Civil Appeal No 1815 1975
Appeal by Special Leave from the Judgment and Order dated 22 8 74 of the Kerala High Court in Appeal Suit No 16571
TC Raghavan N Sudhakaran and K Rewal Kumar for the Appellant
TS Krishnamurthy Iyer T Rajandra Choudhury and Mrs VD Khanna for the Respondents
The Judgment of the Court was delivered by GOSWAMI J
This appeal by special leave is directed against the judgment of the Kerala High Court out of a proceeding for opportionment of compensation under the Land Acquisition Act
Certain property measuring 2 acres 21 cents in RS 2991 of Chevayur village was acquired by the Government
The compensation which was awarded was a sum of Rs 285988 including the solatium
There were five claimants clamour ing for the compensation
While the first claimant herein after to be described as the appellant claimed the entire compensation after making allowance for a small sum of Rs 43750 in favour of the claimants 2to 4 hereinafter to be described as the respondents the latter on the other hand claimed the entire amount minus a sum of Rs 350 which according to them was the entitlement of the appel lant
The acquired property originally belonged in janman freehold right to one Vakeri Thannanone Raman Nair
After his death the same was inherited by his heirs and legal representatives
They assigned their Janmam right on Janu ary 14 1967
in favour of the appellant
Based on such a right the appellant is now claiming the aforementioned compensation
The earlier history of the property shows that the otti  right in the land had been transferred to the Prede cessors in interest of the appellant and to those of the respondents by the daughter of Vakeri Thannanone Raman Nair and other heirs by a registered document of December 30 1894 for a consideration of Rs 650 
The document is marked as exhibit A 2
The entire controversy between 698 the parties will turn on the construction of the above deed exhibit A 2 as to whether it is a mortgage fir a lease
Although prior to the assignment of the Janman right in favour of the appellant the parties naturally would have been sailing on the same boat as to theft status under  the deed the acquisition of Janmam right by the appellant in 1967 gave him an opportunity to part company with the respondents and to claim almost the entire compensation to the deprivation of the respondents on the acquisition of the larger estate into which the lesser estate had merged
The respondents therefore threw down their gauntlet taking the position that the document exhibit A 2 evidenced a transaction of lease and they acquired tenant rights in the land
If they succeed in this plea they will be entitled to almost the entire amount of compensation under the Kerala Land Reforms Act 1963 Act 1 of 1964 and the appellant even with the Janmam right will only get a pittance
It may be noted that the appellant had already got his 14th share of the otti right by partition some time in 1936 and there was a partition suit in 1949 when the appellant and the respondents divided this property by metes and bounds in the course of execution of a partition decree in OS 32 of 1949
We are required to construe the deed executed in the year 1894
The deed was not drafted by a lawyer conversant with the legal implications of a mortgage or a lease but by a bond writer as perhaps was the usual practice in the fall of the last century and continuing even upto the present times
The deed was written in Malayalam and we have an agreed translation of the document before us
The learned Judge of the High Court being conversant with the language was natu rally in a better position to appreciate the significance in the original document placed side by side with the translat ed exhibit
In construing a document like the one before us it is always necessary to find the intention of the party execut ing it
The intention has to be gathered from the recitals and the terms in the entire document and from the surround ing circumstances
How the parties or even their represen tatives in interest treated the deed in question may also be relevant
It is also well settled that the nomenclature given to a document by 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
Before we proceed further we may turn to the contents in the document
The deed is described as an otti deed executed by Nani Amma Janmam holder and manager and several other co sharers in favour of Kesavan Nambudiri
Next the document recites the various debts including the kanom of Rs 100 in respect of seven items of nilams wet lands
The debt owed by the executants on that date was Rs 650 covering all the outstanding dues upto that date and Rs 8910 cash received on that date from the transferee
Having recited the consideration in the deed as above the document concludes as follows  The Mambakkad paramba dry land
described in the Schedule under belonging to us in jenm absolute 699 right with all the improvements therein has been demised and given to your possession for a period of 72 years you may enjoy the paramba dry land with all the improvements on otti right and after adjusting the interest on otti consideration pay the purappad Rs 3155 fixed to be paid annually and also pay the revenue in our jema and obtain receipt therefor
On the expiry of the said period when the otti amount is paid and the otti is redeemed we shall pay the value of improvements then found and fixed
We hereby assure you that to our knowledge and belief there is no other charge or liability on this property
Apart from the document neither party adduced any evidence before the court
From the contents of the docu ment it is clear that the consideration was predominantly past debt and only a small sum of cash was received on the date of its execution
Possession of the land was made over to the transferee giving him the right to enjoy the land
The transferee was required to appropriate the income of the property to the interest on the amount ad vanced
The transferee was also to pay the land revenue to the credit of the transferor
A fixed amount of Rs 3155 was to be paid by the transfered to the transferor annually as purappad
This word purappad means the net produce or net rent payable to the janmi after deducting interest on advances made by the tenant and the Government tax
The debt of Rs 650 will remain unpaid even after the expiry of 72 years when the said otti amount has to be repaid
There is also an indication in the recitals that the proper ty will return to the transferor who shall pay the value of improvements then found and fixed
The is nothing in the recitals to show that the land was given as security for the amount of loan
There is no right of sale of the land delivered to the transferee in case the debt is not dis charged
On the other hand there is a clear recital about the payment of annual rent by the transferee to the trans feror
The trial court held the document to be a mortgage whereas the High Court held it to be a lease
It is enough to point out that the trial court was wrong in holding that the transferee was to utilise the amount of Rs 3 15 5 for paying the land revenue
On the other hand the document stated that this amount of fixed rent was to be paid annual ly in addition to the Government revenue which the transfer ee was required to pay
This feature of payment of rent in this case flits the balance in favour of construing the document as a lease coupled with the fact that the essence of a mortgage being the transfer of immovable property as security for the debt is conspicuous by its absence in the detailed enumeration of the terms
Further as stated earli er there is no right to sell the property in case the debt is not repaid
There is also nothing to show that the enjoyment of the usufruct was intended to wipe out the debt in the long period of occupation
We find that after the expiry of the period of 72 years mentioned in the document the appellant purchased the Janmam right of the  Aiyar s Law Lexicon of British India 1940 page 1050
13 1234SCI76 700 entire property in 1967 for a sum of Rs 1000 which in cluded the sum of Rs 650 which was the consideration in exhibit A 2
The Kerala Land Reforms Act 1963 Act 1 of 1964 had already been passed by then
It would therefore appear crystal clear that whoever be the janmi would be able to get only an infinitesimal sum of compensation for the property acquired and the major share would go to the tenants in possession under the aforesaid Act
It is not disputed that the appellant got his 14th share of compensa tion of the acquired property in terms of the earlier parti tion to which we have already adverted
It was therefore a clever act1 on the  part of the appellant to manage to the Janmam right of the transferor in the year 1967 when per haps the proposal for acquisition of the land had already been in the air in order that he was able to claim the remaining 34th share of compensation to which he would otherwise be not entitled except to an insignificant extent
The transferors themselves would be in no better position after the Kerala Land Reforms Act
When therefore the appellant offered to the transferors some money which the latter would not otherwise have obtained in view of the provisions of law the assignment of the Japnam right was made in favour of the appellant
The transferors thus walked out of the field leaving the future contest amongst the transferees out of whom the appellant came to be the Janmi
It is apparent that after the partition the appel lant would not stand to gain with regard to the 34th share of the property which is in dispute by accepting the document rs a lease since the respondents are the transfer ees in possession of this particular property
The appel lant therefore had cast his lot in a gamble by purchasing the Janmam right from the transferors in 1967
There is sufficient force in the contention of the respondents that the transferors themselves treated this document as a lease for else it cannot be explained why they would have parted with their Janmam right of the entire property for Rs1000  inclusive of the otti debt if they themselves had regarded this document as an instrument of mortgage
There is another significant feature that while there was arrangement to pay a fixed annual purappad to the transferor such a sum was not intended to be utilised towards reduction of the principal debt
It is therefore not possible to say that the High Court is wrong in holding that the consideration of Rs 650 in the deed was intended as a premium for the lease
There is also no evidence whatsoever to indicate as to what the price of the land was to determine the proportion between the amount advanced and the value of the property
The document taken as a whole lacks the most essential ingredient of a mortgage namely that the transfer of the property has to be made as a secu rity for the debt
The High Court has also noted that since the document was of a composite character disclosing features of both mortgage and lease it must be taken as a lease
We do not think that the High Court is correct in this view
Indeed the High Court in a later Full Bench
decision has not accepted this view
See Velayudhan Vivekanandan vs Ayyap pan Sadasivan
1 1 ILR 1975 1 Kerala 166
701 We are of opinion that when there are some mixed ele ments in an instrument disclosing features of mortgage as well as of lease the court will have to find out the pre dominant intention of the parties executing the document viewed from the essential aspect of the reality of the transaction
Human transactions cannot be tied to textual defini tions
They have to respond to variable requirements under different situations and often to the dictates of the party at an advantage in the bargain
Mortgages are not always simple English or usufructuary or such other types as defined in the Transfer of Property Act
They are anomalous too and sometimes more anomalous than what is defined in the said Act
Even so there is one most essential feature in a mortgage which is absent in a lease that is that the property transferred is a security for the repayment of debt in a mortgage whereas in a lease it is a transfer of a right to enjoy the property
We have seen that this essential feature of a mortgage is missing in the document in ques tion
We are therefore unable to come to the conclusion that it is a mortgage and not a lease
In view of the foregoing discussion we are not able to hold that the High Court is not right in holding that the document in question is a lease and not a mortgage
In the result the appeal is dismissed
We will however make no order as to costs
PBR Appeal dis missed


Summary:
By a registered deed described as otti deed the otti right in a piece of land had been transferred in 1894 to the predecessors in interest of the appellant and of the re spondents by the janmi for a period of 72 years for a cer tain consideration
The document recited various debts in respect of wet lands
the debt owed by the executants and cash received from the transferee on that date
Possession of the land was made over to the transferee giving him the right to enjoy the land
The other terms of the deed were that the transferee was required to appropriate the income of the property to the interest on the amount advanced to pay land revenue and a fixed amount to be paid by the transferee to the transferor annually as purappad that is the net produce or net rent payable to the janmi after deducting interest on advances made by the tenant and the Government tax
In 1949 the appellant and the respondents divided the property among themselves by metes and hounds and in 1967 the appellant purchased Janman rights in the entire land from the transferors for a small sum including the otti debt with a view to become the owner and therefore a mortgagor and thus get compensation with respect to the 34th share also
When the land was acquired by the Govern ment the appellant claimed the entire compensation while the respondents contended that the otti deed wan really a lease deed and that as tenants in possession of the land they would be entitled to the entire compensation under the Kerala Land Reforms Act 1963
The trial court held that the document was a mortgage while the High Court held it to be a lease
Dismissing the appeal to this Court HELD 1a When there are some mixed elements in an instrument disclosing features of mortgage as well as of lease
the Court will have to find out the predominant intention of the parties executing the document viewed from the essential aspect of the reality of the transaction
701 A b In construing a document 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 and how the parties or even their representatives in interest treated the deed in question
The nomenclature given to a document by the scribe or even by the parties is not always conclusive
The word otti  used in the document is not therefore of much consequence
698 F In the instant case the document taken as a whole lacks the most essential ingredient of a mortgage namely that the transfer of the property has to be made as a security for the debt
The document stated that fixed rent was to be paid annually in addition to the Government revenue which the transferee was required to pay
This feature of payment of rent tilts the balance in favour of construing the docu ment as a lease coupled with the fact that the essence of a mortgage being the transfer of immovable property as securi ty for the debt is absent
There is no right to sell the property in ease the debt is not repaid
There is nothing to show that the enjoyment of the usufract was intended to wive out the debt in the long period of occupation
While there was arrangement to pay a fixed annual purappad to the transferor such a sum was not 697 intended to be utilised towards reduction of the principal debt
There is sufficient force in the contention of the respondents that the transferors themselves treated this document as a lease for else it could not be explained why they would have parted with their Janmam right of the entire property inclusive of the otti debt if they themselves regarded this document as an instrument of mortgage
2 The High Court was however wrong in holding that where the document was of a composite character disclosing features of both mortgage and lease it must be taken as a lease
700 H Later Full Bench decision in Velayudhan Vivekanandan vs Ayyappan Sadasivan ILR 1975 1 Kerala 166 approved