B. S. SREENIVASA RAO, J. ( 1 ) THIS second appeal is filed by defendant 1 against the judgment and decree passed by the Civil Judge, Haveri in R. A. No. 62 of 1992 dated 15-1-1994 reversing the judgment and decree passed by the learned munsiff and JMFC, Hangal in O. S. No. 96 of 1983 dated 31-10-1992 in decreeing the suit of the plaintiffs for redemption of the suit property. ( 2 ) HEARD the learned Counsel for the appellant and the respondents. ( 3 ) FOR convenience sake, the appellant is referred to as defendant 1, respondent 1 as plaintiff 1, respondent 2 as defendant 2 and respondent 3 as plaintiff 3. ( 4 ) THE facts leading to this appeal are that the plaintiffs instituted suit for redemption of mortgage and for recovery of possession of the property and for mesne profits alleging that they are the owners of the property TPC No. 3190 comprising of two properties as detailed in the plaint. As per the contentions and allegations in the plaint, the suit property belonged to the plaintiff and defendant 2, and in a partition, it became exclusive property of the plaintiffs. While plaintiffs and defendant 2 continued to be the members of the joint family, the suit property was given to defendant 1 on lease and he was the tenant for some time. Subsequently, the right of defendant 1 was extinguished and he was allowed to be in possession of the suit property in the capacity as mortgagee. Plaintiff 1's deceased son and plaintiffs 2 and 3 and 2nd defendant created mortgage in favour of defendant 1 on 22-5-1973. Defendant 2 after receiving Rs. 3,000/- as mortgage amount from defendant 1, registered the mortgage deed. In pursuance of the said deed defendant 1 continued to be in possession and he was put in possession of the suit property till 23-5-1983 on which day plaintiffs were to repay a sum of rs. 3,000/- to defendant 1. During the pendency of the mortgage, the 1st defendant was not supposed to pay any rent and plaintiffs were not supposed to levy any interest on mortgage amount of Rs. 3,000/ -. In pursuance of the registered mortgage deed, defendant 1 was in possession of the suit property as a mortgagee and he had to hand over possession of the suit property to defendant 2 on receipt of Rs. 3,000/ -. In pursuance of the registered mortgage deed, defendant 1 was in possession of the suit property as a mortgagee and he had to hand over possession of the suit property to defendant 2 on receipt of Rs. 3,000/-, the mortgaged amount. The plaintiffs stepped into the shoes of defendant 2 to redeem the mortgage property. Plaintiffs deposited a sum of Rs. 3,000/- in the State Bank of India and notice was given to defendant 1 who stated that he was not willing to abide by the mortgage deed. Hence the suit for mortgage was filed. ( 5 ) THE main contention of the 1st defendant in the statement is that when the plaintiffs alleged that the alleged suit property was the joint family property at the hands of plaintiffs and defendant 2, sisters of late krishna were necessary parties to the suit without whom the suit was not tenable. Further it was contended that the suit property was given to defendant 1 on monthly rent basis by plaintiffs 2 and 3 and defendant 2 along with one Krishna. The lease of the 1st defendant was not terminated. The 2nd defendant expressed his desire that he wanted Rs. 3,000/- in connection with the marriage ceremony of his relative and the said amount was received by defendant 2 from defendant 1 as advance rent. So it was mentioned in the deed that defendant 1 was not supposed to pay rent for a period of 10 years. Since defendant 1 had paid money in advance, defendant 2 was to repay it in order to become entitle to future rent from him. Therefore, the question of terminating the lease in respect of the suit property did not arise. The allegation that the mortgage deed would automatically terminate the lease of defendant 1 is not correct. The lease in favour of defendant 1 continues to exist even after period of mortgage is over. On the basis of the pleadings the Trial Court framed the following issues:1. Whether the plaintiffs prove that they are entitled for redemption of suit property? 2. Whether plaintiffs are entitled for possession of the suit property? 3. Whether plaintiffs prove that they are entitled for mesne profits? 4. Whether defendant 1 proves that suit is bad for non-joinder of necessary parties? 5. Whether the plaintiffs prove that they are entitled for redemption of suit property? 2. Whether plaintiffs are entitled for possession of the suit property? 3. Whether plaintiffs prove that they are entitled for mesne profits? 4. Whether defendant 1 proves that suit is bad for non-joinder of necessary parties? 5. What order?additional Issue No. 1 whether defendant 1 proves that he resided in suit property as tenant even during the subsistence of alleged mortgage as contended in para 4 of the written statement? ( 6 ) AFTER contest, adducing the evidence by both the parties and hearing the arguments, the suit of the plaintiffs was dismissed. Aggrieved by the same, the 1st plaintiff filed the appeal before the learned Civil judge, Haven, The points which were raised by the Appellate Court with respect to the mortgage in favour of the 1st defendant and with respect to the redemption of the mortgage and whether there was termination of the lease when the mortgage came into existence and with respect to the redemption of the mortgage and the possession of the suit schedule properties have been held in the affirmative and the suit of the plaintiff was decreed for redemption of mortgage and for possession of the suit schedule property with mesne profits. Aggrieved by the same, defendant 1 has filed the present appeal. ( 7 ) SUBSTANTIAL question of law raised in the present appeal is whether the conclusion of the First Appellate Court that the lease was not kept alive during the subsistence of the mortgage, having regard to the recitals in Ex. P1 is correct? ( 8 ) THE main contention of the learned Counsel for defendant 1 is that whether the lease which was earlier in force gets automatically revived after extinguishment of the mortgage is the point to be considered in view of the contents of Ex. PI. The I Appellate Court during the course of the order has observed that as per the contents of the mortgage in Ex. PI, the words used in the document show that as long as mortgage was in subsistence, the 1st defendant was not supposed to pay rent. It means that defendant 1 was put in possession of the suit property in lieu of the fact that he paid Rs. 3,000/- to defendant 2 and the plaintiffs. PI, the words used in the document show that as long as mortgage was in subsistence, the 1st defendant was not supposed to pay rent. It means that defendant 1 was put in possession of the suit property in lieu of the fact that he paid Rs. 3,000/- to defendant 2 and the plaintiffs. His right as a lessee came to be automatically terminated as could be seen from the recitals. It has been observed during the course of the order that if really the 1st defendant was interested in reviving of the lease after the mortgage in question is redeemed, he would have insisted the plaintiffs and defendant 2 to mention the same in the deed itself, but he has not done so. The material particulars in Ex. PI are as follows: from these recitals, the 1st Appellate Court has held that according to the above contents, if defendant 2 and plaintiffs do not pay the amount to defendant 1, defendant 1 was to continue as mortgagee in possession even after 23rd May, 1983. Therefore, it was the clear intention of the parties to see that at no stretch of time, defendant 1 should get his lease revived. Defendant 1 was not supposed to pay any rent. It would make clear that the lease in question came to be terminated and defendant 2 and plaintiffs owing to the reasons that he was in possession of the suit property as mortgagee in possession in lieu of money he had parted to them. Under Ex. PI, the transaction was mortgage in possession, but not redeemable mortgage and defendant 1 has to revive the lease. The main contention of the learned Counsel for the plaintiffs is that during the pendency of the mortgage, the lease was surrendered and as soon as the mortgage is redeemed, the mortgagee has to give possession and his original tenancy right would not have revived. The contention of the learned Counsel for defendant 1 is that there is no question of merger of the leasehold, but during the pendency of the mortgage, the lease was suspended and as soon as the mortgage was redeemed, the right of the tenant would survive and the mortgagor cannot claim possession of the property on the redemption of the mortgage. The 1st Appellate Court has considered this aspect from the contents of the document whether after redemption of mortgage was for any reason delayed, only mortgage transaction should continue until redemption is made, but it was not contemplated that after that period of mortgage was over, lease should automatically get revived. From the deed, it is clear that defendant 1 should continue to be in possession of the property under Dattapatra, i. e. , mortgage deed. Hence, possession of defendant 1 was as mortgagee only. It is further observed by the I Appellate Court that having regard to the contents and circumstances of the case, there is no question of revival of tenancy right after redemption of the mortgage and hence, answered all the points raised for determination in favour of the plaintiffs for redemption of the mortgage and also for recovery of possession with mesne profits. ( 9 ) DEFENDANT 1 has relied on the decision of the Supreme Court in Gambangi Appalaswamy Naidu and Others v Behara venkataramanayya Patro , wherein it has been held as under:"there can be no merger of a lease and a mortgage, even where the two transactions are in respect of the same property. It is well settled that for a merger to arise, it is necessary that lesser estate and 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 outstanding. In the case of a lease, the estate that is outstanding in the lessor is the reversion; in the case of a mortgage, the estate that is outstanding is the equity of redemption of the mortgagor. Accordingly, there cannot be a merger of a lease and a mortgage in respect of the same property since neither of them is a higher or lesser estate than the other. Even, if the rights of the lessee and the rights of the mortgagee in respect of a property were to be untied in one person the reversion in regard to the lease and the equity of redemption in regard to the mortgage, would be outstanding in the owner of the property and accordingly, there would not be a complete fusion of all the rights of ownership in one person. The answer to the question as to whether upon redemption of a usufructuary mortgage a tenant mortgagee could be directed to deliver actual or physical possession of the mortgaged property to the lessor mortgagor must depend upon whether there was an implied surrender of the lessee's rights when the usufructuary mortgage was executed in his favour by the lessor-mortgagor. And this obviously depends upon what was the intention of the parties at the time of the execution of the mortgage deed in favour of the sitting tenant to be gathered from the terms and conditions of the mortgage transaction in the light of the surrounding circumstances of the case. It all depends upon whether by executing a possessory or usufructuary mortgage in favour of a sitting tenant the parties intended that there should be a surrender of lessee's rights or not, and only if an implied surrender of lessee's rights could be inferred then the mortgagor would be entitled to have delivery of physical possession upon redemption but not otherwise". ( 10 ) THE learned Counsel for defendant 1 has also relied on the decision of the Supreme Court in Nemi Chand v Onkar Lal. It is held as under:"where the lessee in possession of the suit property lent certain amount to the landlord on the security of the suit property which was mortgaged to him by the landlord and on the expiry of the period of mortgage, a suit for redemption was filed by the landlord, it was held that the lease subsisted, though the parties entered into a new relationship of creditor and debtor on the security of the property already in the possession of the lessee as a lessee. The mortgage was usufructuary in character, the possession being already with the lessee. He held the property both as a lessee and a mortgagee. Moreover, the document of mortgage showed that during the period of the mortgage, which was to last 5 years, neither interest nor rent was payable by the parties, both amounts being equal. This showed that the rent was kept alive and it was to be adjusted against the interest. 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. This showed that the rent was kept alive and it was to be adjusted against the interest. 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. The decree for redemption only redeemed the mortgage and did not determine the lease. That was a relationship which still subsisted and determinable according to law". In the present case on hand, as per the contents of the mortgage deed it has been clearly recited as follows: thus it is seen from the contents of the documents, the mortgagee who was in possession of the property was a lessee and in view of the interest he could be in possession of the property for a period of 10 years. After the period of 10 years, paying the amount, the mortgage would be redeemed. During the expiry of 10 years, if the mortgage is not redeemed when the mortgage amount is paid to the mortgagee he has to discharge the mortgage deed. There is no mention in the mortgage deed that he has to deliver back possession. Thus it is seen that before executing the mortgage deed, the mortgagee was in possession of the suit schedule property as a lessee under the mortgagor. During the pendency of the mortgage the mortgagee in lieu of interest to the money advanced he could be in possession of the property. After the expiry of the mortgage when the amount is paid he has to discharge the mortgage deed. In view of the above decisions and also the contents of the documents, it cannot be said that there was merger of the leasehold and the 1st defendant surrendered his leasehold right and the same could not have been re vived after the redemption of the mortgage. Even the contents of the document make it clear that subsequent to the payment of the mortgage amount the mortgage stands discharged and no question of delivering the possession of the mortgaged property. Under these circumstances, it is to be held that the contention of the 1st defendant that the leasehold right or his tenancy right would survive subsequent to discharge of the mortgage has to be upheld and the finding given by the I Appellate court is not proper. Under these circumstances, it is to be held that the contention of the 1st defendant that the leasehold right or his tenancy right would survive subsequent to discharge of the mortgage has to be upheld and the finding given by the I Appellate court is not proper. Under these circumstances, the appeal has to be allowed in part for the right of redemption of the mortgage but the plaintiffs will not be entitled to recover possession of the same, in view of the ratio decidendi of the above two rulings. ( 11 ) HENCE, I proceed to pass the following Order: appeal is allowed in part. The judgment and decree of the I Appellate court and the judgment and decree of the Trial Court are set aside. The suit of the plaintiffs for redemption of mortgage is decreed with three months time. The plaintiffs are not entitled for recovery or delivery of possession of mortgage property. It is made clear that the plaintiffs can adjudicate their rights to get possession in accordance with law. Parties to bear their own costs in this appeal. --- *** --- .