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Shankar Sakharam Kenjale (D) by LRs. v. Narayan Krishna Gade & Anr.

Civil Appeal · 2020 INSC 338Decided 17 Apr 2020
Civil Appeal No. 4594 of 2010
Justice Mohan M. Shantanagoudar · Justice R. Subhash Reddy

Background

A piece of hereditary "watan" land in Maharashtra was leased to a permanent tenant, who in 1947 mortgaged it to raise money, handing over possession to the mortgagee. After a 1950 law abolished watans and resumed such lands to the Government, the original tenant never applied to get the land "re-granted" back to him, but the mortgagee did, and received the re-grant in 1960 in his own name. The tenant's heirs then sued to redeem (reclaim) the mortgaged land, which the trial court and first appellate court rejected, but the High Court ruled in their favour, prompting the mortgagee's heirs to appeal to the Supreme Court.

Decision Breakdown

The Supreme Court held that the tenant's rights survived the abolition law because his tenancy was protected by specific saving provisions, so the mortgage relationship never actually ended. Since the mortgagee could only have obtained the re-grant because he happened to be in possession of the land as mortgagee, the Court applied Section 90 of the Indian Trusts Act, 1882: a person who gains an advantage only because of a position of trust (like a mortgagee in possession) must hold that advantage for the true owner's benefit. Relying on its own earlier precedents on nearly identical facts, the Court ruled that the benefit of the re-grant belonged to the tenant-mortgagor, not the mortgagee, and upheld the High Court's decision allowing redemption. The appeal was dismissed.

Lesson Learnt

If you hold someone else's property only because of a special position of trust (such as being a mortgagee in possession), any extra benefit or right you manage to secure over that property, even an official government grant, legally belongs to the original owner, not to you personally.

Official source (sci.gov.in)View Judgment (PDF)

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