IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE HARUN-UL-RASHID FRIDAY, THE 25TH FEBRUARY 2011 / 6TH PHALGUNA 1932 SA.No. 118 of 2003() -------------------- AS.153/1994 of DISTRICT COURT, THIRUVANANTHAPURAM OS.147/1983 OF IInd ADDL. MUNSIFF COURT,THIRUVANANTHAPURAM .................... APPELLANT/APPELLANT/DEFENDANT -------------------------------------------------------- K.KARUNAKARAN NADEAR, K.S.R.T.C. MECHANIC, RESIDING AT CHEMANNUVILA VEETTIL, MEMOM MURI, NEMOM VILLAGE, TRIVANDRUM. BY ADV. SRI.G.S.REGHUNATH RESPONDENT/RESPONDENT/PLAINTIFF --------------------------------------------------------- K.MADHAVIKUTTY AMMA, KARINGOTTU VEEDU, CHIRAYINKEEZHU TALUK, TRIVANDRUM FROM KOCHUKALEEKKAL VEEDU, NEMOM MURI, NEMOM VILLAGE, TRIVANDRUM BY ADV. SRI.D.KISHORE THIS SECOND APPEAL HAVING BEEN FINALLY HEARD ON 11.2.2011, THE COURT ON 25.2.2011, DELIVERED THE FOLLOWING: VK SA.No. 118 of 2003() ------------------------------ ORDER ON IA. NO.993/2004 IN SA NO.118/2003 DISMISSED 25.2.2011 Sd/- HARUN-UL-RASHID, JUDGE / TRUE COPY / PA. TO JUDGE VK HARUN-UL-RASHID,J. ------------------------------- S.A. NO. 118 OF 2003 ------------------------------- DATED THIS THE 25TH DAY OF FEBRUARY, 2011 JUDGMENT Defendant in O.S.No.147/1983 on the file of the II Additional Munsiff's Court, Thiruvananthapuram is the appellant. The appeal is directed against the judgment and decree in AS.No.153/94 on the file of the District Court, Thiruvananthapuram. Notice is ordered on the following substantial question of law framed: “Whether the Lower appellate court was justified in directing the value of improvements to be decided in the final decree proceedings in a suit for redemption of mortgage. 2. The suit was filed for redemption of mortgage dated 5/11/1966. Defendant in the suit inter alia contended that he is entitled to fixity of tenure and alternatively contended that he has effected value of improvements to the tune of Rs.80,000/-. 3. The claim of tenancy under the Kerala Land Reforms -2- S.A.No.118/2003 Act was referred to the Land Tribunal. The Land Tribunal held that the defendant is not entitled to fixity of tenure. The said finding was accepted by the trial court and a preliminary decree for redemption was passed on 13/11/1992 holding that the plaintiff should deposit an amount of Rs.1,000/- being the mortgage price and Rs.50,000/- being the value of improvements. A commissioner was deputed to ascertain the value of improvements. He assessed the value of improvements at Rs.1,62,973.40 ps. 4. The trial court considered the prayer of the plaintiff for redemption of mortgage after payment of mortgage price together with compensation for improvements. The trial court considered the Commissioner's report. The Commissioner was examined as PW-2. The report of the Commissioner was marked as Ext.C1. Based on Ext.C1 commission report, the plaintiff filed a petition for amending the prayer to increase the value of improvements claimed originally from Rs.80,000/- to Rs.1,20,000/- in the written statement. The said application was dismissed by the trial court as highly belated. -3- S.A.No.118/2003 5. The dispute that survives in the case is with regard to the value of improvements only. The learned counsel for the plaintiff, who appeared before the trial court, has expressed the plaintiffs' willingness to pay reasonable sum to the defendant ; towards value of improvements as fixed by the court below. The trial court was not satisfied with the assessment of the value of improvements at Rs.1,62,973/- by the Commissioner. The trial court observed that there cannot be a mathematical accuracy as far as the value of improvements is concerned. Taking into account all the aspects and circumstances of the case and the long possession of the defendant as usufructory mortgagee, who have improved the plaint schedule property, the trial court held that a proportionate increase in the value of improvements can be granted to the defendant. Thus the court fixed Rs.50,000/- as reasonable. In the appeal preferred by the defendant it was contended that Rs.50,000/- fixed towards the value of improvements is not reasonable; but is arbitrary and that the court below went wrong in not relying on the Commissioner's report in fixing the value of -4- S.A.No.118/2003 improvements. The Lower Appellate Court also considered the question of adequacy of value of improvements. The learned Judge held that the fixation of value of improvements at Rs.50,000/- by the trial court is without showing any reason or data and therefore the said fixation cannot be upheld. The Learned Judge further held that a remand is not necessary as the question of value of improvements can be decided in the final decree proceedings. The Appellate Court modified the decree and judgment to the extent of directing the final decree court to assess and fix the value of improvements due to the defendant. The learned counsel for the appellant canvassed the only question of quantum of value of improvements. The substantial question of law framed is also regarding the value of improvements. The learned counsel for the appellant submits that under Order XXXVII Rule 4 CPC it is incumbent upon the court to pass a decree declaring the amount due to the defendant from the date of such decree. He further contended that as the decree is not passed as provided under Order XXXIV Rule 4 CPC, the same is liable to be set aside. The learned -5- S.A.No.118/2003 counsel also relied on the decision reported in Sultan Pillai Meeran Pillai v. Madhavan Pillai Damodaran Pillai (1968 KLT 248). This court in the said decision held as follows: “ A direction in a preliminary decree for redemption that compensation for improvement due to the mortgagee may be ascertained or assessed in final decree proceedings or at execution is not in accordance with Rules 7 and 8 of Order XXXIV C.P.C. and is for that reason not warranted by law.” 6. The Madhya Pradesh High Court in the decision reported in Bharosilal and others v. Shiladevi (AIR 1989 Madhya Pradesh 122) held that “the preliminary decree in the suit for redemption of mortgage should be drawn up in accordance with the Rule 7 of Order XXXIV CPC. In other words, there should be a direction first for an account being taken of what was due to the defendant at the date of the decree for principal and interest on the mortgage and thereafter declaration ought to be made of the amount, if any, to be paid to the defendant.” 7. The trial court assessed and fixed the value of improvements due to the mortgagee. Finding that the fixation of -6- S.A.No.118/2003 value of improvements is arbitrary, the Lower Appellate Court modified the preliminary decree and directed the final decree court to decide the quantum afresh. In view of the legal position stated above, the compensation for improvements due to the mortgagee has to be assessed in the preliminary decree stage itself and the decree shall be passed in accordance with Rules 7 and 8 of Order XXXIV CPC. Therefore, the direction of the Lower Appellate Court is not warranted. 8. The learned counsel on both sides requested this Court to fix the value of improvements at a reasonable rate. The trial court, after considering the materials on record, finds that an amount of Rs.50,000/- is reasonable. It is true that there cannot be a mathematical accuracy as far as the value of improvements is concerned in a case like this. The learned counsel for the respondent submits that his client shall pay Rs.1,00,000/- towards the value of improvements. The counsel for the appellant did not suggest any fixed amount; but requested this court to fix a reasonable amount as compensation. -7- S.A.No.118/2003 9. Taking into consideration the contentions of both sides and the request made, this court finds that Rs.1,20,000/- will be a reasonable amount as compensation for value of improvements. In the result, the appeal is partly allowed. The modified decree and judgment passed by the Lower Appellate court is set aside. The decree passed by the trial court for redemption of mortgage on payment of Rs.1,000/- being the mortgage price is restored. The value of improvements fixed by the trial court is modified and Rs.1,20,000/- (Rupees one lakh and twenty thousand) is fixed as the value of improvements. Except the said modification in all other respects the decree and judgment passed by the trial court is confirmed. No order as to costs. HARUN-UL-RASHID, Judge. kcv.