Decided on June 19,1967

Executive Officer, Anjumurthy Devaswom Respondents


T.C. Raghavan, J. - (1.) IN these second appeals the question to be decided is the same; and that is whether Ex. B -l of June 1923 was a mortgage or a tease. The Subordinate Judge held that the transaction was a kanom, while the District Judge after extracting long passages from as many as ten judgments of this Court which account for about two -thirds of his fairly long judgment and after summarizing the provisions of the documents hold that the transaction was a mortgage observing that applying the principles laid down in the decisions cited above I hold that Ex B -l evidences a relationship of a debtor and creditor and not that of a landlord and tenant" without indicating how each of the quoted passages applied to the cases before him. It is the correctness of this decision that has to be considered in these second appeals. The only guiding rule in deciding such questions is the one laid down by the Supreme Court in Ramdhan Puri v Bankey Bihari ( : A.I.R. 1958 S.C. 941) that the intention of the parties must be looked into and that once a debt with the security of land for its repayment was found, then the arrangement was a mortgage by whatever name it was called. In several decisions of this Court the question had been considered; and ultimately, the matter was considered by a Full Bench of this Court to which I was also a party in Krishnan Nair v Sivaraman Nambudiri ( : 1967 K.L.J. 84:1967 K.L.T. 78). The several recitals and circumstances that usually arise for consideration in such documents have been considered in the said Full Bench decision. I shall now consider the recitals and the circumstances of the cases to find out the intention of the parties to the document in the light of the said Full Bench decision.
(2.) THE suit properties belonged to a devaswom; and the same were outstanding on mortgages with one of the ooralan's of the devaswom. The devaswom filed suits for redemption and obtained decrees; and thereafter to deposit the redemption price the devaswom borrowed amounts from a Ravuthan and put him in possession of the properties under an agreement. (The said agreement however has not been produced.) Ultimately, Ex. B -l was executed stating that the document incorporated the agreement already existing between the parties. Ravuthan's rights under Ex. B -l were subsequently brought to sale by the devaswom in a suit for arrears of michavaram and the said rights were purchased under Ex. B -2 by the appellant before me, so that the holding by the appellant is under the terms and conditions contained in Ex. B -l. The transaction is called karipanayam; and Ex. B -l is the counter -part executed by Ravuthan, the original having been executed by the devaswom. Several recitals are pointed out by Mr. M.K. Narayana Menon, the counsel of the appellant, which, he claims, support his contention that the transaction was a lease. The counsel points out that it is not usual to have a counter -part if the transaction was intended to be a mortgage. The other circumstances pointed out are that the parties have called the transaction charthu; that the annual income of the properties is termed pattom; that out of the 1750 paras of paddy fixed as the annual pattom, after deducting the interest on the mortgage money and the revenue of the properties, the michavaram payable is 615 paras of paddy and 3 edangalies of gingili oil and neivilakku panam of 2 fanoms; that the gingili oil and neivilakku panam are called parambu pattom; that the michavaram is to be measured to the pattapara before 30th Makaram every year; that there is a term of 12 years; that the transferee had to meet the expenses of surrender after the term; and that the arrears of michavaram bore interest at 2 per 10 for paddy and 12 per cent for money which are the usual rates for arrears of rent. On the other side, Mr. K. Kuttikrishna Menon, the counsel of the devaswom, points out the following recitals, which, the counsel claims, support the case of the devaswom that the transaction was a mortgage. The counsel points out that the amount for which the document was executed was fairly high (Rs. 5,540/ -); that the amount was taken to discharge the decree debts payable to the ooralan, against whom decrees for redemption were obtained; that the transaction was called by the parties karipanayam in several places of the document; that after the term of 12 years the transferee has also the right to claim the amount advanced by him; and that even when the right was brought to sale for the realization of the decree against Ravuthan the right was called a mortgage and it was that that was purchased under Ex. B -2.
(3.) AS already stated at the commencement of this judgment, the intention of the parties to the transaction should be gathered from the recitals in the document and the circumstances so as to see whether they intended the transfer of the properties as security for the money advanced or whether the transfer was intended for the enjoyment of the transferee. In these cases there are some provisions, which might at the first flush indicate that the money was taken as a loan and the transaction was intended to secure the loan. The amount, as I have already pointed out, is fairly high; but that should not be given undue importance. In the Full Bench decision referred to already it is observed that raising money to the hilt need not necessarily be a borrowing to the hilt -for example, there can be a lease for a premium which amounts very nearly to the value of the property - so that & high ratio home by the consideration advanced to the value of the property is not so strong a circumstance in favor of a mortgage as a low ratio is in favor of a lease. Mr. M.K. Narayana Menon points out in this connection that there is no indication at all that there was pressure from the mortgagee, the ooralan, which necessitated the filing of the suits for redemption. The counsel suggests that the idea of the devaswom might have been to recover possession of the properties front the ooralan and lease them out to another at a higher rent so as to augment the income of the devaswom Obviously this suggestion has force, because the suits were by the devaswom for redemption and not by the mortgagee for the mortgage money. Again, some of the provisions pointed out by Mr. Kuttkikrishna Menon might indicate that the transaction was intended to secure the money advanced and to that extent the transaction was intended to be a mortgage. Here also I would point out the observation of the Full Bench at the close of paragraph 6 of the judgment that the question would not be whether the transaction was predominantly a lease or predominantly a mortgage, but whether it was a lease at all. Therefore, if there is an element of lease in the transaction, though there are other indications that the transaction might have been intended to be a mortgage, the transaction should be construed only as a lease.;

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