P. Sitaranamma vs P. Ankaiah and Others

Bhmasankaram, J.—The third Plaintiff in each of two suits for redemption of two usufructuary mortgage bonds is the Appellant in these two appeals. Exhibit A-l is the usufructuary mortgage bond involved in Second Appeal No. 1935 of 1953 and Exhibit A-2 is the usufruactuary mortgage bond involved in Second Appeal No. 1936 of 1953. The Courts below found that Exhibits A-l and A-2 are not usufruactuary mortgage bonds but usufructuary leases and that the Plaintiffs cannot recover possession of the lands covered by them before the expiry of the period mentioned in each of them. They, therefore, dismissed both the suits for redemption. The bonds in both the suits are in identical terms and it would be sufficient if I consider the language in Exhibit A-l, in order to determine the question as to whether the suits-are maintainable.

The material portion of Exhibit A-l is as follows:

"Inam premium lease deed for 47 years for the repayment of Rs. 450. Premium lease deed for 47 years for the repayment on the 10th of March, 1903 in favour of by excuted on the 10th of March, 1903 in favour of by. For the repayment of the sum of Rs. 450 in all made up of Rs. 118 taken from you today for the marriage of Rangaiah amongst us and for the amount of Rs. 82 due under a promissory note in favour of Bhadrayya and a sum of Rs. 250 being approximately the probable future interest, the land mentioned in the schedule given below is to be enjoyed by you as you please and that the debt is to be discharged by your enjoying the usufruct thereof from the year 1918-19 to the end of the year 1961. This land now put in your possession is subject to a possessory mortgage registered by the Sub-Registrar, Bapatla, executed by Appayya, the adoptive father of Bapayya and Ramaswami, father of Bhadrayya and others amongst us. The land now leased has already been in your possession. You will surrender possession at the beginning of the year Subhakruthu (1962) without claiming any notice and meanwhile you will cultivate the land and enjoy the produce thereof on the strength of this document. The beriz and the quit rent will be paid by you. This is the premium lease executed by our consent."

Now, the point for consideration is whether this document is a lease or a mortgage. The first thing to be noticed about it is that the parties name it a premium lease. This phrase occurs twice in the document at the end as well as in the beginning. Secondly, it is clear that the parties are aware of the distinction between a mortgage and a lease, because a previous possessor mortgage over the same property is mentioned. There are also counter-parts executed by the lessees who are marked as Exhibits A-3 and A-4. Exhibit A-3 is the counter-part of Exhibit A-l and Exhibit A-4 is the counter-part of Exhibit A-2. Further, there are no words indicating that the land should constitute security for the debt. On the other hand, the very fact that the document is called a lease seems to exclude any intention to create any security. It is true that future interest is mentioned. But the whole of such interest is assesses at a consolidated sum and treated as part of the money advanced by the lessees to the lessons.

A document almost similar in terms was considered by a Bench of the Madras High Court in Chitikala Peda Yerranna Vs. Chitikala Somanna and Others, ; (A). The document there in question was entitled a Khandagutta cowle. In the body of the document, it was recited that the land had been mortgaged for a period of 33 years and there was also reference made to the discharge of the aforesaid debt. Despite that language, the learned Judges held that the document was a lease and in doing so, applied the reasoning of their Lordships of the Privy Council in Nidha Sah v. Murli Dhar, ILR 25 All 115 from which they extracted the following passage.

It (the document) is not a security for the payment of any money or for the performance of any engagement. No accounts were to be rendered or required. There was no provision for redemption expressed or implied. It was simply a grant of land for a fixed term free of rent in consolations of a sum made up of past and present advances.

I am of opinion that this reasoning applies with equal force to the document now before me.

Mr. Suryanarayana for the Appellant placed reliance on reference under Stamp Act Section 46, ILR 21 Mad 358 (FB) (C), a decision of the Full Bench of the Madras High Court. In that case, the judgment of the Full Bench consisted of two sentences, one, in which they held that | the document before them was a usefructuary mortgage under which the rents and profits were estimated to satisfy both principal and interest, and the other in which they distinguished the case before them from an earlier case in Reference from the Board of Revenue u/s 46 of the Indian Stamp Act. ILR 7 Mad 203 (FB) (D). I do not propose to place any reliance upon it because of the latter decision of the Privy Council in ILR 25 All 115 (B)which has been followed by the Madras High Court in Chitikala Peda Yerranna Vs. Chitikala Somanna and Others, (A).

It may also be remarked that the document which their Lordships were considering in ILR 25 All 115 was called a mortgage by the parties. Mr. Suryanarayana poinds out that as there-is a provision for interest, the instrument Exhibit A-l, should be construed as a mortgage. I cannot, agree with this contention. The mere fact that) part of the sum, which constitutes the consideration for the lease, is future interest seems to me to make no difference to the nature of the document; whether the consideration is past and future advances or past advances with future interest (both the sums being consolidated into one sum for the purpose of being treated as a premium) does not, in my opinion alter the character) of the document from one of a lease to that of a mortgage.

For these reasons, I find myself in concurrence with the views of the lower court as regards the irredeemably of the bonds in question. The result is that this appeal S. A. No. 1935 of 1953 and S. A. No. 1936 of 1953 must fail and they are therefore dismissed. There will be costs only in S. A. No. 1936 of 1953. No leave.