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Judgment
Ramaswami, J.—These are two connected appeals arising from the decrees and judgment of the learned Subordinate Judge of Ottapalam in
A. S. Nos. 97 and 98 of 1950, modifying the decrees and judgment of the learned District Munsif of Chowghat in O. S. Nos. 299 and 127 of
1949.
The facts are :-- Ex. B-2 is a copy of the pattamchit executed by the defendants'' predecessor Itteeri in favour of the then karnavan of the
plaintiffs'' family and a junior member. That document recites that the properties were already in the possession of Itteeri as a lessee and that he
was taking verumpattam lease with the liability to pay an annual rent of 45 1/2 paras of Paddy. Ex. B-3 is a possessory mortgage deed executed
by the karnavan and a junior member of the plaintiffs'' tarwad to Itteeri''s son Velu in respect of the properties.
It recites that the properties were possessorily mortgaged to Velu for a sum of Rs. 250. It also recites that the properties were in the possession of
Velu as a tenant. The document finally states that out of the pattam of 45 paras and 3 3/4 narayams of paddy, 35 paras might be appropriated by
Velu towards the Interest on the mortgage amount and that the balance of 10 paras 3 3/4 narayams should be paid to the mortgagors. The term of
the mortgage was one year. After that period the mortgagee was to surrender Possession of the properties.
Provision was also made for setting off the amount due from the mortgagee against the mortgage amount at the time when possession had to be
surrendered. These are undisputed facts. On the mortgagors seeking to redeem the property, because by operation of Madras Act IV of 1938 as
subsequently modified by Act XXIII of 1948, the mortgage had become extinguished, they were met with the contention that delivery of
possession could not be given because the fact of a tenant''s taking a mortgage of land comprised in his holding from his landlord does not of itself
extinguish the tenancy by merging the rights of the tenant In those of the mortgagee and the effect of such a mortgage on the tenant''s rights would
be merely that ''they would be in abeyance and that when the landlord redeemed the mortgage, the parties would revert to their former position,
and the land-lord would, not be entitled to get possession of the land except by ejecting the tenant In due course of law.
In other words, it is clear that the mortgagors want to evict these defendants and take Possession of the property and the defendants are setting up
fixity of tenure in order to defeat that claim of the plaintiffs.
Both the lower Courts accepted this contention of the defendants which is based upon the judgment of the Allahabad High Court in Kallu v.
Diwan ILR 24 All 487 (A).
The defeated mortgagors prefer these anneals on the ground that the prior leases got terminated with the mortgage and that the lessee''s interest
merged in the mortgage right at its acquisition as a large and superior interest, and secondly that on accepting the mortgage there was an implied
surrender of the leasehold. This contention is based upon a recent decision of the Travancore -- Cochin High Court in Velu v. Lekshmi, AIR 1953
Trav-Co. 584 (B) .
Therefore, the short point for determination before me is whether the contention of the defendants which has been accepted by the lower Courts
or the contention put forward before me by the plaintiffs is correct.
I have no hesitation in accepting the contention of the plaintiffs advanced before me based upon the decision in AIR 1953 Trav-Co. 584 (B). It
is a case almost identical with the facts of the present case. In fact it is one of the rare instances where the learned advocate has been able to hand
over to me a decision on all fours with the appeals under consideration. In that case the facts were: Kidangaserry Tharanananellur Illom, the jenmi,
leased on verumpattom an item of land to Kurunhikattall Manickan and another item to Manali Makkotha.
During the subsistence of these leases the lessor in the year 1080 executed a usufructuary mortgage and in 1092 a purankadam deed to
Manickan''s son and heir Raman. These were possessory mortgage and purankadam which formed the basis of the suit. In 1081 Makkotha
attorned to Raman. After obtaining the purankadam Raman apportioned an amount of Rs. 50 from out of the mortgage money of Rs. 200 and a
further advance of Rs. 50 for the purankadam upon the item in Makkotha''s possession as lessee and assigned that part of his rights to Makkotha.
The illom assigned its right over both the items to the plaintiff in the suit in 1120. Meanwhile the rights of Makkotha had by several transfers and
transmissions, devolved upon Kailath Kochuraman. Kochuraman surrendered the property to the plaintiff. Having thus obtained possession of one
of the items on payment of the proportionate part of the mortgage and Purankadam amounts, he brought the suit for redemption of the other item
on payment of the balance amount and claiming khas possession though the mortgagee was not inducted into possession along with the mortgage
on the allegation that the antecedent lease terminated with the mortgage, whereafter the relationship between the parties was merely one of
mortgagor and mortgagee and not of lessor and lessee.
The defence was that the lease did not terminate with, but survived, the mortgage whose redemption would have the effect of only freeing the
property from the encumbrance thereunder leaving the lessee in possession thereof as such. The question that arose for consideration was as
regards the effect of the mortgage transaction upon the pre-existing lease. The learned Judge, Subramania Iyer, J. discussed the contentions of the
appellants before him from two points of view to which I have already made reference viz., that firstly, the lessee''s interest got merged in the
mortgage right at its acquisition as a large and superior interest and secondly, that on accepting the possessory mortgage there was an implied
surrender of the leasehold.
The learned Judge construed Section 111, Clause (f) of the Transfer of Property Act and found that the principle underlying it was that whenever a
certain relationship exists between two parties in respect of a subject-matter if the two sets of relationships cannot co-exist as being inconsistent
and incompatible, that is to say, if the latter can come into effect only on termination of the earlier that would be deemed to have been terminated in
order to enable the latter to operate. Therefore, the acceptance by the lessee, who takes a possessory mortgage of his leasehold from the lessor of
the obligation to surrender the property on redemption by payment of the mortgage money necessarily implies the non-existence of his rights to
possession of the property as lessee.
There is therefore an implied surrender of the lease with the execution and acceptance of the possessory mortgage. It is unnecessary for me to
discuss this matter further because I respectfully adopt the reasoning of the learned Judge and hold that in a case of this nature first of all the
lessee''s interest gets merged in the mortgage right at its acquisition as a larger and superior interest and secondly, that on accepting the possessory
mortgage there is an implied surrender of the lease-hold.
then turning to the Allahabad decision (A), which incidentally has not been noticed in the aforesaid decision cited just now, I respectfully prefer
not to follow this decision for the following reasons. The facts of that case Were: The Court of first instance (Munsif of Kairana) found that the
mortgaged land was Identical with that which the defendants asserted to be their tenancy and therefore gave the plaintiff a decree for redemption,
though not for possession. The plaintiff appealed, and the lower appellate Court (Additional Subordinate Judge of Saharanpur) modified the
decree of the first Court by decreeing possession in favour of the plaintiff.
The tenants in that case were found to be no more than non-occupancy tenants and it was held by that lower appellate court that by accepting the
mortgage they had by their own act changed the nature of their possession from that of tenants to that of mortgagees. There was an appeal to the
High Court and it was heard in the first instance by Banerji, J. The relevant portion of the judgment of Banerji, J. is as follows:
I take the lower appellate Court to hold that when the defendants took a mortgage of the land of which they had been non-occupancy tenants,
they gave up the tenancy and became mortgagees, and thus ceased to be tenants. There can be no doubt on the findings that the defendants had at
the date of the mortgage no right of occupancy in respect of the mortgaged land. It is also noticeable that the mortgage deed does not purport to
mortgage the zamindari rights of the mortgagor maintaining the tenancy rights of the mortgagees. It is not the defendants'' case that they were both
mortgagees and tenants.
From these circumstances it may he rightly inferred and that I take to be the inference at which the lower appellate Court has arrived, that the
defendants ceased to be the tenants of the plaintiff, and took a mortgage of the land of which they were tenants. That being so, no question of the
acquisition of a right of occupancy or of the existence of a tenancy arises, and the mortgagor is entitled to possession of the land which he
mortgaged to the defendants under the usufructuary mortgage in question.
This case is different from that of a mortgage, which included land in which the mortgagee had a right of occupancy before the mortgage. I dismiss
the appeal with costs.
There was a Letters Patent Appeal and the leading judgment was delivered by Blair, J., the other judge being Aikman, J. Blair, J. purported to
follow an unreported judgment of Burkitt, J. which fortunately for us had been reproduced at p. 491. On a reference to that judgment we find that
Burkitt, J. dealt with only a case of occupancy ryot before taking a mortgage and after taking a mortgage. Therefore, Burkitt, J. began with the
opening words:
In my opinion the decision of the Additional Judge in this case cannot be supported. I entirely dissent from the novel and extraordinary doctrine
laid down by the Additional Judge that, if an occupancy tenant lends money to his landlord and takes from his landlord a mortgage of an area of
land, which includes his own occupancy holding, he thereupon ceases to be an occupancy tenant under some novel doctrine of merger, apparently
invented for this case.
If this doctrine were affirmed, the result would be that the occupancy tenant referred to would be in a much worse position after his possession as
mortgagee had ceased than before. For according to the Additional Judge he would have ceased to be an occupancy tenant, I cannot assent to this
doctrine. I see no reason why in such a case the occupancy tenure should be forfeited, and it is the first time I have heard such a doctrine mooted.
On the other hand, the case before Blair and Aikman, JJ. was only the case of a non-occupancy ryot, before taking the mortgage, which makes
all the difference in the world Blair, J. gets over it with this rather bald statement:
In our opinion the ruling in that case is absolutely sound law, and governs cases of tenancy of a less durable character than an occupancy right"".
In support of this proposition, which in no way follows from the judgment of Burkitt, J. there is neither discussion nor citation. This is the only
sentence to be found in the judgment of Blair J. in support of a proposition which does not flow from the decision of Burkitt, J. Turning to the
judgment of Aikman, J., he observed:
The lower appellate Court and our learned colleague came to the conclusion that the effect of the mortgage was to put an end finally to the
defendants'' tenancy. In my opinion that is a conclusion which is not warranted by law"".
Which law does not warrant it, has not been indicated. Lower down he observes:
The effect of the mortgage was to suspend for the time being the relationship of land-holder and tenant between the parties. When the mortgage is
redeemed, the parties are relegated to the position which they occupied immediately before the mortgage was executed.
I could understand this reasoning if it relates to an occupancy tenancy because in such a case the mortgage could suspend the operation of the
occupancy tenancy itself and after the mortgage debt is extinguished, the man would be relegated to the previous unextinguished vested
nonevictable position of an occupancy tenant whose fixity of tenure will only be terminated by relinquishment or by sale of the holding for arrears
and rent (to mention two instances). In the case of a non-occupancy tenant when the mortgage gets extinguished, what is the relation back of this
non-occupancy tenant?
He will be relegated to nothing because he was only a verumpattomdar having no fixity of tenure. Zero back to Zero rules out abeyance. On
account of the fact that we do not know the rights of non-occupancy tenants in Saharanpur area in 1902 it is not possible for us to follow Justice
Aikman''s penultimate sentence ""they were at all events agricultural tenants who had certain rights including the right to retain possession of their
holding until ousted in due course of law.
All that we know is that the Verumpattadar in Kerala has no such rights. That is why I have said the relegation can only be to zero rights. I
respectfully, therefore, consider that this judgment of the Allahabad High Court should not be followed in preference to that of the Travancore-
Cochin Court''s judgment which has decided a controversy of precisely identical nature, apart from the fact that the learned Judge of the
Travancore-Cochin High Court dealt with native knowledge of verumpattam tenure and Malabar usufructuary mortgage, because these
controversies both before that Court as well as this Court arise from the same Kerala area.
In the result I reverse the decrees and judgments of both the lower Courts and find under the points for determination in both these appeals as
follows; viz., that the plaintiffs-appellants are entitled to get actual possession of the properties, that they are entitled to get mesne profits after the
extinguishment of the usufructuary mortgage up to the date of delivery of possession at 45 1/2 paras of paddy per annum shown as the amount
going towards the reduction of the principal and interest representing the income from the property, for which the defendants would be liable to
account to the plaintiffs. These appeals, in the result are allowed with half costs throughout. Vakil''s fee to be taxed only in one appeal.