Case: Commissioner of Income Tax, Uttar Pradesh Vs. Abdul Hai Azim Ullah

transferee. The transferor is called the lessor, the transferee is called the lessee and the price is called the premium and the money, etc., or other thing to be so rendered is called the rent4. On behalf of the appellant strong reliance has been placed on the observations of the Privy Council in Nidha Sah v. Murlidhar. In that case one Indarjit Lal executed an instrument purporting to be a mortgage with possession in respect of proprietary rights in certain villages for a period of 14 years. It was provided that on the expiration of the term the mortgagor" shall come in possession of the mortgaged villages without settlement of accounts..... that on the expiration of the term..... the mortgagee shall have no power whatever in respect of the said estate..... and after the expiration of the term this mortgage-deed .... shall be returned to the mortgagor without his accounting for (paying) the mortgage money ....... "Their Lordships observed" This instrument, though it is called a mortgage, and though it will be convenient to follow the nomenclature used in the document itself and in the pleadings and judgments in the courts below, is not a mortgage in any proper sense of the word. It is not a security for the payment of any money or for the performance of any engagement. No accounts were to be rendered or required. There was no provision for redemption expressed or implied. It was simply a grant of land for a fixed term free of rent in consideration of a sum made up of past and present advances. "When the term expired the mortgagee refused to give up the possession on the ground that he had not been able to get possession owing to the misrepresentation of the mortgagor and had not received the full benefit purported to be given by the mortgage. In a suit by the mortgagor to recover possession, it was held by the Judicial Committee that the plaintiff was entitled to rely on his proprietary right and, in the absence of any stipulation express or implied in the mortgage-deed depriving him of the right to recover possession, he was entitled to succeed5. On behalf of the respondent reliance has been placed on Ishan Chandra v. Sujan Bibi. In that case, in consideration of a loan received, a party agreed that his property should remain in the hands of the lender for a term of years by which time it was understood the whole amount borrowed would be liquidated, the transaction was held to be Bhogbhundhuk or usufructuary mortgage and not a lease6. In Tukaram Bin Mairal v. Ramchand Malukchand, a Full Bench had to consider a document which was described in the heading as a mortgage deed. There was a provision that the debt was not to bear interest but towards liquidation of it the creditor was to appropriate the income of the land described which was given for enjoyment for a period of 10 years. The deed went on to state that when the creditor had managed the land and appropriated the produce, the debtor would understand that the money due had been paid off and would take a receipt and thereafter the person to whom the document was passed would have no right over the land. No mention had been made of any premium or periodical payment of rent or share of the produce. It was contended that the transaction in that case could not be one of usufructuary mortgage as set forth in section 58(d) of the Act because that provision did not contain mention of any fixed term. The Full Bench observed" That, no doubt, is so, but the law contemplates the property remaining in the possession of the mortgagee, who is authorised to retain it until payment of the mortgage money and to appropriate the rents and profits in lieu of interest or in payment of principal or both, and the nature of the contract is not altered by the fact that the calculation is made beforehand of the period for which the rents and profits will be sufficient to pay off both principal and interest. There is no apparent reason why such a contract as the present should not come within the category of anomalous mortgages as defined in section 98 of the Transfer of Property Act..... "7. The ratio of the Full Bench decision was applied in Mahmad Muse Umarji v. Bagas Amanji Umar, where by a deed it was provided that in consideration of a certain amount advanced to the plaintiff the defendant was to take possession of lands belonging to the plaintiff for 199 years and to apply its profits in liquidation of the debt. The deed was headed " lease in respect of valatdan. " Before the expiration of the period the plaintiff brought a suit for redemption of the mortgage and for possession of the land alleging that the transaction evidenced by the deed was a mortgage. It was held, that reading the deed as a whole and in view of the decision of the Full Bench, the transaction was one of mortgage. The parties clearly intended that the relations between them should be that of mortgagor and mortgagee8. It is unnecessary for us to decide any other point except the narrow question whether the transactions embodied in the deeds referred to were of leases or of mortgages. The Privy Council decision was based on different facts and is clearly distinguishable. There was no question there of the liquidation of debt by the receipt of rents and profits thereof by the mortgagee. The deed was interpreted as containing a simple grant of land for a fixed term free of rent in consideration of a sum made up of past and present advances. The deeds, in the present case, when examined closely, fall more appositely within the type of instruments which came up for consideration in the other three cases on which reliance was placed by counsel for the respondent

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]8. It is unnecessary for us to decide any other point except the narrow questionthe transactions embodied in the deeds referred to were of leases or of mortgages.The Privy Council decision was based on different facts and is clearly distinguishable. There was no question there of the liquidation of debt by the receipt of rents and profits thereof by the mortgagee. The deed was interpreted as containing a simple grant of land for a fixed term free of rent in consideration of a sum made up of past and present advances. The deeds, in the present case, when examined closely, fall more appositely within the type of instruments which came up for consideration in the other three cases on which reliance was placed by counsel for the respondent