took up a new tenancy under the mortgagee. In such a circumstance it is not possible to hold that there was a surrender by the tenant of his tenancy under the mortgagor. In order to hold that the tenant 619 has surrendered his tenancy it must be shown that the earlier tenancy was put to an end and a new tenancy was created. The mere fact that the same tenant has continued as a tenant of the property and has only executed the fresh note in favor of the mortgagee will not automatically amount to a surrender : See Jagan Nath v. Mittar Sain, .

(70) Secondly, counsel argued that Ram Richpal was originally the person who took the premises on rent in 1928 and now others have come in his place, he having quitted the premises. Tek Chand who with his son, son-in-law and another is now carrying on the business was a minor at that time and thereforee this respondent is also liable to be dispossessed. I cannot accept this submission. Assuming there is a transfer or assignment in favor of others, the remedy of the auction purchaser is to bring a suit for ejectment before the rent controller and not to agitate these questions in this court. Nor is there any pleading before me regarding the transfer or assignment. The simple case pleaded is that Sheo Pershad Shambu Ram is a tenant of the mortgagees and thereforee should be evicted. This case is not proved. It is proved, on the other hand, that Sheo Ram Shambu Pershad was a tenant of the mortgagor in 1928 and thereforee their tenancy continues on the redemption of the mortgage.

(71) Shiv Narain has not appeared in these proceedings. He is not in possession of any part of the premises.

(72) Radhey Shyam sits on the chabutra which is admittedly in the tenancy of Godrej Boyce and Company respondent No. 7. Radhey Shyam has made a statement in court. He said that he lias taken the chabutra from Godrej Boyce and pays rent to them. He being a subtenant of Godrej cannot be evicted in these proceedings as he is not a tenant of the mortgagees. The remedy lies elsewhere.

(73) Radhey Shyam Kapur, it appears, took the chotta house (small house) from Ishwari Pershad: Luxmi Narain on October 22, 1934. This is clear from the list dated January 14, 1937 (See Public Witness 27/135). Ishwari Pershad Luxmi Narain were inducted by the mortgagees. thereforee, Radhey Shyam Kapur sails in the same boat as do other respondents who were inducted by the mortgagees. He gets no higher rights than his immediate landlords. He swims or sinks with them.

(74) Dr. Yudhvir Singh has in his occupancy a portion of this house under the order of requisition passed by the Delhi Administration. He is not the tenant of the mortgagees. Nothing was argued against Dr. Yudhvir Singh by the counsel. He cannot thereforee be dispossessed.

(75) I would thereforee return the following answers to the issues :

ISSUENo. 1 -- No. The auction purchaser is only entitled to symbolical possession.

ISSUENo. 2 -- Not maintailnable.

ISSUENo. 3 -- No.

ISSUENo. 4 -- Yes. The effect is that the respondents became the tenants of the tenants of the auction purchaser.

ISSUENo. 5 -- Yes.

ISSUENo. 6 -- Executing court has no jurisdiction under rule 95.

ISSUENo. 7 -- I order that symbolical possession be given to the auction purchaser as prescribed in rule 96 of Order 21, Code of Civil procedure. The parties aare however left to bear their own costs.


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