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Judgment
This writ petition converted from C.P. No. 5532 of 1991 is traceable to R.A. No. 582 of 1987 before the Additional Appellate Authority, Land Reforms, Chikkodi, in turn traceable to W.P. No. 11426 of 1982, which is to assail the order of the Land Tribunal, Chikkodi, passed in KLR.SR.365+295 (Manjri), dated 8-12-1981, granting occupancy rights in favour of the deceased third respondent. The case of the petitioner is that the land involved measuring 4 acres 16 guntas in Survey No. 41/2A in the Village of Manjri is owned by the petitioner and has been cultivated by him till 4-4-1966 on which date he mortgaged the petition land with possession to the father of the third respondent by taking loan, of Rs. 6,000/-. The redemption period was 5 years and the document was styled as Thevi Patta and rent was Rs. 20/-per year. The very land was attached in execution of decree and to avoid the sale the land was given on possessory mortgage and not on lease. In fact, no rent was paid by the third respondent or his father and therefore the giving of any receipt does not arise.
But yet, the third respondent filed Form 7, claiming occupancy rights and the Tribunal has chosen to grant such a right and consequently the grant is assailed. It is contended by the learned Counsel for the petitioner Shri Ravi S. Balikai, that the Dhevipatta document was not properly appreciated by the Tribunal. Mere mention of rent does not change the nature of transaction and the deposit of Rs. 6,000/- as principal was detained as carrying no interest. In fact, the rent was never paid. The transaction being mortgaged, the question of grant of occupancy rights does not arise.
On the other hand Mr. B.S. Kamate appearing for respondents 3(A) to 3(C) submitted that the transaction is really a lease. The translation of the Dhevipatta is produced which I shall refer later. Reliance was placed upon the dictum of this Court in case of Mallappa Bharamappa Madar and Others v Basavantappa Shivarudrappa Malagi and Another, 1994(2) Kar. L.J. 116 (DB), Mallappa v Land Tribunal, Naragund and Others, 1996(2) Kar. L.J. 72, Fuzhakkal Kuttappu v C. Bharagavi and Others and Others, AIR 1977 SC 105, and in Gambangi Appalaswamy Naidu and Others v Behara Venkataramanayya Patro, AIR 1984 SC 1728, which shall be considered infra.
The learned Government Advocate, Mr. Bharama Gowda for respondents 1 and 2 submitted in support of the order. I have considered the submissions made by the respective Counsel.
The question to be considered is whether the document is a mortgage or lease. The Tribunal has come to the conclusion that the agreement is not Dhevipatta. Relying upon the mention of the word ''rent'', the Tribunal held that the agreement is not a mortgage. It also found that the name of the third respondent is found in the RTC extract. On that basis, the order was passed.
The document reads as follows.-
"The land bearing R.S. No. 41, Hiss No. 2A, 4A-15 Gs, Asst. Rs. 13-9-0, this entire pot-Hiss, situated in Manger village, which is of my ownership, and under my possession and enjoyment and personal cultivation, this dry land, situated in Chikkodi sub-registrar Area, in Chikkodi Taluk, District Belgaum, and this land I have given to you for cultivation from the current year end to five years, on an agreement that you should take five crops for five years, and agreeing to take Rs. 20/- per annum from you as rent, and I have put you in possession of the land today for cultivation on tenancy basis. Since I am badly in need of money to meet my financial difficulties, on the above said land I have taken a sum of Rs. 6,000/- (Six thousand only) as deposit in cash, which is without interest. As per the agreement between ourselves, the said the amount of Rs. 6,000/- (Six thousand only) are received by me already and I have received the amount earlier. But, the annual rent amount of Rs. 20/- (Twenty only) should be paid by you to me every year and without making any default and obtain receipts from me. There is no agreement to pay the rent unless the rent receipts is obtained. The land should be properly maintained and cultivated. The boundary marks and boundary stones should be maintained at your expenses by you I would pay the Land Revenue of the said land. Thus, after cultivating the land for five years and taking five crops on tenancy basis, after the expiry of your period, i.e., in the cultivation season of shake 1883, you should take back your amount of Rs. 6,000/- (Six thousand only) and hand over the possession of my land to me without any objection. And I also will pay you the they amount of Rs. 6,000/-(Six thousand only) in time in lump sum and take back the possession of my land from you. I will not fail to do the same and the Thevi Patta executed by me accordingly".
A perusal of the document clearly indicate that there is no agreement to pay rent unless rent receipt is obtained. It is also mentioned the land should be returned on paying back Rs. 6,000/- in one lump sum. The final lines speak "I will not fail to do the same and Thevi Patta executed by me accordingly. Thus prima facie, it is seen that it was only a mortgage and not the tenancy agreement.
(a) Reliance was placed on the decision of Mallappa Bharamappa Madar, to the following passage.
"Nevertheless in view of the order made by the Taluk Executive Magistrate, we would like to examine the question raised by the petitioner as to whether there has been any merger of rights of mortgage and lease in view of the ''Agauva Lavani Patra'' document entered into between the parties and whether the right as lessee stood extinguished. Section 26 of the Karnataka Land Reforms Act makes it clear that if land is mortgaged by a landlord by way of a unfructuary mortgage to a tenant cultivating such land, the tenancy of such land shall be in abeyance during the period the mortgage subsists. After the expiry of the said period it shall be lawful to the tenant to continue to hold the land on the terms and conditions on which he held it before the mortgage was created. The rights as a lessee was not lost at all, in fact it merely reflects the legal position as explained by the Supreme Court in Gambangi Appalaswamy Naidu''s case, which refer to an earlier decision of the Supreme Court in Shah Mathuradas Maganlal and Company v Nagappa Shankarappa Malaga, AIR 1976 SC 1565: (1976)3 SCC 660. These two decisions make it clear that both rights as mortgagee and lessee could be held at the same time in respect of the same land and those rights could be simultaneously held, one right is neither higher nor lesser than the other. If that is so, the provision of Section 26 of the Act, could be understood as to mean that the tenancy does not cease on the creation of usufructuary mortgage.
(b) On the decision of Mallappa''s case, to the following passage:
"The petitioner filed Form 7 claiming occupancy rights in the suit schedule property. The Tribunal by the impugned order has rejected the claim of the petitioner on the ground that the petitioner had obtained the right on advance lease from the deceased father of Shettappa Faikirappa Kuri and even after the period of five years, he continued to cultivate the said land without any agreement with the landlord. On that basis, the Tribunal has held that on account of the expiry of the period of five years of the lease, the relationship of the landlord and the tenant do not'' exist between the parties. But this is a wrong interpretation of law done by the Tribunal. As per Section 6 of the Karnataka Land Reforms Act, no tenancy for any land shall be terminated merely on the ground that the period fixed for its duration whether by agreement or otherwise has expired. This Court has also interpreted this section in the case of Gurusiddaiah Chandrashekharaiah v Land Tribunal, Bagalkot, 1979(2) Kar. L.J. 176, as follows.-
"Where a lease was for five years on an yearly basis, merely because the rentals amount for the period of five years had been paid in advance and there was a recital that after the expiry of five years possession of the land must be given to the landlord, it cannot be said that the same have the effect of converting the lease into a mortgage. In view of Section 6 of the Act, the recital to surrender possession after five years can have no consequence".
(c) On the decision of Fuzhakkal Kuttappu, to the following passage:
"In construing a document like the one before us it is always necessary to find the intention of the party executing it. The intention has to be gathered from the recitals and the terms in the entire document and from the surrounding circumstances. How the parties or even their representatives-in-interest treated the deed in question may also be relevant. It is also well-settled that the nomenclature given to a document the scribe or even by the parties is not always conclusive. The word ''otti'', as such, used in the document, is not, therefore, of much consequence".
(d) On the decision of Gambangi Appalaswamy Naidu, to the following passage:
"There can be no merger of a lease and a mortgage, even where the two transactions are in respect of the same property. It is well-settled that for a merger to arise, it is necessary that lesser estate and a higher estate should merge in one person at one and the same time and in the same right and no interest in the property should remain outstanding. In the case of a lease, that estate that is outstanding in the lessor is the reversion; in the case of a mortgage, the estate that is outstanding is the equity of redemption of the mortgagor. Accordingly, there cannot be a merger of a lease and a mortgage in respect of the same property since neither of them is a higher or lesser estate than the other. Even, if the rights of the lessee and the rights of the mortgagee in respect of a property were to be united in one person the reversion in regard to the lease and the equity of redemption in regard to the mortgage, would be outstanding in the owner of the property and accordingly, there would not be a complete fusion of all the rights of ownership in one person.
The answer to the question as to whether upon redemption of a usufructuary mortgage a tenant-mortgagee could be directed to deliver actual or physical possession of the mortgaged property to the lessor-mortgagor must depend upon whether there was an implied surrender of the lessee''s rights when the usufructuary mortgage was executed in his favour by the lessor-mortgagor. And this obviously depends upon what was the intention of the parties at the time of the execution of the mortgage deed in favour of the sitting tenant to be gathered from the terms and conditions of the mortgage transaction, in the light of surrounding circumstances of the case. It all depends upon whether by executing a possessory or usufructuary mortgage in favour of a sitting tenant the parties intended that there should be a surrender of lessee''s rights or not, and only if an implied surrender or lessee''s rights could be inferred, then the mortgagor would be entitled to have delivery of physical possession upon redemption but not otherwise. The term of the mortgage deed that during the currency of the mortgage the liability to pay rent to the lessor-mortgagor (albeit to be discharged by adjustment) is kept alive, runs counter to any implied surrender of the lessee''s rights. When there is no term fixed for redemption of mortgage property which means that is open to the mortgagor to redeem the mortgage at any time that is to say even within a very short time and if that be so, a sitting tenant cultivating the lands under a lease, who has obliged his lessor by advancing monies to him to tide over his financial difficulties would not give up his rights as a lessee no sooner redemption takes place".
These decisions speaks about the creation of mortgage when the tenancy was in operation where mortgage was created and the mortgagee was put in possession and incidentally reference has been made to a payment of rent in the document. A perusal of the document produced herein, clearly indicate that the third respondent''s father came into possession only as a mortgagee and not earlier. In any event, the agreement between the parties as evidenced by the document in question has to be considered to arrive at a decision as to whether the transaction was a lease or mortgage.
The present document clearly indicates that on return of the sum of Rs. 6,000/-, the father of the third respondent was to give back possession of the lands to the petitioner. Such a transaction cannot but be construed as mortgage and certainly it is not a lease.
The fact that the entries are made in the RTC showing the third respondent as a tenant does not take away the right of the petitioner and as much as such entry is made on the basis of the mortgage deed in question. It is also seen from Form 7 that the deceased third respondent had mentioned that he was a tenant for 25 years as on 6-4-1979. That means he should have been a tenant from 1954 onwards. In the registered document of Dhevi Patta, it is clearly mentioned that "this entire land is given in your possession today for cultivation". Therefore the claim that he has been a tenant for 25 years must fail.
Viewed from any angle, I am satisfied that the document in question being a mortgage cannot be considered as lease deed and consequently, the claim as a tenant must fail.
In the result, the impugned order is quashed and the writ petition is allowed.
Rule made absolute.