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PETITIONER: CHERUMANALIL LAKSHMI AND ORS.

       Vs.

RESPONDENT: MULIVIL KUNNINAMKANDY NARAYANI AND ORS.

DATE OF JUDGMENT: 12/09/1966

BENCH: BACHAWAT, R.S. BENCH: BACHAWAT, R.S. WANCHOO, K.N. SHAH, J.C.

CITATION:  1967 AIR  876            1967 SCR  (1) 314  CITATOR INFO :  R          1971 SC1575  (11)

ACT: Kerala  Land Reforms Act (1 of 1964), s. 2(23)-Malabar  Land Tenures-Difference between usufructuary mortgage and  kanam- kuzhikanam.

HEADNOTE: The  suits,  lands, together with  the  fruit-bearing  trees standing  thereon,  were demised for a period  of  24  years under  two  documents which specified the  kanartham  (kanam amount).   The  documents did not contain any  recital  that they created security for repayment of a debt nor  purported to   be   transactions  for  securing  debts   such   as   a mortgages,  panama or kyyasampanayam.  The transferees  were entitled  to enjoy the lands with the standing trees,  plant other fruit-bearing trees thereon, appropriate the income of the  lands in lieu of interest on the kanam amounts, and  to hold  the  lands  even after the expiry of  24  years  until payment of the kanam amounts and the value of trees planted. The  documents  were  styled kanan deeds  and  one  of  them explicitly stated that the demises were in  kanam-kuzhikanam right.   Subsequent  documents  also all  recited  that  the transactions were kanam-kuzhikanam transactions. HELD:     The  transactions were kanam-kuzhikanam  and  were not usufructuary mortgages. [316 B-C] A  kanan-kuzhikanam  and a usufructuary mortgage  have  many common   features.   Both  of  them  involve   transfer   of possession  on payment of money by the transferee,  set  off profits against interest, and retention of possession  until repayment  of the money. The essential  distinction  between them  is  that  the kanam-kuzhikanam is  a  lease,  and  is, therefore  -a  transfer of a right to  enjoy  the  property, whereas,  a  mortgage is a transfer of an  interest  in  the property for securing the repayment of a debt. [316 B-C]

JUDGMENT: CIVIL APPELLATE JURISDICTION : Civil Appeal No. 567 of 1964. Appeal  by special leave from the judgment and decree  dated

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June  22, 1961 of the Kerala High Court in A. S. No. 243  of 1955(M). H.   R. Gokhale and A. G. Puddissery, for the appellants. P.   Ram  Reddy, K. P. Madhava Menon and A. V. V. Nair,  for respondents Nos. 2 to 13. The Judgment of the Court was delivered by Bachawat, J. The question in this appeal is whether Ex.  A-1 dated March 26, 1900 and Ex.  B-1 dated March 27, 1900  were kanam-kuzhikanam transactions, or whether they created  usu- fructuary mortgages.  The appellants sued for redemption and recovery  of the suit lands alleging that Exs.  A-1 and  B-1 created  usufructuary  mortgages.  The  respondents  claimed that  they were kanam-kuzhikanamdars and entitled to  fixing of  tenure  under s. 21 read with s. 3 (15) of  the  Malabar Tenancy Act, 1929 (Madras Act 14 of 1930).  The trial  Court upheld the respondents’ conten-_ 315 tion  and  dismissed the suit.  On appeal, the  Kerala  High Court  affirmed this decree.  The appellants now  appeal  to this  Court by special leave.  During the pendency  of  this appeal,  the Kerala Land Reforms Act, 1963 (Act 1  of  1964) came  into  force.   It is common case before  us  that  the appeal must be disposed of in accordance with the provisions of  Act  1 of 1964.  In this appeal, the  respondents  claim that  they  are the holders of kanam-kuzhikanam  within  the meaning of s. 2(23) of this Act. Section 13 of Act 1 of 1964 gives to every tenant fixity  of tenure  in respect of his holding and forbids resumption  of the  holding except as provided in ss. 14 to 22.  Section  2 is the definition section.  By s. 2(57), a tenant means  any person  who  has  paid or has agreed to pay  rent  or  other consideration  for his being allowed by another  to  possess and  enjoy the land of the latter and includes inter alia  a kanam-kuzhikanamdar.  Section 2(23) reads               "kanam-kuzhikanam"   means  and   includes   a               transfer  by a landlord to another  person  of               garden  lands  or of other lands or  of  both,               with the fruit-bearing trees, if any  standing               thereon  at the time of the transfer, for  the               enjoyment  of those trees and for the  purpose               of planting such fruit-bearing trees  thereon,               the incidents of which transfer include-               (a)   a  right in the transferee to  hold  the               said  lands liable for the consideration  paid               by  him or due to him; which consideration  is               called ’kanartham’; and               (b)   the  liability of the transferor to  pay               to  the transferee interest on  the  kanartham               unless otherwise agreed to by the parties;               Provided  that a usufructuary mortgage as  de-               fined  in the Transfer of Property  Act,  1882               (Central  Act 4 of 1882), shall not be  deemed               to be a kanamkuzhikanam;" Exhibits  A-1 and B-1 demised the suit lands  together  with the fruit-bearing coconut, arecanut and jack trees  standing thereon for a period of 24 years.  The transfer was for  the enjoyment  of the lands with the standing trees and for  the purpose of planting fruit-bearing trees thereon.  The  kanam amount or the kanartham under Ex.  A-1 was.  Rs. 5,000/- and under Ex.  B-1 was Rs. 600/-.  The transferees were entitled to  appropriate the income of the lands in lieu of  interest on  the kanam amounts and to hold the lands even. after  the expiry  of 24 years until payment of the kanam  amounts  and the  value  of  the trees planted by them.   Thus,  all  the conditions of kanam-kuzhikanam mentioned in the main part of

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s.  2(23)  were  satisfied.  Nevertheless, in  view  of  the proviso M15Sup.CI/66-7 316 to s. 2(23), the transactions would not be  kanam-kuzhikanam if  it  is  shown  that they were  by  way  of  usufructuary mortgages as defined in s. 58(d) of the Transfer of Property Act,  1882.  A kanamkuzhikanam and a  usufructuary  mortgage have many common features.  Both the transactions involve or may  involve transfer of possession on payment of  money  by the  transferee,  set-off of profits  against  interest  and retention  of possession until repayment of the  money.   In spite of their close resemblance, the essential  distinction between   the  two  types  of  transactions  must   not   be overlooked.   A kanam-kuzhikanam is a lease, and is,  there- fore,  a  transfer  of a right to  enjoy  the  property.   A mortgage  is a transfer of an interest in the  property  for securing the repayment of a debt.  The purpose of one is  to enable enjoyment of the property by the transferee, that  of the other is to secure the debt.  On the question whether  a transaction   is  a  kanam-kuzhikanam  or   a   usufructuary mortgage, the name given to it by the parties is a relevant, though not always a decisive, consideration.  If the parties described  the transaction to be a kanam-kuzhikanam it is  a valuable indication that they intended it to be such and not a  usufructuary mortgage.  If the document purports to be  a mortgage, s. 12 of the Act allows the parties to prove  that it is, in substance, a kanam-kuzhikanam or other lease.  But if  the  document  purports  to  be  or  is,  on  its   true construction, a kanamkuzhikanam or other lease, s. 12 has no application  and full effect must be given to  the  document according to its tenor. Both Exs.  A-1 and B-1 were styled kanam deeds.  Exhibit A-1 stated  that  the demise was in Kettiyadakkam  kanam  right. "Kottiadaki"   means  "took  possession".   The   expression "kettiyadakkam kanam" may mean a usufructuary mortgage,  but this,  is not its necessary or invariable meaning.   Exhibit B-1 explained Ex.  A-1.  Exhibit B-1 explicitly stated  that the demises under Ex.  A-1 and B-1 were in  kanam-kuzhikanam right.   Exhibits A-1 and B-1 read together show  that  both the  transactions  were  kanam-kuzhikanam.   The  subsequent documents,  Exs.   B-2,  B-5, B-8, B-9,  and  B-10  executed between 1921 and 1944 all recited that Exs A-1 and B-1  were kanam-kuzhikanam transactions.  Exhibits A-1 and B-1 did not contain  any recital showing that they created security  for repayment  of  a debt.  Significantly, the parties  did  not describe the transactions to be a mortgage, otti, panayam or a kyvasam panayam.  Instead, they described the transactions as kanam-kuzhikanam and the amounts paid to the  transferees as  kanartham.  Exhibits A-1 and B-1 did not purport  to  be and were not transactions for securing debts.  We agree with the Courts below that the transactions were  kanamkuzhikanam and were not usufructuary mortgages. In the result, the appeal is dismissed with costs. Y.P.S.                                      Appeal dismissed. 317