Thangappan vs Ammalu Neithiaramma and Others

Velu Pillai, J.—The only question arising for decision in this Second Appeal is whether Ext. A 1, kaichit, dated November 21, 1916 evidences a mortgage as contended for the respondents who were plaintiffs 2 and 3 in the suit or a kanam as contended for the appellant who was the 6th defendant. The two Courts have answered this against the appellant. Ext. A1 was executed by Andi and Kottan, who were the predecessors-in-interest of the appellant and may be referred to as the transferees, in favor of a member of the respondents'' family which held the suit properties on verumpattom under a Devaswom to which they appertained on jenmom. Ext. A1 purports to be the counterpart of a karipanayam deed, executed on the same day in favor of the transferees. It recited a prior lease from the respondents'' family to the transferees, with a premium of Rs. 200 and an annual rent of 641 paras of paddy and Rs. 10 and that in order to pay renewal fees to the Devaswom, the respondents'' family borrowed on the same day a sum of Rs. 400 from the transferees; it provided, that the transferees shall be in possession of the properties on karipanayam for ten years, for the karipanayam amount of Rs. 600, of which, the sum of Rs. 400 borrowed was to carry no interest, the balance alone to carry interest as before, the rent being fixed as above. It also stipulated, that on the expiry of the term the transferees shall surrender the properties on receipt of Rs. 600 but that even before the expiry of the term if the transferees so desired, they might surrender the properties on receipt of the karipanayam amount. The learned District Judge held, that this last stipulation amounted to a covenant, entitling the transferees to compel the transferor to redeem the mortgage and this was considered by him sufficient to hold, that Ext. A1 evidenced a mortgage and not a kanam.

The learned counsel for the appellant contended on the authority of Emunni Panicker v. Krishna Panickcr & Others (1958 K. L. J. 805) and Nani Amma v. Chummaran alias Narayanan Nambudiri (1961 K. L. J. 324) that Ext. A1 satisfies all the conditions of a ''kanam'' as defined in Section 2(18) of the Kerala Agrarian Relations Act, 1960, referred to hereafter as the ''Act'' and that therefore the decree under appeal cannot be maintained. The above definition, so far as it relates to properties in Malabar area may be extracted below:

kanam'' means the transfer for consideration in money or in kind or in both, by a landlord of an interest in specific immovable property to another for the latter''s enjoyment, whether described in the document evidencing the transaction as kanam or kanapattom, the incidents of which transfer include-

(a) a right in the transferee to hold the said property liable for the consideration raid by him or due to him;

(b) the liability of the transferor to pay to the transferee interest on such consideration unless otherwise agreed to by the parties; and

(c) payment of michavaram, or customary dues or renewal on the expiry of any specified period............,

and corresponds more or less to the definition in Section 3(14) of the Malabar Tenancy Act, 1929, as amended, which reads :

kanam'' means the transfer for consideration in money or in kind or in both by a landlord of an interest in specific immovable property to another (called the ''kanamdar'') for the latter''s enjoyment, the incidents of which transfer include-

(a) a light in the transferee to hold the said property liable for the consideration paid by him or due to him which consideration is called ''kanartham'',

(b) the liability of the transferor to pay to the transferee interest on the kanartham, and

(c) the payment of ''michavaram'' by the transferee

Emunni Panicker''s case was decided on the definition of ''kanam'' in the Malabar Tenancy Act, 1929, while in Nani Amma''s case, the definition in the Act as extracted above was applied. These cases no doubt lend support to the contention, but in my opinion, they do not emphasize the distinction between a mortgage and a kanam, that while a mortgage is a transfer of interest in specific immovable property "for the purpose of securing the payment of money advanced or to be advanced by way of loan, an existing or future debt, or the performance of an engagement which may give rise to a pecuniary liability", the transfer of interest by way of kanam is for enjoyment; in other words, the relationship in the former case is one of debtor and creditor and in the latter, is one of landlord and tenant. This distinction is implicit in the definition of a ''mortgage'' in Section 58 of the Transfer of Property Act and in the first part of the definition of ''kanam'' in Section 2(18) of the Act or in Section 3(14) of the Malabar Tenancy Act, 1929. The distinction was emphasised in Devaki v. Bhaskara Menon (1960) 2 K. L. R. 277.) by T. K. Joseph J. and in Krishnankutty v. Padmanabha Menon (1960 K. L. T. 294) by Vaidialingam J. but seems to have been ignored, in Emunni Panicker''s case where the learned Judge even held, that a provision for sale of the property transferred to realize the amount advanced was immaterial. In Nani Amma''s case also the above distinction does not appear to have been considered. However, in S. A. 146 of 1961 decided quite recently by Raman Nayar J. the distinction was again emphasized. This case, as also Devaki v. Bhaskara Menon were followed by a learned single Judge in S. As. 59 of 1956(K) and 118 of 1957. In my opinion, to accept the contention of the learned counsel, that once a transfer fulfills the conditions in clauses (a), (b) and (c) in Section 2(18) of the Act or in Section 3(14) of the Malabar Tenancy Act, 1929 it amounts to a kanam, would be to ignore the difference between a possessory mortgage, which might also fulfill the same conditions, and a kanam and to obliterate the distinction between the two kinds of transactions, for which there is no warrant even in the provisions of the Act. I am therefore in respectful agreement with the decisions above cited, which have recognized and applied this distinction, including S. As. 59 of 1956(K) and 118 of 1957, in which the learned Judge has attached due importance to a provision for sale of property to enforce repayment of the money advanced, as a distinctive feature of a mortgage. The judgment of a Full Bench of this Court, in Janardhatian v. Kuppandy (1959 K. L. T. 118) was based on the finding of fact, that the karipanayam which was construed in that case, was but the renewal of a prior kanam and does not affect the decision of the question arising in the present case.

The loan aspect of the transaction under Ext. A1 is emphasized by the specific recital in it, of the need of the transferor to borrow for paying renewal fees to the jenmi. The need for borrowing is, as pointed out in S. A. 146 of 1961, one of the relevant matters to be considered. I also agree with the District Judge in thinking, that the effect of the stipulation in Ext. Al, for the repayment of the karipanayam amount even before the expiry of the term, if the transferees so desired, is really to confer a right on them to demand repayment otherwise than at the time of redemption on the expiry of the term as stipulated. As observed in S. A. 146 of 1961,

this right of the transferee to demand repayment otherwise than on redemption by the transferor clearly bespeaks a loan and is, in my view, altogether inconsistent with the transaction being a kanam.

It is true, that no right of sale was expressly recited in Ext. Al; but if a right to enforce repayment can be read into it, that itself might, as held in S. A. 146 of 1961, "imply a right to recover by sale of the land even if no express mention is made of such a right. Moreover there is no right of sale in a usufructuary mortgage pure and simple..............

The learned counsel strongly relied on the execution of Ext. Al, counter-part in addition to the mortgage document, which it was stated, is not usual in the case of mortgages. A similar argument seems to have been considered, but was repelled in S. A. 146 of 1961 with the observation, that the execution of such counterparts is a common feature in the case of possessory mortgages, especially where periodical payment are stipulated. It cannot also be ignored, that the stipulation in Ext. Al, is that the possession was to be on karipanayam and it was not disputed, that karipanayam generally means possessory mortgage. It is no doubt true that two other indicia which were relied on by the learned District Judge viz., that part of the amount is not carry interest, and that the michavaram is not payable to the jenmi, however relevant under the definition in the Malabar Tenancy Act, 1929, are not of much importance in the context of the definition of kanam in the Act; but this circumstance affords no justification for overlooking what are matters of substance, in judging the character of the transaction.

The learned counsel then contended, that u/s 9 of the Act, an opportunity may be allowed to the appellant to prove that Ext. A1 is a transaction by way of kanam though it purports to be a karipanayam. The appellant had the same right u/s 22(1) of the Malabar Tenancy Act, 1929. Reading the above provisions in the two Acts I am not satisfied, that so far as a karipanayam is concerned Section 9 of the Act has conferred a new right or an additional right on the appellant, the only difference relied on, between the two provisions being that the term ''mortgage'' in Section 22(1) of the Malabar Tenancy Act, 1929 has now been expanded to mortgage, otti karipanayam, panayam or nerpanayam. These are but different forms of mortgages or different names in which mortgages are known. I am of the view, that the same light now claimed for the appellant u/s 9 of the Act, to prove that karipanayam as evidenced by Ext. A1 is really a kanam, was available to him under the provisions of Section 22(1) of the Malabar Tenancy Act, 1929, and if he had further evidence to offer at the trial of the suit, but did not choose to, do so he cannot now ask for a retrial. For the foregoing reasons, I come to the conclusion that the appellant must fail in this Second Appeal, which is dismissed with cost.