The execution of a fresh rent-note by a tenant in favor of a mortgagee during the currency of a mortgage does not create a fresh tenancy, and the tenant continues to be the tenant of the mortgagor.

D.K.Mahajan, J.

1. This case was referred to a Full Bench by my Lord, the Chief Justice, in pursuance of my referring order dated March 16, 1967. The reference was necessitated because of the following observations of Dua J. in Dr. Gian Singh Karam Singh v. Mohan Lal, AIR 1964 Punj 846:

".... It has been emphasised that it is only if the mortgagee had himself created a tenancy that one could hold the tenancy not to enure beyond the period of the mortgage. Whether the observations in the judgment in Mam Rajs case, that execution of a fresh rent-note made no difference on the facts and circumstances of that case is right or wrong does not directly concern us, for, we are not sitting on appeal against that judgment. The ratio of the Supreme Court decision, however, which was also binding on the learned Judge deciding Mam Rajs case (Mam Raj v. Rasheshar Parshad), Civil Revn. No. 332 of 1961, decided on the 2nd of March, 1962 (Punj), is clear."

The facts of Mam Rajs case, Civil Revn. No. 332 of 1961, D/-2-S-1962 (Pun), were, that a shop in dispute belonging to Rameshwar Dass had been let out by him to Mam Raj. During the currency of the tenancy, the Patiala and East Punjab States Union Urban Rent Restriction Ordinance, 2006 BK (Ordinance No. 8 of 2006 BK) came into force. This Ordinance ultimately yielded place to the East Punjab Urban Rent Restriction Act, after the merger of Pepsu in Punjab. This fact gave certain protections to the tenants: and one of them was that a tenant could only be evicted under Section 13 of that Ordinance. On December 12, 1949, Rameshwar Dass mortgaged the shop to Munshi Ram with possession. On that very day, Mam Raj executed a rent note in favour of Munshi Ram, mortgagee. Even otherwise Munshi Ram would be the landlord of Mam Raj in view of the definition of landlord in Section 2 (c) of the Ordinance. On January 2, 1959, Basbeshar Parshad purchased the equity of redemption from Rameshwar Dass; and before November, 1959, he redeemed the shop from Munshi Ram, mortgagee. On July 17, 1959, an application was made by Mam Raj against Basheshar Parshad for fixation or fair rent under the Rent Act.

Basheshar Parshad took the plea that there was no relationship of landlord and tenant between the parties and therefore, the application was not competent. The Rent Controller found that Mam Raj was a tenant of Basheshar Parshad. On appeal by Basheshar Parshad, the decision of the Rent Controller was set aside and it was held by the Appellate Authority that Mam Raj was not the tenant of Basheshar Parshad. The reason for this conclusion was that Mam Raj was held to be the tenant of the mortgagee and with the redemption of the mortgage, the tenancy of Mam Raj came to an end. Against this decision, a petition for revision was filed in this Court; and the same was decided by Mehar Singh J. The learned Judge referred to the decision of the Supreme Court in Asa Ram v. Mst. Ram Kali, AIR 1958 SC 183. The learned Judge held that:

"....Approach of the Appellate Authority wag not correct. The execution of a fresh rent-note by him in favour of Munshi Ram, mortgagee, on the date of the mortgage deed made no difference in substance, for it practically amounted to an attainment by him to Munshi Ram as landlord. The tenancy has been continuous since before 1949; and had remained so up to the date of the application by Mam Raj for the fixation of fair rent. In the circumstances, it was not correct that mortgagee, Munshi Ram, had created a tenancy in favour of Mam Raj which tenancy would come to an end with the cessation of the mortgage on redemption."

As a slight doubt seems to have lurked in the minds of the learned Judges deciding Dr. Gian Singhs case, AIR 1964 Punj 346, I thought it desirable to refer this case to a larger Bench; and that is how the case has been placed before us.

2. The facts of the present case may now be stated: Ram Chander, defendant No. 3, was the owner of the shop in dispute. This shop is situate in