SAMUVAL CHEERAN v. PALLIKKOTTU VAYALIL KRISHNAN

Case Details & Bench

Court: High Court of Kerala
Hon'ble Judges: P.BHAVADASAN
Judgment Date: 2011-06-10
Court Decision / Holding: The second appeal is devoid of any merits and it is accordingly dismissed. The cross objection filed in this case is found to be without any merits and it is accordingly dismissed.
Final Disposition: Dismissed

Parties to the Case

Appellants / Petitioners

SAMUVAL CHEERAN

Respondents

PALLIKKOTTU VAYALIL KRISHNAN

Legal Representation & Advocates

Counsels for Petitioners

• SRI.T.R.RAVI
• SRI.P.S.MURALI

Counsels for Respondents

• SRI.M.C.SEN
• SRI.M.P.SREEKRISHNAN
• SMT.SHAHNA KARTHIKEYAN
• SMT.SAVITHA GANAPATHIYATAN

Case Synopsis & Summary

The core issue in this second appeal is whether Ext. A1, dated 01.10.1980, is to be construed as a mortgage or a lease. The trial court interpreted Ext. A1 strictly by its wording and came to a finding of mortgage. The first appellate court, however, re-evaluated the document in its entirety, considering the recitals, the conduct of the parties, and surrounding circumstances, and held that the transaction was a lease disguised as a mortgage. The suit was dismissed by the trial court and again by the appellate court, prompting this second appeal. The questions of law framed ask whether extraneous aids may be used to ascertain the true intention of the parties when the document’s terms appear clear, and whether one may consider the legal effect of the words even when read by a reasonable person. Counsel for the appellant argued that unambiguous terms require no resort to external evidence, relying on Gilbert v. Vivekanandan; counsel for the respondent contended that the lower appellate court was correct to consider recitals and conduct, which corroborate a lease. The High Court, after reviewing the record, agrees that the lower appellate court’s approach is plausible and ultimately dismisses the second appeal and cross-objection. The judgment underscores that a lease can be disguised as a mortgage and must be read in context with the document and surrounding facts.

Submissions & Arguments

Contentions of Appellants / Petitioners

The appellant's counsel contends that where Ext.A1’s terms are clear and unambiguous, there is no necessity to look beyond the document to ascertain the conduct and intention of the parties. reliance was placed on Gilbert v. Vivekanandan (1988(1) KLT 50). They point out that the parties reduced the transaction to writing and are bound by its terms; there is nothing suspicious in the document, so extraneous considerations should not be entertained.

Contentions of Respondents

The respondent’s counsel argues that the lower appellate court correctly examined the document in its proper perspective, considering recitals, conduct, and surrounding circumstances. They contend that Ext.A1 shows a lease, not a mortgage, and that the high value of the property, periodic rent, security, and timing of redemption collectively support a lease. The court’s findings are plausible and supported by the record, and no substantial questions of law arise.

Cited Precedents (1)

Case Name	Citation	Treatment	Explanation
Gilbert v. Vivekanandan	1988(1) KLT 50	Mentioned Only	Cited by counsel in argument; no explicit treatment or binding effect given in this judgment.

Extracted Judgment Text

Exact text extracted from official judgment records.

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** **PRESENT :** **THE HONOURABLE MR. JUSTICE P.BHAVADASAN** **FRIDAY, THE 10TH JUNE 2011 / 20TH JYAISHTA 1933** **SA.No. 885 of 2000(E) & CROSS OBJECTION** **----------------------------------------------------------------** **AS.217/1997 OF II ADDITIONAL DISTRICT COURT, KOZHIKODE OS.364/1993 OF II ADDITIONAL SUB COURT, KOZHIKODE** **....................** ## **APPELLANT/RESPONDENT/PLAINTIFF:** **----------------------------------------------------------** **SAMUVAL CHEERAN, S/O.PAUL CHEERAN, M.P.C. HOUSE, NEAR B.E.M.U.P. SCHOOL, CALICUT-21.** **BY ADV. SRI.T.R.RAVI, SRI.P.S.MURALI.** ## **RESPONDENT/APPELLANT/DEFENDANT:** **------------------------------------------------------------** **PALLIKKOTTU VAYALIL KRISHNAN, S/O.CHATHUKUTTY, HERO METTAL INDUSTRIALS, NEAR B.E.M.U.P. SCHOOL, PUTHIYANGADI, CALICUT-21.** **BY SRI.M.C.SEN, SENIOR ADVOCATE, ADV. SRI.M.P.SREEKRISHNAN, SMT.SHAHNA KARTHIKEYAN, SMT.SAVITHA GANAPATHIYATAN.** **THIS SECOND APPEAL HAVING BEEN FINALLY HEARD ON 10/06/2011,THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **rs** ## **SA.No. 885 of 2000(E)** **ORDER ON C.M.P. NOS.2441/2001 & 2442/2001 IN S.A. NO.885/2000** ## **DISMISSED** **10/06/2011. SD/- P.BHAVADASAN, JUDGE //TRUE COPY//** **P.A. TO JUDGE** **rs** ## **P.BHAVADASAN, J.** ------------------------------------SA No.885 of 2000-E & Cross Objection ------------------------------------Dated this the 10[th] day of June 2011 ## Judgment The short question that arises for consideration in this second appeal is whether Ext.A1 document dated 01.10.1980 is a mortgage or a lease. The trial court, on an interpretation of the document, held it to be a mortgage. The lower appellate court, on the other hand, considered the recitals in the documents, the conduct of the parties and held that it is a lease though styled as a mortgage. Holding so, the suit was dismissed. Hence the second appeal. 2. Notice is seen issued on the following questions of law raised in the second appeal : 1.In the face of the clear and unambiguous recitals n Exts.A1, whether the court below was justified in resorting to extraneous aids to determine what the parties really intended. SA 885/00 2 - 2.Whether the court below is justified in not looking into what is the legal effect of the words if a reasonable man reading Ext.A1 would understand them to mean while interpreting Ext.A1. 3. Mr.T.R.Ravi learned counsel appearing for the appellant very vehemently pointed out that when the terms of the document were unambiguous and clear, there was no necessity to go behind the document to ascertain the conduct and intention of the parties to interpret the document. Reliance was placed on the decision reported in _**Gilbert v. Vivekanandan**_ (1988(1) KLT 50), which has been referred to by the trial court. The learned counsel went on to point out that the parties were aware of the transaction entered into it by them and they knew the consequences thereof. They chose to reduce it into writing and so, they are bound by the terms of it. It was unnecessary thereafter, especially when there was nothing suspicious in the document as the terms were clear and unambiguous. There was no necessity to consider the SA 885/00 3 other aspects to reach the conclusion as to whether the transaction was a mortgage or lease. The learned counsel went on to point out that the interference made by the lower appellate court was quite uncalled for. 4. Per contra, the learned counsel for the respondent pointed out that the lower appellate court has considered the material documents in the proper perspective and has found that the terms of the document spell out a lease rather than a mortgage. It was thereafter that the court went into the conduct of the parties and held that it further fortifies the conclusion that the transaction is a lease and not a mortgage. At any rate, according to the learned counsel, the view taken by the lower appellate court is a plausible view and if that be so, no interference is called for in the second appeal. 5. It is true that quite often, a lease is disguised as a mortgage. One has to read the document as a whole and come to a conclusion as to what is the transaction and what is the intention of the parties. Going by Ext.A1, it can SA 885/00 4 be seen that the property involved is a building, with books and implements therein and the extent of property is only one cent. Even going by the version given by PW1, the value of the property was Rs.10,000/- in 1980 and it was mortgaged for Rs.1,000/-. According to the defendant, he was paying a monthly rent of Rs.250/- and the mortgage was for a period of two years. 6. The trial court strictly went by the wording of the document and came to the conclusion that in the light of the fact that the terms of the document spell out a mortgage, one need not go further into the conduct and circumstances of the case. But the approach of the trial court does not appear to be correct. When the document is read as a whole, the high value of the property, the monthly payment, security amount, the purpose for which the loan was taken – all these aspects, as rightly noticed by the lower appellate court are to be considered. In the case on hand, the loan amount compared to the value of the property, payment of monthly rent, restrictions against SA 885/00 5 transfer, the fact that even after the mortgage amount was wiped off, the delay in seeking redemption, are all stipulations and conditions which militate against a mortgage. They are more in consonance with a lease. 7. The lower appellate court has considered the various aspects of the case and has come to the conclusion that it is a lease and not a mortgage. It could not be said that the findings of the lower appellate court are either perverse or unwarranted by the evidence on record. The result is that no substantial questions of law arise for consideration in this second appeal. The second appeal is devoid of any merits and it is accordingly dismissed. The cross objection filed in this case is found to be without any merits and it is accordingly dismissed. ## **P.Bhavadasan, Judge** sta SA 885/00 6 SA 885/00 7