POMAL KANJI GOVINDJI & ORS. v. VRAJLAL KARSANDAS PUROHIT & ORS.

"In our opinion, on the general aspect of the matter based on facts on which judicial notice can be taken, it is clear that so far as leases· of agricultural lands are concerned, when a Jessee cultivates land by the very process of cultiva- tion ne brings inputs and improves the fertility of the soil. Constant and continuous cultivation by proper manuring ·etc. would improve the fertility of the soil and on the determination of the lease, that fertility would still remain in the land. It is, therefore, necessary that security of tenure should be given to the tenant of agricultural land so that by his proper husbandry and agricultural practices, he himself may derive good benefits from the land and also improve the fertility of the soil. It is because cif this aspect that in all countries legislation has been enacted to protect the actual tiller of the soil, fixity of tenure has been given and all the different measures of tenancy legislation regard-

POMAL KANJI v. V.K. PUROHIT [MUKHARJI; J.l 863

ing agricultural lands have provided for sufficiently long leases and protection of his tenure so as to induce the agriculturist to put in his best efforts and best inputs as they are called now-a-days, during the term of the lease. A prudent owner of property would, therefore, see to it that the term of lease which he grants in respect of agricultural land is sufficiently long to induce the tenant to put in the best efforts which would incidentally benefit the owner of the land by improving the fertility of the land itself. In contrast, to the-agricultural lands, so far as non-agricultural and urban lands are concerned, on determination of the lease the tenant who has been on the property under the terms of the lease is bound to put back the property in the condition in which it was at the time when he entered into possession and nothing is normally done by the tenant which is likely to improve the quality of the soil property by his own efforts put in during the terms of the tenancy. There is, therefore, no question of a prudent owner of urban immovable property granting a Jong term lease merely with a view to improve the quality of the land. Barring Rent Control and Rent Restriction Acts which deal with urban immovable property, in areas where there is scarcity of accommodation both for residential and non- residential purposes, there is no concept of protection to tenants of urban immovable property. We are of opinion that this is the rationale behind the distinction which the Supreme Court has pointed out between leases of agri- cultural lands and leases of urban immovable property while dealing with the provisions of sec. 76(a) of the Trans- fer of Property Act, whereas a prudent owner would not ordinarily speaking think of creating a long term lease purely as a matter of prudent management, an owner of agricultural land in the course of prudent management would create a long term lease purely from the aspect of prudent management. In our opinion, therefore, the word "seldom" used by Hidayatullah C.J. in All India Film Corporation's case (supra) while dealing with the applica- G lion of the exception carved out by sec. 76(a) to urban immovable property has to be read as not being extended at all and it is merely a term of the phrase to say that this exception has seldom been extended to urban immovable property." H

864 SUPREME COURT REPORTS [1988) Supp. 3 S.C.R.

We have noted hereinbefore the ratio and the basis of the deci- A sion of this Court in Jadavji Purshottam v. Dhami Navnitbhai Amarat- lal (supra). Shri Mehta submit.ed that there was no clear finding as to when the tenants were inducted whether before or after the Rent Restriction Act and therefore, he pleaded that the matter should be referred to the larger Bench. In. view of the facts found in this case B which were similar to the facts mentioned in Jadavji Purshottam's case, (supra) there is no specific authority in the lease which stated that the lease wmlid continue beyond the period of mortgage. There is no extended authority as contemplated in -Jadavji Purshottam's case found in this case. The submission was. that the matter should be considered by a larger Bench in the light of the Jadavji Purshottam's case (supra). We are unable to accept the said submission. In this case c the words in the mortgage deed, as we are taken through, did not clearly allow creation of tenancy beyond the period of mortgage. That, in any event, would not have been prudent management, hence, there is no finding that the mortgage deed permitted, either expressly or impliedly, creation of tenancy beyond the period. We think that the tenants were not entitled to protection after redemption of mortgage. Furthermore, in all these cases the authority of the mortgagees to lease out the property, expressed or implied, was circumscribed by a stipula- tion that the mortgagee should re-deliver the possession of the pro- perty when the mortgage was redeemed. In that context, we are of the opinion that the submissions on behalf of the tenants cannot be entertained.

As mentioned hereinbefore, Sh. B.K. Mehta, especially in the background of the facts in C.A. No. 9993/83, has made certain submis- sions relying on the observations of this Court in Jadavji Purshottam's case (supra). That decision requires recapitulation of the basic princi- F ple. That decision reiterated that the tenant-appellant therein was not inducted into possession soon after the mortgage deed was executed and the mortgagee was put into possession of the property but long thereafter. It is not necessary to detain us on the facts of this case. The basis of that decision was: whether the Saurashtra Act was already in force. The appellant therein was inducted into possession and his G tenancy rights could not have become enlarged after the mortgagee granted him the lease by a subsequent legislation enacted for affording protection to tenants. In this case, relying on the said decision, it may be reiterated that the tenancy right was not created by a mortgagee in possession, wherein the mortgagor had not concurred in the grant of a lease beyonq the period of mortgage. The question in that decision was wiJ.ether the lease grantee! to the tenant by the appellant had the

POMAL KANJI v. V.K. PUROHIT (MUKHARJI, J.] 865

approval or concurrence of the mort.g_agor so as to entitle the tenant to A claim tenancy right even against the mungagor after redemption of the mortgage. In all these cases the major term in the mortgage deed was that the possession would be delivered on redemption. In none of these cases was there any term, at least none was adverted to, which stipulated any condition in the mortgage deed which entitled the mort- gagees to create tenancy beyond the period of the mortgage. This B factor along with the condition in the mortgage deed postulating the obligation to deliver possession at the expiry of the term of mortgage to the mortgagors, in our opinion, are the decisive factors showing that the tenants did not get their rights enlarged on the coming into force of the subsequent Rent Legislation. The very Preamble to the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 indicates that it was "An Act to amend and consolidate the law relating to the c control of rents and repairs of certain premises, of rates of hotels and lodging houses and of evictions (and also to control the charges for licence of premises etc.)". It was thought expedient to amend and consolidate the law relating to the control of rents and repairs of certain prem;~es. But that, in our opinion, has indeed never been D construed as enlarging the rights of any group of tenants who were not the tenants of the mortgagors. Hence, the question of enlargement of right by tenancy legislation of persons who were in occupation but had no rights as tenants of the mortgagors, would not arise in the context of these cases. E Incidentally, it may be referred that in appeal from S.L.P. No. 8219/82, this question does not arise.

In C.A. No. 1286/81, the tenancy after the period of mortgage was not bona fide. In C.A. No. 9993/83, it was submitted that the tenants were inducted after the mortgage on 28th April, 1943. The F Bombay Rent Act was made applicable to the area of Kutch in September, 1951.

See Dalal's Rent Act, 4th Edn. page 814 on that basis it was submitted that as there was no Act in the area of Kutch which is in pari materia with the Bombay Rent Act and therefore the rights of the G tenants were enlarged by the subsequent Act. In view of the fact that the mortgage deed did. _!l,()t contemplate rights of the mortgagees to grant tenancy beyond the per.i.od of mortgage, and had imposed an obligation that on the expiry of the period of mortgage, mortgagors were entitled to the possession of the demised premises. In our -. opinion, these contentions cannot be entertained. H :;-

866 SUPREME COURT REPORTS [1988] Supp. 3 S.C.R.

A Incidentially, it may also be mentioned that in C.A. No. 1286/81, the suit property was mortgaged in 1948 for a period of 5 years. The tenant was inducted by the mortgagee in 1955. The period of mortgage had expired in 1953. Apparently, the mortgagee .had inducted the tenant after expiry of the period of mortgage, and such a conduct was grossly imprudent management, and was not bona fide. Such tenant cannot, in any event, claim any protection.

Having considered the facts and the circumstances and the ratio of the decision in Jadavji Purshottam's case (supra), we are clearly of the opinion that the tenancy rights did not come to be enlarged by the Tenancy Legislation after the tenant was put into possession by the mortgagee and the tenancy created in favour of the tenants by the mortgagor did not· have the concurrence of the mortgagor so as to claim tenancy rights even after redemption of the mortgage. See the observations in para 12 of the Jadavji Purshottam' s case· (supra).

D In the premises, the appeals must fail and are dismissed. Civil Miscellaneous Petition in C.A. No. 397 /80 must also fail and is dismis- sed. The parties will pay and bear their own costs.

A.P.J. .Appeals dismissed.