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1967 Supreme(SC) 77

SUPREME COURT OF INDIA
K.N. WANCHOO, R.S. BACHAWAT AND V. RAMASWAMI, JJ.
1. Mangru Mahto and others (In C A. No. 988 of 1964) 2. Ramanandan Lal and others (In C. A. No. 989 of 1964), Appellants
Versus
Thakur Taraknathji Tarkeshwar and others, Respondents.
Civil Appeals Nos. 988 and 989 of 1964
D/-8-3-1967.
Advocates appeared
Mr. D. Goburdhan, Advocate, for Appellants (In C. A. No. 9888 of 1964); M/s. S. C. Agarwal and R. K. Garg, Advocates of M/s. Ramamurthi and Co., for Appellants (In C. A. No. 989 of 1964); M/s. D. N. Mukherjee and S. Mustafi, Advocates for Respondents No. 1 (In both the Appeals).

Advocates:
D.GOVERDHAN CHARY, D.N.MUKHERJI, R.K.GARG, S.C.AGRAWAL, S.MUSTAFI

Headnote:MORTGAGOR’S POWER TO LEASE PRIOR TO ENACTMENT OF A-POWER TO LEASE MORTGAGE PROPERTY - LEASE GRANTED BY MORTGAGOR

       -a lease granted by the mortgagor, out of the ordinary course of management, though not binding on the mortgagee, is binding as between the mortgagor and the lessee. Such a lessee acquires an interest in the right of redemption and is entitled to redumption. If such a lease is created before the institution of a suit relating to the mortgage, the lessee must be joined as a party to the suit under Order 34, Rule I otherwise he will not be bound by the decree passed in the suit and will continue to retain his right of redemption. But in view of Section 52 of the Transfer of Property Act, if the mortgagor grants such a lease during the pendency of a suit for sale by the mortgagee, the lessee is bound by the result of the litigation. If the property is sold in execution of the decree passed in the suit, the lessee cannot resist a claim for possession by the auction - purchaser. The lessee could apply for being joined as a party to the suit and ask for an opportunity to redeem the property. But if he allows the property to be sold in execution of the decree,

       

Judgement

BACHAWAT, J. : One Harbans Narain Singh was the proprietor of villages Seha and Dhobaha and other villages. He created several incumbrances over these villages including a mortgage dated February 10, 1886 in favour of Basanti Bibi, two mortgages dated September 9, 1907 and February 5, 1910, in favour of Harprasad Das and a Mortgage dated August 2, 1911 in favour of defendant No. 1 Ramanandan Lal. On June 23, 1915, Harbans Narain sold the villages to Mahabir Missir redeemed the mortgages in favour of Basanti Bibi and Harprasad Das and became subrogated to their rights. Ramanandan Lal instituted a suit to enforce his mortgage, obtained a final decree for sale, put the decree into execution, at the execution sale purchased villages Seha and Dhobaha and obtained possession of the villages in 1919 and 1920. In 1924, Mahabir instituted suit No. 17 of 1924 to enforce his mortgage lien praying for ratable contribution of his dues in respect of villages Seha and Dhobaha from Ramanandan Lal and obtained a final decree on August 22, 1931, Mahabir died leaving his son Kashinath put the decree in suit No. 17 of 1924 into execution. On July 13, 1934, Ramanandan Lal paid the decretal dues in respect of village Seha. On November 4, 1935, village Dhobaha was sold in execution of the decree in suit No. 17 of 1924 and was purchased by Kashinath. In June, 1934, Ramanandan Lal through his constituted attorney, Munshi Sheobaran Lal granted five leases in respect of the suit lands in the village to defendants 2 to 7. At the time when the leases were created Ramanandan Lal was the mortgagor in possession of the suit lands over which Kashinath had a mortgage lien. One of the questions in issue in these appeals is whether the leases were binding on Kashinath.

2. It appears that Kashinath obtained a money decree against Ramatahal Pandey, husband of defendant No. 3 and execution of the money decree attached the suit lands. Defendants 2 to 7 filed claim petitions objection to the attachment under O. 21, R. 58, C. P. C. The claim petitions were allowed and the lands were released from attachment by orders of the executing court dated November 20, 1942 and February 26, 1944. The executing court found that the leases were genuine. Kashinath did not file any suit under O. 21, R. 63, C. P. C. One of the questions in these appeals is whether the orders passed in the claim proceedings under O. 21, R. 58 precluded Kashinath from setting up his claim in the present suit.

3. On June 11, 1946, Kashinath instituted the suit out of which these appeals arise against Ramanandan Lal and the lessees for recovery of possession of the suit lands and mesne profits alleging that the leases were collusive transactions and were otherwise not binding on him. The defendants contested the suit. In the meantime, in other proceedings, it was declared that Mahabir was a benamidar for Shri Thakur Taraknathji and the deity was the real owner of the villages. In view of this adjudication, Kashinath lost all interest in the present suit. By order dated August 25, 1952, the deity was added as a co-plaintiff in the suit.

4. The subordinate judge, Arrah, held that the leases were genuine, were granted by Ramanandan Lal in due course of management and were binding on the plaintiffs. On this finding, he dismissed the suit. The deity preferred an appeal to the High Court of Patna. The High Court allowed the appeal and decreed the suit. It held that the leases were sham transactions, were made in contravention of S. 65-A of the Transfer of Property Act and were not binding upon the plaintiff. Before the High Court, it was contended on behalf of the defendants that the plaintiffs were precluded from challenging the leases in view of the orders passed against Kashinath in the proceedings under O. 21, R. 58, C. P. C., but the High Court rejected this contention. Defendants Nos. 2, 6 and 7 and the widow of defendant No. 5 have filed C. A. No. 988 of 1964 and defendants 1 and 4 have filed C. A
















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