P L D 1976 Lahore 187 (PLP)

The appellant mortgaged with possession two shops in question situated at Faith Sher Road Mozang, Lahore on 31-3-1961 with the respondent for a consideration of Rs. 5,

000. Rs. 3,500 was received by the appellant at the time when the mortgage-deed was executed while the remaining amount of Rs. 1,500 was received by him on 12-4-1961 when the mortgage-deed (Exh. P. 1) was registered. According to the mortgage-deed, possession of the property was handed over to the respondent through rent note which admittedly was never executed between the parties. It was also stipulated that payment of rent would amount to payment of amount of interest. However, the amount of interest to be paid by the appellant in lieu of the mortgage was not mentioned in the mortgage-deed itself. The mortgage-deed further, stipulated that the appellant would be responsible for the payment of mortgage amount personally as well as the same would be liable to be realised from his other property.

2. Another document, Exh. P. 2, was executed by the appellant in favour of the respondent on 14-12-1962 acknowledging that property in question was on rent with him from the date of the registration of the mortgage-deed at monthly rent of Rs.75 which he had been paying regularly. It means that as soon as the mortgage-deed became effective after having been registered on 12-4-1961 the appellant according to oral agreement between the parties agreed to pay Rs. 75 as rent/interest to the respondent is lieu of the mortgage amount.

3. According to the respondent the possession of the property was delivered to him on 31-3-1961 when the mortgage deed was executed and the shops were thereafter leased out to the appellant after the registration of the mortgage-deed dated 12-4-1961 who occupied them as tenant under the respondent and agreed to pay Rs. 75 as monthly rent of the same. Since the appellant, according to the respondent did not pay rent after January 1963, therefore, ejectment application was filed against him on the ground of default in the payment of rent. The appellant in his written statement denied the relationship of landlord and tenant between the parties. According to him Rs. 75 per month was paid by him as interest in lieu of the mortgage amount and not as rent for the property in question. The learned Controller framed the necessary issues with regard to relationship of landlord and tenant between the parties and after having recorded the evidence decided the case in favour of the respondent holding that since the appellant had acknowledged himself, vide rent note dated 14-12-1962 (Exh. P. 2) to be tenant under the respondent in the property in question, therefore, he could not deny the title of the respondent as his landlord. He further held that possession of the property was delivered to the respondent on 31-3-1961 when the mortgage -deed was executed and the same was again occupied by the appellant on 12-4-1961 when the mortgage-deed was registered. He however did not advert to the fact that the possession was to be delivered by the appellant after the execution of the rent note in favour of the respondent, according to the mortgage-deed itself, as mentioned above. He in this regard mainly relied upon the statement of P. W. I that physical possession of both the shops was taken over by the respondent on the date when the mortgage deed was executed and it remained with him till the date of the registration, when it was delievered to the appellant as tenant. The order of the learned Controller was upheld in appeal by the learned Additional District Judge, Lahore, by his judgment dated 17-1-1968.

4. The main question to be determined in this case is as to whether there is relationship of landlord and tenant between the parties on the basis of the mortgage-deed Exh. P. 1 as "Yaddasht Zabani Kerayanama" dated 14-12-1962 (Exh. P. 2). The definitions of the terms `landlord' and `tenant' as given in section 2(c), (i) of the West Pakistan Urban Rent Restriction Ordinance, 1959 contemplate, landlord to whom any amount is payable as rent and a tenant by whom any amount is payable as rent. In the present case amount of interest to be paid by the appellant in lieu of mortgage amount was not mentioned in the mortgage-deed. However, the facts of the case as discussed above. show, particularly in view of the document Exh. P. 2, that the amount of rent. to be paid by the appellant was agreed to be Rs. 75 per month from the date when the mortgage-deed was registered. There is no doubt that the appellant had acknowledged himself to be tenant under the respondent in the said document and has also admitted that he has been paying Rs. 75 per. month as rent to him. However, the fact remains that the agreement between the parties to pay amount of Rs. 75 by the respondent as rent was simultaneous with the registration of mortgage. deed on 12-4-1961. The mortgage-deed, according to law was to take effect after its registration, and that is why it was agreed that the amount of Rs. 75 would be liable to be paid from the date of the registration of the document. The recital in the mortgage-deed to the effect that possession of the property has been delivered to the respondent through rent note clearly means that such possession was to be delivered by the execution of the rent note and not otherwise and it is not denied by the respondent that no rent note whatsoever was executed at the time of the writing of the mortgage-deed or at the time when the mortgage-deed was registered. It clearly means and the circumstances of the case also show like that, that the physical possession of the property remained with the appellant. This aspect of the case has not been discussed by any of the courts below. The statement of P. W.

1. Mr. Abdur Rashid relied upon by the Controller as well as the lower appellate Court pales into insignificance in view of the recital in the mortgage-deed, as referred to above. According to law where the lease-deed is executed simultaneously with the mortgage deed, it in fact provides a machinery under which the mortgagee receives interest on the principal amount advanced as rent to the mortgager. Reliance in this respect can be placed upon Samander Ahan v. Mst. Maqlbool and others 1974 S C M R 388 Mst. Maqbool and others v. Samandar Khan P L D 1969 Pesh. 216, Muhammad Abdullah v. Abdul Jabbar P L D 1967 Lah. 1000. In the present case as discussed above, the payment of Rs. 75 as rent was agreed to be made by the appellant with effect from 12-4-1961 when the mortgage-deed was registered. As such the lease agreement was simultaneous with the execution of the mortgage deed. It has been vehemently argued on behalf of the respondent that since the mortgage-deed was actually executed on 31-3-1961 and the lease agreement though oral was made on 12-4-1961; therefore, the same cannot be held to have been entered into simultaneously with the execution of the mortgage-deed. I am afraid this contention has no force in the circumstances of the case. As mentioned above the mortgage deed was to take effect from the date of its registration which was admittedly 12-4-1961. The lease agreement was also made on the same date stipulating that Rs. 75 would be paid by him every month in lieu of the payment of the amount advanced by the respondent. In this view of the matter the lease agreement merely provides machinery for realization of interest due on mortgage. As the amount agreed to pay as rent was in fact payable as interest for the amount advanced it was not the rent for use of the property in question. It has been argued that since the parties agreed that the amount of Rs. 75 would be payable as rent therefore, it was not possible for the appellant to take different stand. This contention has no force as the real intention of the parties in this behalf has to be looked into.

5. As held above since the property was leased out without the delivery of the physical possession to the respondent, therefore, the mortgage as well as the lease agreement would be deemed to be a single transaction and in such case the real intention of the parties was that amount of Rs. 75 per mensum was paid as interest on the mortgage amount.

6. It has been argued by the learned counsel for the respondent that since the mortgage in question is usufructuary mortgage, therefore, under the law the mortgagee has a right to receive the rent and profits accruing from the property in lieu of interest or in payment of the mortgage money or partly in payment of the mortgage amount. There is no dispute with regard to this principle of law as put forth by the learned counsel, but in the case of usufructuary mortgage there is no right for the mortgagee to sell the property or to enforce the liability under the mortgage against the mortgagor personally. In the present case, as mentioned above the mortgage deed in question stipulates that the respondent would be entitled to recover the amount of mortgage plus dues thereon from the appellant personally a well as from the sale of the other property belonging to him. This very stipulation cannot make the mortgage a usufructuary one. The mortgage in question maybe covered by the provision as contained by clause (f ) of section 58 of the Transfer of Property Act, being a combination of simple mortgage and a usufructuary mortgagee. In such a mortgage the mortgagee may sue for sale of' the property but in usufructuary mortgage be cannot do so.

6. Since the amount of Rs. 75 was payable as interest by the appellant and not as rent, therefore, question of relationship of landlord and tenant between the parties, does not arise. As such the ejectment application being) not maintainable is liable to be rejected and the same is hereby rejected.

7. For the aforesaid reasons, the learned judgment of both the courts below are hereby set aside and the appeal is accepted with costs. S. Q. Appeal accepted.