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  • BOMBAY RENTS HOTEL AND LODGING HOUSE RATES CONTROL ACT 1947
  • provisions of Section 76, Sub-clause (e) of the Transfer of Property Act."
  • provisions of Sections 60 and 95 of the Transfer of Property Act,
  • Rajasthan Premises (Control of Rent and Eviction) Act, 1950
  • Section 76(a) and (e) of the Transfer of Property Act
  • Section 111(e) of the Transfer of Property Act,
  • Section 111(c) of the Transfer of Property Act,
  • SECTION 76 TRANSFER OF PROPERTY ACT
  • M. P. Accommodation Control Act, 1961).
  • Order 21, Rules 100 and 101, C. P. C.
  • Order 21, Rule 103, C. P. C.
  • Amendment Act, 1976,
  • Rent Control Act
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Citation Codes
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citation codes
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Attorney(S)
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Acts
  • BOMBAY RENTS HOTEL AND LODGING HOUSE RATES CONTROL ACT 1947
  • provisions of Section 76, Sub-clause (e) of the Transfer of Property Act."
  • provisions of Sections 60 and 95 of the Transfer of Property Act,
  • Rajasthan Premises (Control of Rent and Eviction) Act, 1950
  • Section 76(a) and (e) of the Transfer of Property Act
  • Section 111(e) of the Transfer of Property Act,
  • Section 111(c) of the Transfer of Property Act,
  • SECTION 76 TRANSFER OF PROPERTY ACT
  • M. P. Accommodation Control Act, 1961).
  • Order 21, Rules 100 and 101, C. P. C.
  • Order 21, Rule 103, C. P. C.
  • Amendment Act, 1976,
  • Rent Control Act
Smart Summary

Structured Summary of the Opinion

Factual and Procedural Background

This is a defendant's second appeal arising from a suit instituted by respondent Mst. Gulabi under Order 21, Rule 103, Civil Procedure Code (C.P.C.). The suit property is in village Srinagar, District Ajmer, and was originally owned by one Codu. Mst. Gulabi is Codu's widow; Ramlal is alleged to be his adopted son.

On 13-5-1958, Mst. Gulabi and Ramlal executed a registered usufructuary mortgage of the suit property in favour of Chandan Mal for Rs. 350. The mortgagee (Chandan Mal) inducted Mst. Gulabi as a tenant into the property. In August 1959 Ramlal sold the property to Champalal (the defendant-appellant) under a registered sale deed for Rs. 2,500. Out of that consideration, Rs. 400 was left with the appellant for redemption of the mortgage; the appellant claimed to have paid Rs. 400 to Chandan Mal but that payment was disputed.

The appellant instituted a suit for redemption against Chandan Mal, claiming redemption and possession; Mst. Gulabi was joined as a defendant in that suit. The redemption suit was decreed on 30-9-1963, and in execution of that decree possession was taken from Mst. Gulabi on 20-11-1965. Mst. Gulabi objected under Order 21, Rules 100 and 101 C.P.C., but those objections were dismissed on 7-7-1966.

Thereafter (on 8-7-1966) Mst. Gulabi filed Civil Suit No. 171/66 under Order 21, Rule 103 C.P.C. against the appellant and Chandan Mal, averring that there was no decree against her for possession, that a co-mortgagor could not dispossess another mortgagor in execution of a decree, that she was in rightful possession in her own right, and that a tenant of the mortgagee cannot be dispossessed in a decree against the mortgagee for redemption.

The appellant contested the suit, pleading, inter alia, that Mst. Gulabi was a party to the redemption suit and that the present suit was barred by the principle of res judicata. The trial court (learned Munsif) framed issues (listed in the opinion) and after recording evidence decreed Mst. Gulabi's suit. The appellant's appeal to the District Judge was transferred for disposal to the Additional District Judge, Ajmer, who dismissed the appeal by judgment and decree dated 10-4-1968. The present appeal raises the point of law whether a tenant inducted by a mortgagee can be evicted in execution of a decree for redemption.

Legal Issues Presented

  1. Whether, in a decree for redemption, the tenant of the mortgage (inducted by the mortgagee during the subsistence of the mortgage) can be evicted?
  2. Whether a person who sues under Order 21, Rule 103 C.P.C. (as it stood prior to the 1976 amendment) has any right to the present possession of the property when the tenancy was created by the mortgagee during subsistence of the mortgage?

Arguments of the Parties

Respondent / Plaintiff (Mst. Gulabi) — principal contentions

  • There was no decree against her for possession in the redemption proceedings.
  • A co-mortgagor cannot be dispossessed by another co-mortgagor in execution of a decree obtained by that co-mortgagor.
  • She was in rightful possession of the property in her own right.
  • A tenant inducted by the mortgagee cannot be dispossessed in a decree for redemption against the mortgagee.
  • Her counsel relied on certain regional authorities (Dr. Gian Singh Karmsingh v. Mohanlal; Ghamandi Ram v. Shanker Lal; Shrinarain v. Lachhiram) to support the contention that Rent Control/ Premises Acts protect such a tenant.

Defendant / Appellant (Champalal) — principal contentions

  • Appellant asserted that he had filed and succeeded in a redemption suit against the mortgagee (Chandan Mal), obtaining possession under the decree.
  • He pleaded that Mst. Gulabi was a party to the redemption suit and therefore the present suit was barred by the principle of res judicata.
  • Implicit in appellant's position (as reflected in the judgment) was that a tenant inducted by the mortgagee during the mortgage does not acquire rights that survive redemption and can be evicted on execution of the redemption decree.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Mahabir Gope v. Harbans Narain Singh, AIR 1952 SC 205 Principle that a mortgagee cannot confer a better title than he possesses; leases granted by mortgagee in possession must end at redemption; mortgagee must manage property prudently (Section 76, Transfer of Property Act). Relied upon to support the proposition that leases by a mortgagee do not bind beyond the mortgage period and may not defeat mortgagor's right on redemption.
Bhanshali Kushalchand Ramji v. Sha Shamji Jivraj, AIR 1958 Bom 53 Held that Section 76(a) and (e) do not empower the mortgagee to create a lease which will subsist beyond redemption; Rent Control provisions cannot protect such a tenant. Used to reinforce that tenancy created by mortgagee does not survive redemption and that rent-control protections are unavailable to such tenants.
Kamlakar & Company v. Gulam Shafi-Imambhai, AIR 1963 Bom 42 Similar view: leases by mortgagee do not survive redemption; redemption decree can be executed even against a tenant of the mortgagee. Adopted as authority that tenants inducted by mortgagee can be evicted in execution of redemption decrees.
Ram Kailash Singh v. Baliram Singh, AIR 1963 Pat 26 Settlement/lease cannot be valid and subsisting beyond the period of the mortgage; on redemption such leases are liable to be effaced. Applied to show that tenancies or settlements created during mortgage do not subsist after redemption.
K. W. Appu v. State of Kerala, AIR 1974 Ker 2 Held tenancy inducted by the mortgagee in possession comes to an end on termination of the mortgagee's interest; such a tenant is not entitled to protection under the Rent Act. Reinforced the conclusion that Rent Control protection is not available where tenancy ceases on redemption.
Lalji Purshottam v. Thacker Madhavji Meghaji, AIR 1976 Gui 161 (Full Bench) Leases created by mortgagee in possession are not protected under the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947; only an express, clear and indubitable intention in the mortgage deed to permit tenancy beyond mortgage term could bind the mortgagor. Used to underscore that only an unmistakable express power in the mortgage deed can create a lease binding beyond redemption; otherwise such leases do not bind the mortgagor after redemption.
Sachalmal Parasram v. Mst. Ratan Bai, AIR 1972 SC 637 Tenancy created by the mortgagee in possession does not survive termination of the mortgagee's interest; termination ends landlord-tenant relationship and removes Rent Control protection. Treated as authoritative and dispositive against the plaintiff's reliance on regional cases; held to be controlling that mortgagee-induced tenancy ends on redemption and Rent Control protection is not available.
Mirza Yadalli Beg v. Tukaram, AIR 1921 PC 125 Authority for the proposition that one of several mortgagors can redeem the mortgaged property (Sections 60 and 95, Transfer of Property Act). Cited to establish that a co-mortgagor (or one of several mortgagors) may validly redeem and thereby affect possession rights.
Ram Nivasi v. Md. Shafi, 1977 WLN (UC) 338 Illustrative authority supporting that one of several mortgagors can redeem. Invoked to support the proposition that a redemption decree by one co-mortgagor binds co-mortgagors and affects possession rights.
Dr. Gian Singh Karmsingh v. Mohanlal, AIR 1964 Puni 346; Ghamandi Ram v. Shanker Lal, AIR 1966 Rai 19; Shrinarain v. Lachhiram, AIR 1971 Rai 38 Regional decisions relied upon by respondent's counsel to contend that Rent Control/Premises Acts protect tenants inducted by mortgagees. Not followed by the court because the Supreme Court's decision in Sachalmal Parasram (AIR 1972 SC 637) was held to have overruled the contrary view; the court held those authorities cannot be regarded as good law in the face of Parasram.

Court's Reasoning and Analysis

The court identified the controlling legal question as whether a tenant inducted by a mortgagee during the subsistence of the mortgage can be evicted in execution of a decree for redemption. The court analyzed the issue in light of:

  • The pre-amendment text of Order 21, Rule 103 C.P.C., which allowed a party (not being the judgment-debtor) who was affected by an order under Rules 98, 99 or 101 to institute a suit to establish his right to present possession, subject to the result of such suit.
  • Statutory principles under the Transfer of Property Act (notably Section 76(a) and Section 111(c)/(e) as discussed in the opinion): the mortgagee who takes possession must manage as a prudent owner and cannot confer a better or longer title than his own interest; a lease granted by the mortgagee must generally end on redemption.
  • Authoritative case law, most significantly the Supreme Court in Mahabir Gope and Sachalmal Parasram, and subsequent high-court and bench decisions, which collectively establish the following propositions relied upon by the court:
    • A mortgagee cannot create an interest in mortgaged property which will endure beyond the termination of his own interest; leases created by the mortgagee ordinarily end at redemption.
    • Tenancy created by a mortgagee in possession does not survive the termination of the mortgagee's interest; consequently, the tenant loses landlord-tenant status and cannot claim protection under Rent Control legislation.
    • Only where the mortgage deed clearly and indubitably expresses an intention to allow a tenancy beyond the mortgage term would such a tenancy be binding on the mortgagor after redemption.
  • Application of the rule that one of several mortgagors can redeem (Sections 60 and 95, Transfer of Property Act), supported by cited authorities (Mirza Yadalli Beg; Ram Nivasi), meaning a redemption decree obtained by one mortgagor can affect the rights of other mortgagors and those in possession whose tenancy was derivative of the mortgagee's title.

On the facts before the court, Mst. Gulabi had been a party to the redemption proceedings; a decree for redemption had been passed in favour of the appellant and possession had been executed against her. Given the settled legal position that a mortgagee-induced tenancy does not survive redemption, the court concluded (applying the authorities cited) that Mst. Gulabi was bound by the redemption decree and did not have a continuing right to present possession that could be upheld in a subsequent suit under Order 21, Rule 103 C.P.C. The lower courts' decrees in her favour were therefore incorrect.

Holding and Implications

Core Ruling: APPEAL ALLOWED; JUDGMENT AND DECREE OF THE TWO COURTS BELOW SET ASIDE; THE SUIT OF MST. GULABI FOR POSSESSION IS DISMISSED.

Implications as stated or applied by the court:

  • The tenant inducted by a mortgagee during the continuance of the mortgage can be evicted in execution of a decree for redemption; such a tenant does not retain tenancy rights after redemption.
  • Protection under Rent Control / Premises Acts is not available to a tenant whose tenancy arises solely from the mortgagee's possession and who loses that tenancy on redemption (as affirmed by the Supreme Court in Sachalmal Parasram).
  • One of several mortgagors may redeem the mortgaged property, and a redemption decree obtained accordingly binds other mortgagors and affects possession rights derived from the mortgagee.
  • Direct effect: The decree in the redemption suit bound Mst. Gulabi; she had no right of present possession and thus her subsequent suit under Order 21, Rule 103 C.P.C. could not have been upheld.
  • The opinion does not purport to announce any new, broader judicial doctrine beyond applying existing statutory provisions and precedent; the decision applies established principles to the present facts.

Costs: The court allowed the appeal but observed that, in view of the facts, "the costs are made easy" (as stated in the opinion).

    Champa Lal v. Mst. Gulabi

    1. This is a defendant's second appeal arising out of a suit filed by respondent Mst. Gulabi under Order 21, Rule 103. C. P. C.

    2. The suit property is situated in village Srinagar, District Ajmer and more fully described in Schedule 'A', annexed to the plaint. One Codu was the owner of the suit property. Mst, Gulabi is his widow, and one Ramlal is alleged to be his adopted son. Under the registered mortgage deed dated 13-5-1958 of the suit property, a usufructuary mortgage was created by Mst. Gulabi and Ramlal in favour of one Chandan Mal for a consideration of Rs. 350/-. Thereafter, Mst. Gulabi was inducted as a tenant by the mortgagee Chandanmal in the suit property. Ramlal, the adopted son of Codu, sold the suit property to Champalal defendant-appellant for a consideration of Rs. 2500/- under the registered sale deed in August. 1959. Out of the sale consideration, a sum of Rupees 400/- was left with the appellant for redemption of the property, which, as stated earlier, had been mortgaged with Chandan Mal. Though the case of the appellant was that he had paid to Chandanmal Rs. 400/- but this payment was disputed and, therefore, the appellant filed a suit for redemption against the mortgagee Chandanmal and possession was also claimed. Later on, Mst Gulabi was also arrayed as one of the defendants. That suit for redemption was decreed on September 30, 1963, and in execution of the said decree possession of the suit property was taken from Mst. Gulabi on November 20, 1965. Mst. Gulabi first filed objections under Order 21, Rules 100 and 101, C. P. C. but these objections were dismissed on July 7, 1966. Thereafter, Mst. Gulabi respondent filed a Civil Suit No. 171/66 against the appellant and the mortgage Chandanmal under Order 21, Rule 103, C. P. C. on 8-7-66. It was averred in the plaint that there was no decree against her for possession of the suit property, and that a co-mortgagor could not dispossess another mortgagor in execution of decree. That she was in rightful possession of the property in her own right, and that a tenant of the mortgagee cannot be dispossessed in a decree against mortgagee for redemption of mortgage. The suit was contested by the appellant, and the allegations of the plaint were traversed, It was pleaded in the written statement that Mst. Gulabi was a party to the redemption suit instituted by the appellant, and as such the present suit is barred by the principle of res judicata. The learned trial Court on the pleadings of the parties framed the following issues:--

    1. Whether the plaintiff has been dispossessed from the suit premises illegally due to the reasons given in para 8 of the plaint?

    2. What is the value of the property?

    3. Whether this court has got no jurisdiction to entertain the suit?

    4. Whether the suit is barred by constructive res judicata?

    5. Relief?

    3. The learned Munsif, after recording the evidence for the parties, and after hearing arguments, decreed the suit of MST. Gulabi. An appeal was preferred by the appellant before the learned District Judge, which was transferred for disposal in accordance with law to the Additional District Judge, Aimer, who, under his judgment and decree dated April 10. 1968, dismissed the appeal.

    4. The question, which is a question of law, as to whether in a decree for redemption, the tenant of the mortgage can be evicted, arises for determination in this appeal. Under Order 21, Rule 103, C. P. C., as it stood prior to the amendment by the Amendment Act, 1976, any party, not being the judgment-debtor, against whom an order had been made under Rules 98, 99 or 101 could institute a suit to establish the right, which he or she claims to the present possession of the property. Subject to the result of such suit, the aforesaid order made was to be conclusive. If a tenant of the mortgage whose tenancy was created during the subsistence of the mortgage can be evicted in execution of a decree for redemption, then it can hardly be said that the person who files a suit under Order 21, Rule 103. C. P. C. as it stood prior to amendment of 1976, has any right to the present possession of the property. Under Section 76(a) of the Transfer of Property Act, if during the continuance of the mortgage, the mortgage takes possession of the mortgage property, he has to manage the property as a person of ordinary prudence would manage it, if it were his own. But, under Section 111(c) of the Transfer of Property Act, a lease of immovable property determines where the interest of the lessor in the property terminates on or his power to dispose of the same extends only to the happening of any event by the happening of such event. The power of the mortgage to manage the property extends only till such time as the property is redeemed. In Mahabir Gope v. Harbans Narain Singh, AIR 1952 SC 205, their Lordships have held:

    'The general rule is that a person cannot by transfer or otherwise confer a better title on another than he himself, has, A mortgage cannot, therefore, create an interest in the mortgaged property which will ensure beyond the termination of his interest as mortgage. Further, the mortgage, who takes possession of the mortgaged property, must manage it as a person of ordinary prudence would manage, if it were his own; and he must not commit any act which is destructive or permanently injurious to the property. It follows that he may grant leases not extending beyond the period of mortgage; any lease granted by him must come to an end at redemption. A mortgage cannot during the subsistence of the mortgage act in a manner detrimental to the mortgagor's interests such as by giving a lease, which may enable the tenant to acquire permanent or occupancy rights in the land, thereby defeating the mortgagor's right to has possession, it would be an act which would fall within the provisions of Section 76, Sub-clause (e) of the Transfer of Property Act."

    5. In Bhanshali Kushalchand Ramji v. Sha Shamji Jivraj, AIR 1958 Bom 53 the aforesaid ruling of the Supreme Court was relied upon. It was held that Section 76(a) and (e) of the Transfer of Property Act do not empower the mortgage to create a lease of the mortgaged property, which is to ensure beyond the redemption of the mortgage itself, and it is quite clear even from Section 111(e) of the Transfer of Property Act, This authority further lays down that in such circumstances the provisions of Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 (Act No. 57 of 1947) cannot be available to the defendant tenant. In Kamlakar & Company v. Gulam Shafi-Imambhai, AIR 1963 Bom 42, a similar view was taken. It was further held that a redemption decree can be executed even against a tenant of the mortgages. In Ram Kailash Singh v. Baliram Singh, AIR 1963 Pat 26, it was held that the settlement of land could not be valid and subsisting beyond the period of the mortgage and on redemption the said leases were liable to be effected. In K. W. Appu v. State of Kerala, AIR 1974 Ker 2, it was held by the learned single Judge that the tenancy of a tenant inducted by the mortgage in possession comes to an end on termination of mortgage's interest and such a tenant is not entitled to protection of the Rent Act. In Lalji Purshottam v. Thacker Madhavji Meghaji, AIR 1976 Gui 161 a Full Bench authority of Guiarat High Court, their Lordships have held that leases created by the mortgagee in possession are not protected under Bombay Rents, Hotel and Lodging House Rates Control Act, 1947. Their Lordships have further held that even apart from Section 76(a) of the Transfer of Property Act, if the words of the mortgage deed clearly and indubitably express an intention to allow expressly creation of a tenancy beyond the term of the mortgage, then only the lease created in exercise of the power expressly conferred by the mortgage deed would be binding on the mortgagor. If the words of the mortgage deed do not clearly and indubitably disclose the intention to allow expressly the creation of a tenancy beyond the terms of the mortgage, the mere fact that the mortgage deed authorises the mortgage with possession to induct a tenant would not create a tenancy binding on the mortgagor after the redemption of the mortgage.

    6. Mr. Dhingra, the learned Advocate for Mst. Gulabi has placed reliance on Dr. Gian Singh Karmsingh v. Mohanlal, AIR 1964 Puni 346, Ghamandi Ram v. Shanker Lal, AIR 1966 Rai 19, and Shrinarain v. Lachhiram, AIR 1971 Rai 38, in support of his submission that the protection of the Rajasthan Premises (Control of Rent and Eviction) Act, 1950 is available to a tenant of the mortgagee. But, it will suffice to say that in view of the pronouncement of their Lordships of the Supreme Court in Sachalmal Parasram v. Mst. Ratan Bai, AIR 1972 SC 637, this contention has no force, and the law laid down to the contrary in the aforesaid authorities cannot be said to be good law any longer. In Parasram's case (supra) their Lordships have held that the tenancy created by the mortgagee in possession does not survive the termination of the mortgage's interest. The termination of the mortgage's interest terminates the relationship of landlord and tenant. There being no landlord and tenant, the tenant cannot claim protection of the Rent Control Legislation (in that case M. P. Accommodation Control Act, 1961).

    7. Therefore, I am of the opinion that the position of law cannot be disputed that in a redemption decree the tenant of the mortgage inducted during the continuance of the mortgage can be evicted and the protection of the Rent Control Act is not available to him.

    8. In view of the provisions of Sections 60 and 95 of the Transfer of Property Act, to my mind one of the several mortgagors can redeem the mortgaged property. I may simply refer here to Mirza Yadalli Beg v. Tukaram, AIR 1921 PC 125, and Ram Nivasi v. Md. Shafi, 1977 WLN (UC) 338. Therefore, when in a redemption decree to which even Mst. Gulabi was a party. Mst. Gulabi was evicted and could be evicted in accordance with law, firstly, it cannot be said that she was not bound by the decree, and secondly that she had any right of present possession of the suit property. Therefore, her suit under Order 21, Rule 103, C. P. C. could not have been decreed by the courts below. The appellate court though held that the tenancy created by the mortgage in possession could not ensure beyond redemption, but holding that Ms. Gulabi thereafter became the trespasser and ' could only be evicted by due process of law, upheld the decree of the trial Court, which decreed the suit of Mst. Gulabi. This approach of the learned appellate court in view of what has been stated earlier that in a redemption decree against the mortgage, the tenant of the mortgage, if the tenancy created during the subsistence of the mortgage can be evicted cannot be said to be correct.

    9. In the result, the appeal is allowed, the judgment and decree of the two courts below are set aside and the suit of Mst. Gulabi for possession against the appellant is dismissed. But, in view of the facts of this case, the costs are made easy.

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    Champa Lal v. Mst. Gulabi
    (Dec 5, 1980)