The distinction between a lease and a mortgage lies in the purpose of the transfer of property. The real nature of the transaction depends on the purpose of the transfer of possessions. Possession of property can only be for its enjoyment. If it is for enjoyment simpliciter the transfer is a lease. If it is for enjoyment for appropriation of profits, wholly or in part, in lieu of interest or in payment of the principal of a loan advanced it is a usufructuary mortgage.

1. This appeal is in a suit to redeem a puisne mortgage, the kachit (counter-deed) whereof is Ext. A I dated 22nd July 1931, executed by the 1st defendant in favour of the plaintiff. The 1st defendant died pending the suit and is represented by defendants 2 to 4, defendants 2 and 3 being his sons, and defendant 4 the wife of defendant 2. The 5th defendant is his mother-in-law. By the written statement filed on 14th October 1950 the 1st defendant claimed immunity from eviction as a tenant under Ext. A I which he allowed to be a lease in substance, and in any view as holder of a kudiyiruppu on the suit property entitled and willing to purchase the rights of the landlord therein. That contention is continued by his legal representatives. The Courts below concurrently found the transaction under Ext. A I to be a mortgage and therefore redeemable. The Munsif held the defendants to be kudiyiruppu holders and therefore tenants entitled to immunity from eviction, and dismissed the suit; but on appeal by plaintiff, the Subordinate Judge held the defendants not to be kudiyiruppu holders entitled to fixity of tenure and decreed redemption on payment of Rs. 200/-as the mortgage amount and Rs. 8859.76 as value of improvements. Defendants 2 to 5 have come up in second appeal

2. The first question raised is whether the transaction under Ext. A 1 is a lease or a usufructuary mortgage. The document reads:

3. As ruled by a Full Bench of this Court in Krishnan Nair v. Sivaraman Nambudiri 1967 KLT. 78 FB. as also by the Supreme Court in Lakshmi v-Narayani 1967 KLT.1 SC. the distinction between a lease and a mortgage lies in the purpose of the transfer of property: a lease is for the purpose of enjoyment of the property and a mortgage is for the purpose of securing a loan. The property here is a small bit of building Site, about 18 odd cents in extent. The recitals in Ext. A 1 are clear that the purpose of the transfer is not cultivation of the land or even residence thereon, and Ext. A-2, the book of accounts of the plaintiff, shows that the purpose of execution of Ext. A 1 was to raise funds to be remitted to a Bank towards interest on a pronote executed in its favour by the plaintiff. Ext. A 1 spells a usufructuary mortgage.

4. Counsel for appellant relied on the dicta in Krishnan Nair v. Sivaraman Nambudiri 1967 KLT. 78 FB. to support his contention that the instant transaction is in substance a lease and not a mortgage. The test of "the ratio which the amount periodically payable to the transferor bears to the rental value of the property, a higher ratio being indicative of a lea se and a lower of a mortgage" cannot help the appellants as such ratio in the instant transaction is very low, being less than 6 in 40 (to be exact Rs. 5 As. 10 in Rs. 40).

5. Counsel urged alternatively that. Ext. A 1 embodies a composite transaction of a mortgage-cum-lease attracting the ratio of para 6 of the Full Bench judgment, which runs thus:

"Moreover, as in the instance noticed in the order dated 8-11-1963 staying the hearing of S. A. No. 88 of 1963 under S.5 of Act 7 of 1963, a transaction can be a composite transaction embodying both a mortgage and a lease. If it is at least in part a lease no matter how small a part, the person holding under it would be a tenant entitled to fixity under S.13 so that redemption of the part which is a mortgage, no matter how predominant a part, would not entitle the mortgagor to obtain possession which is what a plaintiff suing for redemption normally wants. Therefore, the proper question to be asked in such cases is whether the transaction is, to any extent, a lease."

The argument is that insofaras the instant transaction stipulates payment of a residual rent of Rs. 5 As. 10 per annum it partakes the nature of a lease and therefore comes within the dictum quoted above. As the exact import of that dictum appeared to me a bit baffling, particularly as to the meaning of the expression "a composite transaction embodying