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  • 24 february 1949. Sec. 14 of the tenancy act
  • Clause (21) of sec. 2 of the tenancy act
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  • 24 february 1949. Sec. 14 of the tenancy act
  • Clause (21) of sec. 2 of the tenancy act
Smart Summary

Structured Summary of the Opinion

Factual and Procedural Background

The respondents (who claim to be tenants) filed a suit under section 29 of the Bombay Tenancy and Agricultural Lands Act, 1948 ("the tenancy act") against the petitioner (original landlord) seeking recovery of possession of land described as Survey No. 1194 (5 acres 39 gunthas) in village Anklav, Borsad taluka, Kaira district.

The mamlatdar heard the application on merits and found the land comprised two parts: one part had been under a mortgage with the tenants and the other part had not been mortgaged. He held that, in respect of the mortgaged portion, the tenants had been cultivating it lawfully prior to the mortgage and therefore were tenants; he applied section 25A of the tenancy act and ordered possession of that mortgaged portion in favour of the tenants. He dismissed the claim for the remainder because he was not satisfied the tenants had proved tenancy of that part.

Both parties appealed to the collector. The deputy collector confirmed the mamlatdar's findings and also made an order under section 84 directing summary eviction of the landlord from the portion as to which possession had been ordered and restoration of possession to the tenants. Both parties then filed revision applications to the revenue tribunal.

The revenue tribunal (in a common order) declared that the tenants had proved tenancy over the entire Survey No. 1194 (5 acres 39 gunthas), but it did not make an order for possession under section 29 because it found that the tenants had become deemed purchasers on 1 April 1957. The revenue tribunal also set aside the deputy collector's order of summary eviction under section 84 on the ground that while exercising appellate jurisdiction under section 74, the power of summary eviction under section 84 could not be exercised.

The landlord (petitioner) challenged that common order before the court in the present petition.

Legal Issues Presented

  1. Whether section 25A of the tenancy act is applicable to a case of mortgage by conditional sale.
  2. Whether the transaction between the parties was a transaction of conditional sale simpliciter and not a transaction of mortgage by conditional sale.
  3. Whether the revenue tribunal had jurisdiction, in an application under section 29, to decide whether the persons seeking possession were tenants.
  4. Whether the revenue tribunal exceeded its jurisdiction under section 76 of the tenancy act in reappreciating the evidence.

Arguments of the Parties

Appellant's (Landlord's) Arguments — as advanced by Mr. Shah

  • Section 25A of the tenancy act is not applicable to a case of mortgage by conditional sale.
  • The transaction between the parties was a transaction of conditional sale simpliciter and not a mortgage by conditional sale.
  • The revenue tribunal did not have jurisdiction, in an application under section 29, to decide whether the persons seeking possession were tenants.
  • The revenue tribunal exceeded its jurisdiction under section 76 of the tenancy act by reappreciating the evidence.

Respondents' Arguments — as reported (reply by Mr. Qureshi)

  • Mr. Qureshi argued that the taking of a usufructuary interest in the land by the tenants led to termination of the tenancy, and that such termination could not have been validly and lawfully effected except in the manner prescribed by section 14 of the tenancy act (as it stood at the relevant time).

Table of Precedents Cited

No precedents were cited in the provided opinion.

Court's Reasoning and Analysis

The court examined the nature of the document executed on 24 February 1949. The document evidenced a transaction of sale incorporating a condition to reconvey the land to the tenants; the courts below treated the transaction as a mortgage by conditional sale, and that characterization was not disputed on the applicability of section 25A.

The court turned to section 25A (inserted by Bombay Act 34 of 1951) which applies to cases where land is mortgaged by a landlord to a tenant by way of a usufructuary mortgage. The court noted that clause (21) of section 2 of the tenancy act imports meanings from the Transfer of Property Act, 1882. It analyzed section 58 of the Transfer of Property Act, which distinguishes different types of mortgages (including usufructuary mortgage and mortgage by conditional sale) and concluded that section 25A of the tenancy act specifically contemplates a usufructuary mortgage (clause (d) of section 58) and does not apply to a mortgage by conditional sale (clause (c) of section 58).

Applying that statutory distinction, the court held that section 25A has no application to a mortgage by conditional sale. For non-usufructuary mortgages taken by a tenant from a landlord, the tenant's status as a tenant is displaced by the higher rights he acquires as a mortgagee. Concretely, when the tenants took the land by mortgage by conditional sale on 24 February 1949, they ceased to be tenants and became mortgagees (by conditional sale) simpliciter; their tenancy was superseded by the mortgagee rights.

The court addressed the contention that section 14 (as in force in 1949) restricted termination of tenancies and thus prevented such a voluntary surrender. It analysed section 14 and observed that its grounds for termination were defaults by tenants giving landlords the right to terminate; section 14 dealt with landlord-initiated terminations, not voluntary transactions between parties. The court concluded that the transaction of mortgage by conditional sale was a voluntary surrender of tenancy rights by the tenants and acquisition of mortgagee rights, and was not hit by section 14.

The court considered section 15 as it stood in 1949 and noted that it did not impose a fetter on a tenant's right to surrender the tenancy at that time. Consequently, the voluntary surrender by the tenants in 1949 was permissible and effective.

On that basis, the court concluded that section 25A was inapplicable and that the tenants had ceased to be tenants from 24 February 1949. Therefore the revenue tribunal's finding that the tenants were tenants of the mortgaged land on 1 April 1957 (and hence had become deemed purchasers under section 32) was erroneous and liable to be set aside.

With respect to the other (non-mortgaged) parcel, the mamlatdar and deputy collector had concluded the tenants had not proved they had cultivated it and therefore were not tenants in respect of that part. The revenue tribunal reappreciated the evidence and reached the opposite conclusion. The court analysed the revenue tribunal's jurisdiction under section 76(1)(c) of the tenancy act and held that the tribunal's power is confined to correcting an error in appreciating important evidence which has resulted in a miscarriage of justice; that power does not equate to a general power to reappreciate the entire evidence. The court found that the revenue tribunal had effectively reappreciated the whole evidence and thereby exceeded its jurisdiction.

Consequently, the court held that the revenue tribunal's favorable finding for the tenants on the non-mortgaged portion was recorded without jurisdiction and must be set aside; the deputy collector's finding on that portion must be restored.

Holding and Implications

Core Ruling: The court set aside the revenue tribunal's findings in two respects and restored the findings of the lower authorities.

More specifically:

  • The court held that section 25A does not apply to a mortgage by conditional sale; the tenants, having taken the land by mortgage by conditional sale on 24 February 1949, ceased to be tenants and became mortgagees. The revenue tribunal's finding that the tenants were tenants of the mortgaged portion on 1 April 1957 (and were deemed purchasers under section 32) was set aside.
  • As to the other (non-mortgaged) portion, the court found that the revenue tribunal had impermissibly reappreciated the evidence beyond its jurisdiction under section 76(1)(c). That finding of the revenue tribunal was set aside and the deputy collector's finding (that the tenants had not proved tenancy/cultivation of that land) was restored.

Direct consequences for the parties (as stated in the opinion):

  • Because the tenants became mortgagees by conditional sale in 1949 and section 25A did not apply, their tenancy rights were displaced and did not revive; upon redemption of the mortgage the landlord would be entitled to enter into possession of the mortgaged land.
  • The tenants' claim of tenancy (and resultant entitlement to possession) over the non-mortgaged portion was rejected and the deputy collector's adverse finding for the tenants was restored.

The opinion does not state that it establishes any broader precedent beyond resolving the parties' rights in this case, nor does it suggest that it pronounces a new general rule beyond the statutory interpretation and application to the facts before the court.

    Raj Madhavsang Gulabsang v. Parmar Ranchhodbhai Galabsang

    S.H.Sheth:-

    (1) The respondents who claim to be the tenants in respect of s. No. 1194 admeasuring 5 acres 39 gunthas of village anklav in borsad taluka of kaira district filed the present suit under sec. 29 of the bombay tenancy and agricultural lands act 1948 (hereinafter re - ferred to as the tenancy act for the sake of brevity) against the petitioner (original landlord) for recovering possession of that land. The mamlatdar who heard the application decided on merits and held that the land consisted of two parts one of which had been under mortgage with the tenants and another had not been under any such mortgage with them. In respect of the land under mortgage he held that prior to the mortgage the tenants had been cultivating the land lawfully and had therefore been its tenants. He therefore applied sec. 25a of the tenancy act and made an order for possession of the land under mortgage in favour of the tenants. He dismissed the rest of the claim made by the tenants because according to him they had not proved that they were or have been the tenants in respect of that part of the land.

    (2) Both the parties appealed against that order to the collector. The deputy collector confirmed the findings recorded by the mamlatdar and also the order for possession made by him. However he made an order under sec. 84 of the tenancy act directing that the landlord be summarily evicted from the land in respect of which order for possession had been made and that its possession be restores to the tenants. Against that order recorded by the deputy collector in two appeals filed by the landlord and the tenants both the parties went to the revenue tribunal. The revenue tribunal heard the two revision applications and gave a declaration that the tenants had proved that they had been the tenants in respect of the entire land under s. No. 1194 (5 acres - 39 gunthas). However the revenue tribunal did not make any order as to possession under sec. 29 because according to the revenue tribunal the tenants had become the deemed purchasers on 1st april 1957 and therefore no order for possession under sec. 29 could be made in their favour. The reve - nue tribunal also set aside the order of summary eviction made by the deputy collector because in its view while exercising appellate jurisdic - tion under sec. 74 of the tenancy act the power of summary eviction under sec. 84 cannot be exercised

    (3) It is that common order which is challenged by the landlord in this petition. Mr. Shah who appears for the landlord has raised before me the following four contentions:

    1 sec. 25a of the tenancy act is not applicable to a case of mortgage by conditional sale. 2 the transaction in question which took place between the parties was a transaction of conditional sale simpliciter and not a transaction of mortgage by conditional sale. 3 the revenue tribunal did not have jurisdiction to decide in an application under sec. 29 of the tenancy act whether the persons seeking possession of the land are tenants or not. 4 the revenue tribunal exceeded its jurisdiction under sec. 76 of the tenancy act in reappreciating the evidence.

    (4) So far as the first and the fourth contentions raised by mr. Shah are concerned they turn upon the applicability of sec. 25a to the facts of the case. I have seen the document or mortgage. It evidences the transaction of sale and incorporates a condition to reconvey the land in question to the tenants. It was executed on 24th february 1949. Since the condition to reconvey was incorporated in the document itself the plea that it was a transaction of mortgage by conditional sale could be taken. All the courts below have construed that transaction as a transaction of mort - gage by conditional sale. None of the learned advocates appearing before me has disputed the nature of the transaction in so far as the applicability of sec. 25a of the tenancy act is concerned.

    (5) I now turn to sec. 25a. It was inserted in the tenancy act by bombay act 34 of 1951. It provides as follows.

    If any land is mortgaged by a landlord by way of a usufructuary mortgage to a tenant cultivating such land the tenancy of such land shall be in abeyance during the period the mortgage subsists. After the expiry of the said period it shall not - withstanding any other law for the time being in force be lawful to the tenant to continue to hold the land on the terms and conditions on which he held it before the mortgage was created.

    Sec. 25a clearly lays down that it applies to a case where a tenant cultivating the land has entered into a transaction of usufructuary mortgage with his landlord and becomes a usufructuary mortgagee. Clause (21) of sec. 2 of the tenancy act provides that words and expressions used in this act but not defined shall have the meaning assigned to them in the bombay land revenue code 1879 and the transfer of property act 188 as the case may be. It is clear therefore that the expression usufructuary mortgage used in sec. 25a has got to be understood in light of what it means under the transfer of property act. Sec. 58 of the transfer of property act deals with simple mortgage by conditional sale usufructuary mortgage english mortgage mortgage by deposit of title - deeds and anomalous mortgage. Sec. 59 deals with a mortgage by assur - ance. Clauses (b) to (g) of sec. 58 and sec. 59 draw a very clear distin - ction between different types of mortgages. What sec. 25a of the tenancy act contemplates is a usufructuary mortgage the connotation of which has been amplified by clause (d) of sec. 58. It is needless for me to say that it is much different from mortgage by conditional sale defined by clause (c) of sec. 58. It is therefore clear that see. 25 a of the tenancy act which expressly applies to. A usufructuary mortgage has no appli - cation to a mortgage by conditional sale. In other words if there is a usufructuary mortgage of a land in favour of a tenant who had been cultivating it earlier then as soon as he becomes a usufructuary mortgagee his tenancy is suspended or held in abeyance and as soon as he ceases to be a usufructuary mortgagee it revives and comes into force again. The question which therefore i have to consider is what happens in a case where the transaction between a tenant and a landlord is one of mortgage by conditional sale to which sec. 25a does not apply. In my opinion as soon as the tenant took from the landlord land in mortgage by conditional sale the higher rights which accrued to him as a mort - gagee displaced his rights as a tenant and superimposed themselves on them. In other words on 24th february 1949 when the tenants took the land in mortgage by conditional sale from the landlord they ceased to be the tenants and became mortgagees (by conditional sale) simpliciter. In a case where a tenant takes from his landlord mortgage of a land (other than usufructuary mortgage) it is clear that he ceases to be a tenant and becomes a mortgagee. In other words his lesser status comes to an end and he comes to acquire a higher status. The greater rights which he acquires under a mortgage displace his lesser rights as a tenant. His status as a tenant is elevated to a higher status of a mortgagee. This does not happen in a case where a tenant has taken a usufructuary mortgage of a land because the statute (sec. 25a of the tenancy act) otherwise provides.

    (6) Mr. Qureshi has in reply argued that the taking of a usufructuary of the land in question by the tenants led to the termination of the tenancy of the tenants and it could not have been validly and lawfully terminated except in the manner laid down by sec. 14 of the tenancy act. The transaction in question was entered into between the parties on 24 february 1949. Sec. 14 of the tenancy act as it had been in force then provided as follows:

    (1) notwithstanding any agreement usage decree or order of a court of law the tenancy of any land held by a tenant shall not be terminated unless such tenant -

    (a) (i) has failed to pay in any year within fifteen days from the day fixed for the payment of the last instalment of land revenue in accordance with the rules made under the bombay land revenue code 1879 for that year the rent of such land for that year or (ii) if an application for the determination of reasonable rent is pending before the mamlatdar or the collector under sec. 12 has failed to deposit within fifteen days from the aforesaid date with the mamlatdar or the collector as the case may be a sum equal to the amount of rent which he would have been liable to pay for that year if no such application had been made or (iii) in case the reasonable rent determined under sec. 12 is higher than the sum deposited by him has failed to pay balance due from him within two months from the date of the decision of the mamlatdar or the collector as the case may be; (b) has done any act which is destructive of or permanently injurious to the land; (c) has sub - divided the land; (d) has sublet the land or failed to cultivate it personally; or (e) has used such land for a purpose other than agriculture.

    (2) in the case of a tenant the duration of whose tenancy is for a period of ten years or more the tanancy shall terminate at the expiration of such period unless the landlord has by the acceptance of rent or by any other act or conduct of his allowed the tenant to hold over within the meaning of sec. 116 of the transfer of property act 1882

    (3) notwithstanding anything contained in sub - - sec. (1) the tenancy of any land held by a tenant who is a minor or who is subject to physical or mental disability shall not be liable to be terminated under the said sub - section only on the ground that such land has been sublet on behalf of the said tenant.

    When sec. 14 is read in its proper perspective it becomes very clear that the grounds of which the tenancy could be terminated were grounds which constituted defaults on the part of the tenant giving rise to a right for the landlord to terminate a tenancy. Sec. 14 is a section which therefore deals with the right of the landlord to terminate the tenancy on any of the grounds specified therein. It is a section which clothes a tenant with liabilities and a landlord with a right accruing from those liabilities of the tenant. In the instant case the transaction of mortgage by conditional sale was a voluntary transaction. The tenants therefore did not commit any default of which the landlord had been taking advan - tage or in respect of which the landlord have been exercising any right. Sec. 14 did not deal with the mutual arrangement between the parties to enter into a transaction of mortgage. It dealt with a case in which the landlord wanted to terminate the tenancy of a tenant on any of the grounds specified therein. It had therefore no application whatsoever to a case where a landlord and a tenant had agreed that a transaction of mortgage by conditional sale be entered into between the parties. What the parties did by entering into the transaction in question was in effect the surrender of their tenancy right by the tenants and the acquisition of a different set of rights under the transaction of mortgage by conditional sale. In my opinion therefore the section which really applied to this case in 1949 was sec. 15. Sec. 15 as it had been in force in 1949 read thus :

    Where the period of tenancy of any tenant has expired and if such tenant 11as been allowed to hold over under the last preceding section the tenancy of such tenant shall be deemed to have been renewed for a further period of ten years from the date of its expiry on the same terms and conditions as before.

    In other words sec. 15 as it was in force in 1949 was much different from sec. 15 as it is now on the statute book. Under sec. 15 as it is now on the statute book a tenant cannot surrender his tenancy except under an order of the mamlatdar made under sub - sec. (2) of sec. 15. There was no such fetter which sec. 15 of the tenancy act as it had been in force in 1949 laid on the right of the tenant to surrender his tenancy rights. It was clear therefore that in the absence of any statutory fetter on the right of a tenant to surrender this tenancy rights a tenant could voluntarily surrender his tenancy rights his respect of the land in his possession. All that the tenants his the present case did was to surrender the tenancy rights in respect of the land in question and to acquire higher rights of a mortgagee. Such a transaction was not only not it by sec. 15 of the tenancy act as it was in force in 1949 but it was not hit by any provision of law. It is therefore clear that since sec. 25a is not applicable to the instant case and since there was no legal bar to prevent the tenants from surrendering the tenancy rights in 1949 in favour of the landlord they in my opinion voluntarily surrendered their tenancy rights and acquired the rights of a mortgagee. As soon as that mortgage was redeemed the landlord became entitled to enter into possession of the land in question because upon the redemption of the mortgage the tenants had no rights whatsoever on the land nor were their tenancy rights which became extinct in 1949 revived because sec. 25a did not apply to their case. The revenue tribunal was therefore in error in holding that so far as the land under mortgage was concerned the tenants had been the tenants in respect thereof on 1st april 1957 and had become deemed purchasers thereof under sec. 32 of the tenancy act. The finding recorded by the revenue tribunal in that behalf therefore cannot be sustained and must be set aside and i order accordingly.

    (7) So far as the other land is concerned it was never under mortgage with the tenants. The mamlatdar and the deputy collector appreciated evidence and came to the conclusion that the tenants had not shown that they had at any time in the past cultivated it. According to them there - fore they had not proved that they were tenants in respect of that land and that they were therefore entitled to the possession of that land. The revenue tribunal reappreciated the entire evidence and recorded a contrary conclusion. I have carefully gone through the judgment recorded by the revenue tribunal and it appears very clear to me that what the revenue tribunal has done is simply to reappreciate the evidence. The jurisdiction of the revenue tribunal under sub - sec. (1) of sec. 76 is inter alia confined to the correction of an error in appreciating important evidence which has resulted in the miscarriage of justice. (correction of an error in appreciat - ing important evidence which has resulted in the miscarriage of justice cannot be equated with the power to reappreciate the entire evidence. If the revenue tribunal had found that there was some important evidence which the mamlatdar and the deputy collector had not appreciated or had wrongly appreciated and which had led to the miscarriage of justice and if it had recorded the finding accordingly probably there would have been good reason for it to interfere with the order made by the deputy collector. In the instant case what the revenue tribunal has done is to completely obliterate the distinction between power to re - appreciate evidence and the correction of an error in appreciating important evidence which has resulted in the miscarriage of justice. The expression used in clause (c) of sub - sec. (1) of sec. 76 does not confer upon the revenue tribunal jurisdiction to purely reappreciate the evidence after having carefully perused the judgment of the revenue tribunal i am of the opinion that what the revenue tribunal has done is to purely reappreciate the evidence and in doing so it has exceeded its jurisdiction. The finding recorded by the revenue tribunal therefore in respect of the other land is liable to be set aside because it is a finding recorded without jurisdic - tion. The finding recorded by the deputy collector in that behalf must be restored. I therefore uphold the first and the fourth contentions raised by mr. Shah before me.

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    Raj Madhavsang Gulabsang v. Parmar Ranchhodbhai Galabsang
    (Jul 28, 1975)