RAGHUNATH Vs. KEDAR NATH

JUDGEMENT

(1.) THIS is a judgment-debtors' second appeal. It arises out of execution proceedings instituted by the decree-holder for the ejectment of the appellants. One Madho Ram, father of the judgment-debtor was the tenant of a shop. The shop formed part of a house belonging to the respondent. The respondent fell in need of money and executed a usufructuary mortgage of the shop as well as a house in favour of Madho Ram. In the mortgage deed it was recited that a rent of Rs. 6/- of the premises shall be adjusted towards the interest of the loan advanced. The respondent filed a suit for redemption of the mortgage which was decreed. The decree was put into execution and the respondent sought to eject the appellant in execution of the decree. In the execution proceedings an objection was raised that the lessee rights of the appellant had come into abeyance by the super imposition of the mortgage and had revived after redemption and the appellant was entitled to continue in possession of the premises as a tenant and could not be ejected under the mortgage decree. The decree-holder was thus entitled to symbolicable possession of the property only and not actual possession.

(2.) THE trial court held that the tenancy rights in the shop came into abeyance after the execution of the mortgage but they subsequenly revived after the decree for redemption. THE appellant accordingly was not found liable to be ejectment from the shop in execution of the mortgage decree. As regards the house it held that the same was not the subject matter of any lease and consequently the decree-holder was entitled to actual possession of the same. Two appeals were filed from the decree. THE judgment debtor appealed against the decree directing actual possession of the house while the decree-holder filed an appeal gainst the decree refusing actual possession of the shop.

(3.) THE question for determination is whether the lease was determined as a result of the execution of the usufructuary mortgage. Section 111 of the Transfer of Property Act (hereinafter referred to as the Act) 'deals with extinction of tenancy. Section 111 (d.) provides for extinguishment by merger while sub-sections (e) and (f) provide for extinction by express or implied surrender. In Lachman Das v. Heera Lal, AIR 1966 Allahabad 323 it was held the doctrine of merger under Section 111 (d) of the Act was not applicable against a lessee who had subsequently become a usufructuary mortgagee of the property. THE lessee and the mortgagee rights could co-exist in the same person. It was observed that when the lessor executes a usufructuary mortgage in favour of the lessee, the lessor does not pass his entire interest in the property to the lessee. THE interest transferred to the lessee mortgagee consists of the right, to possess and enjoy the usufruct of the property until the mortgage money was paid up. THE lessor retains to himself the legal interest in the property which is a substantial one. He can assign his right of redemption or can create a second mortgage. See also Ram Kinkar Banerjee v. Satya Charan Srimani, AIR 1939 PC 14. THE Bench in Lachman Das's case further observed "there is no inconsistency or incompatibility in one person being the lessee and usufructuary mortgagee of the same property at the same time, for his obligation as a lessee would remain suspended during the subsistence of the mortgage." THE law laid down in Kallu and another (supra) was relied upon. In Varada Bongar Raju v. Kirthali Avatharam, AIR 1965 Andhra Pradesh 86 it.was held that tenancy and mortgagee right can co-exist in the same person and there was no extinguishment of lessee rights by implied surrender on account of a usufructuary mortgage being executed in favour of the tenant. In M. Malikarnjunnaiah v. Shivanna, AIR 1973 Mysore 40 the same view was taken and it was held that tenancy and mortgagee rights could co-exist, and on execution of a mortgage in favour of the tenant his tenancy rights only remained;; suspended during the period of mortgage and they revived after the redemption of the mortgage. In execution of a 'decree for redemption the tenant was not found liable to deliver possession of the suit property. THE decision in Kallu (supra) was again followed. In Lala Devi Singh v. Bhagwan Dass Badlu, AIR 1972 Delhi 175 the ratio of Kallu's case (supra) was again approved and it was held that there was no extinction of tenancy where a lessee had taken a usufructuary mortgage of the property. THEre was thus no extinguishment . of the appellant's tenancy by reason of his having taken a mortgage of the same property. THE principle of merger as contained in Section 111 (d) did not apply.