2013 (8) TMI 1097 - SC - Indian Laws

Summary

Issues Involved:
1. Whether the mortgagor can induct a person as a 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.
2. Whether the induction of the tenant by the mortgagor during the pendency of litigation is valid under Section 65-A of the Transfer of Property Act, 1882.
3. Whether the tenant inducted during the subsistence of the mortgage is entitled to protection under the Maharashtra Rent Act.

Summary:

Issue 1: Induction of Tenant Pendente Lite
The primary issue was whether the mortgagor could induct a tenant in a mortgaged property during the pendency of litigation, violating Section 52 of the Transfer of Property Act, 1882. The Court noted that Gangabai, the mortgagee, had initiated several legal proceedings to enforce her mortgage rights and had acquired joint possession of the property. Despite this, Respondent Nos. 2 and 3 inducted Respondent No. 1 as a tenant without Gangabai's consent. The Court held that such induction was in violation of Section 52 of the TPA, which prevents a mortgagor from creating any lease during the pendency of a mortgage suit to the prejudice of the mortgagee.

Issue 2: Validity of Lease under Section 65-A of TPA
The Court examined whether the lease granted by the mortgagor during the pendency of litigation was valid under Section 65-A of the TPA. It was concluded that Section 65-A, which deals with the mortgagor's powers to lease, does not override Section 52. Therefore, any lease granted during the pendency of a suit for sale by the mortgagee binds the lessee to the result of the litigation. The Court cited precedents, including Mangru Mahto v. Thakur Math, to support this interpretation.

Issue 3: Protection under Maharashtra Rent Act
The Court addressed whether the tenant inducted during the subsistence of the mortgage could claim protection under the Maharashtra Rent Act. It was determined that a tenant inducted during the subsistence of the mortgage is not entitled to such protection. This position was supported by precedents such as Om Prakash Garg v. Ganga Sahai and Carona Shoe Co. Ltd. v. K.C. Bhaskaran Nair.

Conclusion:
The Court found that the lower courts had erred in their legal interpretation and non-suited the appellant. It was held that the induction of Respondent No. 1 as a tenant was illegal and prejudicial to the mortgagee, Gangabai. Consequently, the judgments of the lower courts were set aside, and the suit was decreed in favor of the appellant, without any mesne profits. The appeal was allowed without any order as to costs.