Alagiriswami Mudali and Others vs Akkulu Naidu

Krishnan, J.—I am unable to agree with the District Judge that when a mortgage is redeemed the lease created by the redeemed mortgagee

is still subsisting and that by virtue of Section 74 of the Transfer of Property Act when it is a 2nd mortgagee that redeems the prior mortgage the

redeeming mortgagee gets the landlord''s rights as against the tenants of the latter.

I consider when a mortgage is redeemed subsidiary rights created on the mortgaged property such as lease rights come to an end ipso facto and

any former tenant continuing on the land must be treated as a trespasser thereafter unless of course from the conduct of parties or otherwise a fresh

tenancy can be held to have been created or an implied tenancy arises ""See Govinda-swami Pillai v. Pethaperumal Chetty (1918) 44 I.C. 839

Adjoodhya Singh and others v. Girdharee 2 N.W.P.H.C.R. 199 and Ram Chand v. Rajbans (1906) 3 All L.J. 517 . Our attention was called to

the ruling in Chinnappa Thevan v. Pazhaniappa Pillai (1915) 2 L.W. 1132 where it was held that the possession of the tenants who were in

occupation of the land under the mortgagee was not adverse to the mortgagor who had redeemed the mortgage under whom they were originally

holding. So far as that case is taken to decide the question as a matter of law I am not prepared to follow it. Seshamma Shettati v. Chickaye

Hegade I.L.R(1902) .Mad. 507 cited therein left the question entirely open and the Allahabad case cited. The Collector of Basil v. Sarnam

Gharak (1911) 8 All. L.J. 802 was the judgment of a single judge and with all respect to the learned Judge it is difficult to see how the tenancy

created by the mortgagee continues after redemption when the learned Judge himself has held that it is not binding on the redeeming mortgagor.

In Chinnappa Thevan v. Pazhaniappa Pillai (1915) 2 L.W. 1132 however, there was a document, Ex G, which was construed as transferring

the mortgagee''s rights to tlje. mortgagor. In that case the mortgagor as assignee will hsjve the rights of his assignor, the mortgagee, and the ruling

may be supported on that ground.

As regards Section 74 of the Transfer of Property Act the District Judge has omitted to notice that the section gives the redeeming 2nd

mortgagee only the rights, and powers of the I redeemed mortgagee as such. It does not pass any rights of his as landlord.

It follows from the above that in the present case the defendants were really trespassers as they refused to accept plaintiff as their landlord and

repudiated his attempt to treat them as his tenants. The suit should have been valued for court fees as a suit for possession of property u/s 7

Clauses (5) Court Fees Act.

The respondent''s vakil asks us to be allowed an opportunity to pay the right Court Fees and to amend his pLalnt. Though it is true he did not

take advantage bf the offer by the 1st Court I am inclined to grant him this indulgence provided he pays the court fees in one month''s time from this

day in the first court and amends his pLalnt as advised. In default the decree dismissing the suit with costs will stand. Plaintiff will pay the

defendant''s costs in this and the lower appellate court. The costs in the 1st court will be disposed of by that court.

Odgers, J

I agree. The lease has come to an end on redemption by 2nd mortgagee. It is quite clear that this was the position in English Law up to very

shortly before the time when the Transfer of Property Act came into force here. The power of leasing was given to a mortgagee under certain

conditions by Section 18 of the Conveyancing Act 1881 but that power was not incorporated in the Indian enactment. I cannot see any difference

in principle and we were referred to an authority on the point) which differentiates the case of redemption by a mortgagor from redemption by a

subsequent mortgagee with reference to leases created by the redeemed mortgagee. The statement of the law in Govindaswami Pillai v. Petha-

perumat Chetty (1918) 44 I.C. 839 is in my opinion correct and the case in Chinnappo Thevan v. Pazhaniappa Pillai (1915) 2 L.W. 1132 cannot

be treated as an authority on the point as it dealt with the special provisions (not reported) of Ex. G. The point is expressly left open by the

judgment in Seshamma Shettati v. Chickaye Hegade ILR (1902) Mad. 507 . The case in The Collector of Basti v. Sarnam Gharak (1911) 8 All.

L.J. 802 is that of a single Judge and is unreported in the authorized reports. I am not prepared to follow it. There can further be no question of

holding over once it is conceded that the tenancy can of course be begun but the defendant''s conduct here in repudiating the relationship of

landlord and tenant when the mortgagee served him with notice to quit 4 days after he had redeemed clearly puts an end to any such contention.

The defendants here are therefore in the position of a trespasser. I am unable to see how a tenancy created by a mortgagee does not come to an

end in this country on redemption and I think the case where this has been held to take place in the case of redemption by a mortgagor must be

held equally applicable to the case of redemption by a subsequent mortgagee.

Section 74 of the Transfer of Property Act only gives the redeeming mortgagee the rights and powers of the mortgagee as such. This does not

extend to a case such as this. I agree in the order proposed by my learned brother.