IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE P.BHAVADASAN FRIDAY, THE 10TH JUNE 2011 / 20TH JYAISHTA 1933 SA.No. 885 of 2000(E) & CROSS OBJECTION ---------------------------------------------------------------- AS.217/1997 OF II ADDITIONAL DISTRICT COURT, KOZHIKODE OS.364/1993 OF II ADDITIONAL SUB COURT, KOZHIKODE .................... APPELLANT/RESPONDENT/PLAINTIFF: ---------------------------------------------------------- SAMUVAL CHEERAN, S/O.PAUL CHEERAN, M.P.C. HOUSE, NEAR B.E.M.U.P. SCHOOL, CALICUT-21. BY ADV. SRI.T.R.RAVI, SRI.P.S.MURALI. RESPONDENT/APPELLANT/DEFENDANT: ------------------------------------------------------------ PALLIKKOTTU VAYALIL KRISHNAN, S/O.CHATHUKUTTY, HERO METTAL INDUSTRIALS, NEAR B.E.M.U.P. SCHOOL, PUTHIYANGADI, CALICUT-21. BY SRI.M.C.SEN, SENIOR ADVOCATE, ADV. SRI.M.P.SREEKRISHNAN, SMT.SHAHNA KARTHIKEYAN, SMT.SAVITHA GANAPATHIYATAN. THIS SECOND APPEAL HAVING BEEN FINALLY HEARD ON 10/06/2011,THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: rs SA.No. 885 of 2000(E) ORDER ON C.M.P. NOS.2441/2001 & 2442/2001 IN S.A. NO.885/2000 DISMISSED 10/06/2011. SD/- P.BHAVADASAN, JUDGE //TRUE COPY// P.A. TO JUDGE rs P.BHAVADASAN, J. ------------------------------------- SA No.885 of 2000-E & Cross Objection ------------------------------------- Dated this the 10th day of June 2011 Judgment The short question that arises for consideration in this second appeal is whether Ext.A1 document dated 01.10.1980 is a mortgage or a lease. The trial court, on an interpretation of the document, held it to be a mortgage. The lower appellate court, on the other hand, considered the recitals in the documents, the conduct of the parties and held that it is a lease though styled as a mortgage. Holding so, the suit was dismissed. Hence the second appeal. 2. Notice is seen issued on the following questions of law raised in the second appeal : 1.In the face of the clear and unambiguous recitals n Exts.A1, whether the court below was justified in resorting to extraneous aids to determine what the parties really intended. SA 885/00 2 2.Whether the court below is justified in not looking into what is the legal effect of the words if a reasonable man reading Ext.A1 would understand them to mean while interpreting Ext.A1. 3. Mr.T.R.Ravi learned counsel appearing for the appellant very vehemently pointed out that when the terms of the document were unambiguous and clear, there was no necessity to go behind the document to ascertain the conduct and intention of the parties to interpret the document. Reliance was placed on the decision reported in Gilbert v. Vivekanandan (1988(1) KLT 50), which has been referred to by the trial court. The learned counsel went on to point out that the parties were aware of the transaction entered into it by them and they knew the consequences thereof. They chose to reduce it into writing and so, they are bound by the terms of it. It was unnecessary thereafter, especially when there was nothing suspicious in the document as the terms were clear and unambiguous. There was no necessity to consider the SA 885/00 3 other aspects to reach the conclusion as to whether the transaction was a mortgage or lease. The learned counsel went on to point out that the interference made by the lower appellate court was quite uncalled for. 4. Per contra, the learned counsel for the respondent pointed out that the lower appellate court has considered the material documents in the proper perspective and has found that the terms of the document spell out a lease rather than a mortgage. It was thereafter that the court went into the conduct of the parties and held that it further fortifies the conclusion that the transaction is a lease and not a mortgage. At any rate, according to the learned counsel, the view taken by the lower appellate court is a plausible view and if that be so, no interference is called for in the second appeal. 5. It is true that quite often, a lease is disguised as a mortgage. One has to read the document as a whole and come to a conclusion as to what is the transaction and what is the intention of the parties. Going by Ext.A1, it can SA 885/00 4 be seen that the property involved is a building, with books and implements therein and the extent of property is only one cent. Even going by the version given by PW1, the value of the property was Rs.10,000/- in 1980 and it was mortgaged for Rs.1,000/-. According to the defendant, he was paying a monthly rent of Rs.250/- and the mortgage was for a period of two years. 6. The trial court strictly went by the wording of the document and came to the conclusion that in the light of the fact that the terms of the document spell out a mortgage, one need not go further into the conduct and circumstances of the case. But the approach of the trial court does not appear to be correct. When the document is read as a whole, the high value of the property, the monthly payment, security amount, the purpose for which the loan was taken – all these aspects, as rightly noticed by the lower appellate court are to be considered. In the case on hand, the loan amount compared to the value of the property, payment of monthly rent, restrictions against SA 885/00 5 transfer, the fact that even after the mortgage amount was wiped off, the delay in seeking redemption, are all stipulations and conditions which militate against a mortgage. They are more in consonance with a lease. 7. The lower appellate court has considered the various aspects of the case and has come to the conclusion that it is a lease and not a mortgage. It could not be said that the findings of the lower appellate court are either perverse or unwarranted by the evidence on record. The result is that no substantial questions of law arise for consideration in this second appeal. The second appeal is devoid of any merits and it is accordingly dismissed. The cross objection filed in this case is found to be without any merits and it is accordingly dismissed. P.Bhavadasan, Judge sta SA 885/00 6 SA 885/00 7