- Bookmark
- Share
- CaseIQ
Meenakshi Amma v. Kizhakke Valath Nakayani And Others.
Structured Summary of the Opinion
Factual and Procedural Background
These are two connected appeals from the decrees and judgment of the Subordinate Judge of Ottapalam in A. S. Nos. 97 and 98 of 1950, which had modified the decrees and judgment of the District Munsif of Chowghat in O. S. Nos. 299 and 127 of 1949.
The material facts (as stated in the opinion) are:
- Ex. B-2: a pattamchit executed by the defendants' predecessor Itteeri in favour of the then karnavan of the plaintiffs' family and a junior member. That document recited that the properties were in the possession of Itteeri as a lessee and that he took a verumpattam lease with liability to pay an annual rent of 45 1/2 paras of paddy.
- Ex. B-3: a possessory mortgage deed executed by the karnavan and a junior member of the plaintiffs' tarwad to Itteeri's son Velu, reciting a possessory mortgage for Rs. 250 and stating that the properties were in Velu's possession as a tenant. The deed provided that 35 paras of the pattam might be appropriated by Velu towards interest and that the balance should be paid to the mortgagors; the mortgage term was one year, after which the mortgagee was to surrender possession.
- The mortgagors sought to redeem the properties because, by operation of Madras Act IV of 1938 as subsequently modified by Act XXIII of 1948, the mortgage had become extinguished. The defendants contended that delivery of possession could not be given, arguing that where a tenant takes a mortgage of land comprised in his holding, that fact does not of itself extinguish the tenancy: the tenant's rights are merely in abeyance and, when the mortgage is redeemed, the parties revert to their former positions so that the landlord would not be entitled to immediate possession except by ejecting the tenant in due course of law.
- Both lower courts accepted the defendants' contention; the plaintiffs (defeated mortgagors) appealed, arguing that the prior leases terminated with the mortgage, that the lessee's interest merged in the mortgage right as a larger and superior interest, and that acceptance of the mortgage involved an implied surrender of the leasehold. The plaintiffs relied on the Travancore-Cochin High Court decision in Velu v. Lekshmi (AIR 1953 Trav-Co. 584).
Legal Issues Presented
- Whether, where a tenant of land comprised in a holding accepts a possessory (usufructuary) mortgage from the landlord, the pre-existing lease/tenancy is terminated (either by merger into the mortgage right or by implied surrender) so as to entitle the mortgagor (landlord) to immediate possession on redemption/extinguishment of the mortgage.
- Alternatively, whether such a possessory mortgage merely suspends the landlord-tenant relationship so that the tenancy survives (in abeyance) and the landlord must obtain possession by ejecting the tenant in due course of law rather than obtaining immediate possession on redemption.
Arguments of the Parties
Plaintiffs-Appellants (mortgagors)
- Contended that the earlier leases/tenancies were terminated when the possessory mortgage was taken, because the lessee's interest merged in the mortgage right as a larger and superior interest.
- Argued that acceptance of the possessory mortgage involved an implied surrender of the leasehold.
- Relied upon the Travancore-Cochin High Court decision in Velu v. Lekshmi (AIR 1953 Trav-Co. 584) to support their contentions.
Defendants-Respondents (tenants / mortgagees)
- Maintained that delivery of possession could not be given to the mortgagors because a tenant's taking a mortgage of land comprised in his holding does not of itself extinguish the tenancy.
- Argued that the effect of such a mortgage would be merely to place the tenant's rights in abeyance and that upon redemption the parties would revert to their previous positions, requiring the landlord to eject the tenant in due course of law to obtain possession.
- Both lower courts accepted this contention, relying on the judgment of the Allahabad High Court in Kallu v. Diwan (ILR 24 All 487).
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Kallu v. Diwan, ILR 24 All 487 (Allahabad High Court) | As reported in the opinion, the Allahabad decision dealt with the effect of a tenant taking a mortgage. The courts below had treated that decision as supporting the proposition that a tenant taking a mortgage does not lose tenancy in some circumstances; the matter before the High Court involved findings about non-occupancy tenants and whether they ceased to be tenants on taking a mortgage. | The present court reviewed the Allahabad decision (including separate exposition by Banerji, Blair and Aikman, JJ.), but declined to follow it. The court explained that the Allahabad case concerned non-occupancy tenants and that certain statements in that judgment did not fit the facts or tenure doctrines applicable in the Kerala verumpattam context. For those reasons the court did not follow the Allahabad decision in preference to the Travancore-Cochin decision. |
| Velu v. Lekshmi, AIR 1953 Trav-Co. 584 (Travancore-Cochin High Court) | The Travancore-Cochin decision addressed the effect of a possessory/usufructuary mortgage taken during an antecedent lease and construed Section 111(f) of the Transfer of Property Act to hold that if two relationships cannot co-exist, the earlier is deemed terminated so as to permit the latter to operate; it found that acceptance of a possessory mortgage by a lessee implies non-existence of his rights as lessee and an implied surrender. | The present court accepted and adopted the reasoning of Velu v. Lekshmi as directly applicable ("a case almost identical with the facts of the present case"), holding that the lessee's interest gets merged in the mortgage right as a larger and superior interest and that acceptance of the possessory mortgage involves an implied surrender of the leasehold. |
Court's Reasoning and Analysis
The court framed the decisive issue as which of the two conflicting contentions should be accepted: the defendants' view (accepted by the lower courts and supported by the Allahabad decision) that tenancy survives or is only suspended, or the plaintiffs' view (supported by the Travancore-Cochin decision) that the lease terminates by merger and implied surrender upon taking a possessory mortgage.
The court adopted the reasoning of the Travancore-Cochin High Court in Velu v. Lekshmi and applied it to the present facts. That decision had construed Section 111(f) of the Transfer of Property Act and held that when two relationships in respect of the same subject-matter cannot co-exist (that is, the later relationship can operate only on termination of the earlier), the earlier relationship is deemed to have been terminated to enable the later to operate. Applying that principle, the court reasoned that acceptance by a lessee of a possessory mortgage involving obligation to surrender the property on redemption necessarily implies non-existence of his rights to possession as a lessee; consequently there is an implied surrender of the lease and a merger of the lessee's interest into the mortgage right at its acquisition as the larger interest.
The court addressed the Allahabad decision (Kallu v. Diwan) at length and explained why it would not follow it. The Allahabad case involved findings about non-occupancy tenants, and different judges in that case expressed divergent views: one strand treated the defendants as having ceased to be tenants upon taking the mortgage, while another view (Aikman, J.) suggested that the mortgage merely suspended the landlord-tenant relationship and that on redemption the parties would revert to their former positions. The present court observed that the reversion theory might make sense for occupancy tenancies but not for verumpattam (non-occupancy) tenants in Kerala, who do not possess the fixity-of-tenure protections described in the Allahabad judgment. The court concluded that in the Kerala context a non-occupancy verumpattamdar would be relegated to "zero" rights upon extinction of the mortgage, which ruled out the doctrine of abeyance relied upon in the Allahabad reasoning.
On that basis—the close factual and legal alignment with the Travancore-Cochin decision and the inapplicability of the Allahabad reasoning to Kerala verumpattam tenure—the court accepted the plaintiffs' contentions and reversed the lower courts' conclusions.
Holding and Implications
Holding:
The appeals are allowed and the decrees and judgments of the lower courts are reversed.
Direct consequences for the parties (as stated in the opinion):
- The plaintiffs-appellants are entitled to actual possession of the properties.
- The plaintiffs are entitled to mesne profits from the time after the extinguishment of the usufructuary mortgage up to the date of delivery of possession, calculated at 45 1/2 paras of paddy per annum (the amount shown in the papers as going towards reduction of principal and interest representing income from the property), for which the defendants are liable to account to the plaintiffs.
- The appeals are allowed with half costs throughout; vakil's fee to be taxed in one appeal only.
Implications beyond the parties: The court expressly adopted the Travancore-Cochin decision and declined to follow the Allahabad decision for reasons tied to the local character of verumpattam tenure. The opinion does not frame or declare a broader new precedent beyond its application of Velu v. Lekshmi to the present appeals; the immediate effect is the reversal of the lower courts' decrees and the relief awarded to the plaintiffs as set out above.
1. These are two connected appeals arising from the decrees and judgment of the learned Subordinate Judge of Ottapalam in A. S. Nos. 97 and 98 of 1950, modifying the decrees and judgment of the learned District Munsif of Chowghat in O. S. Nos. 299 and 127 of 1949.
2. The facts are :-- Ex. B-2 is a copy of the pattamchit executed by the defendants' predecessor Itteeri in favour of the then karnavan of the plaintiffs' family and a junior member. That document recites that the properties were already in the possession of Itteeri as a lessee and that he was taking verumpattam lease with the liability to pay an annual rent of 45 1/2 paras of Paddy. Ex. B-3 is a possessory mortgage deed executed by the karnavan and a junior member of the plaintiffs' tarwad to Itteeri's son Velu in respect of the properties.
It recites that the properties were possessorily mortgaged to Velu for a sum of Rs. 250. It also recites that the properties were in the possession of Velu as a tenant. The document finally states that out of the pattam of 45 paras and 3 3/4 narayams of paddy, 35 paras might be appropriated by Velu towards the Interest on the mortgage amount and that the balance of 10 paras 3 3/4 narayams should be paid to the mortgagors. The term of the mortgage was one year. After that period the mortgagee was to surrender Possession of the properties.
Provision was also made for setting off the amount due from the mortgagee against the mortgage amount at the time when possession had to be surrendered. These are undisputed facts. On the mortgagors seeking to redeem the property, because by operation of Madras Act IV of 1938 as subsequently modified by Act XXIII of 1948, the mortgage had become extinguished, they were met with the contention that delivery of possession could not be given because the fact of a tenant's taking a mortgage of land comprised in his holding from his landlord does not of itself extinguish the tenancy by merging the rights of the tenant In those of the mortgagee and the effect of such a mortgage on the tenant's rights would be merely that 'they would be in abeyance and that when the landlord redeemed the mortgage, the parties would revert to their former position, and the land-lord would, not be entitled to get possession of the land except by ejecting the tenant In due course of law.
In other words, it is clear that the mortgagors want to evict these defendants and take Possession of the property and the defendants are setting up fixity of tenure in order to defeat that claim of the plaintiffs.
3. Both the lower Courts accepted this contention of the defendants which is based upon the judgment of the Allahabad High Court in Kallu v. Diwan ILR 24 All 487 (A).
4. The defeated mortgagors prefer these anneals on the ground that the prior leases got terminated with the mortgage and that the lessee's interest merged in the mortgage right at its acquisition as a large and superior interest, and secondly that on accepting the mortgage there was an implied surrender of the leasehold. This contention is based upon a recent decision of the Travancore -- Cochin High Court in Velu v. Lekshmi, AIR 1953 Trav-Co. 584 (B).
5. Therefore, the short point for determination before me is whether the contention of the defendants which has been accepted by the lower Courts or the contention put forward before me by the plaintiffs is correct.
6. I have no hesitation in accepting the contention of the plaintiffs advanced before me based upon the decision in AIR 1953 Trav-Co. 584 (B). It is a case almost identical with the facts of the present case. In fact it is one of the rare instances where the learned advocate has been able to hand over to me a decision on all fours with the appeals under consideration. In that case the facts were: Kidangaserry Tharanananellur Illom, the jenmi, leased on verumpattom an item of land to Kurunhikattall Manickan and another item to Manali Makkotha.
During the subsistence of these leases the lessor in the year 1080 executed a usufructuary mortgage and in 1092 a purankadam deed to Manickan's son and heir Raman. These were possessory mortgage and purankadam which formed the basis of the suit. In 1081 Makkotha attorned to Raman. After obtaining the purankadam Raman apportioned an amount of Rs. 50 from out of the mortgage money of Rs. 200 and a further advance of Rs. 50 for the purankadam upon the item in Makkotha's possession as lessee and assigned that part of his rights to Makkotha.
The illom assigned its right over both the items to the plaintiff in the suit in 1120. Meanwhile the rights of Makkotha had by several transfers and transmissions, devolved upon Kailath Kochuraman. Kochuraman surrendered the property to the plaintiff. Having thus obtained possession of one of the items on payment of the proportionate part of the mortgage and Purankadam amounts, he brought the suit for redemption of the other item on payment of the balance amount and claiming khas possession though the mortgagee was not inducted into possession along with the mortgage on the allegation that the antecedent lease terminated with the mortgage, whereafter the relationship between the parties was merely one of mortgagor and mortgagee and not of lessor and lessee.
The defence was that the lease did not terminate with, but survived, the mortgage whose redemption would have the effect of only freeing the property from the encumbrance thereunder leaving the lessee in possession thereof as such. The question that arose for consideration was as regards the effect of the mortgage transaction upon the pre-existing lease. The learned Judge, Subramania Iyer, J. discussed the contentions of the appellants before him from two points of view to which I have already made reference viz., that firstly, the lessee's interest got merged in the mortgage right at its acquisition as a large and superior interest and secondly, that on accepting the possessory mortgage there was an implied surrender of the leasehold.
The learned Judge construed Section 111, Clause (f) of the Transfer of Property Act and found that the principle underlying it was that whenever a certain relationship exists between two parties in respect of a subject-matter if the two sets of relationships cannot co-exist as being inconsistent and incompatible, that is to say, if the latter can come into effect only on termination of the earlier that would be deemed to have been terminated in order to enable the latter to operate. Therefore, the acceptance by the lessee, who takes a possessory mortgage of his leasehold from the lessor of the obligation to surrender the property on redemption by payment of the mortgage money necessarily implies the non-existence of his rights to possession of the property as lessee.
There is therefore an implied surrender of the lease with the execution and acceptance of the possessory mortgage. It is unnecessary for me to discuss this matter further because I respectfully adopt the reasoning of the learned Judge and hold that in a case of this nature first of all the lessee's interest gets merged in the mortgage right at its acquisition as a larger and superior interest and secondly, that on accepting the possessory mortgage there is an implied surrender of the lease-hold.
7. then turning to the Allahabad decision (A), which incidentally has not been noticed in the aforesaid decision cited just now, I respectfully prefer not to follow this decision for the following reasons. The facts of that case Were: The Court of first instance (Munsif of Kairana) found that the mortgaged land was Identical with that which the defendants asserted to be their tenancy and therefore gave the plaintiff a decree for redemption, though not for possession. The plaintiff appealed, and the lower appellate Court (Additional Subordinate Judge of Saharanpur) modified the decree of the first Court by decreeing possession in favour of the plaintiff.
The tenants in that case were found to be no more than non-occupancy tenants and it was held by that lower appellate court that by accepting the mortgage they had by their own act changed the nature of their possession from that of tenants to that of mortgagees. There was an appeal to the High Court and it was heard in the first instance by Banerji, J. The relevant portion of the judgment of Banerji, J. is as follows:
"I take the lower appellate Court to hold that when the defendants took a mortgage of the land of which they had been non-occupancy tenants, they gave up the tenancy and became mortgagees, and thus ceased to be tenants. There can be no doubt on the findings that the defendants had at the date of the mortgage no right of occupancy in respect of the mortgaged land. It is also noticeable that the mortgage deed does not purport to mortgage the zamindari rights of the mortgagor maintaining the tenancy rights of the mortgagees. It is not the defendants' case that they were both mortgagees and tenants.
From these circumstances it may he rightly inferred and that I take to be the inference at which the lower appellate Court has arrived, that the defendants ceased to be the tenants of the plaintiff, and took a mortgage of the land of which they were tenants. That being so, no question of the acquisition of a right of occupancy or of the existence of a tenancy arises, and the mortgagor is entitled to possession of the land which he mortgaged to the defendants under the usufructuary mortgage in question.
This case is different from that of a mortgage, which included land in which the mortgagee had a right of occupancy before the mortgage. I dismiss the appeal with costs."
8. There was a Letters Patent Appeal and the leading judgment was delivered by Blair, J., the other judge being Aikman, J. Blair, J. purported to follow an unreported judgment of Burkitt, J. which fortunately for us had been reproduced at p. 491. On a reference to that judgment we find that Burkitt, J. dealt with only a case of occupancy ryot before taking a mortgage and after taking a mortgage. Therefore, Burkitt, J. began with the opening words:
"In my opinion the decision of the Additional Judge in this case cannot be supported. I entirely dissent from the novel and extraordinary doctrine laid down by the Additional Judge that, if an occupancy tenant lends money to his landlord and takes from his landlord a mortgage of an area of land, which includes his own occupancy holding, he thereupon ceases to be an occupancy tenant under some novel doctrine of merger, apparently invented for this case.
If this doctrine were affirmed, the result would be that the occupancy tenant referred to would be in a much worse position after his possession as mortgagee had ceased than before. For according to the Additional Judge he would have ceased to be an occupancy tenant, I cannot assent to this doctrine. I see no reason why in such a case the occupancy tenure should be forfeited, and it is the first time I have heard such a doctrine mooted."
9. On the other hand, the case before Blair and Aikman, JJ. was only the case of a non-occupancy ryot, before taking the mortgage, which makes all the difference in the world Blair, J. gets over it with this rather bald statement:
"In our opinion the ruling in that case is absolutely sound law, and governs cases of tenancy of a less durable character than an occupancy right".
In support of this proposition, which in no way follows from the judgment of Burkitt, J. there is neither discussion nor citation. This is the only sentence to be found in the judgment of Blair J. in support of a proposition which does not flow from the decision of Burkitt, J. Turning to the judgment of Aikman, J., he observed:
"The lower appellate Court and our learned colleague came to the conclusion that the effect of the mortgage was to put an end finally to the defendants' tenancy. In my opinion that is a conclusion which is not warranted by law".
Which law does not warrant it, has not been indicated. Lower down he observes:
"The effect of the mortgage was to suspend for the time being the relationship of land-holder and tenant between the parties. When the mortgage is redeemed, the parties are relegated to the position which they occupied immediately before the mortgage was executed."
I could understand this reasoning if it relates to an occupancy tenancy because in such a case the mortgage could suspend the operation of the occupancy tenancy itself and after the mortgage debt is extinguished, the man would be relegated to the previous unextinguished vested non-evictable position of an occupancy tenant whose fixity of tenure will only be terminated by relinquishment or by sale of the holding for arrears and rent (to mention two instances). In the case of a non-occupancy tenant when the mortgage gets extinguished, what is the relation back of this non-occupancy tenant?
He will be relegated to nothing because he was only a verumpattomdar having no fixity of tenure. Zero back to Zero rules out abeyance. On account of the fact that we do not know the rights of non-occupancy tenants in Saharanpur area in 1902 it is not possible for us to follow Justice Aikman's penultimate sentence
"they were at all events agricultural tenants who had certain rights including the right to retain possession of their holding until ousted in due course of law."
All that we know is that the Verumpattadar in Kerala has no such rights. That is why I have said the relegation can only be to zero rights. I respectfully, therefore, consider that this judgment of the Allahabad High Court should not be followed in preference to that of the Travancore-Cochin Court's judgment which has decided a controversy of precisely identical nature, apart from the fact that the learned Judge of the Travancore-Cochin High Court dealt with native knowledge of verumpattam tenure and Malabar usufructuary mortgage, because these controversies both before that Court as well as this Court arise from the same Kerala area.
10. In the result I reverse the decrees and judgments of both the lower Courts and find under the points for determination in both these appeals as follows; viz., that the plaintiffs-appellants are entitled to get actual possession of the properties, that they are entitled to get mesne profits after the extinguishment of the usufructuary mort gage up to the date of delivery of possession at 45 1/2 paras of paddy per annum shown as the amount going towards the reduction of the principal and interest representing the income from the property, for which the defendants would be liable to account to the plaintiffs. These appeals, in the result are allowed with half costs throughout. Vakil's fee to be taxed only in one appeal.
Alert