Gopi Nath, J. - (1.) THIS is a judgment-debtors' second appeal. It arises out of execution proceedings instituted by the decree-holder for the ejectment of the appellants. One Madho Ram, father of the judgment-debtor was the tenant of a shop. The shop formed part of a house belonging to the respondent. The respondent fell in need of money and executed a usufructuary mortgage of the shop as well as a house in favour of Madho Ram. In the mortgage deed it was recited that a rent of Rs. 6/- of the premises shall be adjusted towards the interest of the loan advanced. The respondent filed a suit for redemption of the mortgage which was decreed. The decree was put into execution and the respondent sought to eject the appellant in execution of the decree. In the execution proceedings an objection was raised that the lessee rights of the appellant had come into abeyance by the super imposition of the mortgage and had revived after redemption and the appellant was entitled to continue in possession of the premises as a tenant and could not be ejected under the mortgage decree. The decree-holder was thus entitled to symbolicable possession of the property only and not actual possession.
(2.) THE trial court held that the tenancy rights in the shop came into abeyance after the execution of the mortgage but they subsequenly revived after the decree for redemption. THE appellant accordingly was not found liable to be ejectment from the shop in execution of the mortgage decree. As regards the house it held that the same was not the subject matter of any lease and consequently the decree-holder was entitled to actual possession of the same. Two appeals were filed from the decree. THE judgment debtor appealed against the decree directing actual possession of the house while the decree-holder filed an appeal gainst the decree refusing actual possession of the shop. The lower appellate court allowed the decree-holder's appeal but dismissed that of the judgment debtor, with the result that actual possession was directed in respect of the entire property in dispute. Aggrieved by the decree of the lower appellate court the judgment-debtor has come up in second appeal. As regards the house the appeal is completely devoid of merit. The judgment-debtor had no lessee right in it. Consequently no question of revival of tenancy rights could arise in respect of that property. As regards the shop the appellant's contention is that his tenancy right did not merge in the mortgagee rights. They were only put in abeyance during the period of mortgage and subsequently revived after its redemption. The landlord accordingly was not entitled to eject the appellant in execution of the mortgage decree but had to take proper proceedings in that regard according to law. Reliance was placed on Kallu v. Diwan, ILR Vol. XXIV, 487. The tenant in that case had taken a usufructuary mortgage of the property. On redemption of the same he was asked to give vacant possession to the landlord. The claim was resisted on the ground that tenancy rights had revived. This court held that on execution of the usufructuary mortgage, the tenancy rights were put in abeyance but were not extinguishable and on redemption the tenancy rights of the tenant revived and the landlord was not entitled to obtain possession of the property except by ejectment of the tenant in due course of law. In the instant case the lower appellate court has found that there was no extinction of tenancy by merger but the same got extinguished by implied surrender.
(3.) THE question for determination is whether the lease was determined as a result of the execution of the usufructuary mortgage. Section 111 of the Transfer of Property Act (hereinafter referred to as the Act) 'deals with extinction of tenancy. Section 111 (d.) provides for extinguishment by merger while sub-sections (e) and (f) provide for extinction by express or implied surrender. In Lachman Das v. Heera Lal, AIR 1966 Allahabad 323 it was held the doctrine of merger under Section 111 (d) of the Act was not applicable against a lessee who had subsequently become a usufructuary mortgagee of the property. THE lessee and the mortgagee rights could co-exist in the same person. It was observed that when the lessor executes a usufructuary mortgage in favour of the lessee, the lessor does not pass his entire interest in the property to the lessee. THE interest transferred to the lessee mortgagee consists of the right, to possess and enjoy the usufruct of the property until the mortgage money was paid up. THE lessor retains to himself the legal interest in the property which is a substantial one. He can assign his right of redemption or can create a second mortgage. See also Ram Kinkar Banerjee v. Satya Charan Srimani, AIR 1939 PC 14. THE Bench in Lachman Das's case further observed "there is no inconsistency or incompatibility in one person being the lessee and usufructuary mortgagee of the same property at the same time, for his obligation as a lessee would remain suspended during the subsistence of the mortgage." THE law laid down in Kallu and another (supra) was relied upon. In Varada Bongar Raju v. Kirthali Avatharam, AIR 1965 Andhra Pradesh 86 it.was held that tenancy and mortgagee right can co-exist in the same person and there was no extinguishment of lessee rights by implied surrender on account of a usufructuary mortgage being executed in favour of the tenant. In M. Malikarnjunnaiah v. Shivanna, AIR 1973 Mysore 40 the same view was taken and it was held that tenancy and mortgagee rights could co-exist, and on execution of a mortgage in favour of the tenant his tenancy rights only remained;; suspended during the period of mortgage and they revived after the redemption of the mortgage. In execution of a 'decree for redemption the tenant was not found liable to deliver possession of the suit property. THE decision in Kallu (supra) was again followed. In Lala Devi Singh v. Bhagwan Dass Badlu, AIR 1972 Delhi 175 the ratio of Kallu's case (supra) was again approved and it was held that there was no extinction of tenancy where a lessee had taken a usufructuary mortgage of the property. THEre was thus no extinguishment . of the appellant's tenancy by reason of his having taken a mortgage of the same property. THE principle of merger as contained in Section 111 (d) did not apply. The next question is whether the lessee rights got extinguished by surrender. The court below found it a case of implied surrender. That depended upon the intention of the parties. It has already been seen that lessee and mortgagee rights can co-exist. Thus a usufructuary mortgage in favour of a lessee does not necessarily result in the extinguishment of his lessee rights unless he yields up that interest expressly or by necessary implication. By implication it occurs in two ways :- (i) by the creation of a new relationship or (ii) by relinquishment of possession. J None of the two circumstances exist in the instant case. As regards the new relationship of mortgagor and mortgagee that was not destructive of the earlier relationship of lessor and lessee as seen earlier. The mortgage deed itself makes the position clear. It recites that the rent of Rs. 6/- would be ajdusted towards interest of the mortgage debt. The relationship of landlord and tenant was thus contained. Learned counsel for the respondent urged that the original rent of the shop being Rs. 2/- only the rent of Rs. 6/- sought to be adjusted being in respect of the shop and the house a new contract of tenancy was substituted in place of the old one. I am not inclined to agree. The part of the house which was not under lease earlier was also leased out under the new arrangement and the tenant was required to pay an enhanced rent which was to be adjusted towards interest. The appellant was already in occupation of the shop as a tenant and after the creation of the mortgage, the rent of the shop was required to be adjusted towards interest of the mortgage debt. In Chhekati Kuriminaidu v. Karri Padmananbham Bhukta, AIR 1964 Andhra Pradesh 539 it was hdd that adjustment of rent towards interest of loan was a circumstance pointing to the continuance of the relationship of landlord and tenant between the parties. Learned counsel for the respondent invited my attention to clauses 2 and 7 of the mortgage deed. Clause 2 provides that the mortgagor shall redeem the mortgage after paying the amount due including the principal, the interest and other sums spent by the mortgagee towards repairs of the property. Clause 7 refers to possession after 20 years, on redemption. Learned counsel urged that reference to possession in clause 7 suggested extinguishment of tenancy right on creation of the mortgage and delivery of actual possession on redemption. The clause does not mention actual possession. The mortgagor did not deliver actual possession to the mortgagee. Possession was already with the mortgagee at the time of the execution of the mortgage deed. On redemption the mortgagor was entitled to be restored to the same position as was occupied by him af the time of the creation of the mortgage. Clause 7 thus could not be construed as referring to delivery of actual possession. The mortgagor had transferred a legal estate to the mortgagee and that estate was to be delivered back to him on redemption.;