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PETITIONER:

PARAMESWARAN GOVINDAN

Vs.

RESPONDENT:

KRISHNAN BHASKARAN AND ORS.

DATE OF JUDGMENT06/02/1992

BENCH:

RAMASWAMY, K.

BENCH:

RAMASWAMY, K.

REDDY, K. JAYACHANDRA (J)

CITATION:

1992 AIR 1135 1992 SCR (1) 582

1993 SCC Supl. (1) 572 JT 1992 (2) 130

1992 SCALE (1)316

ACT:

Kerala Land Reforms Act, 1963-Section 132 (2)-Reopening

of a decree-Conditions-Redemption of mortgage decree-

Reopening-Legality of.

Kerala Land Reforms Act, 1963-Section 2 (57)-`Tenant-

Construction-Ingredients-`Mortgage' u/ss. 60, 76 (h), 83.

Transfer of Property Act, whether tenant-Payment of decretal

amount (inclusive mortgage amount) prior to coming into

force of the Amending Act 35 of 1969-Effect.

Kerala Compensation for Tenants Improvement Act, 1958-

Sections 4, 5 read with section 60, Transfer of Property

Act-Decree of eviction of tenant-Whether preserved-

Possession u/s 60, T.P. Act on redemption of mortgage

whether affected.

Kerala Compensation for Tenants Improvements Act, 1958-

Object of.

Kerala Land Reforms Act, 1963-Section 4-A read with

Section 4, Kerala Compensation for Tenants Improvements Act,

1958-Distinction-Non-completion of 50 years continuous

possession on the date when the Amending Act 35 of 1969 came

into force-Effect.

Kerala Land Reforms Act, 1963-Sections 13, 54(2)-

Vesting of lands in the State-Whether land held by

mortgagees vests.

HEADNOTE:

The appellant was a mortgagor and the respondent No. 1

defendant No. 4 was one of the mortgagees. The suit for

redemption of mortgage filed by the appellant was decreed

providing for payment of Rs. 500, and Rs. 943/9.2 towards

improvements as a condition for redemption.

The appellant court in appeal enhanced the sum for

improvements by Rs. 256/8.4.

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When appellate filed an execution application, the

respondent filed another application under the Kerala

Compensation for Tenants Improvements Act, 1958 claiming a

further sum for improvements.

When it was pending, the appellant deposited the

decretal amount including the enhanced sum decreed by the

appellate court.

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The respondent's application was allowed and appellant

was directed to pay a total amount of Rs. 4,149.66 paise

inclusive of decretal amount.

Thereafter, the respondents filed another application

to reopen the decree u/s. 132 (3) of the Kerala Land Reforms

Act, 1963 contending that he was a tenant u/s. 4A of the

Act, having been continuously in possession for over 50

years and that, therefore, the decree of eviction cannot be

executed against the respondent.

The executing court dismissed it, but on revision, the

High Court declared that the respondent was a `deemed

tenant' u/s. 4A of the Kerala Land Reforms Act, against

which this appeal was filed.

The respondent No. 1 contended that he was a tenant

u/s. 2 (57) of the Kerala Land Reforms Act and that u/s. 72

of the Act the appellant no longer was the holder of the

land and the land stood vested in the State.

Allowing the appeal of the mortgagor and dismissing the

C.R.P., this Court,

HELD : 1.01. If there is a decree passed in one of the

four Acts enumerated in sub-s. 2 of s. 132 and the decree

remained unexecuted and pursuant to which possession was not

effected, then on the commencement of the Kerala Land

Reforms Act a tenant or landlord may make an application

upon which the decree would be reopened and be disposed of

in accordance with the provisions of Act. [588B]

1.02. The decree in question is only a redemption

decree pursuant to which the mortgagor is entitled to

possession, on redemption of mortgage, under s.60 of T.P.

Act. Therefore, the very application to reopen the decree

itself is misconceived, without jurisdiction and authority

of law.

[588B-C]

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2.01. Section 2(57) of the Act, defined `tenant' means

any person who has paid or has agreed to pay rent or other

consideration for his being allowed to possess and enjoy any

land by a person entitled to lease that land. There should

exist jural relationship of landlord and tenant and pursuant

to a lease for consideration possession was given and the

lease remained in possession enjoying the land on payment of

rent or other consideration. [588D-E]

2.02. The mortgagee in possession of the hypothica for a

continuous period of not less than 50 years `immediately

preceding' the commencement of the Amending Act 35 of 1969

is deemed to be a tenant under the Act. [589B]

2.03. The main part of s.2(57) does not apply to a

mortgagor and mortgagee and the mortgagee cannot be treated

to be a tenant. [588E]

2.04. By Amending Act 35 of 1969, s. 4A was introduced

on the statute. It is prospective in operation. [588E-F]

2.05. The respondents had not had continuous minimum of

50 years possession immediately preceding Act 35/69 came

into force. The mortgage amount of Rs. 500 together with

the improvements determined in the appeal were deposited on

June 21, 1961. A conjoint reading of s.60, s. 76(h) read

with s. 83 of Transfer of Property Act would amplify that on

deposit of the mortgage amount the contractual relationship

of mortgagor and mortgagee ceases. [589B-D]

Prithi Nath Singh & Ors. v. Suraj Ahir & Ors., [1963]

3 SCR 302, referred to.

3.01. A conjoint reading of ss. 4 and 5 of the Kerala

Compensation for Tenants Improvements Act, 1958 postulates

that a decree of eviction passed against tenant, namely

recovery of possession of land from the tenant, cannot be

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enforced until the compensation determined under the

Improvements Act is paid. Until such payment of

Compensation for improvements made by him or his

predecessors in interest, etc., is made, the tenant shall be

entitled to remain in possession and the decree of eviction

shall not be executed. [591A-B]

3.02. Payment is a condition precedent u/s. 4 and s. 5

provides the procedure by which the right secured under the

Act is to be enforced. The

585

right to compensation given under s. 4 is a right to the

improvements made by a tenant while in possession and

enjoyment of the land before decree of enjectment was passed

against him. [591C]

3.03. The right to compensation springs into existence

from his continuance in possession as a tenant before decree

of eviction was passed and until the compensation is paid he

is entitled to remain in possession. For the purpose of

improvements, the mortgagee has been treated by fiction of

law to be a tenant. [591D]

3.04. Section 4(2) preserves the pre-existing contract;

the right and liabilities thereunder. The right to

possession under s. 60 of the transfer of Property Act, on

redemption kept uneffected. [591E]

4.01. The object of the Improvements Act is "to make

provision for payment of compensation for improvement made

by tenants". [591D-E]

4.02. The Improvements Act only hedges the right to

eviction and gives right to remain as a mortgagee till the

payment for improvements are made or deposited so that the

mortgagee/tenant is not driven to a separate suit. [591F]

5.01. The assumption of the High Court that

respondents' possession under the Improvements Act as a

statutory mortgage and that he was in possession on the date

s. 4A of the Act came into force and that, he is entitled to

the protection from rejectment and the decree is liable to

be reopened under s. 132(3) of the Kerala Land Reforms Act

is clearly wrong.

[592C-D]

5.02. Merely the respondents remained in possession as

mortgagee, they cannot acquire the status as deemed `tenant'

under s. 4A tagging the period from June 21, 1961 till date

the Amending Act came into force and thereafter to compute

continuous possession as mortgagee for not less than 50

years immediately preceding Amendment Act 35 of 1969 to the

Act.

[592A-B]

5.03. The entitlement to remain in possession as a

condition for payment is different from the entitlement as a

statutory tenancy under s. 4A of the Kerala Land Reforms

Act. There is no non-obstenti clause in s.4 of the

Improvements Act, unlike s.4A of the Kerala Land Reforms

Act, which engrafts non-obstenti clause. The later is of

little assistance to the respon-

586

dent, as he did not complete 50 years of continuous

possession on the date when the Amending Act 35 of 1969 came

into force. The High Court is in error in holding that the

respondent is a deemed tenant under s. 4A.

[592D-E]

6. The landholder's all rights, title and interest in

respect of holdings held by cultivating tenant for fixity of

tenure under s.13 and in respect of which certificates of

purchase under s.54(2) have not been issued, shall subject

to the provisions of the Act, vest in the Govt., free from

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all encumbrance created by the land owners etc. Therefore,

it pertains to only lands held by tenants cultivating land

under fixity of tenure under s. 13. The respondent is not a

cultivating tenant under fixity of tenure. Therefore, the

land does not vest in the Government. [592F-G]

Raghavan v. Velayudhan, 1984 K. L. T. 713, over-ruled.

JUDGMENT:

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 2354 of

1979.

From the Judgment and Order dated 17.11.1977 of the

Kerala High Court in C.R.P. No. 2341 of 1977

N. Sudhakaran for the Appellant.

M.A. Firoz for the Respondents.

The Judgment of the Court was delivered by

K. RAMASWAMY, J. This appeal by special leave arises

against the order dated November 17, 1977 made in C.R.P. No.

2341 of 1977 of the Kerala High Court which granted the

decree that the respondent is a tenant under s. 4A of the

Kerala Land Reforms Act, 1963 (1 of 1964), for short `the

Act' and is not liable to ejectment pursuant to the decree

in O.S. No. 6/64 on the file of the Munsif Magistrate,

Attingal. The facts relevant are as under :

The appellant is the mortgagor. The respondent is one

of the mortgagees/4th defendant. The appellant's suit for

redemption of the mortgage was decreed on December 23, 1965.

The decree provides payment of Rs. 500, and Rs. 943/9.2

towards improvements as a condition for redemption. On

appeal, the appellate court enhanced the improvements

587

by Rs. 256/8.4. In the execution application filed by the

appellant the respondent filed another application under the

Kerala Compensation for Tenants Improvements Act, 1958 (Act

29 of 1958), for short `the improvements Act' claiming a

further sum for improvements. Pending application, the

appellant deposited on June 21, 1961 the decretal amount

including the sum decreed by the appellate court. Under the

Improvements Act, in 1975 the respondents' application was

allowed and total amount of Rs. 4,149.66 paise inclusive of

decretal amount was directed to be paid, which became final.

Then the respondents filed yet another I.A. No. 2340/75 to

reopen the decree under s.132 (3) of the Act, Contending

that he is a tenant under s. 4A of the Act, having been

continuously in possession for over 50 years and that,

therefore, the decree of eviction cannot be executed against

the respondents. The executing court dismissed it, but on

revision, the High Court declared that the respondent is a

`deemed tenant' under s. 4A. Assailing the legality thereof

this appeal has been filed.

Section 132 is a repealing and saving section under the

Act and sub-section 3(a) postulates thus:

`Notwithstanding the repeal of the enactments

mentioned in sub-section (2).

(a) Any decree passed before the commencement of

this Act for the eviction of a tenant from his

holding, pursuant to which eviction has not been

affected, may, on the application of the tenant or

the landlord, be reopened and the matter may be

disposed of in accordance with the provisions of

this Act.

The other sub-sections are not relevant. Hence

omitted. Sub-section 2 thereto provides that:

"The following enactments as in force in any part

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of the State of Kerala are hereby repealed,

namely:-

(i) The Cochin Verumpattamdars Act, VII of 1113.

(ii) The Travancore-Cochin Prevention of Eviction

of Kudikidappukars Act, 1955.

(iii) The Malabar Tenancy Act, 1929.

588

(iv) The Madras Cultivating Tenants (Payment of

Fair Rent) Act, 1956.

A bare reading of both sub-sections would demonstrate

that, if there is a decree passed in one of the four Acts

enumerated in sub-s.2 of s.132 and the decree remained

unexecuted and pursuant to which possession was not

effected, then on the commencement of the Act a tenant or

landlord may make an application upon which the decree would

be reopened and be disposed of in accordance with the

provisions of the Act. Undoubtedly decree in question is

only a redemption decree pursuant to which the mortgagor is

entitled to possession, on redemption of mortgage, under s.

60 of T.P. Act. Therefore, the very application to reopen

the decree itself is misconceived, without jurisdiction and

authority of law. But this question was not gone into by

either of the courts. Therefore, we do not propose to allow

the appeal on this short ground.

The controversy is whether the respondent is a tenant

under the Act, Section 2 (57) of the Act defined `tenant'

means any person who has paid or has agreed to pay rent or

other consideration for his being allowed to possess and

enjoy any land by a person entitled to lease that land. A

reading would indicate that there should exist jural

relationship of landlord and tenant and pursuant to a lease

for consideration possession was given and the lease

remained in possession enjoying the land on payment of rent

or other consideration. Therefore, the main part of s.

2(57) does not apply to a mortgagor and mortgagee and the

mortgagee cannot be treated to be a tenant. But by Amending

Act 35 of 1969, s. 4A was introduced on the statute.

Admittedly, it is prospective in operation. It reads thus:

"Certain mortgagees and lessees of mortgagees to be

deemed tenants-

(1) Notwithstanding anything to the contrary

contained in any law or in any contract, custom or

usage, or in any judgment, decree or order of

court, a mortgagee with possession of land, other

than land principally planted with rubber, coffee,

tea or cardamom, or the lessee of a mortgagee of

such land shall be deemed to be tenant if -

(a) The mortgagee or lessee was holding the land

comprised in the mortgage for a continuous period

of not less than fifty

589

years immediately preceding the commencement of

Kerala Land Reforms (Amendment) Act, 1969; or

Other clauses are not necessary. Hence omitted. It

would be manifest that the mortgagee in possession of the

hypothica for a continuous period of not less than 50 years

`immediately preceding' the commencement of the Amending Act

35 of 1969 is deemed to be a tenant under the Act.

Admittedly the respondents had not had continuous minimum of

50 years possession immediately preceding Act 35/69 came

into force. The mortgage amount of Rs. 500 together with

the improvements determined in the said appeal were

admittedly deposited on June 21, 1961. A conjoint reading

of s.60, s. 76 (h) read with s.83 of Transfer of Property

Act would amplify that on deposit of the mortgage amount,

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the contractual relationship of mortgagor and mortgagee

ceases. This Court in Prithi Nath Singh & Ors. v. Suraj

Ahir & Ors., [1963] 3 S.C.R. 302 held that when the mortgage

money is paid by the mortgagor to the mortgagee, there does

not remain any debt from the mortgagor to the mortgagee and,

therefore, the mortgagee can no longer continue after the

mortgage money is paid. Therefore, on the payment of

mortgage money or deposit thereof in the court by the

mortgagor, the mortgage comes to an end and the right of the

mortgagee to remain in possession is also coterminous.

Thereafter, the mortgagee continues in unlawful possession.

The Improvements Act defines `tenant' under s. 2(d)

thus:

"tenant" with its grammatical variations and

cognate expressions includes-

(i) a person who, as lessee, sub-lessee, mortgagee

or in good faith believing himself to be lessee,

sub-lessee, mortgagee, or sub-mortgagee of land, is

in possession thereof;

Clauses (ii) and (iii) are not relevant. Hence

omitted. Section 2 (a) defines eviction thus:

"eviction" means the recovery of possession of land

from a tenant".

Section 4 reads thus:

4. Tenant "entitled to compensation" for

improvements:

590

(1) Every tenant shall, on eviction, be entitled to

compensation for improvements which were made by

him, his predecessor-in-interest or by any person

not in occupation at the time of the eviction who

derived title from either of them and for which

compensation had not been paid; and every tenant to

whom compensation is so due shall, notwithstanding

the determination of the tenancy of the payment of

the mortgage money or premium, if any, be entitled

to remain in possession until eviction in execution

of a decree or order of court :

Provided that nothing herein contained shall be

construed as affecting the provisions of the Kerala

Land Conservancy Act, 1957 :

Provided further that this section shall not apply

to tenants holding lands under the Government.

(2) A tenant so continuing in possession shall,

during such continuance, hold as a tenant subject

to the terms of his lease on mortgage, if any.

Section 5 grants payment of compensation as a condition

precedent to enforce a decree of eviction which reads thus:

"5. Decree in eviction to be conditional on payment

of compensation :-

(1) In a suit for eviction instituted against a

tenant in which the plaintiff succeeds and the

defendant establishes a claim for compensation due

under section 4 for improvements, the court shall

ascertain as provided in sections 7 to 16, the

amount of the compensation and shall pass a decree

declaring the amount so found due and ordering that

on payment by the plaintiff into the court of the

amount so found due and also the mortgage money or

the premium, as the case may be, the defendant

shall put the plaintiff into possession of the land

with the improvements thereon."

Sub-sections 2 and 3 are not relevant and hence omitted.

Sections 7 to 16 provides the mode to accretion

improvements and

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591

computation thereof, the details of which are not necessary:

A conjoint reading of ss. 4 and 5 clearly postulates

that a decree of eviction passed against tenant namely

recovery of possession of land from the tenant cannot be

enforced until the compensation determined under the

Improvements Act is paid. Section 4 gives substantive right

to payment of compensation for improvements made by him or

his predecessors in interest, etc. Until such payment is

made, the tenant shall be entitled to remain in possession

and the decree of eviction shall not be executed. Payment

is a condition precedent under s. 4 and s. 5 provides the

procedure by which the right secured under the Act is to be

enforced. The right to compensation given under s. 4 is a

right to the improvements made by a tenant while in

possession and enjoyment of the land before decree of

ejectment was passed against him. Section 4(1) begins by

saying that every tenant shall, on eviction, is entitled to

compensation for improvements which were made by him.

Therefore, the right to compensation springs into existence

from his continuance in possession as a tenant before decree

of eviction was passed and until the compensation is paid he

is entitled to remain in possession. For the purpose of

improvements, the mortgagee has been treated by fiction of

law to be a tenant. The object of the Improvements Act is

"to make provision for payment of compensation for

improvement made by tenants". Sub-section 2 of s.4

preserves the pre-existing contract: the right and

liabilities thereunder. Thus it is clear that right to

possession under s. 60 of the Transfer of Property Act, on

redemption is kept uneffected.

The Improvements Act only hedges the right to eviction

and gives right to remain as a mortgagee till the payment

for improvements are made or deposited so that the

mortgagee/tenant is not driven to a separate suit. Sections

7 to 16 prescribes procedure for computation and s. 5

prohibits eviction till date of payment or deposit. Thus,

for and no further. His continuance in possession is by

virtue of contractual relationship, but by operation of

statue, his possession after redemption remain lawful. His

deeming tenancy under the Improvements Act is only to enable

him to recover the improvements determined under the

improvements Act. It confers no other higher rights. It

does not cloth with any right to statutory protection qua

the mortgage. From June 21, 1961, but for the Improvements

Act, his possession would be unlawful. Section 4A of the

Act would

592

not denude the right to repossession of the mortgagor under

s. 60 of the Transfer of Property Act without assent of the

President of India. Therefore, merely because the

respondents remained in possession as mortgagee, they cannot

acquire the status as deemed tenant under s. 4A tagging the

period from June 21, 1961 till the date the Amending Act

came into force and thereafter to compute continuous

possession as mortgagee for not less than 50 years

immediately preceding Amendment Act 35 of 1969 to the Act.

Admittedly, the respondents did not complete 50 years

of possession as a mortgagee preceding June 22, 1961. The

High Court assumed that his possession under the

Improvements Act as a statutory mortgagee and that he was in

possession on the date s. 4A of the Act came into force and

that, therefore, he is entitled to the protection from

ejectment and the decree is liable to be reopened under s.

132(3) of the Act. In our considered view, the assumption

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of the High Court is clearly wrong. The entitlement to

remain in possession as a condition for payment is different

from the entitlement as of statutory tenancy under s. 4A of

the Act. It is necessary to remember that there is no non-

obstenti clause in s. 4 of the Improvements Act, unlike s.4A

of the Act which engrafts non-obstenti clause. The later is

of little assistance to the respondent, as he did not

complete 50 years of continuous possession on the date when

the Amending Act 35 of 1969 came into force. Thus we are of

the considered view that the High Court is in error in

holding that the respondent is a deemed tenant under s.4A.

It is next contended by the learned counsel for the

respondents that under s. 72 of the Act the appellant no

longer is the holder of the land and the land stood vested

the state. The landholder's all rights, title and interest

in respect of holdings held by cultivating tenant for

fixity of tenure under s. 13 and in respect of which

certificates of purchase under s. 54 (2) have not been

issued, shall, subject to the provisions of the Act, vest in

the Govt., free from all encumbrance created by the land

owners etc. Therefore, it pertains to only lands held by

tenants cultivating land under fixity of tenure under s.13.

The respondent is not a cultivating tenant under fixity of

tenure. Therefore, the land does not vest in the Government.

The learned counsel also invited our attention to a

decision of the

593

Kerala High Court in Raghavan v. Velayudhan, 1984 K.L.T.

713. In that case also the Division Bench proceeded on the

same premise as in the impugned order. Practically they

followed this judgment. Therefore, for the same reasons,

the ratio therein is not a good law.

The appeal is accordingly allowed. The C.R.P. is

dismissed and that the order of the executing court is

restored. No Costs.

V.P.R. Appeal allowed.

594