POLAMMARASETTI VARANA VENKA SATYANARAYANAversusSUDDHA APPARAO NAIDU (DEAD) AND ORS

        POLAMMARASETTI VARANA VENKA SATYANARAYANA                                 A
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                                          v.
                 SUDDHA APPARAO NAIDU (DEAD) AND ORS

                                  MARCH 18, 1997

                         [G.N. RAY AND G.T. NANAVATI, JJ.)                        B

             M01tgage:

            Usuftuctua1y 11101tgage--Suit for redemption-Rights of lessee-Lessee
     contending that he had acquired non-evictable right and could not be dispos- C
     sessed by redemption of 11101tgage--Held, the finding of the courts below that
     the lease hold illterest had come to an end and the plaintiff was entitled to
     redemption of the mortgage and to take possession of prope1ties under the
     mortgage deed cannot be held to be unjust or improper.

           Gopalan Krishnakutty v. Kunjamma Pillai Sarojini Amma & Ors.,          D
     [1996] 3 SCC 424; Narayan Vishnu Hendre v. Babuao Savalaram Kohawale,
     [1995] 6 SCC 608; Ga1nbangi Agglaswa1ny Naidu v. Beltara Venkata-
     ramanayya Fatro, [1984] 4 SCC 382 and Shah Mathuradas Madan/al & Co.
     v. Nayappa Shankarappa Malave, [1976] 3 SCC 660, cited.

             CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1738 of               E
     1987.

          From th; Judgment and Order dated 16.4.87 of the Andhra Pradesh
     High Court in S.A. No. 308 of 1981.

           K. Ram Kumar, C. Balasubramaniam, Y. Subba Rao and Ms. Asha            F
     Nair for the Appellant.

             T.L. Vishwanatha Iyer and M.K.D. Namboodri for the Respondents.

             The following Order of the Court was delivered :
                                                                                  G
           This appeal is directed against the judgment of the Andhra Pradesh
     High Court dated April 16 , 1987, passed in Second Appeal No. 308 of
     1981. By the impugned judgment, the High Court has dismissed the Second
     Appeal preferred by the appellant. One Bheemarasetti Adinarayana Naidu
     was the plaintiff in Suit No. O.S. No. 55 of 1967 in the Court of District   H
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     30                   SUPREME COURT REPORTS.                 (1997] 3 S.C.R.

· A Munsif, Anakaballi which was renumbered as OS No. 260 of 1969 in the
   Court of Principal District Munsif, Yellamanchili. Such suit was instituted
   by the plaintiff for redemption of usufructuary mortgage created by deed
   dated December 11, 1946 (Ext. A-1) on the basis of the sale deed dated
   September 19, 1960 (Ext. A-2) under which the said plaintiff purchased the
 B property with a right to redeem. The appellant was the second defendant
   in the said suit. There is no dispute that at the time as creating such
   usufructuary mortgage in 1946, the appellant was continuing as a lessee and
   the lease was to expire in 1948. The appellant contended that his right as
   lessee continued despite the said usufructuary mortgage and in view of such
   right continuing, he had acquired non-evictable right and, therefore, there
 C was no question of taking over possession of the property from him by
   redemption of mortgage. Such contention has not been accepted either by
   the court below or by the High Court.

           Mr. K. Ram Kumar, learned counsel appearing for the appellant has
 D contended that simply on execution of usufructuary mortgage, the right of
   the lessee does not come to an end unless and until it can be established
   that such lease hold interest had been terminated or the lease hold interest
   had been surrendered either by express conduct of the parties or by
   necessary implication flowing from the deed of mortgage. Save as
   aforesaid, it must be held that the lease hold interest continues not-
 E withstanding creation of usufructuary mortgage. In support of such conten-
   tion, reliance has been made to the deciEion of this Court in Gopalwi
   Krishnakutty v. Kunjamma Pillai Sarojini Anuna & Ors., [1996) 3 SCC 424.
   After taking into consideration of the decisions of this Court in Narayan
   Vishnu Hendre v. Babuao Savalaram Kolwwale, [1995] 6 SCC 608 and in
 p Gambangi Applaswamy Naidu v. Vankataramanavya Fatro, [1984] 4 SCC
   382 and in Shah Mathuradas Madanlal & Co. v. Nayappa Shankarappa
   Malave, [1976) 3 SCC 660 it. has been held in Gopalan Krishnakutty's case
   that simply on the execution of the usufructuary mortgage deed, surrender
   of tenancy right cannot be inferred out the question of continuance of lease
   hold interest upon execution of usufructuary mortgage is required to be
 G decided on the facts situation of the case.

         Mr. Ram Kumar has submitted that there is no automatic merger of
   interest of the lessee with that of the mortgagee and in the absence of proof
   of surrender by the defendant of this lease hold interest and to hold only
 H the right of mortgage, the plaintiff is not entitled to automatically claim
   POLAMMARASETTIVARANA VENKASATYANARAYANAv. S.A.NAIDU                     31

possession of the lease hold premises by redeeming the mortgage.                 A
       We have taken into consideration the mortgage deed executed in
1946. In our view, a clear intention of only retaining the mortgage's interest
is to be inferred in view of the specific statement that on redemption, the
mortgagee should deliver possession to the mortgagor. We may indicate
that the expression to that effect used in the mortgage deed has been noted      B
by the courts below. We may als~ indicate that there is no indication in the
mortgage deed as to how the renfpayable by the mortgagee qua lessee was
to be adjusted between the parties. The absence of any mode of adjustment
of lease hold rent implies that it was not intended that despite the said
mortgage, parties intended that the lease hold interest was to continue. It      C
may also be indicated here that lease hold interest was to expire in 1948.
In the absence of any payment of rent for such lease hold interest and
acceptance of such payment after expiring of the period of lease it can not
also be contended anc;l that there was a case of holding over by the lessee.
In the aforesaid circumstances, the finding by the Courts below that the
lease hold interest has come to an end and the plaintiff was entitled to the     D
redemption of the mortgage and to take delivery of the properties under
these mortgage deed cannot be held to be unjust cir improper. We, there-
fore, do not find any reason to interfere with the impugned judgment of
the High Court. The appeal, therefore, fl!ilS and is dismissed, No costs.

R.P.                                                      Appeal dismissed.
                                                                                 E