Madras High Court
Kasilinga Padayachi vs Kaliyaperumal Padayachi on 5 February, 1999
JUDGMENT K.P. Sivasubramaniam, J.
1. This second appeal arises out of the judgment and decree of the learned Subordinate Judge, Virchachalam, in A.S.No. 17 of 1984 reversing the judgment of the learned District Munsif, Virchachalam, in O.S.No. 2258 of 1981. The plaintiff in the suit is the appellant in the above second appeal.
2. This second appeal was disposed of by this Court by judgment dated 2.4.1998. There was no appearance on behalf of respondent at the time of hearing. Subsequently, a petition in C.M.P.No. 10805 of 1998 was filed for leave to file the petition to set aside the judgment and decree dated 2.4.1998 and restore the second appeal for fresh hearings The said petition was allowed and hence the present judgment after re-hearing the second appeal.
3. The suit was filed for redeeming the mortgage as against the first defendant. The plaintiff contended that the suit item in 'A' schedule property belonged to him, while item 'B' belonged to the second defendant. The second defendant had executed a possessor mortgage (Ex.A-1) in favour of the first defendant for a sum of Rs. 1,300 on 22.10.1975 and it was stipulated that the first defendant shall hold, cultivate and enjoy the income from the properties in lieu of interest on the loan amount for a period of three years, by which time if the second defendant pays the loan amount, the first defendant shall redeem the mortgage. The plaintiff further contended that the first defendant was in possession on the basis of the said understanding. As regards the 'A' schedule property, the second defendant and his wife agreed to sell the property to the plaintiff and pursuant to the agreement it was agreed that the plaintiff shall take over the liability under Ex.A-1 and discharge the same and pay a further sum of Rs. 2,200 towards the balance of sale consideration to the second defendant and his wife. It was further contended that the said amount of Rs. 2,200 was paid in two instalments and a sale deed (Ex.A-2) dated 14.9.1977 was executed. It was also pleaded by the plaintiff that he had undertaken to discharge the mortgage debt and as he was entitled to the benefits of Act 40 of 1979, after due deduction he was liable to pay only Rs. 810. A notice to the said effect was also issued to the first defendant who did not respond to the notice. Therefore, as required, he filed a petition under Section 83 of the Transfer of Property Act and he also made the due deposit in court. But as the first defendant did not respond and had refused to receive the amount, the petition filed by him was rejected and hence the suit.
4. The first defendant while disputing the plaint claims also contended that while it was true that he was in enjoyment in the capacity of a possessory mortgagee he would deny the sale in favour of the plaintiff. He would also deny that the plaintiff was entitled to the benefits of Act 40 of 1979, and claim that the second defendant had without his knowledge executed a sale deed in favour of one Selvaprakasam,(the third defendant) which resulted in misunderstandings between himself and the second defendant, that he had also made certain improvements in the property and that the second defendant had also executed a sale deed in favour of the plaintiff and that there was a Panchayat in which the second defendant had agreed to settle the claim of Rs. 2,000 by the first defendant towards the improvement of the lands. The first defendant also contended that the plaintiff was aware of all such facts and there was also a panchayat. He further pleaded that he is prepared to redeem the mortgage provided he was paid Rs. 2,000 being the amount allegedly spent by him towards improvement of the land and that he was also in possession of the property as a lessee having been holding the lands on lease even before the mortgage and that therefore he cannot be evicted from the suit property. He would also claim that his tenancy rights are duly recognised by entry in the tenancy records (Ex.B-3).
5. Both the second and third defendants remained absent and set exparte and the trial court found that the plaintiff's claims were amply established, that the claims of the first defendant that he was entitled to Rs. 2,000 towards improvement and that he was entitled to exercise his tenancy right were unsustainable and that the sale in favour of the plaintiff was valid and binding on the defendants. The learned trial Judge also found that the plaintiff was entitled to the benefits of Act 40 of 1979 and with the result, the suit was decreed. On appeal, the learned appellate Judge reversed the findings of the trial court, Hence the above second appeal.
6. A perusal of the judgment of the appellate court shows that the first defendant who was the appellant before the appellate court, appears to have restricted his case only with reference to his claim of protection of his possession of the property in the capacity as a tenant. The other issues regarding the validity of the sale in favour of the plaintiff etc. do not appear to have been seriously raised. The verdict of the learned appellate Judge is restricted mainly only to the issue of tenancy rights as claimed by the respondents herein. The learned appellate Judge appears to have been mainly influenced by Ex.B-3 being the orders issued by the Tahsildar in favour of the first respondent recognising him as a cultivating tenant. Before me also the learned Counsel for the respondents did not seriously raise any contention regarding the validity of the sale in favour of the plaintiff and his submissions were mainly to the effect that, (a) the alleged tenancy right in favour of the first defendant would continue to subsist and that unless there was a specific surrender of the lease hold right there was no question of any merger and that, (b) at any rate having regard to the fact that the name of the first defendant had been entered in the record of tenancy, the civil court will have no jurisdiction either to ignore the entry or to hold that the first defendant was not a tenant.
7. As far as the question as to whether the alleged tenancy which is said to have existed between the first defendant and the second defendant could be said to have continued even after the execution of the possessory mortgage by the second defendant in favour of the first defendant, learned Counsel for the appellant submits that the recitals in Ex.A-1 would establish that a new relationship of mortgagor and mortgagee had been brought into existence between the first defendant and the second defendant. On a perusal of the following recitals in Ex.A-1, I am inclined to agree with the learned Counsel for the appellant:
8. It is seen that the lower appellate court has not correctly appreciated the legal effect of the claim of tenancy right by the first defendant even after the execution of the agreement. While considering as to whether after execution of Ex.A-1, the relationship of landlord and tenant continued, it is true that the first defendant was a tenant under the second defendant prior to the execution of the said document. But the recitals in Ex.A-1 clearly establish that a new relationship of mortgagor and mortgagee had been brought into existence. It is also clear that there was nothing in the document to suggest the continuance of the relationship of landlord and tenant.
9. The recitals also clearly visualise that the first defendant shall surrender possession immediately on the repayment of the amount due under the mortgage. Therefore, it is futile to contend that the relationship of landlord and tenant was to continue even after the execution of Ex.A-1. In this context, learned Counsel for the appellant rightly relies on the decision of the Supreme Court reported in Gambangi A. Naidu v. Behara V. Patro . while dealing with the question as to whether there could be a merger of the right of a mortgagee and the tenant, the Supreme Court has observed as follows:
In our view 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 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 light of the surrounding circumstances of the case. It may be stated that in both the decisions of the Andhra Pradesh High Court on which reliance was placed by the respective counsel of the parties in support of his own contention the question was ultimately decided on proper construction of the terms and conditions of the mortgage transactions; in the earlier decision the court took the view that there was nothing in the mortgage deed to suggest that there was an implied surrender of the lease's rights while in the later case the court held that the terms of the mortgage deed showed that the lessee had impliedly surrendered his rights. In other words, it all depends upon whether by execution 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. As stated earlier, the intention of the parties in the present case is very clear namely, that the possession of the property was to be surrendered to the mortgagor on the repayment of the loan. Therefore this is a case which not merely raises a presumption of implied surrender of lease-hold right, but the specific recitals requiring surrender of possession also clearly envisages positive cessation of the relationship of landlord and tenant.
11. Reference is also made to another judgment of the Supreme Court reported in Sha Mathuradas v. Nagappa . In that case the terms of the deed made it clear that the mortgagee had undertaken to deliver possession of the property to the mortgagor on the expiry of the period of 10 years. In the present case also, as could be seen from the recitals extracted above, the mortgagee had undertaken to surrender the property to the mortgagor if the loan amount was paid within a period of five years.
12. Reference is also made to a judgment of a learned single judge of this Court reported in Meenakshi Amma v. Narayani . That was a case where a lessee accepted a possessory mortgage of his leasehold land from the lessor, and it was held that there was an implied surrender of lease with the execution and acceptance of the possessory mortgage and that the lessee's leasehold interest got merged with the larger and superior interest of the mortgage right.
13. The effect of the decisions of the Supreme Court referred to above, is that the actual agreement between the parties and the recitals in the document have to be taken into account before concluding as to whether the parties had intended relinquishment of the tenancy right. In the present case, even though tenancy is not specifically referred to in Ex. A-1, the very fact that the mortgagee had agreed to surrender possession of the land to the mortgagor, would necessarily lead to a presumption of implied surrender of leasehold right.
14. Per contra, Mr. S. Parthasarathy, learned Counsel for the respondents contends that unless there is a specific surrender of lease, there is no question of any merger or implied surrender. Learned Counsel relies on the judgment of the Supreme Court reported in Gopalan Krishnankutty v. Kunjamma Pillai Sarojini Amma . In that case it was held where usufructuary mortgage of the leased premises was created by the lessor in favour of lessee, the question whether there was a surrender of the lease by the lessee at the time of execution of the mortgage, was a question of fact to be answered in the evidence. Where there was nothing in the document to prove either expressed or implied surrender, the mortgagor would not be entitled to recovery possession of the leased premises. In the present case, reference has already been made to the actual terms of the lease and hence the said decision cannot help the respondents.
15. Reliance was also placed on another judgment reported in Parmar Kanaksinh Bhagwansinh v. Makwana Shanabhai Bhikhabhai . Learned Counsel seeks to rely on the observations to the effect that if a lessee of a property takes a mortgage of the same property from the landlord, it would be unreasonable to attribute to a tenant, the intention to surrender the tenancy and to invoke the sophisticated doctrine of implied surrender. The said observation came to be made in the context of the facts of that particular case. In the same judgment reference is also made to the earlier judgment of the Supreme Court referred to above and reported in Gambangi A. Naidu v. Behara V. Patro and Sha Mathuradas v. Nagappa . These judgments were distinguished on the facts of the case and it was held that in the case on hand , there was no surrender of possession of the suit properties by the tenant before coming into existence of the mortgage and there was no redelivery of possession given pursuant to the mortgage to the tenant. In the present second appeal, the recitals in Ex.A-1 are sufficient to lead to the conclusion that there was surrender of possession of the property to the mortgagor and a re-delivery of possession to the mortgagee. The expression would establish that there was not only surrender of possession to the mortgagor prior to the execution of Ex.A-1, but also re-delivery to the mortgagee. Further, as stated earlier, there is also a specific undertaking to deliver possession of the property on redemption. Therefore, the facts and circumstances of the present case clearly establish the requisites of a valid merger and specific surrender of the lease hold rights. Reliance was also placed on the judgment of the Delhi High Court reported in Lala v. Bhagwan Dass . That judgment also does not help the respondents in any manner and it is made clear in the said judgment that the entire issue would depend upon the facts and circumstances of each case and intention of the parties at the time of execution of the mortgage.
16. The facts of the present case as analysed earlier not only specifically point out a specific surrender of the lease hold right, but also spell out the collusive conduct on the part of the defendants to deprive the plaintiff of his lawful rights. This aspect has been discussed in detail in the judgments of the trial court. The entire episode was found to be the result of the collusion between the first defendant and the second defendant. The second defendant who chose to remain ex parts without even filing a written statement had however, examined himself as D. W.2 supporting the case of the first defendant. The conduct of the second defendant in having received adequate consideration for the sale made in favour of the plaintiff and at the same time to give evidence against him to deprive the plaintiff all the fruits of his investment, does not inspire confidence. Further, even according to the first defendant, the second defendant had executed another sale deed in favour of the third defendant who also chose to remain ex parte. These facts do not speak well about the conduct of the second defendant and he is exposed to be an unreliable person. The fact that both the first defendant and the second defendant were colluding with each other is clearly established as rightly pointed out by the trial court. The pleadings put forth by the first defendant are also not satisfactory and in fact they are contradictory. It is true that the defendants can put forward alternate plea. But any such plea should be sufficient to inspire confidence in the mind of the court to arrive at a proper decision as regards the real intention between the parties and the circumstances under which Ex.A.1 was executed. The first defendant had in fact expressed that he was prepared to agree for redemption of mortgage if he was paid Rs. 2,000 which was said to have been incurred by him towards improvement of the property. In fact he has also pleaded that there was a panchayat on the said issue and that the plaintiff was aware of the same. Further, the first defendant would also plead that he was not aware of the sale executed in favour of the plaintiff by the second defendant. But a perusal of the oral evidence shows that he has admitted that he was aware of the sale in favour of the plaintiff in 1977. He would also further plead that he was entitled to remain in possession of the property in the capacity of a tenant under the second defendant. Therefore, the said contradictory pleadings and the oral evidence and the conduct of the first defendant would amply establish that he was not speaking the truth and that he along with the second defendant had deliberately colluded together to deprive the rights of the plaintiff. It is also noteworthy that no reply was sent to the notice issued by the plaintiff and there was also no response to the petition filed by the plaintiff under Section 83 of the Transfer of Property Act. All these acts of commission and omission on the part of the defendants clearly establish absolute lack of bona fides on their part.
17. Mr. Parthasarahty, learned Counsel for the respondents would also submit that an entry having been made in the record of tenancy, it was not open to the parties to contend otherwise and that the civil court had no jurisdiction to hold otherwise. He relies on the judgment of a Full Bench of this Court reported in Periathambi Goundan v. District Revenue Officer , and that of a judgment of a Division Bench of this Court reported in S. Balasubramaniam v. Shamsu Thalreez , while the Full Bench held that the jurisdiction of the civil court was expressly excluded to determine whether a person was cultivating tenant or not, the Division Bench held that on the tenant getting himself registered as a cultivating tenant, the civil court will have no jurisdiction to deal with the same matter in a subsequent suit.
18. Per contra, Mr. V. Raghavachari refers to the judgment of Ratnam, J. as he then was, reported in M. Manickam Asari v. Meenakshi Ammal (1988) 1 L.W. 263. In that case usufructuary mortgage was executed over the property upon the expiry of the lease period. The question was whether the relationship of landlord and tenant was preserved after the execution of the mortgage. On a construction of the reccitals in the deed, it was decided that the lease hold rights were not preserved and that therefore the claim for protection under the City Tenants Protection Act could not be sustained.
19. Reference was also made to a judgment of Srinivasan, J. as he then was, reported in (Bhargavakula Nainargal Sangam v. Chakravarthi (1992) 1 L. W. 254. That was a case in which the plaintiff's claim of ownership was denied by the tenant and that even the denial of the title in the course of proceeding for eviction, would be a ground for eviction. Therefore, according to Mr. V. Raghavachari the conduct of the first defendant amounted to denial of title by the tenant and therefore the first defendant was disentitled from claiming protection under the Cultivating Tenants Protection Act.
20. In my view the said point taken by the learned Counsel for the respondents and the defence taken by the learned Counsel for the appellant, are not germane to the points involved in a present suit under appeal. Firstly, this is not a suit where-under the rights of parties as between the landlord and tenant are sought to be agitated. Secondly in a suit for redemption of mortgage by the subsequent purchaser on the one side and the possessory mortgagee and the original landowner on the other side, the issue of rights of the possessory mortgagee is outside the scope of the provisions of the Tamil Nadu Cultivating Tenants Protection Act. The authorities under the Act have no jurisdiction to deal with the said issue and it is the civil court which is the competent forum. Thirdly the issue as to whether there has been a merger of the rights and the liability of the mortgagee with the tenants' rights is again outside the scope of the Cultivating Tenants Protection Act and the Civil court is the only competent forum. Last but not the least the tenancy having come into existence in 1974 on the basis of which the tenant claims to have sought for his name to be entered in the record of tenancy, cannot have any relevance to decide the rights of the parties which had arisen subsequently as a result of the possessory mortgage executed in favour of the first defendant on 12.10.1975 and the sale in favour of the plaintiff on 14.9.1977. It is futile to contend that any subsequent events should be ignored. Nor is it possible to hold that the statutory presumption arising in favour of the entry in the Record of Tenancy could subsist eternally, notwithstanding the subsequent events and conduct of the parties. Therefore, on this issue also I am unable to sustain the objection raised by the learned Counsel for the respondents.
21. The learned appellate Judge has not taken into account any of the aforementioned factual or legal issues while reversing the well considered judgment of the trial court. The learned appellate Judge had also overlooked that even assuming that the first defendant was entitled to continue as a tenant, the plaintiff was at least entitled to a decree for redemption subject to the tenancy. Even the said right was not granted by the appellate court.
22. Therefore, I find that the judgment of the lower appellate court cannot be sustained and the second appeal is allowed and the suit is decreed as prayed for. No costs.