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1972 Supreme(Guj) 20

Gujarat High Court
J. B. MEHTA
Vohra Habsu - Appellant
Versus
Shah Chhaganlal Devachand - Respondent
Second Appeal No. 532 of 1966
Decided On : 02/24/1972

Advocates:
Bhagubhai H. Shah, for Appellant; R. M. Christie, for S. B. Vakil, for Respondent No. 1.

Headnote:

Transfer of Property Act - Section 76 – Mortgage of property – Lease – Tenancy - Lease will continue mortgagor or persons deriving interest from him mortgagor had concurred to grant it - It is true that in that case there was no express power conferred terms mortgage for creating tenancy - That is why tenants interest was held to be conterminous interest mortgagee - Even Rent Restriction Act protection could not be had by such a tenant because termination mortgagors interest relationship of landlord and tenant had terminated and he could not be said to be tenant of that land - Their being no landlord and no tenant their Lordships held provisions Rent Restriction Act could not apply any further - Therefore aforesaid decision clearly shows that if there is concurrence mortgagor grant case shall be one of exception - Held, present case terms mortgage make it clear that the right to recover rent was given mortgagees only during period mortgage and after redemption right reverted mortgagor and therefore mortgagor would landlord and when there is such relationship of landlord-tenant Rent Restriction Act would clearly be applicable - As is earlier pointed out vital question at this stage is whether possession should be awarded when mortgage document itself makes it clear that only possession which was contemplated between parties was such possession property was capable of time of redemption - If property was actually exercising power given mortgagor only possession which could be decreed at time of redemption would be possession through tenant and possession - Appeal allowed

JUDGMENT :-

Defendant No. 6 - tenant of the mortgagee - has filed this appeal as both the Courts have while passing the decree for redemption of the suit mortgage ordered the defendants to deliver actual possession of the mortgaged property. Mr. Shah for the tenant at the outset tried to challenge the fact that the mortgage was duly proved. Mr. Shah cannot be permitted to do so as he is claiming title only under the mortgagees. Once the mortgagees passed Purshis, Ex. 47, admitting the suit mortgage, redemption decree was rightly passed. The only question would be whether Khas possession should be given or such possession as this very property was capable of because of the terms of this very mortgage, but that question could surely be agitated by this tenant defendant No. 6. Under the terms of the mortgage deed in question it is provided that possession was delivered of the house in question and the mortgagees could use or let the suit property or get the rental income in lieu of interest. The mortgagors-plaintiffs would have no right to that rental income. The term was of 25 years. It is also agreed that at the end of the term when the house was returned on repayment of the mortgage debt, the rental income during the period would belong to the mortgagees and their heirs while the plaintiffs mortgagors would have no right to that rental income. It was further stated that at the expiry of the term on acceptance of the mortgage dues, the mortgagees will return the house in question to the mortgagors. Therefore, it is very clear that this mortgage conferred specific power on the mortgagees to induct the tenant in the suit house and to earn rental income in lieu of interest during the continuance of the mortgage and the rental income was to be of the mortgagees and their heirs. Therefore, when such express power is conferred by the mortgage deed to enable the mortgagees to induct the tenant, the tenure of these tenants could never be conterminous with the mortgagees' interest. The only effect of redemption would be that the rental income which the mortgagees had a right to take would thereafter be taken by the mortgagors. Therefore, the very nature of this mortgage revealed because of its express stipulation that a redemption was not intended between the parties by way of delivery of Khas possession but only by symbolic delivery of possession when a tenant had been lawfully inducted by the mortgagee in view of the express conferment of that power. The case would be analogous to power of attorney holder inducting the tenant. Even if thereafter the power of attorney is cancelled the tenancy would not come to an end. The legal position in this connection is well settled that a person can never give a better title than what he has. Therefore, when a mortgagee inducts a tenant, such tenant's interest would be conterminous with the interest of the mortgagee. The recognised exceptions, however to these general principles are :

(1) Because of Sec. 76 (a) of the Transfer of Property Act under which the mortgagee is liable to manage the property as his own and, therefore, if for the purposes of prudent management he bona fide inducts a tenant for a longer period, that tenancy in exercise of this statutory provision would enure for a longer period and would not automatically come to an end. However if such a mortgagee were to induct a tenant without any further stipulation of a longer period of duration etc. the tenancy would come to an end when the mortgagees' interest comes to an end.

(2) Another exception would be where a statute confers on the mortgagees' tenants a statutory protection as in the Bombay Tenancy Act or any other similar legislation.

(3) The next exception which is also a recognised exception is where the mortgage deed by its own terms confers power on the mortgagee to settle the tenants in question. In such a case because of the express power a tenant who is brought on the premises would be continued there even after the rede







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