RSA No.315 of 1983(O&M) 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH RSA No.315 of 1983(O&M) Date of decision: 20. 9.2010 Babu Ram ......Appellant(s) Versus Partap Chand and another ......Respondent(s) CORAM:- HON'BLE MR.JUSTICE RAKESH KUMAR GARG * * * Present: Mr. O.P. Hoshiarpuri, Advocate for the appellant. Mr. Kabir Sarin, Advocate for the respondent. Rakesh Kumar Garg, J. This is plaintiff’s second appeal challenging the judgment and decree of the Lower Appellate Court, whereby while accepting the appeal filed by the defendant-respondents, the judgment and decree of the trial Court was modified holding that in execution of the redemption decree, the plaintiff-appellant will have only symbolic possession of the shop in dispute and not an actual physical possession thereof as the defendant-respondent Hari Chand was in possession of the shop as tenant before the creation of the mortgage. Brief facts as pleaded in the plaint are that the plaintiff- appellant-Babu Ram, who is the owner of the shop in dispute, mortgaged the same for a sum of Rs.200/- with possession in favour of the defendant- respondents by means of registered mortgage deed dated 19.9.1972. He received Rs.200/- from the defendants and delivered them possession of the shop. It was stipulated that the mortgage would stand redeemed as soon as he paid back Rs.200/- to the defendants and the defendants shall deliver back the possession of the shop to him. It was a usufructuary RSA No.315 of 1983(O&M) 2 mortgage with the condition that the defendants would continue in possession till redemption by the plaintiff. The plaintiff filed the suit for possession by way of redemption of the shop on payment of Rs.200/- as mortgage amount. It was further pleaded that Hari Chand-defendant was estopped by his act and conduct from taking up the plea that he was in possession of the shop as tenant under the plaintiff at the time of the execution of the mortgage deed. The suit was contested by Hari Chand-defendant No.2. It was urged that prior to the execution of the mortgage deed, he was in possession of the shop as a tenant at a rental of Rs.40/- per mensem and he has no objection to the redemption of mortgage being allowed in favour of the plaintiff but on redemption the plaintiff was not entitled to obtain actual physical possession and was entitled only to the symbolic possession. The defendant was entitled to continue in possession of the shop in dispute as tenant even after redemption. His status as a tenant did not come to an end with the execution of the mortgage with possession by the plaintiff in his favour. It was pleaded on behalf of Partap Chand- defendant No.1 that prior to execution of this mortgage with possession, Hari Chand was in possession of the shop as tenant and his status as tenant did not come to an end with the execution of the mortgage and Hari Chand was entitled to continue in possession of the shop as tenant even after redemption and only a symbolic possession can be claimed by the plaintiff. On the aforesaid pleadings of the parties, the following issues were framed: “1. Whether defendant No.2 was in possession of the premises in dispute as tenant at a monthly rent of Rs.40/- before the execution of the mortgage deed? If so RSA No.315 of 1983(O&M) 3 its effect? OPD-2 2. Whether the plaintiff is entitled to get actual possession of the suit property on redemption of the mortgage? OPP 2-A. Whether defendant No.2 is estopped by his act and conduct from taking plea of tenancy? OPD. 3. Relief.” While decreeing the suit, the trial Court under issue No.1 held that at the time of mortgage, defendant No.2 was not in possession of the shop in dispute as a tenant. While recording the aforesaid finding, the trial Court noticed that there was no evidence on the file to show that defendant No.2 ever paid any rent from October 1970 upto 19.9.1972 and that in the mortgage deed Ex.P1, which is a registered document, it is recited that the possession was given to the mortgagee at the time of mortgage. Since under issue No.1 it was held that defendant No.2 was not in possession of the property in dispute as a tenant at the time of mortgage, under issue No.2, it was held that the plaintiff was entitled to get actual possession of the property in dispute on redemption of mortgage. However, issue No.2-A was decided against the plaintiff and in view of the aforesaid findings on the various issues, the suit of the plaintiff was decreed. Aggrieved from the aforesaid judgment and decree, the defendant-respondents filed an appeal before the Lower Appellate Court, raising the grievance that on redemption, the plaintiff-appellant was not entitled to get actual physical possession and he should have been allowed only a decree for symbolic possession of the shop in dispute. The aforesaid appeal was accepted and the trial Court decree was modified to the extent of holding that on redemption, the plaintiff-appellant shall have only symbolic possession of the shop in dispute and not the actual physical RSA No.315 of 1983(O&M) 4 possession thereof. While accepting the appeal, the Lower Appellate Court observed that there was no surrender of tenancy rights by Hari Chand- defendant No.2 in favour of the plaintiff-appellant before the execution of mortgage on 19.9.1972 in favour of the defendant-respondents. It was further held that Hari Chand was a tenant in possession of the shop in dispute and the same did not come to an end with the execution of the mortgage deed dated 19.9.1972. Feeling aggrieved from the aforesaid judgment and decree of the Lower Appellate Court, the plaintiff-appellant has approached this Court through the instant appeal. This appeal was admitted by this Court vide order dated 13.4.1983 but no substantial question of law as arising out of this appeal was framed. However before the actual hearing of this case, the appellant moved an application for granting permission to place on record the substantial questions of law arising out of this appeal. Vide order dated 23.3.2010, the aforesaid application was ordered to be heard along with the main appeal. In the aforesaid application, as per the submission made on behalf of the appellants, the following substantial questions of law have been raised: “1. Whether the appellant-mortgagor is entitled to actual possession of the shop on redemption of the mortgage when the mortgagee/respondent was put in possession of the premises at the time of execution of the mortgage deed Ex.P1, dated 19.9.1972? 2. Whether the recital in mortgage deed Ex.P1 that the possession has been given of the shop in dispute to the respondent today i.e. 19.9.1972 goes to show that the respondents were not tenant prior to the execution RSA No.315 of 1983(O&M) 5 of mortgage deed? 3. Whether the respondents have led any evidence to the effect that they were tenants in the shop in dispute prior to the mortgage Ex.P1.?” In support of his appeal, learned counsel for the appellant has vehemently argued that the findings recorded by the Lower Appellate Court on issues No.1 and 2 cannot be sustained and are liable to be set aside as it has been established on record from the recital in the mortgage deed Ex.P1 dated 19.9.1972 that the defendant-respondents were put into possession at the time of execution of the mortgage deed, wherein, it has been recorded that “the possession was delivered to the mortgagee today i.e 19.9.1972.” The burden of proving the fact that the Hari Chand mortgagee was in possession of the shop in dispute at the time of the execution of the mortgage as a tenant was upon the defendants and they have miserably failed to discharge the onus of proving the aforesaid fact. Learned counsel for the appellant has further elaborated his argument by stating that there is no evidence on the file showing that respondent No.2- Hari Chand ever paid any rent from October 1970 upto 19.9.1972 and had respondent No.2 remained in possession as a tenant, he must have paid the rent during that period and also must have been in possession of the receipts and in the absence of the aforesaid receipts, the only conclusion that can be drawn is that defendant No.2 was not in possession of the shop at the time of execution of the registered mortgage deed on 19.9.1972. Not only this, it was further argued by him that had defendant No.2 been in possession as a tenant when the mortgage was executed, the said fact could have been mentioned in the mortgage deed and there was no need to recite the fact that the possession was being handed over to the defendant today i.e. on 19.9.1972 and thus, there being absolutely no RSA No.315 of 1983(O&M) 6 evidence on record to controvert the recital in the mortgage deed Ex.P1 to the effect that possession was being handed over today i.e. 19.9.1972, learned counsel for the appellant has also pressed into service Section 92 of the CPC which expressly excludes the oral evidence to controvert the recital in a registered document. On the basis of the aforesaid submissions, it was argued on behalf of the appellant that from the aforesaid recital in the mortgage deed and in the absence of any evidence to controvert the aforesaid recital and any other evidence in favour of the respondent regarding continuation of their tenancy after October 1970, in the present case, the only inference which can be drawn is that prior to the mortgage deed on 19.9.1972, the defendant-respondent was not in possession of the property in dispute as a tenant and he was put into possession as a mortgagee only on 19.9.1972 on creation of the mortgage deed and therefore, the appellant was entitled to the relief claimed. On the basis of the aforesaid argument, learned counsel for the appellant submitted that the substantial questions of law as framed and placed on record by the appellant vide CM No.3707-C of 2010 arise in this appeal. On the other hand, learned counsel appearing on behalf of the respondents has supported the impugned judgment and decree by arguing that on redemption of the mortgage, automatic merger of the interest of lessee with that of mortgagee and surrender of the lease cannot be inferred so as to entitle the mortgagor/lessor to recover possession of the premises and in the absence of any such evidence, surrendering the tenancy rights before the execution of the mortgage deed, the redemption of the mortgage would revive the tenancy of the mortgagee/lessee.Mr. Kabir Sarin, learned counsel appearing on behalf of the respondents has vehemently argued that in the present case, the question has to be decided on the RSA No.315 of 1983(O&M) 7 interpretation of contents of the deed. According to him, there is no stipulation in the mortgage to prove either express or implied surrender of the lease by the respondent in favour of the plaintiff-appellant on execution of the mortgage deed and since there was no automatic merger of the interest of a lessee with that of a mortgagee in absence of proof of surrender of the lease by the defendant, on redemption of the mortgage, the plaintiff was not entitled automatically to recover possession of the leased premises and defendant had a right to continue in possession as a lessee which continues to subsist. Learned counsel has further relied upon the observations of the Hon'ble Supreme Court in the case of Narayan Vishnu Hendre and others v. Baburao savalaram Kothawale (1995)6 Supreme Court cases 608, to contend that where as per the mortgage deed, no interest was to be paid but unless possession of the property was agreed to remain with the mortgagee it has to be held that there was no surrender of tenancy rights. According to him, from the terms and conditions of the mortgage deed, no express or implied surrender of tenancy in favour of the appellant can be inferred and thus, the appeal was liable to be dismissed. In support of his case, learned counsel for the respondents has also relied upon judgments of the Hon'ble Supreme Court reported as Gopalan Krishnankutty v. Kunjamma Pillai Sarojini Amma and others (1996) 3 Supreme Court Cases 424, and Nirmal Chandra v. Vimal Chand (2001) 5 Supreme Court Cases 51, and has submitted that in view of the findings recorded, this appeal deserves to be dismissed. I have heard learned counsel for the parties and have perused the impugned judgment and decree and the record of the case. On the basis of the arguments addressed by the learned counsel for the parties, the only question which arises for determination RSA No.315 of 1983(O&M) 8 before this Court is:- “Whether in the present case on redemption of mortgage deed dated 19.9.1972 (Ex.P-1) the appellant was not entitled to actual possession of the property in dispute on the ground that defendant No.2 was a tenant in the disputed property prior to the execution of the mortgage deed in his favour and defendant No.2 never surrendered the tenancy rights and defendant No.2 is entitled to the revival of his tenancy rights on redemption ? There is no dispute with the proposition of law that on execution of the mortgage, automatic merger of the interest of lessee with that of mortgagee and surrender of the lease cannot be inferred so as to entitle the lessor/mortgagor to recover the possession of the premises on redemption of mortgage. The only effect of the mortgage would be that lessor's rights are kept in abeyance and the same would revive upon redemption of mortgage. However, the question whether there was surrender of the lease by the lessee at the time of execution of the mortgage in his favour by the lessor or mortgagor is a question of fact which is to be answered on the basis of evidence on record. The question of actual surrender of lease right depends upon the intention of the parties at the time of mortgage. On execution of mortgage, tenancy rights would terminate only if it is clear expressly or impliedly by conduct of other related circumstance that the parties had intended so, and It would be a question of fact depending upon the evidence. A perusal of the impugned judgment and decree would show that there is absolutely no evidence on record to prove that after October 1970, the defendant remained in possession as tenant and continued as such upto 19.9.1972 i.e. the date of execution of the mortgage deed in question. Burden of proving the aforesaid issue was upon the defendant- RSA No.315 of 1983(O&M) 9 respondent however, no evidence has been placed on record by them to prove the continuation of the tenancy after October, 1970 in their favour. The express stipulation in the mortgage deed shows that the defendant was put into possession on the date of execution of the mortgage deed. Moreover, there is no documentary evidence to controvert the recital Ex.P1 in the mortgage deed on the record in favour of the respondent. It has been clearly recited in the mortgage deed Ex.P-1 that the possession of the property in dispute had been handed over to the defendant- respondent on that day i.e. on 19.9.1972. Again, there is no evidence on record to controvert the aforesaid recital. It cannot be held that on redemption, the appellant was not entitled to actual physical possession of the property in dispute as the burden was on the respondents to discharge their onus to prove issue No.1 that defendant No.2 was in possession of the premises in dispute as tenant before the execution of the mortgage deed and the defendant-respondents have failed to prove the same. Thus, the substantial question of law as raised in this appeal is answered in favour of the appellant and against the defendant- respondent. Consequently, the appeal is allowed and the impugned judgment and decree of the Lower Appellate Court is set aside. No costs. September 20, 2010 (RAKESH KUMAR GARG) ps/rk JUDGE RSA No.315 of 1983(O&M) 10