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Godasankara Valia Raja Vs. Tharappan Vareed - Court Judgment

LegalCrystal Citation
CourtKerala High Court
Decided On
Case NumberA.S. No. 286 of 1956
Reported inAIR1961Ker293
ActsTransfer of Property Act, 1882 - Sections 58 and 111; Evidence Act, 1872 - Sections 92
AppellantGodasankara Valia Raja
RespondentTharappan Vareed
Appellant Advocate M.K. Narayana Menon, Adv.
Respondent Advocate P.K. Subramonia Iyer, Adv. for 3rd Respondent and; C.S. Ananthakrishna Iyer, Adv. for Respondent 10 t
DispositionAppeal allowed
Cases Referred and George v. Mathai
.....placed by parties mainly upon two documents produced as evidence - in view of description of mortgaged properties and on terms and provisions of documents relationship of mortgagor and mortgagee established - interpretation of two documents inconsistent - where the terms of document plain and unambiguous no evidence of subsequent conduct of parties to prove how they understood or treat the documents admissible - right under previous document deemed to be extinguished on taking effect of subsequent document - held, plaintiff entitled to relief as prayed. - - b recited, that the possession, of the mortgaged properties was given on that day to the mortgagee, and it directed him to enjoy them directly or indirectly, on payment of tax of rs. in india, the principle has been stated..........the landlord. on the contrary, the parties have taken special care to refer to the amount of 720 paras as income and not as pattom. on the description of the mortgaged properties, and on the terms and provisions of ext. b, i feel no hesitation whatever, in coming to the conclusion, that ext. b evidences only the relationship of mortgagor and mortgagee. thus exts. a and b contemplate two inconsistent and incompatible relations, and on the rule in 1953 ker lt 442 : (air 1953 tray-co. 584), i hold, that the right under ext. a must be deemed to have been surrendered implicdly on ext. b. taking effect. 5. the learned counsel also referred me to what were stated to be some of the surrounding circumstances. it is seen, that tharappan had been a lessee for a long time even before ext. a, and.....

S. Velu Pillai, J.

1. The suit is for the redemption of a mortgage with possession, Ext. B dated August 14, 1931 A. D- corresponding to Karkadakom 29, 1106 M. E. in favour of Thamppan, represented in this suit by his sons, defendants 1 to 3, and grandsons defendants 4 to 9. The principal Question for decision is whether a prior lease, Ext. A dated Karkadakam 28, 1091, in favour of Tharappan subsisted after Ext B, or must be deemed to have been surrendered impliedly on the date thereof.

Ext. A was a 'verumpattom' lease with no premium and no right in the lessee to make improvements, and was for a term of one year. It stipulated the payment of tax by the lessee amounting to Rs. 48-8-1 annually, and the payment of pattom or rent at 670 paras--2 edangazhees--2, nazhees of paddy in the months of Kanni and Makaram, and a perquisite of 'vazhakula' at eight annas per annum.

Ext. B is called 'kaivasapanyadharam' (mortgage with possession), the mortgage amount being Rs. 2500. The mortgaged properties were the three items of properties described as such in the schedule appended to it, which were stated to be then outstanding with Tharappan under Ext. A lease. Ext. B recited, that the possession, of the mortgaged properties was given on that day to the mortgagee, and it directed him to enjoy them directly or indirectly, on payment of tax of Rs. 48-8-1.

The balance of the income from the mortgaged properties after payment of tax was stated to be 720 paras of paddy, out of which, 50 paras of paddy per month or 300 paras of paddy for six months, were to be appropriated towards interest on the mortgage amount, the term of the mort-gage being six months, the balance of the yearly income amounting to 420 paras of paddy being payable to the mortgagor, before the expiry of the term on Makarom 30, 1107, when the mortgagor was to pay the mortgage amount and take a release of the properties.

Ext. B further provided, that if the mortgage amount was not paid as aforesaid, the mortgagee may continue to appropriate interest at the rate of 50 paras of paddy per mensem from the paddy payable to the mortgagor, and the mortgage money would be paid on demand by the mortgagee, when all accounts relating to the mortgage transaction would be settled. If the mortgage money was not paid on such demand, the properties scheduled and the mortgagor were answerable, and the mortgage money may be realised by the sale of the properties.

2. It cannot be disputed, that one o the modes in which a lease may be terminated, is by surrender, which may be either express or implied. Section 111, Clause (f) of the Transfer of Property Act has only codified this principle and illustration to that clause provides that:

'a lessee accepts from his lessor a new lease of the property leased, to take effect during the continuance of the existing lease. This is an implied surrender of the former lease, and such lease determines thereupon,'

This is not exhaustive. The principle of implied surrender is founded in English law, upon the rule of estoppel, which precludes a lessee from j disputing the validity of the second lease which he has accepted and which cannot co-exist with the first lease. In India, the principle has been stated very clearly, if I may say so, in Raman Velu v. Lekshmi, 1953 Ker LT 442; AIR 1953 Trav-Co. 584 in these terms:

'The principle is that whenever a certain relationship exists between two parties in respect of a subject-matter and a new relationship arises as regards the identical subject-matter if the two sets of relationships cannot co-exist as being inconsistent and incompatible, that is to say, if tbe 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.'

This principle was applied by Ramaswamy, J., in Meenakshi Amma v. Kizhakke Valath Narayant, AIR 1957 Mad 212, distinguishing Kallu v. Diwan, ILR 24 All 487 and was restated in. more or less similar terms by Viswanatha Sastri, J., in Venkayya v. Venkata Subbarao, AIR 1957 Andh-Pra. 619. The question is, whether under Exts. A and B, the parties stand to, each other in two inconsistent and incompatible relationships, or in other words, whether the relationship between them after the date of Ext. B, was that of mortgagor and mortgagee and not that of lessor and lessee.

It was contended for the defendants, that the acceptance of a mortgage does not always put an end to the earlier lease, and it was urged, that though under Ext. A, the immovable properties were leased, under Ext. B, what was mortgaged was only the lessor's reversion, meaning not only his right to recover the leasehold, but also the right to the rent and all other rights which hemay possess under the lease.

As an instance, Markose v. Godar Namboodiripad, 39 Cochin 400, may be referred to, where the provision in the mortgage document was to appropriate the interest on the mortgage amount from the 'pattom' or 'rent' payable under the lease, the balance of the pattom alone, being payable to the mortgagor which was held to he a conclusive circumstance for coming to the conclusion, that the lease subsisted notwithstanding the mortgage.

Lekshmi v. Velu, 1956 Ker LT 410, furnished another instance, where the mortgaged property was specifically described to he the landlord's share of the improvements under the lease transaction, This case arose on appeal from 1953 Ker LT 442; (AIR 1.953 Trav-Co. 584), cited earlier, but the Division Bench which disposed of the appeal did not depart from the principle of implied surrender enunciated by the single Judge and adverted to above. These cases are distinguishable from the present.

3. In my opinion, the question has to be answered primarily on the terms of Ext. B, under-stood in the light of the surrounding circumstances.See Mathai Ulahannan v. Kora Pothen, 1958 Ker LT 540 and 39 Cochin 400. The contents of Ext. B which are important in this connection, are, the description of the mortgaged properties in theschedule, the statement in it that possession of the properties was handed over to the mortgagee on the date of the document, the direction to the mortgagee to enjoy the properties directly or indirectly, the reference to 720 paras of paddy as the annual income from the properties in contradistinction with the description as rent in Ext. A, together with the provision for accounting relating to it, by appropriating part of it towards intereston the mortgage amount and by paying the balance to the mortgagor, the provision in it for the release of the mortgaged properties on payment of the mortgage amount, the repetition of the provision for the payment of tax amounting to Rs. 48-8-1, as if Ext. B is self-contained, and the provision for the sale of the mortgaged properties as described.

These indicate to my mind, that after the date of Ext. B, the only relationship that subsisted, wasthat of mortgagor and mortgagee. But the learned counsel for the defendants pointed out, that though the rent fixed by Ext. A was 670 paras --2 edangazhees -- 2 nazhees and this was enhancedby 50 paras sometime later, the income fixed in Ext. B was- only 720 paras, which was less than the rent stipulated in Ext. A, and he urged, that in decided cases, which have held in favour of implied surrender, such as Varkey v. Untaman, 40 Cochin 280 and Columbus v. Easi, 40 Cochin 430, the income fixed by the mortgage was higher than the Tent payable under lease; this he said, was for a very good reason, because in a lease, the tenant's share of the profits is an clement to be taken intoconsideration in fixing the rent, which is not the case in a mortgage. In support of this, the learn-ed counsel relied on the following passage in the Cochin State Manual, page 301:

'In leases of this kind in the old days, a third of the net produce of the land, after deducting the eost of seed and an equal amount for the cost of cultivation, was reserved to the tenant, and two thirds paid to the landlord .........''

But the passage proceeds:

'In many cases now the tenant's share is less, in varying degrees, than a third of the net produce, and in some it is hardly more than the bare cost of seed and cultivation, the tenants in such cases being practically labourers on subsistence wages.'

The fixation of rent is therefore no conclusive circumstance. The cases have not laid down this difference between rent and income, as a test for deciding the issue of implied surrender of a lease upon the execution of a mortgage. In thc case decided by Ramaswami, J., the income fixed by the mortgage deed was less than the rent stipulated by the lease deed and yet this did not affect his conclusion. The freedom for the contracting partics in a mortgage, to fix what shall be the accountable income cannot be curtailed and I fail to see, how the present controversy can be resolved upon this disparity between the rent as stipulated in Ext. A and the accountable income as settled in Ext. B.

4. The learned counsel relied on the provision an Ext. B for the payment to the mortgagor of the balance of the income for the whole year, after appropriating interest on the mortgage amount within the first six months of its date. This was because, the mortgaged properties are paddy lands, the income from which, is derived before the end of Makarom every year, and in Ext. A to the stipulation for the payment of pattom was similar.

The term of one year in Ext. A having expired, and the lessee having continued to hold over, the lease was from year to year and there remained no premium to be refunded and no value of improvements to be paid to the lessee. Ext. A was terminable on Karkadakom 28, 1106, and significantly enough, Ext. B took effect on Karkadakom 29, 1106. Assuming that there has been an interval of time, a split second between Karkadakom 28 when Ext. A could have been terminated and Karkadakom 29, when Ext. B took effect, it was very well open to the parties to supersede the lease by the mortgage at any time and so no argument can be founded on the omission to terminate the lease on the 28th itself.

Much emphasis was laid, on the term '***' (Malayakm, omitted) with reference to this lease, as indicative of its Further continuance. I need only quote the observations of the learned Judge in 1953 Ker LT 442 at p. 446 : (AIR 1953 Tra-Co. 584 at p. 586), which furnish a complete answer to this argument. The learned Judge observed thus:

'This recognition however cannot be taken to connote the subsistence or continuation of the lease after the mortgage because thc document distinctly stipulates that on demand by the mortgagor or mortgagee, they are mutually under an obligation to surrender the property and make payment ofthe money respectively, that is to say, there should be a surrender of the property on redemption. It this surrender should have any meaning and should be possible, an assumption of termination of the pre-existing lease is essential.'

I can find no better words to reject the argument. If, as argued, the subject-matter of the mortgage was only the reversionary interest of the landlord, nothing would have been easier, than to stipulate, for the appropriation of a Part of the pattom towards interest on the mortgage money, and for the further payment of the balance as pattom to the landlord. On the contrary, the parties have taken special care to refer to the amount of 720 paras as income and not as pattom.

On the description of the mortgaged properties, and on the terms and provisions of Ext. B, I feel no hesitation whatever, in coming to the conclusion, that Ext. B evidences only the relationship of mortgagor and mortgagee. Thus Exts. A and B contemplate two inconsistent and incompatible relations, and on the rule in 1953 Ker LT 442 : (AIR 1953 Tray-Co. 584), I hold, that the right under Ext. A must be deemed to have been surrendered implicdly on Ext. B. taking effect.

5. The learned counsel also referred me to what were stated to be some of the surrounding circumstances. It is seen, that Tharappan had been a lessee for a long time even before Ext. A, and continued to hold over, after Ext A, till the date of Ext. B. It was not pretended by the lessee, that he had thereby obtained any fixity of tenure; for, if he had, stronger grounds would have to be made out to establish, that it was given up by him. It was on this ground, that the case decided by the Allahabad High Court in ILR 24 All 487 was distinguished by Ramaswamy, J. in AIR 195? Mad 212.

That the original lease deed, Ext. A, was not returned to the lessee on taking Ext. B, is but a slender circumstance, notwithstanding the reliance on a similar circumstance, along with more weighty reasons, in Chockalingam Pillai v. Mayandi Chettiar, ILR 19 Mad 485, which was a case of a preexisting permanent right, and not of a lease terminable at any time. There is nothing then, in these surrounding circumstances which militates against my conclusion.

6. The learned counsel next relied On a large number of receipts, evidenced by Exts. X to XIII and XIX to XX series. Some of them, like Exts. X (b) and XI (b) were receipts, as for pattom under Ext. A, with deductions towards interest on the mortgage amount under Ext. B, but in others, there is no such indication, though all of them may be taken to be receipts for dues payable under Ext. A, including Vazhakula' for they evidence receipts of 120 paras--2 edangnzhees--2 nazhees for the years 1109 and 1110, and of 150 paras--2 edangazbees--2 nazhees for the subsequent years, which correspond to the pattern under Ext. A after deductions towards interest under Ext. B.

In Ext. I notice issued on behalf of the plaintiff, the lawyer demanded the payment of dues, which are payable under Ext. A and not under Ext. B. Exts. XVI and XVII evidence a joint application for sub-pattah under Cochin Act II of 1103, made by the plaintiff and Tharappan on the basis of Ext. A. These documents afford evidence of subsequent conduct of the parties as to how they interpreted or treated their relationship under Exts. A and B and if they are admissible, notwithstanding the explanation offered by the plaintiff that they were mistakenly or unauthorisedly issued by the plaintiff's karyastha, I have no doubt, that they go against the plaintiffs' case,

But I am also of the view, that where the terms of a document are plain and unambiguous no evidence of subsequent conduct of the Parties as to how they understood them, or treated their relationship, is admissible. The rule was laid clown by the Privy Council in Surayya v. Bala Gangadhara Ramakrishna Reddi AIR 1948 PC 3 and the following observations of the Earl of Hals-bury, L. C. in North Eastern Railway Co. v. Lord Hastings, 1900 A. C. 260 were quoted:

'The words of a written instrument must be construed according to their natural meaning, and it appears to me that no amount of acting by the parties can alter or qualify words which are plain and unambiguous.'

The Supreme Court also has held so, in Union of India v. Kishorilal Gupta and Bros., AIR 1959 SC 1362. Other cases, such as Vasudevan Namboori v. Poranchu Devassi ILR 1956 Trav-Co. 704, Cheriyathu Mathai v. Thoma, 1956 Ker LT 214 : (AIR 1956 Trav-Co. 193) and George v. Mathai, 40 Cochin 1 furnish illustrations of the application of this rule. In ILR 1956 Trav-Co. 704 it was stated thus:

'When the language of the deed is plain and unambiguous, extraneous evidence whether that evidence consists of oral evidence as to the intention of the parties or evidence as to their acts and conduct wherefrom their intention could be gathered, is inadmissible, and Courts of law should, in such cases, give effect to the intention expressed in the document.'

In 39 Cochin 400, the Cochin Court reversed the judgment of the District Judge, who relied on the subsequent declarations and acts of the parties as varying the terms of the document. The learned counsel sought to distinguish these cases, suggesting, that the items of evidence are not relied on for interpreting Ext. B, but that they show how Exts. A and B were reconciled by the Parties, and how the obligation under Ext. B to surrender the properties and to account to the mortgagor, was not enforced or was remitted.

I fail to perceive this, distinction. To my mind, they only evidence the 'acting by the parties' within the meaning of tho rule quoted above, and are therefore hit by the rule of inadmissibility. As I understand the pleading, the defendants had no case in the written statement, that whatever be the terms and Provisions of Ext. B, the obligation to surrender the property and to render accounts was dispensed with or remitted at any subsequent stage of their relationship.

The reference in paragraph 6 of the first defendant's written statement, on which some reliance was placed for this purpose, does not amount to such a plea. If subsequent conduct can bo looked into, the learned counsel for the plaintiffin his turn invited my attention to Exts. XXX and XXXI, two settlement deeds of the year 1109 executed by Tharappan in favour of two of his sons, to the lease deeds, Exts. XXIX (a), XXIX (b) and XXIX (c) taken by one of the sons of TharaPpan for portions of the mortgaged properties from others, in which Ext. B alone and not Ext, A was referred to as the source of title.

But I bold, that equally with those on which the defendants have relied, these documents too are inadmissible. The plaintiff is therefore entitled to recover actual possession of the mortgaged properties on redemption of Ext. B and the decree of the lower court negativing such right cannot stand.

7. It was stated that the plaintiff has deposited the sum of Rs. 2500 on October 17, 1951, in pursuance of the order passed on M. P. 1782 of 1951 and that the first defendant has withdrawn Rs. 625 on October 12, 1953, as per order on M. P. 1479 of 1953, and defendants 2 and 3 have withdrawn Rs. 1250 as per order on M. P. 1495 of 1953. It has also stated, that the legal representatives of Chummar, the deceased son of TharaPpan, had also withdrawn their share of the mortgage money,

The plaintiff had claimed mesne profits for the properties on redemption. Same evidence was adduced to prove, that such profits would be more than 720 paras of paddy per annum, but the evidence is not acceptable. I find, that the amount of mesne profits can be fixed only at 720 Paras of paddy per annum. The plaintiff will be entitled to such mesne profits or their commuted value, from the defendants, from the date on which notice of the deposit of the mortgage amount was given to the defendants.

8. The plaintiff was directed to pay the costs of the defendants in the lower Court, following the rule, that the mortgagee is entitled to his costs in a redemption suit; in the nature of the contentions raised by the defendants, I order, that the parties will bear their costs in the lower court, but the plaintiff is allowed his costs of this appeal in this Court, from the third respondent--the third defendant--who contested this appeal. The appeal is allowed as above.

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