1. The decision in this case depends upon the true construction of a kanom deed, dated 13th July 1897. The deed commences by reciting two previous documents, a hanom, and a patom chit under which a balance of Rs. 600 Was due from the defendants' tarwad and then demises the land in perpetuity and contains a covenant for renewal after every twelve, years.
2. In Malabar it is customary to create a usufructuary mortgage of lands by a demise for twelve years and the mortgage is not redeemable until the expiration of that period. This practice resembles that of English conveyances in creating forms to secure jointured or for raining portions or sub-terms as mortgages of lease-hold interests. Having regard to the facts that the purpose of the document was to discharge previous incumbrances and that the rent reserved is nominal, and to the recital of the number of trees and tanks upon the property which would furnish evidence in estimating any improvements claimed to have been made by the lessee, I am of opinion that the intention of the parties was to create a mortgage and the deed should be read as if it contained a proviso for redemption.
3. Since the demise is made with the object of creating an interest in the land to be held by the kanomdar as security for the re-payment of the amount due by the lessor, it is in this respect immaterial whether the grant is made in perpetuity or for a specified term of years; the right of redemption is not affected thereby. The local Usage, however, restricts the right o redemption for a certain period and when the period does not exceed twelve years, the custom has always been enforced by this Court, and the restriction may be accepted as reasonable and, therefore, not invalid as a clog or fetter on the right of redemption. [See Morgan v. Jeffreys (1910) 1 Ch. 620.
4. Having regard to the usage, I think that the provision for a renewal amounts to a covenant by the lessor mortgagor that the mortgage shall not be redeemable for a period, of twelve years and that if he fails to redeem at the expiration of any such period the lessee shall upon payment of a certain sum be entitled to retain possession for a further period of twelve years.
5. Under Section 98 of the Transfer of Property Act, 1882, the rights and liabilities of the parties are determined by their contract and local usage, and this implied covenant is binding upon them.
6. Any other construction would, as pointed out in the decision in Neelakandhan v. Ananthakrishna Ayyar 16 M.L.J. 462 deprive the mortgagor of his right of redemption, which is of the essence of the transaction. That decision was with reference to a document almost identical in its terms with the kanom deed in this case and T should have regarded myself as bound by it, had not the learned Judges expressly declined to consider the provisions of the Transfer of Property Act which did not apply to the case before them.
7. In Gopalan Nair v. Kunhun Menon 2 M.L.T. 161 the term granted had expired and the mortgagor had the right to redeem at once, and it was held that the kanomdar could not set up a right of specific performance of a covenant of renewal in defence to a suit for redemption. It may also be pointed out that the Court will not enforce specific performance of an agreement to mortgage. In the present case the kanomdar is in possession under a lease in per petuity and there is no need of a fresh grant and, therefore, the agreement to renew cannot be construed as one to create a new demise.
8. The mortgagor in the present case did not redeem the property on the expiration of the first period of twelve years and did not bring his suit for redemption until nearly two years afterwards, and not until the kanomdar had commenced proceedings to enforce his right of renewal. I think that under these circumstances the implied covenant to postpone redemption for a further period of twelve years has come into force and that the mortgagor cannot redeem until it has expired.
9. I agree with my learned brother that the 7th defendant in Second Appeal No. 1923 of 1914 cannot raise any plea based on his authority in these proceedings.
10. For these reasons I would affirm the decrees of the lower Appellate Court and dismiss these appeals with costs of the 1st respondent.
11. Second Appeal No 1450 of 1914.--Two questions arise in this appeal, (1) whether the suit document, Exhibit A, is a perpetual kanom deed, and (2), if so, whether the deed is invalid as it contains a provision which is a clog on the equity of redemption.
12. The language of the document is exactly similar to the document considered in Neela kandhan v. Ananthkarishna Ayyar 16 M.L.J. 462, and it was there held that it constituted a mortgage with a covenant by the mortgagor to renew every twelve years on the terms provided for, and I agree that this is also a correct interpretation of the suit document.
13. In the two lower Courts it was not disputed that the document contained a covenant for perpetual renewal, and consequently the interpretation was not discussed.
14. When the terms of a document are capable of two interpretations we, have to consider the intention of the parties to the document. In the present case the parties have all along treated the document as a perpetual knaom or sasvitam and this fact strengthens me in adopting the same interpretation.
15. As regards the second point we have the ruling in Neelakanahan v. Ananthahrishna Ayyar 16 M.L.J. 462 : 1 M.L.T. 426 that the provision for perpetual renewal is invalid, but in that case the document under consideration was executed before the passing of the Transfer of Property Act and it was held unnecessary to express an opinion as to the effect of Section 9S on such covenants. In Gopalan Nair v. Kunhan Menon 2 M.L.T. 161 the learned Chief Justice (then Wallis, J.) expressed an opinion that a covenant for a perpetual renewal in a kanorn, deed governed by the provisions of the Transfer of Property Act would not be invalid, as a Tcanom is an anomalous mortgage within the meaning of Section 98, of the Transfer of Property Act. A perpetual kanom, was recognised by this Court so long ago as 1871: vide, Kottal TJppi v. Edavalath Thathan Nambudiri 6 M.H.C.R 258, and was held to be valid in Kolangoruth Raman Nayar v. Kannoth 31 Ind. Cas. 184 : (1916) M.W.N. 793.
16. No doubt a mortgage usually implies a possibility of redemption but in the present kanom. I think that possibility is contemplated in case of forfeiture of the demise. If the demise were forfeited for any reason such as refusal to pay renewal fee every twelve years, I do not think the jemmi could enforce the forfeiture without paying up the mortgage amount, and in this contingency we discern a possibility of redemption and it also may account for the enumeration of the trees in existence at the time the deed was executed.
17. I see no reason, therefore, for differing from the opinion frequently expressed in this Court that a kancm is an anomalous mortgage within the meaning of Section 98 of the Transfer of Property Act. This being so, the conditions, even though they constitute a clog on redemption can be enforced. I would, therefore, dismiss this appeal with costs of the 1st respondent.
18. Second Appeal No. 1926 of 1914 is a similar appeal filed by 7th defendant alone. He was a minor at the date of the lower Appellate Court's decree and now wishes to raise new defences in second appeal and contends that the decree is not binding on him. He was represented in the suit by a guardian whose interests are identical with his and there is no reason to suspect any fraud in the conduct of the defence. If 7th defendant thinks ha has been defrauded by his guardian, he has remedy but until he establishes fraud or misconduct the decree is binding on, him. The appeal, therefore, follows Second Appeal No. 1450 of 1914 and is also dismissed with costs of the 1st respondent.
19. Second Appeal No. 2598 of 1914, which relates to the connected suit filed 'for redemption of the perpetual kdnom, must also fail and is dismissed with costs of the 1st respondent.