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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.                                                        583      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]                                                        584      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