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C.K. Kuttappan and anr. Vs. Karthiyayani and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtKerala High Court
Decided On
Case NumberC.R.P. No. 2535 of 1978 C
Judge
Reported inAIR1981Ker107
ActsKerala Agriculturists Debt Relief Act, 1970 - Sections 11 and 11(6); Transfer of Property Act, 1882 - Sections 76 and 111; Kerala Buildings (Lease and Rent Control) Act, 1959 - Sections 2(3) and 11
AppellantC.K. Kuttappan and anr.
RespondentKarthiyayani and ors.
Appellant Advocate T.R. Raman Pillai,; T.R. Ramachandran Nair,; C.C. Thomas
Respondent Advocate S. Subramanian Iyer, Adv.
DispositionPetition dismissed
Cases ReferredReddiar v. Abdul Ghani
Excerpt:
property - debt relief - section 11 and 11 (6) of kerala agriculturists debt relief act, 1970, sections 76 and 111 of transfer of property act, 1882 and sections 2 (3) and 11 of kerala buildings (lease and rent control) act, 1959 - tenancy arrangements entered by mortgagee - whether said lessee's can claim fixity of tenure - mortgagee not an agent of mortgagor - tenancy arrangements entered by mortgagee liable to be terminated on recovery of possession by mortgagor - mortgagor liable to pay said lessee in lieu of land improvements made by them - held, claim of tenants that they are not liable to be evicted not maintainable. - - some of the tenants in addition, also raised a contention that they are kudikidappukars and cannot be evicted since the tenancy binds the mortgagors as well......ordert. chandrasekhara menon, j.1. the petitioners are counter petitioners 2 and 5 in a debt relief petition before the sub-court of kottayam, numbered as d. r. p. o. p. no. 89 of 1971. respondents 1 to 10 herein are thepetitioners in that o. p. the 11th respondent is the first counter petitioner there. the debt relief petition was filed by respondents 1 to 10 under section 11 of act 11 of 1970 for redemption of ext. a1 mortgage claiming that they are agriculturists entitled to redeem the mortgage on deposit of 1/3rd of the mortgage amount. the 11th respondent is the mortgagee. counter petitioners 2 to 4 in the case were impleaded as persons residing in the buildings in the property. the additional counter petitioners 5 to 7 in the o. p. is the wife and children of the 4th counter.....
Judgment:
ORDER

T. Chandrasekhara Menon, J.

1. The petitioners are counter petitioners 2 and 5 in a debt relief petition before the Sub-Court of Kottayam, numbered as D. R. P. O. P. No. 89 of 1971. Respondents 1 to 10 herein are thepetitioners in that O. P. The 11th respondent is the first counter petitioner there. The debt relief petition was filed by respondents 1 to 10 under Section 11 of Act 11 of 1970 for redemption of Ext. A1 mortgage claiming that they are agriculturists entitled to redeem the mortgage on deposit of 1/3rd of the mortgage amount. The 11th respondent is the mortgagee. Counter petitioners 2 to 4 in the case were impleaded as persons residing in the buildings in the property. The additional counter petitioners 5 to 7 in the O. P. is the wife and children of the 4th counter petitioner. The first counter petitioner in the O. P., namely the 11th respondent herein had contended that the applicants before the lower court are not agriculturists as defined in Act 11 of 1970 and he had rented out the buildings in the property in the ordinary and usual course of management as a prudent and reasonable man would do and therefore, the tenancy arrangement would bind respondents 1 to 10 mortgagors. The revision petitioners as tenants in occupation of the buildings let out to them also contended that the petition is not maintainable. They also contended that they cannot be evicted in these proceedings since they are protected under Section 76(a) of the Transfer of Property Act. The second counter petitioner, namely the first revision petitioner contended that he can be evicted only under the Kerala Buildings (Lease and Rent Control) Act since the tenancy binds the petitioners. Some of the tenants in addition, also raised a contention that they are kudikidappukars and cannot be evicted since the tenancy binds the mortgagors as well.

2. The trial court based on Exts. A2 and A3 found that the petitioners have got interest in other agricultural land and therefore they are entitled to benefits under Section 11 of Act 11 of 1970. It was found that the mortgaged property cannot be termed as an agricultural land. The trial court also found that the tenancy arrangements with counter petitioners 2 onwards will bind the mortgagors and hence they are competent only to get symbolical possession of the schedule property on deposit of arrears of interest for the mortgage amount at the rate of Rs. 20/- per mensem and also Rs. 1142.79 as value of improvements. The mortgagors were to treat as per that decision, counter petitioners 2 onwards, namely petitioners herein as tenants under them. The mort-gagors were also allowed to discharge the remaining portion of the mortgage amount as provided in Section 11 (4) of the Act.

3. Respondents 1 to 10 herein, the mortgagors filed A. S. No. 143 of 1977 against the decision in the O, P. That Court, namely the appellate Court found that even though some of the applicants alone were agriculturists, the petition is maintainable under Section 11 of Act 11 of 1970. It was also found by the appellate Court that Section 76(a) of the Transfer of property Act does not protect the rights of the counter petitioners 2 onwards, holding that the tenancy arrangements entered into by the mortgagee do not bind the mortgagors. The appellate court allowed the mortgagors to redeem the property. The lower appellate court dismissed the cross appeal filed by the revision petitioners. It is that decision that is now questioned here.

4. It is contended before me by Mr. Raman Filial, learned counsel for the petitioners, that the lower court should have sustained the objections regarding the maintainability of the petition since all the petitioners in the D. R. P. O. P. are not agriculturists as defined in Act 11 of 1970. According to him, the lower court should not have relied on Exts. A2 and A3 in finding that respondents 1 to 4 herein are agriculturists. He would point out that even though some of the petitioners are agriculturists, the petition under Section 11 of Act 11 of 1970 will not be maintainable, unless all the applicants are agriculturists. Section 11 of Act 11 of 1970, according to him, provides a special right to agriculturists and therefore, only if all the applicants-mortgagors are agriculturists they could take the benefit of that Act. According to the learned counsel, though one or more of the co-mortgagors would be entitled to institute a suit for redemption of the mortgage without the junction of the other co-mortgagors, Act 11 of 1970 being a special enactment, all the mortgagors should be agriculturists, if they are to claim benefit of Act 11 of 1970.

5. Before dealing with the other contentions raised, I would first deal with this question raised. There cannot be a serious dispute as to the fact that some of the applicants in the debt relief petition are agriculturists. A finding of fact on this matter cannot be interfered with by this court in revision. Then the pro-blem posed is, if some of the applicants are agriculturists, will a joint application by them along with the other persons who are not agriculturists, He? It is well settled law that one or some of the co-mortgagors can institute a suit for redemption. If that could be done, I see no reason why they cannot file with the rest of the co-mortgagors a petition under Section 11. An agriculturist co-mortgagor cannot be denied relief which he is entitled to under the Kerala Agriculturists Debt Relief Act, 1970, merely because some of the other co-mortgagors are not agriculturists.

6. The next question raised in the re' vision petition and argued in great detail before me by both the counsel, who, between themselves have placed all the relevant case law on the matter, is a more difficult issue for decision. According to Mr. Raman Pillai, learned counsel for the petitioners, the lower appellate court has not properly appreciated the legal implication of Section 76(a) of the T. P. Act. He would point out that the court below should have found that the lease arrangements with the revision petitioners made by the mortgagee, was made bona fide and during the course of prudent management and that hence the mortgagors are bound by the lease arrangements. On the other hand, Mr. Subramania Iyer, learned counsel for the respondents, tried to sustain the decision of the court below on the basis of the authorities cited before me. I would go into these decisions in some detail.

7. The Punjab High Court had considered the question whether on the redemption of a mortgage, a tenant of the mortgagee can be evicted without recourse to the provisions of the East Punjab Urban Rent Restriction Act. 1949, which was in force in respect of the area where the property with the building therein, which had been let out to the tenant was situated. The definition of the term 'tenant' in the said Rent Restriction Act was as follows:--

'Tenant means any person by whom or on whose account rent is payable for a building or rented land and includes a tenant continuing in possession after the termination of the tenancy in his favour, but does not include a person placed in occupation of a building or rented and by its tenant, unless with the consent in writing of landlord.....'

Clause (1) of Section 13 of the aboveAct provides :

'A tenant in possession of a building or rented land shall not be evicted therefrom in execution of a decree passed before or after the commencement of this Act, or otherwise and whether before or after the termination of the tenancy, except in accordance with the provisions of this section'.

Clause (2) further provides that a landlord who seeks to evict his tenant must apply to the Controller appointed under the Act. The said provision also sets out the circumstances under which the Controller may give a direction for possession. Landlord is defined in the above Act as 'any person for the time being entitled to receive rent in respect of any building or rented land whether on his own account on on behalf, or for the benefit, of any other person, or as a trustee, guardian, receiver, executor or administrator for any other person, and includes a tenant who sublets any building or rented land in the manner as authorised in the Act, and every person from time to time deriving title under a landlord.' The Punjab High Court said in that case (Som Nath v. L. D. Desai (AIR 1951 Punj 404)) that an owner of property does not become a person entitled to receive rent of the property until there is brought into existence a contract of lease between himself and another person. The mortgagors who were the plaintiffs in the suit had not entered into any such contract, nor was there any such contract which was binding upon them. Plaintiffs, therefore, were not landlords within the meaning of the definition, though it is true that the words of clause (1) of Section 13 appear wide and to protect any person who has incurred a liability to pay rent. According to the learned Judges, some limitation must be placed upon the scope of this clause. The Act is not designed to protect trespassers from eviction. Nor would a trespasser become entitled to protection because he has created by contract with a third person, not having rights in the property, a formal relationship of tenant to landlord. Such a contract as between the third person and the trespasser may be enforceable but could be no shield against action by the owner of the property. To hold otherwise, would involve that the owner as against a trespasser might find himself in a worse position than as against a tenant, for the limited right of a landlord under clause (2) of Section 13 is available against his ten-ant. And the Court was of opinion that the protection of the Rent Restriction Act is available only to a tenant against a landlord and the plaintiffs in the suit were not landlords. The Punjab High Court there referred to an English case reported in Bryan v. Cassin, (1942) 2 All ER 262. The question in that case was whether a tenant under lease created by a mortgagor, there being a covenant in the mortgage deed expressly excluding the mortgagor's power of leasing, could claim the benefit of the Rent Restriction Act of 1920, against the mortgagee, entitled to possession by reason of default of payments due under the mortgage. In the English Act the definition of landlord is much wider than that under the East Punjab Act, for the English Act provides :

'The expression 'landlord' also includes in relation to any dwelling house any person other than the tenant, who is or would but for this Act be entitled to possession of the dwelling house.....'

The English Court of Appeal nevertheless held that the tenancy, lawful though it was and binding as between the mortgagor and his tenant could not avail the tenant against the mortgagees who were asserting paramount title and the mortgagees were entitled to possession of the property.

8. The general principles governing tenancies created by a mortgagee in possession vis-a-vis the right of the mortgagor to get possession of the property on redemption were enunciated by the Supreme Court in Mahabir Gope v. Harbans Narain (AIR 1952 SC 205). Chandrasekhara Iyer, J. speaking for the Court said there :--

'(6) The general rule is that a person cannot by transfer or otherwise confer a better title on another than he himself has, A mortgagee cannot, therefore, create an interest in the mortgaged property which will enure beyond the termination of his interest as mortgagee. Further, the mortgagee who takes possession of the mortgaged property, must manage it as a person of ordinary prudence would manage it if it were his own; and he must not commit any act which is destructive or permanently injurious to the property; See Section 76, Sub-clauses (a) and (e) of the T. P. Act. It follows that he may grant leases not extending beyond the period of the mortgage; any leases granted by him must come to an end at redemptionA mortgagee cannot during the subsistence of the mortgage act in a manner detrimental to the mortgagor's interests such as by giving a lease which may enable the tenant to acquire permanent or occupancy rights in the land thereby defeating the mortgagor's right to 'khas' possession; it would be an act which would fall within the provisions of Section 76, Sub-clause (e) of the T. P. Act.

(7) A permissible settlement by a mortgagee in possession with a tenant in the course of prudent management and the springing up of rights in the tenant conferred or created by statute based on the nature of the land and possession for the requisite period is a different matter altogether. It is an exception to the general rule. The tenant cannot be ejected by the mortgagor even after the redemption of the mortgage. He may become an occupancy 'raiyat' in some, cases and a non-occupancy 'raiyat' in other cases. But the settlement of the tenant by the mortgagee must have, been a 'bona fide' one. This exception will not apply in a case where the terms of the mortgage prohibit the mortgagee from making any settlement of tenants on the land either expressly or by necessary implication.'

Venkatarama Aiyer, J., reiterated the same in the following words in Asa Ram v. Mst. Ram Kali (AIR 1958 SC 183) (speaking for another Supreme Court Bench of 3 judges):--

'The law undoubtedly is that no person can transfer property so as to confer on the transferee a title better thanwhat he possesses. Therefore, any transfer of the property mortgaged by themortgagee must cease, when themortgage is redeemed. Now, Section 76(a)provides that a mortgagee in possession'must manage the property as a person ofordinary prudence would manage it if itwere his own.' Though on the language ofthe statute, this is an obligation cast on themortgagee, the authorities have held thatan agricultural lease created by himwould be binding on the mortgagor eventhough the mortgage has been redeemed,provided it is of such a character thata prudent owner of property would enterinto it in the usual course of management. This being in the nature of an exception, it is for the person who claimsthe benefit thereof, to strictly establishit'

9. I may here refer to a decision of a Division Bench of the Allahabad High Court dealing with the case of lease of ashop room by a mortgagee in possession where the learned Judges have made pointed reference to the dictum in A. I. R. 1952 S. C. 205. Malik C. J., speaking for the Bench said there -- Hardei v. Wahid Khan, (A. I. R. 1954 All. 16) -- after quoting Section 76(a) of the T. P. Act.

'If the property mortgaged is a shop which is let out to tenants, the mortgagee is not bound either to keep the shop vacant or to occupy it himself. He is authorised under the provisions quoted above to let it out to a tenant and in the case of a house or a shop a month t'o month tenancy, in the absence of a contract to the contrary, would be the usual tenure under Section 106, T. P. Act. If the mortgagee lets out the premises on a month to month tenancy it cannot be said therefore that he was doing anything beyond the powers conferred on him by Section 76(a) quoted above.

(7) Reliance is placed on Section 111(c) T. P. Act, which provides that

'A lease of immoveable property determines -- (c) where the interest of the lessor in the property terminates on, or his power to dispose of the same extends only to, the happenings of any event -- by the happening of such event; and it is urged that as the mortgagee's right to grant the lease extended only up to the period when the mortgage was in existence the tenant became a trespasser on the date the mortgage was redeemed.

(8) No doubt, on, the redemption of the mortgage, the mortgagor is not bound by the transfers made by the mortgagee or by contracts entered into by him unless his action can be supported on the ground that it was authorised by law or that he was empowered to act under some power or authority, express or implied, con-ferred upon him by the mortgagor. The mortgagor in such a case may be entitled to claim back possession of the property free from any liability created by the mortgagee after the redemption of the mortgage, but this does not mean that, if in the exercise of his powers of due management as a person of ordinary prudence he has entered into an agreement of tenancy, on the mere redemption of the mortgage without the mortgagor exercising his option of putting an end to the tenancy the tenancy automatically and 'ipso facto' lapses on the date of the redemption.

(9) Learned counsel have cited some cases relating to agricultural land and have urged that, though in cases of agri-cultural land by reason of the Tenancy Act those decisions may have been justified, the principle laid down in those cases does not apply. A number of rulings have also been cited for the proposition that a mortgagee has no right to create a title beyond the continuance of a mortgage and on the redemption of the mortgage the title of the transferee from the mortgagee ceases. In view of the recent decision of the Supreme Court in -- 'Mahabir Gope v. Harbans Narain Singh (AIR 1952 SC 205), it is no longer necessary for us to discuss the case relied on by learned counsel.'.....

(10) In the case before us, the mortgagee had created merely a tenancy from month to month in accordance with the provisions of Sections 76(a) and 106 T. P. Act. It could not be said that he had done anything contrary to law or usage in letting out the shop, which he could not occupy himself and that he had not acted as a 'person of ordinary prudence'. On the redemption of the mortgage, the mortgagor no doubt has the right ordinarily to terminate the tenancy by giving 15 days' notice in accordance with the provisions of Section 106, T. P. Act. The Control of Rent and Eviction Act, 1947, it is urged, however, restricts the rights of a landlord to eject a tenant and a suit for ejectment can, therefore, be filed only in accordance with the provisions of Section 3 of the Act.'

10. Shah, J., as he then was, said in a Bombay Case -- AIR 1958 Bom 53 (B. K. Ramji v. S. S. Jivraj) that the owner of the property which is the subject of a mortgage with possession cannot by any stretch of reasoning, be considered as landlord of the mortgagee-tenants within the meaning of Section 5 (3) of the Bombay Rents, Hotel and Lodging House Rates Control Act (Act 57 of 1947), where the word landlord is defined as any person who is for the time being, receiving, or entitled to receive rent in respect of any premises whether on his own account or on account, or on behalf, or for the benefit of any other person, or as a trustee, guardian, or receiver for any other person or who would so receive the rent or be entitled to receive the rent if the premises were let to a tenant. He cannot certainly claim rent from the tenants of mortgagee nor is the tenant liable to pay it to him. In order to attract the provisions of the Bombay Act, the requisite condition is that the plaintiff should be a landlord and thedefendant should be a tenant and there should exist between them a relationship of landlord and tenant. Mr. Justice Shah said that evidently as the owner of the property is not the landlord of the defendants-tenants, the provisions of the Bombay Act cannot be available to the defendants in that case. The learned Judge no doubt, also said that while Section 76 (a) and (e) of the Transfer of Property Act do not empower the mortgagee to create a lease of the mortgaged property which is to enure beyond the redemption of the mortgage itself, and that under Section 111(c) of the Transfer of Property Act when the interest of the mortgagee comes to an end the lease created by him also determines, as laid down in the Supreme Court case in AIR 1952 SC 205, this is subject to any rights that might be conferred or created on the tenant by any statute.

11. Justice Shah's decision has been followed and explained in great detail by a Division Bench of the Bombay High Court in Kamlakar & Co. v Gulamshafi (AIR 1963 Bom 42). There Patel, J., speaking for the Bench has said that while it is undoubtedly true that the mortgagee has got the right of making prudent management of property that has come into his possession, such right must necessarily be conterminous with his right to continue as a mortgagee and it must come to an end as soon as his right to continue in possession ends. If during that period the mortgagee creates a lease, as any other ordinary prudent person would do in respect of his own property, the mortgagor cannot make any grievance whatsoever. From this, the further proposition, that if the original lease or grant was within the power of the mortgagee, then it would continue even after the redemption and would bind the mortgagor does not necessarily follow. Much would depend upon the nature of the interest created by the mortgagee. In respect of leases the rights of the parties are governed by the special provisions in, the T. P. Act. Section 111(c) provides that a lease of immovable property determines when the interest of the lessor in the propertes terminates on, or his power to dispose of the same extends only to, the happening of any event by the happening of such event. This section in clear and unmistakable terms lays down that once the authority of the lessor to lease the property ends, the lease also necessarily terminates. This section must apply to all powers andauthorities derived either from the Transfer of Property Act or from any other law. The mortgagee's rights cannot be any higher than that of any other lessor whose rights are limited in point of time by the very nature of the relationship between the lessor and the owner. If once this position is reached, the Bombay decision proceeds, the Court must hold that the mortgagor is entitled to get possession of the property unless there is some provision in law which creates an exception to this doctrine. Patel, J. then refers to the provisions of the Bombay Act and states that there is no provision in the Rent Act under which any rights as such are conferred on the tenant. Section 12 which states that a landlord shall not be entitled to the recovery of possession of any premises so long as the tenant pays, or is ready and willing to pay the amount of the standard rent, merely imposes a disability on the landlord. It had been contended before that Court that a restriction on the right of the landlord must necessarily mean a right in the tenant in view of the definition of the word tenant in that act which is as follows :--

'any person by whom or on whose account rent is payable for any premises and includes (b) any person remaining, after the determination of the lease, in possession with or without the assent of the landlord, of the premises leased to such person or his predecessor who has derived title before the commencement of the Bombay Rents, Hotel and Lodging House Rates Control (Amendment) Ordinance, 1959'.

The learned Judge then points out that while it is undoubtedly true that the definition of the word tenant is very widely worded and may possibly include even a tenant in possession of the premises under the circumstances of the case, Section 12 does not give the tenant a right to remain in possession of the properties. It only imposes a disability on the landlord and unless the person who seeks to recover possession is brought within the definition of the word 'landlord' the tenant cannot claim possession. The word landlord has been defined to mean any person who is for the time being, receiving or entitled to receive, rent in respect of any premises whether on his own account or on account, or on behalf or for the benefit of any other person. Unless, it could be shown that themortgagor claims the property on redemption through the mortgagee, it is impossible to hold that he is within the definition of the word landlord, while the term landlord will include one who is for the time being, receiving or entitled to receive rent. If the law had contemplated that the tenancy of the tenant continued in spite of redemption then and only then the mortgagor would have been the person entitled to receive the rent whether he consented to the continuance of the tenancy or not. iN view of the provisions of Section 111(c) of the T. P. Act, it cannot be said that the tenancy continued and therefore the mortgagor was entitled to recover the rent of the premises. In this connection, the Bombay High Court refers to the decision of the Madras Court in Chin-nappa Thevan v. Pazhaniappa Pillai (AIR 1916 Mad 911) wherein it is said:--

'Tenancies created by a mortgagee in possession are binding on the mortgagor even after the redemption of the mortgage in so far that the relationship of landlord and tenant continues, and that if the mortgagor desired to bring the tenancy to a close he must do so by a regular suit under Tenancy Act.'

In support of this proposition, the Madras High Court had relied on an earlier decision of the Madras High Court in Se-shamma Shettati v. Chickaya Hegade ((1902) ILR 25 Mad 507) where Justice Bhashyam Ayyangar said:--

'In the present case, on the footing that the defendants were let into possession by the mortgagee, whether as tenants from year to year or professedly as tenants with a permanent right of occupancy, the tenancy between them and the mortgagee would have continued until the redemption of the mortgage in 1894, and such possession cannot be adverse either to the mortgagee or much less to the mortgagor, and the plaintiffs' cause of action would have accrued and the period of limitation commenced to run only in 1894, if such tenancy ceases by the mere fact of redemption, or subsequent thereto, when the term of notice to quit had expired, if the right view should be that a lease given by the mortgagee, as being incidental to the managements of the mortgaged property, is binding upon the mortgagor -- at any rate, as a lease from year to year, until he determines the same.'

The Bombay High Court would say that it is difficult from this to bring out theprinciple that the lease would be binding on the mortgagor in every case, Even Justice Bhashyam Ayyangar himself limits it by saying if that view is right in respect of which there was no discussion. In view of that the Bombay High Court differed from the decision in AIR 1916 Mad 911.

12. I have referred to the decision of the Bombay High Court at length because this as well as that of Justice Saha in AIR 1958 Bom 53, had been viewed with approval in Sachalmal Parasram v. Ratnabai (1973) 3 SCC 198 : (AIR 1972 SC 637). In that case, the earlier ruling of that Court in All India Film Corporation Ltd. v. Sri Rajagyan Nath, (1969) 3 SCC 79, had been followed. In the All India Film Corporation Ltd.'s case a mortgagee in possession had let out the premises and the lessee had further sublet the same to sub-lessees. On redemption the purchaser of the interest of the mortgagor filed a suit for possession of the property from the head lessee and the sub-lessees. The sub-lessees claimed the benefit of East Punjab Urban Rent Restriction Act, 1949 (3 of 1949), One of the points urged was whether the defendants were protected by the East Punjab Urban Rent Restriction Act, and there the Court considered the question: 'Did the tenancy created by the mortgagee in possession survive the termination of the mortgagee's interest so as to be binding on the purchaser?' The Court concluded that the relationship of lessor and lessee cannot subsist beyond the mortgagee's interest unless the relationship is agreed to by the mortgagor or a fresh relationship is recreated. This the mortgagor or the person succeeding to the mortgagor's interest may elect to do. But if he does not, the lessee cannot claim any rights beyond the term ot his original lessor's interest These propositions are well-understood and find support in two rulings in AIR 1952 SC 205 and AIR 1958 SC 183. In regard to Section 76(a) of the T. P. Act, the Court said that the case is not covered by the exception because it cannot be held 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. On the basis of the East Punjab Urban Rent Restriction Act, the Court said that the respondents' attempt to argue that the said Act defines landlord and tenant with reference to the pay-ment of rent should fail because the definitions of landlord and tenant apply only if the tenancy, either real or statutory, could be said to survive after the termination of the mortgage -- the termination of the mortgagee's interest terminated the relationship of landlord and tenant and it cannot be said to run with the land. There being no landlord and tenant, the provisions of the Rent Restriction Act could not apply any further. Following this decision in Sachalmal Parasram's case (AIR 1972 SC 637) the Supreme Court mentioned that the same view had been taken by the Bombay High Court in the two cases which I have earlier referred to.

13. In the light of this decision of the Supreme Court, I think the petitioners' contentions should fail. The learned counsel strongly relied on the decision of the Full Bench of the Allahabad High Court reported in Tajammul Husain v. Mir Khan (AIR 1974 All 234). The Allahabad High Court decision seems to be based on the view that in the nature of the exception contained in Section 76(a) of the T. P. Act to the general principle that a lease executed by a mortgagee in possession would come to an end and the rights of the person holding under the same would get extinguished on the redemption of the mortgage, the mortgagee like an ordinary prudent man, lets out the mortgaged premises and enters into a bona fide transaction in connection therewith, in that event, the rights of such person would not get automatically extinguished on redemption of the mortgage. The person so let in would be entitled to continue in occupation of the premises as a tenant of the mortgagee after redemption. According to this decision, the principle behind Section 76(a) appears to be based on the hypothesis that, in case a mortgage had not been executed and the mortgagor as owner had remained in possession, he would also have similarly let out the premises and, therefore if instead of the mortgagor, the mortgagee in his place did the same, it would be considered as binding on the mortgagee (mortgagor?) as well.

14. I for my part, do not think it would be proper to consider the mortgagee as an agent of the mortgagor in the matter of grant of leases even if the lease satisfies Section 76(a) of the T. P. Act. Such a view will be totally ignoring Section 111(c) of the T. P. Act, which provides that a lease of immovable property determines when the interestof the lessor in the property terminates on, or his power to dispose of the same extends only to, the happening of any event, by the happening of such event. Once the authority of the lessor to lease the property ends, the lease also necessarily terminates even if the lease can be supported by Section 76(a). No doubt, the tenant may be entitled to continue in possession even afterwards, if he acquires rights of a special character by virtue of statutory provisions which may, in the meanwhile, come into operation. As the Supreme Court has said in AIR 1952 SC 205, AIR 1956 SC 305 (Harihar Prasad Singh v. Deonarain Prasad), AIR 1958 SC 183 and again in AIR 1966 SC 1721 (Prabhu v. Ram Deo) a permissible settlement by a mortgagee in possession with a tenant in the course of prudent management and the springing up of rights in the tenant conferred or created by statute based on the nature of the land and possession for the requisite period is a different matter altogether. Such a case is clearly an exception to the general rule prescribed by the T. P. Act. The Supreme Court has specifically pointed out that while dealing with the normal possession under the T. P. Act, the rights of the tenants inducted by the mortgagee may conceivably be improved by virtue of the statutory provisions which may in the meanwhile come into operation. Otherwise even in a case of lease under Section 76(a) the lease terminates on the extinction of the mortgage or if such a lease is for a particular period the operation of such lease may not extend beyond that period. One cannot equate the lease granted by a mortgagee to a lease granted by the mortgagor.

15. In the light of the decisions in AIR 1958 Bom 53 and AIR 1963 Bom 42, which decisions are apparently approved in (1973) 3 SCC 198 : (AIR 1972 SC 637), it cannot be said that the Kerala Buildings (Lease and Rent Control) Act would be of help to a mortgagee's tenant on redemption of the mortgage. The Allahabad High Court said that the Supreme Court has approved the Bombay Cases only in regard to the limited point as to whether a person who had been admitted in tenancy by the mortgagee could be considered as a tenant for the purpose of conferring the benefit of the Rent Restriction Act.

16. According to me, the context in which the Bombay decisions are referred to in the Supreme Court Case, theSupreme Court seems to have approved the general principles laid down in the Bombay decisions.

17. No doubt, there is also the question whether an exception in Section 76(a) of the T. P. Act to the general rule would apply to urban property. In All India Film Corporation's case ((1969) 3 SCC 79). Hidayatullah, C. J., speaking for the Court said that it 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 the lessee or to confer on them rights under special statutes. The Allahabad High Court said about the observations of Hidayatullah C. J., that the learned Chief Justice had clearly held that he was not going to decide as to whether the exception contained in Section 76(a) of the T. P. Act applied to urban properties or not, as he had further observed:

'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'.

The Allahabad High Court also pointed out that a property situated in an urban area is as much immovable property as an agricultural land, and, therefore there is no good reason to hold that Section 76(a) of the T.P. Act does not apply to urban properties.

18. However, the Gujarat High Court in Lalji Purushottam v. Madhavji Meg-haji (AIR 1976 Guj 161) (FB) and the Madras High Court in S. V. Venkat-aram Reddiar v. Abdul Ghani (AIR 1980 Mad 276 (FB)) viewed this aspect differently. According to those decisions, agricultural land requires constant attention as well as nursing and is always associated with productive operations. To keep the land fully productive, it has to be tended with care and diligence. Not only has the soil of the land to be conserved, but effective steps should be taken for preventing soil erosion. The land, has also to be safeguarded from, inundation by flood water and rain water. The fertility of the soil has to be preserved by not only periodical ploughing operations, but tended with inputs like green manure and fertilisers. The land has to be periodically de-weeded and the trees and plants standing on the land have to be safeguarded from straying cattle. On account of all these factorsit goes without saying that to keep an agricultural land unattended and uncar-ed for will certainly constitute an act of imprudence, therefore, it is that it has been uniformly accepted and followed that leases of agricultural lands created by a mortgagee with possession generally, if not invariably, constitute prudential acts in that they will not only benefit the land but eventually benefit the owner of the land as well. Such leases, even if they had been created by a person having a transitory title like a mortgagee with possession, will be binding on the mortgagor and held enforceable even after the redemption of the mortgage for the rest of the term of the tenancy. In comparison, in the case of a building, it certainly does not require constant care and attention like a land. It is not a productive item of property like a land wherein agricultural crops can be raised. Therefore, there is a good deal of difference between agricultural lands and non-agricultural properties. Hence, different standards will have to be applied for evaluating the leases created over the two items of properties. While in the case of agricultural lands, leases will prove to be beneficial in almost all cases, in the case of non-agricultural properties particularly buildings in urban areas, the leases may prove counter-productive in the sense that the properties are likely to get tied up in the hands of lessees who may claim rights under special statutes like the Rent Restriction Act.

19. However, I need not go into this question in great detail. According to me, in the light of the Supreme Court pronouncements especially that in (1973) 3 SCC 198 : (AIR 1972 SC 637), it will be difficult to follow the Allahabad decision. Apart from this, as Mr. Subra-manya Iyer, learned counsel for the respondents, pointed out the petitioners' contentions should fail in view of the special provision in Section 11 (6) of the Kerala Agriculturists' Debt Relief Act. That provision is as follows:--

'Where the property mortgaged has been leased out by the mortgagee, the lease shall, except in the case of tenants entitled to fixity of tenure under any law for the time being in force, stand terminated when the mortgagor recovers possession of the mortgaged property, and thereupon any value of improvements due to the lessee shall be paid to him out of the amount deposited by themortgagor under Sub-section (2) towards the value of improvements.'

In no view it can be said that the Kerala Buildings (Lease and Rent Control) Act confers fixity of tenure to tenants covered by the said Act. That Act only imposes a disability on the landlord restricting his rights to get eviction of tenants to the grounds specified in the statute.

In this view, the C. R.P. has only to be dismissed. I dismiss the same. In the circumstances of the case there will be no order as to costs.


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