K S SRINIVAS Vs. V RAMKUMAR

JUDGEMENT

(1.) THIS is a defendant's appeal arising out of a suit for possession upon redemption of a mortgage. The short but interesting question that arises for consideration is whether the tenancy rights held by the Mortgagee who was occupying the mortgaged property as a tenant would extinguish on the principle of merger upon creation of the mortgage and if they did not whether the tenant-mortgagee had surrendered the tenancy rights so that the Mortgagor was entitled to claim possession of the mortgaged property upon redemption. The question arises in the following backdrop: the suit property which happens to be a single storeyed shop situate within the City Municipal Corporation limits of Bangalore was in the occupation of M/s. KR. Suryanarayana Setty and Sons, a partnership firm as a lessee on payment of monthly rent of Rs. 225/- only. The property was owned by M/s. Venkatachalaiah and Sons, another partnership concern who mortgaged the same with the lessee in terms of a mortgage deed dated 28-8-1982. The Mortgage was to run for a period of ten years. During the currency of the mortgage, M/s. Venkatachalaiah and Sons, the owner was dissolved and the property allotted to the share of the plaintiff. O. S. No. 5818 of 1992 for redemption of the mortgage and for possession of the property was filed by the plaintiff before the xtv Additional City Civil Judge at Bangalore. Apart from other reliefs, the plaint also sought damages from the defendant at the rate of Rs. 200/-per day from 28-8-1992 till the date of full satisfaction of the decree.

(2.) IN the written statement filed by the defendant, several defenses were raised. It was inter alia pointed out that M/s. KR. Suryanarayana setty and Sons was carrying on business in the suit premises in the name and style of'srinivas Stores'. Upon dissolution of the said partnership, the second defendant succeeded to the tenancy and other rights in the schedule property and that he was in exclusive possession and enjoyment of the same. It was also alleged that upon redemption of the mortgage, the tenancy rights would stand revived as the parties never intended to put an end to the tenancy that existed on the date of creation of the mortgage. It was alleged that the parties had with the intention of continuing the tenancy even after redemption of the mortgage entered into an agreement on the same date by which the Mortgagor had agreed to continue the lease of the schedule property in favour of the Mortgagee on a monthly rent of Rs. 500/- for a period of eleven months with an option to the lessee to extend the lease period for a period of four years thereafter. The claim for delivery of possession made by the plaintiff was according to the defendants misconceived in the light of the contents of the mortgage deed and the clear understanding between them regarding the continuance of the tenancy even after the mortgage was redeemed.

(3.) ON the above pleadings, the Trial Court framed the following six issues: