Kewal Ram v. Sudrisht Narain Anand — 1979 DIGILAW 167 (ALL)

JUDGMENT B.N. Sapru, J. - This is a defendants appeal arising out of a suit for ejectment, arrears of rent and damages for use and occupation filed by the plaintiff-respondent. The plaintiff also claimed certain sum of money by way of interest and damages at the rate of Re. 1/- per month. 2. The facts necessary to dispose of the second appeal are that one Sita Ram was the owner of the property in which the defendant-appellant was a tenant. 3. The owner Sita Ram made a conditional sale by way of mortgage in favour of Jagannath Prasad Gupta and his mother on 7th of June, 1962. 4. Sita Ram having died, the heirs of the owner sold the equity of redemption by a deed dated 18-6-1965 to the present plaintiff-respondent. The plaintiff-respondent on 19-6-1965 redeemed the mortgage. 5. Subsequently, the plaintiff-respondent also purchased the right to recover the arrears of rent from the heirs of the previous owners. 6. On 22-9-1965 the plaintiff-respondent demanded the arrears of rent from the defendant-appellant from November, 1962 to August, 1965. 7. As a result of the mortgage executed by Radhey Shyam, the mortgagee got into possession and remained in possession till the mortgage was redeemed and in the mortgage deed, it was provided that the mortgagee shall realise rent, pay taxes and spend money on the repairs of the property and also recover interest. It was further provided that if the realisation by the mortgagee exceeded and the amount is paid by him, the same shall be adjusted to the credit of the mortgagor. 8. The defendant-appellant not having paid the arrears of rent. The plaintiff served a notice of demand for arrears which exceeded for more than three months and also terminated the defendants tenancy. 9. It has been found that the plaintiff in his plaint averred that he found before instituting the suit that the defendant has deposited a sum of Rs. 113.25 P. in the Court of Munsif West under Section 7-C of the U. P. (Temporary) Control of Rent and Eviction Act, 1947 and also paid a sum of Rs. 128/-towards house and water tax to the Municipal Board. The plaintiff-respondent gave credit to the defendant-appellant for these two amounts and instituted the suit. In this suit, the plaintiff-respondent has claimed after giving the aforesaid credit Rs. 128/-towards house and water tax to the Municipal Board. The plaintiff-respondent gave credit to the defendant-appellant for these two amounts and instituted the suit. In this suit, the plaintiff-respondent has claimed after giving the aforesaid credit Rs. 803/- as arrears of rent from August 1963 to 23rd of October, 1965 and Rs. 151/- as damages for wrongful use and occupation. The plaintiff-respondent has further claimed a sum of Rs. 189/-as interest by way of damages at the rate of Re. 1/- per month. The total claim of the plaintiff-respondent as against the defendant respondents was Rs. 1163/-. The plaintiff respondent also claimed pendente lite and future interest at the rate of Rs. 1/- per day from the date of suit. 10. Various defences were raised on behalf of the defendant-appellant. It was found by the courts below that under the sale deed executed in his favour, the plaintiff-respondent was the owner of the accommodation. It was found by the trial court that the notice served upon the defendant was valid and the defendant was a defaulter within the meaning of Section 3 of the Act, and was in arrears of rent for more than 3 months and had not paid the same within the period of 30 days from the date of service of notice of demand. 11. The trial Court, therefore, decreed the suit with costs in terms of reliefs 1, 2 and 4 with pendente lite and future interest at the rate of Rs. 4/- per annum. It was further provided that the relief (IV) prayed for in the plaint would be available when court lee is paid in execution. 12. The defendant appellant appealed. The lower-appellate court dismissed the appeal and confirmed the decree of the trial court. 13. It was held that the plaintiff was the owner under the sale deed executed in his favour. It was further held that the plaintiff was entitled to recover the arrears of rent due by the defendant-appellant from the date prior to the sale in favour of the plaintiff-respondent. 14. Aggrieved by the order of the lower appellate court, the defendant-appellant has filed the instant appeal. 15. It was further held that the plaintiff was entitled to recover the arrears of rent due by the defendant-appellant from the date prior to the sale in favour of the plaintiff-respondent. 14. Aggrieved by the order of the lower appellate court, the defendant-appellant has filed the instant appeal. 15. The argument of Sri Jagdish Swarup in support of this appeal is that under the mortgage executed by Radhey Shyam, the son of Sita Ram the possession of the mortgage property along with the right to recover rent had been transferred to the mortgagee. The document of mortgage is on the record. It is clear as to the fact that it was mortgagee who was entitled to realise the arrears of rent. The argument proceeds that the right to recover the rent continued in the mortgagee till 19-6-1965 on which date, the plaintiff-respondent redeemed the mortgage. 16. Sri Jagdish Swarup further argued that the mortgagors had no right to recover the arrears of rent payable by the defendant-appellant to the mortgagee. It is submitted that the lower appellate court, therefore, committed a manifest error of law when it came to the conclusion that the arrears of rent which has been found to be payable by the defendant-appellant to the mortgagee could be transferred to the plaintiff-respondent by the mortgagors. 17. Section 58 of the Transfer of Property Act is in Chapter IV and it deals with the subject of the mortgages of immovable property and charges. Under Section 58 C, it has been provided that where the mortgagor ostensibly sells the mortgaged property the transaction is called a mortgage by conditional sale and the mortgagee a mortgagee by conditional sale " 18. Sub-section (d) of Section 58 is important for the purposes of this case. It provides as follows : - "Where the mortgagor delivers possession or expressly or by implication binds himself to deliver possession of the mortgaged property to the mortgagee, and authorises him to retain such possession until payment of the mortgage money, and to receive the rents and profits accruing from the property or any part of such rents and profits and to appropriate the same in lieu of interest, or in payment of the mortgage-money, or partly in lieu of interest or partly in payment of the. mortgage-money, the transaction is called a usufructuary mortgage and the mortgagee a usufructuary mortgagee." 19. mortgage-money, the transaction is called a usufructuary mortgage and the mortgagee a usufructuary mortgagee." 19. When the arguments in this case originally look place it was discovered that a large part of the record has been destroyed, as a result of the fire in the lower appellate court. The parties sought the permission to file the records which have been lost due to fire. The- document purporting to be a copy of the mortgage deed dated 7th June, 1962 was filed on behalf of the defendant appellant. During the course of arguments, it was not disputed on behalf of the plaintiff-respondent that such a document had been filed. However, when the judgment was being dictated today after lunch Sri Radha Kishan appearing on behalf of the plaintiff-respondent mentioned that the said document had not been filed before the trial court. He made a statement on the basis of the instructions received by him during the course of the day. 20. Sri Vinod Syarup appearing on behalf of the defendant-appellants states that a copy of this document had been filed in the trial Court. 21. From the judgments, it appears that the document which was executed was a conditional sale in favour of Jagannath Prasad Gupta. The conditional sale under which the mortgagee was put into possession would necessarily pass a right to realise rent to the mortgagee. 22. The question then is as to who had the right to realise the rents from the defendant-appellant during the period 7th of June, 1962 to 19-6-1963 when the plaintiff-respondent redeemed the mortgage. Obviously, it was the mortgagee who was in possession under the document of conditional sale. 23. The plaintiff-respondent has under an agreement executed by his predecessor-in-interest acquired the right to realise the arrears of vent. 24. It is settled law that the owner of the building can transfer the right to realise the arrears of rent from the tenant to his transferee. 23. The plaintiff-respondent has under an agreement executed by his predecessor-in-interest acquired the right to realise the arrears of vent. 24. It is settled law that the owner of the building can transfer the right to realise the arrears of rent from the tenant to his transferee. It has further been held by this Court that such a transferee can demand the arrears of rent from the tenant and if the arrears of rent exceeds more than three months and despite the sendee of notice of demand, the tenant does not pay up the rent within 30 days from the service of notice of demand, he can be evicted by the transferee, in view of the provisions of Section 3 (1) (a) of the U. P. (Temporary) Control of Rent and Eviction Act. 25. Sri Jagdish Swarup appearing on behalf of the defendant-appellant does not dispute this position. In view of this fact, that Sri Jagdish Swarup, does not dispute this position, it is not necessary to refer the three decisions cited by Sri Radha Kishan, on behalf of the respondents. 26. Sri Radha Kishan then has also referred a judgment of the Supreme Court reported in the case of Prithivi Nath v. Suraj Ahir ( AIR 1963 SC 1041 ). In that case, it was held by the Supreme Court that a mortgage is a transfer of interest of an immovable property and that on the payment of the mortgage amount by the mortgagor to the mortgagee, the mortgage comes to an end. This position is also not disputed by Shri Jagdish Swarup, on behalf of the defendant-appellant. 27. Sri Jagdish Swarup has referred to Section 130 of the Transfer of Property' Act, where it has laid down that a transfer of an actionable claim whether with or without consideration shall be effected only by the execution of an instrument in writing signed by the transferor or bis duly authorised agent, shall be complete and effectual upon the execution of such instrument, and thereupon all the rights and remedies of the transferor, whether by way of damages or otherwise, shall vest in the transferee, whether such notice of the transfer as is hereinafter provided be given or not. 28. In this case the right to recover the rent as mentioned earlier was transferred by the mortgagor to the plaintiff-respondent and not by the mortgagee. 28. In this case the right to recover the rent as mentioned earlier was transferred by the mortgagor to the plaintiff-respondent and not by the mortgagee. Any arrears of rent which may have fallen due after the redemption of the mortgage by the mortgagor could certainly be transferred by the mortgagor in favour of the plaintiff-respondents. 29. The right to realise the rent having been transferred in favour of the mortgagee consequent in the execution of the document of sale dated 7th of June, 1962, the right continued in the mortgagee till the redemption of the mortgage on 19th June, 1965 to realise the rent in favour of the plaintiff-respondent. Consequently the plaintiff-respondent in his turn could not demand the same from the defendant-appellant. 30. The mortgage having been redeemed on 19th June, 1965, the arrears of rent due: after that date can certainly be recovered by the plaintiff-respondent. These arrears admittedly do not exceed three months rent and as such the plaintiff-respondent is not entitled to a decree for eviction- of the defendant-appellant from the accommodation on that ground. 31. In the result, the appeal is allowed in part. The decree of the lower appellate court for the ejectment of the defendant-appellant from the accommodation in dispute is set aside. The decree for arrears' of rent as against the defendant-respondent for the period prior to 19th June. 1965 is also set aside. The decree for mesne profits is also set aside. The other portions of the decree shall remain intact except the decree for costs. 32. In the circumstances of the case, the parties shall bear their own costs throughout.