The main legal principle established is that the purpose of the transfer, in part or whole, should be for the enjoyment of the land, rather than solely for securing a loan, to determine whether a transaction is a lease or a mortgage.

1. A tenant so I have eventually found him to be, in this appeal seeks to resist the execution of a decree for redemption of a mortgage, and in so doing, has raised the ancient and never finally resolved question of how to tell a mortgage from a lease. The clarification by judges of the juridical ideas behind the two does not yet serve to give us simple litmus tests by which a given transaction may be said to be this or that. The legislature, by insensible degrees and sometimes by revolutionary leaps, has endeavoured to give protection to tenants and in that process has brought in categories otherwise understood to be mortgages for classification as tenancies. The same legislature, in its compassion towards debtors, has attempted to save mortgagors in their unfortunate lot as debtors and allowed them to redeem their property on concessional terms from creditors figuring as mortgagees. This cross-ruff has produced provisions of law of which S.2 (22) of The Kerala Land Reforms Act, 1963 (Act 1 of 1964) and S.5 of The Kerala Agriculturists Debt Relief Act, 1958 (Act 31 of 1958) are excellent examples. Quite often, as in the case of Ext. P1 in this appeal, the transaction partakes of the character of a lease and of a mortgage and Courts, confronted with these mongrel deeds, have attempted to separate the ingredients and sometimes heir-split, with the result that the observations made by Ghosh several decades ago hold good even today. The learned author states:

On the question whether a transaction amounts to a mere lease or a mortgage, or whether it partakes of the character of both, a crowd of cases has accumulated in the law reports which would require a catalogue as long as that in the second book of the Illiad, and I may add without offence, as dry as Homer's list. But I confess I have not been able to unearth any definite rules from the mass of case law in which the question is buried." (Law of Mortgages in India pages 134135, 3rd edn.)

Even Full Bench rulings have attempted to simplify the law and to produce clear tests but the difficulty still persists. The traditional way to tackle the question is to itemise the features pro and con and find out the resultant force, whether in favour of a mortgage or of a lease. Let us proceed that way. The document describes the transaction as otti, which bespeaks a mortgage, with an implied right of sale and therefore goes against the transaction being treated as a lease. The other features are evident from the following extracts from Ext. P1:

The property, a waste land 6 acres in extent, was transferred in 1080, on Otti. The recitals, not with standing the label, eloquently testify to the transaction being a tenancy, in large part or predominantly. For, the primary purpose of the transaction is to make over possession of a waste land to another for the purpose of making improvements, after protecting the holding with stone-walls, he is asked to take the income, plant it with coconut trees, jack-trees and other like trees, presumably fruit-bearing trees; and construct a homestead. He is to pay a small rent after adjusting the interest of the ottiyartham There is the further provision that at the expiry of the 12 years (which is the customary period in a lease and may not be incompatible, I must say, with a mortgage) either a renewal or surrender of possession is to follow. The object, as I understand it, was to enable a cultivator to get into possession of a waste land and to enjoy it by planting it up and making a homestead there for himself and continue, after the customary period of 12 years, by getting renewals thereof. It is true that there is an advance of Rs. 125/-and the transaction styles itself an Otti. But it is difficult to say that it is a borrowing and not an advance being received by the landlord. It is equally difficult to say that the name of the deed is fatal to its complexion as a lease. However in the light of the fairly elaborate arguments advanced, it is on