GOPALAN KRISHNAN KUTTY versus KUNJAMMA PILLAI SAROJINI AMMA & ORS.

Citation: [1996] 3 S.C.R. 355 · Decided: 13-03-1996 · Supreme Court of India · Bench: J.S. VERMA · Disposal: Appeal(s) allowed

Judgment (excerpt)

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GOPALAN KRISHNAN KUTTY 
A 
v . 
KUNJAMMA PILLAI SAROJINI AMMA & ORS. 
MARCH 13, 1996 
(J. S, VERMA, S.P. BHARUCHA AND K. VENKATASWAMI, JJ.] 
B 
Mo1tgage: 
M01tgage in favour of Lessee-Lease not sun-endered7-0n expi1y of 
Mortgage suit for redemption and recovery of possession-Allowed by Trial C 
Cowt and A/finned by High Cowt-011 appeal-Held, No automatic merger 
of interest in the absence of proof of swrender-Not entitled to recover 
possession of leased lands-Restoration order set aside. 
The Defendant (appellant) was a lessee. The Respondent (Plaintill) 
executed a mortgage in favour of defendant (appellant). On expiry of the D 
period of mortgage, the defendant filed a suit for redemption and rec~very 
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of possession of the premises. The Trial court passed preliminary decree 
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granting redemption and directing recovery of possession from the defen .. 
dant. The High Court dismissed the appeal of the defendant. Hence the 
present appeal. 
Allowing the appeal, this Court 
HELD : 1. The mere fact that the owner creates a mortgage in favour 
of the lessee is not by itself decisive to hold that the prior lease was 
surrendered and the possession of the earlier lease is only that of a 
mortgai,~ on creation of the mortgage. TI1e nature of possession is a 
question of fact in each case. [357-E] 
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F 
2. Unless there was a surrender of the lessor's rights at the time of 
execution of the mortgage, the mortgagor would not be entitled to obtain 
delivery of physical possession upon redemption. The question whether G 
there was surrender of the lease by the lessee at the time of execution of 
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the mortgage in his favour by the lessor • mortgager is a question of fact 
to be answered on the evidence. [357-G; 358-B] 
3.1 The High Court proceeded on the erroneous assumption that 
surrender of the Lease by the lessee (defendant) must be implied from the H 
355 
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356 
SUPREME COURT REPORTS 
(1996] 3 S.C.R. 
A fact of execution of the usufructuary mortgage in his favour by the lessor 
(plaintill). It has to be decided on the contents of the deed since there is 
no other evidence of surrender of the lease by the defendant on execution 
. .. 
of the mortgage. There is nothing in the mortgage to prove either an 
express or implied surrender of the lease by the defendant in favour of the 
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plaintiff on execution of the mortgage deed. [358-C-D] 
3.2. There is no automatic merger of the interest of the lessee with 
that of the mortgagee when the same person is a lessee as well as the 
mortgagee, in absence of proof of surrender of the lease by the defendant, 
on redemption of the mortgage the plaintiff is not entitled automatically 
c to recover possession of the leased premises. The defendant's right to 
continue as a lessee therefore continued to subsist. [358-E) 
Shah Mathuradas Magan/a/ & Co. v. Nagappa Shankarappa Ma/age & 
Ors., [1976) 3 SCC 660; Gambangi Appalaswamy Naidu & Ors. v. Behara 
Venkataramanayya Patro & Ors., [1984) 4 SCC 382 and Narayan Vishnu 
D Hendre & Ors. v. Baburao Savalaram Kothawale, [1995) 6 SCC 608, referred 
to. 
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CIVIL APPELLATE JURISDICTION : Civil Appeal No. 4192 of 
1994. 
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From the Judgment and Order dated 30.9.86 of the Kerala High 
Court in AS. No. 100 of 1981. 
S. Balakrishnan and S. Prasad for the Appellants. 
F 
P.S. Poti, Ms. Malini Poduval and K.M.K. Nair for the Respondents. 
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The Judgment of the Court was delivered by 
J.S. VERMA, J. This appeal by special leave is by the defendant and 
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it arises out of a suit for redemption of a mortgage. The appellant was the 
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lessee in the premises which is a shop in which he was carrying on his 
bakery business from 1965. The plaintiff later executed a mortgage in 
favour of the defendant on 18.7.1974 for a consideration of Rs. 13,000. On 
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expiry of the period of mortgage, the plaintiff ftled a suit for redemption 
and recovery pf possession of the premises. The defendant contested the 
claim for recovery of possession, inter a/ia, on the ground that his posses-
H• sion was that of a lessee, independent of the mortgage and even after 
G.KRISHNANKU'!TYv. KP.S.AMMA [VERMA,J.] 
357 
redemption of the mortgage the defendant was entitled to continue in A 
possession under the lease. The Trial Court passed a preliminary decree 
.-J • granting redemption and directing recovery of possession from the defen-
dant. The first appeal by the defendant has been dismissed by the High 
Court. Hence, this appeal by the defe

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