Full Judgment Text
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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.
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