Phoolchand Jain v. Chhotelal — 1989 DIGILAW 326 (MP)

JUDGMENT S.K. Dubey, J.-l, The defendant, having lost in the two Courts below, has filed this second appeal against the judgment and decree of arrears of rent and of eviction under section 12 (1) (a) of the M.P. Accommonation Control Act, 1961, (for short, the 'Rent Act'), passed in Civil Appeal No. 44-A/1976, by Second Anditional District Judge, Guna" on 22-12-1979. 2. Brief facts leading to this appeal are thus:-The defendant is owner of the suit property which was mortgaged by him with the plaintiffs for a consideration of Rs. 12,000/- vide registered mortgage-deed (Ext. P.1), dated 28-8-1970. The mortgage was with possession, a usufructuary mortgage, as defined Under section 58 (d) of the Transfer of Property Act, 1882 (for short, the' Act'). On the same day, the mortgagees/plaintiffs leased back the property to the mortgagor/defendant on the terms and conditions mentioned in the rent-note (Ext. P. 2) on a monthly rent of Rs. 141/- for a perion of 10 months. A formal handing over and taking over of possession by delivery of the key of the suit property took place between the parties at the time of execution of the aforesaid two deeds. The appellant after taking over possession of the suit property on rent, did not make any payment of rent, hence, the mortgagees as landlords served a notice, dated 2-3-1971 (Ex. P/5), making a demand therein to pay the arrears of rent due. When even after expiry of two months the arrears were not paid, the mortgagees/plaintiffs served another notice, dated 20-8-1971, re-agitating the demand of the accrued rent due and terminating the tenancy of the defendant/appellant in accordance with the provisions of section 106 of the Act. After expiry of two months, as the rent was not tendered to the mortgagees/landlords they instituted a suit on 13-1-1972 for eviction for realisation of arrears of rent u/s. 12 (1) (a) of the Rent Act and mesne profits. After service of the writ of summons of the suit, the defendant did not deposit the arrears of rent within one month of the institution of the suit. Nor deposited any amount of rent during the pendency of the suit. The defendant contested the suit on the ground that there was no relationship of landlord and tenant, the amount of Rs.141/- was to be paid towards monthly interest on the amount of Rs. Nor deposited any amount of rent during the pendency of the suit. The defendant contested the suit on the ground that there was no relationship of landlord and tenant, the amount of Rs.141/- was to be paid towards monthly interest on the amount of Rs. 12,000/- and the rent-note (Ext-P/2) was executed by him as a collateral security for payment of interest. The trial Court framed six issues which arose out of the pleadings of the parties. Issue No.1 related to the relationship of landlord and tenant between the plaintiffs and the defendant, issue No.2 was raised to the effect "whether the defendant took the suit property on rent from 28-8-1970 for a period of 10 months ON a monthly rent of the 141/- or the defendant took a loan of Rs.9,000/- by mortgaging the suit property and whether the rent-Note was executed by the defendant towards payment of interest on the mortgage amount as penalty." After recording evidence, the trial Court decreed the suit holding that the mortgage was a mortgage with possession, a usufructuary mortgage, the mortgagees/plaintiffs, after taking possession of the mortgaged property, leased back the suit property to the defendant/mortgagor on execution of the rent-note (Ext. P/2) by the defendant, and the key of the suit-property, which was handed over by the defendant to the plaintiffs/mortgagees, was again given to the defendant. Relationship of landlord and tenant came into existence. As the defendant did not make any payment of rent after service of the notice of demand or even after the institution of the suit, a decree for eviction under section 12 (1) (a) of the Rent Act and for arrears of rent was passed. The lower appellate Court also confirmed the findings and decree of the trial Court. Aggrieved of the judgment and decree of the Courts below, tile defendant has preferred this second appeal which was admitted by this Court on 29-4-1980 on the following substantial question of law:- “Whether in a suit based on the ground available under section 12 (i) a) of the M.P. Accommodation Control Act, the Court is justified in decreeing the suit without passing an interim order under section 13 of the M.P. Accommodation Control Act when the alleged tenant has disputed the rate of rent as well as the right of the plaintiffs/landlords to recover the rent ?" 3. Shri Arun Mishra, learned counsel for the defendant/appellant contended that execution of the mortgage deed of the suit property owned by the defendant is admitted; in view of this, the mortgagees/plaintiffs are not entitled for a decree for eviction under section 12 (1) (a) of the Rent Act. Reliance was placed on a Single Bench decision of this Court in case of Buddhu Lal v. Dulle Khan1986 MPRCJ 234. Alternatively, Shri Mishra contended that interest on the mortgage amount cannot be more than the principal, and under S.3 (2) (a) of Usurious Loans Act, 1918, as amended in Madhya Pradesh, the rent being penal in nature, a direction is required by this Court to re-open the accounts. Learned counsel further submitted that the mortgagor/appellant cannot be deprived of his right of redemption. Reliance was placed on Mathuralal v. Keshar Dai and another AIR 1971 SC 310 , which has been followed in a recent decision of this Court in Bharosilal v. Shila Devi 1988 JLJ 712 . Learned counsel made a prayer that according to the view of this Court in Lacchobai Rathor v. Registered Shri Murti Gon Madan Mohanji 1988 JLJ 213 even if a decree for eviction is passed under section 12 (1) (a) of the Rent Act, the defendant/tenant is entitled to deposit all arrears of rent due under the decree in the executing Court, in that case too, eviction cannot be ordered. 4. Shri R.D. Jain, learned counsel for the respondents/landlords, submitted that the two Courts below, after appreciation of evidence led by the parties on specific issues arising out of the pleadings relating to relationship of landlord and tenant and after considering the mortgage-deed and the rent-note, have held that as the mortgage was a mortgage with possession and the suit property was leased back, the mortgagees became landlords as defined in section 2 (b) of the Rent Act and that they are entitled to maintain B suit for eviction on any of the grounds available under section 12 (1) of the Rent Act. Reliance was placed on a recent pronouncement of the Apex Court in the case of S.B. Abdul Azeez (by Lrs.) v. M. Maniyappa Setty AIR 1989 SC 553 , wherein the earlier decision of Apex Court in Mathuralal v. Keshar Bai and another (supra) was followed. Reliance was placed on a recent pronouncement of the Apex Court in the case of S.B. Abdul Azeez (by Lrs.) v. M. Maniyappa Setty AIR 1989 SC 553 , wherein the earlier decision of Apex Court in Mathuralal v. Keshar Bai and another (supra) was followed. Learned counsel also placed reliance on Division Bench and Single Bench decision of this Court in Trustees of Motidas Beragi Sadhu Ratlam Trust Board v Ramjatan Ramprasad Sonar AIR 1963 MP 265 ; Mathuralal v. Sobhagmal 1964 JLJ 376 , Ramlal Bhagirathji v. Mahant Atmaramji 1960 JLJ 950 and a decision of this Court in S.A. No. 172/1983 (G), decided on 10-9-1984, Mahila Karanbai alias Bhauji v. Bheronlal short-noted in 1985 MPRCJ N (101). Learned counsel also submitted that the suit being not aredep1ption suit, nor a suit for foreclosure, the question of re opening of the accounts relating to interest does not arise and, as the defendant/appellant has not deposited the arrears of rent and the rent-accrued during the pendency of the suit at all, the decree for eviction cannot be set aside. 5. In the back-drop of the facts, which are either admitted or found proved by both the Courts below, indisputably, the suit property belonged and is owned by the defendant/mortgagor. On execution of the deed of mortgage, the possession of the suit property was formally taken over by the mortgagees by taking the key of the suit-property. After the execution o the mortgage-deed (Ext. P-1) at the same time the rent-note (Ext. P/2) was executed by the defendant in favour of the plaintiffs for taking the said mortgaged property on rent from the mortgagees at the rate of Rs. 141/per month and, thus defendant acquired the rights of a lessee, the relationship of landlord and tenant came into existence between the mortgagees and the mortgagor. By reading Ext. P. 1 and Ext. P/2) was executed by the defendant in favour of the plaintiffs for taking the said mortgaged property on rent from the mortgagees at the rate of Rs. 141/per month and, thus defendant acquired the rights of a lessee, the relationship of landlord and tenant came into existence between the mortgagees and the mortgagor. By reading Ext. P. 1 and Ext. P/2 together, an inference can easily be drawn that they are component parts of the same transaction, but it does not mean that the two deeds are inconsistent with each other, nor it can be said that after handing over formal possession of the suit property, the suit-property was not leased back by the mortgagees to the mortgagor, who acquired the rights of a lessee, and that no relationship of landlord and tenant existed between the mortgagees and the mortgagor, so as not to give any rights to the mortgagees/lessors to enforce the terms of the rent note (Ext. P.2) by instituting a suit on any of the ground under section 12 (1) of the Rent Act. Such a mortgagor in a suit for eviction by the mortgagees, based on the rent note, which is executed as a sequel to the mortgage-deed, cannot contend that he is not, in fact. a tenant, and the terms in the two deeds cannot be given effect to separately and that the mortgage was not an usufructuary mortgage but a simple one. (See Feroz Shah v. Sohbat Khan AIR 1989 SC 553 ; Taustees of Beragi Sadhu Ratlam Trust Board v. Ramjatan Ramprasad Sonar (supra); Mathuralal v. Sobhagmal (supra) and Ramlal Bhagirathji v. Mahant Atmaramji (supra). 6. The Apex Court in the case of Mathuralal v. Keshar Bai (supra) has held that a mortgagee with possession is entitled to be in possession of the mortgaged property so long as it is not redeemed by the mortgagor. If the mortgagee with possession leases back the property to the mortgagor, the mortgagee acquires the rights of a lessor and is entitled to enforce the terms of the lease against the mortgagor. If the mortgagee with possession leases back the property to the mortgagor, the mortgagee acquires the rights of a lessor and is entitled to enforce the terms of the lease against the mortgagor. This Court in the case of Mahila Karanbai alias Bhauji v. Bheronlal (supra) while considering the case of a mortgagee with possession, who filed a suit for eviction on the ground under section 12 (1) (f) of the Rent Act against the mortgagor/tenant, construed the word "owner" and the term "ownership" used in section 12 (1) (f) of the Rent Act and observed that the word "ownership" varies in its significance according to the context and the subject matter with which it is used. It has been defined as the right by which a thing belongs to an individual to the exclusion of all others; but it does not always mean absolute ownership. No straight-jacket definition of ownership can be given, it differs with the context in which it has been used, and, as such, the mortgagee with possession bas the right to possess and enjoy the property till redemption as an owner for the purposes of the Rent Act. 7. Recently, in case of S.B. Abdul Azeez (by Lrs.) v. M. Maniyappa Setty (supra), the Apex Court while considering the provisions of Karnataka Rent Control Act (22 of 1961) definition of "landlord" as contained in section 3 (h) and the grounds of bona fide requirement as contained in section 21 (1) (h) of the said Act, and section 76 (a) of the Transfer of Property Act, and placing reliance on its earlier decision in Mathulal v. Keshar Bai (supra), held that a mortgagee with possession is entitled, as much as the owner himself, to seek recovery of possession on the leased premises from a tenant for his own bona fide requirements of use. A mortgagee with possession undoubtedly falls under the first category of the definition of "land. lord" as given in section (3) (h) as he is entitled to receive the rent on his own account and this factor makes the usufructuary mortgagee's stand on a higher and different footing than other persons accorded the status of a landlord under section 3 (b) of the said Act. lord" as given in section (3) (h) as he is entitled to receive the rent on his own account and this factor makes the usufructuary mortgagee's stand on a higher and different footing than other persons accorded the status of a landlord under section 3 (b) of the said Act. 7-A. The definition of "landlord" under section 3 (h) of the said Act is almost pari materia to the definition of "landlord" under section 2 (b) of the Rent Act. A bare reading of the definition of "landlord under section 2 (b) and that of "tenant" under section 2 (i) and the provisions of section 12 with other provisions of the Rent Act would amply make it clear that a suit for eviction and for arrears of rent can be maintained by a mortgagee/landlord against the mortgagor/tenant. 8. Reliance of Shri Mishra in the case of Buddhu Lal v. Dulle Khan (supra) is of no help to the appellant because in the said case the lower appellate Court found that the relationship of landlord and tenant between the parties has not been established, and this Court remitted the case to decide the question as to whether the defendant was a "tenant" of the plaintiff in respect of the suit premises or whether any rent was legally recoverable from him in respect of that premises. It is true that Dr. T.N. Singh, J, in this decision (para 5), after considering the term "tenant", employed in section 2 (i) and the words "rent legally recoverable", used in section 12 (1) (a) of the Rent Act, has held that it is the duty of the Court to arrive at a finding whether the plaintiff's claim as to entitlement under law to recover any amount as rent from the tenant had been proved. In para 5 of the said report, the finding of the appellate Court that there was no relationship of landlord and tenant on the admission of the plaintiff regarding mortgage of the suit property and that the rent-note merely manifested defendant's liability as to payment of into est for the loan advanced by the plaintiff, was affirmed. That being the position, in that case, it was held that the plaintiff's claim for defendant's eviction from the suit premises was rightly rejected by the lower appellate Court. That being the position, in that case, it was held that the plaintiff's claim for defendant's eviction from the suit premises was rightly rejected by the lower appellate Court. In my opinion, this decision is of no help to the appellant in the present facts of the case, as the findings of the two Courts in the case are that relationship of landlord and tenant for the purposes of the Rent Act has been established and the ground under section 12 (1) (a) has been found proved, decreeing the suit of the plaintiffs. 9. It was submitted on behalf of the appellant that if this Court takes a different view from the decision rendered in Buddhu Lal v. Dulle Khan (supra) then the matter be referred to a larger Bench. I am not inclined to accept this submission for the reason that the facts found proved in Buddhu Lal v. Dulle Khan (supra) were different, and in that case the earlier decisions of this Court rendered in Trustees of Motidas Baragi Sadhu Ratlam Trust Board v. Ramjatan Ramprassad Sonar (supra); Mathuralal v. Sobhagmal (supra); Ramlal Bhagirathiji v. Mahat Atmaramji and Mahila Karanbai alias Bhauji v. Bheronlal (supra) were not brought to the notice of the learned Judge. More over, now the law has been settled by the Apex Court in case of S.B. Abdul Azeez (by Lrs.) v. M. Maniyappa Setty (supra). wherein it has been laid down that a mortgagee/landlord is entitled, as much as the owner himself, to seek recovery of possession of the leased premises from a tenant if the ground for eviction is made out. 10. The contention of Shri Mishra that interest would be much more than the principal amount of the mortgage, and that the interest so charged would be against the provisions of section 3 (2) (a) of the Usurious Loans Act, 1918, as amended in Madhya Pradesh and, as such, the accounts deserve to be reopened, cannot be considered in this case, as this ground has been raised for the first time in appeal and, further, the defendant/mortgagor has still got his right to file a suit for redemption, where all questions, which are now agitated here, can be considered. Admittedly, the mortgagees have not filed a suit for forecloure or sale of the property and, unless the property is sold, the mortgagor's right to file a suit for redemption would not be barred, even though the eviction suit has been decreed. (See Mathuralal v. Keshar Bai) (supra), and Bharosilal and others v. Shila Devi (supra). 11. The last submission of Shri Mishra that a direction be made for depositing the rent by the defendant, so that eviction may not be ordered, in view of the decision of this Court in Lacchobai Rathor v. Regd. Shri Murti God Madan Mohanji (supra). cannot be accepted. Suffice it to say that till date no rent has been deposited nor any application has been filed for condonation of delay and for depositing the rent, hence, no direction order can be passed in this regard. The appellant/defendant is free to deposit the rent to avoid the eviction decree and may draw the attention of the executing Court to the law laid down in Lacchobai Rathore v. Regd. Shri Murtigon Madan Mohanji (supra). There is no doubt that the executing Court certainly will dispose of the prayer of the appellant/defendant in accordance with law. 12. In the result, the appeal fails and is dismissed with no order as to costs.