Manuvel Sathianesan v. Mallan Sankaran — 1956 DIGILAW 30 (KER)

Judgment :- 1. The plaintiff is the appellant. He sued for recovery of possession of property stated to have been taken on lease by the 1st defendant from one Easwara Pillai under Ext. A dated 4.9.1099. The property was demised under that deed on pattom and Kuzikanom, receiving a sum of fs. 450 from the 1st defendant. Defendants 2 to 8 were stated to be in possession under the 1st defendant. Easwara Pillai's rights were sold in execution of the decree in O.S. No. 860 of 1105, obtained on the basis of a hypothecation bond executed by him. The plaintiff took an assignment of the auction-purchaser's rights and sued for recovery of possession claiming mesne profits at the rate of 128 fanams per annum. The rent stipulated in Ext. A was 741/2 fanams per annum. The plaintiff sought to set off the arrears of mesne profits against the premium of 450 fanams. The main contest was by the 4th defendant who contended that there was a later lease deed Ext. II executed by Easwara Pillai on 10.6.1105 whereunder a sum of 1200 fanams was received as premium. This sum is inclusive of the sum of 450 fanams under the earlier lease. He claimed the said sum of 1200 fanams as well as value of improvements amounting to Rs. 400. The trial court found that the plaintiff had obtained title to the property and that Ext. II was a valid transaction. The plaintiff was accordingly given a decree for recovery of Oodukur 1/3 share in the property on payment of a sum of 960 fanams arrived at by setting off the arrears of rent against the premium of 1200 fanams. The plaintiff was also directed to file a suit for partition of 1/3rd share and it was provided that the value of improvements would be decided in such a suit. Future profits was allowed at the rate of 80 fanams per annum from the date of deposit of 960 fanams. The plaintiff preferred an appeal to the District Court against this decree and the 4th defendant preferred a memorandum of cross-objections relating to his costs. The lower appellate court upheld the finding of the trial court that Ext. II was valid and that the plaintiff was liable to pay a sum of fanams 960 before obtaining recovery of possession. The plaintiff preferred an appeal to the District Court against this decree and the 4th defendant preferred a memorandum of cross-objections relating to his costs. The lower appellate court upheld the finding of the trial court that Ext. II was valid and that the plaintiff was liable to pay a sum of fanams 960 before obtaining recovery of possession. It was however held that the plaintiff need not file a suit for partition. The value of improvements due to the defendant was fixed at 484 fanams and cash 12. The memorandum of cross-objections was dismissed with costs and the plaintiff was directed to pay the costs of appeal incurred by the 1st defendant in the appellate court. The plaintiff has preferred this Second Appeal from the decree. 2. The main point for consideration is whether Ext. II is valid. It is not disputed that Ext. II was executed after the institution of the suit on the simple mortgage executed by Easwara Pillai. The courts below took the view that Easwara Pillai was competent to execute Ext. II, notwithstanding the simple mortgage and the suit based thereon. Reliance was placed on S.65-A of the Transfer of Property Act which is extracted below: "Subject to the provisions of sub-s. (2), a mortgagor, while lawfully in possession of the mortgaged property, shall have power to make leases thereof which shall be binding on the mortgagee. 2(a) Every such lease shall be such as would be made in the ordinary course of management of the property concerned, and in accordance with any local law, custom or usage. (b) Every such lease shall reserve the best rent that can reasonably be obtained, and no premium shall be paid or promised and no rent shall be payable in advance. (c) No such lease shall contain a covenant for renewal. (d) Every such lease shall take effect from a date not later than six months from the date on which it is made. (e) In the case of a lease of buildings, whether leased with or without the land on which they stand, the duration of the lease shall in no case exceed three years, and the lease shall contain a covenant for payment of the rent and a condition of re-entry on the rent not being paid within a time therein specified. (e) In the case of a lease of buildings, whether leased with or without the land on which they stand, the duration of the lease shall in no case exceed three years, and the lease shall contain a covenant for payment of the rent and a condition of re-entry on the rent not being paid within a time therein specified. (3) The provisions of sub-s. (1) apply only if and as far as a contrary intention is not expressed in the mortgage deed; and the provisions of sub-s. (2) may be varied or extended by the mortgage deed and, as so varied and extended shall, as far as may operate in like manner and with all like incidents, effects and consequences, as if such variations or extensions were contained in that sub-section." 3. This section was construed as empowering the mortgagor in possession to grant a lease of the property. In taking this view the courts below have ignored the provisions of S.52 of the Transfer of Property Act which deals with the principle of lis pendens. It is not disputed that Ext. II was executed during the pendency of the suit on the simple mortgage. If Ext. II is upheld, it amounts to a violation of S.52 of the Transfer of Property Act because the amount payable at the time of the redemption has been substantially increased by the deed. Mulla in his Commentary of the Transfer of Property Act states: "A mortgagor in possession has now statutory power to lease under S.65(A) and it is submitted that a lease granted by a mortgagor under this statutory power pending a suit by the mortgagee would be subject to rules of lis pendens, for otherwise it would convert the mortgagee's estate into one expectant on the term created by the lease." 4. If the mortgagor cannot lease the mortgaged property during the pendency of the suit to the prejudice of the mortgagee's right he cannot accept any premium as has been done in this case which has the effect of increasing the burden on the property. Ext. II is thus clearly hit by the rule of lis pendens. Clause.2(b) S.64(A) itself makes this clear. Ext. II cannot therefore be availed of to the detriment of the plaintiff. Ext. II is thus clearly hit by the rule of lis pendens. Clause.2(b) S.64(A) itself makes this clear. Ext. II cannot therefore be availed of to the detriment of the plaintiff. On behalf of the 4th defendant - Respondent an argument was advanced that under the law in Travancore at the time of execution of Ext. II, the hypothecatee could recover the amount from the hypothecator personally and that the principle of S.52 of the Transfer of Property Act could not be applied to this case. I fail to see how that fact can make any difference. The principle of S.52 was followed by the courts in Travancore even before the Transfer of Property Act became law in this State. It must therefore be found that the plaintiff is liable to pay only the sum of 450 fanams received as premium under Ext. A. The question of the 4th defendant's liability for rent has to be decided in the light of the above finding. The plaintiff is entitled to claim arrears of rent at the rates stipulated in Ext. A for a period of six years preceding the suit, as rent after the year 1109 has admittedly not been paid. He is also entitled to recover rent at the aforesaid rate from the date of the institution of the suit. The claim for mesne profits at the rate mentioned in the plaint has to be disallowed in the absence of evidence regarding the same. 5. In the result, the decree of the court below is modified and it is held that the amount payable by the plaintiff is a sum of 450 fanams as premium and 484 fanams 12 cash as value of improvements. The plaintiff is allowed to recover arrears of rent for six years preceding the suit at the rate of 741/2 fanams per annum and thereafter at the same rate till date of recovery of possession of the property or the expiry of three years from this date. The amounts decreed to the plaintiff are allowed to be set off against the amount payable by the plaintiff as premium and value of improvements, as found above. Both sides will bear their costs incurred here and in the courts below. The Second Appeal is allowed to the extent indicated above.