JUDGMENT Yatindra Singh, J.
1. This writ petition raises a question about the status of a tenant (of a portion of a house) of a person "A" during the period when he (the person 'A') had transferred the entire house to the third party 'B1 and he himself (the person 'A') became the tenant of his transferee 'B'. Will the tenant continue to be the tenant of that person 'A' or become the tenant of his transferee 'B'? What will happen if the transferee 'B' re-transfers the house to the person 'A'? Does it mean that the person 'A' continued to be the landlord of the tenant during the period he had transferred the house to the third party 'B'? These questions arise in the following background.
FACTS
2. Petitioners are the owners of the House No. 636, Bahadurgang, Allahabad (hereinafter referred to as the House). There is a shop in this house, which was let out to one Nafis Ahmad (respondent No. 3) at the rate of Rs. 90 per month in 1967. Nafls Ahmad has died during the pendency of the writ petition and is substituted by his heirs. All of them are referred to as respondent No. 3. In 1969, some of the petitioners executed a sale deed in favour of one Rama Shankar for Rs. 3.000 in respect of the house. The details of the petitioners who have executed these deeds are not relevant. They are referred to as the petitioners. Rama Shankar also executed an agreement of reconveyance in favour of the petitioners on the same day. A rent deed was also executed on the same day by which petitioners became the tenants of Rama Shankar at the rate of Rs. 60 per month. In 1972. three deeds were executed on the same day between the three parties : (1) Rama Shankar to whom the house was earlier sold ; (2) some of the petitioners (the petitioners for short as the details are not relevant) ; and (3) Saligram and Radheshyam (Saligram-Radheshyam for short). They executed three deeds on the same day. These deeds were : (1) a sale deed in favour of Saligram-Radheshyam for Rs. 10,000 (the money was shared by the petitioners and Rama Shankar : (2) a deed of reconveyance in favour of the petitioner by Sal igram-Radheshyam : and (3) a rent deed by which the petitioners became the tenant of the house at the rate of Rs. 150 per month. The effect of these three deeds (in 1972) was that Rama Shankar went out of the picture and a new relationship between petitioners and Saligram-Radheshyam came into existence. In the deeds of 1969 or 1972, there is no any reference about the shop, or respondent No. 3, or about his status. They are silent on this question.
3. Saligram-Radheshyam were undoubtedly the landlord of the petitioners. They filed a JSCC Suit No. 39/1976 for ejectment and for arrears of rent against the petitioners. Some of the petitioners (petitioners for short as the details not relevant) filed a Suit No. 19 of 1977 for cancellation of the transfer deed, etc. (executed in 1972) in favour of Saligram-Radheshyam. These two suits were consolidated and decided by a common judgment dated 12.8.1980 by the IIIrd Additional District Judge, Allahabad. The suit filed by Sal igram-Radheshyam was decreed for the recovery of arrears of rent against by the petitioners, but was dismissed for their ejectment. The other Suit No. 19/1977 filed by the petitioners for the cancellation of the sale deed was dismissed. Petitioners filed an appeal and a revision against the judgment in these suits. During pendency of these proceedings, two more suits were filed by the petitioners : one against Saligram-Radheshyam alleging that the transaction evidenced by the three deeds in 1972 was in fact mortgage and for its redemption ; and the other against respondent No. 3 for his ejectment.
4. The petitioners filed the Suit No. 440/1990 against Saligram-Radheshyam on the allegation that transaction evidenced by the three deeds in 1972 was in fact a mortgage and it be redeemed. This suit was compromised between the petitioners and Saligram-Radheshyam in 1994. A compromise decree was also passed in the same year. In substance, the compromise was that: the petitioners have paid the entire amount due to Sal igram-Radheshyam and Saligram-Radheshyam were to re-convey the house to the petitioners. This they did in the same year and the petitioners again became owners of the house. This disposed of this suit as well as the appeal and the revision between the petitioners and Saligram-Radheshyam against the judgment dated 12.8.1980 in O.S. No. 19 of 1977 and JSCC Suit No. 3 of 1976. This has happened during the pendency of the present writ petition. Petitioners have filed a supplementary affidavit bringing these facts on the record. Respondent No. 3 has admitted it, but has denied that this has rendered the impugned orders Illegal.
5. The present writ petition arises out of the proceedings in the JSCC Suit No. 240/1981 filed by the petitioners against the respondent No. 3 for his ejectment from the shop on the ground of non-payment of rent for the period 1.6.1975 to 31.12.1976 (Rs. 1,710) and from 1.1.1981 to 31.3.1981 (Rs. 270). These arrears are for the period when the petitioners were not the owners of the shop. They had transferred the house (which included the shop) to Saligram-Radheshyam. The suit was contested by respondent No. 3. The Courts below have dismissed the suit on the ground that petitioners were neither owner, nor the landlord for the relevant period and the suit was incompetent. It is against these orders that the present writ petition has been filed.
POINTS FOR DETERMINATION
6. I have heard Sri K. B. Mathur, counsel for the petitioners and Sri Ra) Kumar Jain counsel for the respondents. Following points arise for determination :
1. What was the nature of the transaction between petitioners and Saligram-Radheshyam.
evidenced by the three deeds in 1972? Was It a mortgage? What is the effect of the Supreme Court decision in Indra Kumar v. Sheo Lal, AIR 1988 SC 1074.
2. What was the status of respondent No. 3 during the period of the sale deed in favour of Saligram-Radheshyam? Was Respondent No. 3 a tenant of Saligram-Radheshyam : or a tenant of the petitioners and thus a sub-tenant of Saligram-Radheshyam?
7. Three separate deeds were executed on the same day in 1972. One was a sale deed of the house by the petitioner in favour of Sallgram-Radheshyarn ; the second was a deed of re-conveyance in favour of the petitioners ; the third was a rent deed, showing that the petitioner had become tenants of Saligram-Radheshyam in respect of the house. At some point of time, such transaction by separate deeds was treated to be a mortgage. But then, the Transfer of Property Act (the Act for short) has been amended in 1929. A proviso has been added in Section 58(c). The effect of the amending Act is that such transaction now cannot be a mortgage unless the condition to re-convey is Incorporated in the sale deed. Mulla on the Transfer of Property Act 8th Ed. has succinctry stated the law as. The effect of the proviso to clause (c) added by the amending Act of 1929 is that if the condition for retransfer is not embodied in the document which effects or purports to effect a sale, the transaction will not be regarded as a mortgage. This has now been settled by several decisions of the Supreme Court, and this was also the opinion expressed by the High Courts tn many cases. The effect of the proviso is that a transaction in which the stipulation for re-conveyance is contained in a separate document cannot be a mortgage of any kind, both because of the language of the proviso, and because it could not fall in any other category of mortgage. If a document purports to be an absolute sale and there is no stipulation for treating the sale as mortgage, a separate document of reconveyance cannot convert it into a mortgage. The very object of the proviso to Section 58(c) is to shut out an enquiry whether a sale with a stipulation to re-convey is a mortgage where the stipulation is not embodied in the same document. Hence, if the sale and agreement to repurchase are embodied in separate documents, then the transaction cannot amount to mortgage, whether or not the documents are executed contemporaneously.
Indra Kaur v. Sheo Lal Kapoor
8. Sri K. B. Mathur counsel for the petitioners has cited a decision in Indra Kaur v. Sheo Lal Kapoor to the effect that such transaction would be a mortgage. It is true that in this case, the Supreme Court did frame a question if such a transaction will be a mortgage or outright sale and did make certain observations. But the Supreme Court ultimately did not decide this question. It was left to be decided at appropriate time. This case is neither an authority that such transactions are mortgage nor the present transaction in 1972 can be treated to be a mortgage. It is, in fact, an outright sale in favour of Saligram-Radheshyam with a separate agreement of re-conveyance In favour of the petitioners.
2nd Point--STATUS OF RESPONDENT NO. 3
9. The shop, let out to the respondent No. 3, is a part of the House. Respondent No. 3 was the tenant of the petitioners. Ultimately by different deeds, the house including the shop was sold to Saligrarn-Radheshyam. They were its owners from 1972 to 1994. This includes the period for which rent is claimed from respondent No. 3. Section 109 of the Act, clarifies the right of the transferees. It says.
transferee in the absence of a contract to the contrary, shall possess all the rights'. There was no mention about the shop or respondent No. 3 in any of the deeds. They are silent. There was no contract to the contrary. The deeds never stipulated that :
1. Saligram-Radheshyam will not be the landlord of the shop ; or
2. they are not entitled to receive the rent of the shop ; or
3. the petitioners will continue to be the landlord of the shop and respondent No. 3 will be a subtenant of the transferee Saligram-Radh eshyam.
Respondent No. 3 is the tenant of Sallgram-Radheshyam during the period there was sale deed in their favour and not their sub-tenant. It is also doubtful if without consent of the tenant, namely, respondent No. 3 another tenant can be superimposed.
10. Saligram-Radheshyam became the owner as well as the landlord of respondent No. 3 in respect of the shop. They also became owner and the landlord of the petitioners of the remaining house in the possession of the petitioners, as there is nothing to the contrary in any of the deeds. The fact that in the earlier litigation, between the petitioners and Saligram-Radheshyam, they had taken different pleas is Immaterial. Respondent No. 3 is also not bound by any observation made in the judgment between them. He was not a party there. The fact that by the compromise decree all litigations between the petitioners and Saligram-Radheshyam have been compromised and the house has been again re-transferred to the petitioners in 1994, does not mean that Saligram-Radheshyam were not entitled to the rent from Respondent No. 3 for the period the sale stood in their favour. Saligram-Radheshyam are entitled to the arrears of rent, if there is any, for that period. The petitioners are not entitled to the arrears of rent for that period unless it was also transferred to them in 1994. This is clear from proviso to the Section 109 of the Act. There is nothing on the record to show that respondent No. 3 was in arrears of rent so far as Saligram-Radheshyam are concerned or Saligram-Radheshyam have transferred the arrears of rent to the petitioners. Apart from it, the present suit was filed in 1981 and on that date petitioners were not entitled for the arrears of rent. The suit was rightly dismissed as not maintainable.