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All India Film Corporation Ltd. & Ors vs Shri Raja Gyan Nath And Ors on 26 September, 1969

It is further observed that purchaser has dual character i.e. there was no redemption but the sale operated to extinguish the mortgage and transferred the right of mortgagor and mortgagee CS-281/2010 Page:-28/42 in favour of plaintiff being auction purchaser and the plaintiff being a auction purchaser acquired all right of the mortgagor and can ask for recovery of possession. It has been further observed that M/s Lakhi Ram Mahi Lal other defendant in other case was inducted on 02.09.70 and Samman Oil & General Mill was inducted on 20.03.70 and Indraprastha Finance Company other defendant in other case was inducted on 16.09.1970; whereas the sale proclamation of the property was ordered on 21.07.1970 and the date of auction was 25.09.70. The predecessor of defendant was inducted in the year 1940 and preliminary decree was passed on 25.01.1935 and final decree for sale was passed on 23.05.1940. The acts of the mortgagees in inducting tenants with unlimited terms and even after the passing of the final decree on 23.5.1940 and even long after the sale of the property were ordered had resulted in reduction of the value of the property at the time of the auction which reflects their malafide intentions of causing injury to the value of the property for their illegal gains. Especially when the decree for sale having passed on 23.5.1940, the Mortgagee's right to induct any tenant ceased. It is submitted that when the property was put to sale and was purchased by the plaintiff the mortgage was redeemed. Whether the mortgagor makes the payment or the property was put on sale for failure of the mortgagor to pay the amount, this cannot create any benefit to defendant because it is well settled law that after sale of the property the auction purchaser acquires all the right/interest of the mortgagor as well as of mortgagee as they existed on the date of mortgage. It was held in (1969 (3) SCC 79) titled as All India Films Corporations V. Raja Gian Nath "That the interests of the CS-281/2010 Page:-29/42 mortgagor and mortgagee united in the person of the purchaser and the mortgage ceased to subsist. In this view of the matter the purchaser, speaking in his character as a mortgagor, could claim that the mortgagee's action came to an end and there did not subsist any relationship between him and the tenants.
Supreme Court of India Cites 5 - Cited by 50 - Full Document

Mahabir Gope And Others vs Harbans Narain Singh And Others on 14 April, 1952

13. There is, however, a well established exception to this general rule. The general rule will not apply if a tenant, inducted by a mortgagee in possession in the process of CS-281/2010 Page:-21/42 prudent management, is given any protection or certain rights are conferred an him by a statute enacted in the meantime. Mortgagors rights to obtain actual possession of the mortgaged property on redemption would be affected to that extent. This exception, obviously, is the creation of the statute concerned and not the Transfer of Property Act. This principle was recognized by the Supreme Court in Mahabir Gopes case (AIR 1952 SC 205) (supra). It was held :
Supreme Court of India Cites 6 - Cited by 81 - N C Aiyar - Full Document
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