Punjab-Haryana High Court
Dyal Chand And Ors. vs Bihari Lal And Anr. on 21 January, 1997
Equivalent citations: (1997)117PLR447
Author: B. Rai
Bench: B. Rai
JUDGMENT B. Rai, J.
1. Dyal Chand and others filed a suit for possession by way of redemption of the shop mortgaged, situated at Taraori, Tehsil and District Karnal. That suit was decreed by the trial Court and preliminary decree for symbolic possession by way of redemption was passed (si) favour of plaintiffs and against defendant No. 1 with costs, vide judgment and decree, dated August 31, 1978, directing that if the plaintiffs deposit an amount of Rs.1,500/- on or before November 6, 1978, the defendant shall deliver constructive possession of the shop in question as distinguished from actual possession to the plaintiffs. In case the amount due under the preliminary decree was not deposited on or before November 6, 1978, then defendant No. 1 shall be entitled to apply for a final decree. The plaintiffs, were, however, not satisfied with the said judgment and decree which they challenged in appeal. The appeal preferred by the plaintiffs was dismissed by Mr. R.K. Nehru, the then Additional District Judge, Karnal, vide his judgment and decree, dated May 4, 1979, whereby the judgment and preliminary decree passed by the trial Court were confirmed.
Hence, this second appeal at the instance of the plaintiffs.
2. The brief facts of the case are that one Gugan Mal father of the plaintiffs was the owner of the shop in dispute. He mortgaged it with possession with all rights and interest appurtenant thereto for Rs. 1,500/- with Bihari Lal vide registered mortgage deed, dated June 29, 1959. The terms of the mortgage were that (i) the interest on the mortgage amount and rental income of the mortgaged shop shall be equal; (ii) the defendant was put in possession of the shop in dispute as mortgagee after mortgage in question; (iii) there was bar for redeeming the mortgage in question for one year from the date of mortgage; (iv) in case of any damage to the shop the mortgagor was liable to get it repaired; and (v) the mortgagee was himself responsible for getting it white-washed.
3. Bihari Lal mortgagee in possession subsequently mortgaged the shop with Chetru Ram on July 29, 1975, though he was not authorised to do so. Plaintiffs asked the defendants to vacate the shop in question and deliver its possession to them on receiving the mortgage amount, but the defendants did not accede to their request. Hence, they filed the suit aforesaid.
4. The defendants resisted the suit on the grounds that Bihari Lal was in possession of the shop as tenant under Gugan Mal and the shop in dispute was mortgaged with him but he was to retain his tenancy rights. The defendant continued to be in possession of the suit property as a tenant and the interest was to be counted towards rent. There was no intention to merge the interest of the defendant as a lessee with his interest as a mortgagee. Preliminary objections were also raised that the suit was not maintainable, the plaintiffs had no locus standi to file the suit and the Court of Rent Controller had got the jurisdiction to try the suit.
5. on the pleadings of the parties, the following Issues were framed :
(1) Whether the, plaintiff is not entitled to redeem the property in suit on payment of Rs. 1500/- ? OPD.
(2) Whether the defendant No. 1 was tenant at the time of mortgage in question, if so what is the effect ? OPD.
(3) Whether the civil Court has no jurisdiction in the matter? OPD.
(4) Relief.
Later on, an application was made for framing additional Issues. Accordingly, on October 5,1976, following additional issues were framed:
1(a) Whether the plaintiffs are the legal heirs of Gugan Mal deceased ? OPP.
2(b) What were the conditions of the mortgage in question ? OPP.
3(c) Whether the suit is bad for non joinder of necessary parties ?
Under Issue No. 1(a), it was held that the plaintiffs were the legal heirs of Gugan Mal. Under Issue No. l(b), it was observed by the trial Court that it does not fell the need of enumerating the conditions in detail because there was not much dispute about the conditions but the real dispute was about the intention of the parties and the construction of the conditions and this Issue was accordingly decided in favour of the plaintiffs. Under Issue No. 1 (c) finding returned was that the suit was not bad for non-joinder of necessary parties.
6. Under Issue No.1, it was held that the plaintiffs were definitely entitled to redeem the property in question on payment of Rs. 1,500/- as mortgage amount. Issue No. 2 was decided in favour of the defendants observing that the mortgage did not cause any merger of the tenancy rights of the defendant No. 1 and defendant No. 1 shall retain the possession of the shop in question after it is redeemed and he shall remain as a tenant as he was a tenant under the plaintiff,,, before the mortgage in question. It was further held that after the redemption of the mortgage, the plaintiffs will be entitled to symbolic possession as distinguished from the actual possession because the actual possession shall remain with the defendant No. 1 being the tenant under the plaintiffs. Issue No. 3 was not pressed before the trial Court. Accordingly, it was decided against the defendants. In view of the findings recorded by the trial Court, the suit was decreed and a preliminary decree for symbolic possession by way of redemption was passed in favour of the plaintiffs, as mentioned in the earlier part of this judgment.
7. I have heard Mr. C.B. Goel, learned counsel for the appellants. He invited my attention to the mortgage deed registered on June 29, 1959 to contend that when the property in dispute was mortgaged for Rs. 1,500/- with Bihari Lal, he was already in possession of the suit property as tenant, but on the date of mortgage possession of the property in dispute was delivered to him as mortgagee and he continued to be mortgagee in possession till it was redeemed. It was further pointed out that the mortgage deed contained certain stipulations, one of which was to the effect that there was bar for redeeming the mortgage in question for one year from the date of mortgage. It was also stipulated in the mortgage that the interest on the mortgage amount and rental income of the mortgaged shop would be equal. According to the learned counsel, this condition clearly goes to show that tenancy rights of Bihari Lal mortgagee had merged into mortgagee rights. Therefore, the mortgagee, on redemption of the shop was under legal obligation to deliver the vacant possession of the shop in dispute to the mortgagor. As such, both the Courts below committed a legal error in holding that the appellants were entitled to symbolical possession of the shop and not to actual possession. Therefore, the appeal deserves to be allowed and judgments and decrees of the Courts below are required to be modified to that extent. In support of his argument, he relied upon a Division Bench decision of this Court in Mis. Gian Chand Sham Chand v. Mis. Rattan Lal, Kishen Kumar and Ors., 1963 Current Law Journal (Pb.) 377. The learned counsel for the appellants has not disputed the legal position that provisions of Section 111 of the Transfer of Property Act have no application to the State of Haryana and the provisions of this section have never been applied as a rule of equity, justice or good conscience. Therefore, the case has to be decided on the general law of merger.
8. A reference may be made to Gambangi Appalaswamy Naidu and Ors. v. Behara Venkataramanayya Patro, A.I.R. 1984 S.C. 1728, wherein the facts were that one Behara Audinarayana Patro, the original owner of suit property executed two usufructuary mortgage deeds dated 30.8.1939 and 25.8.1942 in favour of the first defendant Sambangi Thavitinaidu, who was then a sitting tenant of that property. In 1951 the mortgagor filed suit for redemption of the mortgages and obtained a preliminary decree on 31.12.1952. Subsequently, the mortgagor died and the respondents were brought on the record as his legal representatives. On 21.10.1963 the respondents filed an application for passing a final decree by way of ascertainment of the amount due and for delivery of possession upon deposit of entire dues so ascertained. The application was resisted by the first defendant and other defendants (the appellants before their Lordships) on several grounds. Inter alia the appellants contended that even after depositing the entire amount found due to them no decree directing delivery of actual or physical possession in favour of the respondents should be passed but delivery of symbolical possession alone should be ordered inasmuch as the appellants' possession of the suit property as a tenant or lessee could not be disturbed. In other words, the appellants contended that on redemption the original relationship of landlord and tenant would revive which needed to be protected. Dealing with the case, their Lordships were pleased to hold as under:
"In our view 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 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 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 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 united 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."
So holding, their Lordships approved the view expressed by the Bombay High Court in Naryana Dogra Shetty v. Ramchandra Shivram Hingne, (1963) 65 Bom. LR 449. This view further received the approval of their Lordships in Shah Mathuradas Maganlal and Co. v. Nagappa Shankarappa Malaga and Ors., A.I.R. 1976 S.C. 1565.
9. In Para 6 of the report, it was held that the answer to the question raised in this appeal 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 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.
10. In the instant case, it was stipulated in the mortgage deed that interest on the mortgage amount and rental income of the mortgaged shop would be equal and there was bar for redeeming the mortgage in question for one year from the date of mortgage. That clearly goes to show that during the subsistence of mortgage the liability of the tenant to pay rent to the mortgagor was kept alive and in any way cannot be said that here was implied surrender of tenancy rights, No doubt, there was bar for redeeming the mortgage for one year from the date of mortgage, but it also does not mitigate against the tenant and does not whittle down his tenancy rights. The mortgagor willingly accepted that condition when he executed the mortgage deed in favour of the tenant-mortgagee. From this, it implies that mortgagor's right to redeem the suit property was kept in abeyance for one year and the right of the I tenant to remain in possession was kept alive. It does not appeal to reason that a siting tenant would give up his tenancy rights as soon as the redemption takes place. If it were the intention of the respondent that was certainly to run counter to his interest as tenant. It is, thus, obvious that during the subsistence of the mortgage the amount of interest to be paid by the mortgagor was to be treated as the rent paid by the lessee-mortgagee. That goes to show that liability to pay rent by the lessee was kept alive and there was no intention of the lessee-mortgagee that he intended to impliedly surrender this tenancy rights. In view of the above discussion, the case law relied upon by the learned counsel for the appellants is not of any help to the appellants. Both the Courts below have rightly held that the appellants are entitled only to the symbolical possession of the shop in dispute and no fault can be found with the same in second appeal.
The irresistible conclusion is that there is no merit in the appeal and the same is dismissed. No costs.