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IN THE HIGH COURT OF MADHYA PRADESH (INDORE BENCH)
V.R. Nevaskar, J.
Ramlal Bhagirathji
Vs.
Mahant Atmaramji Guru Kalyandasji (Deceased) through L.R. Rambilas Guru Mahant Atmaramji
C.R. No. 371 of 1958
Decided On: 07.04.1959
RENT-NOTE - LANDLORD-TENANT RELATIONSHIP - MORTGAGE - INTEREST-NOTE - SUCCESSION CERTIFICATE - ARREARS OF RENT - VALIDITY OF RENT-NOTE - INTERPRETATION OF DOCUMENTS - SECTION 92, EVIDENCE ACT - SECTION 214, INDIAN SUCCESSION ACT - SUMMARY: The Court held that a rent-note executed by a mortgagor in favor of the mortgagee, agreeing to pay rent for continuing to occupy the mortgaged house, created a valid landlord-tenant relationship. The Court interpreted the documents together and found that the rent-note was not intended to secure interest on the mortgage loan but to create a tenancy. The Court also held that the Defendant's payment of rent to the Plaintiff, the heir of the original landlord, amounted to recognition of the Plaintiff as his landlord, and therefore, the Plaintiff could recover arrears of rent without obtaining a succession certificate.
Fact of the Case:
The Defendant, who was the original owner of the house in suit, had executed a mortgage of this house and had executed a rent-note in favor of Mahant Atmaram agreeing to pay rent to him for continuing to occupy the said house subsequent to the date of the mortgage. The rent-note was for a period of one year and had been executed on 15-10-1952. The Defendant however had paid rent for one year in advance and the rent-note appears to have been extended to enable the Plaintiff, if he so desired, to obtain ejectment from the Defendant. The rent-note contained a specific stipulation that in case the Defendant did not vacate at the end of the year for which the rent had already been paid in advance, the landlord would be entitled to obtain ejectment by having recourse to a suit for the costs of which he would be liable. The mortgage deed mentioned the fact that the mortgagor had obtained Rs.4,000 for securing which the Defendant had executed the usufructuary mortgage deed and had executed a rent-note for one year. One year's rent had been paid in advance which was credited towrads interest of one year. The house would be redeemed at the end of the year. In case this were not done the house should be deemed to have been sold to the mortgagee. It is clear that the last mentioned term was a clog on the mortgage and was invalid. The mortgage appeared to be of anomalous sort and the rent-note was intended by the parties with a view to convert the occupation of the Defendant as an owner into that of a tenant.
Finding of the Court:
The Court held that the rent-note was a valid document creating a landlord-tenant relationship between the Plaintiff and the Defendant. The Court also held that the Defendant's payment of rent to the Plaintiff amounted to recognition of the Plaintiff as his landlord, and therefore, the Plaintiff could recover arrears of rent without obtaining a succession certificate.
Issues: 1. Whether the Plaintiff could sue without obtaining succession certificate? 2. Whether the document sued upon is not a rent-note but is only an interest-note and had become inoperative subsequent to 14-10-1953? 3. Whether the Plaintiff could claim Rs.200 as arrears.? 4. Whether by reason of the expiry of the period of one year for redemption of mortgage had expired no suit could be based on the rent-note covering that period ?
Ratio Decidendi: 1. The Court held that the rent-note was a valid document creating a landlord-tenant relationship between the Plaintiff and the Defendant. The Court relied on the decision in Feroz Shah v. Sohbat Khan AIR 1933 P.C. 178, where the Privy Council held that a possessory mortgage accompanied by a lease back to the mortgagor is not invalid and that the mere absence of a formal handing over of the land to the mortgagee, and a handing back by him to the mortgagor in the character of lessee, is of little significance. 2. The Court also held that the Defendant's payment of rent to the Plaintiff amounted to recognition of the Plaintiff as his landlord, and therefore, the Plaintiff could recover arrears of rent without obtaining a succession certificate. The Court relied on the decision in Ramarayanimgar v. Maharaja of Venkatagiri AIR 1927 P.C. 32, where the Privy Council held that where a mortgage and a lease are executed simultaneously as part of the same transaction, the two documents should be read together and the amount of arrears with interest thereon has a charge upon the mortgaged property.
Final Decision: The Court dismissed the Defendant's petition and upheld the trial court's decree in favor of the Plaintiff.
V.R. Nevaskar, J.
This petition for revision arises out of Plaintiff's suit for recovery of arrears of rent. The Defendant, who was the original owner of the house in suit had executed a mortgage of this house and had executed a rent-note in favour of Mahant Atmaram agreeing to pay rent to him for continuing to occupy the said house subsequent to the date of the mortgage. The rent-note was for a period of one year and had been executed on 15-10-1952. The Defendant however had paid rent for one year in advance and the rent-note appears to have been extended to enable the Plaintiff, if he so desired, to obtain ejectment from the Defendant. The rent-note contained a specific stipulation that in case the Defendant did not vacate at the end of the year for which the rent had already been paid in advance, the landlord would be entitled to obtain ejectment by having recourse to a suit for the costs of which he would be liable. The mortgage deed mentioned the fact that the mortgagor had obtained Rs.4,000 for securing which the Defendant had executed the usufructuary C.R. No. 371 of 1958 decided on 7-4-1959. (Indore Bench.) J mortgage deed and had executed a rent-note for one year. One year's rent had been paid in advance which was credited towrads interest of one year. The house would be redeemed at the end of the year. In case this were not done the house should be deemed to have been sold to the mortgagee. It is clear that the last mentioned term was a clog on the mortgage and was invalid. The mortgage appeared to be of anomalous sort and the rent-note was intended by the parties with a view to convert the occupation of the Defendant as an owner into that of a tenant.
The Plaintiff claims to be the heir of Mahant Atmaram the person named as the landland in the rent-note and entitled to recover arrears of rent as Mahant Atmaram was dead. It was asserted by the Plaintiff that subsequent to the death of Mahant Atmaram the Defendant paid Rs.300 through Indarmal Kataria. He was given credit for the rent of Rs.50 said to have been paid in excess to Mahant Atmaram. The Plaintiff claimed Rs.200 as rent due from 15-6-1956 upto 14-2-1957 at Rs.25 P.M.
The Defendant denied Plaintiff's right to succeed to Mahant Atmaram and contended that he could not recover arrears of rent in the absence of succession certificate. The payment of rent Rs.300 to the Plaintiff was not specifically admitted although it was admitted that the transaction of payment took place through Indarmal Kataria. Whatever had been paid was said to have been paid as interest as according to the Defendant the alleged document styled by the Plaintiff as a rent-note was in fact a interest-note and the Plaintiff therefore was not entitled to recover any rent from him.
The amount of interest to which he might be liable would be determined at the time of redemption.
On these contentions the trial Court framed the following two points for determination in the first instance:
1. Whether the Plaintiff could sue without obtaining succession certificate ?
Whether the document sued upon is not a rent-note but is only an interest-note and had become inoperative subsequent to 14-10-1953 ?
Both these points were determined in favour of the Plaintiff. It was held that since the Defendant had paid rent to the Plaintiff he could not contend that he was not his tenant. The Plaintiff if he is entitled to recover rent for the period in question he could do so without obtaining succession certificate. It was further held that the document sued upon was a rent-note and not an interest-note. It was further held that it was meant to be operative even subsequent to the expiry of one year as one year's rent had already been paid in advance.
After these findings two more points of determination were added and as one of them involved question of fact evidence was taken. These points are:
1. Whether the Plaintiff could claim Rs.200 as arrears.?
Whether by reason of the expiry of the period of one year for redempt
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