KUNJU KUNJU v. ALEY — 1986 DIGILAW 432 (KER)

Judgment :- 1. In a suit for redemption of mortgage the trial court passed a preliminary decree rejecting the tenancy right claimed by the defendant without referring the question to the Land Tribunal. Appellate Court confirmed the decree upholding the finding that defendant is not a tenant. Hence the defendant has come up in second appeal. 2. It is not necessary to advert to the facts in detail since facts are not in serious dispute. Exts. A2 and A3 are the mortgage deeds of 1121. At the time of these two documents the property was outstanding on lease with a stranger. The mortgagees were directed to collect rent from the tenants and get possession from them. Accordingly they got possession. As to how the mortgagees got possession is a fact in dispute even though it is admitted that they got possession. Though they filed a suit it was dismissed If so possession could have been obtained only under some arrangement with the lessee. Equity of redemption devolved on the plaintiff and the right of the mortgagees devolved on the defendant. 3. Defendant claimed tenancy right and fixity of tenure under two counts. The first is under S.4A(1)(b) of the Kerala Land Reforms Act as amended. That claim was found against by both the courts and it was rightly not pressed before me. The second ground is that when the mortgage is redeemed the lease hold right obtained by the mortgagee will revive. Contention of the plaintiff in this respect is that the lease was determined by express or implied surrender under S.111(e) or (f) of the Transfer of Property Act when the mortgagee redeemed the lease. That is the main aspect to be considered in the second appeal. 4. Incidentally there is another question also to be considered. Though the defendant claimed tenancy right in the written statement under two heads and though both these claims were denied in the replication the only issue raised by the trial court in this connection was whether the plaint transaction is a mortgage or has it the nature of a lease as contended by the defendant. The question of tenancy was not referred to the Land Tribunal. Without a reference the trial court decided that issue on the merits as if the claim was only under S.4A of the Land Reforms Act. The claim was negatived. The question of tenancy was not referred to the Land Tribunal. Without a reference the trial court decided that issue on the merits as if the claim was only under S.4A of the Land Reforms Act. The claim was negatived. The claim on the basis of the original lease redeemed by the mortgagee was not considered at all. In the appeal memo before the first appellate court the defendant challenged the finding on the question of tenancy and stated that the action of the trial court in deciding the question of tenancy without reference to the Land Tribunal was illegal. But there is nothing to show that either before the trial court or the appellate Court the appellant-defendant made a move for reference to the Land Tribunal. Judgments of the courts below do not show that even at the time of arguments the necessity of reference to the Land Tribunal or the illegality or lack of jurisdiction without such a reference was taken up. I do not mean to say that a defendant who has raised the question of tenancy in his pleadings is bound to remind or request the court that a reference to the Land Tribunal is necessary or that without such a reminder or request the court is not bound to make a reference to the Land Tribunal simply because such a question has arisen from the pleadings. I only stated that apart from the plea in the written statement and appeal memorandum the question was not otherwise mooted and both the trial court and the appellate court therefore skipped consideration of the question of reference. 5. From the judgment of the appellate court it appears that tenancy under both heads was raised. The claim under S.4A was considered by the appellate judge in para 9 of his judgment and rightly found against. The claim based on revival of the earlier tenancy was considered in para 10 and the appellate judge rejected that contention on the finding that the mortgagee bad no intention to keep the leasehold 'interest alive. In my opinion this is a wrong finding. I shall give the reasons later. 6. The claim based on revival of the earlier tenancy was considered in para 10 and the appellate judge rejected that contention on the finding that the mortgagee bad no intention to keep the leasehold 'interest alive. In my opinion this is a wrong finding. I shall give the reasons later. 6. I have referred to these aspects only because there was initially an argument by the appellant that the decision on the question of tenancy without reference to the Land Tribunal was without jurisdiction and therefore the case has to go back for a reference. Respondent-plaintiff argued that even if the trial court could be said to have acted without jurisdiction when it decided the question of tenancy without reference to the Land Tribunal that stigma cannot be attached to the decision of the appellate court which had every right to decide the question. Certain decisions were also brought to my notice. Alavi v. Radha Varasyaramma (1976 KLT 691 (FB)) said that when for the first time, the objection that the decisions of the trial court should have been reached after reference to the Land Tribunal, is taken up in second appeal this Court is not bound to reopen the decisions of the courts below in order to enable the trial court to make a reference. Kesava Bhat v. Subraya Bhat (1979 KLT 766 (FB)) laid down that if a question of tenancy arose the contravention of S.125(3) of the Land Reforms Act is a matter affecting jurisdiction and not one relating to procedure and the civil court decree without reference to the Land Tribunal would be without jurisdiction and therefore null and void. But the majority decision in that case left open the question whether if, on appeal from the trial court decision, the appellate court goes into the question of tenancy and renders a decision, that decision will be a nullity. It was said therein "We do not wish to pronounce on this aspect". Therefore on this aspect the decision in Alavi's case (1976 KLT 691) stands. It was said therein "We do not wish to pronounce on this aspect". Therefore on this aspect the decision in Alavi's case (1976 KLT 691) stands. Another Full Bench decision in Karthyayani v. Pappu (1980 KLT 541) also considered this aspect and said that if the point was taken before the appellate court it may in given circumstances set aside the decree and remit the case to the trial court for want of reference to the Land Tribunal, but it is not obligatory on the part of the appellate court to do so since it has full powers to decide the question itself. It was also held therein that in cases where the point that the trial court acted illegally in not referring the question under S.125(3) has been taken before the appellate court, but bad not been accepted by the appellate court, the question might arise before the second appellate court whether the decision of the first appellate court not to remit the case to the trial court to make a reference to the Land Tribunal was a just and proper decision. A later Division Bench decision in Kunjan v. Janaki (1980 KLT 796) also considered this question. But that was a case in which there was no complaint either in the trial court or in the first appellate court that the trial court had no jurisdiction to go into the question. The principle laid down in that decision was that if the jurisdiction is usurped by a court in passing a decree against which an appeal would lie if it had been passed without jurisdiction, that appeal cannot be defeated on the ground that the decree was made without jurisdiction. This decision has also considered Alavi v. Radha Varasyaramma (1976 KLT 691) and Kesava Bhat v. Subraya Bhat (1979 KLT 766). This decision has also considered Alavi v. Radha Varasyaramma (1976 KLT 691) and Kesava Bhat v. Subraya Bhat (1979 KLT 766). The argument that the power of the appellate court is limited to the consideration of the correctness of the finding of the Land Tribunal incorporated in the judgment of the trial court and if there is no finding of the Land Tribunal the bar under S.125(1) of the Land Reforms Act will apply to the appellate court also was considered in that decision and it was said that the argument is clearly unsustainable because S.125 not only does not limit the powers of the appellate court, but it requires 'the appellate court to treat the finding of the Land Tribunal as a finding of the civil court. This was held to mean that the appellate court's powers under the Code of Civil Procedure are not taken away. 7. In the light of these decisions pointed out by the counsel for the respondent and in view of the arguments based on them the counsel for the appellant did not pursue his contention regarding the alleged illegality in the decision of the appellate court without reference to the Land Tribunal. Both sides said that the finding of the appellate court on the question of tenancy may be taken as one with jurisdiction and its correctness gone into. If go. I need not consider whether it was "just and proper" on the part of the appellate court not to remit the case to the trial court to make a reference to the Land Tribunal in spite of the contention taken in the appeal memo before that court as was doubted in Karthiyayan's case (1980 KLT 341). In the absence of challenge it could be proceeded, as if the finding of the appellate court on the question of tenancy was within its jurisdiction. Its legality and correctness alone are the factors that are to be gone into. 8. Exts. A2 and A3 mortgage deeds clearly show that as per document under 3985 of 1119 the property was outstanding on lease with one Chandy Varghese. Mortgagee was directed to collect the rent and get possession from him. The lease deed or the document by which the mortgagee got the rights of the lessee are not in evidence. 8. Exts. A2 and A3 mortgage deeds clearly show that as per document under 3985 of 1119 the property was outstanding on lease with one Chandy Varghese. Mortgagee was directed to collect the rent and get possession from him. The lease deed or the document by which the mortgagee got the rights of the lessee are not in evidence. Even though the plaintiff contended that the mortgagee filed a suit for eviction of the lessee and obtained possession, the evidence is that the suit was dismissed. I referred to this aspect because it was contended on behalf of the respondent-plaintiff before me that the question of surrender of the lease would not have arisen if it was by an assignment given by the lessee and in this case surrender will arise because the lessee was submitting himself to a decree for eviction. When the suit was dismissed that question cannot arise because the mortgagee could have come by possession only under some other arrangement with the lessee. Even if it was a case of eviction by a decree through court, it cannot amount to surrender which determines the lease under S.111(e) or (f) of the Transfer of Property Act because surrender is a case in which the lessee yields up his interest under the lease to the lessor. Mortgagee is not the lessor. Surrender must be in favour of the person having the immediate reversion or the lessor's interest. The lessee cannot surrender to a person in whom the reversion is not vested in order to effect determination of the lease. In this case that question does not arise because mortgagee is not having the entire interest of the lessor. Equity of redemption vests with the lessor even after the mortgage. 9. Ext. A-4 assignment of the mortgage right in favour of the defendant and his evidence as dw.1 that he has only the mortgage right were sought to be highlighted in order to contend that there was no intention to keep alive the leasehold right. That question will arise only in a case coming under S.111(d) of the Transfer of Property Act where the interest of the lessee and the lessor in the whole of the property becomes vested at the same time in one person in the same right. That is on the doctrine of merger. That cannot also apply in this case. That question will arise only in a case coming under S.111(d) of the Transfer of Property Act where the interest of the lessee and the lessor in the whole of the property becomes vested at the same time in one person in the same right. That is on the doctrine of merger. That cannot also apply in this case. Further, the counsel for the respondent himself conceded that there is no merger involved in this case and, in my opinion, he has rightly done so. If so, the argument that the mortgagee who got the lessee's right had no intention to keep alive the lease hold right is only a confusion of the issue. 10. The question of annihilation or merger arises only when a greater estate and a lesser one coincide and meet in one and the same person without any intermediate estate. In such a case, the lesser estate may not have any independent existence thereafter and it is considered to have merged, sunk or drowned in the greater. For merger to arise, it is necessary that the lessor and higher estates should not only merge in the same person, but it should also be at one and the same time and in the same right and no interest in the property should remain outstanding. There cannot be a merger of a lease and a mortgage in respect of the same property. Neither of them is a higher or lessor estate than the other. Even if these two rights are united in the same person at the same time, the reversion in regard to the lease and equity of redemption is regard to the mortgage, would be outstanding in the owner and hence irrespective of the question of intention to keep alive these rights distinct and separate or not, there cannot be a complete fusion of all the rights of ownership in one person in order to constitute merger. Further, there cannot be any question of one right merging, sinking or drowning in the other since none of them is lesser or higher than the other. The question of merger therefore does not arise at all. It was so held by the Supreme Court in G. Appalaswamy v. B. Venkitaramanayya (AIR 1984 SC 1728 -1984 (4) SCC 382). Further, there cannot be any question of one right merging, sinking or drowning in the other since none of them is lesser or higher than the other. The question of merger therefore does not arise at all. It was so held by the Supreme Court in G. Appalaswamy v. B. Venkitaramanayya (AIR 1984 SC 1728 -1984 (4) SCC 382). The very basis of the principle of merger is that the same person cannot normally bold a superior and inferior right over the same property at the same time when all the rights are vested in him. For eg., one cannot be at the same time landlord and tenant of the same property. For the purpose of independently and separately holding an inferior right the superior right must be with some body else so that the relationship is there. 11. In England equity stepped in to modify the rigour of the doctrine of merger by laying down that one must look at the intention of the parties to decide whether there has been a merger or not. If on this basis it was considered that there was no merger in equity, then the position is that there is no merger in law also. In deciding the intention, when no intention is expressed, courts have always looked to the benefit of the person in whom the interest coalesces. It was always considered that the presumption will be against merger where it was either the duty or in the interest of the person acquiring both the rights that both should be preserved as separate rights. As held in Jyotish Thakur and others v. V. Tarakant Jha and others (AIR 1963 SC 605) the principles of doctrine of merger in England have influenced the judicial thinking in our country. Any how, we are not concerned with that aspect because the question of intention to merge or otherwise and the consequent merger or otherwise will arise only when there is a union of the superior and subordinate interests in the same person. That contingency has not arisen it. this case for the reasons already stated. 12. Any how, in this case there is nothing indicating intention to merge even taking for granted that merger of the leasehold right could be had in the mortgage right. It was always better in the interest of the mortgagee to keep alive and separate these two rights. this case for the reasons already stated. 12. Any how, in this case there is nothing indicating intention to merge even taking for granted that merger of the leasehold right could be had in the mortgage right. It was always better in the interest of the mortgagee to keep alive and separate these two rights. The provision in Exts. A-2 and A-3 are not capable of establishing any intention of merger. In both documents the mortgagees were directed to collect rent from the lessee. They were not directed to redeem the lessee but the words used are to get possession from the lessee. Ext. A-4 assignment was executed in favour of the defendant by the legal representatives of the mortgagee who got the rights of the lessee also. What they have stated is that all their rights are transferred. The statement in Ext. A-4 that the assignors are not having permanent right is not capable of inferring an intention that the leasehold right was not intended to be kept alive. Ext. A-4 was given at a time when lessees were not having fixity of tenure. It is not known from where the appellate court found that the mortgagee had no intention to keep alive the leasehold interest. Factually and legally that finding is incorrect. 13. AIR 1984 SC 1728 referred to above is a case where mortgage was executed in favour of the person who was in possession as lessee. The question that came up for consideration in that case was whether acceptance of the mortgage amounted to an implied surrender of the lease under S.111(f) of the Transfer of Property Act and not whether the intention was to keep alive the two rights or to merge them. It was held that the question of implied surrender depends upon the intention of the parties at the time of the execution of the mortgage deed gathered from the terms and conditions of the mortgage transaction in the light of the surrendering circumstances. In that case the finding was that the leasehold right was kept in abeyance and it revived on redemption of the mortgage. In this case such a question of implied surrender also does not arise and there is no question of merger also. If so. when the mortgage is redeemed the leasehold right which came to the mortgagee will revive. In that case the finding was that the leasehold right was kept in abeyance and it revived on redemption of the mortgage. In this case such a question of implied surrender also does not arise and there is no question of merger also. If so. when the mortgage is redeemed the leasehold right which came to the mortgagee will revive. There is no contention that in such a situation the appellant-defendant will not be entitled to fixity of tenure under the Kerala Land Reforms Act. If so, there is no question of the plaintiff being given a decree for redemption because he has no right to redeem and recover possession. The second appeal is allowed and the decrees and judgments of the courts below are set aside. The suit for redemption is dismissed since the defendant is a tenant entitled to fixity of tenure and the right of the landlord vested is the Government. Parties will bear their costs.