KUMARAN NAIR Vs. MAMAPPAN PILLAY

JUDGEMENT

(1.) THIS is an appeal from an order of a learned single judge of this court confirming (he order of the District Judge, Palghat, passed in appeal reversing the order passed by the Munsif accepting the objections of the 4th defendant-appellant to the execution of the decree passed in Q. S. 97 of 1962 on the file of the Muosif's Court, Palghat.

(2.) THE suit was for redemption of a usufructuary mortgage executed by the predecessor of the plaintiff in favour of the 1st defendant. Item No. 6 in the mortgage consisted of a group of four shop buildings. In 1949 the appellant had taken one of the shop buildings on rent from the mortgagee for conducting stationery business on a monthly rental of Rs. 12 and was in possession of the same. In the suit the appellant filed a written statement contending that he is not liable to be evicted. On 30-3-1964 the plaintiff and the 1st defendant filed a compromise petition, settling all accounts between them, declaring the mortgage as redeemed, and providing for surrender of the buildings to the plaintiff by the defendants. THE court passed a decree on the basis of the compromise. When the compromise decree was sought to be executed by the issue of a warrant of delivery, the appellant put in E. A. No. 1360/1964 contending that he was not a party to the compromise, that the decree based thereon cannot be executed against him, and that he can be evicted only in accordance with the provisions of the Kerala Buildings (Lease and Rent Control)Act 1958. THE learned Munsif upheld the objection and directed withdrawal of the warrant of delivery giving the plaintiff liberty to apply for symbolic delivery. THE plaintiff filed an appeal to the District Court against this order. THE court held that the Kerala Buildings (Lease and Rent Control) Act can have no application as the lease in favour of the appellant terminated with the redemption of the mortgage, and as the appellant never became a lessee of the mortgagor, and that the decree was binding on the appellant, even if he was not a party to the decree. THE appellant filed S. A. No. 115 of 1965 in this court. THE court after hearing arguments, called for a finding from the district Judge on the question whether the lease in favour of the appellant was granted by the 1st defendant in the ordinary course of his management 'of the mortgaged property. THE learned District Judge found that the lease was granted by the 1st defendant in the ordinary course of management within the meaning of s. 76 (a) of the Transfer of Property Act. THE learned single judge thereafter heard the appeal again and passed the order negativing the contentions of the appellant; but granted leave to appeal to a division bench.

(3.) MR. Chandrasekhar Menon, on behalf of the respondent, however, contended that even if there was no decree against the appellant the decree holder can execute it against him and recover possession of the building. He said that just as a sub-lease terminates when the lease is determined and the sub-lessee bound to surrender possession of the property leased, even though not a party to the suit in which the decree was passed against the lessee, so also a lease created by a mortgagee "would terminate, when the mortgage is redeemed, and the lessee of the mortgagee would be bound to surrender possession of the property even though the lessee was not made a party to the suit for redemption Counsel referred to the rulings of the supreme Court in Gurushiddaswami versus DMD. Jain Sabha AIR. 1953 SC. 540 and rupchand v. Raghuvanshi (Pvt) Ltd AIR. 1964 SC 1889 in support of the contention. In both these cases it was held that a sub-lessee would be bound by a decree for possession passed against the lessee even if the sub-lessee is not a party to the suit. In the last mentioned case Das Gupta J. , observed: "taking the last section first, viz. , Raghuvanshi's ommission to implead the appellant, it is quite clear that the law does not require that the sub-lessee need be made a party. It has been rightly pointed out by the High Court that in all cases where the landlord institutes a suit against the lessee for possession of the land on the basis of a valid notice to quit served on the lessee and does not implead the sub-lease as a party to the suit, the object of the landlord is to eject the sub-lessee from the land in execution of the decree and such an object is quite legitimate. The decree in such a suit would bind the sub-lease. This may act harshly on the sub-lessee; but this is a position well understood by him when he took the sub-lease. The law allows this and so the omission cannot be said to be an improper act. " The reason why such a decree would bind the sub-lessee was explained at length by B. K. Mukherjea J. , in Sailendra Nath v. Bijan Lal air. 1945 Calcutta 283. But it is difficult to apply the reasoning of these decisions to the case of a lessee from a mortgagee. If a lease is granted by a mortgagee in the ordinary course of management of the mortgaged property the lease will be binding on the mortgagor even after redemption of the mortgage. The rulings of the Supreme Court in Harihar Prasad v. Deo Narain Prasad AIR. 1956 SC. 305. and Asa Ram v. Mst Ram Kali AIR 1958 SC. 183 are clear authorities for this proposition. In the former case it was observed: "the law is that a person cannot confer on another any right higher than what he himself possesses, and therefore, a lease created by a usfructurary mortgagee would normally terminate on the redemption of the mortgage. S. 76 (a) enacts an exception to this rule. If the lease is one which could have been made by the owner in the course of prudent management, it would be binding on the mortgagors, notwithstanding that the mortgage has been redeemed. " In view of the finding by the District Judge which was accepted by the learned single judge, that the lease in favour of the appellant was granted by the mortgagee in the ordinary course of management, the lease would be binding on the mortgagor, even after the mortgage has been redeemed. The contention that the decree holder is entitled to execute the decree against the appellant, even though the appellant, the lessee was not a party to the decree for redemption, must fail. As we hold that there was no decree against the appellant, the learned Munsif was right in withdrawing the warrant of delivery and directing the decree-holder, if so advised, to apply for symbolic delivery of the building. We allow the appeal, reverse the orders passed by the learned single judge and the District Court, and restore the order passed by the Munsif. We make no order as to costs. Allowed. . .