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1974 Supreme(Ker) 151

Judges : P.GOVINDA NAIR.,V.P.GOPALAN NAMBIYAR,V.BALAKRISHNA ERADI,M.U.ISAAC,G.BALAGANGADHARAN NAIR
VELAYUDHAN VIVEKANANDAN - Appellant
Versus
AYYAPPAN SADASIVAN - Respondent
Case No : A. S. No. 25 of 1971
Decided On : 09/27/1974
Advocates Appeared :
K. Sreedharan; For Appellant K. Velayudhan Nair; V. S. Moothathu; K. J. Joseph; N. R. K. Nair; For Respondents

Headnote:

Whether Ext. P5 described as an 'Ottikuzhikanam' is a redeemable mortgage or a lease.

Fact of the Case:

The trial court held that it was a mortgage and granted a decree for redemption of plaint item No. 1. In appeal filed by the 2nd defendant, the lower appellate court held that the plaintiff had not established his tile to the property and so the decision of the trial court was reversed and the suit was dismissed.

Finding of the Court:

The transaction evidenced by Ext. P5 can be termed to be a composite transaction in which the elements of a lease and those of a mortgage are present.

Issues: Whether the transaction evidenced by Ext. P5 was a mortgage or a lease.

Ratio Decidendi: The correct approach is to take the terms of the document into consideration paying due heed to the label used, and ascertain from them whether the transaction is essentially a loan or a lease, in other words, whether the transfer is essentially for the purpose of security or for the purpose of enjoyment.

Final Decision: I therefore, with due respect, find it difficult to agree with the learned judge in his view in the judgment under appeal that the defendant is a tenant coming under the main part of the definition 'tenant' in S.2 (57) of the Act. I hold that Ext. P5 evidences a redeemable mortgage. Accordingly I set aside the judgments of the lower appellate court as well as of this Court in S.A. No. 348 of 1968 and restore that of the trial court.

Judgment :-

1. The question is whether Ext. P5 described as an'Ottikuzhikanam' is a redeemable mortgage or a lease. The trial court held that it was a mortgage and granted a decree for redemption of plaint item No. 1. In appeal filed by the 2nd defendant, the lower appellate court held that the plaintiff had not established his tile to the property and so the decision of the trial court was reversed and the suit was dismissed. The appellate court did not find on the question whether Ext. P5 was a mortgage or a lease. In the second appeal which was heard by a learned single judge of this Court, title was found in favour of the plaintiff but the suit was dismissed on the ground that the transaction evidenced by Ext. P5 was a lease. Leave for appeal was granted by the judge and when the appeal by the plaintiff came up before a Division Bench, the correctness of the view taken by the learned single judge that the payment of land revenue may well be treated as "other consideration" within the meaning of that term in S.2 (57) of the Kerala Land Reforms Act, 1963, for short, the Act, was doubted in view of the decision of the Supreme Court in Kunhamina Umma v. Paru Amma 1971 KLT 163 and it was further felt that the decision in Rev. Fr. Victor Fernandez v. Albert Fernandez 1971 KLT 216 required reconsideration. The case was therefore directed to be placed before a Full Bench of five judges.

2. It is necessary to read the whole of the document Ext. P5. I shall extract the document in an appendix to this judgment.

3. Reliance on the provision in the document for payment of Sirkar-tax for holding that there was "other consideration" to satisfy S.2 (57) of the Act, by the learned single judge, cannot be sustained in view of the pronouncement of the Supreme Court in Kunhamina Umma v. Paru Amma 1971 KLT 163.

4. The Full Bench decision in Rev. Fr. Victor Fernandez v. Albert Fernandez 1971 KLT 216 also, I think with great respect, has not been correctly decided. The document that was considered therein was styled as 'Ottikuzhikanam" and the operative part of the document was to the effect.

The Full Bench observed that

"The words, in the operative portion of the document would put it beyond any doubt that the property was given for enjoyment."

S. 2 (39A) of the Act defines "Ottikuzhikanam" and I shall read that section:

"'Ottikuzhikanam' means a transfer for consideration by a person to another of any land other than nilam for the enjoyment of that land and for the purpose of making improvements thereon, but shall not include a mortgage within the meaning of the Transfer of Property Act, 1882."

5. If the transaction is a mortgage within the meaning of the Transfer of Property Act, it will not be an 'Ottikuzhikanam' as defined in the section. There can of course be a combination of a mortgage and a lease in that the elements of both may be present in a transaction. In most cases transactions styled as 'Ottikuzhikanam' would at least be an anomalous mortgage as defined in S.58 (g) of the Transfer of Property Act from the usual terms embodied in such documents. If there is a lease element also present and the transfer is for the dual purposes of security and enjoyment, the further question whether the transferee would be a tenant under S.2 (57) of the Act can arise and when that question arises it will have to be resolved on the basis of the principles which, I think, are fairly well settled by the decisions in Hussain Thangal v. Ali 1961 KLT 1033 and in Krishnan Nair v. Sivaraman Nambudiri 1967 KLT 78. I am unable to agree, with respect, that the expression 'Ottikuzhikanam', whether it was used as the appellation given to the document, or when employed in the operative portion of the document as in Hanbpw IpgnimWhpsamsi FgpXnX¶v. can be conclusive in determining the nature of the transaction. I would therefore overrule the decision in Rev. Fr. Victor Fernandez v. Albert Fernandez 1971 KLT 216.

6. The transaction evidenced by Ext. P5 can be termed to be a
























































































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