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1956 DIGILAW 44 (KER)

Lekshmi v. Raman Velu

1956-03-28

JOSEPH VITHAYATHIL, KOSHI

body1956
Judgment :- 1. Defendants 1 to 3 are the appellants. The suit is for redemption of a mortgage, Ext.A, dated 26.12.1080 and a puravaippa, Ext. E, dated 30.8.1090. The plaint property belonged to Kadangassery Mana. The Mana executed the mortgage and puravaippa in favour of one Manickan Raman, the predecessor-in¬interest of the defendants. The mortgage and puravaippa comprised two items of properties. Of these, item No.1 was outstanding on a lease granted by the mana to Raman's father, Manickan. Ext. I dated 30.5.1054 is the lease deed. Item No. 2 was outstanding on a lease granted by the mana to one Makkotha. In 1081 Makkotha attorned to Raman in respect of Item No. 2. Subsequently, Raman assigned the mortgage and puravaippa rights in favour of Makkotha as regards item No. 2 receiving proportionate mortgage and puravaippa amounts. The mana assigned the equity of redemption over both the items in favour of the plaintiff under Ext. B dated 31.1.1120. Makkotha surrendered his rights under the mortgage and puravaippa in respect of item No. 2 in favour of the plaintiff, and the plaintiff got possession of that item. The suit was instituted by the plaintiff for redeeming item No.1 on payment of proportionate mortgage and puravaipa amounts. 2. Defendants 1 to 3 contested the suit. Their main contention was that the plaintiff was not entitled to get khas possession of the property on redemption of the mortgage and puravaipa. According to them, the lease (Ext. I) was not extinguished with the execution of the mortgage (Ext. A) and what was mortgaged by the Mana was only the lessor's right in the property, the lease being kept intact. It was, therefore, contended that the plaintiff was not entitled to get khas possession of the property on redemption of the mortgage and puravaipa. 3. The trial court upheld this contention and held that the plaintiff was not entitled to get actual possession of the property on redemption of the mortgage and puravaipa. In appeal filed by the plaintiff from this decree the District Court also took the same view. But in second appeal our learned brother, Subramonia Iyer, J., took a different view. He held that with the execution of the mortgage the lease came to an end and that therefore the plaintiff was entitled to get khas possession of the property on redemption of the mortgage and puravaipa. But in second appeal our learned brother, Subramonia Iyer, J., took a different view. He held that with the execution of the mortgage the lease came to an end and that therefore the plaintiff was entitled to get khas possession of the property on redemption of the mortgage and puravaipa. The learned judge granted leave to defendants 1 to 3 to appeal from his decision. 4. The only question for decision in this appeal is whether the lease, Ext. I, came to an end with the execution of the mortgage, Ext. A. The question is whether the taking of the mortgage (Ext. A) by Raman who was holding the property on lease would amount to an implied surrender of the lease under S.111(f) of the Transfer of Property Act. According to the appellants, the effect of the mortgage was not to destroy the lease but only to suspend the obligation of the lessee to pay rent to the lessor while the mortgage subsisted. 5. Learned Counsel for the appellants relied on the decision of the Cochin High Court in Pappachan v. Ouseph (37 Cochin 524) in which Koshi, J., (as he then was) following the decision of the Allahabad High Court in Kallu v. Diwan (24 All. 487), observed as follows: "If a landlord mortgages his interest to the tenant or the tenant mortgages his interest to the landlord, redemption of that mortgage would relegate the parties to the position they occupied before the mortgage came into being". That was a case in which the lessee mortgaged his lease-hold interest in the property to the land-lord and took the property back on lease. The question whether the execution of the mortgage amounted to an implied surrender of the lease was not considered in that case. 6. The question whether the taking of a mortgage of the lease-hold property by the lessee will amount to a surrender of the lease is primarily one of intention of the parties. That was the view taken by the Cochin High Court in Markose v. Godar Nambudiripad (39 Cochin 400). Koshi, J., observed as follows in that case: "The question is whether the new relationship of the mortgagor and the mortgagee had the effect of determining the lease by virtue of the operation of the principle underlying the rule referred to (S. 111(f) of the Transfer of Property Act). Koshi, J., observed as follows in that case: "The question is whether the new relationship of the mortgagor and the mortgagee had the effect of determining the lease by virtue of the operation of the principle underlying the rule referred to (S. 111(f) of the Transfer of Property Act). "While a determination of the lease by merger was in this case a legal impossibility the question whether there has been a determination by reason of the doctrine of implied surrender has to be decided with reference to the intention of the parties as discernable from the terms of the mortgage deed, Ext. IV". It was held that the terms of the mortgage deed in that case showed that the parties did not intend to determine the lease. 7. The question again came up before the Cochin High Court in Varkey v. Untaman (40 Cochin 280) and Columbus v. Easi (40 Cochin 430). In the first case, Ananthakrishna Iyer, C.J., after referring to the decision in Kallu v. Diwan (24 All. 487), observed as follows:- "It is enough for me to state that, on the evidence afforded by the two documents, the proper inference to be drawn in this case is that there was an implied if not an express, surrender of the old lease by the first defendant when he accepted Ext. A". In the second case also Ananthakrishna Iyer, C.J., held upon a construction of the mortgage deed that there was an implied surrender of the lease. In the light of these decisions the only question to be decided in this case is whether a reading of Ext. A mortgage goes to show that there was an implied surrender of the lease (Ext. I) when the mortgage was taken by the lessee. In the schedule of properties it was stated that what was mortgaged was the landlord's share of the improvements in the properties : A reading of the document as a whole, in our opinion, goes to show that the intention of the parties was to keep the lease intact. It was expressly stated in the document that item No.1 was in the possession of the mortgagee on lease. Item No. 2 was stated to be outstanding on lease with Makkotha and the mortgagee was directed to realise from him pattom for that property or to recover possession of the property on payment of the value of improvements. It was expressly stated in the document that item No.1 was in the possession of the mortgagee on lease. Item No. 2 was stated to be outstanding on lease with Makkotha and the mortgagee was directed to realise from him pattom for that property or to recover possession of the property on payment of the value of improvements. Raman was directed to appropriate the rent, due from him to the mana under the lease, towards interest due to him on the mortgage amount. More than all these, the description of the properties in the schedule shows that what was mortgaged was only the lessor's interest in the properties. Admittedly, the value of the improvements effected by the lessee in item No.1 was not paid to him when the mortgage deed was executed. That the lessee had effected improvements in the property is admitted in the mortgage deed itself. The mortgagee was also directed to pay the value of improvements due to Makkotha in respect of item No. 2. It is not at all likely that the lessee would have surrendered his right to the value of improvements without receiving any consideration. That this is an important circumstance to be taken into consideration in deciding the question whether the taking of the mortgage by the lessee would amount to an implied surrender of the lease is clear from the judgment of Ananthakrishna Iyer, C.J., in 40 Cochin 430 already referred to. In our opinion, the language of Ext. A makes it clear that in executing the mortgage, Ext. A, the parties had no intention to terminate the lease, Ext. I. We are therefore, constrained to disagree with the opinion of our learned brother, Subramonia Iyer, J., that there was an implied surrender of the lease in this case. We set aside the judgment and decree in S.A. No. 101 of 1124(C) and restore those of the courts below. The appellants will get their costs both in this appeal and in S.A. No. 101 of 1124(C).