H. N. TILHARI, J. ( 1 ) AND decree dated November 9, 1984, delivered by Principal Civil Judge, Belgaum in Regular Civil Appeal No. 13 of 1984, dismissing the first appeal of the defendant-appeal and confirming the judgment and decree dated 14th December, 1983 given in Original Suit No. 206 of 1976, by the First Additional munsiff, Belgaum, whereby the Trial Court decreed the plaintiff-respondent's suit for redemption of mortgage and possession of the mortgaged property and for future mesne profits. The plaintiff-respondent filed the above mentioned Regular suit for redemption of mortgage with the allegations to the effect as contained in the plaint that plaintiff-respondent is and has been the adopted son of one Smt. Tulsabai w/o Gangadhar sabannavar. The plaintiff's case is that Smt. Tulsabai referred to above died on August 7, 1971, leaving behind her, the plaintiff-the only son and heir entitled to succeed her. The plaintiff further alleged that during her life time Smt. Tulsabai had taken a sum of Rs. 2,200/- from the defendant on security of the house for her maintenance and family needs. According to the plaint case, on the death of Smt. Tulsabai, the plaintiff succeeded to the property of Tulsabai. Plaintiff further alleged that having taken loan from defendant on security of the house, the plaintiff-respondent's mother namely Smt. Tulsabai executed a mortgage deed in favour of defendant-appellant namely narayan Punnappa Khilare. The plaintiff claim that since after the death of Smt. Tulsabai, plaintiff has stepped into the shoes of Smt. Tulsabai and as such he is entitled to redeem the mortgage and to get the property of Tulsabai, which had been mortgaged by her in favour of the defendant-mortgagee namely the appellant. In paragraph-2 of the plaint, the plaintiff has given the particulars of the mortgage as under: the date of mortgage is alleged to be 11th July, 1962 and 4th march, 1966. The name of the mortgagor has been mentioned as smt. Tulsabai Gangadhar Sabannavar, deceased and succeeded by her legal heir - Shripad Gangadhar Sabannavar i. e. , the plaintiff-respondent. The name of the mortgagee is mentioned as narayan Punnappa Khilare. The sum secured under the mortgage is mentioned as Rs. 2,200/- (Rs. 1,500 + Rs. 700 ). The name of the mortgagor has been mentioned as smt. Tulsabai Gangadhar Sabannavar, deceased and succeeded by her legal heir - Shripad Gangadhar Sabannavar i. e. , the plaintiff-respondent. The name of the mortgagee is mentioned as narayan Punnappa Khilare. The sum secured under the mortgage is mentioned as Rs. 2,200/- (Rs. 1,500 + Rs. 700 ). With reference to the rate of interest it is mentioned, being possessory mortgage the mortgagee is to enjoy the mortgaged property in lieu of interest as per the deed of mortgage dated 11-/-1962 and has to get interest at 9 per cent per annum as per the mortgage deed dated 4-3-1966 on the sum of Rs. 700/ -. Period of mortgage mentioned is five years. The property mortgaged has been mentioned as house bearing No. CTS-204 A and B, situated within the limits of Khade Bazar, Shahapur, Tel. Belgaum. The plaintiff has further alleged in the plaint para-3 that the property in suit having been mortgaged with possession by plaintiffs predecessors in title for a total sum of Rs. 2,200/- to the defendant and as the plaintiff has inherited and succeeded the property and interest of the deceased mortgagor and the defendant being in possession as mortgagee and enjoying the property as such, the possession of the suit property is to be handed over back to the plaintiff free from all suit mortgage encumbrances, after payment of the mortgage money and that the plaintiff is ready and willing to pay the amount due under the aforesaid mortgage. The plaintiff has further'alleged that plaintiff made a request to the defendant to accept the said mortgage amount and release the property from the mortgage encumbrances and to hand over the actual possession thereof to the plaintiff. But the defendant on one pretext or other postponed and avoided the same and finally in the last week of april, 1976, when the money was tendered with a request to the defendant to deliver the possession of the suit property, the defendant did not do so. According to the plaintiff as such the need for filing the suit for redemption of suit property did arise and so the plaintiff has filed the suit. According to the plaintiff as such the need for filing the suit for redemption of suit property did arise and so the plaintiff has filed the suit. The plaintiff has claimed for the decree being passed in his favour reconveying the suit mortgage property free from mortgage encumbrances after redemption and has further prayed for actual possession being delivered, of the same to him. The plaintiff has also claimed future mesne profits from the date of the suit till the actual delivery of possession of the property to him. The defendant filed the written statement on 25-11-1976. He also filed additional written statement on July 13, 1982. The defendant-appellant denied the plaintiff-respondent claim. Nodoubt defendant admitted that Smt. Tulsabai had mortgaged the property in dispute with possession to defendant for a sum of rs. 2,200/- for a period of 5 years and had taken hand loan from defendant-appellant from time to time for her maintenance and medical expenses. But the defendant denied the plaint allegation to the effect that the plaintiff is or has been the adopted son of smt. Tulsabai, and the defendant further denied that Smt. Tulsabai died on /-8-1971 leaving behind her, the plaintiff-respondent as her only son. The defendant denied the plaintiff's case that plaintiff has succeeded to the property of smt. Tulsabai and as such the defendant asserted that the plaintiff is not entitled to redeem the suit property as the plaintiff is not the mortgagor her heir as claimed. The defendant further alleged that one Bharmanna Anantappa Sabannavar and two others filed a suit against the plaintiff of the present suit No. 206 of 1976. It was alleged that, that the suit which had been filed by Bharmanna Anantappa Sabannavar was numbered as suit No. 128 of 1976 in the Court of Additional Munsiff, belgaum. The defendant further alleged that the defendant-appellant and two others were also parties as defendants in suit No. 128 of 1976. It was further alleged that in that suit O. S. No. 128 of 1976 the plaintiff of that suit claimed to have purchased the suit house No. 204/a-b and that all the properties of Sabannavar's family is joint family property. It was further alleged that in that suit O. S. No. 128 of 1976 the plaintiff of that suit claimed to have purchased the suit house No. 204/a-b and that all the properties of Sabannavar's family is joint family property. The defendant further alleged that in suit No. 128 of 1976, the relief claimed was a decree for declaration to the effect that the present plaintiff-respondent (who was the defendant in O. S. No. 128 of 1976) is not and has not been entitled to redeem the suit property and other properties and as such until that matter involved in suit No. 128 of 1976 is not finally decided, the present plaintiff has got no right to redeem the suit property. The plea was also taken to the effect that Bharmanna anantappa Sabannavar and others who had filed suit No. 128 of 1976 were proper and necessary parties to the suit and unless they are impleaded the present suit is bad for non-joinder of necessary parties. The defendant denied the plaintiffs right to claim future mesne profits as according to the defendant, the plaintiff had got no right or title to the suit property. In the additional written statement the defendant took the further plea, after having stated that it is true that Smt. Tulsabai had mortgaged the suit property in 1962 to the defendant for Rs. 1,500/- and had created additional encumbrance on 4-3-1966 after taking further sum to the tune of rs. 700/- from defendant and then mortgage was for a total sum of Rs. 2,200/- That after the expiry of the period of mortgage period late Smt. Tulsabai re-let the property in suit to the defendant in 1969 on a rental of Rs. 25/- per month and that smt. Tulsabai used to take rent from time to time after the expiry of the period of said mortgage. The defendant's case is that as such after the expiry of the period of mortgage relationship of landlady and the tenant was revived between tulsabai and the defendant. The defendant stated that Tulsabai had issued receipts for having received the rent after the expiry of the mortgage period and therefore, the defendant cannot be dispossessed from the suit property without taking recourse to the provisions of the Rent Control Act. The defendant stated that Tulsabai had issued receipts for having received the rent after the expiry of the mortgage period and therefore, the defendant cannot be dispossessed from the suit property without taking recourse to the provisions of the Rent Control Act. It is further alleged that as the tenancy of the defendant had been revived after the expiry of the period of mortgage, the defendants are not liable to be dispossessed from the property in the suit except in accordance with the provisions of Karnataka Rent Control Act. The defendant has further claimed to have incurred expenditure in the payment of Municipal tax as well as for having effected repairs to the suit property, which according to the defendant, smt. Tulsabai had agreed to repay and therefore he claimed to be entitled to that amount with interest. The defendant has shown that the amount due against the plaintiff to defendant as such has been to the tune of Rs. 4,456. 27/- and interest on the sum of Rs. 700/- from the date of suit up to date. To the additional written statement, the plaintiff-respondent filed her application described as counter statement. The plaintiff-respondent denied the defendant's case to the effect that the defendant is a tenant on a rental of Rs. 25/- or Rs. 65/- from 1969 as well as the defendant's case to the effect that deceased Tulsabai or that defendant-appellant had paid any rent to her. The plaintiff took the plea that this case as pleaded by defendant in the additional written statement was false and baseless. The plaintiff has asserted that during the life time of smt. Tulsabai defendant-appellant never lived or resided in the suit house as a tenant. He asserted that the defendant has taken a false plea of his being tenant from 1969 or from the date of expiry of the period of mortgage. The plaintiff has denied the defendant's claim to the effect that defendant-appellant made any repairs in the house in question, either during the life time of Smt. Tulsabai with her consent. The plaintiffs in his re-application asserted that defendant at no time spent any amount for the repairs of the property and that defendant-respondent is not entitled to any amount towards repairs. The plaintiffs case is the defendant is the mortgagee in possession with further charge of Rs. 700/- and is entitled to receive only Rs. The plaintiffs in his re-application asserted that defendant at no time spent any amount for the repairs of the property and that defendant-respondent is not entitled to any amount towards repairs. The plaintiffs case is the defendant is the mortgagee in possession with further charge of Rs. 700/- and is entitled to receive only Rs. 2,200/- under the mortgage deed and not the sum of Rs. 4,456. 27 paise as claimed in the additional written statement. The plaintiff further stated that suit No. 128 of 1976 filed by Bharmanna Sabannavar and two others against the present plaintiff-respondent and the defendant for declaration, in which the present defendant-appellant was defendant No. 2, has been dismissed vide the judgment and decree dated 25-3-1981 and the said decree is binding on the present defendant as the present defendant has also contested the said suit. The plaintiff further alleged in the said reapplication that in that suit it has been held that defendant No. 1 of that case namely, the present plaintiff-respondent is and has been the legal heir of Smt. Tulsabai and has got interest in the suit property and that no appeal had been filed from that judgment and decree by the present defendant-appellant, challenging the said decree, therefore, the decree and the findings recorded therein are binding on the present defendant-appellant. On the basis of the pleadings of the parties issues as well as additional issues were framed, which read as under:1. Whether the plaintiff is entitled for the redemption of the suit mortgaged property free from all the encumbrances from the defendant?2. If so, the plaintiff is entitled for the future mesneprofits as prayed for by him from the defendant?3. Whether the defendant proves that he is entitled forthe stay of the suit until the disposal of O. S. No. 128 of 1976 pending before this very Court?4. What order and decree?additional issues framed by the learned Munsiff on 9-12-1982 read as under:1. Whether defendant proves that he has repaired and renovated the suit property by spending huge amount as alleged?2. What order and decree?additional issues framed by the learned Munsiff on 9-12-1982 read as under:1. Whether defendant proves that he has repaired and renovated the suit property by spending huge amount as alleged?2. Whether he further proves that his tenancy has been revived after the expiry of the mortgage period and therefore he cannot be dispossessed from the suit property, without taking recourse under the provisions of the Karnataka Rent Control Act?further additional issue was framed on June 6, 1983, which read as under: whether the suit is bad for non-joinder of necessary parties as contended in paragraph-3a of the written statement? the Trial Court after having considered oral and documentary evidence led by the parties recorded the following findings: (A) That the plaintiff is entitled for redemption of the suit mortgage property free from all encumbrances from the defendant; (B) That in view of the terms contained in the document to the effect that interest is in lieu of the rent, therefore, the question of considering future mesne profits will arise only when the mortgaged money is deposited in the Court and therefore the trial Court ordered enquiry regarding future mesne profits being made during the final decree proceedings, after the deposit of the mortgage money by the plaintiff in the Court. (C) The defendant is not entitled to stay of the present suit until disposal of O. S. No. 128 of 1976. He held that O. S. No. 128 of 1976 filed by Bharmanna Anantappa Sabannavar and others against the present defendant-appellant and also the plaintiff of this case, has been decided vide judgment and decree dated 25-3-1981 and an appeal against the dismissal of suit No. 128 of 1976 had also been preferred and it was numbered as R. A. No. 63 of 1981 on the file of the First Additional Civil Judge, belgaum and that said appeal has also been disposed of on 16-11-1983 and no material has been produced to point out that any appeal has been preferred in the High Court against the decision rendered by the First Additional Civil Judge in Regular civil Appeal No. 63 of 1981. On this basis the Court held that there was no question of staying the proceedings of the present suit No. 206 of 1976. 2 additional issues framed subsequently have been answered in the negative. On this basis the Court held that there was no question of staying the proceedings of the present suit No. 206 of 1976. 2 additional issues framed subsequently have been answered in the negative. The Trial Court held: regarding the plea of the defendant that defendant became tenant when Smt. Tulsabai re-let the premises, that there is no re-letting as is evident from the fact that defendant has not produced any receipt to show that he paid rent to Smt. Tulsabai, after the expiry of the period of mortgage. Thus as per Exh. P. 2 it is clear that on the day mortgage Exh. P. 2 came into existence the tenancy of defendant no. 1 was surrendered by necessary implication. The Court further held that the contention of the learned counsel for the defendant that the tenancy revived and that the document speaks about the revival of tenancy after expiry of the mortgage is misconceived and is an after-thought and without proper plea as well. So it is answered in the negative. After having recorded the above findings, the Trial Court decreed the plaintiff-respondent's suit for decree for redemption and directed the plaintiff to deposit the mortgage money in the Court and to recover the possession from the defendant. It further ordered enquiry into future mesne profits under Order 20, Rule 12 of the civil Procedure Code and directed that the preliminary decree be drawn up. Having felt aggrieved from the Trial Court decree dated 14-12-1983, in Original Suit No. 206 of 1976, the defendant-appellant preferred the First Civil Appeal No. 13 of 1984 in the Court of Principal Civil Judge, Belgaum. That by judgment and decree dated 9-11-1984, the lower Appellate Court namely the Principal Civil Judge and C. J. M. , Belgaum dismissed the defendant's appeal with costs and affirmed the findings of the Trial Court. That by judgment and decree dated 9-11-1984, the lower Appellate Court namely the Principal Civil Judge and C. J. M. , Belgaum dismissed the defendant's appeal with costs and affirmed the findings of the Trial Court. The First Appellate Court allowed the defendant-appellant to file additional evidence/material under Order 41, Rule 27 of c. P. C. , to show that the second appeal had been preferred from the judgment of the courts below before this Hon'ble Court namely the High Court, in the matter of Original Suit No. 128 of 1976 and Regular Appeal No. 63 of 1981, challenging the decision of the Trial Court and the Appellate Court in suit No. 128 of 1976, the First Appellate Court further held that before it additional evidence furnished was in the nature of an application for condonation of delay in filing the second appeal, and took the view that unless delay is condoned, appeal cannot be deemed to have been entertained nor can it come up for hearing. So there is no need to stay under Section 10 of the c. P. C. The Appellate Court further held that the findings of the trial Court that the tenancy did not revive either on the expiry of the period of mortgage nor could revival take place on redemption of the mortgage, cannot be said to be illegal or perverse and the above findings of the Trial Court are perfectly correct and in accordance with law. The Appellate Court further held that the finding of the Trial Court on the question of non-joinder of the parties does not suffer from any error of law instead it is perfectly legal and valid and correct. It held that only necessary party to the suit is and has been - the defendant-appellant. Having regard to these findings as above, the Appellate Court dismissed the defendant's appeal. Having felt aggrieved from the judgment and decree of the lower Appellate Court, whereby the lower Appellate Court has confirmed the Trial Court's findings and decree, the defendant-appellant has preferred second appeal. I have heard learned counsel for the appellant Sri S. K. Joshi as well as Sri B. V. Rama Murthy for learned counsel for the respondents at length. Before referring to the contentions of the learned counsel for the parties, I think it proper to mention few facts. I have heard learned counsel for the appellant Sri S. K. Joshi as well as Sri B. V. Rama Murthy for learned counsel for the respondents at length. Before referring to the contentions of the learned counsel for the parties, I think it proper to mention few facts. Original Suit No. 128 of 1976 has been dismissed vide judgment and decree dated 25-3-1981 and therefrom an appeal had been filed, which was numbered as Regular Civil Appeal No. 63 of 1981. That Regular Civil Appeal No. 63 of 1981, which had been filed by Bharmanna Anantappa Sabannavar the plaintiff of that Suit No. 128 of 1976, had been dismissed by the First appellate Court, First Additional Civil Judge, Belgaum vide judgment and decree dated 16-11-1983 and there from the same plaintiff-appellant of that suit namely Bharmanna Anantappa sabannavar filed Second Civil Appeal No. 508 of 1984, in this court. It may be mentioned that the Second Appeal No. 508 of 1984 after having heard the learned counsel for the parties has been dismissed by this Court vide judgment and decree dated 19-9-1994, whereby this Court has held that the Second Appeal did not involve any question of law instead it was concluded by findings of facts and has held it was not open for this Court to interfere with the finding recorded as well as with the judgment and decree of the courts below given in Regular Suit No. 128 of 1976. So the proceedings of that Suit No. 128 of 1976, concluded on 19-9-1994. Learned counsel for the appellant, namely Sri S. K. Joshi, submitted that the ground relating to Section 10 of the Code of civil Procedure to the effect that the courts below committed error of law in not staying the proceedings of O. S. No. 206 of 1976 and of R. A. No. 13 of 1984, in view of pendency of the suit at the second appeal stage vide Second Appeal No. 508 of 1984, need not be pressed, in view of the fact that the Second Appeal no. 508 of 1984, has been finally decided by this Court and as such ground Nos. 2, 3, 4 and 5 of the memo of appeal are not pressed. 508 of 1984, has been finally decided by this Court and as such ground Nos. 2, 3, 4 and 5 of the memo of appeal are not pressed. The learned counsel further submitted that the finding regarding plaintiffs title on the basis of his being adopted son of deceased Smt. Tulsabai in the present case, on the basis of the finding in the earlier suit O. S. No. 128 of 1976 is erroneous and said finding or decision, rendered in the suit filed by a third person who is not a party in the present proceedings cannot be considered to operate as res judicata between the parties to the present litigation i. e. , suit No. 206 of 1976 giving rise to the present Second Appeal No. 112 of 1985, as the appellant and respondent No. 1 were co-defendants in the Original Suit No. 128 of 1976. The learned counsel for the appellant further submitted that the learned courts below erred in law in taking the view to the effect that the lessee's rights with the appellant on the execution of the mortgage deed merged in the mortgagee's rights of the appellant, as well as in taking the view that as the tenancy rights merged in the mortgagee's rights. So the plaintiffs suit was maintainable and plaintiff was entitled to decree for possession and redemption without complying with the requirements of the Karnataka Rent Control Act. The learned counsel for the appellant submitted that the learned courts below ought to have held that the tenancy rights did not merge in the mortgagee's rights. It may be that during the period of mortgage they remain suspended and on the expiry of the period of mortgage the said rights did revive. The learned counsel for the appellant made reference to the decision of the supreme Court in the case of Nemi Chand v Onkar Lal. The learned counsel for the appellant also made reference in this connection to the case of Kallu v Diwan, as well as to another decision in the case of Lachman Das v Heera Lal. The learned counsel for the appellant made reference to the decision of the supreme Court in the case of Nemi Chand v Onkar Lal. The learned counsel for the appellant also made reference in this connection to the case of Kallu v Diwan, as well as to another decision in the case of Lachman Das v Heera Lal. On behalf of the respondent it has been submitted by learned counsel for the respondent that the finding given in suit No. 128 of 1976 to the effect that plaintiff-respondent No. 1 has been proved to be the adopted son of Smt. Tulsabai and that he has inherited the title, right and interest in the property of Smt. Tulsabai and as such, has been entitled to file the suit for mortgage, which has been upheld by the lower Appellate Court in Appeal No. 13 of 1984, as well as by this Hon'ble Court in second Appeal No. 508 of 1984 vide judgment and decree dated 19-9-1994, is binding on the parties and operates as res judicata even if the present appellant and plaintiff-respondent No. 1 were co-defendants. Learned counsel submitted that the decision between the co-defendants can; on a point directly and substantially in issue either actually or constructively operates as res judicata. He submitted that it is not necessary that there should have been active contest between the co-defendants. He further submitted that what is necessary in this regard is that there must have been conflict of interest and this conflict must exist notwithstanding that one of the concerned defendants did not contest it at all. He submitted that all the conditions necessary for operating of res judicata between the two co-defendants namely, the present plaintiff-respondent who was the defendant in that case, who was claiming to be the adopted son and heir of Smt. Tulsabai, who had created a mortgage in favour of the present defendant-appellant, was one of the defendants. Therefore, interest of the two defendants of that suit were in conflict with each other, in the sense that whether the present plaintiff-respondent i. e. , defendant No. 1 of O. S. No. 128 of 1976 was entitled to redeem the mortgage or not. Therefore, interest of the two defendants of that suit were in conflict with each other, in the sense that whether the present plaintiff-respondent i. e. , defendant No. 1 of O. S. No. 128 of 1976 was entitled to redeem the mortgage or not. This dispute was not only between the plaintiff of that suit and the two defendants, but it was a dispute or a substantial issue between the two defendants as well, as to who is and has been entitled to redeem that mortgage and claim possession of the property from the mortgagee i. e. , the present defendant-appellant or say defendant No. 1 of earlier suit and thus there was a conflict of interest between defendants. The conflict was necessary to be decided in that case for granting of the main relief claimed in that suit and further the present plaintiff-respondent and defendant-appellant both were necessary parties for the decision of the case and grant of relief in the matter as well as for final adjudication of the matter and that matter has been finally adjudicated upon by the Trial Court as well as by the Appellate court and by this Court holding the plaintiff-respondent to be the adopted son of Smt. Tulsabai, in that suit No. 128 of 1976. As such the said finding is binding and the Trial Court has rightly held so. As such the said finding is binding and the Trial Court has rightly held so. The counsel for the respondent further submitted that it is admitted case of the defendant as per written statement that at the time the mortgage deed was executed and relationship of mortgagor and mortgagee came into existence, the relationship of landlord and the tenant came to an end, and it is the case of the defendant-appellants as per pleadings contained in the written statement that the fresh contract of lease was entered into and the property was re-let to the defendant-appellant by the plaintiff-respondent and as it was the case of defendant- respondent that there was a fresh re-letting as per fresh contract of lease alleged by the defendant after expiry of the period of mortgage by Smt. Tulsabai the mortgagor, and it is not the case of the defendant-respondent that old tenancy rights did continue even during the period of mortgage as well after the expiry of the transaction of mortgage, it is to be taken that the tenancy rights that had been created in favour of the defendant-appellant prior to the execution of the deed of mortgage and creation of new relationship of mortgagor and mortgagee between the plaintiff- respondent and the defendant-appellant have ceased to exist and those rights under contract of tenancy had been, in a way surrendered by the tenant and the possession was delivered with effect from the date of mortgage by the mortgagor to mortgagee under new relationship of mortgagor and mortgagee. Therefore, there does not. arise any question of suspension or revival of old relationship of landlord and tenant between the plaintiff- respondent and the defendant-appellant. Therefore, there does not. arise any question of suspension or revival of old relationship of landlord and tenant between the plaintiff- respondent and the defendant-appellant. In alternative, it was further submitted that the courts below have recorded concurrently a finding of fact to the effect that the defendant-appellant has failed to prove any subsequent fresh contract of tenancy or agreement of re-letting after the expiry of the period of mortgage as claimed by defendant and when the defendant has failed to prove his case and admitted in his statement that relationship of landlord and tenant came to an end when the new transaction of mortgagor and mortgagee was entered into, the Trial Court or the First Appellate Court did not commit any error of law or error of law substantial in nature nor any illegality in recording the finding to the effect that defendant-appellant was in possession as a mortgagee on the date of the suit and plaintiff was entitled to decree for possession on the redemption of the mortgage deed and were justified in decreeing the suit for the reliefs claimed. Learned counsel for the plaintiff-respondent further submitted that there was surrender of the tenancy and there was merger of tenancy rights in the mortgagees rights. He submitted as appears from the deed of mortgage the intention of the parties was to the effect that possession was to be enjoyed by the defendant-appellant in lieu of the interest of the mortgage amount and not as a tenant. The learned counsel for the respondent in support of his contention that tenancy rights extinguished on the creation of the possessory mortgage deed and that plaintiff was entitled as owner mortgagor to get possession, placed much reliance on the following decisions namely: (A) Shah Mathuradas Maganlal and Co. v Nagappa shankarappa Malaga and Others. (B) Meenakshi Amma v Kizhakke Valath Narayani and others. I have applied my mind to the above mentioned contentions of the learned counsels for the parties and to the record of the case. v Nagappa shankarappa Malaga and Others. (B) Meenakshi Amma v Kizhakke Valath Narayani and others. I have applied my mind to the above mentioned contentions of the learned counsels for the parties and to the record of the case. That as regards, the finding recorded by the Court below to the effect that the finding recorded in O. S. No. 128 of 1976, as affirmed by the Lower Appellate Court in R. A. No. 13 of 1984 or by this Court in Second Appeal No. 508 of 1984 vide judgment and decree dated 19-9-1994 to the effect that the present plaintiff-respondent Sripad Gangadhar Sabannavar had been adopted by Smt. Tulsabai and that he on the death of Tulsabai succeeded to the interest of Smt. Tulsabai in property including the property in the suit which has been mortgaged by Smt. Tulsabai as her heir and is entitled to claim redemption, is binding on the parties as well as on the Court under the doctrine of res judicata, appears to be correct. The principle of res judicata is incorporated in Section 11 of the Code of Civil procedure. It has been contended by the learned counsel for the appellant as mentioned above that the said decision is not binding on the parties nor on the Court as res judicata, because in the earlier suit the present appellant and the plaintiff-respondent were arrayed as co-defendants and the suit had been instituted by the third party and therefore, it is not res judicata. In order that a decision may operate as res judicata between co-defendants under Section 11 of the C. P. C. certain conditions no doubt are prescribed. In the case of Chandu Lal agarwalla and Another v Khalilur Rahaman and Others , it has been laid down as under:"4. In Munni Bibi v Tirloki Nath, the conditions for the application of the doctrine of res judicata as between parties who have been co-defendants in a previous suit are thus laid down : there must be (1) a conflict of interest between the co-defendants, (2) the necessity to decide that conflict in order to give the plaintiff the appropriate relief, and (3) a decision of that question between the co-defendants. It may be added that the doctrine may apply even though the party, against whom it is sought to enforce it, did not in the previous suit think fit to enter an appearance and contest the question. But to this the qualification must be added that, if such a part is to be bound by a previous judgment, it must be proved clearly that he had or must be deemed to have had notice that the relevant question was in issue and would have to be decided". This view of Their Lordships of the Privy Council had been followed with approval by Their Lordships of the Supreme Court in the case of Iftikhar Ahmed and Others v Syed Meharban Ali and Others. Their Lordships of the Supreme Court had been pleased to observe at page 751 as under:"now it is settled by a large number of decisions that for a judgment to operate as res judicata between or among co- defendants, it is necessary to establish that (1) there was a conflict of interest between co-defendants; (2) that it was necessary to decide the conflict in order to give the relief which the plaintiff claimed in the suit; and (3) that the court actually decided the question". In the earlier suit i. e. , suit No. 128 of 1976, filed by bharamanna Anantappa Sabannavar, in which the present plaintiff-respondent and defendant-appellant were co-defendants, the relief that had been claimed was a decree for declaration to the effect that the present plaintiff-respondent i. e. , the defendant No. 1 of that suit is not and has not been the adopted son of Smt. Tulsabai and that he is not and has not been entitled to redeem the suit property belonging to Smt. Tulsabai. The first issue in O. S. No. 128 of 1976 had been to the effect - whether plaintiff proves that defendant No. 1 (Nagendra rudrappa Kadalaskar @ Sripad Gangadhar Sabannavar) is the legal heir of deceased Smt. Tulsabai and issue No. 4 in that suit has been that - whether plaintiffs prove that defendant No. 1 (referred to above) is not entitled either to redeem the suit properties mortgaged or entitled to receive any compensation in respect of suit agricultural lands. Issue No. 5whether defendant No. 1 proves that he is the exclusive owner of suit properties as the only legal heir of deceased Smt. Tulsabai? Issue No. 5whether defendant No. 1 proves that he is the exclusive owner of suit properties as the only legal heir of deceased Smt. Tulsabai? the Trial Court in suit No. 128 of 1976 i. e. , former suit held that the plaintiff of that suit failed to prove that defendant No. 1 namely, Nagendra Rudrappa Kadalaskar @ Sripad Gangadhar sabannavar, is not the heir of Smt. Tulsabai. The Trial Court further held that the plaintiffs of the suit No. 128 of 1976 failed to prove that the present defendant No. 1 (Defendant- respondent No. 1 in the present second appeal) is not entitled to either redeem the suit properties mortgaged. They have also failed to prove that defendant No. 1 of the suit is not entitled to receive the compensation in respect of the agricultural lands. Thus issue Nos. 1 and 4 had been answered in the negative, and against the plaintiff of that suit. The Trial Court in that suit No. 128 of 1976 further held that defendant No. 1 (i. e. , the present plaintiff-respondent No. 1 in the Second Appeal No. 112 of 1985) proves that he is the exclusive owner of the suit properties as the only legal heir of Smt. Tulsabai, being her adopted son and that he i. e. , Sripad Gangadhar Sabannavar-Defendant No. 1 became the exclusive owner of the properties left by Smt. Tulsabai on her death, on account of his being adopted as son and legal heir of late Smt. Tulsabai and entitled to seek the redemption of mortgage etc. These issues were very much clear to the parties to the suit, including the defendants of that suit namely, the present plaintiff-respondent and to the defendant-appellants and the said issues were necessarily required to be decided in that suit as the plaintiff of that suit had claimed the decree for declaration, to the effect that defendant No. 1 namely Nagendra rudrappa Kadalaskar known and called as Sripad Gangadhar sabannavar is and has not been entitled to redeem the mortgage of suit House No. C. T. S. 204 (A-B) situate in Khade Bazar, shahapur, Belgaum, as according to the plaintiff he was not the adopted son of Smt. Tulsabai and Smt. Tulsabai had no son or legal heir. In that case Narayan Punnappa Khilare, i. e. , present appellant No. 1-A, had filed the written statement and in that case vide paragraph-2 of the written statement, present defendant-appellants who were defendants 2 and 3 in that case had taken the plea that they did not know about their adoption deed nor do they know if Smt. Tulsabai had ever adopted Sripad gangadhar Sabannavar as her son and they alleged that the defendants do not know who are the legal heirs of deceased tulsabai, who were legally entitled to the property. They further alleged that they are willing to accept the person, who is declared as rightful owner to the properties of deceased Smt. Tulsabai Gangadhar Sabannavar, to be the legal heir and owner of the property. Thus it cannot be said that they did accept the present plaintiff-respondent who was defendant No. 1 in suit No. 128 of 1976 to be the legal heir of deceased Tulsabai nor did they accept that he was the person entitled to the property of Smt. Tulsabai, instead asserted that they did not know either about the adoption or about the person legally entitled to the property of Smt. Tulsabai and they submitted before the Court that the person who will be declared to be the rightful owner of the properties of Smt. Tulsabai Gangadhar Sabannavar will be accepted by them as well to be the legal heir and owner of the property and thus they put defendant No. 1 of that suit No. 128 of 1976 i. e. , present plaintiff-respondent to prove that he was the adopted son and legal heir of deceased Smt. Tulsabai and that he was entitled to the properties left by Smt. Tulsabai and that he was entitled to redeem as well. In this view of the matter, in my opinion the findings recorded in suit No. 128 of 1976 by the Trial Court as well as by the First appellate Court and affirmed by this Court in Second Appeal no. 508 of 1984 are binding on the present defendant-appellant, operate as res judicata and have rightly been held so by the courts below. 508 of 1984 are binding on the present defendant-appellant, operate as res judicata and have rightly been held so by the courts below. I further hold that the finding of the Court below that the plaintiff-respondent is the adopted son of Smt. Tulsabai and as such he has succeeded to the properties and interest in property left by Smt. Tulsabai and as such as held by the Courts below, he has rightly been held to be entitled to sue for redemption of the mortgage as per mortgage deeds dated 11-7- 1962 and 4-3-1966 which had been created by Smt. Tulsabai and to seek decree for redemption as heir of Smt. Tulsabai. That as mentioned earlier, the appellant's counsel has next urged that tenancy rights or lessees rights of the defendant-appellant did not merge in the mortgagees rights and that on the expiry of the mortgage, the defendant-respondent's tenancy rights did revive and so suit for possession filed by the plaintiff is not maintainable against the defendant-appellant for redemption without complying with the requirements of the karnataka Rent Control Act. That as regards the question of maintainability of the plaintiffs suit on this ground, firstly it has to be taken into consideration what is the defendants case in this regard. That as has been mentioned earlier, as per pleadings in the written statement that defendant-appellant has taken the plea in paragraph-2 of the additional written statement to the effect as under:"thus the total mortgage amount was Rs. 2,200/ -. After the expiry of the mortgage period late Smt. Tulsabai who was advanced in age was always ailing and was in need of money for her medicines and therefore she re-let the suit property to defendant in 1969, on rental of Rs. 25/- per month and the said Smt. Tulsabai had taken the rent from time to time, after the said mortgage. Therefore, after the period of the mortgage deed, the relationship of landlady and tenant was revived, between Smt. Tulsabai and this defendant. Said Smt. Tulsabai has passed the receipts for having received the rent amount, after the expiry of the mortgage period. Therefore, the defendant cannot be dispossessed of the suit property without taking recourse to the provisions of the Karnataka Rent Control Act. Said Smt. Tulsabai has passed the receipts for having received the rent amount, after the expiry of the mortgage period. Therefore, the defendant cannot be dispossessed of the suit property without taking recourse to the provisions of the Karnataka Rent Control Act. In that context it was further pleaded in paragraph 6 as under: as the tenancy of this defendant has been revived after the expiry of the period of mortgage the defendant cannot be dispossessed from the suit property without taking recourse to the provisions of Karnataka Rent Control Act, 1961". (emphasis supplied) thus a perusal of the pleadings of the defendant-appellant per se show that according to the defendant's case a fresh contract of tenancy was entered into - might be oral or written, there had been re-letting of the house in the suit by Smt. Tulsabai, to the defendant-appellant and because of that act of re-letting as alleged in the written statement, the relationship of landlord and tenant between the two i. e. , Smt. Tulsabai - the landlady and the defendant-appellant was revived and it is on this ground of new contract of tenancy or re-letting the defendant has claimed in his written statement that he is in possession of the property in dispute since after the expiry of the period of mortgage as a tenant and is entitled to protection of the provisions of Karnataka Rent Control Act. It is well-settled principle of law that the case of a party has to be decided on the grounds pleaded. The courts below have no doubt come to the conclusion and have recorded the finding to the effect that defendant-appellant has failed to prove any such contract between Smt. Tulsabai and the appellant whereby the property was, after the expiry of the period of mortgage re-let to the appellant and this finding of fact is a concurrent finding of fact recorded by two courts below and has not been challenged by the counsel for appellant nor has been shown to be suffering from any error of law or error of law substantial in nature and that finding is binding as finding of fact or as final finding on question of facts. The learned counsel now at the second appeal stage urges that the defendant-appellant has been a tenant long before entering into contract of mortgage or prior to the execution of deed of mortgage. The learned counsel now at the second appeal stage urges that the defendant-appellant has been a tenant long before entering into contract of mortgage or prior to the execution of deed of mortgage. He has submitted that these tenancy rights which did exist prior to entering into the relationship of mortgagor and mortgagee-have automatically revived on the expiry of the period of mortgage and there was no merger thereof, nor surrender thereof and as such since after the expiry of the period of mortgage the defendant-appellant became tenant entitled to continue in possession and no suit for eviction or possession against defendant-appellant could be filed, except after complying with the provisions of the Karnataka Rent control Act. While respondents counsel contention has been that on entering into of the transaction of mortgage between the two i. e. , the defendant-appellant and Smt. Tulsabai, vide deed dated 11-7-1962, which was a usufructuary mortgage and whereunder the possession had been delivered by the mortgagor to the mortgagee namely to the defendant-appellant as mortgagee and he had been authorised to retain such possession i. e. , possession as mortgagee until the payment of mortgage money and to use the property in lieu of the interest and where under he was further given right to sell the property as well. The appellant's possession as the tenant did come to an end and by appellant's express or implied surrendering of his possession as a tenant and by his accepting and taking possession and retaining possession in his new characteristic as a mortgagee with a right to enjoy the property in lieu of interest and therefore, there is no question of tenancy being revived in any manner on the expiry of the period of mortgage and as such the Trial Court rightly decreed the suit for possession and redemption and was justified in holding that the suit was maintainable without recourse to rent control law. The decision on the question of maintainability of the suit without recourse to Rent Control Act, is dependent on the decision of the question if defendant-appellant's possession on the date of the suit has been that of a mortgagee or of a tenant and on the decision of the question if there was any revival etc. , of previous tenancy. The decision on the question of maintainability of the suit without recourse to Rent Control Act, is dependent on the decision of the question if defendant-appellant's possession on the date of the suit has been that of a mortgagee or of a tenant and on the decision of the question if there was any revival etc. , of previous tenancy. The case pleaded by the defendant-appellant on the basis of fresh contract of re-letting has been ruled out and held not to have been established. Now only one question remains to be determined whether under section 111 (d) or Section 111 (e) and (f) of Transfer of Property act, by creation of mortgage and execution of mortgage deed in favour of the defendant-appellant and defendant-appellant having accepted the transaction of usufructuary mortgage and possession thereunder, whether, defendant-appellant surrendered his tenancy rights and his earlier tenancy rights did come to an end for all times to come or there was only suspension thereof. Before I proceed further, I think it will be just and proper to make reference to certain provisions of law, particularly the transfer of Property Act. Section 111 of the Transfer of Property act, reads as under:"111. A lease of immovable property determines (a ). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (b ). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (c ). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (d) in case the interests of the lessee and lessor in the whole of the property become vested at the same time in one person in the same right; (e) by express surrender; that is to say, in case the lessee yields up his interest under the lease, to the lessor by mutual agreement between them; (f) by implied surrender. "section 105 of the Transfer of Property Act defines the lease as under:"105. "section 105 of the Transfer of Property Act defines the lease as under:"105. A lease of immovable property is a transfer of right to enjoy such property, made for a certain time, express or implied, or in perpetuity, in consideration of a price paid or promised, or of money, a share of crops, service or any other thing of value, to be rendered periodically or on specified occasions to the transferor by the transferee, who accepts the transfer on such terms. The transferor is called the lessor, the transferee is called the lessee, the price is called the premium and the money, share, service or other thing to be so rendered is called the rent". Section 58 of the Transfer of Property Act define a Mortgage and it reads as under:"58 (A) A mortgage is the transfer of an interest in specific immoveable property for the purpose of securing the payment of money advanced or to be advanced by way of loan, an existing or future debt or the performance of an engagement which may give rise to a pecuniary liability". The transferor is called a mortgagor, the transferee a mortgagee; the principal money and interest of which payment is secured for the time being are called the mortgage-money and the instrument (if any) by which the transfer is effected is called a mortgage-deed. Sub-section (d) of Section 58 defines usufructuary mortgage as under:" (D) 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 an usufructuary mortgage and the mortgagee an usufructuary mortgagee". Lease of immovable property, as defined under Section 105 of the Transfer of Property Act, is a transfer of a right to enjoy such property made for a certain time, express of implied, or in perpetuity, in consideration of a price paid or promised, or of money, a share of crops, service or any other thing of value, to be rendered periodically or on specified occasions to the transferor by the trensferee, who accepts the transfer on such terms. The definition of lease per se indicates that lease is the transfer of right to enjoy the property which ordinarily vests in the owner of the immovable property. The owner-landlord transfers that right to enjoy to the transferee for a consideration and the transferee who is known as the lessee accepts the same on such terms. So the right to enjoy the property always is the right of the owner who makes a transfer of the same. The nature of lessees position is distinct from that of the mortgagees. The mortgage as appears from the definition, thereof is a transfer of interest in specific immovable property and purpose of transfer is to secure the payment of money advanced or to be advanced by way of loan or the like. In the matter of usufructuary mortgage, the mortgagor delivers the possession or expressly or by implication he binds himself to deliver the possession of the mortgaged property to the mortgagee while creating the mortgage for the purpose of securing the payment of mortgage money i. e. , the money advanced by way of loan or the interest and he is authorised to retain such possession until payment of the mortgaged money and to receive and enjoy the rents and proceeds etc. , of the property in lieu of interest or partly in lieu of interest and partly in payment of mortgage money. The mortgagor remains entitled to redeem the mortgage and to claim back possession of the property. Right of redemption vests in the mortgagor and he is entitled to transfer the same. In the matter of landlord-tenant it is no doubt true that a lessor is also entitled to claim decree for possession against the lessee and suit the lessee after the passing of the decree for ejectment in suit filed for the purpose and in accordance with the conditions of the law applicable. In the matter of landlord-tenant it is no doubt true that a lessor is also entitled to claim decree for possession against the lessee and suit the lessee after the passing of the decree for ejectment in suit filed for the purpose and in accordance with the conditions of the law applicable. The question in such a case is whether by entering into contract of mortgage, did the parties, particularly the defendant-appellant intend to surrender or give up the nature of their earlier possession i. e. , whether did the appellant expressly or impliedly surrender the leasehold rights as a lessee to the lessor by mutual agreement between them. If that had happened, then no doubt it can be said that the tenancy rights stood determined under law on the date of mortgage. In merger the lessee's right do merge in the higher or superior rights such as the cases where lessee purchases the property in occupation of which he has been till before the said date of sale, of that very property in his favour, in that case no doubt the lessee's rights merge in the lessor's rights of the ownership, in same person on execution of sale deed by lessor in favour of the lessee himself. In my opinion, the status or position of the mortgagee not being higher or superior, as that of the owner, to the lessee's, there cannot be any such thing as merger of tenancy rights in the mortgagees rights. It may be a different thing that the parties intend to surrender tenancy rights in the property when the lessee surrenders his possession as a lessee and accepts delivery of possession as a mortgagee. In that case no doubt the earlier tenancy rights can well be said to have come to an end on the creation of the new relationship of mortgagee and mortgagor by execution of the mortgage deed and in particular the deed of mortgage creating usufructuary mortgage. Dealing with the question of merger, Their Lordships of the privy Council have been pleased to lay it down in the case of dulhin Laochanbati Kumari and Others v Bodh Nath Tiwari and Others , as under:"merger is not a thing which occurs ipso jure upon the acquisition of what may be called the superior with the inferior right. Dealing with the question of merger, Their Lordships of the privy Council have been pleased to lay it down in the case of dulhin Laochanbati Kumari and Others v Bodh Nath Tiwari and Others , as under:"merger is not a thing which occurs ipso jure upon the acquisition of what may be called the superior with the inferior right. There may be many reasons, conveyancing reasons, reasons arising out of the object of the acquisition of the one right being merely for a temporary purpose, family reasons and others in the course of which the expediency of avoiding the coalescence of the interest and preserving the separation of title may be apparent". In the case of Lachman Das, supra, the Division Bench of the allahabad High Court considered the question of application of doctrine of merger ennunciated in Section 111 (d) of the Transfer of Property Act and expressed the view that Section 111 (d) cannot be made applicable where the lessee becomes a usufructuary mortgagee of the demised property. In paragraph 9, Their lordships observed:"we shall now take up the issue of merger of tenancy rights in the usufructuary mortgagee rights. Section lll (d) of the Act provides that a lease of immovable property determines "in case the interests of the lessee and the lessor in the whole of the property become vested at the same time in one person in the same right". The coalescence of the entire interest of the lessee and the entire interest of the lessor in one person is essential for termination of the lease. The use of the definite article before the word "interests" in Section 111 (d) shows that the entire interest of the lessor and the lessee should coincide at the same time in one person. "their Lordships further observed:"when the lessor makes a usufructuary mortgage of the demised premises to the lessee, the lessor does not pass on his entire interest to the lessee. By the mortgage he has transferred only an interest in the premises and not all the rights of an owner. The interest transferred to the lessee-mortgagee consists of the right to possess and to enjoy the usufruct of the property until the mortgage-money is paid the lessor retains with himself a legal interest in the property. This legal interest is a substantial interest. He can assign his right of redemption; he can create a second mortgage. The interest transferred to the lessee-mortgagee consists of the right to possess and to enjoy the usufruct of the property until the mortgage-money is paid the lessor retains with himself a legal interest in the property. This legal interest is a substantial interest. He can assign his right of redemption; he can create a second mortgage. In Ram Kindar v Satya charan, the Privy Council observed: "by Indian law the interest which remains in the mortgagor is a legal interest and its retention may therefore prevent the whole of the mortgagor's interest from passing to the mortgagee. The entire interest of the lessor-mortgagors did not accordingly pass to the mortgagee, in the present case. "the Division Bench in the above mentioned case followed with approval the decision of the Division Bench in Kallu, case, supra, wherein earlier Division Bench consisting of Hon'ble Blair and Aikman, JJ. , opined as under:"in our opinion the effect of the mortgage was not to destroy the tenancy, but only to suspend the obligation of the tenancy to pay rent to the landlord while the mortgage subsisted". Therefore, according to the view taken by me above finds support from the above mentioned decisions, allahabad High Court, according to which there is no merger of leasehold rights in the mortgagee's rights on the execution of mortgage deed by lessor in favour of lessee. In the case of Shah Mathuradas Maganlal, supra. Their lordships of the Supreme Court, have been pleased to observe as under:"for a merger to arise, it is necessary that a lessor estate and a higher estate should merge in one person at one and the same time and in the same right, and no interest in the property should remain outside. In the case of a lease the estate that is in the lessor is a reversion. In the case of a mortgage the estate that is outstanding is the equity of redemption of the mortgagor. Therefore, there cannot be a merger of lease and mortgage in respect of the same property since neither of them is a higher or lesser estate than the other. The view expressed in Narayan v ramchandra, is correct". In this view of the matter it is now well-settled that there cannot be anything like merger of lease into mortgage in respect of same property. The view expressed in Narayan v ramchandra, is correct". In this view of the matter it is now well-settled that there cannot be anything like merger of lease into mortgage in respect of same property. The next question that has now got to be considered is whether there was surrender of tenancy rights by the defendant-appellant. The material document in the case is the deed of mortgage. The deed of mortgage dated 11th July, 1962 has been filed in the Trial Court. The mortgage deed is in marathi and its English translation has been provided. The material paragraphs of the deed, as per the English translation read as under:"that I am in need of amount i. e. , money to satisfy decree passed in No. 20 of 1962 by the Civil Judge, belgaum in favour of Shri Ramasa Venkusa Pawar. Hence today I have taken Rs. 1,500/- in cash from you and to secure the said amount and interest thereon I have mortgaged with possession the property described as below. The City Survey Number 204a and 204b measuring 722/g square yards and 7% sq. yards respectively. The said cts numbers are adjacent to each other and they are bounded by: towards East C. T. S. No. 1297 of Shri Laxman Sunar. To West Government Road to South C. T. S. No. 203 of Shri Khatavkar to North C. T. S. No. 205 of John Paise and boundary of C. T. S. No. 1297". This above mentioned property is with you and it is in your enjoyment as a tenant thereof. This very property is hereby now being given to you in lieu of above mentioned mortgage and is being mortgaged to you. Henceforth your possession is being settled or established as such. So you make use and enjoy the above mentioned property in lieu of interest and in complete discharge of the interest without interruption. The necessary repairs will be carried on by me. I will also pay the Municipal taxes and if you pay the same, I will reimburse the same along with the mortgage amount within 5 years from today and I will take back this mortgage deed. The necessary repairs will be carried on by me. I will also pay the Municipal taxes and if you pay the same, I will reimburse the same along with the mortgage amount within 5 years from today and I will take back this mortgage deed. If I fail in this you will enjoy the property till I repay the amount or you can recover the amount by selling the property and if any amount falls short, I will reimburse the same from my other properties or you can recover from me personally. There are no claims against the said mortgage property or dispute with any body as on today. If any disputes arises I will satisfy the same at my cost. This agreement is binding on me and on my heirs. Out of the said mortgage amount Rs. 1,352. 8-0 should be kept by you and you should deposit the same in Execution Case in the Court and obtain the receipt in this regard. Remaining Rs. 147-8 anas are received by me in cash from you. Hence there is no need of separate receipt in this regard. Hence, I have executed this mortgage deed with my free will on this 11th July, 1962". Whether there has been surrender - implied or express i. e. , the question of intention of parties to be derived. In this case, the trial Court recorded the finding after having considered the material evidence including the admission of the defendant as well as the deed Exh. P. 2 as under :"what is clear therefore, is that on the day of the mortgage Exh. P. 2 came into existence, tenancy of defendant is surrendered by necessary implication though there is no express surrender". The Trial Court has further referred to the following portion of the statement of D. W. 1 in cross-examination as under:"in 1962 I continued as mortgagee. The tenancy right ceased on the day of execution of the mortgage deed". On this basis the Trial Court took the view that there has been surrender of the tenancy rights. The learned lower appellate Court has observed as under:"in the instant case it is seen that the parties took into consideration at the time of the execution of the mortgage deed that the defendant was in possession of property as a tenant. On this basis the Trial Court took the view that there has been surrender of the tenancy rights. The learned lower appellate Court has observed as under:"in the instant case it is seen that the parties took into consideration at the time of the execution of the mortgage deed that the defendant was in possession of property as a tenant. Having done so it was agreed that the possession of the defendant would be that of an usufructuary mortgagee after the execution of the deed. That is clear from the first recital extracted above. It is also seen from the second recital extracted above that the possession of the defendant after execution of the mortgage deed was that of mortgagee. From the above two recitals it is clear that defendant took over the deed after surrendering his possession as tenant. As observed by the Supreme Court in such a case, it is not necessary that there should be physical handing over of the possession by tenant in favour of the landlord and then re-delivery of the same by mortgagor in favour of the mortgagee. . . . . . So relying on the above decision, it is seen that the finding of the Trial Court that the tenancy did not revive on the redemption of mortgage cannot be said to be perverse". The material portion of the deed in Marathi, after paragraphs 1 and 2 thereof reads:"yene Pramane Vareel Varnachi Milkhat Tumhakade halli Bhadotri Natyane Kabja Wahiwati Asalile Vareel aivajas Kabjagahan Devun Hallicha Tumacha Kabja kayam Kelaahe Tar Tumhi Sadarcha Upabhoga Vareel rakamaiche Vyajat Khandit Pane Karava. "the 5th condition of the deeds reads:"muddat Rupaya Tumhas Me Aajapasun Panch varshani Devun Phed Karum Hadast Parathoean. Kadachit Mudatis Dene Na Hoial Tarpudhe Me Tumche sarva Rakkam Dai Paryant Vareel Pramane Milkhatache upabhog Karva Agar Sadar Milkhatachi Riti Pramane vikri Karvun Tumchya. This condition per se shows that firstly, when the property was being mortgaged with possession, it had been clearly mentioned "that the above mentioned property is with you as a tenant thereof. Now that very property is hereby given to you in lieu of above mentioned mortgage. (Henceforth) your possession is being and has been established and settled as such. So you make use and enjoy of the above mentioned property in lieu of interest and in complete discharge of interest without interruption. Now that very property is hereby given to you in lieu of above mentioned mortgage. (Henceforth) your possession is being and has been established and settled as such. So you make use and enjoy of the above mentioned property in lieu of interest and in complete discharge of interest without interruption. Further the clause provides and confers that if I fail to pay back the money within 5 years - you the mortgagee will enjoy the property till I repay the amount. You can recover the amount by selling the property and if any amount falls short I will reimburse". A reading of these two clauses per se shows that there was an agreement and the parties knew that till the date of creation of new relationship the possession of the appellant over the property has been that of a tenant. In other words that property has been in enjoyment of the defendant-appellant as a tenant thereof. The deed further thereafter mentions that the property henceforth has been given to you and in your possession in lieu of the above mentioned mortgage. It is being given to you in lieu of the above under the mortgage as mentioned above and henceforth the transferee i. e. , the mortgagee-defendant- appellant's possession is being established and settled as such. 'as such' here means as mortgagee under the mortgage deed and so the transferee-defendant-appellant has to make use and enjoyment of the property till payment of mortgage money within 5 years from the date of the deed and in case the mortgagor fails to pay back mortgage money and to get mortgage redeemed the mortgagee i. e. , the defendant had to enjoy and make use of the property. He has also been given a right along with the possession to recover the amount by selling the property. The deed per se shows that from the date of the deed, parties intended to change the nature and character of possession of defendant-appellant over the property and he was conferred the right to enjoy the property as mortgagee in lieu of interest for a period of 5 years and thereafter in case the mortgage money was not paid within that period of five years as well as the right to sell the property mortgaged, to realise the principal sum and interest. When the possession with different relationship and different rights than that of a tenant was being given to the defendant and defendant accepted the same, it can be said to be a case of surrender under that deed and in every case to be one of implied surrender of the tenancy rights under earlier lease. It cannot be a case of merger of leasehold rights in the mortgagees rights, but here it is a case where in fact there has been surrender of possession and rights in property as a tenant by the defendant. It may be that there has been no actual delivery and re-delivery of possession, but that is not necessary, in view of law laid down by Their Lordships of the Supreme Court in the case of Shah Mathuradas Maganlal and Co. , supra, if a lessee accepts a new lease that in itself is a surrender. Surrender can also be implied from the consent of parties and from such facts as the relinquishment of possession by the lessee and taking over possession by the lessor. Relinquishment of possession operates as an implied surrender. There must be a taking of possession, not necessarily a physical taking, but something amounting to a virtual taking of possession. Whether this has occurred is a question of fact. In the present case if the mortgagor was not able to redeem the appellant mortgagee was to enjoy the property in accordance with the terms of the mortgage and also to sell the property for recovery of debts. This feature shows that the appellant surrendered the tenancy rights, when he accepted the mortgage and mortgage (usufructuary mortgage) deed was executed in 1962. In the case in hand, as appears from the perusal of the deed, it is very clear that the parties in terms agreed that the property which has been in use and possession or enjoyment of the defendant as a tenant was being given to him in mortgage and his possession was being settled and established by the deed to be in pursuance of the mortgage and it was clarified that he was to enjoy and to be in possession of the same as under the mortgage deed in lieu of the interest. The expression 'henceforth possession being and has been established as such' are clearly indicative of the nature and character of the possession which was being settled with the defendant under the deed and as such is indicative of nothing but the nature of possession and the fact that defendant accepted it. It means he surrendered his tenancy rights and accepted the property and its possession as nothing but as a mortgagee. In the same way, as a new relationship is established under the new lease. If acceptance of the new lease amounts to surrender as observed by Their Lordships of the supreme Court, there can be no dispute that in accepting of the new relationship of mortgagor and mortgagee, there is surrender of old relationship of landlord and tenant and relinquishment of possession as a tenant and such it can be said to be a case of implied surrender and as observed by Their Lordships of the supreme Court - taking or giving of possession is not vital and nor necessary but there should be something amounting to a virtual taking of possession in another position status or character. Here that appears to have taken place as defendant with open eyes accepted it and further accepted with the right to sell the property to recover the mortgage money. In my opinion the decision of the Supreme Court in Shah mathuradas Maganlal and Co. , fully applies and here on the creation of the mortgage deed, there has been surrender which may be covered under clauses (e) and (f) of Section 111 of the transfer of Property Act. This view of mine, further finds support from the subsequent conduct of the defendant-appellant. Firstly as referred by the learned lower Appellate Court, the defendant-appellant admitted that till July 1962, he was in possession as a tenant and since thereafter he is in possession as mortgagee. The material portion of the admission of the defendant reads as under:"it is not recited in the mortgage deed that after the period is over, I should continue as a tenant. The tenancy rights ceased on the date of execution of the mortgage". The further circumstantial evidence emerging from the conduct of the appellant appears from the defence taken by him in the written statement which defence plea is to the effect that a fresh contract of tenancy was revived. The tenancy rights ceased on the date of execution of the mortgage". The further circumstantial evidence emerging from the conduct of the appellant appears from the defence taken by him in the written statement which defence plea is to the effect that a fresh contract of tenancy was revived. It clearly indicates that defendant well knew that he had surrendered his tenancy rights in 1962 and after creation of the new relationship under the mortgage deed his possession was as a mortgagee and not as a tenant and so he took the plea in defence to the effect that a new contract of tenancy had been created, in respect of which, the findings of the courts below is against the defendant-appellant. In this view of the matter, in my opinion the possession of the appellant on the date of suit was that of a mortgagee and not that of a tenant. The case relied upon by learned counsel for the appellant namely, of Nemi Chand, supra, is distinguishable in view of the specific contents of the deed involved therein, which indicate that according to the document both the things did continue i. e. , the relationship of landlord and tenant i. e. , lessor and lessee and that of the mortgagor and mortgagee. Their Lordships have referred to that portion and the material portion of the judgment clearly shows:"the courts below misconstrued the document to read that no rent accrued during the period of the mortgage and that there was a symbolic surrender of possession by the appellant upon execution of the mortgage deed. This was not the correct position and it was a wrong reading of the document resulting in an error of law. The words "there shall be no interest of amount to you and no rent of the house. The interest of the amount and the rent of the house are equal", show that both interests and rent accrued, but both being in equal sums, neither was payable. That was an adjustment of one liability against another. In other words the relationship between the parties as lessor and lessee subsisted. There was no merger of the lease and the mortgage. No such merger could take place in law". A reading of this above paragraph per se shows that in that case, firstly Their Lordships took the view as in the case of Shah mathuradas Maganlal and Co. In other words the relationship between the parties as lessor and lessee subsisted. There was no merger of the lease and the mortgage. No such merger could take place in law". A reading of this above paragraph per se shows that in that case, firstly Their Lordships took the view as in the case of Shah mathuradas Maganlal and Co. , supra, i. e. , in law there can be no merger of mortgage and lease. Secondly their Lordships took the view that a reading of the Deed per se indicated that during the period of mortgage both things i. e. , interest and rent accrued and both being equal sums, neither was made payable and only adjustment of one liability in another was made and so the relationship of leassor and lessee subsisted. In that case question involved was that of merger and the view in that case that has been taken after taking into consideration of the specific terms of the deed, which are wanting in the present case and as such the case of Nemi Chand is not applicable to the facts of the present case. In my view the present case is completely covered by the authority of law laid down by Their Lordships of the Supreme court in the case of Shah Mathuradas Maganlal and Co. , supra. Thus I find that the courts below rightly held that the appellant surrendered the tenancy rights and entered into a new relationship of mortgagor and mortgagee. Having arrived at the above conclusion and findings, in my opinion there is no question of application of the provisions of the Rent Control Act to the present case, as the present case has been the one for redemption of mortgage and for possession inter se the mortgagor and mortgagee and the Court below has rightly held the plaintiff-respondent to be entitled to get the decree and they did not commit any error of law or of jurisdiction in decreeing the suit. The second appeal as such, in my opinion has got no force, as such the judgment and decree given by courts below are being confirmed herewith and the second appeal is hereby dismissed with costs throughout. --- *** --- .