V. Balasubrahmanyan, J.
1. This second appeal raises a nice point about rights of subrogation which a tenant of a building may claim against his landlord while seeking reimbursement through a Court of law of the municipal property tax which he has paid as occupier of that building. The question turns on a true construction of the relevant provisions of the Transfer of Property Act, 1882, and the Madras District Municipalities Act, 1920.
2. The tenant in this case was in occupation of a certain non-residential building within the municipal limits of Kumbakonam Town. He had been paying the municipal property tax on the building for some time. So far as the agreement of lease between him and his landlord was concerned, the liability for the rates had to be borne wholly by the landlord. Nevertheless the tenant was meeting the half-yearly demands from the Municipality for the property tax only in virtue of his statutory liability as occupier of the building. Upto a certain time, such payments by him to the municipality amounted to Rs. 956.86. Under the relevant statutory provisions relating to tax recovery by municipalities, the tenant was entitled to obtain reimbursement from his landlord of the amounts paid by him as tax for the property in his occupation. This reimbursement he was entitled either by way of adjustment against the rent due by him or otherwise.
3. In this case, before the tenant could fully adjust the payment of property tax against the rents accruing due, the landlord obtained an eviction order from the Rent Controller and took possession of the building from the tenant. As on the date of vacant possession, the tenant owed the landlord rent for the premises for some months, but they amounted only to Rs. 416. But this left a balance of Rs. 540.28 towards reimbursement of property taxes already paid by him for the property. Hence he sued the landlord for the amount, asking for a charge decree, directing the recovery of the amount from the landlord on a charge of that very property. He claimed the right to this relief as a subrogee from the Municipality which had a statutory charge over the property for the property tax due on it.
4. The landlord resisted the tenant's suit on two main grounds which, in their very nature, were inter-related. One was that the tenant was not entitled to any subrogation of the rights of the Municipality in respect of the property tax paid by him. The other was that the suit was barred by limitation as a simple money suit.
5. The trial Court rejected both the contentions. It held that the tenant was entitled to sue the landlord for a charge decree in virtue of his having been subrogated to the rights of the Municipality. Following up this determination the trial Court held that the period of limitation for a suit of this kind was 12 years under Article 62 of the Schedule to the Limitation Act, 1963. On the facts it was found that the suit had been filed within this time-limit. The trial Court accordingly directed the landlord to pay the amount within three months and granting leave to the tenant to apply to the Court for bringing the property for sale in the event of default in payment of the amount decreed within the time stipulated.
6. The landlord appealed to the Sub-Court, Kumbakonam raising the same contentions as during the trial. The learned Subordinate Judge, however, rejected them and confirmed the preliminary decree. The landlord has now brought the matter in second appeal.
7. The charge on the suit property, the benefit of which is claimed by the tenant in this case, is a charge not by agreement between him and his landlord, but by operation of law. Payment of municipal property tax to the Municipality is a statutory liability under the Madras District Municipalities Act, 1920. Under Section 85 of that Act, it is a first charge on the property. Section 332 of the Act confers a right of reimbursement on the occupier of the property to reimburse himself from the landlord the amounts he has paid to the municipality by way of property tax to the building under his occupation. Section 100 of the Transfer of Property Act, 1882 does cover such charges. The same provision, Section 100, it may be observed, expressly adopts all the provisions in the Transfer of Property Act relating to simple mortgages to charges as well, so far as may be. learned Counsel for the appellant accordingly invited my attention to Section 91 of the Transfer of Property Act to find if the claim of the tenant in this case to subrogation can be placed within the four corners of that section. His argument was that Section 91(a) applies only to persons who have an interest in or upon the property mortgaged or in or upon the right to redeem the mortgaged property. He pointed out that in the present case the tenant was a tenant at will, the tenancy not being for any term of years certain. On this basis, learned Counsel argued that the tenant in this case cannot invoke Section 91. It was but a step from this argument for learned Counsel to contend that the suit for reimbursement filed by the tenant cannot have been filed as a mortgage suit for the purpose of taking advantage of the longer period of time provided by the Limitation Act for suits of that kind. learned Counsel cited a decision in support of his contention reported in Pannalal v. Rajaram (1926) 96 I.C. 973, a decision of the Nagpur Judicial Commissioner. That case raised the applicability of Section 91 of the Transfer of Property Act to a lessee from the mortgagor. In the course of his judgment, the learned Judicial Commissioner observed:
After the creation of a valid mortgage what is left with the mortgagor is the equity of redemption. If the mortgage is without possession, the mortgagor's equity of redemption comprises also the right to enjoy the mortgaged property. Consequently, if the mortgagor grants a lease of the mortgaged property to another, the latter becomes a transferee of a portion of the equity of redemption and as such is a person having an interest in the property or at least in the right to redeem the property within the meaning of Section 91, clauses (a) and (b) of the Transfer of Property Act.
8. learned Counsel for the landlord, however, sought to build his argument on the following further observations of the learned Judicial Commissioner:.I hold that the words 'any person having any interest in the property' or 'any person having an interest in the right to redeem the property' as used in Section 91 of the Transfer of Property Act are sufficiently wide to include a lessee for a term of years.
9. learned Counsel emphasised the words 'term of years' occurring in the passage last cited, and urged that the principle of this decision was confined only to a lessee for a term of years and cannot be applied to such cases as the present where the tenancy is precarious and is for an uncertain duration. I am unable to accept this contention. The passage last cited from the judgment of the learned Judicial Commissioner can be explained by reference to the arguments addressed in that case. The argument there was that even a lessee had a right to redeem and can claim under Section 91 to be subrogated to the position of a mortgagor. This argument was sought to be minimised by reference to certain earlier authorities which had applied Section 91 to lessees who in those earlier cases happened to be holders of permanent tenures. It was only by way of discounting the validity of the distinction sought to be made as between permanent lessees and other kinds of leases that the learned Judicial Commissioner made the observation that even in cases where the lease is for a term of years, the lessee in question would have the right of subrogation under Section 91. The question whether a tenant at will in occupation of a mortgaged property has any such right was not discussed in the said judgment, for, on the facts of that case, there was no occasion for the learned Judicial Commissioner to discuss that point. In my view, on the principle that any tenant in occupation of an item of property subject to a simple mortgage has an interest in the equity of redemption, it must follow that he would be one of the persons entitled to subrogation under Section 91 of the Transfer of Property Act.
10. There is yet another consideration which would operate in favour of the tenant in this case. Although he is characterised as a tenant at will it must be noticed that he is in occupation of what is described as 'non-residential' building within the municipal limits of Kumbakonam. As such, the occupation of the building as well as the terms of the tenancy must be subject to the provisions of the Madras Buildings (Lease and Rent Control) Act. The tenant would, therefore, be properly described as a statutory tenant having rights of occupation, governed by the overriding provisions of the statute rather than by any terms of the contract between him and his landlord. It is notorious that this statute protects the occupation of tenants of such buildings and the tenants are liable to eviction only on certain grounds being made out by the landlord to the satisfaction of the Rent Controller. In this view, therefore, there can be practically no difference between a tenant for a term of years and a statutory tenant with such rights as are conferred on him by the statute. Hence, even giving a restricted application to the principle decided in Pannalal v. Rajaram (1926) 96 I.C. 973. I am satisfied that in this case the tenant must be regarded as a person having a right to redeem the charge in favour of the Municipality, and he having paid the municipal taxes, must be regarded as subrogated to the position of the Municipality entitled to enforce the charge against the landlord.
11. In my view, on the language of Section 91 of the Transfer of Property Act, the position of a tenant who pays statutory dues to the Municipality should be regarded as an a fortiori case. With reference to such a person it may be truly said that what he possesses is not just a mere 'right' to redeem. It is something more. Under Section 332 of the Madras District Municipalities Act, 1920, the tenant, as occupier of the property, is under duty bound to pay the municipal property tax. It seems to me, therefore, that his right for the purpose of Section 91 could not be less than that of a lessee paying the taxes or discharging the mortgage of his landlord on the basis of an agreement.
12. For all the above reasons, I feel that the judgment and decree of the learned Subordinate Judge are correct in law. The second appeal is dismissed but in the circumstances, without costs.