Skip to content


Gauri Shankar and Etc. Etc. Vs. Kapoor Chand and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtRajasthan High Court
Decided On
Case NumberCivil Revn. Nos. 305 and 307 to 309 of 1982
Judge
Reported inAIR1983Raj77
ActsTransfer of Property Act, 1882 - Sections 60, 72, 76 and 111; Control of Rent and Eviction Act, 1950 - Sections 13
AppellantGauri Shankar and Etc. Etc.
RespondentKapoor Chand and ors.
Appellant Advocate B.P. Agrawal and; O.P. Garg, Advs.
Respondent Advocate S.M. Mehta and; G.S. Befna, Advs.
DispositionPetitions dismissed
Cases Referred(see Champalal v. Gulabi
Excerpt:
.....it seems that champalal's case (ibid) was not cited before agrawal, j. 16. in view of the foregoing discussion of law, i have no hesitation in holding that a tenant inducted into possession of an urban building or premises by a usufructuary mortgagee does not retain his status as a tenant after the redemption of the mortgage and that therefore he is not entitled to the protection of the rajasthan premises (control of rent and eviction) act, 1950. consequently, the revision petitions fail and are dismissed, leaving the parties to bear their own costs......in the absence of a contract tothe contrary, a mortgagee is entitled to grant a tease of the mortgaged property.such a lease must however come to an end on redemption of the mortgage.another section of the t. p. act which is material for our present purpose is section 76. in contradistinction to section 72 of the t. p. act which deals with 'rights of mortgagee in possession', section 76 deals with liabilities of mortgagee in possession. two of his liabilities as enacted therein are as under:--(a) he must manage the properly as a person of ordinary prudence would manage it if it were his own (b) (c) (d) ..... (e) he must not commit any act wich is destructive or permanently injurious to the property. section 111(c) of the t. p. act lays down that a lease of immoveable property.....
Judgment:
ORDER

K.S. Sidhu, J.

1. The only point which falls for determination in the four connectedpetitions for revision under Section 115 C.P.C. listed above, is whether a tenant induct-ed into possession by a usufructuary mortgagee retains his status as a tenant even after the redemption of mortgage by the mortgagor and is as such, entitled to the protection of the Rajasthan Premises (Control of Rent and Eviction Act, 1950. It has arisen in the following circumstances.

2. Kapoor Chand and others (respondents 1 to 10 herein), the mortgagors, hereinafter collectively called the decree-holder, obtained a final decree in a suit for redemption against Ghisilal and others (respondents 11 to 13 herein), hereinafter called the mortgagees, in respect of a building, situate in Jaipur city, on March 6, 1982. Between 1959 and 1973, when the mortgage was still continuing, the mortgagees inducted into possession from time to time Ram-chandra (petitioner in C.R. No. 307 o 1982), Janwar Mal (petitioner in C. R. No. 309 of 1982), Abdul Rashid (petitioner in C. R. No. 308/1982) and Gauri Shankar (petitioner in C. R. No. 305 of 1982), as respective tenants, into foot different portions of this building at different monthly rates of rent. The decree-holder applied for execution of the decree and obtained from the executing court a warrant to its Nazir directing him to put the decree-holder in possession of the property in dispute, Apprehending that they might be evicted from their respective portions in execution of the final decree tor redemp-tion against the mortgagees (i. e. the petitioners' lessor's) the petitioners approached the executing court and made four separate applications between May 15 and 17, 1982, purporting to do so under Section 115 C.P.C., raising identical pleas to the effect that the mortgagees had lawfully let out the premises to them and that being tenants they were not liable to be evicted except in accordance with a decree or order passed by the Court under Section 13 of the Rajas than Premises (Control of Rent and Eviction) Act, 1950, hereinafter to be referred to as the Act. They pleaded that although they had alt been inducted into possession of their respective tenements as tenants by the mortgagees prior to the institution of the suit tor redemption by the mortgagors, the latter did not im-plead them as parties to the suit, and as such they cannot be evicted in execu-tion of the final decree obtained by themortgagers in that suit.

3. The decree holder contested these applications and pleaded that the peti-tioners' tenancies were extinguished with the redemption of the mortgage and that therefore the decree-holder was entitled to delivery of actual possession under Oder 21 Rule 55 C.P.C.

4. By its order, dated July 1, 82 the ex-ecuting court held, relying on authoriti-es, that a lease granted by a usufructuary mortgagee of an urban building must come to an end at the redemption of the mortgage and that therefore the peti-TIONERS had no legal justification for re-sisting the actual delivery of possessionof the decretal property to the decree holder. Consequently, the executing court dismissed the petitioners' application under Section 115 C. P. C., mentioned above.

5. Aggrieved by the order of dismis-sal of their applications, the petitioners filed four separate petitions of revision which are proposed to be disposed of by this judgment.

6. After hearing both sides and perus-ing the record, I am of opinion that theexecuting court has taken correct view of law in holding that the tenancies of the petitioners which were created by the mortgagees during the continuance of the usufructuary mortgage were ex-tinguished when the mortgagors ob-tained the final decree for redemption and that therefore the petitioners cannot legitimately claim the legal status of tenant entitled to the protection of Sec-tion 13 of the Act. This view is based on authorities, including those of the Supreme Court, which will be referred to and discussed presently. I may straightway point out that in viewof the law laid down by the Supreme Court in All India Film Corporation Ltd.v. Raja Gyan Nath, 1969 (3) SCC 79, and Sachalmal Parasram v. Ratanbai, AIR 1972 SC 637, the contrary view ex-pressed by this court in Ghammandi Ramv. Shanker Lal, AIR 1966 Raj 19, must be taken as impliedly overruled.

7. Before taking up the authorities cited at the bar, it will be useful to read the relevant statutory provisions of the Transfer of property Act, 1882, thereinafter called the T. P. Act). Sec-tion 60 of the T. P. Act which deals with right of mortgagor to redeem', comitting its portion which is not mate-rial, lays down that at any time after the principal money has become due, the mortgagor has a right to require the mortgagee, where the mortgagee is in possession of the mortgaged properly to deliver possession thereof to the mortgagor and to have an acknowledgement in writing that any right in derogation of his interest transferred to the mortgagee has been ex-tinguished.

Section 72 of the T. P. Act which deals with 'right of mortgagee in possession' is important for our present purpose, not for what it contains, but for what it does not. It is significant to note that it does not vest a mortgagee with right to grant a lease extending beyond the period of the mortgage. Of course, in the absence of a contract tothe contrary, a mortgagee is entitled to grant a tease of the mortgaged property.Such a lease must however come to an end on redemption of the mortgage.

Another section of the T. P. Act which is material for our present purpose is Section 76. In contradistinction to Section 72 of the T. P. Act which deals with 'rights of mortgagee in possession', Section 76 deals with liabilities of mortgagee in possession. Two of his liabilities as enacted therein are as under:--

(a) He must manage the properly as a person of ordinary prudence would manage it if it were his own

(b) (c) (d) .....

(e) He must not commit any act wich is destructive or permanently injurious to the property.

Section 111(c) of the T. P. Act lays down that a lease of immoveable property determines where the interest of the lessor in the property terminates on, or his power to dispose of the same ex-tends only to, the happening of any event by the happening of such event.

8. A combined reading of Secs. 60, 72, 76 and 111(c) of the T. P. Act, as reproduced above would give rise to four propositions which may be stated as under:--

(i) A mortgagee in possession cannot grant a lease extending beyond the termof the mortgage. A lease granted by such a mortgagee determines on redemption.

(ii) The enumeration of the rights ofa mortgagee in possession as given in section 72 of the T. P. Act does not in-clude any right in him to grant a leaseextending beyond the term of the mortgagee.

(iii) The liabilities of a mortgagee in possession, as contradistinguished from his rights, include (i) the liability to manage the mortgaged property as a person of ordinary prudence would manage it if it were his own, and (ii) the duty to refrain from committing any act destructive or permanently injurious to the property.

(iv) The mortgagee in possession must, on redemption restore possession of the mortgaged property to the mortgagor in the same condition as it was at the time when it was mortgaged.

9. Applying the test of these four propositions to the admitted facts of this case, there should be no difficulty in holding that the tenancies of the petitioners which had been created by the mortgagee in possession during the continuance of the mortgage ceased on redemption of the mortgage by the decree holder and that thereafter the petitioners lost their status as tenants with the result that they cannot legitimately claim protection of the provisions of Section 13 of the Act which, as already stated, protects only a tenant from eviction by his landlord but not a former tenant of a mortgagee in possession who ceased to be a tenant on a final decree having been obtained by the mortgagor in a regular suit for redemption filed for the purpose. The difficulty, however, arose by reason of a Division Bench ruling of this court reported as Ghamandi Ram v. Sankerlal, AIR 1966 Raj 19. The Division Bench referred to the definition of 'landlord' and 'tenant' as given in Sections 3 (iii) and 3 (vii) and then construed Section 13 of the Act in such a manner as to hold that a tenant inducted into possession by a mortgagee in possession could not be evicted by the mortgagor on redemption of the mortgage because, in the opinion of the Division Bench, the mortgagor becomes, on redemption, a 'landlord' and the lessee of the mortgagee becomes a 'tenant' by operation of law, and therefore such a tenant is entitled to the protection of the Act against eviction by the landlord. The Division Bench observed in this context that the provisions of the T. P. Act which militate against its reasoning and conclusion, as stated above, are excluded and overridden by the provisions of the Act.

10. With utmost respect to the learned Judges, who decided Ghamandi Ram's case (AIR 1966 Rai 19), I have not been able to understand how the definitions of 'landlord' and 'tenant' as given in Section 3 (iii) and (vii) of the Act can be read, consistent with the well-known rules of interpretation of statutes, so as to support the conclusions drawn by the Division Bench. I would have referred the matter to a larger Bench for an authoritative opinion, but, fortunately for all concerned, I am relieved of this necessity because after Ghamandi Ram's case was decided by this court in 1963, the Supreme Court has had occasion to deal with a similar question and lay down the law authoritatively in 1969, and again in 1972. As already stated, the enunciation in Ghamandi Ram's case in so far as they are sought to be invoked on behalf of the petitioners in the instant case, must be taken to have been overruled by the Supreme Court twice over in 1969 and 1972. I may now refer to the two rulings.

11. In the All India Film Corporation Ltd. v. Raja Gyan Nath, (1969) 3 SCC 79, the subject matter of the dispute was a cinema building in Jullundur City of Punjab. The mortgagee with possession of this building granted a lease to the appellant purporting to do so in accordance with an agreement between the mortgagee and the mortgagor. The appellant sublet the building to other defendants. At an auction, the building was purchased by the respondent, Raja Gyan Nath who paid off the mortgage charge and filed a suit for possession of the property from the head lessee and the sub-lessees. The sublessee claimed the benefit of the East Punjab Urban Rent Restriction Act, 1949. The suit was decreed up to the High Court. The sub-lessee appealed by certificate to the Supreme Court. One of the issues arising for decision by the Supreme Court as stated by Hidayatullah C. J., was whether the tenancy created by the mortgagee in possession survived the termination of the mortgagee interest so as to be binding on the respondent Raja Gyan Nath how had purchased the property and redeemed the mortgage. The issue was decided in these words.

A general proposition of law is that no person can confer on another a better title than he himself has. A mortgage is a transfer of an interest in specificimmoveable property for the purpose of securing repayment of a loan. A mortgagee's interest lasts only as long as the mortgage has not been paid off. Therefore on redemption of the mortgage, the title of the mortgagee comes to an end. A derivative title from him must ordinarily come to an end with the termination of the mortgagee's title. The mortgagee by creating a tenancy becomes the lessor of the property but his interest as lessor is conterminous with his mortgage interest. Section 111(e) of the Transfer of Property Act provides that a lease of immoveable property, determines where the interest of 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. The duration of the mortgagee's interest determines his position as the lessor. 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 terms of his original lessor's interest. These propositions are well understood and find support in two rulings of this court in Mahabir Gope v. Harbans Narain Singh, AIR 1952 SC 205 and Asa Ram v. Mst. Ram Kali, AIR 1958 SC 183.

To the above proposition there is, however, one exception. That flows from Section 76(a) which lays down liabilities of a mortgagee in possession. It is provided there that when during the continuance of the mortgage, the mortgagee takes possession of the mortgaged property he must manage the property as a person of ordinary prudence would manage it if it were his own. From this it is inferred that acts done bona fide and prudently in the ordinary course of management, may bind even after the termination of the title of the mortgagee in possession. This principle ap-plies ordinarily to the management of agricultural lands and has seldom been extended to urban property so as tie it up in the hands of the lessees or to confer on them rights under special sta-tutes. To this again there is an excep-tion. The lease will continue to bindthe mortgagor or persons deriving interest from him if the mortgagor has concurred to grant it.

It appears that an attempt was made before the Supreme Court on behalf of the appellant to argue that as per definitions of 'landlord' and 'tenant' as given in the East Punjab Urban Rent Restriction Act, 1949, a landlord means a person entitled to receive rent and a tenant means any person whom or on whose account rent is payable. Their Lordships rejected the said argument stating that these definitions would apply if the tenancy, either real or statutory, could be said to survive after the termination of the mortgage, and that there being no landlord and no tenant, the provisions of the East Punjab Urban Rent Restriction Act, 1949, could not apply any further. This authority serves as a direct refutation of a similar argument, raised on behalf of the petitioner in the instant case, on the basis of the definition of 'landlord' and 'tenant' as given in the Act and as construed by this court in Ghamandi Ram's case (AIR 1966 Raj 19), learned counsel for the petitioners however argued that the definitions of 'landlord' and 'tenant' as given in the Act are materially different from such definitions given in the East Punjab Urban Rent Restriction Act, 1949, and that therefore the ratio in the All India Film Corporation case would not apply to the instant case. I have compared the two sets of definitions and find no material difference. The words 'who would so receive or be entitled to receive the rent if the premises were let to a tenant' which occur in the definition of 'landlord' in the Act and do not occur in the Punjab definition of this expression cannot make any material difference as to the applicability of the ratio of the cited Supreme Court authority t0 the facts of this case. Their Lordships have held in clear terms that these definitions would apply only if the tenancy could be said to survive after the redemption of the mortgage. The additional words quoted above which occur in the definition of the Act will have meaning only in a futuristic situation in the event of a contract of lease coming into being and not before. No such contractbetween the decree-holder and the petitioners has been alleged or proved. Moreover, Section 5 of the Act makes it further clear that rent is such 'as may be agreed upon between the landlord and the tenant'. No rent has been agreed upon between the decree-holder and the respective petitioners. There is thus no question of the decree-holder being a 'landlord' and the petitioners being 'tenants' in instant case.

12. Turning now to the second Supreme Court authority, it will be seen that in Sachalmal Parasram v. Ratanbai, AIR 1972 Sc 637, the Supreme Court reaffirmed its earlier view thai tenancy created by the mortgagee in possession does not survive the termination of the mortgagee's interest, and that there being no landlord and tenant after the termination of the mortgagee's interest, the tenant cannot claim the protection of Rent Control Legislation (in that case M. P. Accommodation Control Act, 1961). It may be mentioned here that their Lordships expressly noted the decision of the Bombay High Court in Bhanshali Khushalchand Ramji v. Sha Shamji Jivraj, AIR 1958 Bom 53 and approved its ratio in so many words. A study of the report of the cited Bombay judgment would reveal that the words 'who would so receive the rent Or be entitled to receive the rent' which occur in the definition of 'landlord' in the Act also occur in the corresponding definition relevant to the decision by the Bombay High Court in Bhanshali's case (ibid).

Confronted with this difficulty the Division Bench in Ghamandi Ram's case (AIR 1966 Raj 19) tried to gel over it by stating that these words have not received adequate consideration at the hands of the Bombay High Court and that therefore the Division Bench would not accept the Bombay view as correct. Now that the Supreme Court has approved the Bombay view, the contrary view of this court in Ghamandi Ram's case stands overruled by necessary implication. The Bombay view, based on definitions of 'landlord' and 'tenant' which are pan materia with the definitions in the Act and which stands approved by the Supreme Court, has been very succinctly stated in headnotes (a) and (b) of the published report (AIR 1958 Born 53) as follows :

(a) The owner of the property which is the subject of a mortgage with posses-sion cannot by any strelch of reasoning, be considered a landlord of the mortgagee's tenants within the meaning of Section 5 (3) of the Rent Act. He cannot certainly claim rent from the tenants of the mortgagee nor is the tenant liable to pay it to him. In order to attract the provisions of Section 12 of the Bombay Rent Act the requisite condition is that the plaintiff should be a landlord and the defendant should be a tenant and there should exist between them a relationship of landlord and tenant. Evidently, as the owner is not the landlord of the defendants-tenants, the provisions of the Bombay Rent Act cannot be available to the defendants.

(b) Section 76 (a) and (e) does not empower the mortgagee to create a lease of the mortgaged property which is to enure beyond the redemption of the mortgage itself, and it is quite clear that under Section 111(e) of the Act when the interest of the mortgagee comes to an end the lease created bv him also determines, though this is subject to any rights that might be conferred or created on the tenant by any statute.

13. Incidentally, it may also be mentioned hear that in Sachalmal's case (AIR 1972 SC 637) (supra), the Supreme Court reiterated its earlier view, as expressed in the All India Film Corporation case (1969-3 SCC 79) (supra), that the principle of section 76(a) T. P. Act that act done bona fide and prudently in the ordinary course of management may bind even after the termination of title of the mortgagee in possession applies ordinarily to the management of agricultural lands and has seldom been extended to urban property. It has already been seen while discussing the relevant provisions of the T. P. Act that Section 76 deals with the Abilities of the mortgagee in possession and not his rights and that therefore Section 76(a) cannot be so construed as to read in it a right vesting in the mortgagee in possession to create a lease of the mortgaged property which is to enure beyond the redemption of the mortgage. This view also finds support from another authority of the Supreme Court. In Asa Ram v. Mst. Ram Kali, AIR 1958 SC 183, their Lordships held that Section 76(a), in laying down that the mortgagee in possession 'must manage the property as a person of ordinary prudence would manage it if it were his own' cast an 'obligation' on the mortgagee rather than confer uponhim a right. It is in this perspective that a lease of urban property created by a mortgagee in possession should be viewed. Any act of management which is destructive or permanently injurious to the property is also forbidden by law.

14. Reference may also be made here to three Full Bench authorities which support the view that a tenant inducted into possession by the mortgagee of a building remains a tenant during the continuance of the mortgage and that on redemption of the mortgage the tenancy comes to an end- The Punjab and Haryana High Court (Jagan Nath v. Mittar Sain, AIR 1970 Puni & Har 104), (FB) the Gujarat High Court (Lalji Pur-shottam v. Thaker Madhavji Meghji, AIR 1976 Guj 161 (FB) and the Madras High Court (S. V. Venkatarama v. Abdul Ghani Rowther, (1981) 1 Rent CR 1 : (AIR 1980 Mad 276) (FB) have held that when the interest of a mortgagee in possession is extinguished by redemption of the mortgage, his status as landlord also ceases and with that the tenant also ceases to be a tenant. A contrary view taken by the Allahabad High Court in Tajamul Hussain v. Mir Khan, AIR 1974 All 234 (FB), which tried to distinguish the Supreme Court authorities in the All India Film Corporation, (1969-3 SCC 79) and Sacharmal cases (AIR 1972 SC 637) (supra) are not, it is submitted with respect, quite convincing.

15. Mr. Agrawal, learned counsel for the petitioners, then referred to an order, dated, February 5, 1981, made by my learned brother, S. C. Agrawal J., in Civil Regular Second Appeal No. 7 of 1981, Devki Nandan v. Roshanlal canvassed for a reference to a Full Bench of the question of law, which has already been referred by Agrawal J. to a Full Bench, in view of the controversy raised as to the correctness of the view taken by a Division Bench of this court in Ghamandi Ram's case (AIR 1966 Raj 19) (supra). In view of the authorities of the Supreme Court discussed above, no such reference appears to be necessary. Moreover, this court has already taken a definite position (see Champalal v. Gulabi, AIR 1981 Rai 130) that the law laid down in Ghamandi Ram's case (supra) by the Division Bench can no longer be considered good law after the authorities of the Supreme Court handed down in 1969 and 1972. It seems that Champalal's case (ibid) was not cited before Agrawal, J. Had it been cited,Agrawal, J. might not have made the reference relied upon by learned counsel for the petitioners.

16. In view of the foregoing discussion of law, I have no hesitation in holding that a tenant inducted into possession of an urban building or premises by a usufructuary mortgagee does not retain his status as a tenant after the redemption of the mortgage and that therefore he is not entitled to the protection of the Rajasthan Premises (Control of Rent and Eviction) Act, 1950. Consequently, the revision petitions fail and are dismissed, leaving the parties to bear their own costs.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //