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Roshanlal Vs. Baboo Lal and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty;Civil
CourtRajasthan High Court
Decided On
Case NumberSecond Appeal No. 94 of 1958
Judge
Reported inAIR1964Raj120
ActsTransfer of Property Act, 1882 - Sections 111
AppellantRoshanlal
RespondentBaboo Lal and ors.
Appellant Advocate R.K. Rastogi and; J.S. Rastogi, Advs.
Respondent Advocate Guman Mal Lodha, Adv.
DispositionAppeal allowed
Cases Referred and Mehrban Khan v. Makhana
Excerpt:
- - the english law of property act, 1925 clearly provided that there will be no merger by operation of law unless there was a merger or extinction in equity. the present case, however, has one distinct and exceptional feature. bashiran or her successors-in-interest became that of a lessor and a lessee on account of an agreement which came to operate after redemption and the plaintiff's suit wherein he has claimed roshanlal to be a trespasser must obviously fail......that while the union of the superior and subordinate interests will not automatically cause a merger, merger will be held to have taken place if the intention to merge is clear and not otherwise. in the absence of any express indication of intention, the courts will proceed on the basis that the party had no intention to merge if it was to his interest not to merge and also if a duty lay on him to keep the interest separate. in deciding the intention of the party the court will have regard also to his conduct.'in the transfer of property act as it stands a lease stands determined on the merger of one relationship into that of another. the present case, however, has one distinct and exceptional feature. it is this. there is an unequivocal indication of the intention between the.....
Judgment:

B.P. Beri, J.

1. This is a defendant's second appeal directed against the judgment and decree dated 14th April, 1958, passed by the Civil Judge, Dholpur in a suit for possession and mesne profits.

2. The controversy relates to a shop situate in Mohalla Talaia, Dashera Road Gothi, Dholpur. Roshanlal, the defendant appellant, took this shop on rent on 25th June, 1350 on a rental of Rs. 10/- per month from Mst. Bashiran and others. On 8th February, 1951, Mst. Bashiran and others mortgaged this shop with Roshanlal. According to the terms of this mortgage-deed no interest was to be paid by the mortgagors to the mortgagee Roshanlal and he was no longer required tp pay any rent of the shop. It was further stipulated that when half the mortgage money was paid the mortgagee was to pay Rs. 5/- per month as rent and when the full mortgage amount was repaid the mortgagee was to restart paying Rs. 10/- per month as rent. On 25th September, 1954 Mst. Bashiran redeemed the shop and mortgaged this shop with some other property with Babulal and Rambharose for the sum of Rs. 3,500/-. Baboolal and another instituted a suit for the possession of the shop which was in possession of Roshanlal and for mesne profits on several grounds. This suit was resisted by Roshanlal. The Munsiff Dholpur who tried the suit found that there was no agreement between Roshanlal on the one hand and Baboolal and Rambharose on the other to the effact that the former will deliver possession of the shop to the latter, that there was no implied surrender on the part of Roshanlal and dismissed the plaintiff's suit. Baboolal and another preferred an appeal and the learned Civil Judge concurred with the finding of ths trial Court that no independent assurance was given by Roshanlal to vacate the shop in dispute but he held that inasmuch as Roshanlal became the mortgagee of the shop in suit by operation of law there was an extinction of the original lease and it was a case covered by Section 111(d) of the Transfer of Property Act. Roshanlal has now come up in second appeal.

3. The only point urged before me and which calls for consideration is whether on account of the mortgage-deed dated 8th February, 1951 between Mst. Bashiran and others on the one hand and Roshanlal on the other the relationship between them as of lessor and lessee came to an end and the lease stood determined. On behalf of the appellant it is contended that Roshanlal did not extinguish the tenancy rights residing in him by becoming a mortgagee. The tenancy rights remained in abeyance and revived when the land lady Mst. Bashiran redeemed the mortgage from Roshanlal. He placed reliance on Kallu v. Diwan, ILR 24 All 487; Parasram v. Dharamchand, AIR 1935 Lah 522; Jyotish Thakur v. Tarakant Jha, AIR 1963 SC 605 and Dhulilal v. Pannalal, AIR 1963 Raj 110. The learned counsel for the respondent however placed reliance on the provisions of Section 111(d) of the Transfer of Property Act and argued that the interest of the lesseei and the lessor in the entire shop became vested in Roshanlal and the lease came to be determined on execution of the mortgage by the land lady. Roshanlal became a trespasser and the subsequent mortgagee, therefore, became entitled to possession and mesne profits. He placed reliance on Velu v. Lekshmi, AIR 1953 Trav-Co 584, Meenakshi Amma v. Kizhakki Valath Narayani, AIR 1957 Mad 212, Abdul Gafoor v. Kunj Behari Lal, AIR 1957 All 346, Venkayya v, Venkata Subbarao, AIR 1957 Andh Pra 619 and Mehrban Khan v. Makhana, AIR 1930 PC 142.

4. The material portion of Section 111 of the Transfer of Property Act reads as follows:

'A lease of immovable property determines--

(d) in case the interests of the lessee and the lessor in the whole of the property become vested at the same time in one person in the same right.

. . . . .

. . . . .'

This provision of law contains the doctrine of merger as known in the English Common Law. In equity, however, merger was regarded as a question of intention between the parties. It was possible in equity to keep two estates separate and alive if the party so intended. The English Law of Property Act, 1925 clearly provided that there will be no merger by operation of law unless there was a merger or extinction in equity. Clause (d) of Section 111 of the Transfer of Property Act, however, appears to be a departure in this respect from the English Law in so far it ignores question of intention by laying down that where the interest of the lessor and the lessee become united in the same person at the same time in the same right there is a merger and the lease is extinguished. In the Rajasthan case AIR 1963 Raj 110, cited above there was a contract of tenancy regarding a shop. The tenant eventually acquired the rights of a mortgagee in respect of the same shop of which he was a tenant. The landlord was not to pay any interest on the sum borrowed under the deed of mortgage and the tenant was not to pay any rent. The relationship was not regulated by the Rent Control Act and the tenancy was an ordinary monthly tenancy. The learned Judge held that the two relationships namely that of the landlord and the tenant and of mortgagor and mortgagee could not stand or coexist and, therefore, the earlier, relationship of landlord; and tenant must be held to have been impliedly surrendered when the subsequent one of mortgagor and mortgagee came to operate. This case would appear to be practically parallel to the one before me excepting for one circumstance namely that in the mortgage-deed itself (Ex. 7) before me it was stipulated between the parties that when the mortgage money was paid the relationship of the landlord and the tenant would come into being again and the tenant will continue paying Rs. 10/ per month as rent of the shop. The provisions of Section 111(d) no doubt do not incorporate any element of intention between the parties and would appear to be operative on the merger of interest in regard to the same property and in the same person. The Supreme Court case AIR 1963 SC 605, referred to above by the learned counsel for the appellant does not assist as it examined the doctrine of merger outside the Transfer of Property Act for the case bafore their Lordships was one from Santhal Parganas and was governed by the Santhal Parganas Settlement Regulation (III of 1872). In paragraph 11 of th.e judgment it is observed,--

'Statutory provisions as regards merger were made in the Transfer of Property Act in 1882 and in the Bengal Tenancy Act in 1885 -- which was later extended to Bihar. These statutory provisions have, admittedly, no application to the present case. The legal position as regards merger, apart from these statutory provisions, may be stated thus: That while the union of the superior and subordinate interests will not automatically cause a merger, merger will be held to have taken place if the intention to merge is clear and not otherwise. In the absence of any express indication of intention, the Courts will proceed on the basis that the party had no intention to merge if it was to his interest not to merge and also if a duty lay on him to keep the interest separate. In deciding the intention of the party the Court will have regard also to his conduct.'

In the Transfer of Property Act as it stands a lease stands determined on the merger of one relationship into that of another. The present case, however, has one distinct and exceptional feature. It is this. There is an unequivocal indication of the intention between the parties that after the redemption of the mortgage the old relationship of the landlord and the tenant between Mst. Bashiran on the one hand and Roshanlal on the other will again come into being or will be revived and the rate of rent would be same as it was prior to the execution of the deed of mortgage. Kallu's case ILR 24 All 487 recognised the possibility of the relationship of a landlord and a tenant remaining in abeyance during the subsistence of a different and another relationship namely, that of a mortgagor and a mortgagee between the same parties. Though no reference has been made to the provisions of Section 111(d) of the Transfer of Property Act in that decision and that case has been dissented to in Dhulilal's case, AIR 1963 Raj 110 the circumstances of the case before me are; however, easily distinguishable. In the present case even if it is assumed that there was a merger on account of a superior relationship coming into being between Roshanlal and Mst. Bashiran there was a contemporaneous agreement that as soon as that relationship came to an end there will be another relationship which will come into being and that was to be one of a lessor and a lessee. It is admitted on all hands that the mortgage dated 8th February, 1951 came to be redeemed and the other clause of the same deed (Ex. 7) came into operation after the redemption. The exact words contained in Ex. 7 may be reproduced in this context:

^^tc feu eqdjku :i;k tks jgu vnkdj nsxk rc nqdku eqnbZu dks okxqtkj QkSju djuh gksxh vkSj okxqtkjh ds ckn 10nl :i;k eghuk fdjk;k vnk djuk gksxk A**

This deed of mortgage in my opinion has an implied agreement that after the redemption of the mortgage the parties will be placed In the position of a lessor and a lessee in respect of the same shop the rent whereof would be Rs. 10/- per month. This feature in the case before me is altogether different from the circumstances in which the cases of Travancore Cochin and Andhra Pradesh came to be decided. There was no agreement between the parties for the creation of a fresh relationship after the conclusion of the mortgage.

5. The learned counsel for the respondent urged that after the redemption of mortgage any stipulation for the continuance of the lease would amount to a clog on equity of redemption, and for that purpose he placed reliance on the Privy Council case of AIR 1930 PC 142. Lord Macnaghten, quoted in the Privy Council case, opines:

'It seems to me to be contrary to principle that a mortgagee should stipulate with his mortgagor that after full payment of principal interest and costs he should continue to receive for a definite or an indefinite period a share of the rents and profits of the mortgaged property as the result of an obligation arising from the contract made when that mortgage was created.'

No situation of the kind appears to arise in the present case. Even prior to the mortgage the relationship between Roshanlal and Mst. Bashiran was that of a landlady and a tenant and all that was agreed upon was that after the redemption of the mortgage the tenant will continue to pay rent in the sum of Rs. 10/- per month. The creation of this obligation on Roshanlal appears to be altogether independent of the mortgage and cannot be characterised as a clog on the equity of redemption.

6. In my view, therefore, having regard to the 'peculiar circumstances of this case Roshanlal did not become a trespasser after the mortgage dated 8th February, 1951 was redeemed. His relationship with Mst. Bashiran or her successors-in-interest became that of a lessor and a lessee on account of an agreement which came to operate after redemption and the plaintiff's suit wherein he has claimed Roshanlal to be a trespasser must obviously fail.

7. I would, therefore, set aside the judgment anddecree of the Civil Judge, Dholpur, and allow this appeal.In the circumstances of this case, however, I make the,costs of this appeal easy.


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