Isufali vs Majidkhan

V.R. Newaskar, J.—The only question raised in this revision petition arising out of a small cause is as regards the competancy of the present suit for recovery of arrears of rent. The objection is based on the provision of Order 2 Rule 2 C.P.C.

The facte, which are not in dispute, are that the Defendant Majidkhan mortgaged his house situatad in Sailanipura Ratlam with the Plaintiff Usufali Taiyabali Bohara for a consideration of Rs. 500-. The mortgage-deed provided that the Plaintiff should have possession of the mortgaged property as security for his dues and that the mortgage money should not carry interest and no rent is liable to be paid by the Plaintiff for having the possession of the house. There was a lease back by the Plaintiff to the Defendant of the mortgaged house under a rent note at the rate of Rs. 17-8-0 per month and a reference to the fact of this lease back is made in the mortgage-deed itself although a separate rent-note is also executed on the same date. There was a term in the mortgage-deed that the mortgagor would redeem the house within the period of six months. The amount of the mortgage-money was agreed to be recoverable from the mortgagor''s other property and personally from him besides out of the mortgaged property. The rent-note executed as a sequel to the mortgage transaction was operative for the period of six months only. The Plaintiff in the present suit claimed rent for 34 months at the rate of Rs. 17-8-0 p. m. i. e. Rs. 595/-.

On 30-8-1956 the Plaintiff filed his suit for recovery of the mortgage amount by the sale of the mortgaged property without claiming therein anything in respect of the arrears of rent. His claim in his mortgage-suit was confined to the principal amount only. This claim was decreed on 6-4-1960 and a preliminary decree was passed. Subsequent to this the present suit was filed on 9-7-1960 for recovery of the above mentioned arrears of rent.

A contention of a preliminary character was raised on behalf of the Defendant that the suit is not maintainable since the Plaintiff had secured a decree on the basis of the mortgage and the claim for the amount in suit should have been included in that suit. This was treated by the learned Small Cause Judge as a preliminary point. He accepted the Defendant''s objection which in substance was based on the provision of Order 2 Rule 2 C. P. C. The reasoning of the learned fudge for upholding the defence may be stated in his own words:

I see much force in this contention of the Defendant. Under the M. B. Interest Act, the mortgagee could not claim interest above -/8/- annas p. c., p. m. and by this device, he was securing for himself Rs. 17-8-0 per month which comes to Rs. 3-8-0. p. c., p. m. If the mortgagee were permitted to sue for rent, without making him accountable for the same and without adjusting the recovery towards the principal and interest at -/8/- annas p. c., p. m. which the law permits, the provisions of law would be defeated.

The learned Judge distinguished the case reported in 1958 JLJ 789 Iqtar Ahmad v. Hulkey, on the ground that it has no application under the circumstances of the case. The learned Judge accordingly upheld the Defendant''s contention and dismissed the suit.

In this petition for revision against that decision Mr. S. K. Agrawal for the Petitioner, contended that the provision of Order 2 Rule 2 C. P. C. cannot be applied in the circumstances of the present case in as much as the transaction of mortgage and the transaction of lease are two distinct transactions though they be of the same date. The cause of action on the basis of the mortgage-deed is a distinct cause of action from that based on the rent-note. The legal relationship is also different. The mere fact therefore that the Plaintiff had filed his suit on the basis of the mortgage cannot disentitled him to file another suit on the basis of rent-note which should be treated as the distinct and separate cause of action. He relied upon the decisions reported in 1958 JLJ 788 Iqrar Ahmad v. Hulkey, 1955 MBLJ 1368 Binodilal v. Satyendrasingh 1955 MBLJ 1250 Laxmandas v. Hoshiyabai and 1955 MBLJ 39 Ganga Prasad v. Yadavrao, in support of his contention. He also referred to the Division Bench decision of the Madras High Court reported in Puthanpurayil Nittookandi Kappalli Krishna Kurup and Another Vs. Kottikollon Mammad and Others, as also the decision of Wanchoo C. J. in Jankidas and Another Vs. Laxminarain,

Mr. Patel, who appeared for the other side, on the other hand contended that the question as to whether the transaction of a mortgage and that of a lease back constitute a single cause of action or represent two different causes of action ought to depend upon the facts and circumstances of each case. In considering this question the Court will have to take(sic) into account the terms of the mort gage-deed and the circumstances under which it came into being. The Court will also have regard to the terms of the rent-note and the object with which it had been executed. If on consideration of the entire circumstances the Court comes to the conclusion that the mortgage and the lease back constitute but a single transaction and the object of leasing back is merely to provide for recovery of interest then the provision of Order 2 Rule 2 C. P. C. are attracted where the mortgagee first sues only for the principal amount and later tries to recover the amount of arrears of rent particularly when the rent is also agreed to be a charge upon the property under the terms of the mortgage-deed. The learned Counsel in this connection relied upon the decisions in Puthanpurayil Nittookandi Kappalli Krishna Kurup and Another Vs. Kottikollon Mammad and Others, Habib and Others Vs. Daulatram and Another, and Jankidas and Another Vs. Laxminarain, in the support of his contention.

In my opinion the case has been approached from an entirely erroneous point of view. It seems from the observations of the learned Judge in Para 2 of his judgment that a decree for foreclosure had been passed on 6-4-1960. It is not for the learned Small Cause Judge to say whether the decree for foreclosure was correctly passed or not. The decree determined the rights of the parties unless it had been modified in appeal. The effect of a decree for foreclosure is that the relationship of the mortgagor and the mortgagee have come to an end and the mortgagee became the absolute owner of the property, vide ILR 36 All 327 Munnalal v. Munna Lal.

In that event the possession which the mortgagor had under the rent-note, the period whereof has expired, is that of a tenant holding over.

Even assuming, as said in some of the decisions, that the provision regarding leasing back is intended to secure payment of interest all that it means is that the mortgagor cannot redeem without paying Interest vide ILR 20 Allahabad 401 (407) Imdad Hasan Khan v. Badri Prasad and another ILR 32 Cal 576 Sheo Saran Singh v. Mahabir Prasad Saha, and AIR 1918 Mad 942, Achutha Variar v. Ibrayen Kutti.

But where a mortgagee has obtained a decree for the foreclosure the position entirely changes. The parties had voluntarily chosen the form of the transaction. There was a usufructuary mortgage for a period of six months and a rent-note was executed for that period leasing back the property. Had the mortgagor redeemed on paying the principal and arrears of rent which under the terms of the mortgage are charged upon the property that would be good defence upon merits that the relationship of landlord and tenant had come to an end. This is not so in this case. Not only this there is a decree for foreclosure in favour of the landlord. In that event the possession, which the mortgagor has, will be referable to the rent note. The cause of action in respect of the mortgage transaction and that in respect of the transaction of lease, though inter-connected and as such could be considered as part of the same transaction, cannot be hit by the principle of Order 2 Rule 2 C. P. C. because although the transaction be one, causes of action are different.

As held in 41 Indian Appeals 142 Pyana Reena Saminathan v. Pana Lana Palanippa, "the provision contained in Section 34 of the Ceylon CPC Code, (which is the same as contained in Order 2 Rule 2 C P. C.) is directed to securing the exhaustion of the relief in respect of a cause of action and not to the inclusion in one and the same action different causes of action, even though they arise from the same transaction". In that case, before their Lordships, there was a dispute between the Plaintiff and the Defendant which was referred to two arbitrators. The arbitrators gave an award in Plaintiff''s favour for Rs. 28,224/- and got a document called receipt executed by the Defendant which recited payment of Rs. 224/-in cash and the giving of two pro-notes of Rs. 14000/- each in full settlement of the claim of the Plaintiff against the Defendant. The receipt was signed by him, Rs. 224/-were paid in cash and the two pro-notes executed by the Defendant were handed over to the Plaintiff. The Plaintiff first brought a suit on the basis of the pro-notes. The suit was dismissed on a defence raised by the Defendant that there had been material alteration in the pro-notes. The Plaintiff then brought a second suit this time on the award of the arbitrators. Defence under Order 2, Rule 2 C. P. C. (Section 34 of the Ceylon CPC Code) was taken. Their Lordships rejected the defence. The above quoted observations were made in that connection.

It is thus clear that as long as the causes of action are distinct the fact that they arise out of the same transaction, cannot come in the way of bringing different suits in respect of them.

In the present case the Plaintiff brought first his mortage-suit seeking foreclosure of the mortgage. He then brought the present action on the basis of rent-note for rent. Toe cause of action for the mortgage and that for rent were provided for by two distinct documents though they arose in the course of the same transaction. In such a case the right under the rent-note had not become barred. On the other hand due to the suit lor foreclosure which was decreed it was no longer open for the Defendant to contend that the transaction of the rent-note was no longer subsisting. Since the Plaintiff became owner due to the decree for foreclosure he has right to recover rent from the Defendant in possession on the basis of the rent-note which was a distinct and separate cause of action. The former suit therefore does not come in the way of the present suit. The decision of the learned Small Cause Judge is on this account, clearly erroneous and contrary to law.

The same is therefore, set aside and the suit is remanded to the trial Court for trial and disposal in accordance with law after determining the points left undetermined by it.

16: The Petitioner is entitled to the costs of this revision petition from the opponent who shall bear his own. Costs of the suit will abide the final result.