GODASANKARA VALIA RAJA Vs. THARAPPAN VAREED

JUDGEMENT

(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:

(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 the schedule, 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 interest on 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, was that 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 enhanced by 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 into consideration 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.