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Rajasthan High Court
Modi, J.
Dhulilal - Appellant
Versus
Pannalal - Respondents
Civil Regular Second Appeal No. 219 of 1962
Decided On :
Under the contract of tenancy, the defendant was or would have to pay a sum of Rs. 8/8/- per month as rent to the plaintiff, while under the transaction of mortgage which was subsequently entered into between the parties, it was agreed that the plaintiff would not pay any interest on the sum of Rs. 1500/- borrowed by him from the defendant and the defendant was not required to pay rent whatever. These two stipulations one under the contract of tenancy and the other under the contract of mortgage would hardly co-exist at one and the same time. It was agreed that the mortgagor was mortgaging the property for a period of ten years and that he will have no rights to redeem it before the limit of ten years. In other words, the defendant was given a right to remain in occupation of the shop for a period of ten years certain under the mortgage. But what was his right of occupation under the contract of tenancy ? The tenancy being an ordinary monthly tenancy was terminable at any time, and no notice for the termination of the tenancy was even necessary. That being so, it is clear that while under the contract of tenancy, the defendant had no right to remain in occupation of the shop in question, save at the pleasure of the plaintiff, the defendant, under the contract of mortgage, acquired a right to remain in occupation of it for at least a period of ten years. It is obvious that these two positions are utterly inconsistent with each other. It was further stipulated in the deed that after the completion of ten years, the plaintiff would be entitled to redeem his shop on paying the entire redemption money to the defendant. The plain meaning of this stipulation is that on receiving the redemption money at the end of ten years, the defendant will hand over possession to the plaintiff. This condition was and is also inconsistent with the right of the defendant to remain in possession of the mortgaged property even after it had been redeemed by the plaintiff. Obviously, the two relationships namely (1) of landlord and tenant and (2) of mortgagor and mortgagee, as analysed above could not stand side by side or co-exist and therefore the earlier relationship of landlord and tenant must be held to have been impliedly surren-derd when the subsequent one of mortgagor and mortgagee arose for operation.
The correct text in such cases is not whether there is an inherent impossibility in a person occupying two positions at one and the same time, namely, a mortgagee in possession and a lessee but whether the enjoyment under the two contracts is inconsistent with each other or not. Where it is, having regard to the terms of both of them, then, the only proper conclusion to come to would be that when subsequent relationship arose, the earlier one must ex necessitaterei be treated as having come to an end on the doctrine of implied surrender as contained in sec. 111(f) of the Transfer of Property Act. (paras 7,8,9 and 10)
2. The plaintiffs case was that he had made a usufructuary mortgage of the suit shop, the boundaries whereof have been fully described in paragraph one of the plaint, as a security for a loan of Rs. 1500/-taken by him from the defendant on the 3rd August, 1945, vide Ex. 1. I shall refer to the conditions of this mortgage at the proper place. Suffice it to state at this place that the plaintiff asked the defendant to give redemption of the suit property but without any avail and consequently he instituted the suit, out of which the present appeal arises, on the 30th July, 1959, in the court of the Munsiff Kotah. The defendant admitted the mortgage but he denied that the plaintiff had ever offered the redemption money to him. His principal contention, however, was that the plaintiff was in no case entitled to get possession of the shop because on the 3rd August, 1945, when it had been mortgaged to him, he was in occupation of it as a tenant from the plaintiff and that tenancy had never been terminated. The trial court held that the plaintiff was entitled to redeem the mortgage on payment of Rs. 1500/- into the court but it further held that the plaintiff would not be entitled to get possession thereof inasmuch as there was a previous relationship of landlord and tenant between the parties and it having remained in abeyance during the subsistence of the mortgage was bound to revive and the parties would revert to their former status. The plaintiff then went up in appeal to the learned District Judge Kotah who allowed the appeal and held that the plaintiff shall be entitled to get back possession of the mortgaged shop as well. The learned District Judge acted on the principle that as soon as the parties entered into the transaction of mortgage in this case having regard to the terms of the mortgage, the old relationship of landlord and tenant between them was terminated by an implied surrender within the meaning of clause (f) of sec. 111 of the Transfer of Property Act, and thereafter the only relationship in which they stood with each other was that of a mortgagor and a mortgagee and on redemption of mortgage, therefore, the plaintiff should be held entitled not only to get back the documents relating to his title which he had handed over to the defendant at the time of the mortgage but he was also entitled to get back actual possession of the property under mortgage. Aggrieved by this decision, the defendant has come up in second appeal to this Court.
3. The only question which, therefore, falls for determination in this appeal is whether the finding of the learned District Judge that there was an implied surrender of tenancy rights on the part of the defendant as soon as he acquired the status of a mortgagee with respect to the property in question is well founded. Learned counsel for the defendant appellant has strenuously contended that it is not, and places his chief reliance on a decision of the Allahabad High Court in Kallu vs. Diwan (1). This decision in its turn relied on a decision of Burkitt, J. of the same High Court in second appeal No. 122 of 1898, decided on the 20th December. 1898, in which it had been held that no extinction of tenancy rights could take place upon the grant of a usufructuary mortgage to an occupancy tenant by his landlord, To use the words of Burkitt, J., if the extinction of tenancy rights was brought about in such a case on the redemption of mortgage, the result would be that the occupancy tenant would be in a much worse position after his possession as mortgagee had ceased than before, and such a result could not be assented to. The point to be noted is that in the case before Burkitt, J. the person in whose favour the mortgage came to be made was an occupancy tenant of the land under mortgage. The learned Judges in Kallus case (supra) seem to have extended the
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