- (1.) This appeal by leave is from the judgment and order of the High Court of Kerala, dated 21st October, 1986. It arises in the following circumstances : The building in question which is a shop building No. T. C. 887, M.G. Road, Pazhavangadi, Trivandrum, is part of a pucca three storeyed building belonging to one M .P. Philip and as per his settlement the disputed shop-building and two other rooms devolved on one of his sons M. M. Philip. While this disputed shop-building was in the possession of a tenant under the owner, the owner mortgaged the disputed building and the remaining portions to the first defendant with a direction to receive the rent from the tenant. The mortgagor directed the tenant also to attorn to this mortgagee. The first defendant subsequently in the course of his management of the mortgaged property, gave the building on lease to the appellants for a higher rent when the former tenant vacated the same. Subsequently, the owner executed a subsequent mortgage with a direction to redeem the mortgage in favour of the first defendant and before the subsequent mortgagee took steps to redeem the mortgage, the owner assigned his equity of redemption to the respondent. The respondent and the subsequent mortgagee together as plaintiffs 1 and 2 filed a suit to redeem the mortgage of the first defendant impleading the appellants as well as respondents and claimed recovery of the khas possession of the building. The appellants contended that they are tenants of the building inducted into possession by the mortgagee as a mode of enjoyment that the mortgage deed authorised the mortgagee to enjoy the building by letting it out and they were not liable to be evicted through a decree of court in a redemption suit without an order under the Kerala Buildings (Lease and Rent Control) Act, 1965 (hereinafter referred to as 'the Act'). The trial Court decreed the suit and directed recovery of possession of the shop-building on the ground that the mortgagee could not induct a tenant and give him any right to continue in possession even after the redemption of the mortgage. On appeal by the appellants, the first appellate court held that the disputed building was a shop-building which was never in the enjoyment of the owner and the mode of enjoyment of the owner of the property was by letting it out and when the mortgagee enjoyed the property in that manner, by letting it out, the person put in possession as a tenant was entitled to continue in possession even after redemption, until evicted under the Rent Control Act. The first appellate court further found that the mortgage deed impliedly authorised the mortgagee to let out the building. In that view the decree for khas possession of the shop-building in possession of the appellants was denied to the respondent.
(2.) The respondents filed a second appeal before the High Court, raising the following three contentions :- 1) Whether under S. 76(a) of the Transfer of Property Act, 1882, a tenancy created by the mortgagee in possession of an urban immovable property would be binding on the mortgagor after redemption of the mortgage, assuming that the tenancy was such as a prudent owner of property would have granted in the usual course of management. 2) Whether a tenancy created in exercise of a general power to grant a lease expressly or impliedly conferred on the mortgagee would survive the redemption of the mortgage in view of S. 111(c) of the Transfer of Property Act, 1882; and 3) Whether a tenant inducted on the property by a mortgagee with possession, would after redemption of the mortgage be protected under the provisions of S. 1l(l) of the Act.
(3.) The High Court was of the view that as the appellants had not pleaded that they were inducted into possession by the mortgagee as prudent act of management, it as not open to the appellants to contend that they could continued in possession even after redemption. Further, the High Court was of the view that it was not open to the mortgagee to induct a person into possession which conferred any right on the tenant to continue in possession even after redemption.;