NATWARLAL DEOCHANDDAS GUJRATHI Vs. MOTILAL RAOJI BANSI

JUDGEMENT

(1.) THE appellants were in occupation of premises, owned by the respondents, as tenants. During the subsistence of lease, as the landlords were in need of money, they executed a document of mortgage by conditional sale in favour of the tenants. The controversy in this appeal revolves around the nature of the document. According to the landlords, the said document creates a usufructuary mortgage with a right of redemption, on tender of the amount; whereas according to the tenants, it was contended before the trial Court, that the document is a sale with a right of repurchase. The tenants have given up their case before the first appellate Court, that the document is a sale and had accepted that the document in question is a mortgage, as such, the said issue is resolved before the first appellate Court on concession made by the tenant. Both the Courts below have decreed the suit for redemption of mortgage and for possession of the premises. So far as decree passed by the Courts below for redemption of mortgage, the same has to be confirmed as the said point was conceded before the first appellate Court, so also, before this Court, by the tenant.

(2.) THE substantial question which emerges for consideration and decision in this appeal reads thus :

(3.) BOTH the Courts below on consideration of the oral evidence, so also, the terms of mortgage, have held that the rights of the lessee extinguished on execution of the deed of mortgage. It is held that the rights of the lessee and the mortgagee have merged destroying the lessees rights. The learned Counsel appearing for the appellants has attacked the said finding by contending that without there being sufficient material on record to come to the conclusion, in favour of merger of rights, the said finding has been recorded and the same is not sustainable in law. It is also contended that general rule is against merger and merger cannot be readily inferred. He has contended that implied surrender of lease cannot be inferred in the absence of a clear statement or obvious indication in that regard in the deed itself.