Shankar Sakharam Kenjale (Died) a through His Legal Heirs vs Narayan Krishna Gade and Another

HELD: 1. Admittedly, lease was subsisting as on 25.01.1951, i.e., the day on which the Abolition Act came into force. The proviso to Section 3(3) of the Abolition Act envisages that the resumption of watan land to the Government under the Abolition Act does not affect the rights of an alienee of the watandar or his representative of such land under the Watan Act or that of any person claiming through or under him. Further, in respect of watan land that has been lawfully leased and wherein the lease is subsisting on the day appointed for the coming into force of the Abolition Act, Section 8 of the Abolition Act accords primacy to the Bombay Tenancy and Agricultural Lands Act, 1948 in governing the rights and liabilities of the holder of such land and his tenant(s). In the instant case, the rights of a lawful permanent Mirashi tenant would survive resumption of the suit land to the Government by virtue of the proviso to Section 3(3) as well as Section 8 of the Abolition Act. This is because the tenancy created in favour of the Mirashi tenant subsisted as on the day on which the Abolition Act came into force, thereby implying that his tenancy rights were protected and continued to be governed by the Bombay Tenancy Act despite the introduction of the Abolition Act. This is well-aligned with the general primacy accorded to tenancy laws over other legislations, as is also reflected in Section 8 of the Abolition Act. Thus, the rights of SHANKAR SAKHARAM KENJALE (D) THR. HIS LRs. v. NARAYAN KRISHNA GADE

permanent tenants over watan lands were intended to subsist even after the coming into force of the Abolition Act. [Paras 79][230-D; 232-B-E]

2. Section 4 indicates that with the coming into force of the Abolition Act, watans were abolished and all watan lands vested absolutely with the Government, subject to Section 4. Under Section 4(1), ‘holders’ of the watans were allowed to pay a certain occupancy price within five years from the date of coming into force of the Act and obtain a re-grant of the land. However, according to the second proviso to Section 4(1) of the Abolition Act, if the holder failed to pay such occupancy price within the five-year period, he would be deemed to be in unauthorised occupation of the land and would be liable to be summarily ejected in accordance with the Bombay Land Revenue Code, 1879. The watandar in the instant case did not exercise her right to seek re-grant of the land under Section 4(1) of the Abolition Act. It seems, the State Government passed orders dated May 3, 1957 and November 23, 1960 to grant the lands in favour of persons who were in actual possession. By virtue of the said orders, wherever the holder or watandar had failed to pay the occupancy price as required by Section 4(1) of the Act before the prescribed period, the lands in question be granted in favour of permanent Mirashi tenants who were in actual possession of lands. But the Mirashi tenant in this matter did not apply for re-grant pursuant to the said orders. On the other hand, the mortgagee applied for re-grant, though he was not a permanent Mirashi tenant. The failure on the part of the mortgagor to pay the occupancy price and seek a re-grant is not fatal to his rights as a Mirashi tenant as the tenancy in his favour continued to subsist despite the introduction of the Abolition Act. Consequently, the mortgage executed by him also survived resumption of the suit land under the Abolition Act. [Paras 10, 11 and 13][233-G-H; 234-A-D, H; 235-A]

3. A mortgagee who has entered into possession of the mortgaged property will have to give up such possession when a suit for redemption is filed, unless he is able to establish that the right of redemption has come to an end as per law. This emanates from the legal principle applicable to all mortgages - “Once a mortgage, always a mortgage”. In the instant case, none of the conditions in which the right of redemption comes to an end exist with respect to mortgage deed dated 14.05.1947. As regards the impact of the re-grant on such right of redemption, such re-grant in favour of the mortgagee could not have been made but for the fact that he was in actual possession of the property by virtue of his position as a possessory mortgagee. The re-grant to the Appellants’ predecessor based on actual possession as mortgagee cannot be divorced from the existence of the underlying mortgagor-mortgagee relationship between the parties. A bare reading of Section 90 of the Indian Trusts Act, 1882 indicates that if a mortgagee, by availing himself of his position as a mortgagee, gains an advantage which would be in derogation of the right of the mortgagor, he must hold such advantage for the benefit of the mortgagor. In the instant case, the conditions stipulated under Section 90 of the Indian Trusts Act, 1882 are satisfied. Section 90 of the Indian Trusts Act, 1882 casts a clear obligation on the mortgagee to hold any right acquired by him in the mortgaged property for the benefit of the mortgagor, as he is seen to be acting in a fiduciary capacity in respect of such transactions. Therefore, the advantage derived by the Appellants (mortgagee) by way of the re-grant must be surrendered to the benefit of the Respondents (Mirashi tenant-mortgagor), subject to the payment of the expenses incurred by them in securing the re-grant. This is because the Mirashi tenant-mortgagors’ right to redeem the mortgage was not extinguished but was protected by virtue of the Abolition Act as well as under the provisions of the Bombay Tenancy and Agricultural Lands Act, 1948; in other words, the tenancy in his favour continued to subsist. [Paras 1417][235-C-F; 236-B-C, F-G] Jayasingh Dnyanu Mhoprekar and Another v. Krishna Babaji Patil and Another (1985) 4 SCC 162 : [1985] 2 Suppl. SCR 308 – relied on.

Collector of South Satara and Another v. Laxman Mahadev Deshpande and Others [1964] 2 SCR 48; Malikarjunappa Basavalingappa Mamle Desai v.

Siddalingappa & Others (1973) 3 SCC 180 –

distinguished.

SHANKAR SAKHARAM KENJALE (D) THR. HIS LRs. v. NARAYAN KRISHNA GADE

Namdev Shripati Nale v. Bapu Ganapati Jagtap and Another (1997) 5 SCC 185 : [1997] 2 SCR 980 – referred to.