Holding

An auction‑purchaser who is not a party to the mortgage suit is not entitled to physical possession of portions occupied by tenants and may only be granted symbolic possession under Order XXI Rule 96.

Summary

The case involved a mortgaged bungalow that, after a compromise decree allowing sale on default, was leased to three tenants. When the mortgagor failed to pay, the bank sold the property at a court auction and the highest bidder, Gyan Chand Jain, obtained a sale certificate. Jain applied under Order XXI Rules 95 and 96 for delivery of possession, seeking actual physical possession of the parts occupied by the tenants. The Delhi High Court granted physical possession, holding that the post‑decree leases were void under Section 52 of the Transfer of Property Act. On appeal, the Supreme Court held that the auction purchaser, who was not a party to the mortgage suit, could obtain only symbolic possession of premises occupied by tenants, as Rule 95 requires the property to be in the occupation of the judgment‑debtor or his agent, which was not the case. Consequently, the High Court order granting physical possession was set aside.

Issues considered

Whether Section 52 of the Transfer of Property Act applies to leases created after the compromise decree
Whether a third‑party auction purchaser is entitled to actual physical possession under Order XXI Rule 95 or only symbolic possession under Rule 96
Whether the rights of the auction purchaser are governed by Rules 95/96 notwithstanding Section 52 and Section 65A
Whether the post‑decree tenancies are void and affect the purchaser’s entitlement
Whether earlier Supreme Court decisions (Supreme General Films, Jayaram Mudaliar, Mangru Matha) are applicable to the present facts

Legislation cited

Code of Civil Procedure, 1908s. Order XXI Rule 95, s. Order XXI Rule 96, s. Section 151
Transfer of Property Act, 1882s. Section 52, s. Section 58, s. Section 65A

Subjects

mortgagecourt auctionpossessionOrder XXIRule 95Rule 96Section 52Transfer of Property Actleasetenancysymbolic possessionphysical possessioncivil procedure

Judgment

I

174
\
A DEV RAJ DOGRA AND ORS.
v.
GYAN CHAND JAIN AND ORS.
March JO 1981

B [S. MURTAZA FAZAL ALI, A. VARADARAJAN AND A.N. SEN, JJ.]
"Code of Civil Procedure 1908, Order XX/ Rules 95 and 96 and Transfer of
Property -Act 1882, Ss 52, 58 and 6JALJ.fortgage-Consent decree passed in suit
for money due-property let out by owner to tenants-property sold in court auction
-Auction purchaser -applying to court for delivery ~of possession of propeny-
Whether entitled to actual physical possession or symbolic possession.
c Order XXI Rules 95 and 96 of the Code of Civil Procedure enable a pur-
chaser of immovable property in a Court sale, to apply for delivery of possession.
Rule 95 provides for actual physical possession and rule 96 provides for symbolic
possession. A purchaser wi11 be entitled to physical possession of the property
purchased if the property sold is in the occupation of the judgment-debtor, of
some person on behalf of the judgment debtor or some person claiming under a
D title-created by the judgment-debtor subsequent to the attachment of the property.
If the property sold is in the possession of a tenant or other person entitled to
occupy the same, symbolic possession is to be made over to the purchaser under
Rule 96.

The first respondent was an auction purchaser of property, of which the
three appellants were _tenants occupying different portions. The property was
E mortgaged by its owner with a Bank. As the amount due was not paid, the Bank
instituted a Suit , for its· recovery. A decree was ·passed by Consent of the parties
which provided that if the amount was not paid within two years, the Bank could
enforce the decree by ·sale of the property. After the compromise decree was
passed, the owner leased out different portions of the property to the appellants.
As the owner failed to make payment of the decreetal dues, the property was sold
by Court auction and the first resrondc:nt, whose bid was the highest, was
<iec!-a!'ed to be the purchaser of the premises, and the sale in his favour was
F -- confirmed.

The first respondent/auction-purchaser filed an application und'!r Order XXI,
Rules 95 and 96 read with Section 151 of the Code_ o_f Civil Procedure in the High
Court, for delivery of vacant physical possessioµ of the entire property and prayed
that if it was not possible to grant vacant physical possession of any part of the
, property, symbolic possession of that part may be granted. This application was
G contes_ted by the three appellants/tenants. ·

._ A Single Judge of the High C~urt holding that the tenancies in favour of the
---: appellants having been created after the institution of the suit by the Bank and
after the passing of the compromise decree in the said suit, and the said tenancies
would have no effect on the rights acquired by the auction-purchaser in view
H of Section 52 of the Transfer of Property Act, and relying on the Division Bench
Judgments of the Bombay High Court in Ramdas Popat Patil v. Fakira Patil and
Ors. AJR 1959 Bom 19 and of the Gujarat High Court in Jagjiwondas a Firm v.
DEV RAJ DOGRA V. G.C. JAIN 175

Lakhiram Haridasmal and Ors. AIR 1968 Guj 193 passed an order for delivery of A
physical possession of the portions in the respective occupation of the appellants.

In appeal it was contended that the Full Bench decision of the Bombay High
Court in Anaji Thamaji Patil v. Ragho Bhivraj Patil and Anr. AIR JQ73 Born 75,
over-ruled the Bombay Division Bench decision and doubted the correctness of the
Gujarat decision, but the Division Bench of the High Court dismissed the appeal
accepting the contention put forward on behalf of the respondent-purchaser thai B
the decision of this Court in M/s Supreme General Films Exchange Ltd. v. His
Highness Mahara;a Sir Brijnath [1976] J SCR 237 concluded the controversy.

In the appeal to this Court, it was contend on behalf of the appellants
that:

(I) Section 52 of the Transfer of Property Act has no application to the
facts and circumstances of this case as the conditions laid down therein for its
c
applicability are not satisfied.

(ii) The right that the mortgagee had was only to put the property to sale in
the event of the mortgagor failing to pay the decreetal amount in terms of the
provisions of the compromise decree, and this right cannot be said to be a right
to immoveable property directly and specifically in question in the suit. D
(iii) Section 65A of the Transfer of Property Act should be read alongwith
Section 52 and both these sections have been incorporated with the object of pre-
serving the interest of the mortgagee by making suitable provisions so that the
security of the mortgagee might not in any way be affected by any act done by
the mortgagor after the creation of the mortgage and also after the institution of
any suit for enforcement of the mortgage. E
(iv) Section 52 makes provisions for the parties to the suit or proceeding
and can have no application to any auction purchaser who is not a party to the
suit or proceeding and who only acquires his right after the sale in execution of
the decree has been confirmed.

(v) The right of the third party auction-purchaser to get physical possession
of the property purchased at the auction sale was not considered by the Supreme F
Court in M/s Supreme General Films Exchange Ltd. v. His Highness Maharaja
Sir Brijnath Singhji Deo of Maihar and Ors. and Jayaram Mudaliar v. Ayya
Swami and Ors. AIR 1973 SCR 569.

(vi) Order XXI, Rule 95 and Rule 96 of the Code of Civil Procedure pro-
vides that the rights of an auction-purchaser are governed by the provisions
contained therein and that the auction purchaser cannot claim physical possession G
of the portions in the occupation of the appellants even though they might have
been inducted as tenants after the compromise decree in the suit had been
passed.

On behalf of the first respondent auction-purchaser it was submitted that (!)
as the tenants were inducted not only after the institution of the suit for enforce- H
ment of the mortgage but also after the compromise decree that has been passed
therein, Section 52 of the Transfer of Property Act must be held to be applicable
176 SUPREME COURT REPORTS (1981] 3 S.C.R.

A and it must be held that the tenancies were illegal and were created in breach of
these provisions. S.(2) 65A the Transfer of Property Act does not in any way cont-
rol section 52. S 65A makes provisions with regard to the powers of the mortgagor
to grant leases of the mortgaged property after the creation of the mortgage but
before the institution of suit, while S. 32 makes provisions for cases of transfer or·
otherwise dealing with any property after the institution of a suit or proceeding
and S. 52 imposes a complete ban on the transfer of any kind or dealing with im-
B movable property except with the authority of the Court during the pendency of
the suit or proceeding so that the rights of any part may not be affected when any
decree or order is passed.

3. Section 58 of the Transfer of Property Act provides that a mortgage is
a transfer of an interest in specific immovable property for the purpose of securing
the payment of money advanced or to be advanced by way of loan. In a suit for
the enforcement of a mortgage, the right to immovable property is directly and
c specifically in question and after the 1;deeree for sale is passed, the mortgagor
loses even his right to redeem the property. The tenancies in the instant case
having been created long after the compromise decree, are illegal and void and in
contravention of S. 52 of the Act.

4. The decisions of this Court in .Ml s Supreme General Films Exchange
Ltd. Manager Mahto and Ors. and Jayaram Mudaliar conclude the question
D involved in the appeal.

On the question whether the !st Respondent as auction purchaser in an
application under Or. XXI, rules 95 and 96, of the Code of Civil Procedure is
entitled to recover actual physical possession of the portions in the occupation of
the appellants as lessees, the lease in respect of which were created after the
decree in the mortgage suit by consent between the parties had been passed.
E Allowing the appeal

HELD I. The Judgment and Order passed by the High Court directing
physical possession of the portions in the occupation of the appellants to be made
over to the auction-purchaser Respondent No. 1 is set aside. Symbolic posses-
sion of the portions in occupation of the appellants to be made over to the
F auction-purchaser respondent. [194 DJ

2. In the case of M/s Supreme General Films Exchange Ltd., the validity
of the lease had been questioned by the mortgagee decree holder in a suit for
declaration. The claim was not for possession by a third party auction-purchaser in
a proceeding, under rules 95 and 96 uf Order XX! of the Code of Civil Procedure
and the merits of such an application and the scope and effect of the said provi-
G sions of the Code did not come up for consideration. In Mangru Matha and Ors. y.
v. Shri Thakur Taraknath Tarakeshwar Math and Ors. a suit was instituted by the
mortgagee auction-purchaser for recovery of possession of mortgaged property
sold in execution of the mortgage decree and purchased by the mortgagee himself
and the decision rested mainly on the basis that the lease was not granted by the
mortgagor in the usual course of business. This case was also not concerned with
an application by an outsider-auction purchaser for physical possession of the ("

H property purchased by him in an application made under Order XXI Rules 95 and
•
96 of the Code of Civil Procedure. These two decisions do not therefore con-
clude the question involved in the present appeal. [190 A-B, 191 H-192 CJ
DEV RAJ DOGRA v. G.C. JAIN (4.N. Sen, J.) 177

3. The auction-purchaser derives his right to obtain possession only after A
the sale in his favour has become absolute and sale certificate has been obtained
by him. The mode and manner of obtaining such possession are regulated by
Rules 95 and 96 of the Code of Civil Procedure. [ 193 F]

In the instant case a third party auction-purchaser is seeking recovery of
the physical possession of the property purchased by him at the auction from the
appellants who are in possession of different portions of the said premises as
tenants of the said portions. The auction-purchaser was not the mmtgagee and he
B
was no pariy to the suit in which the compromise decree was passed. The auction-
purchaser in view of the provisions contained in Rule 95 which regulate the rights
of the auction-purchaser to obtain physical possession of the property, is not
entitled to recover the physical possession of the portions in the occupation of the
appellants as tenants. The appellants are not the judgment-debtors. They are
not in occupation of the property on behalf of the judgment-debt or. They are
also not claiming to be in occupation under a title created by the judgment- c
' debtors subsequent to any attachment of the property. There is no question of
1. any attachment in the case. The appellants are in the occupation of their respec-
tive portions as tenants and they claim to occupy the same as such. The auction-
purchaser must therefore be held to be entitled to only symbolic possession in
terms of the provisions contained in Or XXI rule 96 in respect of the portions in
occupation of the appellants. [192 H-193 A, 193 H-194 A, CJ
D
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1653 of
1979.
Appeal by special leave from the Judgment and Order dated
23.5.1979 of the Delhi High Court in E.F.A. No. 8/76.
Madan Bhatia and Sushi! Kumar for the Appellant.
E
SN. Kacker, S.K. Mehta, P.N. Puri, E.M.S. Anam and M.K.
Dua for the Respondents.

The Judgment of the Court was delivered by
A.N. SEN J. The principal question which falls for determi-
nation in this appeal by Special Leave granted by this Court, is F
whether Gyan Chand Jain, the Respondent No. 1 in this appeal,
who purchased a two and half storeyed Bungalow at No. 5-C/96,
W.E.A. I<arol Bagh, New Delhi, at an auction sale held pursuant
to the terms of the compromise decree between the morgagor and
the morgagee, is entitled to recover actual physical possession of the G
portions in the occupation of the appellants as lessees, the leases
in respect of which were created after the decree in the mortgage
suit by consent between the parties had been passed, in an applica-
tion made by the auction purchaser Gyan Chand Jain under O. XXI,
rules 9 5 & 96 of the Code of Civil Procedure.
H
There is no serious dispute with regard to the facts material for
the purpose of appeal. Des Raj Agarwal, the sole proprietor of M/s.
178 SUPREME COURT REPORTS [1981] 3 s.c.R.

A Raj Kumar & Co., mortgated the 2! storeyed bungalow No. 5-C/96,
WEA. Karol Bagh, New Delhi (herein-after referred to as the ·premises)
along with various other properties with Oriental Bank of Commerce y
(hereinafter referred as the Bank) on 28.6.1960 by deposit of title (

deeds. The Bank filed a suit to recover its dues on the mortgage
on 6.11.1962. On 3.9.1963, a decree was passed by consent of the
B parties in favour of the plaintiff-mortgagee for the sum of
Rs. 479177 .49 with costs and future interest at 6% till realisation
of the decretal amount. The other relevant terms of the consent
decree which are contained in clauses 8 and 9 of the compromise
are to the following effects :

c "8. If the judgment debtor pay Rs. 479177.49 less costs
and interest as after March, 1961 within two years of the
decree, then whole of the decree shall stand satisfied.

9. If full amount of the decree with costs and interest is
not paid as agreed above, within two years of the decree, then
D the decree-holder shall be free to enforce the decree against
the property mortgaged which shall be sold in execution of
the same and the decree holder shall be entitled to proceed
against other property and person of the judgment-debtor in
the case of the proceeds of the property not being sufficient to
satisfy the decree".
E
After the decree had been passed on 3.9.1963, it appears that the
judgement-debtor leased out different portions of the premises to
Dev Raj Dogra, Ish Kumar Khosla and Balwant Singh, the
appellants herein, 1966, 1967 and 1970 respectively. The judgment-
debtor failed to make payment of the decreetal dues in terms of the
F
provisions contained in the consent decree and the premises in )
question resold by public auction on 28.10.1971. Gyan Chand Jain
whose bid was the highest, was declared to be the purchaser of the
premises and the sale in his favour was confirmed on 6.8.1973. On
25.10.76 an application was made on behalf on Gyan Chand Jain,
G the auction purchaser, in the Delhi High Court under 0. XXI rules
95 and 96 and also S. 151 of the Code of Civil Procedure for the
following reliefs:-

(i) Warrants of possession with the direction that vacant
H physical possession of the entire property be delivered to
the applicant, be issued and vacant physical possession of
the entire property be got delivered to the applicant ;
DEV RAJ DOGRA v. G.C. JAIN (A.N. Sen, J.) 179

(ii) in case the Hon' ble Court comes to a c_onclusion that the A
applicant is not entitled to vacate physical possession of
any part of the property symbolic possession of that part
of the property be granted to him ;

(iii) notices be issued to the persons mentioned in para 9 above
to show cause why vacant physical possession of the B
portion of the property in their occupation be not deliver-
ed to the applicant.

The three tenant who were in possession· of the respective portions
leased out to them and on whom notices had been served, contested
the said application. A learned Single Judge of the Delhi High Court c
passed an order of physical possession of the said portions in the
respective occupation of the tenants, the appellants before us, to be
made over to the auction purchaser Gyan Chand Jain. The Learned
Judge held that the tenancies in favour of the tenants had been
created after institution of the suit by the Bank and after the passing
of the compromise decree in the said suit ; and, the said tenancies D
would have no effect on the rights acquired by the auction purchaser,
in view of the provisions contained in S. 52· of the ·Transfer of
Property Act. The Learned Judge had relied on the judgment of
a Division Bench of the Bombay High Court in the case of Ramdas
Popat Patil v. Fakira Pandu Patil and Ors.(1) and also on decision of
Division Bench of the Gujarat High Court in case Jagjiwandas a E
Firm v. Lakhiram Haridasmal and Ors.(2) The tenants preferred an
appeal against the said order of the learned Judge. Before the
Division Bench of the Delhi High Court, it was urged on behalf of
the tenants that the decision of the Division Bench relied on by the
learned Single Judge had been subsequently over-ruled by a decision
of the Full Bench of the Bombay High Court in case of Anaji F
Thamaji Patil v. Ragho Bhivraj Patil and Anr.(3 ) and the correctness
of the decision of the Gujarat High Court had also been questioned
in this Full Bench judgment. Various other arguments were also
advanced before the Division Bench on behalf of the tenants and the
said arguments have been noted in the judgment of the Division Bench.
The Division Bench however, dismissed the appeal, accepting the G
contention put forward on behalf of the respondent auction-purchaser
that the decision of this Court in the case of M/s. Supreme General
Films Exchange Ltd. v. His Highness Maharaja Sir Brijnath Singhji

(I) A.1.R. 1959 Bom.'J9.
(2:) A.I.R. 1968 Guj. 193.
(3) A.I.R. 1973 Born. 75.
180 SUPREME COURT REPORTS [1981] 3 8.C.R.

A Deo of Maihar and Ors.,(1) concludes the controversy. The' Division
Bench also referred to the decision of this Court in case Jayaram
Mudaliar v. Avva Swami and Ors.(2) Against the judgment and
decision of the Delhi High Court the tenants have preferred this
appeal after obtaining special leave from this Court.

B Mr. Bhatia, learned counsel appearing on behalf of the tenants
the appellants before us, has urged that S. 52 of the Transfer of Pro-
perty Act has no application to the facts and circumstances of this
case, as the conditions laid down in the said Section for the applica-
bility of the said section are 'not satisfied. It is the argument of Mr.
Bhatia that the requirements of the said Section are--(1) there must
c be a suit or proceeding which is not a collusive one and any right to
immovable property must be directly and specifically in question in
the said suit or proceeding and (2) transfer or otherwise dealing with
the property by any party to the suit or proceeding must affect the
right of any other party thereto under any decree or order which may
be passed therein. Mr. Bhatia has contended that in the instant
D case the right that the mortgagee had was only to put the property
to sale in the event of the mortgagor failing to pay the decreetal
amount in terms of the provisions of the compromise decree. It is
his contention that the right to put the property to sale cannot be
said to be a right to immovable property directly and specifically in
question in the suit. He also referred to S. 65A of the Transfer of
E Property Act which empowers the mortgagor while lawfully in posses-
sion of the mortgaged property to grant lease in terms of the provi-
sions contained in the said Section. He has submitted that S .. 65A
should be read along with S. 52 and both these sections have been
incorporated with the object of preserving the interest of the mort-
gagee by making suitable provisions so that the security of the
F mortgagee might not in any way be affected by any act done by the
mortgagor after the creation of the mortgage and also after the insti- )
tution of any suit for enforcement of the mortgage. It is his submis-
sion that in S. 65A of the Transfer of Property Act the Legislature
has made it manifestly clear that the mortgagor will be entitled to
grant a lease of the property in conformity with the provisions of the
G said Section and he submits that when a mortgagor grants a lease of
the mortgaged property in terms of the provisions of Section 65-A
of the Transfer of Property Act, it cannot be said that the granting
of any such lease affects the right of the mortgagee. Mr. Bhatia has
next contended that in any event S.52 makes provisions for the
H
(I) [1976] 1 S.C.R. 237.
(2) A.l.R. 1973 S.C. 569, [1973] I S.C.R. 139.
DEV RAJ DOGRA v. G.C. JAIN (A.N. Sen, J.) 181

parties to the suit or proceeding and can have no application to any A
outside auction purchaser who is not a party to the suit or proceed-
ing and who only acquires his right after the sale in execution o(the
decree has been confirmed. Mr. Bhatia argues that the judgment of
the learned Single Judge of the Delhi High Court must be held to be
wrong, as the learned Single Judge came to his decision relying on
the decision of the Division Bench of the Bombay High Court in the B
case of Kamdas Popat Patil v. Fakira Pandu Patil and Ors. (supra)
and the decision of the Gujarat High Court in the case of
Jagjiwandas a Firm v. Lakhiram Haridasmal and Ors. (supra)
and the decision of the Division Bench of the Bombay High Court
in Ramdas Popat Patil's case has been over ruled by the Full Bench
decision of the Bombay High Court in Anaji Thamaji Patil v. Ragho c
Bhivraj Patil and Anr.(supra) in which the correctness of the decision
of the Gujarat High Court has also been questioned. Mr. Bhatia has
commented that the decisions of this Court in the case of M/s.
·Supreme General Films Exchange Ltd. v. His Highness Maharaja Sir
Brijnath Singhji Deo of Maihar and Ors. (supra) and in the case of
Jayaram Mudaliar v. Ayya Swami and Ors. (supra) do not conclude D
the question involved in the instant case. He has submitted that the
rights of a third party auction-purchaser to get physical possession of
the property purchased at the auction sale was not considered by the
Supreme Court in any of these two decisions; and he has further
submitted that in these two · cases the Supreme Court had
indeed proceeded on the assumption that S. 52 of the Transfer of E
Property Act was applicable without considering whether the require-
ments of the · said Section had been complied with or not,
as these aspects were not argued before the Supreme Court in these
two cases. Mr. Bhatia has drawn our attention to O.XXI, rule 95
and also to rule 96 of the Code of Civil Procedure and has submit-
ted that the rights of an auction purchaser are governed by the F
provisions contained therein. It is the argument of Mr. Bhatia that
in view of the provisions contained therein, the auction purchaser can-
not claim physical .possession of the portions in the occupation of
the appellants, even though the appellants might have been inducted
as tenants after the compromise decree in the suit had been passed.
G
Mr. Kakkar, learned counsel appearing on behalf of the auction
purchaser; has submitted that as the tenants in the instant case were
inducted not only after t~e institution of the suit for enforcement of
the mortgage but also after the compromise decree had been passed,
therein S. 52 of the Transfer of Property Act must be held to be H
applicable and it must be held that the tenancies were illegal and
were created in breach of the provisions contained in S. 52 of the
182 SUPREME COURT REPORTS (1981] 3 S.C.R,

A Transfer of Property Act. Mr. Kakkar has argued that S. 65-A of
the Transfer of Property Act does not, in any way, control S. 52 of
the said Act. It is his argument that S. 65-A makes provisions with
regard to the powers of the mortgagor to grant leases of the mort-
gaged property after the creation of the mortgage but before the
institution of suit, while, on the other hand S. 52 makes provisions
B for cases of transfer or otherwise dealing with any property after
the institution of a suitor proceeding and S. 52 imposes a complete
ban on the transfer of any kind or dealing with immovable property
except with the authority of the Court during the pendency of the
/
suit or proceeding in which any right to immovable property is
directly or specifically in question so that the rights of any party
c may not be affected when any decree or order is passed in the suit
or in the proceeding. Mr. Kakkar has referred to S.58 of the Trans-
fer of Property Act in support of his contention that in case of a
mortgage, there is a transfer of an interest in specific immovable
property for the purpose of securing of the payment of money
advanced or to be advanced by way of loan. He has argued that
D in a suit for the enforcement of mortgage it musi, therefore, be held
that the right to immovable property is directly and specifically in
question; and he has further argued that after the decree for sale is
passed in a mortgage suit the mortgagor loses even his right to re-
deem the property. He has submitted that in the instant case
tenancies have been created long after the compromise decree in which
E provision for sale of the mortgaged property had been made and the
right of the mortgagee decree-holde(to put up the mortgaged property
to sale had also arisen for failure on the part of the mortgagor-
judgment-debtor to pay the decretal dues in terms of the compro-
mise decree and the tenancies created by the mortgagor must be
held to be illegal and void as they are clearly in contravention of the
F provisions contained in S. 52 of the Transfer of Property Act. He
submits that there cannot be any manner of doubt, that the creation )
of 11. tenancy affects the value of the property and to that extent
affects the security, even though it may be said that the Legislature
in iti wisdom has thought it fit to permit the mortgagor to grant
leases of the mortgaged property in terms of the provisions contained
G in S. 65-A of the Transfer of Property Act. It is his argument that
the Legislature has thought it fit not to impose any kind of absolute
prohibition in respect of the dealing with any property by the mort-
gagor after the creation of a mortgage and has imposed only such
restrictioni which the Legislature thought would not prejudicially
H affect the security of the mortgagee; but the Legislature, however, ia
S.52 of the Act has thought fit to impose_complete ban on the transfer
DEV RAJ DOGRA v. G.C. JAIN (A.N. Sen, J.) 183

of or otherwise dealing with any property after the institution of a A
suit or proceeding in which the right to property is directly or
specifically in question, so that the rights of any party thereto may
not be affected under a decree or order which may be made in the
suit or proceeding. Mr. Kakkar has next submitted that the auction-
purchaser at the Court sale acquires all the right, title and interest
of the mortgagor and also of the mortagee as a result of the purchase B
and the auction-purchaser, therefore, steps into the shoes ofthe
mortgagee and becomes entitled to obtain physical possession of the
property purchased in the same manner as the mortgagee himself
would have been able to do. Mr. Kakkar in this connection has
referred to the decision of this Court in the case Mangru Mahto and
Ors. v. Shri Thakur Taraknath Tarakeshwar Math and Ors.(1); and c
also to the decision of the Supreme Court in M/s. Supreme General
Films Exchange Ltd. v. His Highness Maharaja Sir Brijnath Singhji
Deo of Maihar and Ors. (supra) It is the submission of Mr. Kakkar
that the decisions of this Court in the case of M/ s. Supreme General
Films Exchange Ltd. (supra) and also in the case of Jayaram Muda-
liar (supra) conclude the question involved in the present appeal and D
the Division Bench rightly dismissed the appeal relying on the said
decisions.

Before we proceed to deal with the respective contentions of
the parties, it will be convenient to consider the material provisions
of the relevant statutes to which we were referred in the course of E
submissions made from the bar. Section 52 of the Transfer of Pro-
perty Act reads as follows :-

"During the pendency in any Court having authority with-
in the limits of India excluding the State of Jammu and Kashmir
or established beyond such limits by the Central Government I'
of any suit or proceeding which is not collusive and in which
any right to immovable property is directly and specifically in
question, the property cannot be transferred or otherwise dealt
with by any party to the suit or proceeding so as to affect the
rights of any other party thereto under any decree or order
which may be made therein, except under the authority of the G
Court and on such terms as it may impose.

{Explanation-For the purposes of this section, the pen-
dency of a suit or proceeding shall be deemed to commence
from the date of the presentation of the plaint or the institu- H
(1) [1967] 3 S.C.R. 125.
184 SUPREME COURT REPORTS (1981] 3 S.C.R,
•
A tion of the proceeding in a Court of competent jurisdiction, and
to continue until the suit or proceeding has been disposed of
by a final decree or order, and complete satisfaction or dis-
charge of such decree or order has been obtained, or has be-
come unobtainable by reason of the expiration of any period
of limitation prescribed for the execution thereof by any law
B for the time being in force.]"

Material provisions of S. 58 (a) and (b) of the said Act are in the
following terms :-

"(a) A Mortgage is the transfer of an interest in specific im"
c moveable property for the purpose of securing the payment of
money advanced or to be advanced by way of loan, an existing
or future debt, or the performance of an engagement which
may give rise to a pecuniary liability.

The transferor is called a mortgagor, the transferee a mort-
gagee; the principal money and interest of which payment is
D
secured for the time being are called the mortgage-money, and
the instrument (if any) by which the transfer is effected is
called a mortgage-deed.

(b) Where, without delivering possession of the mort-
gaged property, the mortgagor binds himself personally to pay
E the mortgage-money, and agrees, expreesly or impliedly, that,
in the event of his failing to pay according to his contract, the
mortgagee shall have a right to cause the mortgaged property
to be sold and the proceeds of sale to be applied so far as
may be necessary, in payment of the mortgage-money, the
transaction is called a simple mortgage and the mortgagee a
F simple mortgagee."
_)
S. 65A which was subsequently introduced into the Act by S. 30 of
the Transfer of Property (Amendment) Act, 1929 provides :-

"(1) Subject to the provisions of sub-section.(2), a mortgagor,
G · while lawfully · in possession of the mortgaged property,
shall have power to make leases thereof which shall be binding
on the mortgagee.

(2) (a) Every such lease shall be such as would be made in the
H ordinary course of management of the property concer-
ned, and in accordance with any local law, custom or
usage.
DEV RAJ DOGRA v. G.C. JAIN (A.N. Sen, J.) 185

(b) Every such lease shall reserve the best rent that can A
reasonably be obtained, and no premium shall be
paid or promised and no rent shall be payable in
advance.

(c) No such lease shall contain a covenant for renewal.
B
(d) Every such lease shall take effect from a date not later
than six months from the date on which it is made.

(e) In the case of a lease of buildings, whether leased with
or without the land on which they stand, the duration
of the lease shall in no case exceed three years, and the
lease shall contain a covenant for payment of the rent
c
and a condition of re-entry on the rent not being paid
within a time therein specified.

(3) The provisions of sub-section ( l) apply only if and as
far as a contrary intention is not expressed in the mortgage- D
deed; and the provision of sub-section (2) may be varied or
extended by the mortgage-deed and, as so varried and extended
shall, as far as may be, operate in like manner and with all
like incidents, effects and consequences, as if such variations or
extensions were contained in that sub-section.
E
Rules 95 and 96 of O.XXI of the Code of Civil Procedure under
which the auction-purchaser in th(instant case had made the appli-
cation for possession are in the following effect :-

"95. Where the immovable property sold is in the occu-
pancy of the judgment-debtor or of some person on his behalf
or of some person claiming under a title created by the judg- F
ment-debtor subsequently to the attachment of such property
and a certificate in respect thereof has been granted under rnle
94, the Court shall, on the application of the purchaser, order
delivery to be made by putting such purchaser or any person
whom he may appoint to receive delivery on his behalf in
possession of the property, and, if need be, by removing any G
person who refuses to vacate the same.
96. Where the property sold is in the occupancy of a
tenant or other person entitled to occupy the same and a certi-
ficate in respect thereof has been granted under rule 94, the H
Court shall, on the application of the purchaser, order deli-
very to be made by affixing a copy of the certificate of sale in
186 SUPREME COURT REPORTS (1981] 3 S.C.R.
A some conspicuous place on the property and proclaiming to
the occupant by beat of drum or other "customary mode, at
some convenient place, that the interest of the judgment-debtor
has been transferred to the purchaser.

An analysis of S. 52 of the Transfer of Property Act indicates
B that for application of the said section the following conditions have
to be satisfied :-
/

1. A suit or a proceeding in which any right to immovable
property must be directly and specifically in question, must
be pending;
c
2. The suit or the proceeding shall not be a collusive one;

3. Such property during the pendency of such a suit or pro-
ceeding cannot be transferred or otherwise dealt with by
any party to the suit or proceeding so as to affect the
D right of any other party thereto under any decree or order
which may be passed therein except under the authority of
Court. In other words, any transfer of such property or
any dealing with such property during the pendency of the
suit is prohibited except under the authority of Court, if
such transfer or otherwise dealing with the property by
E any party to the suit or proceeding affects the right of any
other party to the suit or proceeding under any order or
decree which may be passed in the said suit or proceeding.

It has to be noted that this section imposes a prohibition on
transfer or otherwise dealing with any property during the pendency
F of a suit provided the conditions laid down in the section are satis-
fied.

S. 58 makes it clear that in case of a mortgage there is a
transfer of an interest in the specific immovable property mortgaged
for the purpose of securing the payment of money advanced or to be
G advanced by way of a loan, an existing or future debt, or the
performance of an engagement which may gives rise to pecuniary
liability. It further confers, in case of a simple mortgage where,
without delivering the possession of the mortgaged property, the
mortgagor binds himself personally to pay the mortgage-money, a
H right on the mortgagee to cause the mortgaged property to be sold
and the proceeds of sale to be applied, so far as may be necessary in
payment of the mortgage-debt.
DEV RAJ DOGRA v. G.C. JAIN (A.N. Sen, J.) 187

S. 65A which as we noticed earlier, was introduced by the A
Amending Act, 1929 in recognition of the mortgagor's powers exer-
cised bona fide to grant lease of the mortgage-property in the usual
··~ course of management, makes provision with regard to the exercise
of such powers by the mortgagor, while the mortgage subsists and
the mortgagor is in lawful possession of the mortgaged-property.
This section further makes it clear that any lease granted by the B
mortgagor in accordance with the provisions of this section would be
binding on the mortgagee.

Rules 95 and 96 of O.XXI of the Code of Civil Procedure
makes provisions for enabling a purchaser of immovable property
in a Court sale after obtaining the necessary certificate from the c
--~--- Court in terms of the provisions contained in rule 94 of the Code
to apply for delivery of possession of the immovable property
purchased by him at the Court sale. Rule 95 provides for actual
physical possession and rule 96 provides for symbolic possession. A
plain reading of rule 95 which we have earlier set out, clearly
establishes, that the purchaser will be entitled to physical possession D
of property purchased and the Court will direct delivery of actual
possession of the property sold to him by removing any person who
refuses to vacate the same, if need be, if the following conditions
are satisfied:-

I. The property sold must be in the occupation of the judgment E
debtor;

2. The property sold must be in the occupancy of some
person on behalf of the judgment-debtor;

3. The property sold must be in the occupation of some
person clainung under a title created by the judgment- F
debtor subsequently to the attachment of the property.

Rule 96 on the other hand makes it clear that where the
property sold is in the occupancy of a tenant or other person entitled
to occupy the same, symbolic possession of the property in the manner
provided in the said rule is to be made over to the purchaser after
the purchaser has obtanied the necessary certificate under rule 94 of G
the Code.

We shall now proceed to consider the decision of this Court
in the case of M/s. Supreme General Films Exchange Ltd. v. His
Highness M'lharaja Sir Brijnath Singh Deo of Maihar and Ors. (supra) H
and also the decision of this Court in Jayaram Mudaliar v. Ayya Swami
and Ors (supra). In the case of M/s. Supreme General Films Exchange
188 SUPREME COURT REPORTS (1981) 3 S.C.R.

A Ltd., the plaintiff-respondent who were the mortgagee of a cinema
theatre of which the appellant Supreme General Films Exchange Ltd.
claimed to be a lessee in occupation, had filed a suit against the
mortgagor and a decree by compromise had been passed in the said
suit on 7th May, 1960. By the said compromise decree it was agreed
that the amounts due to the mortgagee deGree-holder would be
B realised by the sale of the theatre. The Central Bank of India,
another creditor of the mortgagor, assigned its rights under the
decree to the plaintiff decree holder. The theatre was attached in the
course of execution of the decree. The original lease of 1940 on the
basis of which the appellant, the Supreme General Films Exchange
Ltd. had entered into possession, expired in 1946 but thereafter the
c Company had continued in possession as a tenant holding over until
the impugned lease-deed of 1946 in favour of the company was
executed. The company filed a suit in 1954 for specific performance
of the agreement to lease and the lease deed of 1956 was executed in
compliance with the terms of the compromise decree passed in the
said suit filed by the appellant company. In the said suit for specific
D performance by the appellant company, the plaintiff mortgagee was
not impleded as a party. The plaintiff mortgagee thereafter filed a
suit claiming that the lease of 1956 was void as the same came within
the mischief of Ss. 52 and 65A of the Transfer of Property Act
and also S. 64 of the Code of Civil Procedure. The appellant com-
pany contested the said suit contending inter alia that the suit of this
E nature filed by the plaintiff mortgagee did not lie as it fell outside the
purview of S. 42 of the Specific Relief Act. The trial Court decreed
the said suit of the plaintiff mortgagee and granted the declaration
asked for. The appellant-company preferred an appeal against the
decree of the trial Court to the High Court which dismissed the
said appeal. Thereafter the appellant company filed a further appeal
F to this Court by special leave granted by this Court. This Court for
reasons recorded in the judgment held that the plaintiff was entitled )
to the declaration asked for on proper construction of S. 42 of, the
Specific Relief Act. One of the contentions which was raised on
behalf of the appellant in this Court was that S. 52 of the Transfer of
Property Act was not attracted to the lease in question. Dealing
y
G with contention this Court observed at pp. 243-244 as follows:-:- I

"The contention that the case fell outside the purview of
section 52 of the Transfer of Property Act as the lease was
executed in purported satisfaction of an antecedent claim
H rests upon the terms of an agreement of 1948, embodied in a
letter, on the strenght of which the defendant-appellant had
DEV RAJ DOGRA v. G.C. JAIN (A.N. Sen, J.) 189

filed his suit for specific performance. We find that the terms A
of the compromise decree in that suit and lease-deed of 1956
purported to confer upon the defendant-appellant new rights.
Indeed, there are good grounds for suspecting that the compro-
mise in the suit for specific performamance was adopted as a
device to get round legal difficulties in the execution of the
lease of 1956 in favour of the defendant-company. We are B
unable to accept the argument, sought to be supported by the
citation of Bishan Singh and Ors. v. Khazan Singh and Anr.
(AIR 1951 Assam 101) that the lease was merely an enforce-
ment of an antecedent or pre-existing right. We think that it
purported to create entirely new rights pendente lite. It was,
-l-- therefore struck by the doctrine of !is p211dens, as explained by c
this Court in Jayaram Mudaliar v. Ayyaswami and Ors. [1973
l SCR. 139] embodied in Section 52 of the Transfer of Property
Act.

An alternative argument of the appellant was that a case
falling within S. 65A (2) (a) of the Transfer of Property Act,
D
confining the duration of a lease by a mortgagor to three years,
being a special provision, displaces the provisions of section 52
of the Transfer of Property Act. This argument overlooks
the special object of the doctrine of /is pendens which applies
to a case in which litigation relating to property in which rights
E
are sought to be created p211de11te lite by acts of parties, is pen-
ing. Moreover, for the purposes of this argument, the defen-
dant-appellant assumes that the provisions of Section 65A(2)
(e) Transfer of Property Act are applicable. If that was so, it
would make no substantial difference to the rights of the defen-
·dant-appellimt, which would vanish before the suit was filed if
F
Section 65A applies'. We, however, think that, as the special
doctrine of tis p!ndens, is applicable here, the purported lease
of 1956 was invalid from the outset. In this view of the matter,
it is not necessary to consider the applicability of Section 65A
(2) (e), which the defendant-appellant denies, to the facts of
this case." G
This Court further held agreeing with the concurrent findings of the
Trial Court and the High Court that the lease of J956 was also struck
by the provisioris of S. 64 of the Civil Procedure Code, as the
property continued to remain under attachment at the time of the H
grant of the lease in 1956.
190 SUPREME COURT REPORTS (1981] 3 S.C.R.

A It may be noted that in the case the validity of the lease had
been questioned by the mortgagee decree-holder in a suit for
appropriate declaration. The claim was not for possession by
a third party auction-purchaser in a proceeding under rr. 95 and 96
of O.XXI of the Code of Civil Procedure and the merits of an appli-
cation under the said provisions of the Code and the scope and effect
B thereof did not come up for consideration,
In the case of Mangru Mahto and Ors. v. Shri Thakur Taraknath
Tarakeshwar Math and Ors. (supra), the mortgagor had granted
lease of the mortgaged-property to certain persons. In execution of
the mortgage-decree, the mortgagee himself purchased the property
at the auction. The lessees of the mortgaged-property had allowed
c the property to be sold and had not applied for being added as a
party. The mortgagee had also obtained the money decree against
one of the lessees and in execution of the decree had attached the
mortgaged land. _The lessees filed claim petitions objecting to the ·
attachment under O.XXI, rule 58 of the Code of Civil Procedure.
The claim petitions filed by the lessees were allowed and the
D
executing court held that the leases were genuine. The mortgagee
auction-purchaser did not file any suit under Order XXI,'.rule 63 but
·Jatter filed a suit against the mortgagor and the lessees for recovery
of possession of the lands, alleging that the leases were co!lesive
transactions and were otherwi.se not binding on him. The Trial
E Court dismissed the suit holding that the leases were genuine; but
the High Court decreed the suit holding that the leases . were sham
transactions .and were made in contravention of S. 65A of the Trans-
fer of Property Act. The lessees thereafter preferred an appeal to this
Court under certificate granted by the High Court. One of the conten-
F tions raised before this Court was that as the mortgagee did not file a
suit under 0. XXI, rule 63 of the Code of Civil Procedure after the
claim petitions of the lessees under O.XXI rule 58 of the Code of Civil
Procedure had been allowed and the mortgagee was not entitled to
maintain th<suit for recovery of possession of the mortgaged land
and for mesne profits on the allegation that the leases were collusive
G transactions and were otherwise not binding on him. This contention
was negatived by this Court for reasons recorded in the judgment.
y
This Court further held that the validity of the leases granted by the I

mortgagor was not affected by S. 65A of the Transfer of Property Act
as the leases were granted before the enactment of S. 65-A. lAs these
aspects do not have any material bearing on the question involved in
H the present appeal, it does not become necessary for us to pursue
these two aspects any further. This Court, however, held that the
leases in question were not granted by the mortgagor in the ordinary
DEV RAJ DOGRA v. G.C. JAIN (A.N. Sen, J.) 191

course of managment as the agent or bailiff of the mortgagee and A
were not binding on the mortgagee and in that view of the matter
this Court dismissed the appeal. This Court observed at p. 132
as follows : -

"A lease granted by the mortgagor, out of the ordinary
course of management, though not binding on the mortgagee B
is binding as between the mortgagor and the lessee. Such a
lessee acquires an interest in the right of redemption and is
entitled to redeem. If such a lease is created before the institu-
tion of a suit relating to the mortgage, the lessee must· be joined
as a party to the suit under 0. 34, r. 1, C.P.C.; otherwise he
will not be bound by the decree passed in the suit and will
continue to retain his right of redemption. But in view of c
S. 52 of the Transfer of Property Act, if the mortgagor grants
such a lease during the pendency of a suit for sale by the mort-
gagee, the lessee is bound by the result of {the litigation. If the
property is sold in execution of the decree passed in the suit,
the lessee cannot resist a claim for posession by the auction-
purchaser. The lessee could apply for being joined as a party D
to the suit and ask for an opportunity to redeem the property.
But if he allows the property to be sold in execution of the
mortgage decree and they have now lost the present case, the
lessees allowed the suit lands to be sold in execution of the
mortgage decree and they have now lost the right of redemption.
They cannot resist the claim of the auction-purchaser of recovery E
of possession of the lands."

It may be noted that the Court immediately after the aforesaid
observations has further observed as follows:--

"If a mortgagor in possession of the mortgaged property F
executes a lease of the property in the ordinary course of
management as the agent or bailiff of the mortgagee during
the pendency of a suit by the mortgagee to enforce the mort-
gage, a question may arise whether such a lease is in the eye
of the law a lease granted by the mortgagee through his agent G
and therefore binding on him. But in the present case, that
question does not arise as the leases were not granted by the
mortgagor in the ordinary course of management as the bailiff
or agent of the mortgagor."
H
It is to be noticed that this decision arose out of the suit instituted
by the mortgagee auction-purchaser for recovery of possession of
J92 SUPREME COURT REPORTS [1981] 3 S.C.R.

A mortgaged-property sold in execution of the mortgage decree
and purchased by the mortgagee himself and the decision in the case
rested mainly on the basis that the lease was not granted by the
mortgagor in the usual course of business. This case was also not
concerned with an application by an outside-auction purchaser for
physical possession of the property purchased by him in an application
B made under O.XXI, rr. 95 and 96 of the Code of Civil Proceedure,
and the Court did not have to consider this scope and effect of a
proceeding under O.XXI, rr. 95 and 96 of the Code of Civil
Procedure.

c In our opm10n, it cannot, therefore, be said that these two
decisions of this Court conclude the question involved in the present
appeal before us.

It may be true that S. 52 and S. 65-A of the Transfer of
Property Act operate in different spheres. S.65-A, as we have earliar
noticed deals with the powers of the mortgagor to grant a lease of
D the mortgaged property,, while the mortgagor remains in lawful
possession of the same. S. 52 deals with cases of transfer of or
otherwise dealing with any immovable property after any suit
or proceeding in which any right to the said immovable property is
directly and specifically in question, has been filed. It is also to be
noted that S. 65-A which came to be inserted by the Amending Act
E 1929, is neither made 'subject to' nor 'not withstanding the provi-
sions' contained in S. 52 of the Act. S. 52 will, however, be only
applicable, if the requirements of the said section are satisfied. We
have earlier noticed what the requirements of the said section are.
In the instant case, it does not become necessary for us to consider
whether the grant of any lease by a mortgagor in conformity with )
F
the provisions of S. 65-A of the Transfer of Property Act during the /
pendency of a suit by the mortgagee to enforce the mortgage will
attract the provisions of S. 52 of the Act or will be outside the
mischief of the provisions of the said section on the ground
that the creation of such a lease may not affect the rights of
G the mortgagee under any decree or order which may be passed in
the suit. We ha,·e earlier quoted the observations of this Court in
the case of Mangru Mahto (supra) and it will be noticed that the
Supreme Court in the said case did not decide this question and left
this question open. In the instant case an outside auction-purchaser
H is seeking recovery of the physical possession of the property purcha-
sed by him at the auction from the appellants who are in possession
of different portions of the said premises as tenants of the said por-
•
I

• DEV RAJ DOGRA v. G.C. JAIN (A.N. Sen, J.) 193

tions. The auction-purchaser in the instant case was not the mort- A
gagee and he was no party to the suit in which the compromise
decree was passed. S. 52 in clear terms speaks of the rights of the
parties to the suit or proceeding. In this connection it may be noted
that this Court in the case of Jayaram Mudaliar (supra) held at
p. 153 as follows:-
B
"It is evident that the doctrine, as stated in section 52,
applies not merely to actual transfers of rights which are
subject-matter of litigation but to other dealings with it by any
party to the suit or proceeding, so as to affect the right of any
other party thereto. Hence it could be urged that Where it is
not a party to the litigation but an outside agency such as c
the tax collecting authorities of the Government, which proceeds
against the subject-matter of litigation, without anything
done by a litigating party, the resulting transaction will
not be hit by section 52. Again, where all the parties
which could be affected by a pending litigation are them-
selves parties to a transfer or dealings with property in D
such a way that they cannot resile from or disown the trans-
action impugned before the Court dealing with the litigation the
Court may bind them to their own acts. All these are matters
which the Court could have properly considered. The pur-
pose of Section 52 of the Transfer of Property Act is not to
defeat any just and equitable claim but only to subject them to E
the authority of the Court which is dealing with the property to
which claims are put forward."

The auction -purchaser derives his right to obtain possession only
after the sale in his favour has become absolute and sale certi-
ficate has been obtained by him. The mode and manner of obtaining F
such possession are regulated by rr. 95 and 96 of the Code of Civil
Procedure. It is of interest to note that in the instant case, the
auction purchaser had applied for obtaining possession under r. 95
which provides for actual possession and also under r. 96 which pro-
·v vides for symbolic possession. We have earlier set out the provisions
of these two rules. In the facts and circumstances of this case, the G
auction purchaser, in view of the provisions contained in rule 95
which regulates the rights of the auction purchaser to obtain physi-
cal possession of the property purchased, is not entitled to recover
the physical possession of the portions in the occupation of the
appellants as tenants. The appellants are not the judgment-debtors. H
They are not in occupation of the property on behalf of the judg-
menHlebtor. They are aleo not <1laimln: to be in occupation under
194 SUPREME COURT REPORTS (1981) 3 S.C.R.

A a title created by the judgment-debtor subsequently to any attach-
ment of the property. There has been no question of any attachment
in the instant case. The appellants are in the occupation of the respec-
tive portions as tenants and they claim to occupy the same as such.
The question of validity or otherwise of the tenancy may have to be
considered and determined in an appropriate proceeding. In the
B present proceeding, the auction-purchaser who is an outsider and was
not a party to the suit resulting in the compromise decree in execution
of which the property was put up for sale, is not entitled to recover
physical possession from the appellants in view of the provisions con-
tained in 0. XXI, rule 95, and the au<'tion-purchaser must be held to
be entitled to symbolic possession in terms of the provisions contain-
c ed in O.XXI, rule 96 in respect of the portions in occupation of the
appellants.

We, accordingly, allow this appeal. We set aside the judgment
and order passed by the High Court directing physical possession of
the portions in the occupation of the appellants to be made over to
D the auction-purchaser Gian Chand Jain, We direct that symbolic
possession of the portions in occupation of the appellants is to be
made over to the auction-purchaser Gian Chand Jain. In the facts
and circumstances of this case, we make no order as to costs.

N.V.K. Appeal allowed.

)