Research › Search › Judgment

Punjab High Court · body

2002 DIGILAW 844 (PNJ)

Varinder Kumar v. Jagdish Singla

2002-08-26

M.M.KUMAR

body2002
JUDGMENT M.M. Kumar, J. - Plaintiff-petitioners have invoked the provisions of Section 115 of the Code of Civil Procedure, 1908 (for brevity the Code) by filing the present revision petition challenging the order dated 2.2.2002 passed by the Additional District Judge, Sangrur dismissing their appeal which was directed against the order dated 15.6.2001. In his order dated 15.6.2001, the Civil Judge (Junior Division), Sunam has declined the prayer of the plaintiff-petitioner for issuing interim directions restraining defendant-respondent No. 2 from demolishing shop Nos. 1 to 6 (which are fully described in the heading of the plaint) and also from dispossessing the plaintiff-petitioners or from interfering in their possession. 2. Brief facts of the case which have led to the filing of the present petition are that defendant-respondent No. 2 (for brevity the mortgagor) mortgaged the suit property to defendant-respondent Nos. 1 and 2 i.e. Hindu Sabha High School, Sunam (for brevity the mortgagee). The property was redeemed from the mortgagee by virtue of a judgment and decree of redemption dated 24.1.2001. The mortgagee appears to have inducted the plaintiff-petitioners as tenant in the shops in dispute. After redemption, the plaintiff-petitioners are claiming that they are either tenants of the mortgagor or the mortgagee. 3. The case pleaded by the plaintiff-petitioners is that the mortgagee is owner of the shops in dispute and they have been in possession of shops in dispute as tenants under the mortgagee. The plaintiff-petitioner No. 1 has taken a loan from the State Bank of India., Sunam and is running a PCO/STD in the name and style as Pinki STD in Shop No. 1. He has also claimed that electricity charges are being paid by him. He has also been paying rent and house tax although no rent note has been executed by the owner Hindu Sabha High School, Sunam. Similar averments have been made by plaintiff-petitioner No. 2 asserting that he is running a Chemist shop known as Bansal Medical Hall, Sunam. It is admitted that Hindu Sabha High School, Sunam who is alleged to be owner of the property has not executed any rent note nor issued any receipt for payment of rent. However, it is claimed that the plaintiff-petitioner No. 2 is in possession of the disputed property since long and earlier to his possession their ancestors were in possession. It is admitted that Hindu Sabha High School, Sunam who is alleged to be owner of the property has not executed any rent note nor issued any receipt for payment of rent. However, it is claimed that the plaintiff-petitioner No. 2 is in possession of the disputed property since long and earlier to his possession their ancestors were in possession. Other plaintiff-petitioners have also raised similar plea claiming possession since the period of their ancestors. It is also claimed that under the provisions of the East Punjab Urban Rent Restriction Act, 1949 (for brevity, the 1949 Act) the owner of the property the mortgagee is not entitled to get the same vacated and the mortgagor is conniving with the mortgagee. Alongwith the suit an application under Order 39 Rules 1 and 2 of the Code seeking protection of possession of the plaintiff-petitioners and restraining mortgagor for forcibly evicting and dispossessing them was also filed. 4. The plaintiff-petitioners failed to persuade the learned trial Court to grant them any interim injunction because it held that the plaintiff-petitioners did not claim to be tenants of the mortgagor. Therefore, the tenant of mortgagee cannot acquire any tenancy right beyond the period of mortgage. The Civil Judge also held that such a tenant after redemption is considered to be a trespasser and no injunction could be granted in favour of such a trespasser against the true owner. the Civil Judge has relied upon the judgment of the Supreme Court in Premji Ratasney Shah and others v. Union of India and others, 1994(5) SCC 547. The Civil Judge also did not find any substance in the contention that the mortgagor could seek the eviction of the plaintiff-petitioners only under the provisions of the 1949 Act because they were never tenant of the mortgagor. In this regard, the Civil Court relied on the case of Carona Shoe Co. Ltd. and others v. K.C. Bhaskaran, Nair, AIR 1989 SC 1110. The Civil Judge further held that the plaintiff-petitioners would not be entitled to equitable relief of injunction as they had suppressed the facts from the Court because it was not disclosed that the property has already been redeemed by defendant-respondent No. 2 (the mortgagor) from the mortgagee vide judgment and decree dated 24.1.2001. 5. Feeling aggrieved the plaintiff-petitioners filed an appeal which was also dismissed. 5. Feeling aggrieved the plaintiff-petitioners filed an appeal which was also dismissed. The Additional District Judge in his order dated 2.2.2002 has recorded the following prima facie finding : "It is established that the Hindu Sabha High School, Sunam is not a true owner. The property was belonging to defendant No. 2 whose predecessors had mortgaged the same in favour of Hindu Sabha High School, Sunam. It was Hindu Sabha High School, Sunam, who had inducted the plaintiff as tenant. Plaintiffs were not the tenants of the original owner/mortgagor. It is also established fact that the property in question has been got redeemed by the decree dated 24.1.2001. It is true that the plaintiffs tenants were not parties to that suit and it was not necessary also. It was held in that decree that the true owners were entitled for possession of the property in dispute. As mentioned earlier that the plaintiffs are tenants of Hindu Sabha High School and not of the mortgagor/true owner. However, against the true owner they are trespassers. Their tenancy could continue so long the mortgage service. On redemption the mortgage of mortgagee comes to an end and the tenancy under the mortgagee also terminates. The interest of the tenants under the mortgagee could not be better than mortgagor. I am further of the view that the mere production of assessment register, bills and other documents are not establishing their possession. The true owner who had got the decree for possession cannot file suit for possession against those tenants who were not inducted by him. There would have been a different position if Hindu Sabha High School had to dispossess the plaintiff forcibly and they can protect their possession but in the present case they are totally strangers to the original owner/mortgagor. Their status is not more than the trespassers. The tenants were treating Hindu Sabha High School as owner which is against real fact. The plaintiffs had admitted in their ground of appeal that in redemption suit they were not made party but as already held tenants were not so necessary party in that suit. The learned trial Court has rightly observed that the tenancy created by Hindu Sabha High School, Sunam with the plaintiffs came to end on redemption of the property by defendant No. 2 and other. The learned trial Court has rightly observed that the tenancy created by Hindu Sabha High School, Sunam with the plaintiffs came to end on redemption of the property by defendant No. 2 and other. The plaintiffs-appellants have not come with any such plea that mortgagors have allowed the mortgagee to induct any tenants. The learned trial Court has further rightly observed that the defendant has not created any tenancy with the plaintiffs. The learned trial Court has, therefore, given correct observation that the appellant-plaintiffs are not the tenants of defendant No. 2, owner of the property. The tenants were required to surrender the possession on the asking of the mortgagor but they did not do so. The learned trial Court further held that if the mortgage is redeemed and true owner becomes entitled to possession and the plaintiffs could not claim protection nuder the East Punjab Urban Rent Restriction Act. It is correctly held by the trial Court that relief of injunction is an equitable relief which is granted in accordance with judicial discretion of the Court in accordance with certain established norms. The learned trial Court has further held that the defendant being true owner has got every right to protect the property. Thus, viewing the case from all angles, I am of the view that the learned trial Court has rightly dismissed the application of the plaintiff. Therefore, the appeal has no merit and the same is dismissed. 6. I have heard Shri Sanjay Majithia, learned counsel for the plaintiff-petitioners who has referred to some averments made in the pliant to the effect that they have been tenant and in the disputed shops for more than 5 decades. On the basis of these averments, the learned counsel has made a feeble attempt to argue that the plaintiff-petitioners have infact been the tenant of the mortgagor. The learned counsel has further argued that the plaintiff-petitioners would suffer enormous loss if their possession is not protected during the pendency of the Civil Suit. 7. I have given serious consideration to the arguments raised by the learned counsel and regret my inability to accept the same. The proposition of law which has arisen for consideration of both the Courts below and also of this Court is whether the mortgagee can create tenancy which would be binding on the mortgagor even after redemption. 7. I have given serious consideration to the arguments raised by the learned counsel and regret my inability to accept the same. The proposition of law which has arisen for consideration of both the Courts below and also of this Court is whether the mortgagee can create tenancy which would be binding on the mortgagor even after redemption. It is well settled that the mortgagee cannot create an interest in the mortgaged property which would result into benefit to the mortgagee even after redemption of mortgage. The provisions of Sections 76(a) and (e) of the Transfer of Property Act, 1882 (for brevity the 1882 Act) imposes an obligation on the mortgagee to manage the property as a person of ordinary prudence would manage it if it was his own property and he is also restrained from committing any act which is destructive or permanently injurious to the mortgaged property. Sections 76 of the 1882 Act are reproduced below for facility of reference : "76. Liabilities of mortgagee in possession. When, during the continuance of the mortgage the mortgagee takes possession of the mortgaged property - a) he must manage the property as a person of ordinary prudence would manage it if it were his own; XX XX XX XX e) he must not commit any act which is destructive or permanently injurious to the property." 8. The afore-mentioned provisions fell for consideration of the Supreme Court in the case of Mahabir Gope and others v. Harbans Narain Singh and others, AIR 1952 SC 205. The observations made by their Lordships are as under :- "The general rule is that a person cannot by transfer or otherwise confer a better title on another than he himself has. A mortgagee cannot, therefore, create an interest in the mortgaged property which will injure beyond the termination of his interest as mortgagee. Further, the mortgagee, who takes possession of the mortgaged property, must manage it as a person of ordinary prudence would manage it if it were his own; and he must not commit any act which is destructive or permanently injurious to the property. See Section 76 sub-clauses (a) and (e) of the Transfer of Property Act. It follows that he may grant leases not extending beyond the period of the mortgage; any leases granted by him must come to an end at redemption. See Section 76 sub-clauses (a) and (e) of the Transfer of Property Act. It follows that he may grant leases not extending beyond the period of the mortgage; any leases granted by him must come to an end at redemption. A mortgagee cannot during the subsistence of the mortgage act in a manner detrimental to the mortgagors interests such as by giving a lease which may enable the tenant to acquire permanent or occupancy rights in the land thereby defeating the mortgagors right to khas possession; it would be an act which would fall within the provisions of Section 76 sub-clause (e) of the Transfer of Property Act." 9. There is an exception recognised to the above-mentioned general principle in Mahabir Gopes case (supra) itself. Their Lordship have recognised the exception in following circumstances : "A permissible settlement by a mortgagee in possession with a tenant in the course of prudent management and the springing up of rights in the tenant conferred or created by statute based on the nature of the land and possession for the requisite period is a different matter altogether. It is an exception to the general rule. The tenant cannot be rejected by the mortgagor even after the redemption of the mortgage. He may become an occupancy raiyat in other cases. But the settlement of the tenant by the mortgagee must have been a bona-fide one. This exception will not apply in a case where the terms of the mortgage prohibit the mortgagee from making any settlement of tenants on the land either expressly or by necessary implication." 10. The Supreme Court has taken a consistent view in a plethora of judgments reiterating the principle that even if there is no term in the mortgage deed conferring a right on a mortgagee to induct a tenant nevertheless the tenant could retain possession even after redemption if he proves (a) that the tenancy was created by the mortgagee an as act of produent management and (b) that the tenancy is protected by statute. However, such an exception is applicable only to agricultural tenancies. 11. In respect of tenancy other than agricultural tenancies law is well settled. In Carona Shoes Co.s case (supra) this question fell for consideration. However, such an exception is applicable only to agricultural tenancies. 11. In respect of tenancy other than agricultural tenancies law is well settled. In Carona Shoes Co.s case (supra) this question fell for consideration. In the course of rejecting the contention that a tenant inducted by a mortgagee would be entitled to tenancy rights under mortgagor, their Lordships observed as under :- "But in view of the said definitions, we are of the opinion that between the appellants and the respondent, there was never any landlord and tenant relationship. The appellants were never the tenants of the respondent. Shri Iyer drew our attention to the observations of this Court in Raj Brij Raj Krishan v. S.K. Shaw and Bros., AIR 1951 SC 115, where it was held that non onstante clause would be applicable. Our attention was drawn to the observations of Fazl Ali, at p. 117 of the report. There, the Court observed that Section 11 of the Bihar Buildings (Lease, Rent and Eviction) Control Act, 1947 was a self contained Section and it was wholly unnecessary to go outside the Act for determining whether a tenant was liable to be evicted or not, and under what conditions he could be evicted. But in the instant case, the appellants were not the tenants. The respondent, the original mortgagor, would never after the redemption of the mortgage have treated the appellants to be tenants. There was no relationship ever between the appellants and the respondent. The mortgagor had a separate and distinct interest which was wiped out on the redemption of the mortgage or expiry of the period of mortgage. The mortgagor on redemption of mortgage gets back his own right, he is not the successor-in-interest of the mortgagee. Interest, if any, created by the mortgagee on the mortgagors right must disappear on ceasing of interest of the mortgagee. In that view of the matter, in our opinion, thus the said observations would not be of any relevance to the present case. Similarly, reliance was placed on the observations of this Court by Sri Iyer in Ravel and Co. v. K.G. Ramachandaran, 1974(1) SCC 474 : AIR 1974 SC 818. The observations that the definitions of landlord and tenant might apply even if the contractual tenancy has come to an end. But this is not the situation here in the instant case. Similarly, reliance was placed on the observations of this Court by Sri Iyer in Ravel and Co. v. K.G. Ramachandaran, 1974(1) SCC 474 : AIR 1974 SC 818. The observations that the definitions of landlord and tenant might apply even if the contractual tenancy has come to an end. But this is not the situation here in the instant case. In the said case, Bhagwati J, as the Chief Justice then was, in the judgment at page 439 : of (S.C.C.): (at pp. 427-28 of AIR) of the report observed that sub-section (1) of Section 4 of the Act in question i.e., Tamil Nadu Buildings (Lease and Rent Control), Act 1960 contemplated that an application for fixation of fair rent of a building might be made by the tenant or the landlord. The definition of tenant, it was observed, included contractual tenant as well as tenant remaining in possession of the building after determination of the contractual tenancy, i.e. statutory tenant, and both contractual tenant and statutory tenant could, therefore, apply. It was, therefore, submitted in this case that on the analogy of the contractual tenant, the appellants were entitled to the protection of the Act. We are unable to agree. It is not a question of a contractual tenancy coming to an end. The limited estate created in favour of the mortgagee having disappeared all rights emanating from that limited estate disappear and the superior right of the mortgagor comes not in place of the mortgagee but as a result of an independent title, and as such the mortgagor cannot be bound by any act created or any relationship contracted between the mortgagee and the tenant, unless it is permitted by the mortgage deed. Reliance was also placed on certain observations of this Court in V. Dhanpal Chettiar v. Vesodai Ammal, 1979(4) SCC 214 : AIR 1979 SC 1745. Therein, it was held that under the State Rent Acts, the concept of contractual tenancy has lost much of its significance and force. Therefore, giving of the notice was a mere surplusage and unlike the law under the Transfer of Property Act, 1882, it does not entitle the landlord to evict the tenant. In our opinion, the observations of the said decision cannot have any assistance or significance for the purpose of the issues involved in the present controversy. 12. Therefore, giving of the notice was a mere surplusage and unlike the law under the Transfer of Property Act, 1882, it does not entitle the landlord to evict the tenant. In our opinion, the observations of the said decision cannot have any assistance or significance for the purpose of the issues involved in the present controversy. 12. This view taken in Carona Shoe Co.s case (supra), Mahabir Gopes case (supra) has been followed in Harihar Prasad Singh v. Deonarain Prasad, AIR 1956 SC 305, Asa ram v. Ram Kali, AIR 1958 SC 183, Prabhu v. Ramdeo, AIR 1966 SC 1721, All India Film Corp. Ltd. v. Raja Gyan Nath, 1969(3) SCC 79, Sachalmal Parasaram v. Ratnabai, 1973(3) SCC 198, Jadavji Purshottam v. Dhami Navinibhai Amaratlal, 1987(4) SCC 223, Pomal Kanji Govindji v. Vrailal Karsandas Purohit, 1989(1) SCC 458, Om Parkash Garg v. Ganda Sahai, 1987(3) SCC 553, Hanumant Kumar Talesara v. Mohan Lal, 1988(1) SCC 377. 13. The Supreme Court in Puran Chand and others v. Kirpal Singh and others, 2001(2) SCC 433, has further interpreted the provisions of Section 76 of the 1882 Act by laying down that there are three requirements which would need to be established by a tenant like the plaintiff-petitioners in order to succeed in getting the benefits of the tenancy created by the mortgagee. The observation of their Lordships read as under : "If the principle, whether as originally enunciated in Mahabir Gope or as modified later were to be applied to the case before us three separate obstacles would have to be overcome by respondents 1 and 2 before they can succeed in their claim to continue in possession as tenants. The first hurdle that respondents 1 and 2 would have to overcome would be to establish the consent of the mortgagor to the creation of the tenancy by the mortgagee. Infact it was never the case of the respondents that the tenancy was created by the mortgagee in terms of the mortgage deed. The second hurdle would be to prove the ingredients of Section 76(a) which provides that a mortgagee must manage the property as a person or ordinary prudence would manage it if it were his own. Infact it was never the case of the respondents that the tenancy was created by the mortgagee in terms of the mortgage deed. The second hurdle would be to prove the ingredients of Section 76(a) which provides that a mortgagee must manage the property as a person or ordinary prudence would manage it if it were his own. As said in Asa Ram "this being in the nature of an exception, it is for the person who claims the benefit thereof, to strictly establish it." Respondents 1 and 2 have singularly failed to do this. Though an argument was raised before the trial Court that the lease created by Labhu Ram in favour of Bir Singh was binding on the mortgagor under Section 76(a) of the Act, the argument was specifically negatived by the trial Court and affirmed on appeal. No submission was made to us on behalf of respondents 1 and 2 on the basis of Section 76(a). The third hurdle is to prove statutory protection. Respondents 1 and 2 claim to continue in occupation as tenants despite the redemption of the mortgage is sought to be deprived from Sections 18 and 8B of the Pepsu Tenancy and Agricultural Lands Act, 1955." 14. When the requirements laid down by the Supreme Court are applied to the facts of the present case, it becomes evident that the plaintiff-petitioners have failed to produce even an iota of evidence that there was any consent of mortgagor to the creation of tenancy by the mortgagee. Infact it is no where the case pleaded by the plaintiff-petitioners that they had become tenant of mortgagor by virtue of the terms and conditions of the mortgage deed. Similarly, the second and third requirements have also not been satisfied. Therefore, I am of the firm opinion that this revision petition lacks merit and is thus liable to be dismissed. The discretion exercised by both the Courts below is based on correct appreciation of law and prima facie evidence produced by the parties. 15. For the reasons recorded above, this petition fails and the same is dismissed. However, any observation made in the preceding paras shall not be construed as an expression of opinion on merit of the controversy pending adjudication before the trial Court in the suit. Petition dismissed.