CARONA SHOE CO. LTD. AND ANR. versus K.C. BHASKARAN NAIR

Citation: [1989] 1 S.C.R. 974 · Decided: 09-03-1989 · Supreme Court of India · Bench: SABYASACHI MUKHERJI · Disposal: Dismissed
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Judgment (excerpt)

CARONA SHOE CO. LTD. AND ANR. 
v. 
K.C. BHASKARAN NAIR 
MARCH 9, 1989 
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[SABYASACHI MUKHARJI AND S. RANGANATHAN, JJ.] 
Kerala Buildings (Lease and Rent Control) Act 1961: Sections 
2(.3), 2(6) and ll(a)-Tenants inducted into possession by mortgagee-
Whether liable to eviction through a decree of Court passed in a suit for 
redemption of mortgage. Section 76(a) of the Transfer of Property Act 
1882-Whether attracted. 
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The ap11ellants are tenants. The premises in dispute is a shop 
building bearing No. T.C. 887, M.G. Road, Pazhavangadi, Tri-
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vandrum, part of a Pucca three storeyed building owned by one M.P. 
_PMllip. As per the settlement the shop in dispute devolved on one of his 
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_sons, wMle the shop was in the posses.5ion of the tenant. During the tenancy 
owner mortgaged the premises in dispute and the remaining portions to 
the first defendant with a direction to receive the rent from the tenant. 
The tenant was asked to attorn to the mortgagee. The first defendant in 
course of management of the property gave the building on lease to the 
appellants for a higher rent; the earlier tenant having vacated the same. 
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The owner thereafter executed the second 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. 
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The Respondent and the subsequent mortgagee together as 
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plaintiffs 1 & 2 filed a suit to redeem the mortgage of the first defendant 
impleading the appellants as parties and claimed recovery of the Khas 
possession of the building., The appellants contended (i) that they are 
tenants of the building inducted into possession by the mortgagee as a 
mode of enjoyment; (ii) that the mortgage deed authorised the mort-
gagee to enjoy the building by letting it out and that they were not liable 
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to be evicted through a decree of Court in redemption Suit ,without an 
order under the Kerala Building (Lease and Rent Control) Act 1965. 
The trial Conrt decreed the suit and directed recovery of posses-
sion of the Shop bnilding. It took the view that the mortgagee could not 
induct a tenant and give him any right to continue in possession even 
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after the redemption of the mortgage. 
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974 
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CAR'ONA SHOE CO. v. K.C.B. NAIR 
975 
On appeal, the first appellate Court held that the disputed build-
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ing was a shop building which was never in the enjoyment of the owner; 
mode of enjoyment of the owner being 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 posses-
sion even after redemption, until evicted under the Rent Control Act. It 
also found that the mortgage deed impliedly authorised the mortgagee 
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to let out the building. In that view of the matter, the trial Court's order 
was set aside. 
The Respondent thereupon filed a second appeal before the High 
Court. The High Court took the view that it was not open to the mort-
gagee to induct a persi>n into possession which conferred any right on 
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the tenant to continue in possession even after redemption. Accordingly 
it allowed the appeal and a decree for eviction was passed. Hence this 
appeal by the appellants tenant. 
Dismissing the appeal, but directing that the decree for eviction 
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should not be executed till the 31st October, 1989 if the appellants give 
usual undertaking to deliver vacant possession on 3 lst October, 1989, 
this Court, 
HELD: That the mortgagor on redemption of mortgage gets back 
his own right: he is not the successor-in-interest of the mortgagee. 
Interest, if any, created by the mortgagee on the mortgagor's right, 
must disappear on ceasing of the interest of the mortgagee. [983C-DI 
The limited estate created in favour of the mortgagee having dis-
appeared, all rights emanating from that limited estate disappear and 
the superior right of the mortgagor comes not in place of the mortgagee 
but as a result of an independent title, and as such the mortgagor 
cannot be bound by any act created or any relationship contracted 
between the mortgagee and the tenant, unless it is permitted by the 
mortgage-deed. [983G-H) 
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The mortgagor's right of redemption and the mortgagee's right of G 
foreclosure or sale are co-extensive. [9840 I 
Jadavji Purshottam v. Dhani Navnitbhai Amaratlal & Ors., 
[1988
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