SUNITA JUGALKISHORE GILDAversusRAMANLAL UDHOJI TANNA (DEAD) THR. LRS. AND OTHERS

                   [2013] 8 S.C.R. 215


         SUNITA JUGALKISHORE GILDA                            A
                         v.
  RAMANLAL UDHOJI TANNA (DEAD) THR. LRS. AND
                      OTHERS
          (Civil Appeal No. 6966 of 2013)
                    AUGUST 21, 2013
                                                              8

     [K.S. RADHAKRISHNAN AND A.K. SIKRI, JJ.]

      Transfer of Property Act, 1882 - s. 52 - Mortgagor
inducting tenant in a mortgaged property, to the prejudice of C
the mortgagee, pendente lite - Permissibility - On facts,
mortgagor (respondent no.2 & 3) inducted respondent no.1
as a tenant without consent of the mortgagee (appellant) -
Induction of respondent no.1-tenant was during subsistence
of the mortgage and a/so subsistence of various legal D
proceedings pending before various courts between the
mortgagor and the mortgagee - Suit of appellant-mortgagee
against respondents for recovery of possession, and
damages for use and occupation - Held: Rule of /is pendens
applies to suit by a mortgagee as well - s.52 of the TPA E
prevents a mortgagor from creating any /ease during the
pendency of mortgaged suit so as to effect the right of a
mortgagee - However, in view of s. 52, if the mortgagor grants
such a /ease during the pendency of a suit for sale by the
mortgagee, the lessee is bound by the result of litigation and F
if the property is sold in execution of the decree, the lessee
cannot resist a claim for possession by auction purchaser -
 Tenant inducted during subsistence of the mortgage is not
entitled to get protection of the Rent Act - The courts below
erred in non-suiting the appellant - Appellant entitled to get G
decree, as prayed for, since respondent no. 1 was inducted
illegally by respondent nos. 2 & 3 and to the prejudice of
 appellant-mortgagee - Suit of appellant decreed, however,
 without any mesne profits - Maharashtra Rent Act.
                            215                               H
    216      SUPREME COURT REPORTS               [2013] 8 S.C.R.


A       Doctrines - Doctrine of !is pendens - Rationale for - Held:
    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.
B
       'G', the grand mother-in-law of the appellant, became
  a mortgagee of the property in question in 1953 by a
  registered mortgage deed executed by one 'V", father of
  Respondent Nos.2 and 3 for himself and as guardian of
  Respondent No.2. Suit was filed by 'G' for enforcing the
C mortgage, which was decreed by the civil court on
  01.09.1956 and preliminary decree later became final as
  against the share of 'V'. 'G' purchased % share in the
  mortgaged property from 'V' on 02.03.1960 which was
  confirmed in her favour by the civil court and was placed
D in joint possession by the executing court on 25.11.1960.
  Respondent no.1 was inducted as a tenant while all these
  proceedings were pending before the court. The entry of
  respondent no.1 into the suit property was not with the
  consent and knowledge of 'G' even though she was a
E 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
F of those proceedings, evidently, respondent no.1 was
  inducted as a tenant. 'G' filed civil suit against the
  respondents for recovery of possession, damages for
  use and occupation. The trial court dismissed the suit on
  the ground that Respondent Nos.2 and 3 being
G mortgagors were entitled to induct Respondent No.1 as
  a tenant. Appeal before the District Judge was dismissed.
  'G' later bequeathed the suit property in favour of the
  appellant. Subsequently the appellant filed Second
  Appeal, which was dismissed by the High Court and
  therefore the instant appeal.
H
 SUNITA JUGALKISHORE GILDA v. RAMAN LAL UDHOJI         217
            TANNA (DEAD) THR. LRS.

    The question that arose for consideration in the          A
instant appeal was 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.
                                                              B
    Allowing the appeal, the Court

    HELD: 1.1. The induction of respondent no.1 was
during the subsistence of the mortgage and pendency of
court proceedings. Rule of lis pendens applies to suit on
mortgagee as well. The doctrine is intended to prevent        C
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 a                 D
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         E
of mortgaged suit so as to effect the right of a mortgagee
or the purchaser. [Para 12 and 13] [224-E-H; 225-A]

     1.2. Section 65-A of the TPA deals with the
mortgagee's powers to lease. However, in view of Section
                                                              F
52, 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 litigation and if the property is
sold in execution of the decree, the lessee cannot resist
a claim for possession by auction purchaser. Section 52
deals with cases of transfer of anything otherwise dealing    G
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      H
    218       SUPREME COURT REPORTS            [2013] 8 S.C.R.


A remains in lawful possession of the same. 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. [Paras 14, 15] [225-E-H; 226-A-B]

B     1.3. On facts, it is found that the induction of the first
  respondent was during the subsistence of the 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. This plea has no
C 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. The
  courts below have not appreciated the various legal
  issues and committed an error in non-suiting the
D appellant. 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 decreed, however,
E without any mesne profits. [Paras 16, 17] [226-8-D, E-G]

       Mangru Mahto and Others vs. Thakur Math AIR 1967 SC
  1390; Dev Raj Dogra and Others vs. Gyan Chand Jain and
  Others (1981) 2 SCC 675: 1981 (3) SCR 174; Om Prakash
F Garg vs. Ganga Sahai and Others AIR 1988 SC 108: 1987
  (3) SCC 553 and Carona Shoe Co. Ltd. And another vs. K.C.
  Bhaskaran Nair AIR 1989 SC 1110: 1989 (1) SCR 974 -
  relied on.

     Smt. Gangabai vs. Vijay Kumar and Others (1974) 2
G SCC 393: 1974 (3) SCR 882 - referred to.

          Bellamy vs. Sabine (1857) 1 De G J 566 - referred to.

                         Case Law Reference:
H         1974 (3) SCR 882       referred to          Para 6
 SUNITA JUGALKISHORE GILDA v. RAMANLAL UDHOJI               219
            TANNA (DEAD) THR. LRS.
    AIR 1967 SC 1390           relied on              Para 10       A
    (1857) 1 De G J 566        referred to            Para 13
    1981 (3) SCR 174           relied on              Para 15
    1987 (3) sec 553           relied on              Para 15
                                                                    B
    1989 (1) SCR 974           relied on              Para 16

    CIVIL APPELLATE JURISDICTION : Civil Appeal No.
6966 of 2013.

     From the Judgment and Order dated 13.03.2007 of the            C
High Court of Judicature at Bombay in Second Appeal No. 548
of 2003.

    V.A. Mohta, J.K. Gilda, Nilkanta Nayak, Rameshwar
Prasad Goyal for the Appellant.                                     D

    D.K. Pradhan, Shashibhushan P. Adgaonkar for the
Respondents.

    The Judgment of the Court was delivered by
                                                                    E
     K.S. RADHAKRISHNAN, J. 1. 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
                                                                    F
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 as Gowardhandas Mathurdas Mohta, along with the suit
premises and open space situated at Nazrul Plot Nos. which          G
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.
                                                                    H
    220      SUPREME COURT REPORTS                [2013] 8 S.C.R.


A      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% share in the property belonging to Mohta, with
  the leave of the court in auction. The auction was confirmed by
B 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.1109of1961and1110
C   of 1961 against two tenants for recovery of% share in rent,
    which suits were, however, dismissed by the trial court.
    Gangabai, later, filed Cl revision before the High Court, which
    was allowed decreeing her claim for % share in the rent.
    Gangabai, on 05.01.1963, filed a SCS No.33 of 1963 against
D   all the tenants including Respondent Nos.2 and 3 for a
    declaration and injunction that she was the owner of % 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,
E   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-
F   mentioned suit, left the decreed premises, without raising any
    claim.

       6. The First Appeal No.40of1959, 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
G 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 vs. Vijay Kumar and
H
                - .
 SUNITAJUGALKISHORE GILDA v. RAMANLAL UDHOJI                 221
 TANNA (DEAD) THR. LRS. [K.S. RADHAKRISHNAN, J.]

Others (1974) 2 SCC 393. This Court set aside the judgment           A
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.        B
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           C
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           D
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 12.10.1989 before the
Bombay High Court, Nagpur Bench. The second appeal was,
however, dismissed by the High Court vide its judgment dated         E
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           F
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          G
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              H
    222       SUPREME COURT REPORTS                [2013] 8 S.C.R.


A   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. Gangabai then
    preferred RCA No. 7 of 1995 before the District Judge,
s   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 Ci co-owner from inducting a tenant and
    Section 65 of the Act was inapplicable as there was no
    relationship of mortgagor-mortgagee.
c      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
D 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
E   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 Respondent No.1 was inducted into the property
    in question without consent and to- the detriment of Gangabai
F   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
G   vacate the premises consequently Gangabai had to file a civil
    suit for possession and damages for use and occupation
    against the first respondent. Le::trned senior counsel also
    submitted that the premises in possession of Brij Lal were got
    vacated and thereafter in or about year 1965-66 first
H   respondent entered into possession without the knowledge and
  SUNITA JUGALKISHORE GILDA v. RAMANLAL UDHOJI 223
  TANNA (DEAD) THR. LRS. [K.S. RADHAKRISHNAN, J.]

consent of Gangabai. Learned senior counsel submitted that         A
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   B
on the Judgment of this Court in Mangru Mahto and Others v.
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.                                    c
      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       D
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 Y:i share    E
of the property in favour of Gangabai became absolute on
09.04.1974 yet it would be deemed that joint Y:i 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        F
property purchased was deemed 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   G
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
                                                                   H
    224      SUPREME COURT REPORTS               (2013) 8 S.C.R.


A 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.
B Gangabai purchased % 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
c proceedings were pending before the court and that the entry
  of the first respondent into the suit property 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
0
  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
E 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
F 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
G 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 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
H mortgage suit. Section 52 of the TPA prevents a mortgagor
 SUNITA JUGALKISHORE GILDA v. RAMANLAL UDHOJI                  225
 TANNA (DEAD) THR LRS. [K.S. RADHAKRISHNAN, J.)
from creating any lease during the pendency of mortgaged suit          A
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:
                                                                       B
    " ................. 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         C
    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         D
    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."
                                                                       E
      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 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,     F
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            G
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,             H
    226      SUPR.EME COURT REPORTS               [2013] 8 S.C.R.


A   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
8
  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 mortgage and also subsistence of the various legal
  proceedings pending before various courts. A plea was raised
C by the counsel for the respondent that he is entitled to get the
  protection of the Maharashtra ReAt 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
D 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.

E      17. In the above-mentioned qircumstances, 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,
F 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
  decreed, however, without any mesne profits. The appeal is
  allowed, but without any order as to costs.

    8.8.8.                                        Appeal allowed .




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