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REPORTABLE IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL No. 6966 OF 2013 [Arising out of SLP (Civil) No.12731 of 2007)

Sunita Jugalkishore Gilda            .. Appellant

Versus

Ramanlal Udhoji Tanna (Dead) Thr. Lrs. and others .. Respondents

 J U D G M E N T  

K. S. Radhakrishnan, J

  Leave granted.

2. The question that arises for our consideration is whether the  

mortgagor  can  induct  a  person  as  tenant  in  a  mortgaged  

property,  to  the  prejudice  of  the  mortgagee,  pendente  lite,  in  

violation of Section 52 of the Transfer of Property Act, 1882.  

3. Gangabai, the grand mother-in-law of the appellant, was a  

mortgagee in respect of a three storied building, popularly known

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as -Gowardhandas Mathurdas Mohta, along with the suit premises  

and open space situated at Nazrul Plot Nos. which was executed  

by one Vijaysingh Mohta, father of Respondent Nos.2 and 3 for  

himself and as guardian of Respondent No.2 on 24.03.1953.  A  

partition deed was executed by Mohta and Respondent Nos.2 and  

3 on 11.1.1956.   

4. Gangabai,  on 01.09.1956, filed a civil  suit  No.3-A/1956 for  

enforcing the mortgage in the court of the First Additional District  

Judge, Amravati.  On 02.03.1960, Gangabai also purchased the ½  

share in the property belonging to Mohta, with the leave of the  

court  in  auction.   The auction  was  confirmed by  the  court  on  

21.09.1960 in favour of Gangabai after rejecting the objections  

raised by Respondent Nos.2 and 3.  On 25.11.1960 Gangabai was  

placed in joint possession of the mortgaged property in execution  

by the civil court.   

5. Gangabai  then  filed  a  SCS  No.1109  of  1961  and  1110  of  

1961 against two tenants for recovery of ½ share in rent, which  

suits were, however, dismissed by the trial court.  Gangabai, later,  

filed  a  revision  before  the  High  Court,  which  was  allowed

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decreeing  her  claim  for  ½  share  in  the  rent.   Gangabai,  on  

05.01.1963,  filed a SCS  -No.33 of 1963 against  all  the tenants  

including Respondent Nos.2 and 3 for a declaration and injunction  

that she was the owner of ½ share in the property and entitled  

to1/2 share in the rent thereof from each of the tenants.   SCS  

No.33 of 1963 was later decreed by the civil court, Amravati on  

23.03.1983 in favour of Gangabai, granting the reliefs sought for.  

Thereafter  Respondent  Nos.2  and  3,  without  the  consent  of  

Gangabai,  however,  started  recovering  rent  from  Respondent  

No.1 on the strength of some alleged rent receipts.  Brij Lal, the  

real  brother  of  Respondent  No.1,  who  was  also  one  of  the  

tenants/defendants in the above-mentioned suit, left the decreed  

premises, without raising any claim.

6. The First Appeal No.40 of 1959, filed by Gangabai, was later  

withdrawn on  20.03.1967  since  final  decree  had  already  been  

passed.  The First Appeal No.72 of 1959 filed by Respondent Nos.2  

and 3 was, however, allowed setting aside the preliminary decree  

dated 20.09.1958.  Gangabai then preferred civil appeal No.582 of  

1969 before this Court against that order, which was allowed on  

09.04.1974, the judgment of which is reported in Smt. Gangabai

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vs. Vijay Kumar and others (1974) 2 SCC 393.  This Court set --

aside the judgment of the High Court and restored that of the trial  

court.

7. Respondent  Nos.2  and 3 then filed  SCS No.76 of  1974 in  

October  1974  for  setting  aside  the  preliminary  decree  dated  

20.09.1958 before the Civil Judge, Senior Division, Amravati.  The  

suit  was,  however,  dismissed  with  costs  by  the  civil  court  on  

31.01.1980.  Respondent Nos.2 and 3 then filed RCA No.234 of  

1980  before  the  District  Court,  Amravati.   Before  the  District  

Court, Amravati, Gangabai  and Respondent Nos.2 and 3 filed a  

compromise application and  21.08.1987 and agreed to partition  

the suit property.   District Judge, Amravati  vide its order dated  

12.10.1988 passed a compromise decree disposing of RCA No.234  

of 1980 in view of the compromise application filed on21.08.1987.  

In  view  of  the  compromise  arrived  at  between  Gangabai  and  

Respondent Nos.2 and 3, the suit property was partitioned and  

the  area  occupied  by  Respondent  No.1  came  to  the  share  of  

Gangabai.   Respondent  Nos.2  and  3,  however,  filed  Second  

Appeal  No.57 of 1989 challenging the compromise order dated

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12.10.1989 before the Bombay High Court, Nagpur Bench.  The  

second appeal was, -

however,  dismissed by the High Court vide its  judgment dated  

31.08.1989.

8. Gangabai  then issued legal  notice to  Respondent  No.1 on  

05.10.1989 asking  him to  vacate  the  suit  property  contending  

that  he  was  a  trespasser  and  had  been  occupying  the  suit  

property without her consent and the transfer of interest made by  

Respondent No.2 and 3 in favour of Respondent No.1 was hit by  

doctrine of lis pendens.  Gangabai following the above-mentioned  

notice, preferred SCS No.6 of 1990 against the respondents for  

recovery of possession, damages for use and occupation before  

the Civil Judge, Senior Division, Amravati.  Respondent No.1 filed  

his written statement claiming that he was a tenant of the original  

owners, namely, Respondent Nos.2 and 3.  The trial court vide its  

judgment dated 26.10.1994 dismissed the suit filed by Gangabai  

on the ground that  Respondent Nos.2 and 3 being mortgagors  

were entitled to induct Respondent No.1 as a tenant.  The Court  

also  recorded  the  finding  that  Respondent  No.1  was  not  a  

trespasser  when  he  was  initially  inducted  into  suit  property.

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Gangabai  then  preferred  RCA No.7  of  1995  before  the  District  

Judge, Amravati, which was also dismissed on 21.07.2003 on the  

ground that -Section 44 of the Transfer of Property Act (for short  

the TPA) did not debar a co-owner from inducting a tenant and  

Section  65  of  the  Act  was  inapplicable  as  there  was  no  

relationship of mortgagor-mortgagee.

9. Gangabai later bequeathed the suit property in favour of the  

appellant.   Consequently  the  appellant  filed  Second  Appeal  

No.548  of  2003  challenging  the  findings  recorded  by  the  trial  

court  as well  as by the District  Court.   The High Court by the  

impugned judgment found no substantial question of law which  

arose  for  its  consideration  and  dismissed  the  appeal  on  

13.03.2007  against  which  this  appeal  has  been  preferred  by  

special leave.

10. Shri  V.A.  Mohta,  learned  senior  counsel  appearing  for  the  

appellant  submitted  that  the  courts  below  have  committed  a  

serious error in not answering various substantial questions of law  

which were raised for their consideration.  Learned senior counsel  

submitted that it was during the pendency of the litigation that

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Respondent  No.1  was  inducted  into  the  property  in  question  

without  consent  and  to  the  detriment  of  Gangabai  as  well  as  

appellant’s interest and that Respondent No.1 had full knowledge  

of-

the pending litigation between Gangabai, on the one hand, and  

Respondent Nos.2 and 3, on the other.  Gangabai had issued a  

notice to the tenant on 05.01.1989 calling upon him to vacate the  

suit premises and he did not vacate the premises consequently  

Gangabai had to file a civil suit for possession and damages for  

use and occupation against the first respondent.  Learned senior  

counsel also submitted that the premises in possession of Brij Lal  

were got vacated and thereafter in or about year 1965-66 first  

respondent entered into possession without the knowledge and  

consent of Gangabai.  Learned senior counsel submitted that in  

view  of  the  provisions  of  Section  52  of  the  TPA  a  mortgagor  

cannot  be  permitted  to  induct  any  person  as  a  tenant  in  the  

mortgaged  property  which  is  the  subject  matter  of  litigation  

between the mortgagor and the mortgagee, to the prejudice of  

the mortgagee.  In support of his contention, reliance was placed  

on the Judgment of this Court in Mangru Mahto and others v.

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Thakur  Math AIR  1967  SC  1390.   Learned  senior  counsel  

submitted  that  the  questions  of  law  raised  were  not  properly  

appreciated or considered by the courts below and hence calls for  

interference by this Court.

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11. Shri  D.K.  Pradhan,  learned  counsel  appearing  for  the  

respondents, on the other hand, submitted that first respondent  

was  occupying  the  premises  as  a  legally  inducted  tenant  

peacefully  for  over  40  years  from  the  mortgagor  and  the  

mortgagor and the mortgagee being co-owners, there is no bar in  

one  co-owner,  inducting  a  tenant  in  the  property.   Learned  

counsel  also submitted that rent receipts produced by the first  

respondent would indicate that he was a legally inducted tenant.  

Learned counsel also submitted that by virtue of Section 65 of the  

Code of Civil Procedure, though sale of the joint ½ share of the  

property in favour of Gangabai became absolute on 09.04.1974  

yet it would be deemed that joint ½ share of the property vested  

in her only in the year 1960.  Learned counsel also submitted that  

even though sale in question became absolute at a later date by  

assumption of law, the right in property purchased was deemed

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to be vested in the purchaser only from the date of sale.  Learned  

counsel  also  submitted  that  all  these aspects  and legal  issues  

were  considered  by  all  the  courts  below  and  they  have  

concurrently  found that  the plaintiff  Gangabai  or  the appellant  

could  not  establish  her  right  over  -the  property  in  question.  

Learned counsel,  therefore, prays that the appeal be dismissed  

with costs.

12. We have narrated the facts in detail to indicate as to when  

the rights had been accrued to Gangabai.  Gangabai, as already  

stated, became a mortgagee of the property as early as in 1953  

by a registered mortgage deed and the suit filed by Gangabai for  

enforcing  the  mortgage  was  decreed  by  the  civil  court  on  

01.09.1956  and  that  preliminary  decree  later  became  final  as  

against the share of Vijaysingh Mohta.  Gangabai purchased ½  

share in the mortgaged property from Mohta on 02.03.1960 which  

was confirmed in her favour by the civil court and was placed in  

joint  possession  by  the  executing  court  on  25.11.1960.   Facts  

would clearly indicate that the first respondent was inducted as a  

tenant while all these proceedings were pending before the court  

and that the entry of the first respondent into the suit property

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was  not  with  the  consent  and  knowledge  of  Gangabai  even  

though she was a mortgagee of a portion of the property from  

1953 onwards.  Several civil suits were also pending between the  

mortgagor and the mortgagee and it is during the course of those  

proceedings, evidently, first respondent was inducted as a tenant.  

The  question  -is  whether  such  induction  was  in  violation  of  

Sections  52  and  65  of  the  TPA  and  to  the  prejudice  of  the  

mortgagee  Gangabai.   On  facts,  we  are  convinced  that  the  

induction of  the respondent  was during the subsistence of  the  

mortgage and pendency of court proceedings and the legality of  

that action has to be tested on the touchstone of above statutory  

provisions and the precedents set by this Court.

13. Rule  of  lis  pendens applies  to  suit  on mortgagee as  well.  

Lord Justice Turner has succinctly dealt with this principle in the  

leading case of Bellamy v. Sabine (1857) 1 De G J 566 (Courtesy  

Mulla on T.P. Act).  The doctrine is intended to prevent one party  

to a suit making an assignment inconsistent with the rights which  

may be decided in  the  suit  and which might  require  a  further  

party  to  be  impleaded  in  order  to  make  effectual  the  court’s  

decree.  Law is well settled that a mortgagee, who has purchased

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a  mortgaged  property  in  execution  of  his  mortgage  decree  is  

entitled to  avoid a transfer on the ground that it was mortgaged  

by  the  mortgagor  during  the  pendency  of  a  mortgage  suit.  

Section 52 of the TPA prevents a mortgagor from creating any  

lease during the pendency of mortgaged suit so as to effect the  

right of a mortgagee or the purchaser.   This Court in  Mangru  

Mahto  and  others (supra)  had  -an  occasion  to  consider  the  

scope of Section 52 of the TPA in that very context and held as  

follows:

“……………..But in view of Section 52 of the Transfer of  Property  Act,  if  the  mortgagor  grants  such  a  lease  during  the  pendency  of  a  suit  for  sale  by  the  mortgagee,  the  lessee  is  bound by  the  result  of  the  litigation.  If  the  property  is  sold  in  execution  of  the  decree passed in  the suit,  the lessee cannot resist  a  claim  for  possession  by  the  auction-purchaser.  The  lessee could apply for being joined as a party to the suit  and ask for an opportunity to redeem the property. But  if he allows the property to be sold in execution of the  mortgage decree and they have now lost the present  case, the lessees allowed the suit lands to be sold in  execution of the mortgage decree and they have now  lost  the  right  of  redemption.  They  cannot  resist  the  claim  of  the  auction  purchaser  of  recovery  of  possession of the lands.”

14. Section 65-A of the TPA deals with the mortgagee’s powers  

to lease.  However, in view of Section 52, if the mortgagor grants

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such  a  lease  during  the  pendency  of  a  suit  for  sale  by  the  

mortgagee, the lessee is bound by the result of litigation and if  

the property is sold in execution of the decree, the lessee cannot  

resist a claim for possession by auction purchaser.

15. Section 52 deals with cases of transfer of anything otherwise  

dealing with any immovable property after any suit or proceeding  

in which any right to such immovable property is directly and  --

specifically in question has been filed.  Section 65-A of the TPA  

deals  with  the  powers  of  the  mortgagor  to  grant  a  lease  of  

mortgaged  property,  while  the  mortgagor  remains  in  lawful  

possession of the same.  In Dev Raj Dogra and Others v. Gyan  

Chand  Jain  and  Others   (1981)  2  SCC  675, following  the  

judgment in Mangru Mahto and others (supra), this Court held  

that if the mortgagor grants a lease during the pendency of a suit  

for sale by the mortgagee, the lessee is bound by the result of the  

litigation.

16. Above legal proposition, in our view, will squarely apply to  

the facts of this case.  On facts, we have already found that the  

induction of the first respondent was during the subsistence of the

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mortgage and also subsistence of the various legal proceedings  

pending before various courts.  A plea was raised by the counsel  

for the respondent that he is entitled to get the protection of the  

Maharashtra Rent Act.  In our view, this plea has no basis in the  

facts  of  this  case.   A  tenant  who  is  inducted  during  the  

subsistence of the mortgage is not entitled to get the protection  

of the Maharashtra Rent Act.  This legal position has been settled  

by this Court in Om Prakash Garg v. Ganga Sahai and others  

AIR  1988  -SC 108.   In  this  connection reference may also be  

made to the Judgment of this Court in  Carona Shoe Co. Ltd.  

And another  v. K.C. Bhaskaran Nair  AIR 1989 SC 1110.

17. In the above-mentioned circumstances, we are of the view  

that  the  courts  below  have  not  appreciated  the  various  legal  

issues and committed an error in non-suiting the appellant.  We  

answer those questions in favour of the appellant and hold that  

the appellant is entitled to get a decree, as prayed for, since the  

original  first  respondent  was  inducted  illegally  and  to  the  

prejudice  of  the  original  mortgagee.   Consequently,  the  

judgments  of  the  courts  below  are  set  aside  and  the  suit  is

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decreed,  however,  without  any  mesne profits.    The appeal  is  

allowed, but without any order as to costs.

……………………………..J. (K.S. Radhakrishnan)

……………………………..J. (A.K. Sikri)

New Delhi, August 21, 2013