Case: Mathuralal Vs. Keshar Bai And Another

on the principal amount of Rs. 500/-. 13. In contrast with the above cases reference may be made to the case of Jankidas v. Laxminarain, ILR (1957) 7 Raj 268 = (AIR 1957 Raj 32 ). In this case the plaintiffs who were usufructuary mortgagees of a house gave a lease of it to the defendant mortgagor on rent and put the lessee in possession thereof on the same day. The rent remaining unpaid the plaintiff filed a suit for arrears of rent and ejectment. Ultimately however the High Court of the former State of Marwar granted a decree for arrears of rent but refused the prayer for ejectment. The plaintiff thereupon filed the suit in 1953 claiming arrears of rent amounting to Rs. 126/- for three years preceding the date of the suit. The suit was resisted by the defendant who among other pleas, contended that the suit was barred by Or. II, Rule 2, Civil P. C. There it was said that although the mortgage and the deed of lease represented one transaction that would not mean that no tenancy came into existence by the execution of the deed of lease. It we held that the right which arose to the mortgagees to sue for rent was an in dependent obligation though it might be part of the same transaction in the sense that it was brought into existence by an arrangement made at the same time for a common purpose. 14. In Lalchand v. Nenuram, ILR (l962) 12 Raj 947 = (AIR 1963 Raj 69 ) the defendants had executed a mortgage in favour of the plaintiffs agreeing to pay interest at 8 per cent. p. a. which came to Rs. 27-8-0 per month. The mortgagors had delivered possession to the mortgagees and a registered qubuliat reciting that they were taking on lease the property described at a monthly rental of Rs. 27-8-0. The lower Courts took the view that the mortgage deed was a rent note and part and parcel of the same transaction and the plaintiffs were not entitled to get a decree for ejectment on the basis of the rent note. Rejecting this the Rajasthan High Court observed at p. 952 (of ILR Raj) = (at pp. 71-72 of AIR) :"Whether the two documents represent one transaction or two different transactions, a Court of law should be anxious to give effect to the terms in both the documents instead of being unduly critical about them............. Having secured the possession of the mortgage, the mortgagee is further entitled to lease it out even to the mortgagor. It is in the interest of the mortgagor that the property is leased out to him as he can better look after it. There is nothing objectionable in this nor is there any statutory prohibition for such transactions. Now if the parties do this by executing proper documents, it is the duty of the Court of law to give effect to them". 15. The reasoning of the Rajasthan judgment seems to be logical and commends itself to us.In all such cases the easing back of the property arises because of the mortgage with possession but we find ourselves unable to hold that the mortgagee does not secure to himself any rights under the deed of lease but must proceed on his mortgage in case the amount secured to him under the deed of lease is not paid. If the security is good and considered to be sufficient by the mortgagee there is no reason why he should be driven to file a suit on his mortgage when he can file a suit for realisation of the moneys due under the rent note. The position of the creditor is strengthened whereas in this case the interest on the amount of the mortgage is not the same as the rental fixed. If during the continuance of the security the mortgagee wants to sue the mortgagor on the basis of the rent note and take possession himself or to induct some other tenant thereby securing to himself the amount which the mortgagor had covenanted to pay, there can be no legal objection to it. Under the provisions of order 34, Rule 4, he cannot deprive the mortgagor of his right to redeem excepting by proceeding an his mortgage. Although we express no final opinion on this point it may be that a mortgagee who secures a decree for payment of arrears of rent cannot put the property to sale for realisation of the amount decreed but there can be no objection to his suing for possession if the rent note entitles him to do so. So long as the mortgagor had a right to redeem the mortgage he can always pay off the mortgagee and get back possession. This position would continue so long as the property is not sold under a final decree for sale under the provisions of Order 34,Civil P. C. 16.In our opinion the second con tension put forward on behalf of the appellant has no force. The rights of a mortgagee do not merge in his rights under the preliminary decree for sale. As already mentioned, the mortgagee lost his right to recover the money by sale of the mortgaged property; otherwise his security remained intact and the mortgagor continued to have his right to redeem the property. 17. As regards the third point the only statutory provision to which a reference was made was Section 28 of the Limitation Act of 1908 which provided that:"At the determination of the period hereby limited to any person for instituting a suit for possession of any property, his right to such property shall be extinguished" If the right of the mortgagee arose on the strength of the rent note which continued to be in force notwithstanding that the period for applying for a final decree for sale had expired, there could be no extinction of his right to sue for possession because of Section 28 of the Limitation Act.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]15. The reasoning of the Rajasthan judgment seems to be logical and commends itself to us.In all such cases the easing back of the property arises because of the mortgage with possession but we find ourselves unable to hold that the mortgagee does not secure to himself any rights under the deed of lease but must proceed on his mortgage in case the amount secured to him under the deed of lease is not paid. If the security is good and considered to be sufficient by the mortgagee there is no reason why he should be driven to file a suit on his mortgage when he can file a suit for realisation of the moneys due under the rent note. The position of the creditor is strengthened whereas in this case the interest on the amount of the mortgage is not the same as the rental fixed. If during the continuance of the security the mortgagee wants to sue the mortgagor on the basis of the rent note and take possession himself or to induct some other tenant thereby securing to himself the amount which the mortgagor had covenanted to pay, there can be no legal objection to it. Under the provisions of order 34, Rule 4, he cannot deprive the mortgagor of his right to redeem excepting by proceeding an his mortgage. Although we express no final opinion on this point it may be that a mortgagee who secures a decree for payment of arrears of rent cannot put the property to sale for realisation of the amount decreed but there can be no objection to his suing for possession if the rent note entitles him to do so. So long as the mortgagor had a right to redeem the mortgage he can always pay off the mortgagee and get back possession. This position would continue so long as the property is not sold under a final decree for sale under the provisions of Order 34,Civil P. C16.In our opinion the second con tension put forward on behalf of the appellant has no force. The rights of a mortgagee do not merge in his rights under the preliminary decree for sale. As already mentioned, the mortgagee lost his right to recover the money by sale of the mortgaged property; otherwise his security remained intact and the mortgagor continued to have his right to redeem the property17. As regards the third point the only statutory provision to which a reference was made was Section 28 of the Limitation Act of 1908 which provided that:"At the determination of the period hereby limited to any person for instituting a suit for possession of any property, his right to such property shall be extinguished"If the right of the mortgagee arose on the strength of the rent note which continued to be in force notwithstanding that the period for applying for a final decree for sale had expired, there could be no extinction of his right to sue for possession because of Section 28 of the Limitation Act.