Judgment

KIRPAL

( 1 ) THIS is an appeal by special leave against the judgment and order of the High Court of judicature at Bombay, dated 11-12-1987 in Second Appeal No. 643/81 and the main question which arises for consideration is whether there was an implied surrender of the tenancy by the appellants-defendants in favour of the respondent-plaintiff at the time when the respondent-plaintiff executed a mortgage of the premises in favour of the appellants.

( 2 ) THE father of the appellants-defendants, namely Vishnu Malba Hendre (hereinafter referred to as Vishnu) was a tenant in respect of the front portion of House No. 115, Rawiwar Peth, Phaltan. The said house was owned by Baburao Savalaram Kothawale, the original plaintiff, now represented by his legal heir. The said house was mortgaged by the respondent-plaintiff in favour of Vishnu by three different deeds which were styled as conditional sale-deeds. By the first deed dated 16-4-1952 for a consideration of Rs. 2,000. 00 the tront portion of the house was transferred and by the other two deeds, possession of the rear and the middle portions were transferred for Rs. 1,200. 00 and Rs. 2,000. 00 respectively. The documents, inter alia, provided that in case the respondent-plaintiff returned the amounts within six, seven and nine years respectively, then Vishnu was to recover the property and in case the said amounts were not paid within the stipulated period, then the deeds were to be treated as sale out and out. After the execution of the third document. Vishnu created a tenancy in favour of the respondent-plaintiff in respect of the middle portion of the house and a rent note was executed on 18/03/1953. The respondent-plaintiff failed to pay the rent and the Vishnu filed a suit for recovery of the said rent and the same was decreed in March, 1956.

( 3 ) IN the year 1957, Vishnu died and thereafter, the appellants, who were his legal heirs, filed a suit in 1958 against the respondent-plaintiff for recovery of possession of the middle portion of the said house on the ground of default of payment of rent. The said suit was decreed in 1959. The result of this was that the appellants-defendants secured the possession of the entire house, consisting of three different portions.

( 4 ) ON 23-12-1959, the respondent-plaintiff served a notice claiming redemption in respect of front portion of the property only, covered by the first document. The appellants-defendants sent a reply pointing out that the period of five years which was fixed by the document for re-payment was over, and, therefore, the right of the respondent-palintiff to recover possession stood exhausted. This was followed by notice dated 7-3-1962 sent by the appellant-defendants informing the respondent-plaintiff that the time in the three said deeds having expired, the right to re-conveyance had come to an end.

( 5 ) AFTER a lapse of time, the respondent-plaintiff on 17-6-1974 filed a suit for redemption of the mortgage and recovery of possession. This suit was resisted by the appellants-defendants by raising various contentions. It was claimed that the suit was barred by limitation as the right to get back the property was lost due to the failure of the respondent plaintiff to repay the amount within the stipulated period set out in the document. It was also claimed that the appellants-defendants has become owners of the suit property by adverse possession. Another plea which was raised and with which we are concerned in this appeal was that the appellants-defendants were tenants in respect of the front portion of the house and in case it was found that the nature of the transaction was that of mortgage, then, on redemption, the tenancy would stand revived and the respondent-plaintiff would not be entitled to actual possession of the front portion of the house.

( 6 ) THE Trial Court decreed the suit on 3-5-1979 by holding that the suit transactions were mortgages by conditional sale and not sales with a condition to re