MOHAMMED Vs. SAVITHRI

JUDGEMENT

(1.) In 1953 the appellants and five minors suffered a joint and several decree for arrears of periodical payments due under the deed, Ext. A2 dated 13-5-1951. (The 1st appellant had executed the deed for the minors as well claiming to be their guardian, but he was not, in fact, their legal guardian and it stated on behalf of the appellants that, in a subsequent suit filed by these minors, the decree was set aside as against them). The decree holder made an application for execution against the appellants in 1960 while Kerala Act I of 1957 was in force, and the contention of the appellants was that the transaction effected by Ext. A2 was a lease, that the periodical payments enjoined thereunder were rent, and that therefore the execution application was not maintainable by reason of S.4 of that Act. This contention found favour with the executing court which held that Ext. A2 was a lease, but was rejected by the lower appellate court which held that it was only a possessory mortgage.

(2.) It is well settled that the essential difference between a lease and a possessory mortgage is that, in the case of the former, the transfer of the property is for the purpose of enjoyment while, in the case of the latter, the transfer is by way of security for the money advanced by the transferee to the transferor. In other words, in the case of a mortgage there is a loan, and the relationship created is that of debtor and creditor while in the case of a kanom or other lease, the money paid for the transfer is not a loan and is repayable, if at all, only if and when the transferor resumes the property. The lower appellate court has considered the matter in all its aspects, and, having regard to the label chosen by the parties - they called the transaction a panayam - the quantum of the money paid in relation to the value of the property, the purpose for which the money was taken, and, above all, to the circumstance that the deed provided for recovery of the money by sale of the property, came to the conclusion that the transaction was essentially a loan and that the transfer was only by way of security for the loan advanced and not for the purpose of enjoyment. I think it was right - see the decision in Hussain Thangal v. Ali ( 1961 KLT 1033 = 1961 KLJ 1291) and in Ayyappan v. Venkiteswara Naicken ( 1962 KLT 733 = 1962 KLJ 1291). For the moment the parties make provision for the recovery of the money paid by the sale of the property, it shows that what is in their minds is not so much that the transferee should enjoy the property in consideration of the money paid as that it should be possible for the transferee to obtain repayment of the money when he chooses, a clear indication that the money was paid as a loan.

(3.) If the transaction was a possessory mortgage and not a lease, the periodical payments enjoined by the document are only excess profits and not rent. S.4 of Act I of 1957 was therefore no bar to the execution of the decree.