Lease or mortgage depends on substance and dominant intention, not nomenclature, where possession and revenue obligations point to a lease.

An instrument executed in 1894 was construed by its recitals, surrounding circumstances, and substance rather than its label. Because it transferred possession for a fixed term, required annual purappad, placed land revenue on the transferee, and contained no right of sale on default, the essential feature of a mortgage-security for debt-was absent. The predominant intention was therefore a lease, not a mortgage, and the transferees were treated as lessees in possession; the compensation dispute was resolved on that footing and the appeal failed.

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Issues: Whether the document executed in 1894 created a mortgage or a lease.

Analysis: The document had to be construed from its recitals, the surrounding circumstances, and the substance of the transaction rather than its nomenclature. The instrument showed transfer of possession for a fixed term, annual payment described as purappad, payment of land revenue by the transferee, and no right of sale of the property in default of repayment. The essential feature of a mortgage, namely transfer of property as security for debt, was absent, while the terms more closely answered to a lease.

Conclusion: The document was a lease and not a mortgage.

Final Conclusion: The compensation dispute had to be resolved on the footing that the transferees were lessees in possession, and the appeal therefore failed.

Ratio Decidendi: Where an instrument contains mixed features of mortgage and lease, its true character is determined by the predominant intention of the parties, and if the transfer is not shown to be security for repayment of debt, the instrument is a lease.

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