The plaintiff, who was non suited by the trial court as well as by the first appellate court is before me in the second appeal. 2. The appellant approached the Munsiff's Court, Kozhikode with a suit in redemption of a mortgage. The property involved is a building with a tiled roof consisting of three rooms one Varandah and Kitchen. The appellant/plaintiff alleges that as per Ext.A1 registered deed dated 22.02.1972, the building was mortgaged to the defendant receiving ₹ 500/- as mortgage money.
According to the appellant/plaintiff it was a possessory mortgage in favour of the respondent/defendant for a period of one year with liability to pay ₹ 15/- per month to the appellant/plaintiff as excess profit. He further alleges that on the expiry of the period or on demand the respondent/defendant had to surrender the possession of the building to the appellant/plaintiff. It was stipulated in Ext.A1 that in case of non payment of the mortgage money, it was to be a charge over the building; it was alleged. The appellant/plaintiff allege that he wanted the building back and in spite of demands the respondent/defendant had not cared to receive the sum of ₹ 500/- and surrender the building.
3. The respondent/defendant who resisted the suit contended that he got the building on a lease arrangement on payment of ₹ 2,000/- as advance and with liability to pay ₹ 15/- per month as rent. He contended that it was not a mortgage at all. He further contended that he was made to sign an agreement preferred by the husband of the appellant/plaintiff. However, he admitted that the appellant/plaintiff had borrowed ₹ 500/- and he agreed to pay excess profit. It was also contended that the building was constructed about 50 years back at a cost of ₹ 200/- and the rent that would be fixed by the building at that time was ₹ 1/- per month. He also claimed that he is a Kudikidappukaran in the building and prayed that the question be referred to the Land Tribunal, Kozhikode, where he had already filed an application as OA No.28/2007 for the purchase of Kudikidappu.
4. The trial court raised proper issues for trial including the question of Kudikidappu and the issue regarding Kudikidappu was referred to the Land Tribunal concerned. The Land Tribunal concerned answered the question in the negative, i.e., in favour of the appellant/plaintiff. The trial court thereafter considering the evidence consisting of the oral testimonies of PWs 1 and 2, DW1 as well as the documentary evidence consisting of Exts.A1, B1 and B2 dismissed the suit finding that the transaction between the parties was not a mortgage, but it was a lease as could be discerned from the circumstances of the case.
5. Though the appellant/plaintiff took the matter in appeal before the lower appellate court, it was without success. The lower appellate court though did not agree with certain observations made by the trial court, came to the conclusion that the transaction between the parties was in essence a lease and not a mortgage and thus refused to grant the decree in favour of the respondent/defendant. It is with this background the appellant/plaintiff has come up before this Court.
6. Arguments have been heard.
7. The substantial question of law urged in the appeal memorandum as well as the arguments advanced by the learned counsel for the appellant/plaintiff is that whether the courts below were justified in finding that the transaction evidenced by Ext.A1 is a lease to non suit the appellant/plaintiff. I have gone through the evidence in this case as well as the judgments rendered by the Courts below. The following are the reasons pointed out by the lower appellate court to hold that Ext.A1 is not a mortgage deed.
i) The execution of Ext.B1 by the respondent/defendant was on 22.02.1972. On the same date Ext.A1 was executed by security for a sum of ₹ 500/- borrowed from the husband of the appellant/plaintiff. Therefore it is quite unlikely that the very same defendant who is said to have lend ₹ 500/- to the plaintiff on 22.02.1972 borrowed ₹ 500/- from the plaintiff's husband and obliged himself to repay the amount with interest as per Ext.B1.
ii) The period of mortgage was only one year from 22.02.1972 and the suit was filed only in the year 1987, though the appellant/plaintiff was entitled to demand vacant possession of the building at any time after one year from the date of execution of Ext.A1.
iii) It is quite unlikely that the building of the nature described in Ext.A1 constructed in the year 1960 at a cost of ₹ 5,000/- was given as security in 1972 for a sum of ₹ 500/-.
8. For arriving at a conclusion that Ext.A1 is a lease deed, the learned District Judge placed reliance on the decision of the Apex Court in Mangala Kunhamina Umma v. Puthiyaveettil Paru Amma & others (AIR 1971 SC 1575). The following paragraph was extracted in the judgment.
“The test to be applied in determining if a document is a lease or mortgage is whether the purpose of the transaction is enjoyment of the property by the transferee or whether it is intended to secure the repayment of debt by transfer of interest in the property. The mere description of the deed as kanam Kuizhikanam will not be decisive of the essence of the transaction. The circumstances and the conduct of the parties are always a very useful guide in ascertaining the true character and content of the transaction. A mere direction to pay revenue of the property by the grantee, particularly when no payment is stipulated to be made to the grantor or when the payment is not directed to be made out of anything which is due or payable to the grantor, cannot be constructed as a payment of rent or michavaram to the grantor. The proportion between the amount advanced and the value of the property is one of the important tests to be taken into consideration in deciding the nature of the transaction. Where the amount advanced bears a substantial proportion to the value of the property it is an important element indicating that the intention was the creation of a mortgage and not a tenancy.” In the light of the above decision of the Apex Court it is to be considered whether the transaction between the parties is a lease or a mortgage.”
9. As the material question to be considered in this case is whether Ext.A1 has to be construed as mortgage or lease, the learned counsel for the appellant/plaintiff invited me to a series of decisions on the point. The learned counsel for the appellant would submit that the document must be read as a whole to understand its true nature and significance and the character of the document must be determined with reference to the effect of the words used by the parties. The learned counsel invited my attention to the decision of the Apex Court in Chunchun Jha v. Ebadat Ali (AIR 1954 SC 345-346), wherein it was observed as under:
“.............If the words are express and clear, effect must be given to them and any extraneous enquiry into what was thought or intended is ruled out. 'The real question in such a case is not what the parties intended or meant but what is the legal effect of the words which they used. If however there is ambiguity in the language employed, then it is permissible to look to the surrounding circumstances to determine what was intended.”
(emphasis supplied)
10. In Davies v. Elsy Brothers Ltd. ((1961) 1 WLR 170-176), it was observed as under:
“.................. It is a general principle.... that the intention which the framer of the document has in mind when he brings it into existence is not material as a general principle the question is not what the writer of the document intended or meant but what a reasonable man reading the document would understand it to mean ”
(emphasis supplied)
11. In Street v. Mountford ((1985) 2 All. ER.
289,294 (H.L.)) it was observed as under:
“..............Both parties enjoyed freedom to contract or not to contract and both parties exercised that freedom by contracting on the terms set forth in the written agreement and on no other terms. But the consequences in law of the agreement, once concluded, can only be determined by consideration of the effect of the agreement. If the agreement satisfied all the requirements of a tenancy, then the agreement produced a tenancy and the parties cannot alter the effect of the agreement by insisting that they only created a licence. The manufacture of a five-pronged implement for manual digging results in a fork even if the manufacturer, unfamiliar with the English language insists that he intended to make and has made a spade.”
(emphasis supplied)
12. A Division Bench of this Court in Moideenkutty Haji v. Muhammedali reported in (1987(2) KLT 994) has observed that the intention of the parties has necessarily to be gathered primarily or in the first instance from the language used by them in the agreement, the substance of it, as opposed to the form. It was observed that it is the first and manifest expression of their intent and what they intended to achieve under the transaction. It was further observed that it is a general principle that the intention which the framer of a document had in his mind when he brings it into existence is not the material factor, but what is incorporated in the document. The intention has thus to be gathered from the language of the document, explained if necessary by the circumstances and the conduct of the parties.
13. In the instant case, what is stated in Ext.A1 is that it is mortgage deed. A sum of ₹ 500/- is seen received as mortgage money. It is true that certain restrictions are imposed on the enjoyment of the property as usually done in the case of lease deeds. But, according to me, that is not a relevant circumstance to hold that it is a lease deed when it is manifest from the apparent tenor of the instrument that the parties intended to transfer an interest in specific immovable property for the purpose of security money given by way of advance. Though the respondent/defendant had taken a contention in the written statement that they were made to believe that it is only a lease arrangement, as rightly pointed out by the learned counsel for the appellant, they have not specifically pleaded the allegation of fraud or misrepresentation in the written statement.
14. It cannot be said that the respondent/defendant was the victim of fraud, undue influence or the like or he was deceived. The respondent/defendant, who is residing the house raised a contention that he is entitled to Kudikidappu right of the property, but it was repelled by the Land Tribunal concerned. It appears from record that the parties dealt with each other at arms length, and of their own volition concluded the transaction. It cannot be said that they were unaware of the meaning of the words which they used in Ext.A1.
15. Once they have used the language of mortgage in Ext.A1, the only presumption is that they knew its implications as well. Both the courts below went in search of extraneous circumstances to understand the intention of the parties. Such a course can be resorted to only if the words lead to any ambiguity. It is clear from the language used in Ext.A1that the suit property was given to the respondent/defendant as a security for a sum of ₹ 500/- which was advanced on the date of execution.
The enquiry regarding the adequacy of consideration is totally irrelevant as it appears from the apparent tenor of the instrument that the parties really intended to create an interest in favour of the respondent over the suit property. Both the Courts below have erred in holding that Ext.A1 is a lease deed. It is evident from record that the appellant/plaintiff has deposited the mortgage amount in the court below, as contemplated under Section 33 of the Transfer of Property Act. Therefore, the appellant is entitled to obtain a decree as prayed for.
16. In the result, the appeal is allowed. Judgments of the Courts below are set aside.
The appellant/plaintiff is granted a decree allowing her to redeem the mortgage in respect of suit property on deposit of ₹ 500/- (Rupees five hundred only) in terms of Ext.A1. Petitioners shall suffer their costs.
Sd/-
A.V. RAMAKRISHNA PILLAI JUDGE das // True copy // PA to Judge