1. The additional 9th defendant who has acquired the rights of the 2nd defendant in the case, is the appellant. The suit property was obtained by defendants 1 and 2 under the kanapattom deed Ext. I of the year 1099. While they were in possession and enjoyment of the property on the strength of Ext. I, the jenmi of the property executed a mortgage in respect of this property in favour of the 3rd defendant in the year 1111 with directions to redeem Ext. I and to recover possession from defendants 1 and 2.
The 3rd defendant assigned his mortgage right in favour of the 4th defendant. Tin's right was subsequently acquired by defendants 5 and 6. But none of these defendants took any step to redeem Ext, I up to the year 1122. In the meanwhile, the mortgagor's right of equity of redemption of the property was acquired by the plaintiff in this suit (O. S. No. 895/1121 on the file of the Sherthallai District Munsiff's Court) under a Court sale. His suit was for redeeming Ext. I and also the subsequent mortgage and for recovery of possession of the property on payment of the kanartham, the mortgage amount and the value of improvements to such of the defendants who may be found to be entitled to the same. The suit was decreed in his favour.
When the decree-holder attempted to get delivery of possession of the property, the additional 9th defendant filed an objection petition contending that as the assignee of the 2nd defendant he is in possession of the 2nd defendant's half share of the property on the strength of Ext. I, the other half share which belonged to the deceased 1st defendant being in the joint possession of the 8th defendant as the heir of the 1st defendant.
It was also contended that the kanapattom evidenced by Ext. I comes within the purview of Act 8 of 1950 and that therefore the decree-holder is not entitled to evict the 9th defendant in disregard of the protection afforded by the provisions of that Act. This contention was repelled by both the lower Courts. Hence the second appeal by the 9th defendant.
2. The position that the kanapattom created under Ext. I comes within the purview of Act 8 of 1950, is not disputed. The first Court's order shows that this position was admitted on behalf of the decree-holder. All the same, the 9th defendant's objection was repelled mainly on the ground that theassignment taken in the names of defendants 5 and 6 of the rights under the subsequent mortgage of the year 1111, was benami for defendants 1 and 2 and that by virtue of such assignment the rights under Ext. I have been extinguished, the same having merged in the mortgage.
On behalf of the decree-holder-respondent it is contended that in O. S. No. 102/1122 of the Sherthallai Munsiff's Court and to which all these persons were parties, it was definitely found that the assignment taken by defendants 5 and 6 was benami for defendants 1 and 2 and that the 9th defendant appellant is not entitled to put forward any claim against that finding.
In answer to this contention the appellant's learned counsel pointed out that the finding on the question of benami was not upheld in the final judgment passed in that case by the High Court. O. S. 102/1122 was a suit instituted by the present defendants 5 and 6 as assignees of the mortgage right and the claim in that suit was for redeeming Ext. I and for recovery of possession of ttie property 'from defendants 1 and 2.
From the final judgment passed by the High Court in that case and which was read over to us, it is seen that the High Court confirmed the decree dismissing that suit on the sole ground that the mortgagee having failed to exercise the right of redeeming Ext. I within a reasonable time from the date of the mortgage, that right was lost to the mortgagee. Consistent with such a view taken by the High Court, no opinion was recorded on the question that the assignment taken by the plaintiffs in that case was benami for defendants 1 and 2.
Thus it cannot be said that there has been any final and conclusive decision in that case on the question of the benami nature of the assignment taken by defendants 5 and 6. Apart from this aspect of the case the fact remains that their attempt to recover possession of the property from defendants 1 and 2 on the strength of the mortgage of the year 1111 was unsuccessful. Even if the assignment taken by the defendants 5 and 6 was benami for defendants 1 and 2, such an assignment by itself will not show that the kanapattom arrangement under Ext. I was extinguished by having become merged in the mortgage.
The taking of a mortgage by the lessee in respect of the property in his possession cannot always be taken to amount to an implied surrender of his leasehold right as contemplated by Clause (f) of Section 111 of the Transfer of Property Act. The question whether there has been such an implied surrender has to be gathered from the intention of the parties as disclosed by the attendant circumstances.
This position has been explained in Lekshmi v. Velu, 1956 Ker LT 410 (A). So far as the present case is concerned, the circumstances disclosed by the evidence on record are such as to prima facie indicate that the surrender of the leasehold right was not intended by defendants 1 and 2. If they had any such intention they could have taken the assignment of the mortgage in their own names.
Defendants 5 and 6 who are the assignees of the mortgage right are seen to have taken legal steps for terminating Ext. I by instituting the suit O. S. No. 102/Z122, thereby indicating that evenafter the assignment of the mortgage the lease arrangement was subsisting as an independent transaction. It is stated on behalf of the respondent that the matter was not argued in this light in the lower Court and that therefore the decree-holder had no opportunity to adduce the required evidence to show that the parties conducted themselves in such, a way as to clearly indicate that Ext. I was extinguished and that the mortgage alone was subsisting,
Since the case has to be sent back for investigation on other points, we think that it is only just and proper that the decree-holder is allowed a chance to adduce evidence to make out that there has been a real surrender and extinguishment of the lease evidenced by Ext. I and as to whether the assignment of the mortgage right taken in the names of defendants 5 and 6 was benami for defendants 1 and 2.
3. The lower Court has held that the objection raised by the 9th defendant on the strength of Act 8 of 1950 is barred by the rule of constructive res judicata on account of the failure of his assignor, the 2nd defendant, to raise such a plea when notice of execution of the decree was served on him at an earlier stage. In the 9th defendant's objection petition he has slated that no notice about the execution of the decree had been served on the 2nd defendant.
Without investigating into this matter and ascertaining whether such notice had been served on the 2nd defendant and whether any order for execution of the decree had been passed previously, no finding could be recorded on the plea of constructive res judicata raised on behalf of the decree-holder. For such investigation and findings the case has to be remanded to the lower Court.
4. An argument advanced on behalf of the decree-holder and which found favour with the lower Court is that the decree in this case is one for redeeming the mortgage only and as such the 9th defendant is not entitled to invoke the aid of Act 8 of 1950. We are unable to accept this position as correct. No doubt the direction in the decree is that the plaintiff may recover possession of the property from the defendants after depositing the mortgage amount and value of improvements due to them.
All the same, it cannot mean that the rights under the kanapattam Ext. I have been ignored by the decree and the redemption directed is only of the mortgage. Part of the amount mentioned in the mortgage deed represents the kanartham due under Ext. I. The improvements are those effected by the tenants in possession of the property on the strength of Ext. I.
The nature of the reliefs claimed in the suit and which are extracted in the decree, makes it clear that what the plaintiff sought for was a redemption of Ext. I and also of the subsequent mortgage on payment of the amount deposited by him to such of the defendants as may be found entitled to it. It follows therefore that unless it is definitely found that there has been a surrender and extinguishment of the rights under Ext. I, the protection afforded by Act 8 of 1950 will be available to the 9th defendant who represents the interests of the 2nd defendant.
5. In answering the objections of the 9th defendant the decree-holder has stated that the 9thdefendant or his predecessor, the 2nd defendant, had no possession of the property at any time that, possession was exclusively with the 1st defendant and after his death the property is in the possession of the 6th defendant. Regarding these matters also there has been no investigation by the lower Court,
If possession is exclusively with the 9th defendant, the 9th defendant will not be entitled to raise any objection to the decree-holder getting recovery of possession from the 6th defendant. If, on the other hand, the 9th defendant also is in possession of the property as the successor to the 2nd defendant's half share of the rights under Ext. I, he will be entitled to resist eviction from the property by invoking the aid of Act 8 of 1950. He will not be precluded from invoking the aid of the Act merely on account of the prior orders passed against the 1st defendant.
6. In the result this appeal is allowed in themanner and to the extent indicated above and theorder of the lower Court is set aside and the caseis remanded to the execution Court for fresh disposal of C. M. P. 2612 dated 6-3-1956 and C. M. P.2678 dated 7-3-1956 in accordance with law andin the light of the observations made above.