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Des Raj Om Parkash v. Shankar Dass And Others
Factual and Procedural Background
Respondent 1 (Shankar Das) mortgaged a shop to Budha Ram (father of Respondents 2–5) for Rs 6,000 under a usufructuary mortgage executed in 1963. Budha Ram, the mortgagee, leased the shop back to the mortgagor, who in turn sub-leased it to the appellant firm, Des Raj Om Parkash. When the mortgagor failed to pay rent, the mortgagee obtained and executed a decree for eviction and took possession of the shop. At that stage the appellant executed a fresh rent-note (Ex. PW 6/1) in favour of the mortgagee and began paying rent directly to him. The mortgage was later redeemed by the mortgagor, who then filed the present suit seeking possession. The trial court and first appellate court held that the appellant remained a tenant notwithstanding the rent-note, but the High Court, in second appeal, reversed this view and ordered redemption with consequential possession to the mortgagor. The appellant’s civil appeal challenges that High Court judgment.
Legal Issues Presented
- Whether, after redemption of the mortgage, the appellant could continue as a tenant against the mortgagor or was liable to be evicted in light of the rent-note executed with the mortgagee following the decree for eviction.
Arguments of the Parties
Appellant's Arguments
- Relied on All India Film Corpn. Ltd. v. Raja Gyan Nath (1969 3 SCC 79) and Jadavji Purshottam v. Dhami Navnitbhai Amaratlal (1987 4 SCC 223) to contend that where the mortgagor consents to continuation of a tenant even after redemption, eviction at the instance of the mortgagor is impermissible.
- Cited Jagan Nath Piare Lal v. Mittar Sain (AIR 1970 P&H 104) to argue that a tenant who attorns to the mortgagee remains a tenant of the mortgagor upon redemption unless the tenancy is lawfully terminated.
Respondents' Position
- Supported the High Court’s finding that the fresh rent-note created an entirely new tenancy between the appellant and the mortgagee, extinguishing any rights claimed through the mortgagor. Therefore, upon redemption, the appellant had no subsisting tenancy against the mortgagor.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| All India Film Corpn. Ltd. v. Raja Gyan Nath (1969 3 SCC 79; 1970 2 SCR 581) | Consent of mortgagor for continuance of tenancy survives redemption, preventing eviction by mortgagor. | Held inapplicable because the appellant’s original tenancy ended when the mortgagee executed the decree and a new tenancy was created by the rent-note. |
| Jadavji Purshottam v. Dhami Navnitbhai Amaratlal (1987 4 SCC 223) | Same principle as above—continuance of tenant after redemption with mortgagor’s consent. | Similarly distinguished; court found the facts did not involve consent-based continuation but a fresh tenancy with the mortgagee. |
| Jagan Nath Piare Lal v. Mittar Sain (AIR 1970 P&H 104) | Tenant attorning to mortgagee remains tenant of mortgagor on redemption unless tenancy is surrendered and a new one created. | Distinguished because, unlike that case, the earlier tenancy was terminated through execution proceedings and a new tenancy was explicitly created by rent-note Ex. PW 6/1. |
Court's Reasoning and Analysis
The Supreme Court noted the High Court’s factual finding that after the mortgagee recovered possession through execution, the appellant executed rent-note Ex. PW 6/1 and commenced paying rent directly to the mortgagee. The earlier sub-lease granted by the mortgagor was terminated by the decree for eviction. Consequently, the appellant’s status derived solely from the fresh tenancy created with the mortgagee. Upon redemption, that tenancy could not bind the mortgagor because:
- The appellant’s rights as sub-tenant under the mortgagor ended when the mortgagee took possession pursuant to the decree.
- The execution of the rent-note constituted surrender of the previous tenancy and creation of a new lease relationship exclusively between the mortgagee and the appellant.
- Because the tenancy was not one that the mortgagor had consented to continue after redemption, precedents relied on by the appellant were inapplicable.
The Court therefore found the High Court’s conclusion, ordering redemption with possession to the mortgagor, to be correct.
Holding and Implications
APPEAL DISMISSED.
The dismissal upholds the High Court’s directive that, after redemption, the mortgagor is entitled to possession of the shop, and the appellant’s tenancy cannot subsist against the mortgagor. The decision turns on specific factual findings regarding surrender and creation of a new tenancy, and does not establish a new legal precedent beyond reinforcing the principle that rights flowing from a superseded tenancy do not survive redemption.
Order
1. The short facts relating to the civil appeal are as under:
2. The suit property was mortgaged by Respondent 1, Shankar Das with Budha Ram who is the father of defendants 1 to 4 (respondents 2 to 5 herein). The mortgage was for a sum of Rs 6000 and it was a usufructuary mortgage in relation to the shop covered by this appeal. Budha Ram leased out the shop in favour of Shankar Dass mortgagor-plaintiff. In other words, there was lease back in favour of the mortgagor. The mortgagor has subleased it in favour of the appellant Des Raj Om Parkash. The mortgagee obtained the decree against the mortgagor for eviction for non-payment of rent. That decree came to be executed. He took possession of the shop. At this stage, the appellant executed a rent-note in favour of the mortgagee. The mortgage came to be redeemed later on. Thereafter, the present suit came to be filed. The trial court and the court of first appeal held that the appellant would continue to be a tenant under the mortgage, as a whole, notwithstanding the rent-note executed by him. However, in the second appeal, the High Court reversed the findings and directed redemption and consequential possession. Hence, the present civil appeal.
3. The only point for our consideration is, whether the judgment of the High Court could be upheld. In attacking the findings therein, the learned counsel would seek to rely on two decisions i.e All India Film Corpn. Ltd. v. Raja Gyan Nath (1969) 3 SCC 79, (1970) 2 SCR 581, Jadavji Purshottam v. Dhami Navnitbhai Amaratlal (1987) 4 SCC 223. On the basis of those rulings it is urged, where the mortgagor has consented for the continuance of the tenancy of the appellant even after redemption, no eviction is possible at the instance of the mortgagor.
4. Yet another ruling is cited as Jagan Nath Piare Lal v. Mittar Sain AIR 1970 P&H 104. It was held therein where a tenant of a mortgagor, after the mortgage, necessarily attorns to the mortgagee he becomes a tenant of the mortgagee. In such an event, unless his tenancy has been put to an end to by the mortgagor on the redemption of the mortgage, he again is relegated to his position of a tenant of the mortgagor. This ruling also supports the contention of the appellant.
5. It is not possible for us to apply the case-law on the facts. In the case on hand, the factual finding as rendered by the High Court is as follows:
“Again Des Raj in his cross-examination admitted that the mortgagee had gone to the shop and took its possession in execution of the decree against the mortgagor. He, thereupon, executed the rent-note, Ex. PW 6/1 in favour of the mortgagee and started paying rent to him. It is thus established beyond doubt from the said rent-note and the statement of Des Raj that he was inducted as tenant by the mortgagor with effect from July 9, 1966 whereas the mortgage had been created in the year 1963. Mortgagor had taken on lease the shop from the mortgagee and in his capacity as tenant under the mortgagee he created the sublease in favour of Respondent 5. Even that sublease was terminated when the mortgagee successfully ejected the mortgagor from the shop in dispute under a decree of the Court. Thereafter, Des Raj was tenant under the mortgagee by virtue of the rent-note, Ex. PW 6/1.”
6. In view of this factual situation, whatever rights the appellant had under the original mortgage as subtenant when the mortgagor held the property under enjoyment on a lease back that right came to an end upon execution of the decree by the mortgagee. The said mortgagee recovered possession in execution proceedings. Thereafter new rights as lessor and lessee came into existence between the appellant and the mortgagee, by reason of the execution of rent-note Ex. PW 6/1. Hence, this is a case in which the conclusion is inescapable upon the redemption of the mortgage, the rights of the appellant tenant vis-a-vis the mortgagor came to an end. Hence, neither All India Film Corpn. Ltd. case (1969) 3 SCC 79, (1970) 2 SCR 581 nor Jadavji Purshottam case (1987) 4 SCC 223 will have any application into the facts of this case.
7. Nor again, Jagan Nath Piare Lal case AIR 1970 P&H 104 will advance the case of the appellant. On facts, that case could be distinguished. The relevant facts of the ruling are as found in paragraph 13 which are as under:
“13. So far as the facts of the present case are concerned, the tenant was the tenant of the mortgagor. After the mortgage, he continued to be the tenant of the mortgagee. There was no surrender by him of the tenancy he held under the mortgagor. All that happened was that he executed a fresh rent-note and agreed to pay 50 naye paise per mensem over and above the rent he was paying to the mortgagor. There is no other evidence on the record which will indicate that he gave up the tenancy under the mortgagor and took up a new tenancy under the mortgagee. In this situation, it is not possible to hold that there was a surrender by tenant of his tenancy under the mortgagor. In order to hold that a tenant has surrendered his existing lease, it must be shown that the earlier tenancy was put to an end to and a new tenancy was created. The mere fact, that the same tenant has continued as a tenant of the property and has only executed the fresh rent-note in favour of the mortgagee, will not automatically amount to surrender.”
8. Accordingly, we conclude that the appeal is without merit and is dismissed. No costs.
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