The case of M. Rangaiah Naidu (Died) By L.Rs. v. Abdul Kareem Khan And Ors. [1992 (1) ALT 336], decided by the Andhra Pradesh High Court on November 3, 1989, before Justice Radha Krishna Rao, is a significant ruling in the domain of rent control law, addressing the interplay between eviction proceedings for wilful default and subsequent events affecting the landlord's title.

The case arose from a revision petition challenging the eviction of a tenant from a non-residential premises owned by a usufructuary mortgagee, ordered due to non-payment of rent. The tenants argued that a subsequent decree for redemption of the mortgage extinguished the landlord's right to pursue eviction. The court's dismissal of the revision petition clarifies the principles governing wilful default, the consideration of subsequent events in rent control cases, and the legal obligations of mortgagees upon redemption.

Detailed Factual Background:
The premises in question was a non-residential building located on Park Street, Pakala, originally owned by Syed Ahmed Saheb. On October 2, 1952, Syed Ahmed Saheb executed a usufructuary mortgage in favor of the respondents (landlords), as evidenced by Exhibit A-1.

The landlords claimed they leased the premises to M. Rangaiah Naidu in April 1965 on a monthly rent of Rs. 25, payable on the first of each succeeding month. The tenant, M. Rangaiah Naidu, contended that despite the mortgage, Syed Ahmed Saheb and his family remained in possession until April 1965, when the premises was leased to him by Subhan Khan, a relative of Syed Ahmed Saheb, at Rs. 24 per month. The tenant claimed to have paid rent to Subhan Khan until March 1972.

The landlords filed an eviction petition before the Rent Controller, alleging wilful default in rent payment from June 1973 to June 1979. They relied on Exhibit A-5, a judgment in O.S. No. 527 of 1976, which confirmed a landlord-tenant relationship and decreed arrears of rent, and E.P. 126/79, an execution proceeding for rent up to May 30, 1979.

The Rent Controller accepted the landlords' plea, rejecting the tenant's claim that Subhan Khan was the lessor, and ordered eviction. M. Rangaiah Naidu died during the appellate stage, and his legal representatives (L.Rs.) were impleaded as revision petitioners. Before the Appellate Authority, the tenants raised subsequent events: the heirs of Syed Ahmed Saheb filed O.S. No. 578 of 1982 for redemption of the mortgage against the landlords and the tenant, which was decreed on September 12, 1986. The tenants, as defendants 5 to 7 in that suit, filed an appeal (A.S. No. 20 of 1987) and obtained a stay of the redemption decree, conditional on depositing rent. Neither the mortgagor nor the mortgagee appealed the redemption decree.

Detailed Procedural Background:
The landlords initiated eviction proceedings before the Rent Controller under the Andhra Pradesh Buildings (Lease and Rent Control) Act, 1960, citing wilful default. The Rent Controller, after examining evidence including Exhibit A-5 and E.P. 126/79, found a landlord-tenant relationship between the mortgagees and the tenant, confirmed the default from June 1973 to June 1979, and ordered eviction.

The tenant appealed to the Appellate Authority, where M. Rangaiah Naidu's death led to his L.Rs. being impleaded. The tenants introduced the redemption decree from O.S. No. 578 of 1982 at the appellate stage, arguing it extinguished the landlords' title. The Appellate Authority held that the subsequent events did not alter the tenants' default or the landlords' right to eviction, affirming the Rent Controller's order. The tenants filed a revision petition before the Andhra Pradesh High Court, represented by Mr. P.S. Narayana, challenging the concurrent findings. On November 3, 1989, Justice Radha Krishna Rao heard the revision petition and dismissed it, granting time for eviction until December 31, 1989.

Issues Involved in the Case: The case raised the following issues for determination:Whether the court could take cognizance of subsequent events in rent control proceedings and mould relief accordingly?

Petitioners submission:
Represented by Mr. P.S. Narayana, the tenants argued that the eviction order was unsustainable due to subsequent events, particularly the redemption decree in O.S. No. 578 of 1982, which directed the mortgagee-landlords to deliver vacant possession to the mortgagor. They contended that upon redemption, the mortgagees' title and right to continue eviction proceedings ceased, rendering the tenants trespassers rather than tenants, as per Section 74 of the Transfer of Property Act, 1882.

The tenants claimed they paid rent to Subhan Khan until March 1972, believing him to be the lessor, and disputed the landlord-tenant relationship with the mortgagees. They argued that the stay of the redemption decree in A.S. No. 20 of 1987, conditional on rent deposits, further complicated the landlords' claim. Citing precedents like Pasupuleti Venkateshwarlu v. Motor & General Traders and Kommera Mallaiah v. Yarlagadda Mahalakshmamma, the tenants urged the court to consider the redemption decree as a subsequent event that nullified the basis for eviction, asserting that the mortgagees lacked locus standi to enforce the eviction order.

Respondents submission:
The landlords, represented by counsel (not named in the judgment), maintained that the tenant's wilful default from June 1973 to June 1979 was established by the Rent Controller and Appellate Authority, supported by the decree in O.S. No. 527 of 1976 and execution in E.P. 126/79. They argued that a landlord-tenant relationship existed, as the mortgagees leased the premises to M. Rangaiah Naidu in April 1965, and the tenant's claim of paying rent to Subhan Khan was rightly rejected.

The landlords contended that the redemption decree did not extinguish their right to evict for prior default, as the default occurred during their lawful possession as mortgagees. They asserted that the tenants, as parties to the redemption suit, could not evade liability for default, and the stay in A.S. No. 20 of 1987 did not alter the eviction order's validity. The landlords emphasized their obligation to deliver vacant possession post-redemption, which aligned with enforcing the eviction order, and cited the tenants' failure to pay rent as a basis for upholding the lower courts' findings.
 

Detailed Discussion on Judgments and Citations

The court relied on several precedents to address the consideration of subsequent events and the effect of mortgage redemption on tenancy rights.

Below is a detailed discussion of each judgment, its citation, and its context:

• Pasupuleti Venkateshwarlu v. Motor & General Traders, AIR 1975 SC 1409: Cited by the tenants, this Supreme Court decision, authored by Justice Krishna Iyer, held that courts must take cognizance of subsequent events to ensure just and meaningful remedies, provided fairness is maintained. The tenants used it to argue that the redemption decree altered the landlords' title. The court applied this principle to consider the redemption decree but found it did not negate the eviction basis.
   
• Kommera Mallaiah v. Yarlagadda Mahalakshmamma, 1980 (2) ALT 134: Cited by the tenants, this Andhra Pradesh High Court ruling held that a life estate holder lost locus standi to pursue eviction after a partition assigned the premises to another. The tenants argued it supported their claim that the mortgagees lost standing post-redemption. The court distinguished this case, as the mortgagees' right to evict arose from prior default, not extinguished by redemption.
   
• Ram Das v. Ishwar Chander, AIR 1988 SC 1422: Cited by the court, this Supreme Court decision reaffirmed that courts can mould relief based on subsequent events in rent control cases. The court used it to justify considering the redemption decree but held it supported the landlords' right to vacant possession.
   
• Gopalkrishna v. G. Satyanarayana, 1984 (1) ALT 56: Cited by the court, this Andhra Pradesh High Court ruling, authored by Justice Rama Rao, held that events nullifying the basis for eviction can be considered. The court applied this to assess the redemption decree's impact but found it reinforced the eviction order.
   
• Alagiriswami Mudali v. Akkulu Naidu, AIR 1921 Madras 393: Cited by the court, this Madras High Court decision held that a lease created by a mortgagee terminates upon redemption, rendering the tenant a trespasser unless a new tenancy arises. The court used it to clarify that the tenants' status post-redemption did not absolve their prior default.
   
• S.V. Venkatarama Reddiar v. Abdul Ghani Rowther, AIR 1980 Mad 276: Cited by the court, this Madras High Court Full Bench decision held that tenants of urban property leased by a usufructuary mortgagee are not protected under the Tamil Nadu Buildings (Lease and Rent Control) Act post-redemption, per Section 76(a) of the Transfer of Property Act. The court applied this to limit the tenants' protection, reinforcing the eviction order.
   
• Sachalmal Parasram v. Mst Ratanbai, AIR 1972 SC 637: Cited by the court, this Supreme Court decision clarified that Section 76(a) applies primarily to agricultural lands, not urban properties, limiting the binding effect of a mortgagee's lease post-redemption. The court used it to hold that the tenants' lease did not survive redemption, supporting the landlords' claim for vacant possession.

Detailed Reasoning and Analysis of Judge:
Justice Radha Krishna Rao's reasoning centered on balancing the established wilful default with the impact of the redemption decree as a subsequent event. The court affirmed the Rent Controller and Appellate Authority's findings of wilful default from June 1973 to June 1979, supported by the decree in O.S. No. 527 of 1976 and execution in E.P. 126/79, which confirmed the landlord-tenant relationship and rejected the tenants' claim of paying rent to Subhan Khan. The court emphasized that the default was crystallized into a decree, making subsequent rent payments irrelevant, as the arrears had legal consequences.

Addressing the tenants' reliance on subsequent events, the court accepted the principle from Pasupuleti Venkateshwarlu and Ram Das that courts can consider post-proceeding developments to mould relief, provided fairness is maintained. The redemption decree in O.S. No. 578 of 1982, directing the mortgagees to deliver vacant possession to the mortgagor upon payment of Rs. 5,000, was a significant event.

However, the court held it did not extinguish the landlords' right to evict for prior default, as the default occurred during their lawful possession as mortgagees. Citing Alagiriswami Mudali and Sachalmal Parasram, the court noted that a mortgagee's lease terminates upon redemption, rendering the tenant a trespasser unless a new tenancy is created. For urban properties, S.V. Venkatarama Reddiar clarified that tenants lack protection under rent control laws post-redemption, limiting the tenants' defense.

The court rejected the tenants' argument that the mortgagees lost locus standi, distinguishing Kommera Mallaiah, as the mortgagees' eviction right stemmed from a valid default during their tenure. The stay in A.S. No. 20 of 1987, obtained by the tenants, did not alter the redemption decree's effect, as neither the mortgagor nor mortgagee appealed.

The court reasoned that the mortgagees' obligation to deliver vacant possession aligned with enforcing the eviction order, as the tenants' default necessitated their removal. The tenants' participation in the redemption suit as defendants 5 to 7 further bound them to the decree's consequences, including their liability for default. The court concluded that the lower courts' reasoning was sound, as the wilful default was incurable, and the redemption decree reinforced the landlords' right to vacant possession.

Final Decision: On November 3, 1989, the Andhra Pradesh High Court dismissed the revision petition in M. Rangaiah Naidu (Died) By L.Rs. v. Abdul Kareem Khan And Ors., upholding the eviction order for wilful default. The court granted the tenants until December 31, 1989, to vacate the premises and deliver vacant possession to the landlords. No costs were awarded.

Law Settled in the Case:
The case clarified several principles in rent control and property law:Wilful Default in Rent Payment: Non-payment of rent over an extended period, confirmed by a civil court decree, constitutes wilful default under rent control laws, justifying eviction, and subsequent payments do not cure the default.Subsequent Events in Rent Control Cases: Courts can take cognizance of events , during the pendency of Appeal, post-dating the eviction petition, such as a redemption decree, to mould relief, ensuring justice aligns with current realities, per Pasupuleti Venkateshwarlu.

Effect of Mortgage Redemption:
A usufructuary mortgagee's lease terminates upon redemption, rendering the tenant a trespasser for urban properties, with limited protection under rent control laws, as per Alagiriswami Mudali and S.V. Venkatarama Reddiar.

Mortgagee's Eviction Rights:
A mortgagee-landlord retains the right to evict for defaults occurring during their possession, unaffected by redemption, provided the default is legally established.

Tenant's Liability Post-Redemption:
Tenants remain liable for prior defaults, and their status as trespassers post-redemption does not negate eviction orders based on earlier breaches.Interplay of Rent Control and Property Law: The obligation to deliver vacant possession post-redemption aligns with enforcing eviction for default, balancing the mortgagee's duties and tenant's obligations.

M. Rangaiah Naidu Vs Abdul Kareem Khan: November 3, 1989: 1992 (1) ALT 336; High Court of Andhra Pradesh: Radha Krishna Rao, J.

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Written By: Advocate Ajay Amitabh Suman, IP Adjutor - Patent and Trademark Attorney
Email: ajayamitabhsuman@gmail.com, Ph no: 9990389539