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  • provisions of the Bombay Tenancy & Agricultural Lands Act.
  • provisions of s. 52 of the Transfer of Property Act
  • provisions of s. 52 of the Transfer Property Act.
  • s. 52 of the Transfer of Property Act.3.
  • TRANSFER OF PROPERTY ACT
  • provisions of the Bombay Tenancy Act
  • s. 52 of the Transfer of Property Act
  • s. 3A of the Tenancy Act of 1939
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Citation Codes
Equivalent Citations
citation codes
Case Number
Judges
Acts
  • provisions of the Bombay Tenancy & Agricultural Lands Act.
  • provisions of s. 52 of the Transfer of Property Act
  • provisions of s. 52 of the Transfer Property Act.
  • s. 52 of the Transfer of Property Act.3.
  • TRANSFER OF PROPERTY ACT
  • provisions of the Bombay Tenancy Act
  • s. 52 of the Transfer of Property Act
  • s. 3A of the Tenancy Act of 1939
Smart Summary

Summary of Opinion — Bavdekar, J.

Factual and Procedural Background

The land originally belonged to Dhana Supadu, who in 1928 created two mortgages: the first in favour of Madhav Martand and the second in favour of Rajmal Lakhichand. Madhav sued on his mortgage in Suit No. 511 of 1928, joining Rajmal and the original mortgagor as parties. Rajmal purchased the property pendente lite in 1932. Madhav obtained a decree for sale on April 10, 1935, and applied for execution in 1938. While the execution application was pending (either in 1939 or 1940–1941) Rajmal let the property to opponent No. 1. The mortgaged property was sold in execution on March 17, 1953, and the petitioner purchased it.

The petitioner applied to the Mamlatdar for a declaration that opponent No. 1 was not his tenant. The Mamlatdar held that opponent No. 1 was not the petitioner's tenant because the lease created by Rajmal in 1939 or 1940–1941 was affected by the doctrine of lis pendens (s. 52, Transfer of Property Act) and therefore could not affect the rights of the auction-purchaser (the petitioner). The Prant Officer upheld the Mamlatdar's order. The Revenue Tribunal reversed, holding that although s. 52 prevented the lease from affecting the mortgagee's rights, the lessee's possession was lawful in its inception and statutory protections under the Bombay Tenancy Act made the lessee a protected tenant; the Tribunal observed the auction purchaser would have to take eviction proceedings under the Act if he wanted possession and concluded “It cannot be accepted that the applicant was not a tenant.”

The petitioner then applied under Article 227; this opinion disposes of that application.

Legal Issues Presented

  1. Whether a lease created by the mortgagor pendente lite (during a suit filed by the mortgagee) can bind the mortgagee or an auction purchaser under the doctrine of lis pendens as embodied in s. 52 of the Transfer of Property Act.
  2. Whether rights conferred on a tenant by provisions of the Bombay Tenancy & Agricultural Lands Act (in particular s. 3A of the Tenancy Act of 1939 and related provisions) can operate against the mortgagee or an auction purchaser despite s. 52.
  3. The relevance of s. 65A of the Transfer of Property Act (and the Supreme Court decision cited in relation thereto) to the question whether a mortgagor could create a lease binding on the mortgagee even after a suit had been filed.

Arguments of the Parties

Arguments advanced on behalf of the tenant (opponent No. 1) — Mr. Desai

  • Section 65A of the Transfer of Property Act gave the mortgagor the power to let the property in such a manner that a lease could be binding upon the mortgagee; that power existed whether or not a suit had been filed, and did not terminate on the mere filing of Madhav's suit.
  • The mortgagor failed to make an application within the time mentioned in s. 3A of the Tenancy Act of 1939 for a declaration that the tenant was not a protected tenant; as a result, opponent No. 1 became a protected tenant under s. 3A of the old Act, and remained a protected tenant for the purposes of the 1948 Act.
  • Because the lease was valid in its inception and the tenant acquired statutory protections under the Tenancy Act, those rights should protect the tenant against the auction purchaser as well.

The opinion contains detailed statements of the tenant's arguments (above). The opinion does not set out detailed, separate argument briefs for other parties in the same manner.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Raja Kamaleshya Narayam Singh Bahadur v. Chohan Ram, [1933] S.C.R. 108 Cited as deciding the previously unsettled question whether a mortgagor had power to lease property so that the lease would be binding upon the mortgagee (the decision set the question at rest). The Court observed that s. 65A only made clear the mortgagor's right to lease subject to conditions in s. 65A(2), but held that this clarification did not affect the doctrine of lis pendens (s. 52). The case was used to explain why s. 65A need not be applied to resolve the lis pendens issue in this matter.
Jaman Mia v. Akali Mudiani (Calcutta High Court) Cited as authority for the proposition that a lease created by the mortgagor pending a suit would not bind the mortgagee. The Court relied on this authority to support its conclusion that lis pendens prevents a mortgagor's pendente lite lease from affecting the mortgagee or an auction purchaser who acquires the mortgagee's interest.
Mahabir Gope v. Harbans Narain Singh, [1952] S.C.R. 775 Cited for the observation that if a mortgagee had power to create a lease in favour of a third person, statutory rights may arise in a tenant introduced by him because such rights depend on the nature of the land and possession for the requisite period. The Court cited this decision to distinguish the present situation: while Mahabir Gope recognized that a mortgagee's own action might give rise to statutory tenant-rights, it did not imply that a mortgagor's pendente lite lease (void as against the mortgagee under s. 52) could confer rights against the mortgagee or purchaser.

Court's Reasoning and Analysis

The Court's analysis proceeds in distinct steps, each based on the text of the opinion:

  1. Identification of the controlling statutory doctrine: the Court emphasized the doctrine of lis pendens as embodied in s. 52 of the Transfer of Property Act. Because Madhav filed suit in 1928 (a suit properly constituted with the second mortgagee and the mortgagor as parties), any transfer by a party to the suit pendente lite that would affect Madhav's rights was prohibited by s. 52.
  2. Treatment of s. 65A: the Court noted s. 65A was enacted to clarify whether a mortgagor could create a lease binding on the mortgagee (a question settled by the Supreme Court decision cited). However, the Court regarded s. 65A as not decisive for the present case; even if s. 65A would otherwise permit certain leases, that enactment did not displace the lis pendens rule. The Court concluded it was unnecessary to resolve the s. 65A issue here because s. 52 furnished a conclusive answer.
  3. Nature of what an auction purchaser acquires: the Court explained that an auction purchaser at a sale upon mortgage acquires not only the mortgagor's interest or subsequent mortgagees' interests but also the interest of the mortgagee who brought the property to sale. Thus the petitioner, having purchased at auction, obtained both the mortgagee's and the mortgagor's interests; that dual acquisition means a pendente lite lease that would affect the mortgagee would necessarily affect Madhav's rights.
  4. Interaction with the Bombay Tenancy & Agricultural Lands Act (s. 3A): the Court accepted that the mortgagor could validly create a lease and that opponent No. 1 became a protected tenant vis-a-vis the mortgagor under s. 3A of the old Tenancy Act (and for purposes of the 1948 Act). But the Court held that those statutory tenant-rights, insofar as they arise from a lease affected by lis pendens, do not create enforceable rights against the mortgagee or an auction purchaser unless the tenancy legislation expressly provides that such tenant-rights operate notwithstanding s. 52. The Court found no provision in the Tenancy Act that overrides s. 52.
  5. Synthesis and conclusion: because s. 52 prevents a mortgagor from creating any lease that would affect the mortgagee or a subsequent purchaser who acquires the mortgagee's interest, the lease in favour of opponent No. 1 could not bind the mortgagee or the petitioner's rights. Consequently, no relationship of protected tenant was created between opponent No. 1 and the petitioner after the petitioner's purchase.

The Court referred to supporting authority (Jaman Mia) and distinguished the limited circumstance in Mahabir Gope where rights might arise from a mortgagee's own act; the Court emphasised that nothing in the tenancy legislation was shown to oust the operation of s. 52.

Holding and Implications

Holding:

The order passed by the Revenue Tribunal is set aside, and the orders passed by the Prant Officer and the Mamlatdar are restored.

Direct implications for the parties:

  • The petitioner (the auction purchaser) is not affected by the lease that was created by the mortgagor pendente lite.
  • Opponent No. 1 was not a protected tenant of the petitioner following the petitioner's purchase; the lease could not be enforced against the purchaser because it was impotent to affect the mortgagee's rights under s. 52.
  • There will be no order as to costs of the Article 227 application.

Broader implications:

The Court did not purport to lay down a new principle beyond applying the doctrine of lis pendens (s. 52) to the facts. The opinion states that nothing in the tenancy legislation was shown to override s. 52; accordingly, the decision is confined to the direct effect on the parties and does not declare any statutory provision to be overridden. The Court noted that had the Legislature wished to provide that tenancy rights could arise notwithstanding s. 52, it could have done so, but no such provision was drawn to the Court's attention.

    Ramdas Popatlal v. Fakira Pandu Patil

    Bavdekar, J.:— The land in the present application under art. 227 originally belonged to one Dhana Supadu. He created two mortgages upon it in the year 1928, the first a mortgage in favour of one Madhav Martand, and then a mortgage in favour of one Rajmal Lakhichand. We will not be concerned with the second mortgage in the present case. Madhav Martand sued upon his own mortgage in suit No. 511 of 1928 joining as parties to it Rajmal and the original mortgagor. Rajmal himself purchased the property pendente lite in the year 1932. Subsequently on April 10, 1935, Madhav obtained a decree for sale upon the first mortgage, and in execution of the decree brought the mortgaged property to sale. The application for execution was made in the year 1938, and while it was still pending—it is not quite clear whether in the year 1939 or 1940–1941—Rajmal let the property to opponent No. 1. Subsequently in that application for execution made by Madhav, the property was sold on March 17, 1953, and the petitioner purchased it. He then made the application to the Mamlatdar, from which the present application under art. 227 arises. That implication was for a declaration that opponent No. 1 was not his tenant. The Mamlatdar held that opponent No. 1 was not the tenant of the petitioner, because the lease created by Rajmal in 1939 or 1940–1941 was affected by the doctrine of lis pendens and could not affect, the rights of the auction-purchaser, the petitioner. The Prant Officer upheld his order, but when the matter went to the Revenue Tribunal, they held that even though the result of s. 52 was that the case which was created by Rajmalal would not affect the rights of the mort-agee, still the possession of the lessee could not be said to be unlawful in its inception. Rajmal was entitled to cultivate the lands himself, or to let them but to any other person, till the property was sold. Consequently the lease as lawful in its inception. He was, therefore, lawfully cultivating the lands under the ordinary law. Then they went on to observe:

    “The opponent auction purchaser may be entitled to evict the applicant under the provisions of the Act. The opponent will be obliged to take action under the provisions of the said Act if he wants possession. It cannot be accepted that the applicant was not a tenant.”

    2. The petitioner has made this application, under art. 227, and it appears to us that this was a lease which was created after s. 65A of the Transfer of Property Act was enacted, and consequently if it had not been a lease which was created pendente lite, then, it would have to be investigated, before determining whether the lease was binding or not as to whether the lease fell within the powers of a mortgagor under that section. It is not, however, necessary to go into that, question in this case, because the question can be decided upon the doctrine of lis pendens, which is embodied in s. 52 of the Transfer of Property Act.

    3. Now, Madhav had filed his suit upon the first mortgage in the year 1928. That, suit was a properly constituted suit having as parties the second mortgagee as well as the mortgagor. Subsequently Rajmal having purchased the interest of the mortgagor, the mortgagor of course went out of the suit for all practical purposes. But the result of the application of s. 52 of the Transfer of Property Act was that no lease could be created by Rajmal pending the suit filed by Madhav so as to affect Madhav's rights. Now, it is quite true that subsequently Madhav having brought to sale the mortgaged property, it has been purchased by the petitioner. But the argument that allowing the lease to hold good as against Madhav would not affect the rights of Madhav cannot for a moment be accepted. It is quite true that the petitioner purchased the interest of the-mortgagor as well as the second mortgagee at the auction sale, and if that was all that he had purchased, then, it could be said that holding the lease good as against the petitioner would not affect the interest of the mortgagee. But what an auction purchaser purchases at a sale upon a mortgage is not only the interest of the mortgagor, or the interest of any subsequent mortgagees who have been made parties to the suit, but also the interest of the mortgagee who has brought the property to sale. The petitioner, therefore, had in him both the interests of the mortgagor and the mortgagee after his purchase, and if the lease in favour of opponent No. 1 is held good as against him, then, in that case, the result must necessarily be that Madhav's rights in the property, which were the subject-matter of the suit, would be affected. Mr. Desai, who appears on behalf of the tenant, contends however that in this case there was power in the mortgagor under s. 65A of the Transfer of Property. Act to let the property in such a manner as the lease would be binding upon the mortgagee, and he says that this power the mortgagor had, whether a suit had been filed or not. The power would not come to an end by the mere fact that Madhav had filed a suit. Now, s. 65A was enacted, because there was a difference of opinion between the different High Courts before it was enacted as to whether a mortgagor had got power to let the property to another in such a manner that the lease would be binding upon the mortgagee. This question is now set at rest by the decision of their Lordships of the Supreme Court in Raja Kamaleshya Narayam Singh Bahadur v. Chohan Ram . [1933] S.C.R 108.. But the question was undecided when s. 65A was enacted, and the only effect of this enactment was to make if quite clear that a mortgagor had a right to lease the property, provided the conditions mentioned in s. 65A(2) were satisfied. But it seems to us that the does not affect the question of lis pendens. The question whether one party to a suit had or had not got a right to enter into a transaction does not affect the question of lis pendens. A mortgagor, for example, may, pending a suit file by the mortgagee, convey the equity of redemption to anybody he likes. He may similarly create a second mortgage. The only thing which he cannot is to do these things in such a manner as to affect the first mortgagee. If does create a second mortgage, or if he conveys the equity of redemption, the second mortgagee or the purchaser takes subject to the result of the suit. That is because once a suit is filed, s. 52 prohibits one party to the suit to effect transfer which he could have done, if the suit had not been filed, not absolutely lately, but in such a manner as to affect the rights of the Other party to the suit. It seems to us, therefore, that if s. 52 is to be allowed to have full effect, it must be decided that any lease, which is created by a mortgagor pending a suit which was filed by the mortgagee, would not be binding upon the mortgagee, or any person who has subsequently purchased the interest of the mortgagee along with that of the mortgagor in the property in suit, and the lessee will have to take subject to the result of the suit. There is authority for this proposition in the case of the Calcutta High Court in Jaman Mia v. Akali Mudiani.

    4. Then we come to the provisions of the Bombay Tenancy & Agricultural Lands Act. Now, it is quite true that, as their Lordships of the Supreme Court observed in the case of Mahabir Gope v. Harbans Narain Singh . [1952] S.C.R 775. if the mortgagee had power to create a lease in favour of a third person, then rights may spring up in a tenant whom he has introduced in the land, because of a statute which makes such rights dependent upon the nature of the land and possession for the requisite period. But the question is whether in this particular case there are any rights created because of the provisions of the Bombay Tenancy Act in the tenant who was introduced upon the land by the mortgagor. Now, Mr. Desai, who appears on behalf of the tenant, points out that in this case it was the mortgagor who let the property to opponent No. 1. He failed to make an application within the time mentioned in s. 3A of the Tenancy Act of 1939 for a declaration that the tenant was not a protected tenant. The result was that the tenant became a protected tenant, under the provisions of s. 3A of the old Act, and such a person is to be regarded as a protected tenant for the purposes of even the 1948 Act. His next; argument is that it was permissible for the mortgagor to create such a lease, because nothing prevented him from creating it. Even s. 52 of the Transfer of Property Act did not prevent a mortgagor from creating a lease, and the lease was not invalid in its inception. He says that in that case there is no reason why if a valid lease was created by the mortgagor in favour of opponent No. 1, if subsequently owing to the operation of s. 3A of the Act opponent No. 1 became a protected tenant of the mortgagor, then he should not subsequently also become a protected tenant of the person who was entitled to the possession of the property as a result of the auction sale in the mortgagee's suit tow, the reply to that is that, it is true that there was nothing to prevent the mortgagor from creating a lease of the mortgaged property, and the lease was of void in its inception. But s. 52 of the Transfer of Property Act prevented he mortgagor from creating any lease so as to affect the rights of the mort-agee, or any person who would purchase the property as a result of the suit ending which the lease was made. Any rights, therefore, which would be created in such a tenant because of the operation of the provisions of ??? Act would not help the tenant as against the mortgagee, unless there as anything in the provisions of the tenancy act which required that not ??? tan ding the provisions of s. 52 of the Transfer of Property Act such rights would be created in the tenant Now, as I have already mentioned, the only provision which creates any rights in the tenant introduced by the mortgagee s. 3A of the old Act. Under that provision opponent No. 1 became a protected tenant; but that was so far as the mortgagor himself was concerned, here is nothing in the provisions of s. 3A, or for the matter of that anywhere ??? in the Act, which gave opponent No. 1 any rights because of the lease ??? in his favour by the mortgagor as against the mortgagee. It is true at to do so is to hold that the doctrine of lis pendens is not affected by any of ??? provisions of the tenancy act, Now, we do not say that if the Legislature ??? wanted it could not have provided that a person would be a protected ant of the property, notwithstanding the provisions of s. 52 of the Transfer Property Act. But our attention has not been drawn to any provisions of tenancy act in which it is so provided. We must, therefore, take it that ??? leases which are created and which are affected by the doctrine of lis pendens do not enable the lessee to exercise any rights, created in his favour by the Bombay Tenancy Act, because of the creation of such a lease, against the mortgagee. In the result, therefore, the petitioner was not affected by the lease, which was created by the mortgagor, because of the doctrine of lis pendens. No relationship of a protected tenant was consequently created after the purchase by the petitioner between him and opponent No. 1. Opponent No. 1 was not consequently a protected tenant of the petitioner.

    5. In the result, the order which has been passed by the Tribunal must be set aside and those which have been passed by the Prant Officer and the Mamlatdar restored.

    6. There will be no order as to costs of this application.

    7. Order set aside.

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    Ramdas Popatlal v. Fakira Pandu Patil
    (Sep 19, 1956)