( 1 ) sa417.89 IN THE HIGH COURT OF JUDICATURE AT BOMBAY BENCH AT AURANGABAD SECOND APPEAL NO. 417 OF 1989 Asagarali Abdul Hussain Bohari .. Appellant died through his L.Rs. 1-a) Zainabai Asgarali, Aged 75 years, Occ. Household, R/o. At 3180, 3181, 3182, Old Kapad Bazar, Ahmednagar. 1-b) Mr. Moizbhai Asgarali, Aged 52 years, Occ. Business, Residing at 3180, 3181, 3182, Old Kapad Bazar, Ahmednagar. Versus 1. Subhash Zumbarlal Mutha .. Respondents Occ. Business, residing at 2805, Ganj Bazar, Ahmednagar. 2. Ajagarlli Ibrahim Bohari Age 49 years, residing at Bhusaval. 3. Kamroddin Ibrahim Bohari, Age. 54, Occ. Business, residing at Bombay. 4. Batulabai Fajalbhai Bohari residing at Adkini Bohari Darga, Barhanpur. 5. Sagirabai Yusufbhai Bohari Household, Saraf Bazar, Bhusawal. ( 2 ) sa417.89 Mr. V.S. Bedre, Advocate for the appellant. Mr. A.S. Bajaj, Advocate for respondent No.1 to 5. CORAM : A.V. NIRGUDE, J. RESERVED ON : 13.07.2011 DELIVERED ON : 09.08.2011 J U D G M E N T :- 1. This appeal arose from Regular Civil Suit No. 272 of 1978. 2. The facts leading to this appeal in short can be stated as under :- 3. The plaintiff purchased the suit property which is a building at Ahmednagar. He purchased it from children of one Ibrahim. Children of Ibrahim had mortgaged four rooms and privies etc. situated on first floor (floor above the ground floor) of this building to the defendant/appellant on 12.06.1965, by a registered deed. The contents of the mortgage deed suggest that out of these four rooms, defendant No.1 was already occupying two rooms and the other two rooms were in possession of two different tenants of children of Ibrahim. The other term of this transaction was that after ten years, the children of Ibrahim were entitled to redeem the mortgage by repaying the amount of Rs. 10,000/-. The property as said above was sold to the plaintiff by the children of Ibrahim. The plaintiff sought redemption of mortgage but the same was denied. So, the suit was filed for redemption of mortgage and possession. 4. Defendant No.1 took up a defence that there was no mortgage ( 3 ) sa417.89 of the suit property in his favour but it was a outright sale. Rather belatedly, defendant No.1 tried to take up a defence that in case the Court came to the conclusion that it was a transaction of mortgage at the redemption of the same, his earlier status as tenant occupying the two rooms on the first floor of the building should be revived and he cannot be dispossessed without due process. 5. Both the Courts below rejected his defence and held that the deed was of mortgage and that his right as tenant had come to an end on the day when the mortgage deed was executed. 6. The Second Appeal was admitted on the following substantial questions of law. (1) Were the lower Courts wrong in rejecting the appellant/defendant’s amendment application Ex.21? (2) Does the tenancy in favour of the appellant not merge with the mortgage? 7. The question No.1 mentioned above is in fact not a serious contention between the parties. I have indicated above that though the defendant No.1 took up a defence of tenancy rather belatedly, the same was considered on merits by the Courts below. However, while the case was before the Trial Court, defendant No.1’s application seeking amendment to ask such claim of tenancy was rejected. Even though, the application was rejected virtually, defendant No.1 was allowed to take up that defence based on tenancy and the findings were recorded by the Courts below. Question No.2 referred to above is based on the said ( 4 ) sa417.89 defence. 8. The learned advocate appearing for the appellant/ defendant No.1 tried to raise question of fact as to whether the deed of mortgage was an out right sale. Both the Courts below had dealt with this question of fact and recorded findings that the deed was of mortgage only and not a sale. In view of the concurrent finding of fact, I would not allow this question to be raised in this appeal. The only that requires consideration thus is – Whether the tenancy of defendant No.1 merged with the mortgage?. 9. Mr. Bedre, learned advocate appearing for the appellant/defendant No.1 contended that such question required to be decided on interpreting the terms of the agreement. The agreement, if translated in English roughly would read as under :- “Limited period sale-deed” We (children of Ibrahim) are selling the demised portion on the first floor of the building for Rs. 1200/-. We have received consideration of Rs. 1200/- today. We have put you in possession of demised premises. Since you are staying in two rooms of the demised premises, there was no question of giving you possession of the said rooms. Other two rooms are in occupation of two tenants namely, Manubai and Munawar. They would execute rent notes in your favour. In case, we repay the sum of Rs. 1200/- to you within ten years from today, you should sell demised property back to us at our costs. You should thus hold demised premises as full owner and you should pay municipal taxes relating to it from today. “ 10. Mr. Bedre placed reliance on judgment of the Supreme Court in ( 5 ) sa417.89 the case of Gopalan Krishnankutty Vs. Kunjamma Pillai Sarojini Amma and Others, AIR 1996 S.C. 1659 (1) and asserted that there shall be merger of lease or mortgage when two transactions are in respect of the same property and that such merger should not be readily inferred. The Supreme Court in that judgment held that in case of usufructuary mortgage by the landlord in favour of tenant, in case there is no express or implied surrender of lease by the tenant mortgagee on redemption of the mortgage, the mortgagor landlord will not be entitled to recover possession of the premises automatically and the mortgagee/tenant’s right to tenant subsists. The Supreme Court, however, clarified that such a question has to be decided on the contents of the deed as well as the evidence given by the parties. 11. In this case we have to examine the contents of the deed to decide as to whether there was surrender of lease by defendant No. 1/appellant. Mr. Bedre asserted that in this case the plaint is silent in respect of alleged surrender of tenancy right in favour of landlord/mortgagor. He further pointed out that when the plaintiff purchased the suit property from children of Ibrahim, there is mention that the property was occupied by the tenants and purchaser would have right to recover rent etc. Mr. Bedre then submitted that since the surrender of tenancy cannot be inferred readily, it is necessary for the Court to take into account the contents of deed and to infer as to whether there was surrender of tenancy. 12. I have already narrated above the gist of the mortgage deed. Mr. Bedre asserted that in the mortgage deed, there is no specific covenant giving up the tenancy right. He then placed reliance on ( 6 ) sa417.89 judgment of Supreme Court in the case of Narayan Vishnu Hendre & Ors. Vs. Baburao Savalaram Kothawale (1995) 6 S.C.C. 608. The facts of that case are quite similar to the present case. In that case, Vishnu – tenant became mortgagee in respect of the premises which he had in his possession as tenant. The question that arose between the parties then was - Whether Vishnu’s right as tenant would revive on the event of redemption of mortgage? The Supreme Court accepted the case of Vishnu when he said that he would not surrender easily his right of lessee because he was aware that during the stipulated time the landlord/the mortgagor had a right to redeem. Para No. 18 of this judgment would enlighten us in this regard. On the other hand, the learned advocate appearing for the plaintiff asserted that the facts of the present case are different and would permit the Court to infer that there was not only an implied surrender but an active one also. Unlike the case of Vishnu, the defendant No.1 in this case since beginning took up stand that he became owner of the property since beginning because according to him the deed was of outright sale and not of mortgage by conditional sale. The learned advocate asserted that in view of this peculiar defence, assuming the contents of the deed, would not show express surrender of tenancy, the defence itself would amount to surrender of tenancy. I am not inclined to accept this contention. The plea of tenancy is generally taken as an alternate plea and only to seek limited protection for a mortgaging tenant. The landlord/mortgagor in such situation would be driven to another litigation for eviction of such tenant. I think the reasoning mentioned in para 18 of the above mentioned judgment would squarely apply to the facts in this case also. Para 18 of the said judgment is reproduced below :- ( 7 ) sa417.89 “18. It was submitted by Mr. Ramachandran, learned Counsel that by stating that the mortgagor had "delivered possession thereof to you (the purchaser)" clearly showed that there was an implied surrender of the tenancy. We find it difficult to accept this submission. The mortgage deed makes no mention with regard to the delivery of the possession of the mortgagor in the event of his redeeming the mortgage. Secondly, the principal amount which was taken by the mortgagor was Rs. 2,000/- and the deed did not provide for payment of interest and the property could be and was redeemed on the re-payment of the principal amount of Rs. 2,000/- itself. With the execution of the mortgage deed, no rent was paid for the front portion of the house and the mortgagee did not charge any interest on the mortgaged amount of Rs. 2.000/-. Redemption of the mortgage for paying at the same amount of Rs. 2,000/- showed that the parties had agreed that during the subsistence of the mortgage, neither any rent would be payable nor interest would be charged. Thirdly, it is difficult to imagine that the tenant who had a valid tenancy since the year 1942, would agree to surrender his tenancy right on the mortgage deed having executed while being conscious of the fact that the mortgagor had a right to redeem the mortgage. Lease of a property is a very valuable right and it's implied surrender would not be readily inferred. Had the parties wanted to terminate their earlier relationship of landlord and tenant on the execution of a mortgage, then one would expect a clear statement or an indication to that effect in the document itself. Neither the conduct of the parties nor the said document in the present case indicates that Vishnu intended to surrender his tenancy rights. This being so, the redemption of the mortgage would revive the tenancy of the appellants-defendants.” 13. The next question is to what extent defendant No.1 would get protection. The mortgage deed clearly mentioned that he was occupying only two rooms out of the suit property as tenant. He said that he eventually took possession of remaining two rooms also from the earlier ( 8 ) sa417.89 tenants. He acted as if was landlord owner of those room qua the tenants and would occupy them not as tenant qua the mortgagor. So he cannot claim tenancy in respect of those two rooms qua the mortgagor landlord. So, the appeal would partly succeed. The plaintiff is entitled to redemption of the entire suit premises, but shall be entitled to possession of the rooms which were not in possession of defendant No.1 as tenant. Decree be drawn accordingly. [A.V. NIRGUDE, J.] snk/2011/JUL11/sa417.89/ok