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2000 Supreme(SC) 336

2000(1) Supreme 475
SUPREME COURT OF INDIA
(From Kerala High Court)
K.T. Thomas, D.P. Wadhwa, & S.S. Mohammad Quadri, JJ.
Narayanaru Thrivikranaru -Appellant
versus
V. Madhavan Potty & Ors. -Respondents
Civil Appeal No. 5392 of 1997
Decided on 10-2-2000
Counsel for the Parties :
For the Appellant : R. Sundarvaradan, C. Sitaramaiah and C.S. Vaidyanathan, Sr. Advocates, K.R. Nambiar, Shivam, B.K. Yadav, K.V. Mohan, K.N. Tripathy, Advocates.
For the Respondent No. 1 : P. Krishnamurthi, P.S. Poti, Sr. Advocates, Ms. Malini Poduval, Ramesh Babu and Ms. Lan Singh Rongmir, Advocates.
For the Respondent Nos. 3-4 : K. Sukumaran, Sr. Advocate, Ms. Karthika S., Ms. Baby Krishnan, Advocates.

IMPORTANT POINTS
1. Section 12 of the Kerala Land Reforms Act does not permit the Court to supersede the findings made by the Court to the effect that the earlier lease came to an end with the execution of the transaction which purports to be a mortgage.
2. Ottikuzhikanam which amounts to mortgage within meaning of the Transfer of Property Act is specifically excluded from the ambit of definition of Section 2(39A) of the Kerala Land Reforms Act and as such a Ottikuzhikanamdar is not a tenant within meaning of Section 2(57).

Headnote:(i) Code of Civil Procedure, 1908 -Section 47-Objection to execution of decree-Decree in redemption suit rejecting defence that defendant was lessee-During execution proceedings judgment debtors claim that he continued to be a lessee-Rejection by executing Court-High Court holding judgment debtor to be a lessee and mortgage deed did not terminate relationship of lessor and lessee -Held : High Court s finding untenable-Issue stood settled finally in appeal-High Court s judgment set aside. (Para 8)

       (ii) Kerala Land Reforms Act, 1969-Section 12(1)-Mortgage or lease-Interested persons right to prove real nature of transaction-Scope of right-Section 12 does not permit Court to supersede findings made by Court to the effect that earlier lease came to an end with execution of transaction which purports to be a mortgagee.

       Section 12(1) enables any person interested in the land to prove that a transaction purporting to be a mortgage is, in substance, a transaction by way of lease. The non-obstante limb of the Section insulates a transaction which purports to be a mortgage, from any other law or judgment or decree. What is saved thereby is "the transaction purporting to be a mortgage." But that saving clause is not a carte blanche for ignoring the transaction altogether. Section 12 of the Act does not permit the Court to supersede the findings made by the Court to the effect that the earlier lease came to an end with the execution of the transaction which purports to be a mortgage. In other words, what Section 12 entitles a person is to prove the real substance of the transaction covered by a document albeit the ostensible tenor of the document. (Para 8)

       Where prior to coming into force of the Kerala Land Reforms Act, in a suit for redemption of mortgage, the Courts rejecting the plea of the defendant that in fact the mortgage deed did not extinguish the pre-existing right of lease decreed suit for redemption but during execution of the decree the defendant again raised the issue that the lease did not come to an end and the High Court in revision against the order of the executing Court held that the lease was not terminated by the mortgage deed, the Supreme Court held that the finding of the High Court could not be salvaged with the aid of Section 12 of the Kerala Land Reforms Act.

       (iii) Kerala Land Reforms Act, 1969-Sections 2(57), 2(39A) r/w Section 12-Tenant-Ottikuzhikanamdar-Lease or mortgage-Determination of-Ottikuzhikanam, on when would amount to lease-Section 2(39A) recognises two types of Ottikuzhikanam-One type would be a mortgage within meaning of Transfer of Property Act-That type of Ottikuzhikanam is excluded from ambit of definition of lease.

       The definition of Section 2(39A) recognises that there are two types of "Ottikuzhikanam". One type would be a mortgage within the meaning of Transfer of Property Act. It is clear that the said type of "Ottikuzhikanam" is specifically excluded from the ambit of the definition. It is the other category of non-mortgage "Ottikuzhikanam" alone has been brought within the purview of the definition. So, even if the nomenclature of the transaction is "Ottikuzhikanam" it should not be a mortgage, if the transaction is to fall within the purview of the definition. (Para 10)

       In the instant case, the respondent was originally a lessee of the land. Subsequently, the land-owner appellant executed a Ottikuzhikanam. There was no stipulation to pay rent to the land-owner. The mortgage was permitted to utilise the property on the strength of the amount secured by the deed.

       Held that the recital in the deed including nomenclature, and the amount of mortgage debt are poignantly in favour of holding the transaction to be a mortgage and not a lessee. (Para 15)

       

JUDGMENT

Thomas, J.-Appellant won the cause at all the tiers in the judicial hierarchy during trial stage but the fruits of the decree which he earned thereby are still eluding him. The decree is practically rendered nonest during execution stage as the High Court upheld the contentions of the contesting respondents in disregard of the contrary findings made during trial stage. The order so passed by a learned single Judge of the High Court of Kerala is now being challenged in this appeal by special leave.

2. Facts, spread over to a wide range of period covering more than half a century by now, can be stated as follows : In 1943 a document (Ex. P1) was executed styling it as "Otti and Kuzhikanam" in favour of the first respondent in respect of the suit properties. In fact those properties were outstanding on lease with the respondent before the execution of Ex. P1. A suit for redemption of mortgage was filed by the appellant, claiming to be entitled to redeem the mortgage, on the premise that Ex.P1 was a usufructuary mortgage. First respondent, after admitting the execution of Ex.P1, contended that it was not meant to terminate the earlier lease arrangement and hence he continued to be a lessee of the property notwithstanding the execution of Ex.P1. The trial Court found that first respondent was in possession of the land as mortgagee and not as lessee. On the strength of such a finding the trial Court passed a decree for redemption of the mortgage on condition that the mortgage amount and value of the improvements effected by the first respondent on the property should be paid to him.

3. First respondent filed a regular appeal against the said judgment before the sub-Court and that Court upheld the decree passed by the trial Court. He then filed a second appeal before the High Court of Kerala. As per the judgment dated 12.1.1967 the High Court dismissed the second appeal. Thus, the decree for redemption of the mortgage became final.

4. It was in the second round of the litigation, when appellant moved for execution of the decree after depositing the entire amount due thereunder that he had to face harder hurdles. The Kerala Land Reforms Act (for short the Act) came into force in the meanwhile which conferred fixity of tenure on tenants of agricultural lands. First respondent raised a contention, in the execution court, that he is a tenant on the land and is hence entitled to the protection envisaged in the Act. The execution court referred the said question to the Land Tribunal as provided in Section 125(3) of the Act for a decision on the aforesaid claim of the first respondent. The Land Tribunal answered the reference against the first respondent and forwarded the records of the case back to the execution court. On the strength of the finding so recorded by the Land Tribunal the execution court directed delivery of the suit property to be given to the appellant as per its order dated 30.11.1995.

5. First respondent filed a revision before the High Court challenging the said order of the executing court. The revision was allowed by the High Court as per order dated 12.1.1996 rendered by a learned single judge who set aside the order of the execution court, which is being challenged now.

6. We heard the arguments of Mr. C.S. Vaidyanathan, Senior Advocate for the appellant and Mr. P. Krishnamurthy, Senior Advocate for the first respondent. Another written submission has been put in by the advocate on behalf of respondent Nos. 3 and 4, though they did not contest the case at any earlier stage. All of them were duly considered by us.

7. Learned single judge, in the impugned order, held that the earlier lease (which existed prior to Ex. P1) in favour of the first respondent did not come to an end despite execution of Ex. P1. The following are the main reasoning adopted by the learned single Judge :

"There is nothing on record to show they they had agreed to surrender tenancy right on the execution of the mortgage deed. Lease was a va















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