License and Mortgage – 3

Lease or Mortgage

A case involved the question whether the transaction involved was a mortgage or lease. The document showed that there was, already a building in the property which was given as possessory mortgage and it also stated that if the amount is not given it will be treated as charge on the property of the mortgagor and the mortgagee was also made liable for committing any waste in the property. It was held that it was a mortgage and not a lease because mere payment of amount does not make the document a lease if it is otherwise a mortgage.

There is no automatic merger of two rights where mortgage is executed in favor of tenant and on redemption of mortgage, the tenancy rights kept in abeyance would revive and entitle the tenant to continue in possession even after the redemption of mortgage. On execution of mortgage, tenancy rights would terminate only if it is clear expressly or impliedly by conduct or from other related circumstances that the parties had intended so which would be a question of fact. Thus, as a normal rule, except where there is contrary intention, mortgage and lease operate independent of each other and on mortgage coming to an end by redemption, tenancy would revive.

Doctrine of Escheat

Where ownership of suit land originally belonged to a and B who left village in 1953-54 and since then both plaintiff and defendant came forward with plea of ownership, the plaintiff advanced plea of oral sale claiming that he had purchased the suit land from owners but there was no evidence to prove that there was any consideration paid or possession delivered and the defendant also tried to assert his right over the suit land, it was held that neither of them had any right over the same and on the basis of the doctrine of escheat it can be safely concluded that the suit land will vest in the state.

Distinction between Composite Tenancy and Integrated Tenancy for Dual Purposes

In case of composite tenancy, the premises are let out for defined purposes more than one, leaving the option open to the tenant to use the entire tenancy premises as one unit for either or both purposes. The tenancy premises are not demarcated separately into two words, in case of tenancy for composite purposes the two diverse purposes for user of the premises are demarcated or divided by reference to the purpose for which they will be separately used

Sale or Mortgage by Lessee

In review of the spiritual services rendered to him, the original owner of land made a gift or grant by way of dohli. The court observed that under no circumstances was dohlidar authorized to sell or mortgage the dohli land to third parties. Intention of the owner was against alienation by dholidar by sale or mortgage. It was held therefore that for lease entered into by dholidar for 95 years by accepting the entire lease money amounted to in –permissible permanent alienation. It being a breach of covenants of dohli by the successors in interest of the dohlidar, it was voidable at the hands of dohli owners.

Registrations not necessary

A lease involves transfer of an interest in some specific immovable property. It requires registration. In the present case the document between the parties defined and described the terms of the parties. The court found it to be not a lease deed. It was held that registration of such an agreement of tenancy was not necessary.

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