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2024 Supreme(Guj) 2253

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
J.C. DOSHI, J.
Mariamben, Dauther Of Rasulbhairahemanbhai Vohra, Since Died Through Lhr & Ors. - Appellants
Versus
Chandrakant Ratilal Kalal, Since Died Through Lhr & Ors. – Respondents
R/Second Appeal No. 134 Of 1995 With Civil Application (For Stay) No. 1 Of 2024
Decided On : 04-09-2024

Advocates Appeared:
For the Appellants : Mr JA Adeshra
For the Respondents: Kishan Y Dave, Mr. Hemang H. Parikh.

Mortgages with a condition of sale extinguish upon redemption. Tenancy rights granted to a mortgagee typically cease when the title reverts to the mortgagor, as the mortgagee’s interest is co-terminous with the mortgage. Unless explicitly proven, such tenancy rights do not revive following the redemption of the mortgage.

Headnote:(A) Transfer of Property Act, 1882 - Section 76(a) and (c) - Code of Civil Procedure, 1908 - Section 100 - Mortgage by conditional sale - Tenancy rights of mortgagee - Redemption of mortgage - Relationship of lessor and lessee - A mortgagee’s interest as a lessor is co-terminous with the mortgage interest; Section 111(c) of the Transfer of Property Act dictates that the duration of the mortgagee’s interest determines their position as a lessor. (Paras 18, 20)

(B) Appeal - Scope and ambit - Second appeal - Substantial question of law - Interference with findings of fact - Exception to general rule: where courts below ignored material evidence, drew wrong inferences from proved facts, or wrongly cast burden of proof. (Paras 22, 23)

Facts of the case:
A property was transferred under an agreement categorized as a mortgage by conditional sale. The mortgagor filed a suit for redemption of the mortgage and recovery of possession. The defendant claimed to be a tenant of the property and argued that tenancy rights were revived upon the redemption of the mortgage. Both lower courts held the transaction to be a mortgage by conditional sale and ordered redemption.

Findings of Court:
The court determined that the transaction was a mortgage by conditional sale rather than an outright sale with a condition for repurchase. Regarding the tenancy claim, the court found no evidence of a subsisting tenancy or its revival upon redemption, as the defendant failed to prove the terms, conditions, or existence of such a tenancy throughout the mortgage period.

Issues: Whether the transaction constituted a mortgage by conditional sale or an outright sale; and whether a tenant’s rights are revived upon the redemption of a mortgage where the tenant had previously functioned as the mortgagee in possession.

Ratio Decidendi: The relationship of landlord and tenant cannot subsist beyond the mortgagee’s interest unless expressly agreed upon by the mortgagor. A tenant inducted by a mortgagee in possession is typically not entitled to remain in possession post-redemption, and in the absence of evidence establishing the terms of a distinct tenancy, no revival occurs. Furthermore, findings of fact by lower courts will not be disturbed in second appeals unless they ignore material evidence or rely on non-existent evidence.

Result: Appeal dismissed and the concurrent decree for redemption and possession confirmed.

Table of Content
1. historical factual and procedural progression of the litigation. (Para 1 , 2 , 3 , 4 , 5)
2. parties' contentions regarding the nature of the transaction and occupancy rights. (Para 6 , 7)
3. interpretation of mortgage by conditional sale versus outright sale with repurchase. (Para 8 , 9 , 10 , 11 , 12 , 13)
4. tenancy rights of a mortgagee do not automatically revive upon redemption. (Para 14 , 15 , 16 , 17 , 18 , 19 , 20 , 21)
5. scope of high court interference in second appeals under section 100 cpc. (Para 22 , 23 , 24 , 25)

JUDGMENT :

J.C. DOSHI, J.

1. This second appeal under Section 100 of the Code of Civil Procedure, 1908 (for short ‘CPC’) at the instance of the original defendant challenges the concurrent judgment and decree passed by the learned Courts below whereby in suit filed by the plaintiff being Regular Civil Suit No.223 of 1983 decree was granted for the prayer of the redemption of the mortgage and for handing over the possession of the suit property along with the order of mesne profit at Rs.400/- per month till the possession of the suit property is handed over to the plaintiff. By judgment and decree dated 06.04.1995 in Regular Civil Appeal No.17 of 1987, learned Second Additional District Judge, Kheda confirmed and approved the judgment and decree passed by the learned Trial Court.

2. Before we note the facts for determining the second appeal, let refer chronicles and narratives placed in this second appeal. This second appeal was admitted on 13.09.1995 by framing substantial question of law. The second appeal was decided on 06.03.2013 (Mr.Justice C.L.Soni as he then was). The coordinate Bench of this Court while partly-allowing the appeal confirmed the decree passed by the Court below for redemption of the mortgage of the suit property but remanded the matter to the first Appellate Court to decide as to whether an execution of the Mortgage Deed, tenancy right of the defendant had stood terminated i.e. to say whether such tenancy right of the defendant wound stand revived on redemption of the mortgage. Special Leave Petition (Civil) No.10309 of 2013 and Special Leave Petition (Civil) No.35133 of 2014, numbered as Civil Appeal No.2022 of 2019 was filed before Hon’ble Supreme Court. The former one was filed by the heirs of Chandrakant Ratilal Kalal (heirs of the plaintiff) and the later one was filed by the appellants herein. In Civil Appeal No.2022 of 2019, the Hon’ble Apex Court quashed and set aside the judgment and order passed by this Court and remanded the matter to be decided afresh on the question of law already framed on 25.02.2019. The SLP filed by the heirs of Chandrakant Ratilal Kalal was also disposed of on 16.08.2013 while permitting the heirs of the Chandrakant Ratilal Kalal to take appropriate steps in the High Court for joining them as heirs.

3. Meanwhile, pursuant to the judgment and order passed by this Court dated 06.03.2013, the appeal proceedings before the First Appellate Court was restored and Regular Civil Appeal No.17 of 1987 was reheard by the learned Appellate Court i.e. learned 3^rd Additional District Judge, Kheda at Nadiad. By judgment and decree dated 31.12.2018, the learned First Appellate Court dismissed the appeal and confirmed the judgment and decree passed by the Court below. Being aggrieved and dissatisfied by the judgment and decree dated 31.12.2018 passed by the learned 3^rd Additional District Judge, Kheda, the original defendant Mariamben preferred Second appeal before this Court being Second Appeal No.287 of 2022. Thus, Second Appeal No.287 of 2022 was dismissed on 10.10.2022 for non-removal of the office objections.

4. In the background of above facts where parallel proceedings took place, let lens the relevant facts as under.

4.1 It is the case of the plaintiff is that the suit property was belonging to the father of the plaintiff and father of the plaintiff mortgaged the suit property with father of defendant, named Rasulbhai by executing deed of condition

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2024 Supreme(Guj) 2253

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