SWAMI, J. ( 1 ) THE question for consideration in this second appeal is as to whether the appellant- defendant must be held to have surrendered his leasehold right in the suit premises when he took the same on mortgage under the deed dated 30-6-1975, Ext. P. 2. ( 2 ) THE Trial Court has held that there was a merger of leasehold right of the appellant-defendant when he became the usufructuary mortgagee. Therefore, the respondent-plaintiff was entitled to redemption and actual possession of the suit premises. In the appeal preferred by the appellant-defendant, the lower Appellate court has discarded the theory of merger in view of a decision of the Supreme Court in shah Mathurdas Maganlal and Co. , v Nagappa shankarappa Malaga and Others (A. I. R. 1976 s. C. 1565) and has further held that having regard to the recitals contained in the mortgage deed, there has been surrender of leasehold right; therefore, it is not open to the appellant-defendant to resist the suit for redemption and actual possession. Accordingly, the lower Appellate Court has affirmed the decree of the Trial Court on the ground that there has been surrender of leasehold right. ( 3 ) SRI Srinivasa Iyer, learned counsel appearing for the appellant, submits that admittedly the appellant-defendant was a tenant of the suit schedule premises before it was mortgaged to him, and he had paid an advance of Rs. 1,000/- as recorded in Ext. D. 1 dated 5-5-1972 and that amount had to be returned at the time of vacating the premises and that there is no recital in the mortgage deed about the said advance and further, the mortgage deed also does not recite that on redemption actual delivery of possession of the premises to the Mortgager should take place; therefore, the decision of the Supreme court in Shah Mathurdas Maganlal's case is not applicable to the facts of the present case; hence the lower Appellate Court is not right in law in holding that there has been a surrender of the tenancy right by the appellant-defendant. ( 4 ) LEARNED counsel for the respondent has repelled the contention of the learned counsel for the appellant and has placed reliance on the recitals of the mortgage deed and the proposition of law laid down by the supreme Court in the aforesaid case.
( 4 ) LEARNED counsel for the respondent has repelled the contention of the learned counsel for the appellant and has placed reliance on the recitals of the mortgage deed and the proposition of law laid down by the supreme Court in the aforesaid case. ( 5 ) THE contention of the appellant that there was no relinquishment or surrender or giving up of leasehold right by the lessee (Sic) on his becoming a usufructurary mortgagee under the deed Ex. P. 1 dated 30-6-1975 cannot be accepted. Certain features of the mortgage deed which make the court to reject this contention of the appellant are as follows:the parties have agreed under the mortgage deed to take delivery of possession of the mortgaged property afresh under the mortgage deed Ex. P. 2. They have further agreed under the mortgage deed that the mortgager on the expiry of the period stipulated under the deed has to pay the amount mentioned in the mortgage deed and take back the mortgage deed with the signature of the mortgagee. They have also further agreed that if the amount is not paid on the expiry of the stipulated period, the mortgagee has to continue in possession of the mortgaged property until the amount is paid. It is contended by Sri Srinivasa Iyer that the mortgage deed does not state that on payment of the amount, mortgagor would be entitled to obtain possession. Therefore, the other recitals contained in the mortgage deed are not sufficient to hold that there was relinquishment or surrender of leasehold right and on the lessee becoming a mortgagee, and as such the parties must be deemed to have agreed for the continuation of the lease-hold right even after redemption. ( 6 ) IF really, the parties intended to continue the lease-hold right even after the redemption of the mortgage, there was no need to specifically mention in the mortgage deed that he should continue in possession until the mortgage amount was paid. Similarly, there was no question of obtaining possession of the mortgaged property afresh by the lessee as a mortgagee as he was already in possession on the date of the mortgage. These recitals were specifically intended to, and had the effect of putting an end to the relationship of lessor and lessee on the creation of the new relationship of mortgager and mortgagee.
These recitals were specifically intended to, and had the effect of putting an end to the relationship of lessor and lessee on the creation of the new relationship of mortgager and mortgagee. These two recitals are opposed to the leasehold interest being continued. Therefore, it is not possible to hold that by reason of absence of the recitals in the mortgage deed as to delivery of possession on redemption of the mortgage, in view of the other recitals, which, as already pointed out, had the effect of putting an end to the relationship of lessor and lessee, is of any consequence in as much as on redemption, the mortgagee in law is required to put the mortgager in possession of the mortgaged property. ( 7 ) IN Shall Mathurdas Maganlal's case, the Supreme Court, regarding the surrender of the leasehold right on the lessee becoming usufructuary mortgagee, has observed thus:"no particular form of words is essential to make a valid surrender. A surrender may be oral. A surrender may be express although delivery of possession is necessary for surrender in the facts and circumstances of a given case. In the present case, delivery of possession was immediately followed by a redelivery of possession of the appellant as mortgagee. The Mortgage Deed establishes beyond doubt that the effect of the Deed was inconsistent with the continuance or subsistence of the lease because the parties themselves stipulated that the lease was to exist only up to 6 November, 1953. On the redemption of the mortgage, the respondent had a right to recover possession both on the terms of the mortgage deed and under Section 62 of the Transfer of Property Act. " ( 8 ) THE contention of the appellant that the recitals in the mortgage deed as to obtaining the document of mortgage on payment of the mortgage amount cannot be interpreted as amounting to entitling the mortgagor to obtain possession of the mortgaged property, cannot also be accepted because those recitals have to be read along with the other recitals in the document that the mortgagee has to remain in possession even after the expiry of the time stipulated in the mortgage deed until the amount is paid. Such a stipulation is inconsistent with the continuation of the lease-hold right.
Such a stipulation is inconsistent with the continuation of the lease-hold right. Hence I am of the view that there was a surrender of the lease-hold right on the tenant becoming the mortgagee. Therefore, the lower appellate court has rightly decided this point. Hence the question of admitting this appeal does not arise because the substantial question has been correctly decided by the lower appellate Court. Accordingly, this appeal is not admitted and it is dismissed. Appeal dismissed. --- *** --- .