Full Judgment Text
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CASE NO.:
Appeal (civil) 1957 of 2008
PETITIONER:
Chandrakant Shankarrao Machale
RESPONDENT:
Parubai Bhairu Mohite
DATE OF JUDGMENT: 13/03/2008
BENCH:
S.B. Sinha & V.S. Sirpurkar
JUDGMENT:
J U D G M E N T
CIVIL APPEAL NO. 1957 OF 2008
(Arising out of SLP (C) No.2491 of 2007)
S.B. Sinha, J.
1. Leave granted.
2. Appellant was the owner of a house property situated in Taluka
Gandhinglaj, District Kolhapur. On 28.2.1983, Bhairu Rama Mohite and
Krishna Rama Mohite (the predecessor of the first respondent herein)
executed a registered deed of mortgage in favour of the appellant. The
possession of the said property was delivered in favour of the mortgagee.
The period prescribed in the said Deed of Mortgage was seven years. The
amount of mortgage was Rs.20,000/-. It was agreed that upon expiry of the
said period, the property would revert back to the mortgagor.
3. Allegedly, an unregistered agreement was entered into by and
between the parties herein, stating :
"This agreement in writing executed by us in
respect of land C.S. No.1943 admeasuring 252 Sq.
meters situated Mouje Gadhinglj which includes
house and open space belongs to us absolutely.
Earlier the house admeasuring East West 39 feet
i.e. 11 meters 89 centimeters and South-North 49
feet i.e. 14 meters 94 centimeters, totally
adm.177.63 59 meters house as also the open space
in front of the house East West 21.89 meters and
South-North 6.10 meters totally adm.72.52 sq.
meters from out of which house and the open
space on the Western side admeasuring 36.26
meters was given to you by way of mortgage by
conditional sale for Rs.20,000/- under registered
document No.229 dated 1.3.1983 and the same is
recorded in your name."
Some other terms and conditions were also laid down therein.
4. Respondents, being the predecessors in interest of the mortgagor filed
a suit for redemption of the mortgage. Krishna died during the pendency of
the suit. As the period specified in the said Deed of Mortgage was to expire
on 28.2.1990, the plaintiff served with a notice dated 17.2.1990 for
redeeming the suit property. As the same was not acted upon, a suit for
redemption of mortgage was filed.
5. Contention of the appellant, inter alia, was that he has been put in
possession of the said property as a tenant. It was urged that by reason of
the said mortgage, his right to occupy the premises as a tenant was not
extinguished.
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In view of the aforementioned rival contentions of the parties, the
learned Trial Judge framed the following issues :
"1. Do the plaintiff prove that Bhairu Rama
Mohite and the defendant No.10 Mortgaged
the suit property to the defendant by
conditional sale on 1.3.1983?
2. Does the defendant prove that he is in
possession of the suit property as a monthly
tenant?
3. Are the plaintiffs entitled to redeem the
mortgage by obtaining reconveyance of the
suit property from the defendant?
4. Are they entitled to possession of the suit
property?
5. What order and decree?"
6. On issue No.1, learned Trial Court opined :
"Now we have to see what was intended by the
parties to these three documents. It may be noted
that parties to these documents are the same. The
defendant claims tenancy rights by virtue of
agreement dated 24.2.1983 (Exh.52). On the other
hand according to the plaintiff the property
comprising this agreement is not the subject matter
of the mortgage the controversy has to be solved
by going through the contents of the document.
From the recitals it appears that the Municipal
House No.1440 was agreed to be let for the period
of 7 years on lease by accepting Rs.20,000/-. It
also appears from the recitals that the plaintiff
received Rs.1,000/- on the day of agreement. I do
not come across recitals of the defendant having
been put in possession of the property. On the
contrary, the recitals do show that the agreement
was executor (sic) in nature and the intended
transaction was to be completed within15 days.
Therefore, I do not subscribe to the submission of
the defendant that the lease was created by Exh.52
on 24.2.1983. It is true that if we peruse the
description of the property given in the mortgage
deed Exh.62, it does not correspond with the
description given in Exh.52. However, the
plaintiff has failed to prove that on the day of
execution of the mortgage deed there were two
Municipal House numbers viz., 1440 and 1440-A.
However, since I have already observed document
Exh.52 to be an agreement of the lease to be
created within 15 days, I do not wish to rely
strongly on that document since the fate of the suit
is rest on subsequent document Exh.53 and
Exh.62."
The suit, however, was dismissed opining that the plaintiff has leased
the suit property in favour of the defendant.
7. An appeal preferred thereagainst by the plaintiff was allowed by the
Court of Appeal, holding :
"After going through terms and conditions of deed
of lease styled as Kararpatra (Exh.53) it reveals
that it is not fresh contract of lease but, under that
document, the right created by plaintiffs, in favour
of the defendant in the immovable property for
Rs.20,000/- as a mortgagee, has been extinguished.
By the terms and conditions of this agreement,
parties, intended to change the right created in
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favour of defendant, under registered deed of
mortgage, which was admittedly executed for the
mortgage amount of Rs.20,000/-. Therefore, U/s.
17(1)(b) of the Indian Registration Act, this second
agreement dated 1.3.1983 (Exh.53) requires
registration. Admittedly, this document is not
registered document. Therefore, under this second
agreement (Exh.53) the relations created in
between the plaintiffs and defendant as mortgagor
and mortgagee, cannot be extinguished. I hold
that, the Kararpatra (Exh.53) cannot extinguish the
right created in favour of the defendant as
mortgagee in the suit property. So also when
under deed of mortgaged deed (Exh.62) in lieu of
amount of Rs.20,000/- interest has been created in
favour of the defendant, after execution of this
deed of mortgage, plaintiffs had no right to lease
out the same property to the defendant by
canceling this registered deed of mortgage under
unregistered agreement of lease (Exh.53) I hold
that, the learned trial court, totally ignored the
legal position that, by unregistered agreement
(Exh.53) the contract of mortgage (Exh.62) cannot
be extinguished or cancelled. Therefore, the
agreement (Exh.53) is of no help to the defendant
to prove that under that document he acquired
interest in the suit property as a tenant of the
plaintiff."
8. As regards the contention that the appellant became a tenant under the
plaintiffs, the Court of First Appeal held that the relationship between the
parties were that of a mortgagor and mortgagee and the defendant-appellant
had failed to prove that he was in possession of the suit property as a tenant.
The appeal was, thus, allowed and the suit was decreed.
9. A second appeal preferred by the appellant herein has been dismissed
by the High Court opining that no substantial question of law arose for its
consideration.
10. Mr. S.N. Bhat, learned counsel appearing on behalf of the appellant,
would, in support of the appeal, contend that the transactions of mortgage
and the lease were separate and independent transactions.
The Court of First Appeal as also the High Court, thus, committed a
serious error in passing the impugned judgment. The learned counsel
furthermore urged that although a decree for redemption could be granted
but in execution of the said decree, only symbolical possession could be
directed to be issued.
11. The Deed of Mortgage dated 28.2.1983 was a registered document.
The terms of a registered document could be varied or altered only by
another registered document. A finding of fact has been arrived at that the
appellant could not prove his possession as a tenant. We have noticed
hereinbefore that the appellant was put in possession as a mortgagee. It was,
therefore, in our opinion, impermissible in law to change his status from a
mortgagee to that of a lessee by reason of an unregistered deed of lease
(even if we assume that the same had been executed).
The learned Court of Appeal may not be entirely correct in taking
recourse to Section 92 of the Indian Contract Act or holding that the deed of
lease required registration even for the purpose of month to month tenancy,
but, as indicated hereinbefore, we have considered the question from a
different angle.
12. Furthermore, the only question of law which was pressed before the
High Court was :
"The lower appellate court ought to have held that
the respondents and appellant executed an
agreement dated 28.2.1983 i.e. Exh.62 and
immediately on the next day, i.e., on 1.3.1983
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executed the agreement for tenancy which is a
subsequent agreement. Hence it ought to have
been held that the parties have by their conduct
agreed to treat the transaction as a lease and hence
suit filed by respondents for redemption of
mortgage is not maintainable in law and ought to
have been dismissed with costs."
No substantial question of law, thus, had been raised.
13. The deed of mortgage was a registered one. It fulfilled the conditions
of a valid mortgage. Its terms could not have been varied or altered by
reason of an unregistered document so as to change the status of the parties
from mortgagee to a lessee. [See S. Saktivel (dead) by L.Rs. v. M.
Venugopal Pillai & Ors. [AIR 2000 SC 2633 para 67]
14. Our attention has been drawn to a decision of this Court in Gopalan
Krishnakutty v.Kunjamma Pillai Sarojini Amma & Ors. [(1996) 3 SCC 424]
wherein upon taking into consideration some of its earlier decisions, this
Court held :
"The High Court, in the present case, proceeded on
the erroneous assumption in law that surrender of
the lease by the lessee (defendant) must be implied
from the fact of execution of the usufrucuary
mortgage in his favour by the lessor (plaintiff). As
indicated, this is an erroneous assumption in law.
This question has to be decided on the contents of
the deed since there is no other evidence of
surrender of the lease by the defendant on
execution of the mortgage. We find nothing in the
mortgage deed (Annexure A-1) dated 18.7.1974
read with the release deed of the same date to
prove either an express or an implied surrender of
the lease by the defendant in favour of the plaintiff
on execution of the mortgage deed. Since there is
no automatic merger of the interest of a lessee with
that of a mortgagee when the same person is the
lessee as well as the mortgagee, in absence of
proof of surrender of the lease by the defendant, on
redemption of the mortgage, the plaintiff is not
entitled automatically to recover possession of the
leased premises. The defendant’s right to continue
in possession as a lessee, therefore, continues to
subsist."
15. We are concerned here with a converse case. The case as to whether
the interest of a lessee merged with the interest of a mortgagee would
depend upon facts and circumstances of each case, as indicated in Gopalan
Krishna Murti. There cannot be any hard and fast rule for arriving at only
one decision as the decision thereupon will depend upon the terms of the
document.
16. For the aforementioned reasons, there is no merit in the appeal. The
same is dismissed accordingly. In the facts of the case, there shall, however,
be no order as to costs.