VELAYUDHAN PADMANABHAN v. K. THYAGARAJAN and Others

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE K.T.SANKARAN WEDNESDAY, THE 16TH MARCH 2011 / 25TH PHALGUNA 1932 ## **SA.No. 596 of 1993** AS.NO.377/1987 OF II ADDL. DISTRICT COURT, TRIVANDRUM O.S.NO.682/81 OF THE I ADDL.MUNSIFF'S COURT, TRIVANDRUM. ## **APPELLANT:** RESPONDENT: 1ST DEFENDANT: VELAYUDHAN PADMANABHAN, T.C.NO.40/1008, VILAYIL VEEDU, PUTHENKOTTA, IRANIMUTTAM VILLAGE, THIRUVANANTHAPURAM. BY ADV. SRI.G.P.SHINOD ## **RESPONDENTS:** APPELLANTS & 2ND RESPONDENT: ## PLAINTIFFS & 2ND DEFENDANT: 1. K.THYAGARAJAN, ARTIST, RESIDING AT T.C.10/1005, VILAYIL VEEDU, KURIYATHI PUTHENCOTTA, IRANIMUTTOM VILLAGE, THIRUVANANTHAPURAM. (DIED - LRS IMPLEADED) 2. K.KRISHNANKUTTY, CARPENTER, -DO- -DO- 3. K.RAMACHANDRAN, ARTIST OF -DO- -DO- 4. K.SHANMUGHAM, ARTIST OF -DO- -DO- 5. V.USHAKUMARI, T.C.40/006, KURIATHY, PUTHENCOTTA, IRANIMUTTAM VILLAGE, THIRUVANANTHAPURAM. - ADDL.6. DEVAMMAL, W/O.K.THYAGARAJAN, T.C.10/1005, VILAYIL VEEDU, KURIYATTI, PUTHENCOTTA, IRANIMUTTOM VILLAGE, THIRUVANANTHAPURAM. 7. SARITHA, D/O.K.THYAGARAJAN, T.C.10/1005, VILAYIL VEEDU, KURIYATTI, PUTHENCOTTA, IRANIMUTTOM VILLAGE, THIRUVANANTHAPURAM. 8. SAJITHA, D/O.K.THYAGARAJAN, T.C.10/1005, VILAYIL VEEDU, KURIYATTI, PUTHENCOTTA, IRANIMUTTOM VILLAGE, THIRUVANANTHAPURAM. 9. SANGEETHA, D/O.K.THYAGARAJAN, T.C.10/1005, VILAYIL VEEDU, KURIYATTI, PUTHENCOTTA, IRANIMUTTOM VILLAGE, THIRUVANANTHAPURAM. LEGAL REPRESENTATIVES OF DECEASED FIRST RESPONDENT ARE IMPLEADED AS ADDITIONAL RESPONDENTS 6 TO 9 AS PER ORDER DATED 16.3.2011 IN I.A.NO.2341/2010. BY ADV. SRI.P.S.RAMESH KUMAR THIS SECOND APPEAL HAVING BEEN FINALLY HEARD ON 16/03/2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ## **K.T.SANKARAN, J.** ## **--------------------------------------------------S.A. NO. 596 OF 1993 D --------------------------------------------------Dated this the 16[th] day of March, 2011** ## **JUDGMENT** The first defendant in a suit for redemption of mortgage, filed by respondents 1 to 4 herein, is the appellant. The suit was dismissed by the trial court. The Appellate Court reversed the judgment and decree of the trial court and the suit was decreed. 2. The plaint schedule property originally belonged to Narayanan Asari Krishnan Asari. He died in 1947. His rights devolved on his children Kolappan Asari and Sivasubramonian Asari. Both of them passed away before 1956. The plaintiffs are the children of Kolappan Asari. The second defendant is the daughter of Sivasubramonian Asari. In 1952, Kolappan Asari and Sivasubramonian Asari executed Ext.A1 ottikuzhikanam deed in favour of the first defendant for `500/-. Ext.A1 property consists of ten cents of land excluding six jack trees and a mango tree, which were retained in the possession of the mortgagors. The land was put in the possession of the mortgagee. The period stipulated in ## S.A. NO.596 OF 1993 :: 2 :: Ext.A1 was eight years. According to the plaintiffs, Ext.A1 is a possessory mortgage. Since the daughter of Sivasubramonian Asari (one of the co-mortgagors) was not willing to join as a plaintiff, she was arrayed as the second defendant. The plaintiffs contended that themselves and the second defendant are entitled to the equity of redemption. 3. The first defendant contended in his written statement that after the execution of Ext.A1, the mortgagee was put in possession of the trees as well, on receipt of `100/- by the mortgagors. Thus the total consideration for the mortgage was `600/-. The plaintiffs have no right to redeem. The first defendant contended that he constructed a building in the plaint schedule property spending `5,000/- and planted mango trees and coconut trees in the property. Value of improvements was also claimed. The first defendant also claimed kudikidappu rights. According to the first defendant, Ext.A1 amounts to a lease and the property was demised as per Ext.A1 for enjoyment of the property by the first defendant. The first defendant claimed fixity of tenure under the Kerala Land Reforms Act. S.A. NO.596 OF 1993 :: 3 :: 4. The second defendant contended that the suit is bad for non-joinder of necessary parties. The mother of the second defendant is also entitled to the equity of redemption. It was contended by her that the suit was filed as a counter-blast to another suit filed by the second defendant and her mother for redemption of another item of property. 5. The trial court referred the question of tenancy to the Land Tribunal under Section 125(3) of the Kerala Land Reforms Act. The Land Tribunal held, by a cryptic order, that the first defendant is a tenant entitled to fixity of tenure and that Ext.A1 confers the benefit of Section 2(39A) of the Kerala Land Reforms Act on the first defendant. Accepting the finding of the Land Tribunal, the trial court dismissed the suit. The trial court also held that the suit is bad for non-joinder of necessary parties and that the claim of kudikidappu raised by the first defendant does not arise in view of the finding of the Land Tribunal that the first defendant is entitled to fixity of tenure. As regards value of improvements, the trial court held that as the first defendant is entitled to fixity of tenure, he is not entitled to value of improvements. S.A. NO.596 OF 1993 :: 4 :: 6. The Lower Appellate Court held that the Land Tribunal did not properly interpret the terms of Ext.A1. It was held that though Ext.A1 is styled as an ottikuzhikanam, it is clear from the recitals in Ext.A1 that the transaction amounts to a mortgage. As regards the contention that subsequent to Ext.A1, the mortgagee was put in possession of the trees as per a 'Sammathapathram', it was held that any such transaction could be made only by a registered instrument. The 'Sammathapathram' was not produced before the trial court and the first defendant did not adduce any evidence to show that possession of the trees was also given. It was found by the court below that the first defendant did not get any right other than the right created under Ext.A1. The court below also held that the suit is not bad for non-jointer of necessary parties. It was held that since the whole mortgage was sought to be redeemed, there is no bar for the suit instituted by the legal representatives of one of the co-mortgagors. It was also also held by the court below that the first defendant did not adduce any evidence to prove that he effected improvements in the property. S.A. NO.596 OF 1993 :: 5 :: 7. The following substantial questions of law are raised in the Second Appeal: - “A. Is not the finding of the Appellate Court that the first defendant is not a tenant entitled to fixity of tenure under the Kerala Land Reforms Act, 1963, erroneous in law? - Since the plaintiffs do not seek to redeem the suit mortgage on behalf of all the co-mortgagors, is the decree passed by the court below sustainable in law? - C. Did not the court below act contrary to law in finding that the first defendant is not entitled to get value of improvements? - D. Did not the court below err in law in disposing the suit finally instead of remanding the suit for fresh disposal after reversing the finding of the Land Tribunal?” ## 8. **Question A** : The nomenclature of Ext.A1 is ottikuzhikanam. Section 2(39A) of the Kerala Land Reforms Act defines “ottikuzhikanam” thus: “(39A) “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;” S.A. NO.596 OF 1993 :: 6 :: Section 2(57) of the Kerala Land Reforms Act defines the expression 'tenant'. The definition of 'tenant' includes an ottikuzhikanamdar. If a person comes within the definition of 'tenant' under Section 2(57), he shall have fixity of tenure in respect of his holding, as provided in Section 13 of the Act. Going by the definition of 'ottikuzhikanam', the predominant purpose of the transaction should be for enjoyment of the land and for the purpose of making improvements thereon. A mortgage within the meaning of Transfer of Property Act does not come within the definition of 'ottikuzhikanam'. The nomenclature of the document is not always decisive. To ascertain whether the transaction is a mortgage or an 'ottikuzhikanam', the Land Tribunal or the Court, as the case may be, has to consider the recitals in the document and the attendant circumstances to ascertain whether the predominant purpose for which the transaction was entered into was for the enjoyment of the land and for the purpose of making improvements thereon by the transferee. The Land Tribunal/Court has also to consider whether the transaction amounts to a mortgage in order to decide the question whether the transaction amounts to 'ottikuzhikanam'. If the Court finds that the transaction amounts to a mortgage, there is no question of the mortgagee getting the S.A. NO.596 OF 1993 :: 7 :: benefits of Section 2(39A) of the Kerala Land Reforms Act. ## 9. In **Velayudhan Vivekanandan** v. **Ayyappan Sadasivan** (1975 K.L.T.1 (F.B.)), it was held that mere use of the term 'ottikuzhikanan' as appellation to the document or in its operative portion is not conclusive in determining the nature of the transaction and that it would not infallibly indicate a lease. It was further held thus: “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)...” The Full Bench also held that the document must be read as a whole and in its entirety giving due weight to every term in it and the S.A. NO.596 OF 1993 :: 8 :: nomenclature of the document and keeping in mind the surrounding circumstances. If on a reading of a document as a whole, it is evident that there has been a transfer for enjoyment, for rent or other consideration, then the transaction is a lease and no further question would arise. 10. In **Kaveripatnam Subbaraya Setty Annaiah Setty Charities Trust** v. **S.K.Viswanatha Setty** ((2004) 8 SCC 717), the Supreme Court held thus: “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 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.Bhargavi: AIR 1977 SC 105, 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 S.A. NO.596 OF 1993 :: 9 :: predominant intention of the parties executing the document viewed from the essential aspect of the reality of the transaction...” 11. In the light of the principles mentioned above, on a careful consideration of Ext.A1, it is clear that the transaction is a mortgage. The consideration shown in Ext.A1 is `500/-. At the time when the document was executed, the amount of `500/- was not a meagre amount considering the nature and extent of the property. The document also refers to earlier mortgage in favour of others. Certain fruit bearing trees were reserved for the enjoyment of the mortgagors. It cannot be said that Ext.A1 was executed for enjoyment of the property by the first defendant. It would appear that the predominant intention of the parties was to secure repayment of debt and not to make transfer of a right to enjoy the property. I concur with the view taken by the court below that Ext.A1 is a mortgage deed and that the first defendant is not a tenant entitled to fixity of tenure under the Kerala Land Reforms Act. 12. **Question B** :- Learned counsel for the appellant contended that since all the co-mortgagors are not in the party array, the suit is not maintainable. The rights of Sivasubramonian Asari, S.A. NO.596 OF 1993 :: 10 :: one of the co-mortgagors, devolved on the second defendant and her mother. Mother of the second defendant is not a party to the suit. She is also entitled to a fractional share in the equity of redemption. 13. A co-mortgagor is entitled to file a suit for redemption of mortgage. A co-mortgagor who redeems the mortgage would have the same rights as the mortgagee whose mortgage he redeems may have against the mortgagor, in so far as regards redemption, foreclosure or sale of the property, as per Section 92 of the Transfer of Property Act. Such redeeming co-mortgagor gets subrogated to the rights of the mortgagee whose mortgage he redeems. The redemption sought for in the present case is in respect of the whole of the mortgaged property and not the one-half share of the plaintiff. The bar contained in Section 92 of the Transfer of Property Act is that a right of subrogation would not be available to any person unless the mortgage in respect of which the right is claimed has been redeemed in full. Learned counsel for the appellant referred to Rule 1 of Order XXXIV of the Code of Civil Procedure which provides that subject to the provisions of the Code, all persons having an S.A. NO.596 OF 1993 :: 11 :: interest either in the mortgage-security or in the right of redemption shall be joined as parties to any suit relating to the mortgage. The second defendant was impleaded in the suit as representing the estate of Sivasubramonian Asari, who was one of the co-mortgagors. The second defendant sufficiently represents one of the two comortgagors. Therefore, it cannot be said that due to nonimpleadment of one of the legal representatives of a co-mortgagor the suit would not be maintainable. In a suit for redemption filed by one of the co-mortgagors, it is not necessary to decide the inter se dispute among the co-mortgagors. 14. In **Ayyan Govindan and others** v. **Ayyan Kunjan** (AIR 1964 Kerala 309), it was held thus: “Under Sec.91 of the Transfer of Property Act, a co-mortgagor is a person entitled to redeem the mortgage, but it is prescribed by O.34, R.1, C.P.C that all persons having an interest either in the mortgagesecurity or in the right of redemption shall be joined as parties to any suit relating to the mortgage. In this view, the other co-mortgagor also is a necessary party to the suit. But the question to determine is whether in his absence, a decree could not be granted to the mortgagor who sues for redemption. ..... However that be, it has been held in Bansidhar Pandey v. Masuden Singh, AIR 1962 Pat 191 that the true test for deciding the point is, whether the rights of the parties on the S.A. NO.596 OF 1993 :: 12 :: record can be fully determined in the absence of the other co-mortgagor and whether that determination can be made so as not to affect the rights of the absent party. Following an earlier decision of the same court in Mt. Raj Mohni Debi v. Harihar Mahton, AIR 1958 Pat 67 it was held, that one of the fractional owners of the equity of redemption may sue to redeem the whole mortgage and the suit is not liable to be dismissed for non-joinder of the other co-mortgagors.” In **Mt. Raj Mohni Debi** v. **Harihar Mahton** (AIR 1958 PATNA 67), it was held thus: “20. It is, therefore, well settled by several decisions of this Court that O.1, R.9 of the Code of Civil Procedure, is not subordinate to O.34, R.1 of the Code of Civil Procedure. The combined effect of O.1, R.9 and O.34, R.1 in so far as mortgages are concerned, is, that all persons whose rights and interests may be adjudicated upon and determined in the suit ought to be added as parties, but that failure to add one or more such persons should not have the effect of defeating the suit, if the Court, in their absence, can deal with the matters in controversy so far as regards the rights and interests of the parties actually before it. If no decree can be passed without affecting the rights of absent parties the suit cannot proceed in their absence and should be dismissed. If, however, the rights of the parties actually before it can be determined in the suit leaving the rights and interests of others unaffected, then, even though the other parties might properly have been added, the Court should determine the matters in controversy between the parties actually present. In order to decide whether a suit can proceed in S.A. NO.596 OF 1993 :: 13 :: the absence of certain proper parties, two tests have been laid down: (1) Can the rights of the parties on the record be fully determined in their absence? And, (2) Can that determination be made necessarily affecting the rights of those absent? : ILR 2 Pat 175: (AIR 1922 Pat 651) (B); AIR 1946 Pat 225(D) and AIR 1952 Pat 161 (1). In the last two cases, all the relevant earlier decisions on the point have been considered, and, on a review of those decisions, the above proposition of law has been laid down.” 15. Though no question of law was raised in that regard in the Second Appeal, the learned counsel for the appellant raised another question. He contended that the execution of the 'Sammathapathram' dated 13.1.1953 for a consideration of `100/-, amounts to a contract to the contrary within the meaning of Section 61 of the Transfer of Property Act and, therefore, the plaintiff has to file a suit for redemption of not only Ext.A1 mortgage but the subsequent mortgage created by the 'Sammathapathram' dated 13.1.1953 as well. Section 61 of the Transfer of Property Act reads as follows: “ **61. Right to redeem separately or simultaneously** :- A mortgagor who has executed two or more mortgages in favour of the same mortgagee shall, in the absence of a contract to the contrary, when the principal money of any two or more of the mortgages has become due, be entitled to redeem any one such mortgage separately, or any two or more of such mortgages together.” S.A. NO.596 OF 1993 :: 14 :: Learned counsel appearing for the appellant relied on the decisions reported in **Narayana Pillai** v. **Lekshmanan** (1961 KLT 52) and **Girvadis Kunjuvariathu and others** v. **Chacku Vareethu and others** (AIR 1952 TRAVANCORE-COCHIN 363) in support of this contention. 16. In 1961 KLT 52, the Court while dealing with a 'Purakkadam' subsequent to the mortgage, held thus: “The terms of the document also are in keeping with the name given to it by the parties, for, there is the express recital that, on demand, the mortgagor would pay the amounts due under both the documents together and obtain a release of the property and, further, that in the event of default the mortgagee could sue and recover both the amounts together from the mortgagor and out of the property. This is clearly a contract to the contrary excluding the operation of S.61 of the Transfer of Property Act and giving the mortgagee the right of consolidation.” In AIR 1952 TRAVANCORE-COCHIN 363, it was held thus: “It is now settled law that the mortgagee is entitled to consolidate the two documents and can claim the amount due thereunder before he is compelled to surrender possession of the property. The decisions in 'BHASKARAN MOOTHATHU v. AGNISARMARU NAMBOORI' 1946 Trav L.R.546 and 'KUNJU SANKARAN v. PETER D'CRUZ', 1948 Trav L.R.612 are for this position.” S.A. NO.596 OF 1993 :: 15 :: 17. In the case on hand, the 'Sammathapathram' is not in evidence. It was not produced before the trial court and marked. In the written statement filed by the first defendant it is not stated as to when the 'Sammathapathram' was executed and when the first defendant was put in possession of the improvements. No evidence was adduced by the first defendant touching upon the transaction allegedly made after Ext.A1 mortgage. It would appear that the 'Sammathapathram' was produced at the appellate stage. The consideration shown in the said document is `100/-. As per the 'Sammathapathram', the right to enjoy the usufructus from the trees, which were excluded from the purview of Ext.A1, was also granted. The court below held that the 'Sammathapathram' is compulsorily registrable under Section 17 of the Indian Registration Act and no such registered document having been executed, it was held that the contention raised by the first defendant is unsustainable. Learned counsel for the appellant submitted that the 'Sammathapathram' is not compulsorily registrable as no rights in immovable properties were transferred as per the said document. S.A. NO.596 OF 1993 :: 16 :: 18. Section 3 of the Transfer of Property Act defines “immovable property”. The definition reads thus: “”immoveable property” does not include standing timber, growing crops or grass.” In **Joseph** v. **Joseph Annamma** (1979 KLT 322), it was held that if a tree is a growing tree, drawing sustenance from the soil, it is immovable property; where however it is to be cut soon, the amount of sustenance it will draw from the soil is negligible and is to be disregarded. In **Shantabai** v. **State of Bombay** (AIR 1958 SC 532) it was held thus: “(29). Now, what is the difference between standing timber and a tree? It is clear that there must be a distinction because the Transfer of Property Act draws one in the definitions of “immovable property” and “attached to the earth”, and it seems to me that the distinction must lie in the difference between a tree and timber. It is to be noted that the exclusion is only of “standing timber” and not of “timber trees”.” The trees excluded from the purview of Ext.A1 are jack trees and a mango tree. Jack trees and mango trees are not just timber trees; they are yielding trees. Income can be generated from the yield. It does not come within the meaning of growing crops. Jack trees and S.A. NO.596 OF 1993 :: 17 :: mango trees produce yield year after year and the trees do not perish after taking the yield once. The yield from jack trees and mango trees do not constitute “growing crops”. Applying these principles, I am of the view that the transaction evidenced by the 'Sammathapathram' amounts to one which requires registration under Section 17 of the Indian Registration Act, as the subject matter dealt with therein amounts to transfer of immovable property within the meaning of the Transfer of Property Act. 19. Since the 'Sammathapathram' is not proved in accordance with law and as it is a compulsorily registrable document, no reliance can be placed on the said document to support the contention of the first defendant that there was a contract to the contrary within the meaning of Section 61 of the Transfer of Property Act. Therefore, the contention of the first defendant that plaintiff should have sued under both the mortgages fails. In order to attract Section 61 of the Transfer of Property Act, there must be two or more mortgages. One of the contentions of the first defendant is that the 'Sammathapathram' does not relate to a transaction in respect of immovable property. If so, it cannot be said that the transaction ## S.A. NO.596 OF 1993 :: 18 :: amounts to a mortgage. In such a situation, there is no scope for raising a contention that there was a contract to the contrary excluding the application of Section 61 of the Transfer of Property Act and disabling the mortgagor to redeem any one of two or more mortgages. 20. **Question C** :- This question of law does not really arise for consideration as the first defendant has not adduced any evidence to prove that he has effected any improvements. The court below noticed in the judgment that though issue No.6 was raised by the trial court in respect of the value of improvements and sufficient opportunity was granted to adduce evidence, the first defendant failed to take out a Commission to ascertain the value of improvements or to adduce any other evidence. 21. **Question D** :- This question also does not really arise for consideration. The parties did not adduce any oral evidence in the case. There is no case that sufficient opportunity was not given to the parties to adduce evidence. The findings of the Land Tribunal are subject to the consideration of the correctness of the same by ## S.A. NO.596 OF 1993 :: 19 :: the Appellate Court. The Appellate Court considered the claim with reference to the evidence already on record and held that the claim of tenancy is not established. The contention raised by the first defendant that Ext.A1 really amounts to a lease was not accepted by the court below. I confirm the finding of the court below. For the aforesaid reasons, the Second Appeal lacks merits and the same is dismissed; however, without any order as to costs. **(K.T.SANKARAN) Judge** ahz/ ## **K.T.SANKARAN, J.** **----------------------------------------** **----------------------------------------** **S.A.NO. 596 OF 1993 D** ## **JUDGMENT** **16[th] March, 2011 ----------------------------------------**