R.S.A.No.1033 of 2015 (Velliyeli Ravi and others vs Karippakudiyil K.P.George and others)

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR.JUSTICE P.G. AJITHKUMAR WEDNESDAY, THE 2[ND] DAY OF AUGUST 2023 / 11TH SRAVANA, 1945 R.S.A.NO. 1033 OF 2015** **AGAINST THE JUDGMENT DATED 06.07.2015 IN A.S.NO.20 OF 2009 OF THE SUB COURT, SULTHAN BATHERY AGAINST THE JUDGMENT DATED 29.06.2009 IN O.S.NO.293 OF 2007 OF THE MUNSIFF'S COURT, SULTHAN BATHERY APPELLANTS/APPELLANT/DEFENDANT AND SUPPLEMENTAL APPELLANTS:** - **1 VELLIYELI RAVI (DIED)* AGED 70 YEARS, S/O KARUPPAN, VALLIYALI HOSUE, PURAKKADI AMSOM DESOM, MEENANGADI VIA, WAYANAD DISTRICT. SUPPLEMENTAL APPELLANTS*** - **2 VASANTHA N.C., AGED 62 YEARS W/O.RAVEENDRAN, AGED 62 YEARS,** - **3 SINDHU P., AGED 44 YEARS D/O.RAVEENDRAN, AGED 44 YEARS,** - **4 SIJI P.R., AGED 42 YEARS D/O.RAVEENDRAN, AGED 42 YEARS,** - **5 SEEMA P., AGED 41 YEARS D/O.RAVEENDRAN, AGED 41 YEARS,** **(ALL ARE RESIDING AT PALLIYERI HOUSE, VATTATHUVAYAL, POST MEENANGADI, WAYANAD DISTRICT.)** 2 **R.S.A.No.1033 of 2015** ***THE LEGAL HEIRS OF DECEASED SOLE APPELLANT ARE IMPLEADED AS SUPPLEMENTAL APPELLANTS 2 TO 5 AS PER ORDER DATED 23.01.2019 IN IA.1/2019. BY ADV SRI.K.A.SALIL NARAYANAN** **RESPONDENTS/RESPONDENTS/PLAINTIFF AND SUPPLEMENTAL RESPONDENTS:** - **1 KARIPPAKUDIYIL K.P.GEORGE, S/O PAILY MEETHALURKUNNU, PURAKKADI AMSOM DESOM, SULTHANBATHERY TALUK, WAYANAD DISTRICT (EXPIRED).** - **2 SOSAMMA** - **W/O KARIPAKUDIYIL GEORGE, KARIPAKUDIYIL VEEDU, P.O.MEENANGADI, SULTHANBATHERY-673592.** - **3 SHIBU K.G. S/O LATE GOERGE, KARIPAKUDIYIL VEEDU, P.O. MEENANGADI, SULTHANBATHERY-673592.** - **4 JESSY D/O LATE GOERGE, KARIPAKUDIYIL VEEDU, P.O. MEENANGADI, SULTHANBATHERY-673592.** - **5 BEENA D/O LATE GOERGE, KARIPAKUDIYIL VEEDU, P.O. MEENANGADI, SULTHANBATHERY-673592.** - **6 SHABU S/O LATE GOERGE, KARIPAKUDIYIL VEEDU, P.O. MEENANGADI, SULTHANBATHERY-673592.** **R2 TO R6 BY ADVS.** **SRI.BALAKRISHNA IYER S.V. (SR.) SRI.P.B.KRISHNAN SRI.P.M.NEELAKANDAN SRI.P.B.SUBRAMANYAN SRI.SABU GEORGE SRI.MANU VYASAN PETER SRI.S.NITHIN (ANCHAL)** **THIS REGULAR SECOND APPEAL HAVING COME UP FOR FINAL HEARING ON 21.07.2023, THE COURT ON 02.08.2023 DELIVERED THE FOLLOWING:** 3 **R.S.A.No.1033 of 2015** ## **P.G. AJITHKUMAR, J.** **-----------------------------------------------------------** **R.S.A.No.1033 of 2015** **----------------------------------------------------------Dated this the 2[nd] day of August, 2023** ## **JUDGMENT** The defendant in O.S.No.293 of 2007 before the Munsiff’s Court, Sulthan Bathery is the appellant. That suit was filed seeking a decree of redemption. The suit was decreed as per the judgment dated 29.06.2009. In the appeal, A.S.No.20 of 2009, the Sub Court, Sulthan Bathery confirmed the judgment and decree of the trial court. Challenging the same, this appeal is filed under Section 100, read with Order XLI, Rule 1 of the Code of Civil Procedure, 1908. 2. During the pendency of the appeal, the original plaintiff expired and respondents 2 to 5, who are the legal representatives, were brought on record. 3. Heard the learned counsel appearing for the appellant and also the learned Senior Counsel appearing, on instructions, for the respondents. 4 **R.S.A.No.1033 of 2015** 4. Essentially, two questions require consideration in the second appeal, which are, (i) to what extent can an appellate court exercise its jurisdiction to receive additional evidence and (ii) what are the essential differences between a mortgage and a lease, and applying that test, can the transaction created in terms of Ext.A1 be termed as a lease. 5. The basic facts constituting the cause of action for the suit are not in dispute. Respondents are the owners of the plaint schedule shop room. Possession of the said shop room was entrusted to the appellant on 31.12.1979 by executing Ext.A1 document. Ever thereafter the appellant has been in possession and enjoyment of the said shop room and making monthly payments as stipulated in the said document. At the time of entrustment, the appellant made a payment of Rs.5,000/- to the plaintiff. Ext.A1 is styled as a mortgage deed. It is a registered document. Monthly payment insisted in Ext.A1 is described as share of profits and the remainder of the profits was agreed to be appropriated by the appellant. There is stipulation in Ext.A1 entitling the landlord to claim 5 **R.S.A.No.1033 of 2015** redemption on making payment of the amount he received. Similarly, the appellant was enabled to claim back Rs.5,000/-, which he had paid at the time of entrustment and on the failure to return, he can realise the same charging upon the plaint schedule shop room. 6. Before the trial court, the original plaintiff gave evidence as PW1. The appellant gave evidence as DW1. He had examined DW2 with a view to prove the transaction as per Ext.A1 is not a mortgage, but a lease. Exts.A1 to A5 are the documents received in evidence. The trial court, after considering the said evidence unhesitatingly took the view that the relationship created by Ext.A1 was a mortgage and the suit having been brought within the period of limitation, the respondents were entitled to get a decree of redemption. 7. Before the first appellate court, the appellant produced a few documents along with an application under Order XLI, Rule 27 of the Code. The appellate court did not accept those documents. Documents produced are rent receipts issued by the original plaintiff and certified copy of a 6 **R.S.A.No.1033 of 2015** judgment and decree in O.S.No.127 of 2008 of the Munsiff’s, Court, Sulthan Bathery. The appellant contended before the lower appellate court that he, despite due diligence, could not trace the rent receipts and therefore he could not produce them before the learned Munsiff. As regards the judgment and decree in O.S.No.127 of 2008, the appellant contended that the same had come to his knowledge only subsequently and in that judgment the same Munsiff held that a similarly worded document executed by the plaintiff himself is lease. The lower appellate court, however, did not accept those documents in evidence. The principles laid down by the Apex Court in **Malayalam Plantations Ltd. v. State of Kerala and another [(2010) 13 SCC 487]** was relied on in order to reject the said documents. The lower appellate court took the view that the attempt of the appellant was to fill up lacuna by producing the additional evidence. It was observed that in the light of oral testimony of DW1, the appellant, availability of the 'rent receipts' he produced as additional evidence were in his possession even before the trial of the suit was evident 7 ## **R.S.A.No.1033 of 2015** and hence the said documents could not be received in evidence. 8. As per the provisions in Order XLI, Rule 27 of the Code, the appellate court can receive additional evidence if the party producing the document could not produce the same despite exercising due diligence before the trial court or if the appellate court finds that reception of such additional evidence would enable the court to pronounce an appropriate judgment or even on satisfying that there was substantial cause for receiving such evidence. The rent receipts produced by the appellant carry the endorsement that the appellant used to make monthly payment to the respondents as rent. The appellant does not have a contention that such payments are not in terms of Ext.A1. Only fact which can be proved by receiving the said ‘rent receipts’ is that the amount which has been paying to the respondents was described as rent. When the sum of monthly payments and also such payments were strictly in terms of Ext.A1 are not in dispute, description of the payment as ‘rent’ in the receipts sought to be received in 8 ## **R.S.A.No.1033 of 2015** evidence by the appellant, does not improve his case much. From the very beginning his case is that he has been occupying the shop room as a tenant and the payment he has been making is rent. To a certain extent the respondent admitted also that the monthly payments were described as ‘rent’. Simply because the payments were described as ‘rent’ that would not change the character of the relationship in regard to the entrustment of the shop room. The question whether the transaction is a mortgage or a lease has to be decided not on the basis of description of monthly payments, but can only be on the basis of the facts and circumstances by giving prominence to the recitals in Ext.A1. In such circumstances, I am of the view that rejection of ‘rent receipts’ produced by the appellant before the lower appellate court cannot be said to be incorrect. 9. The judgment and decree in O.S.No.127 of 2008 were produced in order to substantiate that the same Munsiff took the view that the transaction which is constituted by a document of similar recitals is a lease. The view taken by the 9 ## **R.S.A.No.1033 of 2015** Munsiff in another case does not bind the court. The decision rendered O.S.No.127 of 2008 is on the basis of the evidence and circumstances brought on record in that case. The view taken by the Munsiff in that judgment is not binding or even relevant for deciding the suit on hand. Therefore, the judgment and decree in O.S.No.127 of 2008 by the appellate cannot be said to be incorrect. 10. The nature of transaction created as per Ext.A1 is narrated in paragraph No.5. The question whether the said transaction is a mortgage or a lease has to be considered in the light of the law on the point. The Apex Court in **Kaveripatnam Subbaraya Setty Annaiah Setty Charities Trust v. S.K.Viswanatha Setty [(2004) 8 SCC 717]** held as follows:- “12. The guidelines for deciding whether a transaction is a lease or a mortgage contemplate that the name given to the document is not conclusive. The question has to be decided with reference to the predominant intention of the parties as gathered from the recitals and the terms of the documents and the surrounding circumstances 10 **R.S.A.No.1033 of 2015** including conduct of the parties. In the case of a mortgage, there is a transfer of interest to secure repayment of debt and in the case of a lease, there is a transfer of a right to enjoy the property. (See Mulla: Transfer of Property Act, 9[th] Edn., p. 621.) In the case of Puzhakkal Kuttappu v. C. Bhargavil [(1977) 1 SCC 17] it has been observed that the nomenclature given to a document by the writer or even by the parties is not always conclusive. In construing a document, it is necessary to find out the intention of the parties executing such document. Such intention has to be gathered from the recital, the terms in the document and from surrounding circumstances. When there is a document of a composite character disclosing features of mortgage and lease, the court will have to find out the predominant intention of the parties executing the document viewed from the essential aspect of the reality of the transaction. In that case, it was further observed that mortgages are not always simple, English, usufructuary as defined in the TP Act. They may be anomalous. Even so, the essential feature of a mortgage, which is not there in a lease, is that the property transferred is a security for repayment of a debt in a mortgage whereas in a lease, it is transfer of a right to enjoy the property.” 11 **R.S.A.No.1033 of 2015** ## 11. In **Pathumma Hajumma v. Kalliani and others** ## **[1973 KLT 772]** , this Court held that,- “3. xx xx xx May be that in a particular case both these intentions may be discerned in the transfer. The transferor may intend to transfer the property for enjoyment and the transferee may take with that intention. It may also be that at the same time transferor may want to raise some money on the security of the property and therefore normally what we would apply as a test to find out whether it is a mortgage, if applied, would indicate that there are elements of mortgage also in the transaction. It is not possible in such a case to say that the transaction is a mortgage though a debtor creditor relationship is intended to be created. Though the document is executed also with a view to raise funds, if at the same time there is an idea that there should be a transfer for enjoyment, the document has the characteristics of both mortgage and lease. It is not unusual to see cases where properties have all along been enjoyed by lessees and such lessees are approached by the lessors for further advances for the purpose of discharge of their debts. In such cases even if the lessee takes an usufructuary mortgage of the same property it may not always be that the transferor intends to change the tenure in regard to the property; it may not be that he may want the tenant to hold under another 12 **R.S.A.No.1033 of 2015** relationship, but at the same time he may want to raise money for meeting his commitments and in such cases it is easy to find an intention to create a debtor creditor relationship as well as intention to transfer property for enjoyment. It may appropriately be asked in these cases whether the transaction is a lease or mortgage if one was to raise money to pay off debts that may be satisfied.” 12. This Court reiterated the aforesaid principles in **Velayudhan Padmanabhan v. Thyagaraj [2011 (3) KLT 867]** . A similarly worded document came up for consdieration of this Court in R.S.A.No.298 of 2015 [ **Joseph v. A.R.Manmadhan** ]. A learned Single Judge of this Court took the view that the relationship is one of mortgage. The learned Single Judge placed reliance on **P.S.Ramakrishna Reddy v. M.K.Bhagyalakshmi and another [(2007) 10 SCC 231], Tharachand v. Sagarbai [(2007) 5 SCC 392], Hatika v/s Padmanabhan [AIR 1994 Ker 411], Narayani Amma v. Narayanan Namboothiri [1985 KLJ 49]** and **Muslim Educational Society v. Pariyayi [1986 KLT 1165]** to arrive at the conclusion that the transaction is a mortgage. 13 **R.S.A.No.1033 of 2015** 13. In the light of the law laid down in the aforesaid decisions, the transaction created as per Ext.A1 can be termed only as a mortgage and not a lease. It follows that the concurrent finding rendered by the trial court and the first appellate court in the said regard does not suffer from any infirmity. The appeal therefore fails and the same is dismissed. The period to surrender vacant possession of the plaint schedule shop room on receiving redemption price shall be three months from today. Sd/- ## **P.G. AJITHKUMAR, JUDGE** dkr