TARA CHAND versus SAGARBAI @ CHAIYALIBAI

Citation: [2007] 6 S.C.R. 231 · Decided: 09-05-2007 · Supreme Court of India · Bench: S.B. SINHA · Disposal: Dismissed

Judgment (excerpt)

, 
TARA CHAND 
A 
v. 
SAGARBAI @ CHAIY ALIBAI 
MAY 9, 2007 
(S.B. SINHA AND P.K. BALASUBRAMANYAN, JJ.] 
B 
Transfer of Property Act, 1882: 
ss. 59 and 111 (j)-Landlord executed registered mortgage deed. 
allowing the tenant to use suit premises for 10 years in lieu of interest C 
amount-Taxes including the house tax payable by landlord and on expiry 
of 10 years, tenant-mortgagee to vacate the premises-Suit for redemption of 
mortgage and possession on expiry of JO years-Dismissed on the ground 
that landlord could obtain possession only in terms of 1961 Act-Correctness 
of-Held: Not correct-Relationship of tenant and landlord ceased to exist D 
and the question of applicability of 1961 Act would not arise-Parties 
having altered their position, rule of estoppel would apply-M.P. 
Accommodation Act, 1961. 
s. 59-Terms of a documents altered by a latter document which is 
registered-Held: Latter document would prevail. 
E 
Respondent is the owner of the suit premises. Appellant was a tenant 
under him. Respondent however executed a deed of sufructuary mortgage dated 
1.10.1986 in favour of the appellant whereby he mortgaged with possession 
the entire portion of ground floor of the house for Rs. 25000/- to the appellant. 
The deed stated that appellant would use the ground floor in lieu of the interest F 
amount and the house tax and other taxes would be payable by respondent 
. 1 
himself: The period of redemption of the ground floor had been settled between 
the parties for IO years and that before expiry of IO years, mortgagor would 
not be entitled to get the ground floor redeemed from mortgage. After IO years 
on payment of entire mortgage money, mortgage would vacate the house and G 
deliver it. The deed also provided the failure clause whereby mortgage would 
have right to auction the mortgaged house. The said document was unilateral 
one. It was, however, preceded by an agreement of mortgage. This document 
was also unih!terial one. On expiry of 10 years from the date of mortgage, 
suit was filed for redemption of mortgage and delivery of possession. 
231 
fl 
232 
SUPREME COURT REPORTS 
[2007] 6 S.C.R. 
A 
Trial Court dismissed the suit holding that the respondent being a 
1 
landlord can obtain possession of the premises in question, only in terms of 
the provisions of the M.P. Accommodation Control Act, 1961. On appea~ High 
Court set aside the order of trial court. Hence the present appeal. 
B 
Dismissing the appeal, the Court 
HELD: 1. A transaction of mortgage is governed by the provisions of 
the Transfer of Property Act The Deed of Mortgage dated 1.10.1986 was a 
registered document. In terms of s. 59 of the said Act, a mortgage can be 
) 
effected by a registered instrument signed mortgagor and attested by at least 
c 
at least two witnesses. Requirements of Section 59, therefore, stood flulfilled. 
(Para 11] (238-A, B] 
2. Indisputably, the realtionship of the parties were goverened by the 
provisions of the M.P. Accomodation Control Act, 1961. It contains a non-
obstante clause protecting the rights of the tenant. The right of a tenant, 
D however, would be available provided the tenancy continues. Once, the tenant 
ceases to be a tenant, question of applicability of the said Act would not arise. 
[Para 15] [238-D, E] 
;.. 
3. Whether the rights of a tenant would give way to rights of a mortgagee 
., 
would essentially depend upon the terms and conditions of the mortgage, If 
E the tenant surrrenders the tenancy either explicity or by necessary 
implication, the terms of the deed of mortgage shall prevail. Having 
surrendered the tenancy, it would not lie in the mouth of a mortgagee to contend 
that as he had been a tenant, he would be entitled to the rights of a tenant 
(Para 14) (238-E, FJ 
F 
4. The right of a Usufructuary Mortgagor to redeeem the mortgage and 
recover possession is well known, and with a view to enforce the same, a 
mortgagor may file a suir for redemption or may take recourse to the 
summary process of deposit and notice under Section 83 of the Transfer of 
Property Act. A suit for redemption is essentially a suit for recovery of 
G possession. When a debt is satisfied out of the usufructs of the property or 
otherwise, the mortgagor recovers possession on his title. Profits arising out 
of possession of the morgage property can be taken by the mortgagee in lieu 
of interest. The case at hand comes within the purview of the clause ( d) of 
Section 58. [Paras 15, 16, 17 and 19] [

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