Case: Kamakshaya Narayan Singh Vs. Chohan Ram &amp; Another

ground that as he had acquired the property in the condition in which it was when mortgaged, the lease which would otherwise run till 7th July 1872, did not bind him. The Court of first instance overruled this contention as too broadly formulated, and held that as the mortagor had in good faith granted the lease for a limited term on a fair and reasonable rent, the mortgagee or the purchaser in execution of his decree could not repudite it, specially as the mortgage deed did not prohibit the grant of temporary leases to middlemen or cultivators. On appeal, the District Judge affirment this view and declined to accept the broad contention that leases of all descriptions granted by a mortgagor were void as against the mortgagee. On second appeal to this Court, Jackson and Mitter JJ. took substantially the same view."9. These observations of Mookerjee J. point out what was ratio decidendiof that case. The question of the sufficiency or insufficiency of the security was not really gone into but the Court considered that the lease was granted in good faith, was for a limited term and stipulated a fair and reasonable rent and it was therefore operative against the mortgagee. The Court was really guided by the consideration that the mortgagor dealt with the property in the usual course of management and the interest which was thus created by the mortgagor in the usual course must rightly be deemed operative against the mortgagee. The case of Banee Pershad v. Rest Bhunjan Singh(10 W. R. 325 cal.) therefore is really no authority for the wide proposition that a mortgagor was not restricted in the management of the property by making a mortgage and that so long as nothing took place to impair the value or impede the operation of the mortgage the mortgagor would be well within his powers in making a lease for a tem.10.In our opinion S. 66, T. P. Act, has nothing to do with the mortgagors power to lease the mortgaged property. Section 66 is a statutory enactment of the powers of the mortgagor in possession in regard to waste of mortgaged property. The mortgagor in possession is not liable for what in terms of the English Law of Real Property is known as permissive waste i.e., for omission to repair or to prevent natural deterioration. He is, however, liable for destructive waste i.e. acts which are destructive or permanently injurious to the mortgaged property if the security was insufficient or would be rendered insufficient by such acts. This section therefore has no application to the grant of a lease by the mortgagor in possession.11. The only relevant consideration is whether, the mortgagor in possession having the authority to deal with the property in the usual course of management, the lease granted by him can be rightly deemed operative against the mortgagee. The true position has been stated in the following terms by Mukherjee J. in Madan Mohan Singh v. Raj Kishore,21 cal. W. N. 88 at p. 92:"The true position thus is that the mortgagor in possession may make a lease conformable to usage in the ordinary course of management, for instance, he may create a tenancy from year to year in the case of agricultural lands or from month to month in the case of houses. But it is not competent to the mortgagor to grant a lease on unusual terms, or to alter the character of the land or to authorise its use in manner or for a purpose different from the mode in which he himself had used it before he granted the mortgage."12. The question whether the mortgagor in possession has power to lease the mortgaged property has got to be determined with reference to the authority of the mortgagor as the bailiff or agent for the mortgagee to deal with the property in the usual course of management. It has to be determined on general principles and not on the distinction between an English mortgage and a simple mortgage or on considerations germane to S. 66, T. P. Act. Having regard therefore to the position that S. 66 has no application to leases of the mortgaged property, the decision of Jenkins C. J. in Balmukund v. Motilal,20 cal. W. N. 350, and the cases following that line of reasoning do not govern the question before us.13. While we are on this subject we would like to emphasise that it is in for the lessee if he wants to resist the claim of the mortgagee to establish that the lease in his favour was granted on the usual terms in the ordinary course of management. Such a plea if established - and it must not be overlooked that the burden of proof in this matter is upon him - would furnish a complete answer to the claim of the mortgagee. If the lessee failed to establish this position he would have certainly no defence to an action at the instance of the mortgagee.14. No allegation was made on behalf of the defendants that the grant of the permanent lease was a dealing with the mortgaged property in the usual course of management by the mortgagor. In the absence of any such plea, we are of the opinion that there was no answer to the plaintiffs claim and the permanent lease granted by Wazir Narayan to the defendants could not prevail against the plaintiff.15. We have therefore come to the conclusion that Wazir Narayan Singh had no power to grant the permanent lease in question to the defendants, that the same was not binding and operative against the plaintiff, that the defendants had ample opportunity to redeem the mortgage if they so desired but did not choose to exercise their right of redemption, that the execution sale of Gudi Sirampur including the four villages in question was binding on them and that the plaintiff was entitled to khas possession of the four villages of which the defendants were in wrongful possession.

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

Explanation:
1[ds]10.In our opinion S. 66, T. P. Act, has nothing to do with the mortgagors power to lease the mortgaged property. Section 66 is a statutory enactment of the powers of the mortgagor in possession in regard to waste of mortgaged property. The mortgagor in possession is not liable for what in terms of the English Law of Real Property is known as permissive waste i.e., for omission to repair or to prevent natural deterioration. He is, however, liable for destructive waste i.e. acts which are destructive or permanently injurious to the mortgaged property if the security was insufficient or would be rendered insufficient by such acts. This section therefore has no application to the grant of a lease by the mortgagor intrue position has been stated in the following terms by Mukherjee J. in Madan Mohan Singh v. Raj Kishore,21 cal. W. N. 88 at p.true position thus is that the mortgagor in possession may make a lease conformable to usage in the ordinary course of management, for instance, he may create a tenancy from year to year in the case of agricultural lands or from month to month in the case of houses. But it is not competent to the mortgagor to grant a lease on unusual terms, or to alter the character of the land or to authorise its use in manner or for a purpose different from the mode in which he himself had used it before he granted the mortgage.While we are on this subject we would like to emphasise that it is in for the lessee if he wants to resist the claim of the mortgagee to establish that the lease in his favour was granted on the usual terms in the ordinary course of management. Such a plea if established - and it must not be overlooked that the burden of proof in this matter is upon him - would furnish a complete answer to the claim of the mortgagee. If the lessee failed to establish this position he would have certainly no defence to an action at the instance of the mortgagee.No allegation was made on behalf of the defendants that the grant of the permanent lease was a dealing with the mortgaged property in the usual course of management by the mortgagor. In the absence of any such plea, we are of the opinion that there was no answer to the plaintiffs claim and the permanent lease granted by Wazir Narayan to the defendants could not prevail against the plaintiff.15. We have therefore come to the conclusion that Wazir Narayan Singh had no power to grant the permanent lease in question to the defendants, that the same was not binding and operative against the plaintiff, that the defendants had ample opportunity to redeem the mortgage if they so desired but did not choose to exercise their right of redemption, that the execution sale of Gudi Sirampur including the four villages in question was binding on them and that the plaintiff was entitled to khas possession of the four villages of which the defendants were in wrongful possession.