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R. Gopalasami Naidu Vs. K. Sakalaguna Naidu - Court Judgment

LegalCrystal Citation
CourtChennai
Decided On
Judge
Reported in138Ind.Cas.509
AppellantR. Gopalasami Naidu
RespondentK. Sakalaguna Naidu
Cases ReferredSivarama v. Subramanya
Excerpt:
presidency small cause courts act (xv of 1882), section 41 - scope and applicability--rental agreement--execution on same date as mortgage allowing mortgagor to be in possession--application for ejectment under section 41--maintainability--section 41--essentials to be proved. - - there is a provision in that document that, in case of failure to pay rent as stipulated therein, the mortgagee was entitled to possession of the property even without giving notice to quit or notice demanding possession......and purchased by the mortgagee in execution of a decree for rent obtained by him on the basis of a rent deed similar to the one before me, still vested in the mortgagor. the learned judges held that such a sale would be irregular having regard to the provisions of order xxxiv, rule 14, but the mortgagor should seek his remedy under section 47 of the code in the circumstances. it seems to me that there are some observations probably more direct to the point in a decision of our own court in the case reported in sivarama v. subramanya, 9 m. 57. there also there wag a mortgage and a lease, and the mortgagee argued that he was entitled to a charge on the property not only for the principal amount of the mortgage but also in respect of the rent for which he had obtained a subsequent decree in.....
Judgment:

Anantakrishna Ayyar, J.

1. This is a revision petition filed by one Gopalasami Naidu who was tbe respondent in an application for ejectment filed against him in the court of Small Cause, Madras, by one Sakalaguna Naidu who is the respondent before me. The facts are there. On the 4th March, 1916, the petitioner before me, i.e., Gopalasami Naidu executed a mortgage deed in favour of Sakalaguria Naidu. The document purports to be in some respects a combination of simple end usufructuary mortgage. The mortgagee was to have possession of the mortgage property, but there are certain stipulations therein regarding the interest to be paid on the principal amount. On the same date a deed of rental agreement was entered into between the mortgagor and the mortgagee under which the mortgagor was to remain in possession of the property on payment of a rent of Rs. 22-80 per mensem and the lease was to enure for a term of three years and there are also other conditions in the deed of rental agreement. There is a provision in that document that, in case of failure to pay rent as stipulated therein, the mortgagee was entitled to possession of the property even without giving notice to quit or notice demanding possession. On the allegation that rent was allowed to fall in arrears, the mortgagee under the rights secured by the deed of rental agreement aforesaid, applied to the Court of Small Causes, Madras, under Section 41 of the Presidency Small Cause Courts Act to eject Gopalasami Naidu. The main plea, as I am informed, urged in the lower court was that the small Cause Court had no jurisdiction to proceed under Section 41 of the Act, though from the lower Court's order it is not clear that the objection was put in that exact form before it. The learned Judge of the Court of Small Causes held that having regard to the fact that a separate deed of renal agreement was executed, and having regard to the condition in that deed mentioned by ma already, and rent being in arrears, Sakalagana Naidu was entitled to apply, under Section 41, and he accordingly directed the ejectment of Gopalasami Naidu. The present revision petition is filed against that order. On behalf of Gopalsaami Naidu, his learned Advocate argued before me that the deed of mortgage and the deed of rental agreement are both dated 4th March, 1916, that they should be treated as part and parcel of one and the same transaction, and that being so, whatever rights Sakalaguna Naidu may have should be taken to be those under the mortgage and, therefore, Section 41 would not apply to the present case. On behalf of Sakalaguna Naidu, the respondent before me, his learned Advocate argued that the contention urged on behalf of the petitioner does not take full notice of the fact that in the present case in addition to a deed of mortgage these is also a separate deed of rental agreement and that in such cases it is open to the lessor (because he must be so styled in law when we have to examine critically the rights of the parties at this stage) to enforce his rights under the rental agreement if for any reason he thought fit to do so. As I was informed that such transactions are common in this city, at the outset I enquired of the learned Advocates who appeared before me whether there have been any previous decisions on this question. The learned Advocate for the respondent only mentioned that such ejectment applications based on such leases were common but that the matter has not come up for direct adjudication before the courts. In the circumstance, in disposing of the question raised. I must proceed on the wording of Section 41 of the Presidency Small Cause Courts Act. The learned Advocate for the petitioner argues that the present case is covered by Section 19 of the Act and not by Section 41. Section 19 speaks generally of suits for the recovery of immoveable property. A specific provision covering some cases is made by Section 4l. That section enacts.

When any person has had possession of any immoveable property situate within the local limits of the Small Cause Court's jurisdiction and of which the annual value at a rack rent does not exceed Rs. 2,000, as tenant, or by permission, of another person, or of some person through whom such other person claims, and such tenancy or permission has determined or been withdrawn,....such other person may apply to the Small Cause Court for a summons against the occupant calling upon him to show cause....

2. One of two things must be shown under Section 41, viz., that the respondent to the application was either a tenant or a person who was occupying the property by the permission of another person and that such tenancy or permission has determined or been withdrawn. In the case before me, though it is no doubt true that the lease deed is in some way connected with the mortgage, the very circumstance that the parties to the transaction thought it proper or necessary to have a separate deed of rental agreement with specific conditions as in the present case, governing their rights would prima facie show that Gopalasami Naidu should be taken to be a tenant for the purpose of Section 41.

3. In any event, after the execution of the unufructuary mortgage deed by him in favour of Sakalaguna Naidu possession passed to Sakalaguna Naidu, and Gopalaswami Naidu should be taken to have been subsequently in possesion only with the permission of Sakalaguna Naidu. That permission has been withdrawn, admittedly. It therefore, seems to me that the present case comes within the scope of Section 41 of the Act. The learned Advocate for the petitioner drew my attention to a case in Bhaichand Kirparam v. Ranchoddaa Manchharam 58 Ind. Cas. 23l; 45 B. 174 : 22 Bom. L.R. 670 and in particular to the passage at page 181 Page of 45 B.--[Ed.]. The following passage form the judgment of Shah, J. was read to me. 'It is clear, in my opinion, that the claim for pcsseesion and rent arose under the mortgage. No doubt the claim for rent as also for possession was based upon the rent note; but the rent note itself was the result of the mortgage and the claim based thereon must be taken to arise under the mortgage' The question that arose for direct decision in that case was whether the equity of redemption of the mortgagor in the property mortgaged, which was sold in court auction and purchased by the mortgagee in execution of a decree for rent obtained by him on the basis of a rent deed similar to the one before me, still vested in the mortgagor. The learned Judges held that such a sale would be irregular having regard to the provisions of Order XXXIV, Rule 14, but the mortgagor should seek his remedy under Section 47 of the Code in the circumstances. It seems to me that there are some observations probably more direct to the point in a decision of our own court in the case reported in Sivarama v. Subramanya, 9 M. 57. There also there wag a mortgage and a lease, and the mortgagee argued that he was entitled to a charge on the property not only for the principal amount of the mortgage but also in respect of the rent for which he had obtained a subsequent decree in a suit for rent. The question arose between the first mortgagee and a later second mortgage the contention of the second mortgage was that in the circumstances, the first mortgagee was entitled to a charge on the property only to the extent of the principal amount of his mortgage The lower courts in that case had upheld the contention of the first mortgagee. On Second Appeal to the High Court, Hutchins and Parker, JJ. reversed the decision of the lower courts and at page 68 Page of 9 M.--[Ed.] they make the following observations which seem to help ma to decide the case here.

By letting the mortgaged properties to the mortgagors under the stipulation that they should pay rent in lieu of interest the respondent elected to convert the interest into rent. No doubt such a course had its advantages; but is not entitled to those advantages and also to the advantage of treating the sum conditioned to be paid as if it were interest. He sued for it as rent and not as interest and under the terms of the decree directing the sale of the property the sum now in question was awarded to him as rent. There is no foundation for the contention that arrears of rent are a charge on the land as against an encumbrance.

4. Applying those observations to the case before me the arrangement between the parties has its own advantages. The mortgagee, who may be called the lessor for the present purpose had the advantage of enforcing his rights under the lease deed without being under the necessity to have to enforce his rights under the mortgage document. If he would be entitled to recover rents was held in Sivarama v. Subramanya 9 M. 57 it seems to me that he would be entitled to recover possession also of the property, the other conditions being complied with. It therefore seems to me that Sakalaguna Naidu in the case before me would be entitled to possession as soon as the tenancy was terminated or the permission withdrawn. Having regard to the wording of Section 41 it seems to me that the present case would come within the scope of that section and it being admitted that the tenancy has been terminated and the permission withdrawn, Sakalaguna Naidu was within his rights in having applied to the Court of Small Causes under Section 41, and that he was not bound to go to the City Civil Court to enforce his right to possession under his mortgage. This is the only point argued before me and as I find myself unable to agree with the contention of the learned Advocate for the petitioner, the Revision Petition will stand dismissed with costs.


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