IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE P.BHAVADASAN WEDNESDAY, THE 9TH FEBRUARY 2011 / 20TH MAGHA 1932 SA.No. 600 of 1999(D) -------------------------- AS.65/1998 of I ADDL.SUB COURT, KOZHIKODE OS.933/1987 of PRL.MUNSIFF COURT, KOZHIKODE-II .................... APPELLANT(S):(1ST APPELLANT1ST DEFENDANT) ----------------------------------------------------------- *1. M/S.PARADAN COMPANY, A REGD. FIRM REPRESENTED BY ITS MANAGING PARTNER, PARADATH KUTTY KRISHNAN NAIR KATCHERI AMSOM DESOM, KOZHIKODE. (DIED) * APPELLANT 2 TO 4 ARE IMPLEADED 2. SMT.K.C.LEELA AMMA, W/O. P.KUTTY KRISHNAN NAIR, PARADATH HOUSE, KARUVASSERY, CALICUT - 10. 3. K.C. USHA, D/O.P.KUTTY KRISHNAN NAIR, - DO- 4. K.C. MINI, D/O. P.KUTTY KRISHNAN NAIR, -DO- * ADDL. APPELLANTS 2 TO 4 THE 1ST APPELANT FIRM AFTER THE DEATH OF THE MANAGING PARTNER ARE IMPLEADED AS PER ORDER DATED 11/11/1999 IN C.M.P. NO.2095/1999. BY SRI.A.P.CHANDRASEKHARAN, SENIOR ADVOCATE ADVS. SMT.PRABHA R.MENON SRI.KODOTH PUSHPARAJAN SRI.M.KRISHNA KUMAR RESPONDENT(S):(APPELLANTS 2 & 3 & RESPONDENT/PLAINTIFF/ DEFENDANTS 2 AND 3) ----------------------------------------------------------------------------- **1. POKKANCHERI MOHANAN, AGED 56 YEARS, S/O. CHANDU VAIDYAR, KASABA AMSOM DESOM, KOZHIKODE TALUK.(DIED. LR'S IMPLEADED) svs ............2/-... ...2... SA.No. 600/1999(D) 2. P. VIVEKANANDAN, PULIKKAL HOUSE, NAYARKUZHI, POOLEKKODE VILLAGE, KOZHIKODE TALUK. 3. M. ABDUL AZEEZ, S/O. MUHAMMED, KARAPPOYILIL HOUSE CHEVAYUR AMSOM DESOM, KOZHIKODE TALUK. ** ADDL. R4 TO R6 IMPLEADED 4. LALITHA, W/O. LATE POKKANCHERI MOHANAN, POKKANCHERI HOUSE, VATTAMPOYIL, CALICUT - 3. 5. BIPINCHAND, S/O. -DO- -DO- 6. BIJUSH, S/O. -DO- -DO- ** ADDL. RESPONDENTS 4 TO 6 IMPLEADED AS THE LR'S OF DECEASED 1ST RESPONDENT AS PER ORDER DATED 23/07/2010 IN I.A. NO.390/2003 IN RSA. R3 BY ADV. SRI.M.G.VENUGOPALAN R4 TO R6 BY ADV. SRI.C.P.MOHAMMED NIAS THIS SECOND APPEAL HAVING BEEN FINALLY HEARD ON 09/02/2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: svs ORDER ON C.M.P. NO. 1677/99, IN S.A. NO.600/1999 CLOSED 09/02/2011 SD/- P.BHAVADASAN, JUDGE /TRUE COPY/ P.A. TO JUDGE svs P.BHAVADASAN, J. ------------------------------------- SA No.600 of 1999 ------------------------------------- Dated this the 9th day of February 2011 Judgment Disappointed, first defendant is the appellant. He suffered concurrent decrees at the hands of the courts below. The parties and facts are hereinafter referred to as they are available before the trial court. 2. According to the plaintiff, he mortgaged 19.5 cents of land to the first defendant receiving a sum of Rs.3,000/- and reduced the transaction into writing as evidenced by Ext.A2 dated 03.10.1977. The period of the mortgage was 10 years. The plaint gives in detail the various stipulations contained in Ext.A2. When the mortgage period was over, the plaintiff requested the defendant to surrender possession of the land. But, the defendants did not surrender possession. In spite of the lawyer notice sent by the plaintiff, when the defendants did not surrender possession, the suit was laid for redemption SA 600/99 2 of mortgage. 3. The defendants resisted the suit. They denied that the transaction was a mortgage and contended that in fact, it was a lease. According to them, the mortgage was a camouflage in order to get out of the protection which the defendants may have under the Rent Control Act. They contended that a reading of the document clearly shows that it is a lease. They also contended that they were in possession of the property on the basis of lease deed and they are entitled to fixity of tenure. On the basis of these contentions, they prayed for a dismissal of the suit. 4. On the basis of the above pleadings, necessary issues were raised by the trial court. The evidence consists of the testimony of PW1 and exhibits marked as Exts.A1 to A3(b) from the side of the plaintiff. The defendants examined DW1 and had Ext.B1 marked. Exts.C1 to C4 are the commissioner's report and plan. 5. On an evaluation of the materials before it, the trial court found that none of the contentions raised by the SA 600/99 3 defendants is tenable and decreed the suit in terms of the mortgage deed. The value of the building was found to be Rs.20,000/- and the plaintiff was directed to deposit a sum of Rs.23,000/- towards the value of improvements in the property and mortgage money. 6. The matter was carried in appeal by the first defendant as AS No.65/98 before the Sub Court, Kozhikode. The lower appellate court confirmed the decree of the trial court. Hence this second appeal. 7. Notice is seen issued on the following questions of law raised in the second appeal : 1.Whether the courts below were right in coming to the conclusion that the alleged agreement is a mortgage agreement especially when the basic ingredients of mortgage is lacking in letter and spirit / 2.Whether the alleged mortgage agreement can be accepted as consensus arrived at between the parties when there is no nexus between the mortgage money and the value of the property. SA 600/99 4 3.Whether Section 91 and 92 of the Evidence Act is an absolute bar when the attending circumstances show that the document alleged to have been executed is nothing but a sham ? 4.Whether both the courts were right in accepting the alleged agreement purported to have conveyed mortgage, when the said agreement was forcefully induced by the landlord/plaintiff with an intention to flaut welfare legislations like Kerala Land Reforms At and also the Kerala Building (Lease and Rent Control) Act ? 5.Whether the courts below were right that the alleged agreement conveys a mortgage when the mortgage money of Rs.3,000/- could have been wiped off by 3 months surplus profit of Rs.1,000/- each and the agreement stipulated 10 years term whereby the mortgagee who paid Rs.3,000/- is further compelled to pay Rs.1,20,000/- by the expiry of the term of mortgage? 6.Whether the courts below were right in ignoring the fact that the mortgagee is compelled to pay the surplus profit, SA 600/99 5 even if he is not in a position to use the property profitably and transfer of possession is specifically restricted ? 7.Whether the courts below were right in accepting the documents when it is hit by principles of public policy envisaged under section 23 of the Contract Act ? 8.Whether the 1st appellate court was right in dismissing the appeal without remanding the matter, after permitting amendment of the written statement, whereby the party wanted to adduce fresh evidence on the issue ? 9.Whether the courts below were right in decreeing the suit by accepting the contention of the plaintiff that he had obtained right to the property through an IA when the order in the same went beyond the scope of the preliminary decree ? 10.Whether the courts below ere right in decreeing the suit after realising the fact that the plaintiff does not have any right to the suit property, to claim redemption of mortgage? SA 600/99 6 8. The appellant has filed CMP No.614/02 and has raised the following additional grounds : 1.The decree granted by the lower appellate court in any event, is not in conformity with Order XXXIV of the Code of Civil Procedure, 1908 as amended by the Code of Civil Procedure Amendment Act 104 of 1976. 2.The lower appellate court has egregiously erred in granting a composite decree for redemption of mortgage. 3.The lower appellate court has failed to see that after the coming into force of the 1976 amendment of the Code of Civil Procedure, 1908, no inconsistent State amendment would survive in view of Section 97(1) of the Code of Civil Procedure Amendment Act, 104 of 1976. 4.The lower appellate court ought to have noted that the amendment made to the Code of Civil Procedure in Kerala in 1990 is void by operation of Article 254(2) of the Constitution of India. 5.The lower appellate court ought to have held that in any event, only a preliminary decree for redemption of SA 600/99 7 mortgage can be granted. 6.The courts below ought to have held that the suit is not maintainable as the plaintiff has no title to the property. 7.The suit property stands allotted to the other members of the plaintiff's tarwad under the final decree passed in the partition suit and those members having already initiated execution of the final decree in EP 235/2000 the first respondent/plaintiff is not entitled to redemption and recovery of possession of the property since he is not the title holder. 9. The learned counsel for the appellant contended that a reading of the mortgage deed will clearly reveal that it is only a lease and that the attempt of the plaintiff is to get over the provisions of the Rent Control Act. According to the learned counsel, it is well settled that even though the document is nomenclatured as a 'mortgage', it is possible for the courts to look into the real transaction and come to a conclusion. Relying on Ext.A2 and the evidence of PW1, it was contended that the elements of a SA 600/99 8 mortgage are conspicuously absent. On the other hand, it is more prominent to be a lease. Accordingly, it is contended that both the courts below were not justified in decreeing the suit. 10. It has to be said that there is no basis whatsoever for the contentions raised by the learned counsel for the appellant. On a reading of the document, it is seen that it is a mortgage. First of all, the parties entered into an agreement with open eyes and it cannot be readily accepted when one of the parties later says that it is not a mortgage deed and it is a lease deed. 11. The contention that the document has been executed to get over the provisions of the Rent Control Act i.e., Act 2 of 1965, has no basis. Even assuming the document is a lease deed, it is only a lease of the land and not of the building. Structures were put up by the mortgagee or the lessee as the case may be. There was no landlord-tenant relationship in relation to the structures between the parties. So, at any rate, the provisions of Act 2 SA 600/99 9 of 1965 cannot be attracted. 12. Even if it is construed as a lease, there is a notice contemplated under Section 106 of the Transfer of Property Act and all the necessary formalities for terminating the lease have been complied with. 13. The contention based on S.106 of the Kerala Land Reforms Act was rightly repelled. In the additional grounds raised before this court, it is contended that the courts below ought not to have passed a composite decree as it is violative of Order XXXIV CPC. This contention is also without any basis. It is repeatedly held by this court in several decisions that though a composite decree is not desirable, such a decree is not illegal. The result is that none of the grounds raised in the second appeal is tenable or acceptable. There is nothing to show that the courts below have erred in any manner in coming to the conclusion that the plaintiff is entitled to succeed. No substantial questions arise for consideration in this second appeal. The appeal is devoid SA 600/99 10 of any merits and it is accordingly dismissed. There will be no order as to costs. P.Bhavadasan, Judge sta SA 600/99 11