M. Manickam Asari vs Meenakshi Ammal and Others

Ratnam, J.—The defendant in O.S.No. 389 of 1976, District Munsif''s Court, Madurai Town, is the appellant in this second appeal. The

suit property, bearing Door Nos. 47 and 48 and situate in T.S.No. 1387 in Madurai Town, measures 28'' east to west and 251/2 feet north to

south, inclusive of a shed measuring north to south 191/2'' and east to west 9''. On 27-12-1947, Chidambaram Asari and his wife, Rathinammal,

who owned the suit property, leased out to the appellant a vacant site for a period of three years measuring 9'' east to west and 27'' north to south

from out of a larger extent of the property with common pathway rights and rights in a well. Subsequently, on 16-12-1951, Rathinammal leased

out to the appellant the same property, viz., 9'' x 27'' for a further period of three years. On the death of Rathinammal, her daughter, the 1st

respondent herein, became entitled to her properties, and on 30-8-1954, the Ist respondent leased out to the appellant the very same property,

viz., 9'' x 27'' for a period of 5 years from the First of Marghazhi of Jaya Tamil year. Thereafter, on 27-11-1957, the 1st respondent borrowed a

sum of Rs. 1,850 from the appellant and executed an usufructuary mortgage deed under Ex.A-1, dt. 27-11-1957 on her behalf and as guardian of

her then minor son. The property usufructuarily mortgaged comprised of the entire site measuring east to west 28'' and north to south 251/2'' and

the shed thereon. Pursuant to the usufructuary mortgage executed by the 1st respondent on 27-11-1957, the appellant was put in possession of

the property mortgaged. Under the terms of the mortgage, the period of redemption was fixed as seven years and the appellant had to pay the

municipal tax and agreed further to surrender possession of the property on the expiry of the period of redemption. Subsequently, under Ex.A-2,

dt. 7-4-1964, the 1st respondent again borrowed another sum of Rs. 2,150 from the appellant and executed a further mortgage fixing ten years as

the period of redemption, which expired on 6-4-1974. Respondents 2 to 5 herein are the sons of the 1st respondent subsequently born.

According to the case of the respondents, after the expiry of the period of redemption, the othi amounts were offered and the appellant was

required to suffer redemption. But the appellant was postponing, which resulted in the issue of a notice by the 1st respondent on 20-3-1976 to the

appellant offering to pay the othi amounts and seeking redemption of the mortgages. In the reply notice, the appellant put forth the claim that the

property was leased out as a vacant site to him, wherein he had put up valuable superstructures and that it was agreed that even after the creation

of the mortgages, the possession of the appellant as a tenant with reference to the property leased out, was not to be disturbed, and this, according

to the respondents, was a false claim. The respondents claimed that on the execution of the mortgage deeds, the leasehold right in favour of the

appellant became extinct and thereafter, the appellant could not claim rights as a lease, after taking possession of the property as a usufructuary

mortgagee. The respondents maintained that it was never represented by them that the appellant''s possession would not be disturbed and

therefore, they are entitled to redeem the suit property. Accordingly, the respondents in O.S.No. 389 of 1976, District Munsif s court, Madurai

Town, prayed for the relief of redemption of the suit property.

In the written statement of the appellant, after referring to the prior leases in 1947 and 1951, he contended that at the time of the creation of the

usufructuary mortgages, he was already a tenant in possession of a portion of the suit property and he agreed to advance monies on the strength of

the usufructuary mortgage deeds, only if the lease in his favour was kept in tact and continued and the It respondent agreed to this course and only

thereafter, the amounts were advanced by the appellant under the mortgages sought to be redeemed. The appellant claimed that even if the othis

are redeemed, he is entitled to continue as a lessee in respect of the property leased out to him. Expressing his willingness and readiness to pay the

rent, the appellant disputed the entitlement of the respondents to the relief of redemption. Claiming that he is a tenant entitled to the benefits of

Madras City Tenants Protection Act, the appellant resisted the relief of physical possession by redemption prayed for by the respondents.

Consistent with the stand taken by the appellant in his written statement in the suit for redemption instituted by the respondents herein, the

appellant filed O.P.No. of 1976 u/s 9 of the Madras City Tenants Protection Act claiming that he is entitled to purchase the suit property and for a

direction to the respondents to sell the same to him. This application was resisted by the respondents herein on the ground that the appellant had no

subsisting leasehold right and that the arrangement regarding the continuance of the lease even after the othi, is not true and further that the

appellant is not entitled to any benefit or protection under the provisions of Madras City Tenants Protection Act.

By a joint memo filed by the parties, the suit for redemption as well as the application u/s 9 of the Madras City Tenants Protection Act were

tried together and the evidence recorded in the suit was agreed to be treated as the evidence in O.P.No. 30 of 1976 as well. Before the trial

Court, on behalf of the respondents, Exs. A-1 to A-29 were marked and P.W.1 gave evidence, while, on behalf of the appellant examined himself

as D.W.1. By a common Judgment dt. 6-8-1977, the learned District Munsif, Madurai Town, after considering the oral as well as the

documentary evidence, found that the leasehold rights created in favour of the appellant merged with his rights as usufructuary mortgagee after the

execution of the mortgages and the appellant did not thereafter have any subsisting right as a lessee to so continue even after the redemption of the

mortgage and therefore, the appellant is also not entitled to the benefits of Madras City Tenants Protection Act. Holding that the amount deposited

by the respondents for redemption is correct, the respondents were granted a decree for redemption, but without costs, and a direction for

ascertainment of the quantum of mesne profits in separate proceedings under Order 20, Rule 12, Code of Civil Procedure, was also given. Thus,

while in the suit for redemption, a final decree was passed, the petition filed by the appellant in O.P.No. 30 of 1976, was dismissed. Aggrieved by

the passing of a decree for redemption in O.S.No. 389 of 1976, the appellant preferred an appeal in A.S.No. 63 of 1979, Sub-Court, Madurai.

Insofar as the trial Court declined to award costs to the respondents, they preferred a memorandum of cross objections. The dismissal of O.P.No.

30 of 1976 filed by the appellant, was not questioned by him and that was allowed to become final. Considering the appeal as well as the

memorandum of cross objections, the lower appellate court took the view that it is imporbable that the appellant had agreed to give up the more

valuable leasehold rights at the time of the execution of the mortgages in his favour and that it is also probable that there was an oral arrangement to

keep the leasehold rights in abeyance during the subsistence of the mortgage, subject to a revival on redemption. The lower appellate Court also

agreed with the trial Court that the correct amounts had been deposited by the respondents into the Court for securing redemption. On the

aforesaid conclusions, the lower appellate Court allowed the appeal in part and modified the decree of the trial Court to the effect that the

respondents are entitled to get actual possession on redemption of the suit property, excepting an extent of 9'' x 27'' covered by the lease deed

executed by the appellant in favour of the 1st respondent on 30-8-1954 and that the appellant can continue as a tenant of the vacant site in respect

of 9'' x 27'', physical possession of which, will not be made available to the respondents on redemption. The memo of cross objections was

dismissed. In this second appeal, the grievance of the appellant is that the lower appellate court has omitted to refer to the rights of the appellant

with reference to the passage, well, etc. given to him, while, in the memorandum of cross objections, the respondents have questioned the

propriety of the granting of a decree for redemption excluding the leased property and declaring that the appellant would be entitled to leasehold

rights therein.

Though the scope of the second appeal preferred by the appellant is very limited and narrow, it is seen that the memorandum of cross

objections filed by the respondents is more vital and substantial, for, only in the event of the availability of leasehold rights in favour of the appellant

in a part of the property mortgaged being upheld, the further rights claimed by him as such a lessee would arise. Therefore, the main question that

has to be considered is, whether the appellant is entitled to the leasehold right in respect of 9'' x 27'' in the property mortgaged, despite the

execution of the usufructuary mortgages, under Exs.A-1 and A-2 in his favour and despite their redemption. Learned Counsel for the respondents

contended that the appellant, having agitated that he is entitled to the rights u/s 9 of the Madras City Tenants Protection Act, and failed therein, and

having allowed that order to become final, cannot now be heard to project any right on the basis of the lease in his favour. In other words, learned

Counsel submitted that the appellant must be deemed to have waived his leasehold right. It was also further pointed out by learned Counsel for the

respondents that the usufructuary mortgages executed under Exs.A-1 and A-2 do not preserve to the appellant any leasehold right in a portion of

the property and it has therefore to be considered that after the execution of the usufructuary mortgages, there were no subsisting leasehold rights

in favour of the appellant in a portion of the property. Reliance was also placed upon the recitals in Exs. A-1 and A-2 to show how the appellant

had agreed to surrender possession of the entire property, inclusive of that over which, he had pre-existing leasehold rights and to contend that the

leasehold right was not intended to be kept in tact after the execution of the usufructuary mortgages. Counsel further strenuously contended that

there could be no oral agreement modifying or altering the terms of the registered mortgages under Exs.A-1 and A-2, and therefore, the lower

appellate Court was in error in upholding the oral agreement. Reliance was also placed by the Counsel in support or his contentious, upon the

decisions in Meenakshi Amma Vs. Kizhakke Valath Narayani and Others, and Shah Mathuradas Maganlal and Co. Vs. Nagappa Shankarappa

Malage and Others, . Per contra, learned Counsel for the appellant contended that the absence of mention of leasehold rights in Exs.A-1 and A-2

indicated that those rights were intended to be preserved and further that the provisions of the Madras City Tenants Protection Act would leave in

tact the rights in favour of a tenant contained in any contract. In this connection, learned Counsel relied upon Sections 11 and 12 of the Madras

City Tenants Protection Act. That the rights of the appellant as a lessee continued to remain unaffected by the execution of the mortgage deeds

under ExsA-1 and A-2 was sought to be supported by referring to the decision in Varada Bongar Raju Vs. Kirthali Avatharam and Others, .

Though rival contentions, as set out above, have been raised, it is at once obvious that the main controversy centres round the question whether

inspite of the execution of the usufructuary mortgages under Exs.A-1 and A-2, the relationship of tenant and landlord with reference to a portion of

the suit property, was intended to be preserved. There is no dispute that under Ex.B.3, dated 30-8-1954, the appellant had been granted a lease

in respect of an extent measuring 9'' east to west and 27'' north to south with common pathway and well rights. This leases was to remain in force

for a period of five years. However, a few months after the expiry of a period of three years from the date of Ex.B-3, under Ex.A-1 date 27-11-

1957, the respondents have executed an usufructuary mortgage in favour of the appellant for Rs. 1,850. The property mortgaged under Ex.A-1

takes in the entirety of the property, inclusive of that portion leased out in favour of the appellant under Ex.B-3, dated 30-8-1954. The further

recital in Ex.A-1 is to the effect that the property usufructuarily mortgaged thereunder is in the possession of the mortgagor and that, from that date

onwards, the mortgagee should enjoy the property mortgaged, in lieu of interest for a period of seven years and that thereafter, the mortgagor

would pay a sum of Rs. 1,850 and take back possession of the property along with the mortgage deed. If the intention of the parties under Ex.A-

1, which had come into existence during the currency of the lease granted in favour of the appellant with reference to a portion of the suit property,

was to preserve the leasehold rights created in favour of the appellant under Ex.B-3, then, Ex.A-1 would have referred to the appellant having

enjoyed the rights in a portion of the property as a lessee till the date of Ex.A-1 and his right to enjoy the same as before for the unexpired period

of lease, after the expiry of the period fixed for redeeming the mortgage.

There is yet another very significant recital to the following effect:

It is thus seen from the recitals that the entire property is to be enjoyed by the appellant as an usufructuary mortgagee for a period of seven years in

lieu of interest and that on the expiry of the period, the amount secured by the mortgage would be paid and possession of the property taken back

from the appellant. It is also significant that even the parties to Ex.A-1 had agreed that apart from the usufructuary mortgage created under Ex.A-1,

there is no other right created in favour of any other party. It is thus clearly manifested in Ex.A-1 that the relationship between the appellant and the

1st respondent was only of an usufructuary mortgage and mortgage with reference to the entirety of the property, without any distinction whatever

between the portion leased out to be appellant and that not so leased out. That this is so, is further reinforced by the recital that no other person

has any other right whatever over the property. This certainly would not have been the recital, if the intention of the parties was to preserve in tact

the leasehold rights created by the 1st respondent in favour of the appellant under Ex.B-3 in respect of a portion of the property usufructuarily

mortgaged. Thus, when Ex.A-1 came into being during the time when the lease under Ex.B-3 was in force, there has, been no reference in it to the

pre-existing leasehold rights or the property leased and the leasehold rights therein, not forming the subject-matter of the usufuctuary mortgage as

such. This is further supported by the recitals in the usufructuary mortgage deed executed under Ex.A-2, dt. 7-4-1964. After referring to the

execution of Ex.A-1, the Ist respondent creates yet another usufructuary mortgage for Rs. 2,150 and directs the appellant to enjoy the entire

property for a period of ten years in lieu of interest. A perusal of the description of the property shows that it takes in the entire property, inclusive

of the shed measuring north to south 19'' and east to west 9''. The manner in which the appellant is to enjoy the property as usufructuary

mortgagee, is stated as under:

The recital under Ex.A-2 that the appellant is at liberty to let out the property to any one, indicates that there was no intention in the parties to keep

intact or preserve the tenancy of a portion of the property in favour of the appellant. In the decision in Shah Mathuradas Maganlal and Co. Vs.

Nagappa Shankarappa Malage and Others, , the Court has pointed out that if the intention of the parties was to revive the tenancy, then there was

no necessity for a term that the property may be let out to any one. Again, both in Ex.A-1 and Ex.A-2 there is not the slightest indication that the

leasehold rights in favour of the appellant were intended to be preserved either by specific reference to that or even impliedly. On the contrary, the

usufructuary mortgage deeds deal with the entirety of the property without making any distinction between the portion leased out and the portion

not leased out and confers rights of usufructuary mortgagee in favour of the appellant, who has been empowered to remain in possession of the

property in lieu of interest, either by himself or even by letting out, as provided in Ex.A-2. Thus, the recitals in Exs.A-1 and A-2, the inclusion of

the entire property without making any distinction between that portion wherein the leasehold rights have been granted in favour of the appellant

and the rest in the usufructuary mortgage deeds, the reference to the absence of any other right in favour of the appellant apart from what had been

created under the document, the provision for enjoyment of the entire property either by the appellant himself or by leasing it out to other, the

absence of any reference to the leasehold rights in the mortgage deeds, cumulatively establish that it was farthest from the intention of the parties to

keep in tact the leasehold rights in favour of the appellant with reference to a portion of the property, despite the execution of the mortgage deeds.

It therefore follows that after the execution of Exs.A-1 and A-2, there is no question of the appellant still being entitled to rights as a lessee on the

strength of the lease deed dt. 30-8-1954 executed in his favour.

Unfortunately, the lower appellate Court has not adverted to the aforesaid aspects, but has proceeded to consider the question of the leasehold

rights in a portion of the property in favour of the appellant being kept in tact, merely from the point of the relative value of the right as lessee and

the right as an usufructuary mortgagee. The entire reasoning of the lower appellate Court in Paras. 7, 9 and 10 proceeds only on the footing that

rights under the Madras City Tenants Protection Act are more valuable than the rights as an usufructuary mortgagee and therefore, it is not

probable that such valuable leasehold rights had been given up at the time of the execution of the usufructuary mortgage under Ex.A-1. The relative

value of the rights, is not the proper basis for deciding the question whether despite the execution of the usufructuary mortgage deeds under Exs.A-

1 and A-2, the leasehold rights were kept in tact. The approach should be, whether despite the transactions of usufructuary mortgages entered into

under Exs.A-1 and A-2, the prior leasehold rights in a portion of the property in favour of the appellant, were intended to be kept in tact

unaffected by the right conferred as an usufructuary mortgagee. The lower appellate Court, apart from characterising the rights as a lessee, as more

valuable, and being in the nature of a larger right, has also stated that no prudent person would have opted to give up the valuable rights as a lessee

under the Madras City Tenants Protection Act, by accepting possession of the property as art othidar. This line of reasoning, as pointed out

earlier, is fallacious, and cannot therefore be supported at all.

The lower appellate court has concluded that the leasehold rights in favour of the appellant, were agreed to be kept in abeyance during the

subsistence of the mortgage on the strength of an oral arrangement. In the written statement, the appellant pleaded that he agreed to advance

monies only if the leasehold rights in his favour were kept in tact. If this is true, then, nothing prevented the appellant from insisting that a recital to

the effect that his leasehold interest in a portion of the property would be kept in tact, should be included in the mortgage deeds executed by the Ist

respondent. That has not been done. Under the terms of the mortgage deeds, it has been clearly stated that the possession of the appellant would

only be that of a mortgagee with reference to the entirety of the property and the appellant had accepted the usufructuary mortgages on those

terms and had advanced monies to the 1st respondent. To put forth an oral agreement that only if the leasehold rights were maintained, he had

agreed to advance monies, would be contrary to the terms under Exs.A-1 and A-2, under which, the appellant had agreed to advance monies on

the strength of the usufructuary mortgage deeds executed by the Ist respondent. The lower appellate Court has found an oral arrangement to keep

the leasehold rights in abeyance during the subsistence of the usufructuary mortgage, to be revived on redemption. It is significant that no agreement

of the type found by. the lower appellate court, has been pleaded by the appellant. The appellant, has also not given any details or particulars as to

when and how the so called oral arrangement was arrived at. The lower appellate Court has omitted to refer to the vital recitals in the documents,

Exs.A-1 and A-2 and has also failed to give effect to the legal consequences flowing therefrom. It is further seen from para 9 of the judgment of

the trial Court that even according to the appellant, it was not a contemporaneous agreement at the time of Ex.A-1. This is so even with reference

to Ex.A-2. Thus, even on the footing that the appellant can put forth a plea of oral agreement, that would run counter to the recitals in Exs.A-1 and

A-2, and it cannot be countenanced in law. The lower appellate Court was therefore in error in finding an oral arrangement to keep the leasehold

rights in abeyance during the subsistence of the usufructuary mortgages to be revived on redemption.

Thus, on a consideration of the pleadings and the evidence, it is clear that the leasehold rights in favour of the appellant in a portion of the suit

property, were not intended to be kept in tact even after the execution of the usufructuary mortgage deeds, Exs.A-1 and A-2 in his favour, and

therefore, the appellant is not entitled to resist redemption in respect of the property of an extent of 9'' x 27'' leased out in his favour. In this view, it

is unnecessary to refer to the other contentions raised or the decisions relied on by both sides. Consequently, the lower appellate Court was in

error in declining to grant the relief of redemption with reference to the extent of 9'' x 27'' and in holding that the appellant is entitled to continue as

a tenant of the vacant site measuring 9'' x 27''. In other words, the respondents will be entitled to redemption and physical possession of an extent

of 9'' x 27'' as well.

Insofar as the main second appeal is concerned, in view of the conclusions arrived at earlier, that the appellant did not have any subsisting

leasehold rights in the property after the execution of the usufructuary mortgages under Exs.A-1 and A-2 in his favour by the Ist respondent, there

is no question of declaring further rights in favour of the appellant in relation to the common pathway and well, as prayed for by the appellant.

Consequently, the memorandum of cross objections is allowed, the modification of the decree of the trial Court made by the lower appellate

Court, is set aside and the judgment and decree of the trial Court will stand restored. The second appeal is dismissed. There will be no order as to

costs either in the memorandum of cross objections or in the second appeal.