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1977 DIGILAW 218 (KER)

Divakara Panicker v. Mohammed

1977-08-09

T.CHANDRASEKHARA MENON

body1977
JUDGMENT Chandrasekhara Menon, J. 1. The suit is for redemption of two items of properties one shown as A Schedule and the other B Schedule. The properties originally belonged to one Kavukutty Amma. In respect of A Schedule property as per Ext. P1 dated 18th Makaram 1122 it was mortgaged to one Vikari Hidrose for a sum of Rs. 588; the total extent of the property is 42 cents. The execute is to remain in possession of the property, pay the tax due to the state and appropriate the residual income in lieu of interest on the mortgage amount after paying the mortgagor an annual residual rent of 5 paras of paddy and 7 annas subject to the obligation to surrender possession of the property on receipt of the mortgage amount whenever demanded after the expiration of two years. 8 annas out of the rent is to be paid during Onam time. There was a puravaippa also executed in respect of the property on 22nd Midhunam 1123, which is marked as Ext. P2 in the case. As per this document the mortgagee is to appropriate the entire income in lieu of interest on the mortgage amount and the mortgagor had to personally give to the mortgagee an additional interest of 2 paras of paddy. 2. In respect of B Schedule property Kavukutty Amma had mortgaged the same in favour of one Kadar Pillai for Rs. 154 on 25th November 1950 as per Ext. P3. As per this mortgage the mortgagee is to remain in possession of the property paying the tax due to the state and after appropriating the income in lieu of interest on the mortgage amount he is to hand over to the mortgagor annually by way of residual rent 4 paras of paddy with obligation to surrender possession of the property on receipt of the mortgage amount whenever demanded by the mortgagor. There was a further mortgage in respect of the same for a sum of Rs. 100 on 6th April 1953. Since the execution of this mortgage, the mortgagee, was to appropriate the residual rent payable by him as per the earlier document in lieu of interest upon the further amount advanced so much since that date he was not liable to pay any rent at all to the mortgagor. 3. 100 on 6th April 1953. Since the execution of this mortgage, the mortgagee, was to appropriate the residual rent payable by him as per the earlier document in lieu of interest upon the further amount advanced so much since that date he was not liable to pay any rent at all to the mortgagor. 3. The equity of redemption in respect of the two properties were purchased by the plaintiff from Kavukutty Amma as per assignment deed Ext. P5 in 1965. The mortgage right in respect of both the items was purchased by the defendant, who then came into possession of the property as per assignment deeds Ext. D3 and D4 Ext. D3 in respect of the plaint A Schedule and D4 in respect of B Schedule; they are dated 12th January 1955 and 16th January 1955 respectively. The plaintiff filed suit for redemption and recovery of possession of both the items on payment of the amounts due as per the aforementioned two mortgages and Puravaippas, with mesne profits from the date of deposit of the redemption price at the rate of 100 paras of paddy and Rs. 150 per annum. 4. The suit was resisted by the respondent contending that the transactions sought to be redeemed are really in the nature of tenancies, and not pure mortgages and that the respondent was not entitled to claim fixity of tenure under Act I of 1964 in respect of both the items. I need not go into the other contentions raised by the defendant in this appeal as such. 5. The Trial Court held that both the documents create only a debtor creditor relationship and no question of any tenancy arises in respect of both the properties. The suit was decreed subject to the condition that the plaintiff can claim mesne profits to be decided at the time of execution after the plaintiff deposits the redemption price; the quantum of mesne profits to be decided at the time of execution after the plaintiff deposits the redemption price. In appeal, the learned Additional District Judge of Parur while upholding the Munsiff's decision in respect of B Schedule item held that as regards A Schedule item document Ext. In appeal, the learned Additional District Judge of Parur while upholding the Munsiff's decision in respect of B Schedule item held that as regards A Schedule item document Ext. P1 really created a transaction of lease, and in regard to that the defendant was held entitled to claim fixity of tenure under the Kerala Land Reforms Act and the plaintiff was held entitled to recover only the michavaram due subject to the provisions of the Act. The plaintiff has hence come in appeal. 6. The defendant has taken up the matter by way of cross objections, where he contends that Ext. P3 really evidences a lease transaction. 7. The question to be considered in this appeal and cross appeal is whether the two documents Exts. P1 and P3 create lease transactions or mortgages, What the learned District Judge has said is that prior to Ext. P1 there was a mortgage for an amount of Rs. 92 in respect of the property which is adverted to in Ext. P1 There the mortgagee is made answerable for 22 paras of paddy for michavaram. The prior mortgage is marked as Ext. D1 which is dated 4th Chingam 1120. In Ext. D1 reference is made to a previous transaction of the year 1110 which was terminated along with the execution of Ext. D1. The learned District Judge, therefore, points out that Ext. P1 did not come into existence for the first time on its date but the property was all along outstanding with the third parties at least from 1110. He further points out that the michavaram of 22 paras of paddy payable by the mortgagee under Ext. D1 has a high ratio with respect to the amount advanced. According to him Ext. P1 is really a renewal of the earlier transaction by taking an additional advance. He further points out that in Ext. P1 itself an amount of 8 annas its made payable for Onam, and then pointing out the decision in 1973 KLT 772 , the learned Judge comes to the conclusion that Ext. P1 is a lease. In 1973 KLT 772 it had been said that where a transaction exhibits the characteristics of both lease and mortgage that would be a composite transaction and if that is the case, so long as the elements of both lease and mortgage are present, the document has to be construed as a lease. 8. P1 is a lease. In 1973 KLT 772 it had been said that where a transaction exhibits the characteristics of both lease and mortgage that would be a composite transaction and if that is the case, so long as the elements of both lease and mortgage are present, the document has to be construed as a lease. 8. I do not think that I should go into the question here whether in the transactions in this case the elements of both lease and mortgage are present. I need only state that the decision in 1973 KLT 772 and the earlier decision of Justice Raman Nayar on the point had been explained by a Full Bench of this Court. As far as the present document Ext. P1 is concerned, I feel no doubt that it really creates a creditor debtor relationship. The property has been given possession of by way of security only. The learned Munsiff has considered the question, according to me, from the correct stand point. What he states is: "The consideration in all these documents is seen to have been advanced by the transferee to the transferor for discharge of the latter's debts and it is significant that even for the residual rent or michavaram payable to the transferor, no charge is created over the interest of the transferee in the property, though care has been taken to provide for a charge on the property for the amount advanced by the transferee. There is also no provision in the document directing the transferee to improve the property in any manner whatsoever. The provision for payment of the residual rent cannot in any way detract from the transaction being a purely usufructuary mortgage, for, it has been observed by our High Court even in Krishnan Nair v. Sivaraman Namboodiri ( 1967 KLT 78 ) that a periodical payment by the transferee to the transferor which is an essential incident of a kanom is by no means uncommon in a possessory mortgage. The true differences between a kanom and a possessory mortgage was stated there to be that while a kanom is a transfer for enjoyment of the property transferred, a mortgage is a transfer for securing money advanced by way of loan. The mortgages evidenced both by Ext. P1 as well as by Ext. The true differences between a kanom and a possessory mortgage was stated there to be that while a kanom is a transfer for enjoyment of the property transferred, a mortgage is a transfer for securing money advanced by way of loan. The mortgages evidenced both by Ext. P1 as well as by Ext. P3, it has to be remembered in this context, are followed each by a puravaippa evidenced by Exts. P2 and P4 evidencing a further advance of loan by the transferee in each case. Under the terms of Ext. P2 since the execution of the said document, the transferee not only need not pay any michavaram to the transferor; but is even entitled to realise personally from the transferor something by way of additional interest to make up the full interest payable to him on the total amount advanced. As per the terms of Ext. P4. he is of course not entitled to claim any additional interest through his obligation to pay any michavaram since the date of execution of the said document has been terminated. It is also significant that under Exts. D3 and D4 which come into existence only in 1965 after the advent of Act I of 1964, the present defendant has evidently taken an assignment of what is expressly described therein only as a mortgage right with an obligation to hold the plaint schedule items subject to the terms of the aforesaid documents." 9. I have rather taken the pains of quoting in extense what the learned Munsiff has said, since it appears to me that he has considered the question in all its details in the proper perspective. The learned District Judge was clearly in error in going into the nature of the document Ext. D1. It has to be noted that as per the deed Ext. P1 the relationship as per Ext. D1 is of the year 1120 and taking into account the period one cannot easily proceed on the basis that the amount advanced is only little. Sri P. N. Sankaranarayanan Pillai, learned counsel for the respondent, laid stress on the definition of the term 'tenant', by which word, the said definition includes a kanamdar also. 'Kanam' has been defined in clause 2(22) of the Kerala Land Reforms Act. Sri P. N. Sankaranarayanan Pillai, learned counsel for the respondent, laid stress on the definition of the term 'tenant', by which word, the said definition includes a kanamdar also. 'Kanam' has been defined in clause 2(22) of the Kerala Land Reforms Act. He also referred in this context the Full Bench decision of this Court in Krishnan Nair v. Sivaraman Namboodiri 1967 KLT 78 where Chief Justice Raman Nayar speaking for the Full Bench pointed out: "It might well be asked why, if the first essential of a kanam is a transfer for enjoyment, and that would straightaway, without anything more, make a kanamdar a tenant within the body of the definition in S.2(57), the Act should go to the trouble of giving such an elaborate definition of, 'Kanam' with its non essential incidents, non essential, that is, for making a tenant of the transferee. And since the Act does not appear to treat a kanam tenant differently from other tenants it might be said that the only purpose served is the entirely gratuitous purpose of including a kanamdar within the inclusive portion of the definition of, 'tenant'. The answer, if I may venture one, seems to be this: If the purpose of a transfer is notediscernible, but otherwise the transfer satisfied the definition of both a kanam and a mortgage, then it may be presumed that the purpose is enjoyment and that the transfer is a kanam and 'therefore a tenancy. But if the transfer does not satisfy the definition of, 'kanam' then it may be presumed that the purpose was to secure a loan and that the transfer is a mortgage and not a tenancy. In other words, if a transaction clearly satisfies the definition of, 'kanam' in all other respects and the only element remaining positively to be established is the essential element of the transfer being for the purpose enjoyment, then, unless the contrary is shown, that element must also be regarded as satisfied and the transferred held to be a kanam." According to me on the basis of this decision; even assuming that there is in the transfer an element of lease also one should look on the whole transaction to come to a conclusion whether it is really a security or lease. As the Munsiff has correctly pointed out it is difficult to escape from the conclusion that on a reading of the document as a whole it evidences a, mortgage and not a lease In the light of the above, I have no hesitation in setting aside the judgment and decree of the learned Additional District Judge and upholding that of the Munsiff. As regards the Cross Appeal, I see no reason to differ from the views of the courts below regarding Ext. P3. In fact the quotation that I have earlier made from the learned Munsiff's Judgment relates to Ext. P3 as well. I, therefore, allow this S.A., setting aside the judgment and decree of the learned District Judge and restoring that of the learned Munsiff and dismiss the memorandum of cross objections. The parties shall suffer their costs. If there had been failure to deposit the redemption price due to the pendency of the appeal, the plaintiff shall deposit the same within one month from to day.