1. This Letters Patent Appeal has been preferred against the Judgment of Ismail, J., (as he then was) in App. No. 647 of 1970. The appeal originally came up for hearing before a Division Bench of this court, consisting of Ramanujam and Sengottuvelan, JJ. The Division Bench -felt that the question which arose for consideration in the appeal, viz, whether a tenant inducted into possession by an usufructuary mortgagee can claim the benefits of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960, as against the mortgagor, after the redemption of the mortgage, warranted consideration by a Full Bench, in view of the importance of the question and the conflict of authorities. Accordingly, this Bench has been constituted to consider the appeal and that is how the matter is before us.
2. One P. V. J. Vella Batcha Rowther, who was the plaintiff in the suit, was the owner of the suit property, viz., a non-residential building bearing door No. 55 in Jawahar Bazar in Karur town. He had created three mortgages with possession over the suit property under Ex. A. 1, dated 21-12-1953, Ex. A. 2 dated 14-2-1959 and Ex. A. 3 dated 25-81964. All the mortgages were created in favour of the first defendant who is none other than the son-in-law of the plaintiff. When the first mortgage was created, one Chinnasami Naidu was in occupation of the property as a tenant. He subsequently vacated the property and thereupon, the first defendant let out the property to the 2nd defendant. The lease was first effected under a registered rent deed Ex. A. 12, dated 25-61954 and the tenancy was continued by means of another rent deed Ex. A. 13, dated 26-8-1963. The tenancy created under Ex. A.13 was for a period of 3 years with effect from 1-5-1963. However, the 2nd defendant did not vacate the premises on the expiry of the 3 years' period and he continued to be in occupation of the building. On 13-3-1968, the plaintiff redeemed all the three mortgages and then called upon the 2nd defendant to surrender possession of the building, On the 2nd defendant failing to comply with the demand the plaintiff came forward with the suit, O. S. No. 273 of 1968, on the file of, the Court 32 of the Subordinate Judge Tiruchirapalli, on 22-6-1968, for recovery of the suit building together with profits, past and future, at the rate of Rs. 40 per mensem.
3. Even before the filing of the suit, the 2nd defendant filed a petition, R. C. O. P. No. 47 of 1967, on the file of the Rent Controller, Karur and prayed for recognition of his status as a tenant under the plaintiff and for permission for depositing in court the rent payable for the suit property. The plaintiff opposed the petition- and eventually the petition was closed, after the filing of the present suit, on a joint endorsement made by the parties that without prejudice to the contentions of either party in the suit the 2nd defendant can deposit the rent in court. In the ejectment suit the first defendant did not set up any defence, and, in fact, he remained ex parte. The 2nd defendant alone contested the suit and he raised various defences, the principal one among them being firstly that as per joint representations made to him by the plaintiff and the first defendant, he attorned his tenancy to the plaintiff and thenceforth he had become a tenant directly under the plaintiff and was therefore entitled to the benefits of the Tamil Nadu Buildings (Lease and Rent Control) Act (hereinafter referred to as the Act), and secondly, that even assuming that a direct relationship of landlord and tenant between the plaintiff and himself had not come into existence, he would still be entitled to the benefits of the Act inasmuch as the tenancy created by the first defendant, the mortgagee, was referable to Section 76(a) of the Transfer of property Act, and in such circumstances, the tenancy did not come to a close on account of the redemption of the mortgages by the plaintiff. Both the contentions were repelled by the learned trial Judge. In the appeal before, the learned single Judge, of this court, the first contention, among others, was successfully canvassed. But, so far as the second contention is concerned, it was not pressed. Hence, the learned single Judge dealt with the matter as follows-
''Having regard to the decision of this court and other courts on this point, it was not contended before me that the appellant, as a tenant of the usufructuary mortgagee, would be entitled to claim the protection of the Tamil Nadu Buildings (Lease and Rent Control) Act, 18 of 1960, as against the mortgagor viz, the first respondent herein after the discharge of the mortgages".
Since the other contentions urged before the learned single Judge were not accepted, the learned Judge confirmed the judgment and decree of the trial court and dismissed the appeal.
4. Before adverting to the contentions of the second defendant-appellant in this appeal, we may refer to certain facts so as to make the record complete. During the pendency of A. S. 647 of 1970, the plaintiff (the first respondent therein died and hence his legal representatives had been brought on record or respondents 3 to 7, and, they are respondents 2 to 6 in this appeal. Yet another development is that during the pendency of this appeal, the right, title and interest in the suit property has been purchased by the Ramarathnammal and hence she has been added as the 7th respondent herein.
5. The only contention raised in . The Letters Patent Appeal and with reference to whi6h the Full Bench has been constituted to render judgment, is that the appellant continued to be a tenant of the suit property even after redemption of the usufructuary mortgages by the plaintiff so as to claim protection under the Act against unreasonable eviction. Though this question was not agitated, before the learned single Judge in spite of its having been raised in the grounds, Mr. M. R. : Narayanaswami, learned counsel for the appellant, took the stand that in view of the decision of a Full Bench of this Court, to which one of us was a party, in Chandrasekaran v. Kunju Vanniar, (FB) and the decision of the Supreme Court in Ponniah v. Perumal, , the question which is purely legal in character survives for consideration in the Utters Patent appeal. Both the cases referred to above arose under the 'Tamil Nadu Cultivating Tenants protection Act (here in after referred to as the C. T. P. Act).In Chandrasekaran v. Kunju Vanniar, (FB), it was held that the tenants under an usufructuary mortgagee are entitled. After redemption of the usufructuary mortgage, to claim the protection grant eel under C. T. P. Act, as against the mortgagor. In Ponniah v. Perumal, , it was held by the Supreme Court that a
tenancy created by a life estate holder could legally extend beyond 'her life and the rights of the cultivating tenant , would be protected by the Visions of the C. T. P. Act. It was principally on the ratio contained in these cases, Mr. Narayanaswanmi sought to contend that the tenancy created in favour of the appellant by the usufructuary mortiagee,.viz., the 2nd defendant, will enure to the benefit of the appellant even after the redemption of the usufructuary mortgages and consequently the appellant is entitled to the protection under the Act. In addition, he also placed reliance on Tajammul Husain v. Mir Khan, (FB) and Durai Knitting Co. v. Ramasubramanian,
(1976) 1 Mad LJ 351, where an identical question as the one raised in this appeal came up for consideration and was answered in favour of the tenant. The contentions of Mr. Narayanaswami were opposed by Mr. T. R. Rajagopalan, learned counsel for the contesting respondents and he placed reliance on certain decisions of the Supreme Court as well as certain Full Bench decisions of the Gujarat High Court and the High Court of Punjab and Haryana, to which we shall make reference at a later portion of the judgment. For a proper appreciation of the question, it is necessary to refer to the case law on the subject and the ratio laid down In various cases
6. The first pronouncement of Supreme, Court is contained in Mahabir Gope v. Harbans Narain, , where the Supreme Court had to consider whether a lease created by a mortgagee with possession would ensure to the benefit of the lessee after the redemption of the mortgage so as to entitle him to claim benefits under the Bihar Tenancy Act. The Supreme Court observed as follows -
"The general rule is that a person cannot by transfer or otherwise, confer a better title on another, than he himself has. A mortgagee cannot, therefore, create an interest in the mortgaged property which will ensure beyond the termination of his interest as mortgagee. Further, the mortgagee, who takes possession of the mortgaged property, must manage it as a person of ordinary prudence would manage if it were his own and he must not commit any act which Js destructive or permanently injurious to the property, see Section ", sub-sections (a) and (e) of the Transfer of Property Act.
It follows that he may grant leases not extending beyond the period of the mortgage; any leases granted. by him must come to an end at redemption. A mortgagee cannot during the subsistence of the mortgage, act in a manner detrimental to the mortgagor's interests such as by giving a lease, which may enable the tenant to acquire permanent or occupancy rights in the land thereby defeating the mortgagor's right to 'Khas' Possession; it would be an act which would fall within the provisions of Section 76 sub-clause (e) of the Transfer of Property Act.
A permissible settlement by, a mortgagee in possession with a tenant in the course of prudent management and the springing up of rights in the tenant conferred or created by statutes based on the nature of the land and possession for the requisite period is a different matter altogether. It is an exception to the general rule. The tenant cannot be ejected by the mortgagor even after the redemption of the mortgage. He may become an occupancy 'raiyat' in cases and a non-occupancy 'raiyat' m other cases. But the settlement of the tenant by the mortgagee must have been a bona fide one. This exception will not apply in a case where the terms of the mortgage prohibit the mortgagee from making any settlement of tenants of the land either expressly or by necessary implication".
On the facts of the cat3e, the Supreme Court held that the lessees would not be entitled to claim benefits under Sees. 20 and 21 of the Bihar Tenancy Act since they were not 'settled raiyats' and as such, the mortgagor was entitled to the possession of the land upon redemption of the mortgage.
7. The Supreme Court was again seized of the question in Haribar Frasad v. Deonarain Prasad, AIR 1956 W, 305. The question posed was whether the rights of a tenant inducted by mortgagee with possession would as beyond the period at redemption, as against the mortgagor. From the facts of the case it was noticed by the Supreme Court that the lands were under the personal cultivation of the mortgagors at the time they were mortgaged. Hence there was no question of there being any 'raiyats' of the land and. likewise. any question of the rights of collection of rent being transferred in favour of the mortgagees by the mortgagor. Venkatarama Aiyar, J.,speaking for the Bench observed that the argument on behalf of the tenant proceeded on a confusion of two wholly, independent concepts distinct in their origin and different in their legal incidents. The learned Judge observed as follows-
"The law is that a person cannot confer on another any right higher than what he himself possess, and therefore, a lease created by an usufructuary mortgagee would normally terminate on the redemption of the mortgage. Sec. 76(a) enacts an exception to this rule. If the lease is one which could have been made by the owner in the course of prudent management, R would be binding on the mortgagors, notwithstanding that the mortgage has been redeemed. Even in such a case, the operation of the lease cannot extend beyond the period for which it was granted".
Dealing with the facts of the case it was held the right conferred by Section 21 of the Bihar Tenancy Act was a creature of the statute and could not be claimed apart from its provision and that if the tenant could not resist a suit for ejectment either by reason of Section 76(a) of the Transfer of Property Act, or. Section 21 of the Bihar Tenancy Act the tenant could not get such 4 right as a result of the interaction of both those sections. The Supreme Court ultimately held that the tenants inducted by the mortgagee with possession had failed to establish that they had any right of occupancy over the suit lands. Thus, a right claimable under Section 76(a) of the Transfer of Property Act, because of a lease created in. the course of prudent management of the property was put on a different footing altogether, from a right created by a special statute.
8. In Asa Ram v. Mst. Ram Kali , the question before the Supreme Court was, once again, with reference to the rights of a tenant inducted into agricultural land by a mortgagee with possession. The Court observed as follows:
"The law undoubtedly is that no person can transfer property so as to confer on the transferee a title better than what he possesses. Therefore, any transfer of the property mortgaged, by the mortgagee must cease, when the mortgage is redeemed. Now, Section 76(a) provides that a mortgagee in possession must manage the property as a person of ordinary prudence would manage if it were his own. Though on the language of the Statute, this is an obligation cast an the mortgagee, the authorities have held that an agricultural lease created by him would be binding on the mortgagor even though the mortgage has been' redeemed, provided it is of such a character that a prudent owner of property would enter into it in the usual course of management. This being in the nature of an exception, it is for the per-' son who claims the benefit thereof to strictly establish it".
The Supreme Court pointed out in paragraph 7 of the judgment that if there is a prohibition contained in the mortgage deed against letting of the lands by the mortgagees, the lease would not be binding on the mortgagors, 'but where there is no such prohibition, the only consequence is that the parties would be thrown back on their rights under the Transfer of Property Act, and the lessees must still establish that the lease is binding on the mortgagors under Section 76(a) of that Act. On examination of the facts of the case, the Supreme Court held that the lease before then4' which was granted by the mortgages in possession, was neither competent nor bona fide and hence, under Section 76 al of the Act, the lease created 'by the mortgagees would not be binding on the mortgagors. It was further observed-
"An owner will of course be entitle& to admit a tenant and a mortgagee in possession would have a right to do so, either if he is authorised in that behalf by the deed of mortgage, or if the transaction is one, which is protected by Section 76(a) of the Transfer of Property Act. But, where the transaction is -not one which could be upheld under S. 76(a), then there is no admission of tenant by any person having authority to do so, and such a transaction, though valid between the mortgage and the lessee, cannot from the foundation on which any rights under Section 29, sub-section (a) of the U. P. Tenancy Act could, be based.
On the facts of the case, it was held that It was a condition precedent to the application of the provisions of the U. P. Tenancy Act, that the person must have been admitted as a tenant by one who had a right to do so and if it was found that the person who purported to grant the lease had no authority to do so, whatever right may be created inter se between the lesser and the lessee, as against the true owner, the lessee does not, in law acquire the status of a tenant.
9. In Dahya Lala v. Rasul Mohamed, , the Supreme Court had to consider whether tenant inducted on agricultural land by a mortgagee in possession would fall under the category of 'tenant' or 'another mortgagee in possession'. The Court held that he would only be a tenant and as such, he would 'be entitled to the protection from eviction afforded to tenant by Section 4 of the Bombay Tenancy and Agricultural Lands Act, 1948. Shah, J as he then was, who delivered the judgment for the Bench dealt with the matter as follows-
"Under the Transfer of Property Act, the right of a tenant who has been inducted by a mortgagee in possession ordinarily comes to an end with the extinction of the mortgage by redemption, but that rule, in our judgment, has no application in the interpretation of a statute which has been enacted with the object of the granting protection to persons lawfully cultivating agricultural lands. Nor has the contention that the expression 'mortgagee in possession' includes a tenant from such a mortgagee any force, A mortgagee in possession is excluded from the class of deemed tenants on ground of Public policy; to confer that status upon a mortgagee in possession would be to invest him with rights An consistent with his fiduciary character. A transferee of the totality of the rights of a mortgagee in possession may also be deemed to be a mortgagee in possession. But a tenant of the mortgagee in possession is inducted on the land in the ordinary course of management under authority derived from the mortgagor and so long as the mortgage subsists, even under the ordinary law he is not liable to be evicted by the mortgagor. It appears that the legislature by restricting the exclusion to mortgagees in Possession from the class of deemed tenants, intended that the tenant lawfully inducted by the mortgagee shall, on redemption, of the mortgage, be deemed to be tenant of the mortgagor".
Yet another case 'relating to the question of the status of a tenant inducted into agricultural l4nd by an usufructuary mortgagee, 'considered by the Supreme Court, is Prabhu v. Ramdeo . The tenant therein claimed that notwithstanding the redemption he was entitled to continue his tenancy as per the provisions of the Rajasthan Tenancy Act, 1955, which Act had been enacted subsequent to the creation of the tenancy Gajendragadker, C. J., who delivered the judgment, sustained the case of the tenant and stated that the ratio laid down in Mahabir Gope v. Harbans Narain, and Harihar Prasad v. Deonarain Prasad, AIR 1956 SC 305, did not run counter to the claims of the tenant. The learned Chief Justice, after stating that, the observations in Mahabir Gope v. Harban'sNarain ., (which we have extracted above) were made by reference to the normal relationship between a mortgagor and the mortgagee and their respective rights and obligations as determined by the relevant provisions of the Transfer of Property Act, held as follows -
"Having made these observations, however, this court has taken the precaution to point out that even in regard to tenants inducted into the land by a mortgagee, cases may arise where the said tenants may acquire rights of special character by virtue of statutory. Provisions, which may in the meanwhile, come into operation. A permissible settlement by a mortgagee in p9ssession with a tenant in the course of prudent management and the springing up of. rights in the tenant conferred or created by statute based on the nature of the land and possession for the requisite period, it was observed, was a different matter altogether. Such a case is clearly an exception -to the general rule prescribed by the Transfer of Property Act. It will thus be seen that while dealing with the normal position under the Transfer of Property Act, this Court specifically pointed out that the rights of the tenants inducted by the mortgagee may conceivably be improved, by virtue of statutory provisions which may meanwhile come into operation".
The Supreme Court also considered Harihar. Prasad v. Deonarain Prasad, AIR 1956 SC 305 and pointed out that that decision turned upon the relevant Provisions of the Bihar Tenancy Act. Eventually, in view of the provisions of the Rajasthan Tenancy Act, 1955, the Supreme Court held that the tenant inducted by the mortgagee in possession was entitled to the rights of khatedar by virtue of the provisions of Section 15 and he could not be evicted by the mortgagor on redemption of the mortgage.
10. The sum and substance of, the cases referred to above has been set out in Mullah on Transfer of Property Act 1882, 6W Edn, at p. 528 as, follows -
"In Mahabir Gope v. Harbans Narain , the Supreme
Court observed that the right conferred under clause (a) was an exception to the general rule that a person cannot confer a better title an another than that he possesses himself. The Court pointed out that it followed that though a mortgagee may, if it is prudent, grant leases, these would determine on redemption The court recognised, however, that in some cases the granting of a lease in the course of prudent management might result in the tenant acquiring rights under other laws so that he could not be evicted by the mortgagor, but this was an exception, and could not apply where the mortgage deed prohibited such a lease either expressly or by necessary implication. These observations do not appear to have been followed in Harihar Prasad Singh v. Deonarain Prasad. AIR 1956 SC 305, where the Supreme Court held that even a lease created by a mortgagee in possession in the course of prudent management, though binding on the mortgagor after redemption, could not create the rights of a raiyat on the tenants. The question has next considered in As a Ram v. Ram Kali , where the Supreme Court
held that the creation of a lease which would create occupancy rights in favour Of the tenants could not be regarded as a prudent transaction. In Prabhu v. Ramdeo, , however, the
Supreme Court, without referring to Agaram's case , held that a tenant of a mortgagee can invoke the benefit of subsequent tenancy legislation which provided that such a tenant could not be evicted except in the circumstances set out in that legislation., The court explained Mahabir Gope's case , as being a decision given with reference to the
normal relationship of landlord and tenant, and stressed that the Supreme Court in that cue had contemplated an extraordinary situation arising from a tenant acquiring rights under other laws. The Court explained Harihar Prasad Singh!s case AIR 1956 SC 305, as having been decided on the peculiar facts of the case, viz., that in that case the tenants were not entitled under the local law to invoke the protection of that law".
11. All the cases referred to above, it is worthy of note, were cases of agricultural lands and in each of those cases, the question was examined from two angles, me, whether the tenancy created was referable to prudent management of the agricultural property, and the other, whether the rights of the tenant inducted by the mortgagee with possession had been enlarged as a result of a special stature dealing with the rights of tenants of agricultural lands. We will now proceed to refer to those cases where the effect of a tenancy created over nonagricultural properties, especially in urban areas, was considered. In Film Corporation Ltd. v. Gyan Nath, the
controversy was in respect of a lease of a cinema house granted by the mortgagee with possession. Hidayatullah, C. J. in the course of the judgment, observed that the first question to be considered was whether the tenancy created by the mortgagee in possession survived the termination of the mortgagee interest so as to be binding on the purchaser, and held as follows-
"A general proposition of law is that no person can confer on another a better title than he himself has. A mortgage is a transfer of an interest in specific immoveable property for the purpose of securing repayment of a loan. A mortgage's interest lasts only as long as the mortgage has not been paid off, Therefore on redemption of the mortgage, the title of the mortgage comes to an end. A derivating title from him must ordinarily come to an end with the termination of the mortgagee's title. The mortgagee by t creating a tenancy becomes the lessor of the property but his interest as lessor is conterminous with his mortgage interest. Section ill (e) of the Transfer of Property Act provides that a lease of immoveable property determines where the interest of the lessor in the property terminates on, or his power to dispose of the same, extends only to the happening of any event - by the happening of such event. The duration of the mortgagee's interest determines his position as the lessor. The relationship of lessor and lessee cannot subsist beyond the mortgagee's interest unless the relationship is agreed to by the mortgagor of fresh relationship is recreated. This is the mortgagor or the person succeeding to the mortgagees interest may elect to do. But, if he does not, the lessee cannot claim any rights beyond the terms of his original lessor's interest These propositions are well understood and find support in two rulings of this court in Mahabir Gope V. Harbans Narain Singh. and Asa Ram V- M56*
To the above proposition there is, however, one exception. That flows from Section 76(a) which lays down liabilities of a mortgagee in possession. It is provided there that when during the continuance of the mortgage, the mortgagee takes possession of the mortgaged property he must manage the property as a person of ordinary prudence would manage it if it were his own. From this it is inferred that acts done bona fide and prudently in the ordinary course of management, may bind even after the termination of the title of the mortgagee in possession. This principle applies ordinary to the management of agricultural lands and has seldom been,extended to urban property so as to tie it up in, the hands of the lessees or to confer on them rights under special statutes. To this again, there is an exception. The lease will continue to bind the mortgagor or persons deriving interest from him if the mortgagor had concurred to grant it.
12. These principles were applied to the facts of the case and it was found that a house in a growing city like Jullundur and suitable for a cinema theatre, has been tied down for a period of 15 years to a rent ranging between Rupees 150 to 250 per month, whereas the building was assessed at an annual rent of Rs. 10,800, for the years 1950 - 55 and a tenant willing to pay a better rent could easily have been found and as such the case was not covered by the exception because it cannot be held that such a long lease on such small rent was an act of prudence, whether it was a bona fide act or not, and whether the exception can apply to urban property.
13. The next case on the subject is Sachalmal Parasram v. Ratanbai, . A tenant inducted on urban immoveable property by a mortgagee in possession claimed tenancy rights even after the redemption of the mortgage so as to avail of the protection afforded to tenants by the Madhya Pradesh Accommodation Control Act, 1961. The Supreme Court held that the contentions advanced on behalf of the tenant did not survive for consideration in view of the decision in Film Corporation Ltd. v. Gyan Nath, . The Court, in its judgment, extracted the passages from the judgment in Film Corporation case and pointed out that the principle of Section 76(a) applied ordinarily to the management of agricultural lands and had seldom been extended to urban property so as to tie it up in the hands of lessees or to confer an them rights under special statutes .The Court - then examined the question whether the tenant could take advantage of the provisions of the Madhya Pradesh Accommodation Control Act and held that the definitions of the words 'tenant and 'landlord' in the said Act were in pari materia with the definition of those words in the East Punjab Urban Rent Restriction Act, 1949, and, as suck the termination of the mortgagee's interest terminated the relationship of landlord and tenant and consequently, there being no landlord and no tenant, the provisions of Madhya Pradesh Accommodation Control Act could not be invoked. Accordingly, the Supreme Court rejected the tenant's contentions.
14. In the course of its judgment, the Supreme Court approved the ratio laid down in two judgments of the Bombay High Court, one by a single Judge and the other, by a Division Bench These two cases are B. K. Ramji v. S, S. Jivraj, and Kamalakar & Co. v.
Gulamshafi, , In B. K. Ramji V. S. S. Avraj,
, a learned single Judge of the 3ombay High Court, , after referring to the ratio contained in Mahabir Gope V. Harbans Narain, , held that the relationship of lessor and
lessee was between the mortgagee and the tenants, that the owner of the property could not be considered a landlord of the mortgages tenants within the meaning of Section 5 (3) of the Bombay Rent Restriction Act, and hence no relationship of landlord and tenant existed between the owner of the building and the tenant inducted by. the mortgagee in possession and hence the tenant had to surrender possession as soon as the mortgage was redeemed.,The correctness, of the view taken in-the above said case was affirmed by a Division 3ench in Kamalakar and Co. v. Gulanishafi. . The Bench held.that inasmuch as the mortgagor was claiming the property on redemption in his own right and not through the mortgagee who had created the tenancy during the subsistence of the mortgage, it was impossible to hold that the mortgagor and the tenant would fall within the category of landlord and tenant as defined in the stances, the tenant was' not entitled 'to resist the action for recovery of possession. In the course of the judgment, the Division Bench referred to; a judgment of this Court in Chinnappa Thevar v,Pazhaniappa Pillai, AIR 1916 Mad 911,where it was held that tenancies created by a mortgagee in 'possession are binding on the mortgagor even after the redemption of the mortgage in so far as the relationship of landlord and tenant continues and that if the mortgagor desired to bring the tenancy to a close, he must do so by a regular suit under the Tenancy Act. The Division Bench observed that they found it difficult to agree with the broad proposition as laid down in Chinnappa Thevar v. Pazhani appa Pillai, AIR 1916 Mad 911, and further more, the ratio ran counter to the principles formulated by the supreme Court in Mahabir Gope v. Harbans Narain, .
Thus, it may be seen that so far as tenancies of non Agricultural lands, particularly buildings in urban areas, are concerned, Section 76(a) of the Transfer of Property Act, which provides for an exception to the rule contained in Section 111(e) of the same Act has been held to be seldom applicable so as to: tie up the Property in the hands of lessees or to confer on them rights under special statutes.
15. We shall now advert to the Full Bench decision of this court in Chandrasekhara v. Kunju Vanniar, (FB) and the
decision of the Supreme Court in Ponniah v. Perumal, , as well as the Full Bench decision of the Allahabad High Court in Tajammul Husain v. Mir Khan, (FB). on which reliance was placed by Mr. M. R. Narayanaswami and Jagannath v. Mitter Sain, (FB) on which reliance was placed by Mr. Rajagopalan. Chandrasekhara v. Kunju Vanniar, (1976) 2 Mad IJ 243 (FB) was a case which arose under the C. T. P. Act. The tenants under a usufructuary mortgage claimed, after redemption of the usufructuary mortgage, protection under the C. T. P. Act as against the mortgagor. The definition of the words 'cultivating tenant' and 'landlord' in the said Act and Section 3 (1) of the Act, which affords protection to tenants from eviction, need extraction for a correct understanding of the scope of the judgment. The term 'cultivating tenant' is defined in Sec. 2 (as) thus.:-
" ' Cultivating tenant '-
(i) means a person who contributes his own physical labour or that of any member of his family in the cultivation of any land belonging to another, under a tenancy agreement, express or implied and
(ii) includes - (a) any such person who continues 'in possession of the land after the determination -of the tenancy agreement;
(b) the heir of such person, if the heir contributes his own physical labour or that. of any member of his family in the cultivation of such land;
(c) a sub-tenant if he contributes his own physical labour or that of any member of his family in the cultivation of such lands; or
(d) any such sub-tenant who continues in possession of the land notwithstanding that the person who sublets the land to such sub-tenant ceases to have the right to possession of such land; but ,
(iii) does not include a mere intermediary or his
Explanation: A sub-tenant shall be deemed to be a cultivating tenant of the holding under the landlord if the lessor of such sub-tenant has ceased to be the tenant of such landlord".
The term 'landlord' has been defined in Section 2 (e) as meaning, in relation to a holding of part thereof, the person entitled to evict the cultivating tenant from such holding or part. Section 3 (1) of the said Act. says that subject to the next succeeding sub-sections of that section, no cultivating tenant shall be evicted from his holding or any part thereof, by or at the instance of his landlord whether in execution of a decree or ,order of a court or otherwise. Interpreting these pr ions, the Bench held as follows:-
"It is noteworthy that the first part of the definition of 'cultivating tenant' envisages a tenancy agreement, express or implied. The agreement is a sine qua non to bring about a tenancy. But, in order to make the tenant,a cultivating tenant, a further requisite is that he should carry on personal cultivation as defined which we have adverted to. When such a tenancy agreement comes to an end by whatever means, then the statutory tenancy begins by virtue of the inclusive definition of the term 'cultivating tenant'. Determination of tenancy agreement necessarily means that the contractual. Relationship of landlord and tenant brought to an end and notwithstanding only by reason of the fact that the cultivating tenant as defined in the first Part of the definition continued in possession of the land he is enabled to continue to have. the status of a' cultivating tenant To bring about that result the precedents are that there should have been in the origin a tenancy agreement, express or implied, and under that agreement to which the person is a party he should carry on personal cultivation, on the land. , If these premises are granted, though the agreement of tenancy express or implied had terminated but the person mentioned in the first part of the definition continues in possession of the land, he will be cultivating tenant. The first part of the definition does not specify as between whom and whom the tenancy agreement mentioned is contemplated. The lease may have been granted by the owner or an usufructuary mortgagee or even a lessee of the land. But the person who carries on personal cultivation of the land should derive his right under a tenancy agreement express or implied with a person entitled to enter -into it who may be anyone of those persons we have just now mentioned as in stances. To attract, the inclusive definition the two requisites are the determination of a tenancy agreement and the person who was within the first part of the definition continues in possession of the land ............The inclusive definition does not visualize that after the determination of the tenancy if the person as defined in the first part of the definition continues in possession of the land he would not be a cultivating tenant unless there is a contractual relationship express or implied, with his landlord. We say so, because, a landlord, as noticed supra, in defined not in terms of a person who lets out a land, but as a person entitled to evict a cultivating tenant. No contractual relationship is necessary or is implied for purposes of the definition. The grounds of eviction which we enumerated above would be understood and related to a landlord as defined and not in terms of a land lord as contemplated by the transfer of Property Act Reading the definitions of 'cultivating tenant' and 'land lord' it is further clear that in order to be a cultivating tenant for an extended Period the lessor need not necessarily .have the capacity or light to confer it..... the test to find out whether a person is a landlord is non that whether there is a direct, agreement between him. and the tenant but whether the person who claims to be the landlord is entitled to evict on the grounds mentioned in the Act. It is in the light of this position, in our opinion, we have to appreciate. the scope and effect of sub-section (1) of Section 3".
In, another portion of the judgment, the Bench. Observed as follows:-
"So far as the first part of the learned Judge's reaching reasoning (referring to the order of Balakrishna Ayyar) in Ramaswami Naidu v. Marudaveera Mooppan reported, in (1959), 1 Mad LJ 25, is concerned, we are in agreement because tenancy necessarily implies a landlord n the one hand and a tenant on the other. But, equally to a sub-lessee, the protection is traced to the statute. If the sub-lessee continue in possession, but the tenancy agreement originally. Entered into had not terminated, then the inclusive definition may not apply, are therefore, the sub-lessee may not be entitled to protection. X on the other hand, by the time of sub-lessee claims protection under the Act, the tenancy agreement with his lessor had terminated, then it will be a different matter to which the inclusive definition will have application The principle that no man can confer upon another a title or right higher than what he himself possessed, will, therefore, have no validity in the application of the inclusive definition of 'Cultivating tenant'."
It is apposite to mention here that in reaching its conclusion the Full Bench did not purport to follow the ratio lead down in Prabhu v. Ramdeo, , 'but instead, preferred to rest its view an the construction the Bench had been inclined to make on the statutory provisions themselves in the C. T. P. Act.
16. As regards Ponniah, v. Perumal , we have already. stated that the Supreme Court held therein that a tenancy created by a life estate holder could legally extend beyond her life and the rights of the cultivating tenant would be. protected by the provisions of the C. T. P. Act. The reasoning of the court for taking such a view is to be found in the following words-
It is not disputed that the Provisions of the Act (C. T. P. Act) conferring protection upon cultivating tenants govern the rights of the appellant. We are, therefore, not concerned with any rights under any general or personal law with may enable the remainderman to evict a tenant of a life estate holder, The terms of the statutory protection applied orally to all the tenants governed by the Act irrespective of the nature of the rights of the person who leased the land so long as the lessor was entitled to create a tenancy".
17. From the passage extracted above, it may be seen that in Chandrasekhara v. Kunju Vanniar, (FB) and Ponniah v. Perumal, , the rights of the parties were determined solely with reference to the provisions contained in the C. T. P. Act. Moreover, both the cases related to agricultural tenancies. It is only in Tajammul Husain v. Mir Khan, (FB), the principle that a lessee admitted into possession by the mortgagee in a prudent manner would be entitled to continue in possession even after redemption of the mortgage, has been extended to urban property as well. Before the Full Bench of the Allahabad High Court, rendered it judgment in the case, there were two earlier Division Bench cases of that High Court. One was Hardei v. Wahid Khan, , where it was held that the creation of a tenancy from month to month by a mortgagee with possession of a house property could not be deemed an imprudent act, and as such, the tenant, on the, redemption of the mortgage, will not automatically become a trespasser vis-a-vis the mortgagor. Though it was urged before the learn6d Judges of the Division Bench that S. 76(a) will not apply to tenancies created over non-agricultural properties the Division Bench did not give its finding an the question, but merely contented itself by saying that the act of the mortgagee in creating a monthly tenancy would not constitute an imprudent act. The later Division Bench case is Habib Seth v. Kashinath, 1968 All LJ 44ro. The learned Judges who constituted the Bench adverted to the judgment in Mahabir Gope v. Harbans Narain, and Asa Rwn v. MsL Ram Kali, , and
then held that though these decisions were concerned with agricultural tenancies created by mortgagees, yet the ratio in them would be applicable to non-agricultural tenancies as well, because Section 76(a) of the Transfer of Property Act was in terms not restricted to agricultural tenancies alone. The Full Bench of the Allahabad High Court, not only noticed the later one of the above said two cases and the decisions of the Supreme Court in the earlier cases where the tenancies created by mortgagees were over agricultural lands, but also considered Film Corporation Ltd. v. Gyannath, and
Sachalmal Parasrarn v. Ratanbai , and then affirmed the correctness of the decision in Habib Seth's case, 1968 All LJ 446. The observation of the Supreme Court- in 'the Film Corporation case , that the principle (contained in Section 76(a)) has seldom been extended to urban property so as to tie it up in the hands of lessees or to confer on them rights under special statutes, and which observation was affirmed in Sachalmal Parasram -v. Ratanbai, , was not considered by the Full Bench to be of
operative force as, in its opinion, the rights of parties in the Film Corporation case , were actually determined by testing the validity of the lease on the touch-stone of prudential act. The Full Bench further observed as follows -
"Apart from the above, the learned counsel for the appellant could not show us anything on the basis of which he could tenably argue that the provisions of Section 76(a) of the Transfer of Property Act did not apply to urban properties. A property situate in an urban area is as much immoveable property as an agricultural land. We, therefore, do not find any good reason to hold that Sec. 76(a) of the Transfer of Property Act does not apply to urban properties".
In Dural Knitting Co. v. Ramasubramanian, (1976) 1 Mad LJ 351, which came up before Sethuraman, J., an identical controversy As the one before us was raised for "determination. The learned Judge referred to some of the decisions of the Supreme Court on the subject including the decision in Film Corporation Ltd. v. Gyannath, and also the decision of the Allahabad High Court in Tajamal Hussain v. Mir Khan, (FB) besides the judgment in Chandrasekhar v. Kunju Van niar, (FB) and proceeded on the basis that if, the lease created by the mortgages with possession was a prudent act, then the statute will intervene at the determination of the tenancy agreement and the tenant, inducted into possession of the building would be entitled to protection under the terms of the Buildings (Lease and Rent Control) Act.
18. We shall now refer to the cases where a contrary view to the one taken in the cases from the Allahabad High Court and in Durai Knitting Co. v. Ramasubramanian, (1976) 1 Mad LJ 351, has been taken. A Full Bench of the Gujarat High Court in Purushotham v. Madhavji Meghaj (FB) after one elaborate consideration of the case
law on the subject, has categorically held that Section '76(a) of the Transfer of Property Act will not apply to a case of urban immoveable property. The finding of the Full Bench, as culled out in the headnote, is as follows-
"Where a lease is created by the mortgagee in possession of an urban immoveable property, such a lease would not be binding on the mortgagor after redemption of the mortgage assuming that the lease is such as a prudent owner of the property would have granted in the usual course of management. This is so, because Section 76(a) cannot apply to a case of urban immoveable property and hence a lease created by the mortgagee in possession of an urban immoveable property would not be binding on the 'mortgagor after redemption of the mortgage".
In view of that finding, the Full Bench, held that a tenant inducted on the building property by a mortgagee with possession, after the redemption of the mortgage, will not be protected un4er the provisions of the Bombay Rents~ Hotel and Lodging House Rates Control Act, 1947. For rendering such a finding, the Full Bench took note of the observation of the Supreme Court in Film Corporation Ltd. v. Gyannath, , as affirmed in Sachalmal Parasram v. Ratanbai,
, and also the difference in the nature of
agricultural land and urban immoveable property and the different uses to which they are put. The reasoning of. The Bench runs as follows-
"In our opinion, on the general aspect of the matter, based on facts of which Judicial notice can be taken, it is clear that so far as leases of agricultural lands are concerned, when a lessee cultivates land by the very process of cultivation he brings, inputs and improves the fertility of the soil. Constant and continuous cultivation by proper manuring etc., would improve the fertility of the sod and on the determination of the lease that fertility would still remain in the land. It is, therefore, necessary that security of tenure should be given to the tenant of agricultural land so that by his proper husbandry and agricultural practices, he himself may derive good benefits from the land and also improve the fertility of the soil A prudent owner of the property would, therefore,see to it that the term of lease which he grants in respect of agricultural land is sufficiently long to induce the tenant to put in the best efforts which would incidentally benefit the owner of the land by improving the fertility of the land itself. In contrast, to the agricultural lands, so far as non-agricultural urban lands are concerned, on determination of the lease the tenant who has been an the property under the terms of the lease is bound to put back the property in the condition in which it was at the time when he entered into possession and nothing is naturally done by the tenant which is likely to improve the quality of the soil property by his Own efforts put in during the term of the tenancy. There is, therefore, no question of a prudent owner of urban immoveable property granting a long-term lease merely with a view to improve the quality of the land. Barring Rent Control and Rent Restriction Acts which deal with urban immoveable property, in areas where there is scarcity of accommodation both for residential and non-residential purposes, there is no concept of protection. to contents of urban immoveable property. We are of opinion that this is the rationale behind the distinction which the Supreme Court has pointed out between leases of agricultural lands and leases of urban immoveable property while dealing with the provisions of Section 76(a) of the Transfer of Property Act; whereas & prudent owner would not ordinarily speaking, think of creating a long term lease purely as a matter of prudent management, an owner of agricultural land, in the course of prudent management, would create a long term lease purely from the aspect of prudent management. In our opinion, therefore, the word 'seldom' used by Hidaytullah C. J., in All India Film Corporation case , while dealing with the
application of the exception carved out by Section 76(a) to urban immoveable Property has to be read as not being extended at all and it is merely a turn of the phrase to say that this exception has seldom been extended to urban immoveable property".
Thus, we find that, unlike the Fun Bench of the Allahabad High Court which did not give any reasons for reading down the observation of the Supreme Court in Film Corporation case, , the Gujarat High Court has not only taken note of the observations, but has also given reasons which in its opinion should have impelled. Hidayatullah C. J. to make the said observation.
19. In Jagannath v.Mitter Sain (FB) was decided by a Full Bench of the High Court of Punjab and Haryana, the question that directly arose for consideration was whether the tenant of a mortgagor would cease to be one on the date of redemption of a mortgage subsequently created by the mortgagor, merely because the tenant had attorned to the mortgagee and thus be disentitled in law from claiming protection from eviction under the East Punjab Urban Rent Restriction Act. The Full Bench, answered the question in favour of the tenant, but in doing so, it set out certain propositions of law and held that a tenant inducted by the mortgagee remains a tenant during the continuance of the mortgage and on the redemption of the mortgage the tenancy comes to an end and that, in the case of agricultural tenancies, the above proposition was subject to. the exception contained in Section 76(a) of the Transfer of Property Act. In another Full Bench case Dhaniram v. Deepchand, (FB) the ratio laid down in the above said case was applied and it was held that the tenant of a mortgagee ceases to be a tenant of the property on redemption of the mortgage and that the rule of exception contained in Section 76(a) of the Transfer of Property Act will be applicable only to agricultural leases and not leases of buildings.
20. It is in the background of these conflicting authorities, Mr. Narayanaswami argued that the ratio laid down in Chandrasekhar v. Kunju Vanniar, (FB), and Ponniah v. Perumal,
, will mutatis mutandis apply to the instant case also and the fact that. the tenancy created in favour of the appellant was in respect of a building and not an agricultural land cannot make any difference in law so far as the right of the appellant to claim protection under the Act is concerned. We are unable to accept this argument for a very valid reason. The first is that the two decisions referred to above were rendered with reference to the provisions of . the C. T. P. Act and not with reference to the provisions of the Buildings (Lease and Rent Control) Act. It is a settled principle of law that the rights and liabilities of parties under a particular statute have to be- determined with reference to the provisions of that statute and not with reference to-the provisions contained in other enactments even If those enactments run on parallel lines. Viewing the matter from this perspective, it may be seen that there is a good deal of difference between the definitions of the words 'landlord' and 'tenant' occurring in the Act and the C. T. P.Act. We have already referred to the Definitions of those terms in the C. T. P. Act It is therefore enough if we extract the definitions of those terms in the Act alone. In the Act, a 'landlord' has been defined in Section 2 (6) as follows-
"'landlord' includes the person who is receiving or is entitled to receive the rent of a building, whether on his own account or on behalf of another or on behalf of himself and others or as an agent, trustee, executor, administrator, receiver or guardian or who would so receive the rent or be entitled to receive the rent, if the building were let to a tenant;
Explanation: A tenant who sublets shall be deemed to be a landlord within the meaning of this Act in relation to a tenant".
The definition of 'tenant' in Section 2 (8) is also follows-
"'tenant' means any person by whom or on whose account rent is payable for a building and includes the surviving spouse, or any son, or daughter, or the legal representative of a deceased tenant who -
(i) in the case of a residential
(ii) in the case of a non-residential
a person continuing in possession after the termination of the tenancy in his favour but does not include a person placed in occupation of a building by its tenant or
Thus, it may be seen that a landlord, under the C. T. P. Act, is one who ism entitled to evict the cultivating tenant, whereas, under the Act, a landlord is one who is receiving or entitled to receive the rent of a building, whether on his own account or on behalf of an other or on behalf of himself and others. Even a person who receives rent as an agent, trustee, executor,' administrator, receiver or guardian, is also considered as a landlord. But, in the case of an agent acting as landlord, sub-section (8) of Sec. 10 of the Act places an embargo on his right to file an application for the eviction of the tenant without the previous written consent of the land lord. Likewise, the definitions of 'tenant' in the two enactments are also quite different from each other. Under the C.T. P. Act, the term 'cultivating tenant' would not only include the person in ducted on the. land by the owner, but also a sub-tenant and the Explanation to Section 2 (aa) clearly states that a sub-tenant shall be deemed to be a cultivating tenant of the holding under the landlord even if the lessor of such subtenant has ceased to be a tenant of the landlord. Thus, the C. T. P. Act creates a jural relationship between the land lord and the sub-tenant and makes the sub-tenant directly a tenant under the landlord even if his lessor, viz, the tenant, had ceased to be a tenant under that landlord. However, in the Act, a Jural relationship of landlord and tenant is created only between the tenant and the sub-tenant (vide: Explanation to Section 2 (6)) and a sub-tenant has been specifically excluded from the ambit of the definition of 'tenant, even though the definition is otherwise of an inclusive nature. Hence, under the Act, a sub-tenant would be nothing more than trespasser vis-a-vis the landlord. As matter of fact, the subletting of a premises by a tenant without the written consent of the landlord is made a ground for the landlord to ask for eviction of the tenant. Under C. T. P. Act no such provision is found, and, on the other hand, the law goes to the extent of saying that sub-tenants inducted in the land by the tenant with or without the permission of the landlord have to be treated as tenants of the landlord. In the face of such vital differences between the two Acts, it is futile for the appelant,to contend that the ratio contained in Chandrasekhara, v. Kunju Vanniar 1976-2 Mad 1J 243: (AIR 1975 Mad 27)(FB) and Ponniah v. Perumal , should be applied to his case also, albeit the
protection claimed by him is under the Act and not under the
C., T. P. AcIL This position has been recognised in the very judgments relied on 'by the appellant's counsel. In the Full Bench case, (FB), it has been specifically stated that
the Bench was preferring to rest its view on the construction of the relative provisions of the C. T. P. Act, and not on application of the principle laid down in Prabhu v. Ramdeo, (vide paragraph 42 of the judgment). Moreover, the Beach has indicated that the ruling was only with reference to agricultural tenancies and not non-agricultural tenancies and this is to be found in paragraph 43 of the judgment which reads as follows -
"Counsel for the appellant referred to Sachalmal Parasram v. Ratanbai, ,, which we do not think m any way
affects the view that we have taken as to the effect of the related statutory provisions in the Act (C. T. P. Act).
21. Likewise in Ponniah v. Perumal , also, it has been specifically pointed out that the rights of parties were not being determined with reference to any general or personal law, but solely with reference to the terms contained in the C. T. P. Act. In such circumstances, the judgments also do not afford scope for Mr. Narayanaswami to contend that the ratio laid down in those cases must unreservedly be extended to non-agricultural leases created by mortgagees with possession.
22. Learned counsel for the appellant argued that the definitions of 'landlord' and 'tenant' in the Act are of inclusive nature and since the owner of the building (the 7th respondent herein) is entitled to receive the rent for the building, he must be held t6 be the landlord of the appellant and likewise, the appellant being a tenant by whom rent is payable, must be deemed to be a tenant of the 7th respondent notwithstanding the fact that the tenancy was not created by the owner of the building, but by the first respondent when he was the usufructuary mortgagee of the building. The learned counsel further argued that the tenancy having been created by one competent to create it, the appellant's Induction in the building was lawful in character and, therefore, the appellant must be held entitled to claim protection from eviction under the Act. Even this contention is not a tenable one because it proceeds on fallacious reasoning. It may be true that the owner of the building is entitled to receive the rent for the building and the appellant, in his role as an occupier is liable to pay the rent. But, that will not mean that a jural relationship of landlord and tenant will automatically spring between the owner of the building and the appellant. The relationship of landlord and tenant between the owner and the occupier of a building can only be founded on a legal tenancy, whether express or-implied, between the parties. To constitute tenancy in law, the parties must stand in the relative position landlord and tenant. Admittedly, it was the mortgagee who acted as landlord when he inducted the appellant in the building. When the interest of the mortgagee in the property was extinguished by redemption of the mortgage,his status as landlord also ceased and with that, the rights of the tenant also got snapped. The status of landlord enjoyed by the mortgagee till the time of redemption cannot be -transferred to the mortgagor, viz, the owner of the building, merely because as owner, he is entitled to collect the rent for the building. In other words, the gulf between the owner of the building entitled to collect rent and an occupier of the building liable to pay rent can be bridged only if the owner can be treated as the landlord of the occupier and the occupier can be treated as the tenant of the owner. This position has 'been pointed out in Film Corporation Ltd. v. Gyannath, 1970 2 SCR 581, and the relevant passage runs as follows-
"The respondents attempted to argue that the Rent Restriction Act defined 'landlord' and 'tenant' with reference to the payment of rent. A landlord means a person entitled to receive rent and a tenant means any person by whom or on whose account rent is payable. These definitions apply if the tenancy, either real or statutory, could be said to survive after the termination of the mortgage The property was sold and the mortgage was satisfied. This led to extinction of the mortgagee's interest and the purchaser acquired full title to the property. The termination of the mortgagee interest to terminated the relation ship of landlord and tenant and it could not, in the circumstances, be said to run with the land. There being no landlord and tenant, the provisions of the Rent Restriction Act could not apply any further".
The same position has been set out slightly differently in B. K. Ramji v. S. S. Jivraj, , in the following terms, as
contained in the head-note.
"In order to attract the provisions of Section 12 of the Bombay Rent Act, the requisite condition is that the plaintiff should be a landlord and the defendant should be a tenant and there should exist between them a relationship of landlord and tenant. Evidently, as the owner is not the landlord of the defendants tenants, the provisions of the Bombay Rent Act cannot be available to the defendants".
23. To the same effect is the judgment of the Division Bench of the Bombay High Court in Kamalakar and Co. Ltd. v. Ghulamshafi, . Yet another decision on this point is Somnath v. L. D. Desai, AIR 1951 Punj 404, where a Division Bench of the Punjab High Court held that a mortgagor would not come within the definition of landlord under Section 2 (c) of the East Punjab Urban Rent Restriction Act and consequently, a tenant let into possession of the building cannot claim protection under the Act against the mortgagor after the latter had redeemed the mortgage.
24. In the course of his arguments Mr. Narayanaswami strenuoussly contended that the Supreme Court has, in all cases, recognised the rule of exception contained in Section 76(a) of the Transfer of Property Act and, further more, even in the very first case of Mahabir Gope, , it has been accepted that a permissible settlement by a mortgage in possession with a tenant in the course of prudent management can well result in the springing up of rights in the tenant conferred or created by statute. Proceeding onwards, Mr. Narayanaswami submitted that the creation of rights by statutes on tenants inducted on mortgaged property by the mortgagee with possession would gorvern, not only cases of agricultural leases, but also leases of non-agricultural properties and the-e. is no justifiable reason for treating leases of agricultural lands and leases of urban property on different footing. In support of this argument, learned counsel relied upon the observation of the Full Bench of the Allahabad High Court in Tajammul Husain v. Mir Khan, I(FB), which we have
already "extracted,as well as the following comment made at page 528 of Mullah on the transfer of Property Act, 6th Edition, viz:-
"The Court observed that the principle laid down in Mahabir Gope's case, , that a bona fide and prudent lessee-would
bind the mortgagor ordinarily' applies only to agricultural lands and has 'seldom' been extended to urban property. This observation is, strictly speaking, obiter, as the court found that the lease in question was neither bona fide nor prudent in view of the long term and the low rent. It is respectfully submitted that there is no warrant for limiting Section 76(a) to agricultural land. Whether a particular lease is bona fide or prudent is a question of fact, obviously a lease of urban land which would confer on the lessor the protection of special statutes such as the Rent Acts would prima facie be imprudent".
25. On a careful consideration of the matter, we do not feel persuaded to accept the submission of Mr. Narayanaswami in this behalf. In the first place, we cannot treat the observation of Hidayatullah, C. J., in the Film Corporation case, , that the principle -of committing the owner of property to prudent acts of management done by the mortgagee with possession will ordinarily apply only to the management of agricultural lands and it is seldom extended to urban property, as a casual or insignificant one. Even assuming that the observation is in the nature of obiter, we are bound by it. But, what is important is that the observation cannot be said to have been made without any basis or justification for it. Agricultural land requires constant attention as well as nursing and is always associated with productive operations. To keep the land fully productive, it has to be tendent with care and diligence. Not only h, .1 of the land to be conserved, but effective steps should be taken for preventing soil erosion. The land has also to be safeguarded from inundation by flood water and rain water. The fertility o! the soil has to be preserved by not only periodical ploughing operations, but tended with inputs like green manure and fertilizers. The land has to be periodically de-weeded and the trees and plants standing on the land have to be safeguarded from straying cattle. On account of all these factors it goes without saying that to keep an agricultural land unattended and uncared for will certainly constitute an act of imprudence. Therefore, it is that it has been uniformly accepted and followed that leases of agricultural lands created by a mortgagee with possession will generally, if not invariably, constitute prudential acts in that they will not only benefit the land, but eventually benefit the owner of the land as well. -Such leases, even if they had been created by a person having a transitory title like a mortgagee with , possession, will be binding on the mortgagor and held enforceable even after the redemption of the mortgage for the rest of the term of the tenancy. In comparison, if we take the case of a building, it certainly does not require constant care and attention like a land. It is not a productive item of property like a land wherein agricultural, horticultural or floral crops can be raised. The building will, no doubt yield return by way of rent, but that has nothing to do with preservation of the property or the averting of danger to its value. Hence, in the very nature of these properties, there is a good deal of difference between agricultural lands and non-agricultural properties. Viewed from that angle, it can certainly be said that different standards have to be applied for evaluating the leases created over the two items of properties. While in the case of agricultural lands, leases will prove to be beneficial in almost all cases, in the case of non-agricultural properties, particularly buildings in urban areas, the leases may prove counter-productive in the sense that the properties are likely to get tied up in the hands of lessees who may claim rights under special statutes.
26. Apart from this factor, it may also be noticed that even in the Transfer of Property Act, there is an indirect recognition of the special nature of leases of agricultural lands. In the said Act, Chapter V contains Sections 105 to 117 and relates to leases of immoveable property. Section 117 reads as follows-
"None of the provisions of this Chapter apply to leases for agricultural purposes, except in so far as the State Govt. may, by notification published in the official Gazette, declare all or any of such provisions to be so applicable in the case of all or any of such leases, together with or subject to, those of the local law, if any, for the time being in force.
Such notification shall not take, effect until the expiry of six months from the date of its publication".
The reason for granting exemption for agricultural leases from the operation of the Chapter is that the rights of parties are regulated by usages which have, to a great extent, been embodied in local Acts, and hence the Legislature has abstained from making the provisions of this Chapter apply proprio, vigore for fear of interfering with settled usages. 'If it was the intention of the Legislature to treat leases of immoveable properties of an kinds, of, buildings non-agricultural properties and agricultural properties, on the same footing, the Legislature would not have enacted a provision as found in S. 117. This we think, is sufficient reason for our disagreeing with the view taken in Tajammul Husain v. Mir Khan, (FB), that a property situate in an urban area is as much immoveable property as an agricultural land and therefore, no -good reason could be found to hold that Seetion 76 (A) of the Transfer of Property Act does not apply to urban ProPerties and the comment in MullaWs Transfer of Property Act at page 528, that there is no warrant for limiting Section 76(a) to agricultural lands. It is apposite to point out here that Section 76(a), by itself, does not refer to the mortgagee with possession being conferred powers to create tenancies in respect of mortgaged Property. But, as pointed out by the Supreme Court in Asaram v. Mst. Ranikalt though Section 76(a) only creates an obligation on
the mortgagee, nevertheless, the authorities have held that an agricultural lease created by him would be binding on the mortgagor even if the mortgage is redeemed, provided the lease is of such a character 'that a prudent owner of property would enter into it in the usual course of management. Thus it happens, that it is judicial authority which has interpreted the expression 'Prudent management' contemplated in the section, as taking within its ambit the creation of an agricultural lease by a mortgagee with Possession* prudence always being the touch-stone on which the creation of tenancy by a mortgagee with possession is tested. It is therefore open to the courts to treat a lease of land for agricultural purposes on one footing and a lease of urban property for non-agricultural purposes on another and 'separate footing. It -may be that in. extraordinary cases, even the lease of an urban property may constitute an act of prudence. But, such isolated cases can only form the exception and not the rule.
27. Before we sum up our conclusion we can conveniently deal with some of the other contentions raised by the appellant's counsel. On the basis of Chinnappa Thevan v. Pazhaniappa Pillai AIR 1916 Mad 911, it was argued that. Tenancies created by a mortgagee in possession are binding on the mortgagor even after the redemption of the mortgage in so far as the relationship of landlord and tenant continues. Undoubtedly, that was the ratio laid down in that case. But the facts of that case were totally different. The tenant therein set up, an extreme contention that. since he had been inducted on the land by the mortgagee, his possession subsequent to the redemption of the mortgage was hostile in character. vis-a-vis the mortgagor,and hence he had perfected title by adverse possession. It was in that situation,' the Division Bench held that he continued to be a tenant of the land and hence he had not perfected title. by adverse possession. The decision has been rendered .on the footing that on the redemption of the mortgage it was open to the mortgagor to affirm the tenancy created by the mortgagee with possession or call upon the tenant to surrender possession and, as long as such an option had not ,been exercised, the tenant could not put forth a plea of adverse possession. In the instant case, the appellant does not claim tenancy rights under the mortgagor, nor does he put forward a case of adverse possession. On the other hand, what he contends is that by reason of statutory intervention his tenancy rights are protected even though his landlord's (Mortgagee's) transitory titie over the property came to a close with the redemption of the mortgage. Hence we fail to see how the ratio in Chinnappa Thevan v. Pazhaniappa Pillaig AIR 1916 Mad 911, can be invoked by the appellant. if the decision is, however. relied for contending that the mortgagee's act of creating tenancy, even without reference to Section 76(a), will necessarily bind the mortgagor, we must reject that contention, for it is Opposed to the ratio laid down-in Mahabir Gops. v. Harbans Narain, .
28. Mr. Narayanaswami laid great emphasis on Dorai Knitting Co.V. Ramasubramanian, (1976) 1 Mad. L.T 351. to which we have already;referred, since Sethuraman, J.; has' dealt with the very question which forms the subject matter of reference. Though the learned Judge has followed the ratio laid down in Tajammul Husain v. Mir Khan, (FB) and Chandrasekharan v. Kunju Vanniar, (FB) and rendered judgment in favour of the tenant, we find ourselves unable to approve the judgment. We must point out in the first place that before the learned single Judge the Full Bench decisions of the Punjab and Haryana High Court in Jagannath v. Mittar Sain, ' (FB) and Dhani Ram v. Deepchand,
(FB) as well as the Full Bench decision of the
Gujarat High Court in Lalji Purushotham v. Madhavji Meghaji~ (FB) had not been placed for consideration. Secondly, the debate, before the learned Judge had not been as comprehensive as it has been before us. Since we have held that we cannot share the view taken by the Full Bench in Tajammul Husain v. Mir Khan, (FB) and that the ratio contained in Chandra Bekharan v. Kunju Vanniar, (FB) is confined only to cases
arising under the C. T. P. Act, we hold that Durai Knitting Co. v. Ramasubramanian, (1976) I Mad LJ 351, does not set out the correct view and hence we overruled the same.
29. In the course of his submissions, Mr. NarayanasWami pointed out that even the mortgagor had originally let out the suit property to a tenant and all that the mortgagee has done was to induct another tenant viz., the appellant, after the original tenant had vacated the premises and, therefore, the mortgagee's action cannot be treated as an imprudent act. This submission, in our view, contains many perceptible infirmities. For one thing, we do not know when exactly the mortgagor let out the property to the tenant, i. e., whether it was before the introduction of the Act to Karur or subsequent to that and what were the terms of the tenancy. Secondly, every act of that mortgagor cannot be treated as a prudent act so as to make a repetition of one or more of such acts by a mortgagee with possession certified as an act of prudence. The question whether a -particular act, of a mortgagee with possession -is a prudential. One or not has to, be judged on the basis, of general standards which would be applicable to all mortgagors as a class, and not with reference to the individual act of a particular mortgagor. Judged by such a standard test, there is very little scope for the appellant to contend that conferment of tenancy rights on him, on the basis of which, further statutory rights are claimed under the Act, by the mortgagee, would constitute such a prudent act of management of the property as would be binding- on the mortgagor.
30. Having dealt with all the contentions of the appellant's counsel, we will now proceed to sum up our findings. Firstly, we hold that the ratio in Chandrasekharan v. Kunju Vanniar, (FB) and Ponniah v. Perumal, , cannot be extended to tenants inducted on non-agricultural urban property by transitory titleholders, like mortgagees with possession, since the above said two cases have been decided purely with reference to the provisions contained 'in the Tamil Nadu Cultivating Tenants Protection Act. Secondly, under the Tamil Nadu Buildings (Lease and Rent Control) Act, if a tenancy is created by a mortgagee with possession, the ties of landlord and tenant are snapped eo, instanti the mortgage is redeemed and, unless there is a fresh forging of the relationship of landlord and tenant between the I mortgagor and the erstwhile. Tenant by (i) the voluntary act of the parties or (ii) a deemed forging of the relationship by express provision in the Act itself, as under Section 2 (aa) of the C. T. P. Act, the erstwhile tenant cannot claim protection under the Act so as to perpetuate his occupation of the building as, a tenant. The mere protection given in the Act to tenants from unreasonable eviction will not be of any use, because the protection afforded 'is intended for tenants against their landlords, and not for erstwhile tenants as against the ,mortgagors who are not their landlords. Thirdly, , lease of land for agricultural purposes, stands on a distinct footing and hence lease of, urban property cannot be placed on the same footing. The result-ant position is. that the rule of exception contained in Section 76(a) of the Transfer of Property Act cannot be readily and automatically invoked by- a tenant let into possession of urban property by- a ;mortgage with Hence 'it is, that the Supreme Court has held in Film Corporation Ltd. v. Gyannath, and
Sachalmal Parasram v. Ratanbai, , that the principle of exception afforded by Sec. 76(a) of the Transfer of Property Act applies ordinarily to the management of agricultural lands and has seldom been extended to urban property so as to tie it up in the hands of lessees or to confer on them rights under special statutes. Fourthly, it may be open to a tenant inducted upon urban property by a mortgagee with possession to rely upon Section 76(a) to claim tenancy right for the full term of the tenancy notwithstanding the redemption of the mortgage earlier. But, it is for the person who claims such benefits to strictly establish the binding nature of the tenancy, created by the mortgagee, on the mortgagor.
31. In the light of our findings, we answer the question referred to us in the negative.
32. Before parting with the judgment, it is necessary to deal with another question which was, however, not seriously canvassed before us. The question is whether the civil court has jurisdiction to entertain the suit in ejectment or pass a decree against the appellant when his defence is that he is a statutory tenant and liable to be evicted only under the provisions of the Tamil Nadu Buildings (Lease & Rent Control) Act. So far as this matter Is concerned, it is by now well settled that there is no thing in S. 10 of the Act prohibiting the institution of a suit for possession or prohibiting a civil court from passing a decree for possession. What is prohibited under the section is only the execution of a decree for ejectment passed by a civil court. We may only refer to Muhamadunni v. Melapurakkal Unnir (1949 ) 1 Mad LJ 452: (AIR 1949 Mad 765) and B. V. Patankar v. C. G. Sastry, , in this behalf. As we have held that the appellant is not attendant entitled to claim protection under the Tamil Nadu Buildings (Lease & Rent Control) Act, it follows that even the bar of execution of the decree, contained in S. 10 will riot be attracted.
33. In accordance with our conclusion, on the question referred to us, we affirm the judgment of the learned single Judge and dismiss the Letters Patent appeal with costs.
34. Appeal dismissed.