In a recent judgment, the Hon’ble High Court of Bombay held where a landlord executes a mortgage deed in favour of tenant in possession of the premises, this will amount to implied surrender of tenancy under Section 111 of the Transfer of Property Act 1882.
The said ratio was pronounced by a Single Judge of the High Court of Bombay in the matter of Nivruti Dnyanu Patil Vs. Shankar Krishna Bhagat-Patil (Since deceased through his legal heirs’ representatives), Second Appeal No. 265 OF 1991 decided on 27.06.2018.
The trial court and the court of First Appeal did not agree with a specific contention of the appellant, who was the tenant and subsequently a mortgagee of the subject premise. The Appellant contended that after the redemption of the mortgage, his tenancy stands revived and hence, he is entitled to remain in possession of the suit premises as a tenant.
The question before this Hon’ble Court was whether the Appellant proved that he was in possession of the suit premises as a tenant since prior to execution of the mortgage deed.
The High Court of Bombay, after relying upon the decision of the Hon’ble Supreme Court of India in Tarachand V/s. Sagarbai Alias Chaiyalibai (2007) 5 SCC 392, upheld the decision of the Court of First Appeal and the trial court by stating that the material piece of evidence to know whether or not the Appellant was in possession of the suit premises as a tenant at the time of execution of the mortgage deed, is the mortgage deed itself. However, upon the perusal of the mortgage deed the Court found that fact of continuation of possession as tenant was conspicuously silent therefore it amounts to implied surrender of tenancy.
about prior possession of the Appellant therein as that of a tenant and such possession being converted to that of a mortgagee.