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Gafur v. Sakharam Tanshet Narkar

Bombay High Court
Jun 29, 1939
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Summary of Opinion — Lokur, J.

Factual and Procedural Background

The dispute concerns non-transferable Kularag Khoti holdings originally permanently tenanted by members of the Narkar family. The permanent tenants mortgaged the lands to Sakhubai on March 13, 1907 for twenty years. In 1912 Sakhubai assigned her mortgagee rights to the defendants' predecessor-in-title. The defendants are presently in actual possession as mortgagees.

The plaintiff purchased the lands from the permanent tenants on April 19, 1932 and brought a suit for redemption of the 1907 mortgage. Defendant No. 1 contended that the transfer by the permanent tenants to the plaintiffs was void for want of the Khots' consent and therefore conferred no interest on the plaintiffs; additionally, the defendants argued the plaintiffs were not agriculturists and that the original owners were necessary parties.

The trial Court dismissed the suit holding that the plaintiffs were not entitled to seek redemption, and recorded findings on other framed issues. On appeal the District Judge dismissed the appeal solely on the ground that the plaintiffs had not acquired any interest because the transfer lacked Khots' consent. The District Judge did not consider the trial Court's findings on other issues. The only issue argued before this Court was whether the plaintiffs have a right to seek redemption of the mortgage from the defendants.

Legal Issues Presented

  1. Whether plaintiffs, who acquired title from the permanent tenants by a transfer allegedly made without the Khots' consent, have a right to seek redemption of a prior mortgage affecting the lands.
  2. Whether persons who are ordinary tenants of Khoti lands but not in actual possession (because mortgagees are in possession) have an "interest" sufficient under s. 91 of the Transfer of Property Act to redeem the mortgage.
  3. Whether subsequent consent of a managing Khot and entry of plaintiffs' names in the Revenue Records affects the plaintiffs' rights to redeem (as argued by the plaintiffs).

Arguments of the Parties

Defendant's Arguments

  • The transfer of the lands by the permanent tenants to the plaintiffs was made without the consent of the Khots and was therefore void, conferring no interest on the plaintiffs.
  • The plaintiffs are not agriculturists and hence not entitled to the benefit of the Dekkhan Agriculturists' Relief Act (as argued by the defendants).
  • The original owners (the Khots) were necessary parties to the suit for redemption.

Plaintiffs' Arguments

  • At the time of transfer one Yakub Naik was the managing Khot and his mukhtyar Anant Vinayak consented to the transfer (this alleged prior consent, however, was found not proved by the lower Courts).
  • After purchase the plaintiffs sought to have their names recorded but were initially refused by the Collector; subsequently (in 1933) a brother of plaintiff No. 1, then managing Khot, gave consent and the Collector recognised the plaintiffs by entering the lands in a fresh khata in their names.
  • On this basis the plaintiffs claimed they had at least the status of ordinary tenants entitled to possession until evicted by the Khots after proper notice, and therefore possessed an interest sufficient to redeem the mortgage.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Yesa bin Rama v. Sakharam Gopal That s. 6 of the Khoti Settlement Act applies even to future transfers. Used to support the proposition that a transfer without consent terminates permanent tenancy and the transferee becomes a tenant under s. 6 (and thereafter an ordinary tenant under s. 8).
Ramkrishna v. Bapurao Transfer without Khots' consent converts transferee into tenant of the Khots under s. 6 and (absent special agreement) into an annual tenant under s. 8; Khots may eject transferee after notice under s. 84 Bombay Land Revenue Code. Applied to explain that transferees are entitled to remain in possession as tenants until lawful notice of eviction is given; supported the view that plaintiffs became ordinary tenants for purposes of s. 6 and s. 8.
Paya Matathil Appu v. Kovamel Amina “Interest” in s. 91 (Transfer of Property Act) is not confined to ownership but includes minor interests such as that of a tenant or a person having a charge. Cited to establish that a tenant's interest can suffice to support a right to redeem a mortgage.
Raghunandan Prasad v. Ambika Singh A perpetual lessee of mortgaged premises from the mortgagor was held entitled to redeem the mortgage. Relied on to show that persons holding under the mortgagor (even without ownership) may have the right to redeem.
Tarn v. Turner A lessee whose lease could be determined by notice after seven years was held entitled to redeem; the lessee's interest makes him to some extent an assignee of the equity of redemption. Quoted (Cotton L.J and Fry L.J) to support the principle that even limited tenant interests can confer a right to redeem the mortgage.
Girish Chunder Dey v. Juramoni Dey Held that a raiyati tenant was not entitled to redeem a mortgage by a landlord (as reported). Cited as a contrasting authority; court observed the nature of those tenancies was not clear and may have been tenants at will or on sufferance, and thus distinguished from tenants with a right to possess until proper notice.
Kalu Singh v. Hansraj Upadhiya Held that a cultivating tenant in Oudh was not entitled to redeem a mortgage by the landlord. Also cited as contrasting authority and distinguished on the apparent basis that such tenants may not have possessed an interest sufficient to redeem.

Court's Reasoning and Analysis

The court proceeded step-by-step from the statutory scheme and the factual posture stated in the record:

  1. It recognized the statutory rule in s. 10 of the Khoti Settlement Act that where Khoti lands are transferred without Khots' consent the lands become at the disposal of the Khots free of encumbrances (subject to government liens). This principle, however, does not automatically mean that transferees have no present interest or cannot assert rights prior to eviction.
  2. The court relied on s. 6 of the Khoti Settlement Act and authorities (notably Yesa bin Rama v. Sakharam Gopal and Ramkrishna v. Bapurao) to explain that a transfer without consent terminates permanent tenancy and the transferee is to be regarded as a tenant (and, in ordinary cases, an ordinary or yearly tenant under s. 8). That tenant-status entitles the transferee to remain in possession until legally evicted by the Khots after proper notice.
  3. The court addressed the complication that in this case the mortgagees (defendants) were in actual possession. It relied on the proviso to s. 6 which deems that where the actual holder is in possession as mortgagee, his occupation shall be deemed the occupation of the mortgagor for the purposes of s. 6. Consequently, although the mortgagees were physically in possession, for s. 6 the mortgagors were to be treated as actual holders; because the mortgagors had transferred their rights to the plaintiffs, the plaintiffs stepped into the mortgagors' position and must be regarded as the actual holders for the purpose of s. 6.
  4. On the basis that the plaintiffs are thus ordinary tenants (or at least have a present interest), the court turned to s. 91 of the Transfer of Property Act which permits "any person who has any interest in, or charge upon, the property mortgaged or in or upon the right to redeem the same" to redeem or institute a suit for redemption. The court held that the plaintiffs' tenant-interest falls within the broad meaning of "interest."
  5. The court reviewed supporting authorities (Paya Matathil Appu, Raghunandan Prasad, Tarn v. Turner) holding that a tenant or lessee with an interest in the equity of redemption may redeem a mortgage; it distinguished cases (Girish Chunder Dey; Kalu Singh) where tenants were held not entitled to redeem on the ground that those tenancies appeared to be at will or on sufferance and therefore conferred no real interest.
  6. The court also noted that the plaintiffs' position was strengthened by the subsequent consent of the managing Khot in 1933 and the Collector's recognition by entering a fresh khata in the plaintiffs' names; under s. 21 of the Khoti Act the recording-officer's decision is prima facie evidence of the interest claimed, though the court stated it was unnecessary at that stage to decide exactly what interest was acquired by entry in the Revenue Records.
  7. On these bases the court concluded that the plaintiffs had a sufficient present interest to entitle them to redeem the mortgage and thereby to seek redemption in court.

Holding and Implications

HOLDING: The court reversed the lower appellate Court's finding that the plaintiffs had no right to redeem the mortgage and held that the plaintiffs are entitled to redeem the mortgage.

Direct consequences and immediate implications:

  • The court recorded a finding that the plaintiffs are entitled to redeem the mortgage and remanded the appeal to the lower appellate Court for further hearing and disposal in light of that finding.
  • The respondents were ordered to pay the costs of the appellants in this Court and to bear their own costs otherwise.

Broader implications: The opinion reasons that transferees who become ordinary tenants (or otherwise have a present interest) under the Khoti Settlement Act may, under s. 91 of the Transfer of Property Act and the authorities cited, have a right to redeem a prior mortgage even if they are not in actual possession because mortgagees are in possession. The opinion does not state that it is creating a novel legal principle or a broad new precedent beyond its application to the facts; the court reversed and remanded for further proceedings rather than issuing a final decree on all issues.


Disposition: Case remanded. Respondents to pay the appellants' costs in this Court.

Show all summary ...

Lokur, J.:—

This appeal raises an interesting question regarding the power of a transferee of a Khoti land from its permanent tenant after it was mortgaged to another, to redeem that mortgage.

The lands in dispute are non-transferable Kularag Khoti holdings, and some members of the Narkar family were their permanent tenants. They mortgaged them to one Sakhubai on March 13, 1907, for a period of twenty years. Sakhubai assigned her mortgagee rights to the defendants' predecessor-in-title in 1912. The defendants are now in the actual possession of the lands as mortgagees. The plaintiff purchased the lands from the permanent tenants on April 19, 1932, and filed this suit against the defendants for the redemption of the mortgage of 1907. Defendant No. 1 contended that as the transfer of the lands by the permanent tenants was made without the consent of the Khots, it was void and did not confer any interest upon the plaintiffs, that the plaintiffs not being agriculturists, they were not entitled to the benefit of the Dekkhan Agriculturists' Relief Act, and that the original owners were necessary parties to the suit. The trial Court held that the plaintiffs were not entitled to seek redemption and dismissed the suit. It recorded its findings on the other issues framed, but in appeal the learned District Judge dismissed the appeal only on the ground that the plaintiffs did not acquire any interest in the lands as the transfer was not made with the consent of the Khots. It did not consider the findings recorded by the trial Court on the remaining issues. Hence, the only issue argued in this Court is whether the plaintiffs have a right to seek redemption of the mortgage from the defendants.

It is not disputed that the lands being Khoti lands, if their transfer in favour of the plaintiffs is not proved to have been made with the consent of the Khots or the managing Khot, then under s. 10 of the Khoti Settlement Act (Bom. I of 1880), they shall be at the disposal of the Khots as Khoti lands free of all encumbrances, other than liens or charges created or existing in favour of Government. It was alleged on behalf of the plaintiffs that in the year in which the lands were transferred to them, one Yakub Naik was the managing Khot, and that the transfer was consented to by his mukhtyar Anant Vinayak. Both the lower Courts have held that this alleged consent before the transfer is not proved, and that being a finding of fact it cannot be challenged in second appeal. But it does not follow that the transfer without the consent of the Khots does not confer any interest in the Khoti lands on the transferees. It is true that the Khots thereby got the light to dispose of the lands as they chose, and it was open to them to evict the transferees and take possession of the lands. But till then, the transferee is not a trespasser. Section 6 of the Act provides that when such a land has been transferred, the actual holder of the land shall be deemed to be the tenant of that land. It is held in Yesa bin Rama v. Sakharam Gopal(1) (at p. 302) that s. 6 applies even to future transfers. In other words, the permanent tenancy is terminated by such a transfer without the consent of the Khot and the transferee should thereafter be deemed as an ordinary tenant within the meaning of s. 8 of the Act. This position is made clear in Ramkrishna v. Bapurao.(2) In that case the occupancy tenant of certain Khoti lands sold them to the defendants without the consent of the Khots in 1896. The defendants remained in possession for more than thirty years, and thereafter the heir of the occupancy tenant passed a rajinama in favour of the plaintiffs who were the Khots. When those Khots filed a suit to recover possession of the lands from the defendants, it was contended that the defendants had themselves become the occupancy tenants by being in possession as such for more than twelve years. It was then held that by virtue of s. 6 of the Act the defendants became by the sale in their favour the tenants of the Khots, and that in the absence of any special agreement they should be deemed to have held the lands as yearly or annual tenants of the Khots under s. 8 of the Act. It was further held that the Khots were entitled to eject the defendants after giving them a proper notice to quit under s. 84 of the Bombay Land Revenue Code. Until the tenancy is determined by such a notice the transferee is entitled to remain in possession of the lands as a tenant. It is pointed out that s. 6 confers the position of a tenant on the transferee only if he happens to be the actual holder of the land. But in this case as the lands are in the actual occupation of the mortgagees, the plaintiffs cannot be deemed to have become ordinary tenants of the Khots by the wrongful transfer of the lands by the occupancy tenants. There is apparently some force in this contention. But the proviso to s. 6 says that if the actual holder is in possession of the land as mortgagee, his occupation or cultivating shall for the purpose of that section be deemed to be the occupation or cultivating of the mortgagor. Thus for the purpose of s. 6, though the mortgagees are in actual possession, still the mortgagors should be deemed to be the actual holders, and in this case the mortgagors having transferred their right, title and interest to the plaintiffs, the plaintiffs have stepped into their shoes, and the rights which could have been claimed by the actual holders under s. 6 became vested in the plaintiffs. The plaintiffs must, therefore, be regarded as the actual holders for the purpose of s. 6, and after the transfer of the lands without the consent of the Khots, they must be deemed to have become ordinary tenants within the meaning of s. 8.

It is claimed for the plaintiffs that in this case their position is even better than that of ordinary tenants, because after the transfer the brother of the plaintiff No. 1, who happened to be the managing Khot in 1933, the year after the purchase, gave his consent to the transfer. The plaintiffs' attempt to have their names recorded in the Revenue Records had been rejected by the Collector. But after the consent of the managing Khot was obtained in 1933, the plaintiffs were recognised by the Collector, and the lands were entered in a fresh khata in their names. Under s. 21 of the Act, the decision of the recording-officer is binding on all the parties affected thereby and is prima facie evidence of the interest which the plaintiffs claim to possess in the lands in suit. It is not necessary at this stage to consider what interest the plaintiffs have acquired in the lands by having them entered in their khata in the Revenue Records. But even without their names being thus entered in the Revenue Records, they are at least ordinary tenants of the land entitled to be in possession of them until evicted by the Khots in exercise of the right conferred upon them by s. 10 of the Act.

The question that next arises is whether such tenants, though not in the actual possession of the lands, are entitled to redeem the mortgage. Section 91 of the Transfer of Property Act lays down.

“Any person who has any interest in, or charge upon, the property mortgaged or in or upon the right to redeem the same, may redeem or institute a suit for redemption of the mortgaged property.”

It cannot be disputed that the plaintiffs, as the ordinary tenants of the Khoti lands in suit, have some interest at least in those lands. They cannot be regarded as mere trespassers, and s. 91 enables any person who has any interest in the mortgaged lands to seek redemption of the mortgage. It is true that the plaintiffs can be evicted in any year if the Khots give them a sufficient notice to quit. But in the present case the Khots have not given any such notice. But, on the other hand, the managing Khot has given his consent to the transfer and enabled the plaintiffs to have them recognised by the Revenue Authorities. Thus the plaintiffs have at any rate a present interest in the lands, and if they redeem the lands and take possession of them they will have the right to cultivate them until they are evicted after a due notice. In Paya Matathil Appu v. Kovamel Amina a Verumpattom tenant in Malabar claiming under a lease from the ottidar was held entitled to redeem the prior kanom. Their Lordships observed (at p. 153) that the word “interest” was not necessarily confined to right of ownership, but was sufficiently large to include any minor interest such as that of a tenant or a person having a charge. In Raghunandan Prasad v. Ambika Singh a perpetual lessee of the mortgaged premises from the mortgagor holding under a lease granted upon payment of a premium was held entitled to redeem the mortgage. It is urged that in those cases as the leases were for a long period the lessees had real interest in the lands, and as such they had the right to redeem the mortgages and take possession of the demised lands. But the principle which applies to the long lease equally applies to a lease for a short period. In Tarn v. Turner(3) there was a lease which could be determined by a notice at the end of seven years, and the lessee was held entitled to redeem the mortgage of the demised property by the landlord. On page 464 Cotton L.J observed:—

“… why is the tenant; who holds under an agreement such as I have mentioned not to be entitled to redeem, which is the only way of relieving himself from the effect of the mortgage …. Here is a man who has a certain interest in the equity of redemption, and he may be prejudiced by the action of the mortgagee insisting on his rights as legal owner of the property.….. The interest which he got from the mortgagor makes him to a certain extent an assignee of the equity of redemption, and therefore entitled to all the rights which appertain to the owner for the time being, however small his interest in the equity of redemption may be with regard to duration of time. That, as I understand, is recognised in all the cases.”

At p. 468 Fry L.J observed:—

“Therefore, it appears to me that according to the general law of the land, a person who claims as lessee under a mortgagor after the mortgage, and has thereby derived an interest in the equity of redemption, has the right to redeem.”

it is true that in Girish Chunder Dey v. Juramoni Dey a raiyati tenant was held not entitled to redeem a mortgage by a landlord, and in Kalu Singh v. Hansraj Upadhiya a cultivating tenant in Oudh was similarly held not entitled to redeem a mortgage by the landlord. But the nature of those tenancies is not clear. If they were tenants at will or tenants on sufferance, then they could not be regarded as having an interest in the land. They could be evicted by the landlord at any time without any notice. A tenant on sufferance or a tenant holding over is a mere trespasser. But where a tenant has a right to be in possession of the land until the tenancy is determined by a proper and sufficient notice to quit, he must be deemed to have some interest in the land itself. It was argued that if the plaintiffs are ordinary tenants of the Khots, then the Khots are also necessary parties to the suit. But this question has not been considered by the lower appellate Court, and I do not express any opinion on that point.

I hold that the plaintiffs are entitled to redeem the mortgage. The lower appellate Court has disposed of the appeal on the preliminary issue as to whether the plaintiffs have a right to redeem and has dismissed the appeal holding that they have none. I reverse that finding and record a finding that the plaintiffs are entitled to redeem the mortgage, and remand the appeal to the lower appellate Court for further hearing and disposal in the light of this finding.

The respondents shall pay the costs of the appellants in this Court and bear their own.

Case remanded.
Y.V.D