A. S. SARELA, A. R. BAKSHI, J. ( 1 ) THIS is an appeal by the defendants from the judgment and decree dated 9-8-1966 of the Joint Civil Judge Senior Division Baroda. The appellant No. 1 is a firm in the name of M/s M. M. Patel and Company and was the original defendant No. 1. The appellants Nos. 2 and 3 are the partners of that firm and of these appellant No. 2 Mahijibhai Motibhai who was the original defendant No. 2 was the Managing Partner. It is he who has acted on behalf of the firm appellant No. 1 and on behalf of his other partner and has been referred to in the evidence as the defendent and therefore for the sake of convenience we shall refer to him as the appellant. The respondent plaintiff is a Private Limited Company named United Hire Purchase Private Limited Company Baroda. The Managing Director of that Company is one Jashbhai Marghabhai Patel who has been referred to in the evidence as the plaintiff and will be referred to in this judgment as the respondent for the sake of convenience. The suit by the respondent was for possession of a motor truck bearing No. GTB 3771. The respondent alleged that this motor truck was given to the appellants on hire purchase and as there was a breach of the terms of the agreement of hire purchase committed by them the respondent became entitled to obtain possession. The principal contention on behalf of the appellants was that the transaction was in reality a loan. The trial Court found in respondents favour and passed a decree for possession of the motor truck. Against that decree this appeal has been filed. ( 2 ) SOME broad material facts may first be stated. The appellant Mahijibhai Motibhai is a resident of Baras Taluka Borsad district Kaira. He appears to be an agriculturist by occupation and has lands at Baras but he has a secondary occupation of transport business. He carries on that occupation along with a partner in the name of original defendant No. 1 namely M/s. M. M. Patel and Company. For that business he needed two trucks in December 1962. He therefore approached the Baroda Automobiles Sales and Services a firm dealing in motor vehicles at Baroda (hereinafter referred to as the dealers ). He carries on that occupation along with a partner in the name of original defendant No. 1 namely M/s. M. M. Patel and Company. For that business he needed two trucks in December 1962. He therefore approached the Baroda Automobiles Sales and Services a firm dealing in motor vehicles at Baroda (hereinafter referred to as the dealers ). A partner of that firm namely one Sureshbhai has been examined in the case at Exh. 109. According to the appellant he approached the said firm on or about 9th of December 1962 According to the witness Sureshbhai he approached the firm on 1st of January 1963. We shall consider this difference in version later but we may state here that the probabilities are more in favour of the appellants version. It is undisputed that the price agreed upon was Rs. 30701. 00 per truck. Therefore the price of the two trucks came to Rs. 61402. 00 out of which Rs. 402. 00 appears to have been deducted for discount and the net price payable for the two trucks was Rs. 61000. 00. Now towards this price the appellant admittedly paid Rs. 21000. 00 to the dealers. This payment of Rs. 21000. 00 was made up of two sums of Rs. 2000. 00 and Rs. 19000. 00. The fact of payment of these two sums making up Rs. 21000. 00 towards the two vehicles is not in dispute There is however a slight dispute as to the date of the payments. According to the appellant be paid Rs. 2000. 00 on 9-12-1962 and Rs. 19000. 00 on 1-1-1963. Witness Sureshbhai admits the date so far as Rs. 19000. 00 are concerned but as regards Rs. 2000. 00 his version is that it was in fact paid on 9-1-1963. We shall examine that version later but we may indicate here that in respect of that version also the probabilities are more in favour of the appellants version. At any rate the payment of Rs. 21000. 00to the dealers being admitted the balance payable for the price for the trucks was Rs. 40000. 00. The appellant did not have that much money and that sum was agreed to be provided by the respondent. Upto this point there is no difficulty. The terms of the agreements on the basis of which this sum was provided for by the respondent form the basis of this suit. 40000. 00. The appellant did not have that much money and that sum was agreed to be provided by the respondent. Upto this point there is no difficulty. The terms of the agreements on the basis of which this sum was provided for by the respondent form the basis of this suit. Two agreements were passed both on 2-1-1963 one for each truck. The appellant had obtained delivery of one truck from the dealers on 1-1-1963 and obtained delivery of the other truck from them on 2-1-1963. The truck of which delivery was obtained on 1-1-1963 was later numbered as GTB 3771 and the other truck was later numbered as GTB 3770. The agreements between the appellant and the respondent were as we just stated entered into on 2-1-1963 and these are referred to in the evidence as the Hire Purchase Agreements. We shall come to the terms of those agreements later but to continue the narration it appears that the respondent paid the dealers Rs. 40000. 00 in two sums of Rs. 25000/- and 15000/- on 7-1-1963 and 10-1-1963 respectively. The appellant got the trucks registered in his name under the Motor Vehicles Act built a body on each chassis and began to use them for his business. One of the trucks namely GTB 3770 was later sold by the appellant to one Raijibhai Patel on 10-12-1963. The said Raijibhai has been examined as the appellants witness at Exh. 185. There is a slight difference to the amount for which the truck was sold. According to the respondent it was sold for Rs. 27000. 00and according to the appellant for Rs. 28000. 00. Nothing material turns on that difference. It is not in dispute that Raijibhai has paid to the respondent the price for which the truck was sold to him. The truck which remained with the appellant was seized by the respondent on 18-5-1965 in enforcement of the terms of the hire purchase agreement a breach of which according to the respondent was committed by non-payment of the instalments due. On 19-5-1965 the appellant filed a complaint before the Judicial Magistrate First Class Anand against the respondent for theft of the vehicle. As a result of that complaint the truck No. GTB 3771 was attached from the possession of the respondent. On 19-5-1965 the appellant filed a complaint before the Judicial Magistrate First Class Anand against the respondent for theft of the vehicle. As a result of that complaint the truck No. GTB 3771 was attached from the possession of the respondent. On 20-7-1965 the appellant filed a suit for accounts in the Court of the Civil Judge Junior Division Borsad against the respondent asking for accounts in respect of the transaction relating to the trucks entered into between them on 11-10-1965 the respondent filed this suit. . . . . . . . . . . . . . . . . . . ( 3 ) THE lower Court substantially accepted the respondents version and rejected that of the appellant. The lower Court rejected the pleas of fraud misrepresentation waiver estoppel and acquiescence pleaded by the appellant on the ground that there was no evidence to support any of these pleas. The lower Court found against the case that the transaction was a loan on the ground that the hire purchase agreements produced in the case and admittedly signed by the appellant fully answer the legal requirements of a hire purchase. It appears that the learned Judge missed the real point underlying the contention urged on behalf of the appellant. The lower Court held that forfeiture clauses were not a penalty because according to the lower Court the hire purchase agreement in this case was as it stood enforceable in law against the appellant. The lower Court took the view that under the agreement the respondent had a right to obtain and seize the truck and also to forfeit payments already made and the appellant cannot urge that these rights of the respondent operated as a penalty. This is the short answer the lower Court has given to the plea that the forfeiture clauses should not be strictly enforced against the appellant. Here again the lower Court appears to have missed the substance of the contention. The lower Court found that the appellant had committed a breach by failure to pay the amount due which according to the lower Court was Rs. 13568. 76 as claimed by the respondent. Accordingly the lower Court passed an order of possession as earlier stated. ( 4 ) THE submissions urged on behalf of the appellant before us may now be stated. It is urged by Mr. 13568. 76 as claimed by the respondent. Accordingly the lower Court passed an order of possession as earlier stated. ( 4 ) THE submissions urged on behalf of the appellant before us may now be stated. It is urged by Mr. Pradhan who argued the matter on behalf of the appellant that the transaction between the parties was really of a loan and not of hire purchase because the appellant all along continued to be the owner and the agreement was that the amount was to be advanced to him on the security of the truck. He contends that the document which is in the form of a hire purchase agreement is only a guise for the true agreement which according to him was that of a loan on the security of the truck. He next submits that if the transaction is nevertheless held to be really one of hire purchase then it is voidable as being the result of the misrepresentation as to the true nature of the transaction because according to him the appellant was told that it was really a loan and that he would continue to be the owner. He further submits that even if the transaction as originally entered into is held to be one of hire purchase the contract embodied in the agreement came to an end and there was novatio when the truck No. 3770 was sold with the consent of the respondent. Lastly he submits that the appellant has not committed any breach and that at any rate the forfeiture sought to be enforced by the respondent being in the nature of penalty should be relieved against. ( 5 ) MR. Nanavati for the respondent at first submitted that the contention that the transaction between the parties was in reality a loan cannot be allowed to be urged or inquired into as no leave of the lower Court was taken for introducing that contention when the additional written statement was filed Mr. Nanavati however later gave up this submission and advisedly because no objection appears to have been taken in the lower Court when the additional written statement was filed or at the time of framing of issues which was done thereafter or at the time when evidence on the issues arising from the additional written statement was led and heard. Mr. Nanavati however later gave up this submission and advisedly because no objection appears to have been taken in the lower Court when the additional written statement was filed or at the time of framing of issues which was done thereafter or at the time when evidence on the issues arising from the additional written statement was led and heard. Mr. Nanavati therefore did not pursue this submission but instead urged that the leading of evidence in support of this submission that the transaction was in in reality a loan was not permissible in view of sec 92 of the Evidence Act 1872 as it amounts to varying the terms of the document entered into between the parties. He further urged that the true nature of the transaction must be determined from the terms of the document itself and no oral evidence or the evidence of circumstances was permissible for construction of the document. If the document is so construed it amounts to no other than a hire purchase agreement but even if on a true construction of the document it amounts to a loan transaction even then all the other terms of the agreement embodied in the document would attach to the said loan transaction and would in law be enforceable and the respondent would therefore be entitled to seize the vehicle and retain possession in exercise of his rights under the agreement. He submitted that the forfeiture clauses in the agreement were not a penalty and on merits there was no case for the appellant being relieved against. He generally supported the findings of the lower Court. ( 6 ) THESE are then the broad facts established from the evidence. The facts established are that the appellant approached the dealers directly for purchase of the two trucks that he negotiated with the dealers for their purchase that he paid part of the purchase price to them and that he took delivery of the two trucks and it was thereafter that the transactions between him and the respondent took place on 2-1-1963. It has not been contended before us that oral or documentary evidence establishing these facts cannot be led or is not permissible because of sec. 92 of the Evidence Act. Sections 91 and 92 of the Evidence Act are concerned with the terms of a written instrument. It has not been contended before us that oral or documentary evidence establishing these facts cannot be led or is not permissible because of sec. 92 of the Evidence Act. Sections 91 and 92 of the Evidence Act are concerned with the terms of a written instrument. They are not concerned with statements of fact or recitals other than terms in a written instrument. The recitals or the statements of fact in such an instrument are always open to contradiction by evidence. In this connection it is enough to refer to two decisions. In Sah Lal Chand v. Indrajit (2 Bom. L. R. 553) the Privy Council held that the Evidence Act does not say that no statement of fact in a written instrument may be contradicted by oral evidence but that the terms of contract may not be varied. In Bhaskar v. Shrinarayan (A. I. R. 1960 S. C. 301) His Lordship Shah J. has observed that the oral evidence of intention is not admissible in interpreting the interpreting of the deed but evidence to explain or even to contradict the recitals as distinguished from the terms of the documents may of course be given. As this position has not been disputed it is not necessary to discuss the point further. ( 7 ) NOW it will be noticed that these facts which have been established go to indicate that before 2-1-1963 the two trucks were sold by the dealers to the appellant. This inference gets support from three further faces. One is that the dealers opened the account in their books in respect of these trucks in the name of the appellant and the amount of the two trucks was debited by them to the appellant in his account on 1 The second is that the demand for the balance due in that account which according to the extracts of the account (Exhs. 171 and 172) amounted to Rs. 1881. 00 was made from the appellant. This is clear from the statement of accounts sent to the appellant on 20-10-1964 (Exh. 168 ). Sureshbhai also states that the demand was made. The third fact is that the dealers filed a suit against the appellant for the said balance. A certified copy of the plaint in that suit was produced in the lower Court but not exhibited. Mr. Pradhan urges that it should have been exhibited. 168 ). Sureshbhai also states that the demand was made. The third fact is that the dealers filed a suit against the appellant for the said balance. A certified copy of the plaint in that suit was produced in the lower Court but not exhibited. Mr. Pradhan urges that it should have been exhibited. It is however nor necessary to refer to the certified copy because Sureshbhai has in his deposition stated that a suit to refer the sum of Rs. 1881 has been filed be them against the appellant. These facts therefore support the inference deduced earlier that the dealers had sold the two trucks to the appellant before 2-1-1963. Sec. 20 oh the Sale of Goods Act provides that where there is an unconditional contract for the sale of specific goods in a deliverable state the property in the goods passes to the buyer when the contract is made and it is immaterial whether the time of payment of the price or the time of delivery of the goods or both is postponed. Mr. Nanavati concedes that this section is attracted. The goods were specific goods. They had been set apart for sale to the appellant and were in fact delivered to the appellant one truck on 1-1-1963 and the other on 2-1-1963. They were so delivered in pursuance of a contract made under which a part of the purchase price was paid by the appellant and the balance was to be paid later. The property therefore passed to the buyer. Mr. Nanavati as we have earlier stated does not dispute that proposition. His contention however is that the contract in this case was made by the dealers not with the appellant but with respondent and that the buyer was not the appellant but the respondent. This however is inconsistent with the facts earlier discussed. But Mr. Nanavati relies in support of that argument on three pieces of evidence. The respondent has produced at Exh. 175 an invoice purported to have been sent by the dealers to him on 1-1-1963. That invoice states that a truck was sold to the respondent by the dealers under an order dated 31-12-1962 and under the delivery memo No. 25 dated 1-1-1963. The invoice then sets out the price of the truck as Rs. 30701. 00. This is one piece of evidence on which Mr. Nanavati relies. That invoice states that a truck was sold to the respondent by the dealers under an order dated 31-12-1962 and under the delivery memo No. 25 dated 1-1-1963. The invoice then sets out the price of the truck as Rs. 30701. 00. This is one piece of evidence on which Mr. Nanavati relies. According to the appellate he received one invoice for each of the trucks and this particular invoice refers to the truck which was later numbered GTB 3771. Mr. Nanavati then relies on the account books of the respondent. Exhs. 192 and 194 are the extracts of those account books. Mr. Pradhan argued that those accounts were not proved. No doubt the respondent has not examined the person who wrote those accounts but he has deposed that the accounts were regularly kept under his supervision and that the contents were true and that he produced the extracts. That being so the accounts may be considered as proved. Now it appears from those accounts that on 2-1-1963 an account was opened by the respondent in the name of the dealers and in that account two sums each of Rs. 30701. 00 were credited. There are then subsequent entries in respect of the payments which are debited. The third piece of evidence on which reliance is placed is Exh. 144 which is a receipt dated 2-1-1963 passed by the appellant to the respondent in respect of the vehicle. In that receipt the appellant acknowledges having received from Messrs. Baroda Automobile Sales Services on account of M/s. UNITED HIRE PURCHASE PRIVATE LIMITED a Chassis in good order and condition to his satisfaction complete with all tools and assessors on hire under the terms of Hire Purchase Agreement dated 2-1-1963 signed by him. According to Mr. Nanavati these three pieces of evidence go to show that the contract in respect of the sale of the trucks was made by the dealers with the respondent and that the delivery was given by the dealers to the appellant on behalf of the respondent. A brief examination of these three pieces of evidence shows that the submission cannot be sustained. The invoice appears to have seen the light of the day only at the time of the suit. In the contents of the invoice itself there is inherent evidence of the fact that it appears to have been brought into existence later. A brief examination of these three pieces of evidence shows that the submission cannot be sustained. The invoice appears to have seen the light of the day only at the time of the suit. In the contents of the invoice itself there is inherent evidence of the fact that it appears to have been brought into existence later. The invoice is purported to have been prepared on 1-1-1963. Before this invoice was prepared obviously a sum of Rs. 10500. 00 (half of Rs. 21000. 00) had been received towards the price of the truck and the delivery of the truck had been given. That payment does not find any place in the invoice. Then again the invoice does not get any support from any accounts of the dealers. In fact Sureshbhai admits that there is no account of the respondent in the dealers account books. If that is so the basis of the invoice is lacking. The short answer to second piece of evidence relied on namely the accounts Exhs. 192 and 194 is that there are no matching accounts with the dealers. The dealers obviously did not consider the respondent as the purchaser or as the debtor. The dealers accounts show that they considered the appellant as the purchaser and as the debtor. In the accounts Exhs. 192 and 194 which are produced the entries begin on the 2nd of January 1963 the date of the hire purchase agreement. The contract had however taken place much earlier even according to the respondent. These accounts therefore are not any evidence of the alleged contract with the dealers but are intended to support the recitals in the hire purchase agreement and more. As for the third piece of evidence the receipt Exh. 144 is on one of those printed forms on which signatures of the appellant were taken at the time of the purchase. Several such printed forms appear to have been signed. Another such printed form is Exh. 145 which is a letter addressed to the R. T. O. dated 2-1-1963. Raijibhai has stated that signatures on about 40 printed forms were taken in respect of each truck. The receipt Exh. 154 therefore was meant to support the recitals in the hire purchase agreement and cannot have greater value than what the hire purchase agreement has. 145 which is a letter addressed to the R. T. O. dated 2-1-1963. Raijibhai has stated that signatures on about 40 printed forms were taken in respect of each truck. The receipt Exh. 154 therefore was meant to support the recitals in the hire purchase agreement and cannot have greater value than what the hire purchase agreement has. As to what importance should be attached to the recitals in the hire purchase agreement we shall consider presently. Therefore the three pieces of evidence on which reliance has been placed by Mr. Nanavati do not make out that the contract was made with the respondent or the respondent was the buyer. The dealers accounts head with the evidence relating to negotiations for purchase the payments made the receipts given the delivery memos the sending of the bill to the appellant and the suit by the dealers against him are Sufficient to establish that the sale had taken place to the appellant before the hire purchase agreement had been made on 2-1-1963. ( 8 ) WITH this background we may now examine what the hire purchase agreement provides. It appears that on 2-1-1963 two documents were taken in respect of each truck. One was a proposal and the other a hire purchase agreement proper. The proposal which is at Exh. 45 in respect of the truck with which we are concerned is a letter addressed by the appellant to the respondent. It is on a printed form presumably one of the forms on which signatures of the appellant were taken. In that proposal it is stated that the appellant applied to the respondent to hire to him the vehicle described in the particulars annexed thereto on the terms mentioned in the said particulars. The proposal then sets out the details of the appellants profession income property etc. The particulars referred to earlier are stated at the end of the proposal and in those particulars the make of the vehicle the model the registered number and other details of the vehicle are given and its price is stated to be Rs. 30701. 00. A sum of Rs. 10701. 00 is stated to be the initial hire leaving a balance of Rs 20000 to which Rs. 2000. 00 are added as finance charge amounting to Rs 220)0/ -. These are the particulars of the vehicle stated in the proposal. 30701. 00. A sum of Rs. 10701. 00 is stated to be the initial hire leaving a balance of Rs 20000 to which Rs. 2000. 00 are added as finance charge amounting to Rs 220)0/ -. These are the particulars of the vehicle stated in the proposal. The hire purchase agreement which was entered into simultaneously with the proposal is at Exh. 46. The respondent is described in the preamble as the Owner and the appellant as the Hirer. There are five clauses in this agreement and they are prefaced with this statement whereas the hirer has signed a proposal form (which is to be regarded as the basis of this contract) it is hereby agreed as follows Clause I states that the others (meaning the respondent) being the owners of the Motor Vehicle with fittings tools and accessories and additions more particularly described in the Schedule hereto agree to let and the Hirer agrees to hire the vehicle from the date thereof subject to the terms and conditions there in contained. These terms and conditions are attached to the agreement and we shall turn to them presently. This is the first clause. The clause II provides that on the execution of the agreement the Hirer shall pay to the Owners in cash a sum of Rupee one in consideration of the option to purchase given to the Hirer by Clause IV of the agreement. Clause It provides that the Hirer shall pay to Owners at Baroda on the execution of the agreement the sum of Rs. 10701. 00 as an initial payment by way of hire which shall become the absolute property of the Owners and will pay punctually thereafter instalments as set out in that clause and the payments set out are each of Rs. 2000. 00 in all 11 monthly payments to begin from the 2nd of March 1963. Clause IV provides that if the Hirer shall duly perform and observe all the terms and conditions contained in the Agreement and on his part to be performed and observed and shall in manner aforesaid pay to the Owners monthly sums by way of rent amounting together with the said sum of Rs. 10701. 00 so paid on the execution of this agreement as aforesaid to the sum of Rs. 32701. 10701. 00 so paid on the execution of this agreement as aforesaid to the sum of Rs. 32701. 00 and shall also pay to the Owners all other sums of money which may become payable to them by the Hirer under this agreement the hiring shall come to an end and the vehicle shall at the option of the Hirer become his property and the Owners will assign and make over all their rights title and interest in the same to the Hirer but until such payments as aforesaid have been made and until the owners make over all their right title and interest to the Hirer the vehicle shall remain the absolute property of the Owners. Clause V relates to the guarantor and it is not necessary to refer to its contents. Now we have stated that clause I refers to the conditions which are annexed to the agreement. Those conditions are 12 in number. Condition 1 provides for the option to terminate the hiring. Condition 2 relates to the maintenance of the vehicle in thorough working condition to the liability to idemnify the Owners against loss to the right of the Owners to access to the undertaking by the Hirer not to sell mortgage pledge hypothecate hire or otherwise deal with the vehicle or to part with the possession of the vehicle without the express written permission of the Owners. Condition 3 refers to other sums payable by the Hirer in respect of the taxes fees repairs and supplies which may be due from the Hirer to the Owners in respect of the vehicle. Condition 4 provides that the Hirer holds the vehicle as a bailee of the Owners and shall not have any proprietory right or interest as purchaser. Condition 5 provides that the Owners may terminate the contract of hiring and forthwith retake and recover possession of the vehicle on the happening of events mentioned therein and thereafter provides that on such termination taking place no payment credit or allowance in respect of the payment previously made shall be made or allowed to the Hirer. Condition 6 relates insurance money and Conditions 7 to 12 cover other matters which are not material. ( 9 ) IT would be noticed that some of the material recitals in this Hire Purchase Agreement were not true to facts. Condition 6 relates insurance money and Conditions 7 to 12 cover other matters which are not material. ( 9 ) IT would be noticed that some of the material recitals in this Hire Purchase Agreement were not true to facts. Clauses II and V are not important for the present purpose Clause II as we have earlier stated provides for the consideration of Rupee one for option to purchase given to the Hirer by Clause IV. Clause V relates to the guarantor. The other three Clauses are important. In Clause as we have earlier pointed out it is stated that the respondent is the owner of the motor vehicle. Now obviously before this agreement was entered into or even at the time this agreement was entered into the respondent had not become the owner of the motor vehicle. We have discussed the evidence in that regard. But Mr. Nanavati argues that the respondent became the owner of the vehicle simultaneously with the execution of this agreement. This is his alternative argument to his earlier argument that the contract was made by the dealers with the respondent. This alternative argument is that at the time of the execution of the agreement the appellant transferred his own ownership to the respondent and in support of that argument he relied on the recitals in the agreement itself. No such case of transfer of ownership from the appellant to the respondent has been made in the plaint or in the deposition. The recitals in the agreement on which reliance is placed are in Clause I which states that the Owners being the owners of the motor vehicle agree to let and the Hirer agrees to hire the vehicle. His contention is that the statement being the Owners of the motor vehicle having been subscribed to by the appellant it must be held that the appellant transferred his rights of ownership of the vehicle to the respondent. We are unable to agree with this submission. There is no document of such transfer. If such transfer was intended the absence of a document is surprising because the respondent had taken care to secure every possible document to safeguard his position. There is nothing in the conduct of the parties subsequent to the 2nd of January 1963 suggesting that the ownership had been transferred. There is no document of such transfer. If such transfer was intended the absence of a document is surprising because the respondent had taken care to secure every possible document to safeguard his position. There is nothing in the conduct of the parties subsequent to the 2nd of January 1963 suggesting that the ownership had been transferred. Reliance is placed on the averments made by the appellant in the suit for accounts filed by him. Exh. 53 is a copy of the plaint of that suit. In para I of the plaint the appellant states that he had purchased two motor trucks for Rs. 30701. 00 each on hire purchase basis from the respondent and the amount paid by the respondent towards the price of the vehicles was to be repaid to the respondent with interest by instalments of Rs. 2000. 00 each and the respondent had accordingly taken from him the hire purchase agreement and the appellant (the plaintiff of that suit) was in possession in accordance with the hire purchase agreement. From these recitals in the first para of that plaint which recitals by themselves are no doubt damaging Mr. Nanavati drives the inference that ownership had already passed to the respondent from the appellant because the said recitals are consistent with that position. The submission however does not take into account the case made in the plaint as a whole. In para I itself the case is that the said plaintiffs liability was to repay to the said defendant the amount with interest by instalments. But paras 4 and 5 of the plaint make the position clear. The case as set out there is that the trucks belonged to the said plaintiff and his liability was only to pay the amount taken from the respondent. He repeatedly points out that the truck was his and he called upon the respondent for accounts to be made in accordance with the hire purchase agreement and for determination of the amount which would be payable to the respondent (the defendant of the suit) on such accounts being made in respect of both the trucks Therefore the plaint in that suit when read as a whole does not support the submissions of Mr. Nanavati that at the time of the agreement the ownership of the trucks had been transferred by the appellant to the respondent after he obtained them from the dealers. Clause I of the agreement therefore when it states that the respondent is the owner is clearly inconsistent with the true position. Clause III of the agreement which is the next important clause provides as we have stated that the hirer shall pay to the owners on the execution of this agreement a sum of Rs. 10701. 00 as an initial payment by way of hire which shall become the absolute property of the Owners. It is obvious that this statement is also inconsistent with the facts. The sum of Rs. 10701. 00 in respect of each truck had already been paid and credited in the account books of the dealers before the hire purchase agreement was executed. It is undisputed that no payment of Rs. 10701. 00 was made to the respondent either on 2-1-1963 or at any time thereafter or was contemplated and the reference to the sum of Rs. 10701. 00 to be paid is really a reference to the sum already paid to the dealers. The payment of Rs. 10701. 00 that was made to the dealers was not an initial payment by way of hire but was in part payment of the price. The whole of the above recital therefore is inconsistent with the true position. We then go to the IVth clause. It provides for the position when the Hirer becomes the owner on Payment of the amount stated. It provides that if the Hirer shall in manner aforesaid pay to the owners monthly sums by way of rent amounting together with the said sum of Rs. 10701. 00 so paid on the execution of this agreement as aforesaid to the sum of Rs. 32701. 00 etc. the hiring shall come to an end. Therefore this clause proceeds on the footing of Rs. 10701. 00 paid on the date of the execution of the agreement. No such payment was made to the respondent much less on that date and certainly was not made under the hire purchase agreement. The clause again repeats the position earlier set out in clause I about the ownership by stating that till all the payment are made the vehicle shall remain the absolute property of the Owners. No such payment was made to the respondent much less on that date and certainly was not made under the hire purchase agreement. The clause again repeats the position earlier set out in clause I about the ownership by stating that till all the payment are made the vehicle shall remain the absolute property of the Owners. This statement assumes that respondent was the owner. The true position was otherwise. Obviously this and the other similar statements were introduced for purposes of verisimilitude so as to conform to the legal necessities of what is known as hire purchase. ( 10 ) IT would therefore be now convenient to notice what the legal requirements of a true hire purchase agreement are. This has been explained by the Supreme Court in K. L. Johar and Co. v. Deputy Commercial Tax Officer (A. I. R. 1965 S. C. 1082 ). That was a case relating to recovery of sales tax from a financing firm whose main business was to advance money to persons who intended to purchase motor vehicles but were themselves not in a position to pay the money and therefore the course of business followed by the firm was to enter into hire purchase agreements with those who wanted to purchase vehicles. While considering the question of the liability to pay the sales tax the Supreme Court examined the true nature of hire purchase as understood in law. They observedit is necessary in this connection to understand the nature of a typical hire-purchase agreement as distinct from a sale in which the price is to be paid later by instalments. In the case of a sale in which the price is to be paid by instalments the property passes as soon as the sale is made even though the price has not been fully paid and may later be paid in instalments. This follows from the definition of sale in sec. 4 of the Indian Sale of Goods Act (as distinguished from an agreement to sell) which requires that the seller transfers the property in the goods to the buyer for a price. The essence of a sale is that the property is transferred from the seller to the buyer for a price whether paid at once or paid later in instalments. On the other hand a hire purchase agreement as its very name implies has two aspects. The essence of a sale is that the property is transferred from the seller to the buyer for a price whether paid at once or paid later in instalments. On the other hand a hire purchase agreement as its very name implies has two aspects. There is first an aspect of bailment of the goods subjected to the hire purchase agreement and there is next an element of sale which fructifies when the option to purchase which is usually a term of hire purchase agreements is exercised by the intending purchaser. Thus the intending purchaser is known as the hirer so long as the option to purchase is not exercised and the essence of a hire purchase agreement properly so called is that the property in the goods does not Pass at the time of the agreement but remains in the intending seller and only passes later when the option is exercised by the intending purchaser. The distinguishing feature of a typical hire purchase agreement therefore is that the property does not Pass when the agreement is made but only passe; when the option is finally exercised after complying with all the terms of the agreement. Therefore a true hire purchase agreement has two aspects. One aspect is of bailment of the goods subjected to the hire purchase and the other is the element of sale which fructifies when the option to purchase is exercised by the intending purchaser. The very basis of the hire purchase agreement is that at the time it is entered into the property in the chattel in respect of which it is entered into is in the person from whom that property is taken on hire and that property does not pass at the time of the agreement but only passes later when the option is exercised by the intending purchaser. Therefore the person who gives the chattel on hire is in fact its owner. He may be the owner by reason of the fact that he is the dealer of the chattel or by reason of the fact that he purchased from the dealer before the hire purchase agreement is entered into or by reason of the fact that the hirer who was the owner sold the chattel to him before the hire purchase agreement and thereafter took it on hire. Whatever the variations a true hire purchase implies ownership of the chattel with the person from whom it is hired. In Sundaram Finance Ltd. v. State of Kerala (A. I. R. 1966 S. C. 1178) Their Lordships were considering again the question of sales tax In respect of a motor vehicle taken under a hire purchase agreement. The true nature of the hire purchase agreement has been indicated in that case in the following words:-THE owner under the hire purchase agreement enters into a transaction of hiring out goods on the terms and conditions set out in the agreement and the option to purchase exercisable by the customer on payment of all the instalments of hire arises when the instalments are paid and not before. In such a hire purchase agree- ment there is no agreement to buy goods; the hirer being under no legal obligation of buy has an option either to return the goods or to become its owner by payment in full of stipulated hire and the price for exercising the option. This class of hire purchase agreement must be distinguished from transaction in which the customer is the owner of the goods and with a view to finance his purchase he enters into an arrangement which is in the form of a hire purchase agreement with the financier but in substance evidences a loan transaction subject to hiring agreement under which the lender is given the license to seize the goods. Therefore under a true hire purchase agreement the ownership of the chattel which is the subject of the agreement is during the operation of the agreement with the person who is stated to have given it on hire to the intending purchaser and the hirer does not become the owner till the purchase is completed in accordance with the terms of the agreement. Viewed in this light the present agreement Exh. 46 though it has all the trappings of a hire purchase agreement in its language and its various clauses was not a true hire purchase agreement as the ownership was not with the respondent but was with the appellant throughout ( 11 ) IF the agreement between the parties was not truly a hire purchase agreement the question is what was the agreement in substance. It is the substance the Court must reach. It is the substance the Court must reach. The appellants case as we have earlier stated is that the agreement in substance was that the respondent was to provide the necessary balance of the purchase price which was to be treated as a loan on the security of the vehicle. Now this case is sought to be proved by leading oral evidence and evidence of surrounding circumstances to establish that the transaction was in truth a loan transaction. Mr. Nanavati for the respondent states that we cannot inquire into that question at all and we cannot permit evidence on that point much less can we take into account such evidence. His argument is that We must look at the document and nothing else and if the document contains all the terms of a hire purchase agreement we must bold that that was the only agreement between the parties. In the alternative he argues that even if it is not truly a hire purchase agreement whatever else it is must be gathered only from its terms and not from any oral evidence or any evidence of surrounding circumstances. In support of that argument he relies on secs. 91 and 92 of the Evidence Act. ( 12 ) SECS. 91 and 92 of the Evidence Act embody rules of evidence. They provide for exclusion of oral by documentary evidence in certain cases and are based on what is called the best evidence rule. The sections are concerned with proof of the terms of a contract grant or other disposition of property reduced to form of a document. Sec. 91 excludes oral evidence of the terms of such document by requiring that the terms be proved by the document itself unless otherwise expressly provided in the Act. Sec. 92 excludes admission of oral evidence as between the parties to such document for the purpose of contradicting varying adding to or substracting from its terms as proved under sec. 91. Sec. 92 contains some provisos which set out cases in which such oral evidence can be led and considered. Proviso (1) refers to cases of the type where the contract grant or disposition is invalidated by fraud intimidation illegation etc. Proviso (2) refers to existence of any separate oral agreement as to any matter on which the document is silent and which iq not inconsistent with its terms. Proviso (1) refers to cases of the type where the contract grant or disposition is invalidated by fraud intimidation illegation etc. Proviso (2) refers to existence of any separate oral agreement as to any matter on which the document is silent and which iq not inconsistent with its terms. Proviso (3) refers to oral evidence of a separate agreement constituting a condition precedent to the attaching of any obligation under any such contract. Proviso (4) relates to a distinct subsequent oral agreement to rescind or modify any such contract grant or disposition of property. Proviso (5) is concerned with any usage or custom by which incidents not expressly mentioned in any contract are usually annexed to contracts of that description. Proviso (6) provides that any fact may be proved which shows in what manner the language of a document is related to existing facts. These two sections read together show that sec. 91 broadly speaking provides for exclusion of evidence other than that furnished by the document to prove the terms which the document embodies and sec. 92 makes the document conclusive of those terms. The provisos indicate the cases which are not covered by secs. 91 and 92. The two sections thus supplement each other but they differ materially in respect of their field of operation. When there is a contract between parties sec. 91 applies when the terms of that contract have been reduced to writing. The condition of the application of that section is that the writing embodies the terms of the contract. If it does not then section does not apply and sec. 92 would not be attracted. Merely because there is a document of the nature set out in the section such as a contract it does not preclude a party to prove that that document does not embody the terms agreed upon betseen the parties and was not at all the contract between them. The terms of the writing in such a case are not really the terms of the contract. A party is not precluded from showing that the writing was not really the contract but was only a fictitious or colourable device which clothed something else. This position appears to emerge from the language of sec. 91 but may be illustrated by reference to instances dealt with in some decided cases. A party is not precluded from showing that the writing was not really the contract but was only a fictitious or colourable device which clothed something else. This position appears to emerge from the language of sec. 91 but may be illustrated by reference to instances dealt with in some decided cases. ( 13 ) THE case in Baijnath v. Vally Mahomed (A. I. R. 1925 P. C. 75) is in some respects similar to the present case. The facts there were that one B had borrowed from the bank a large sum of money on security of his shares which were in the custody of the bank and the bank was pressing for reduction of that debt. B approached J As a result of what was agreed the back transferred 70 0 shares to J for Rs. 1 30 0 and handed over to him the certificates of those shares. Then B and I executed bought and sold notes in Js favour for the same shares for Rs. 1 78 750 On the due date fresh bought and sold notes were executed and the last bought and sold notes were executed for Rs 245781-4-0. B sued J for redemption of the shares contending thai the transaction was in truth a mortgage. The plaintiffs right was denied on the ground that the several transactions on which the plaintiff relied were not mortgages but sales with a right of repurchase that had expired. The trial Judge upheld the plaintiffs contention. On appeal the Chief Judge decided that the transactions were mortgages. The learned Judge held that they were sales with contracts for repurchase but that time was not of the essence of the contracts. In the result a decree was passed by the Appeal Court in the suit that on payment by the plaintiff of the sum found due the shares claimed should be transferred to the plaintiff. It appears to have been contended before the Privy Council that sec. 91 and 92 of the Evidence Act bar an inquiry into the true nature of the transaction Their Lordships observed (at page 77):-IT is true as was laid down in Balkishan Das v. Legge (2 Bom. It appears to have been contended before the Privy Council that sec. 91 and 92 of the Evidence Act bar an inquiry into the true nature of the transaction Their Lordships observed (at page 77):-IT is true as was laid down in Balkishan Das v. Legge (2 Bom. L. R. 523) that under sec 92 of the Indian Evidence Act as between the parties to an instrument - oral evidence of intention is not admissible for the purpose either of construing deeds or of proving the intention of the parties. But in the view that their Lordships take of the circumstance of this case the section and the ruling have no application to it. The preamble to the Evidence Act recites that 4th is expedient to consolidate define and amend the Law of evidence and sec 92 merely prescribes a rule of evidence; it does not fetter the Courts power to arrive at the true meaning and effect of a transaction in the light of all the surrounding circumstance their Lordships considered the surrounding circumstances and came to the conclusion that the evidence indicated that the shares were held as a security and they found accordingly. Another case to which our attention has been invited is the case of Tyagaraja Mudaliyar v. Vedathanni (A. I. R. 1936 P. C. 70 ). The facts of that case were that there were two brothers Somasundra and Ramalinga who owned extensive movable and immovable properties in the Tanjore district. Both of them were residing separately and enjoying the properties in separate portions. Ramalinga died first leaving behind his widow. On his death Somasundra the surviving brother feeling nervous as to the possibility of the widow the plaintiff setting up the case that the brothers had separated and that the plaintiff was accordingly entitled to a widows estate in one-half of the family properties was anxious that a document should be executed evidencing the undivided status of the family. With this object a document was executed by the widow and by Somasundra affirming the undivided status of the family and purporting to make provision for the widows maintenance. With this object a document was executed by the widow and by Somasundra affirming the undivided status of the family and purporting to make provision for the widows maintenance. It was however distinctly understood that this document was not to be the final contract for the plaintiffs maintenance but was solely intended as a voucher establishing the joint undivided nature of the family it being agreed that the plaintiffs claim for maintenance on a scale commensurate with the position and status of the family was to be left over for future settlement at leisure. This claim was not settled as contemplated with the result that the widow filed a suit for claiming arrears of maintenance. The claim made was inconsistent with the amount provided for in the document. Their Lordships first considered the facts relating to the separate living of the two brothers and observed that those facts were sufficient to establish that there was a prima facie case of separation in which case the widow would be entitled for life to one-half of the family properties. Then they pointed out that there were concurrent Sidings of the courts below that when this document was presented to her three days after her husbands death she refused to sign it and was only induced to do so two days later by representations that it would not be acted on and was only intended to provide evidence of the undivided status of the family. The main question that arose before Their Lordships was whether as contended by the appellants under the provisions of secs. 91 and 92 of the Evidence Act oral evidence was inadmissible to establish that it had been agreed that the provisions for the plaintiffs maintenance were not to be acted on as the document was only intended to create evidence of the undivided status of the family Their Lordships referred to the decision of the court in Pratap Chandra Ghose v. Mahendra Nath Purkeit (1889) 17 Cal. 281-16 I. A. 233 ). 281-16 I. A. 233 ). In dismissing the appeal in that case it had been observed by the Privy Council:-IF there was any stipulation in the kabuliyat which the plaintiff told the tenants would not be enforced they cannot be held to have assented to it and the kabuliyat is not the real agreement between the parties and the plaintiff cannot sue upon ittheir Lordships observed that from that decision it could be safely inferred as decided that there was no objection to the reception of oral evidence to show that there was no agreement and therefore no contract. Their Lordships then examined the provisions of secs. 91 and 92 of the Evidence Act and stated:when a contract has been reduced to the form of a document sec. 91 excludes oral evidence of the terms of the document by requiring those terms to be proved by the document itself unless otherwise expressly provided in the Act and see 92 excludes oral evidence for the purpose of contradiciting varying adding to. or substracting from such terms. Sec. 92 only excludes oral evidence to vary the terms of the written contract and has to reference to the question whether the parties had agreed to contract on the terms set forth in the document. The objection must therefore be based on see. 11 which only excludes oral evidence as to the terms of a written contract. Clearly under that section a defendant sued as in the present ease upon a written contract purporting to be signed by him could not be precluded in disproof of such agreement from giving oral evidence that his signature was a forgery. In Their Lordships opinion on at evidence in disproof of the agreement (1) that as in Pym v. Campbell (6 E and B 370) the signed document was not to operate as an agreement until a specified condition was fulfilled or (2) that as in the present case the document was never intended to operate as an agreement but was brought into existence solely for the purpose of creating evidence of some other matters stands exactly on the same footing as evidence that the defendants signature was forged. It was contended before Their Lordships that the case carne within sec. 92 because of the provision in the document recognising the widows title to the jewels in her possession. It was contended before Their Lordships that the case carne within sec. 92 because of the provision in the document recognising the widows title to the jewels in her possession. Their Lordships referred to the finding of the High Court that this provision was not intended to operate as agreement but was introduced to give verisimilitude to the document it being usual to make such a provision in agreements for a widows maintenance Their Lordships held that the document was not the real agreement between the parties and the lower Courts were right in finding on the oral evidence in the case that there was no contract. ( 14 ) THE ratio of these cases would be applicable to the present case. The appellant does not want to prove by oral evidence any variation of the agreement between him and the respondent. What he wants to prove is that this document does not and was not intended to express a contract of hire purchase but was merely clothed in that form-a colourable device- to carry out the true and only agreement namely the advance of money and the giving of security therefor in the shape of the chattel referred to in the document. Mr. Nanavati contends that if there is some agreement between the parties then whatever may be the terms of that agreement sec. 91 is attracted although what is embodied in the document As not that agreement but some other co tract. His argument is that the ratio of the Privy Council cases earlier referred to applies to a situation where there was no agreement of any kind at all. We are unable to agree. The observations of the Privy Council in Tyagarajas case do not support that submission. All that is necessary is that there never was an agreement as embodied in the document but the agreement was something different. The document is then only a cloak for the real agreement and cannot come in the way of proof of the real agreement. ( 15 ) MR. Nanavati invites our attention to the decision of the Privy Council in Balkishan Das v. Legge (2 Bom. L. R. 5231. In that case two deeds were passed on the same day namely 4-2-1873. Under one deed Balkishan and his brother who needed a sum sold their taluka to Legge for Rs. ( 15 ) MR. Nanavati invites our attention to the decision of the Privy Council in Balkishan Das v. Legge (2 Bom. L. R. 5231. In that case two deeds were passed on the same day namely 4-2-1873. Under one deed Balkishan and his brother who needed a sum sold their taluka to Legge for Rs. 15 0 By the other deed Legge agreed to sell the same Taluka to Balkishan and his brother for Rs. 165000. 00. The suit was filed in 1894 and redemption was sought on the ground that the transaction was a mortgage by conditional sale The defendant on the other hand contended that the transaction was an absolute sale with a contract of resale the time for which had expired. The Subordinate Judge held that the documents in question were deeds of mortgage by conditional sale and that the plaintiff was entitled to redemption. His judgment was confirmed by the High Court and the defendant came in appeal. It appears that evidence of a person named Man was admitted by the Subordinate Judge for the purpose of proving the real intention of the parties and such evidence was to some extent relied on in both courts. Their Lordships said that they do not think that oral evidence of intention was admissible for the purpose of construing the deeds or ascertaining the intention of the parties. Then they turned to sec. 92 of the Evidence Act and after examining it stated that the case must therefore be decided on a consideration of the contents of the documents themselves with such extrinsic evidence of surrounding circumstances as may be required to show in what manner the language of the document is related to the existing facts. On examining the contents of the document in that light they came to the conclusion that the transaction was a mortgage by conditional sale. Mr. Nanavati relies on the observations of their Lordships just quoted. Now it will be noticed that that case fell under sec. 92 of the Evidence Act. The oral evidence that was led was to prove the intention of the parties in entering into that particular transaction. This evidence was obviously meant to prove a simultaneous oral agreement to treat the transaction as a mortgage. Now it will be noticed that that case fell under sec. 92 of the Evidence Act. The oral evidence that was led was to prove the intention of the parties in entering into that particular transaction. This evidence was obviously meant to prove a simultaneous oral agreement to treat the transaction as a mortgage. This is how the decision has been read not only by the High Court of Bombay in decisions to which reference will be made presently but also by the Privy Council in Maung Kyin v. Ma Sha La (20 Bom. L. R. 278) where at page 287 they point out that the decision in Balkishan Dass case has been rightly followed and applied by the High Court of Bombay in Datoo v. Ramchandra (7 Bom. L. R. 669 ). Mr. Nanavati then invites our attention also to the decisions of the Bombay High Court in Dattu v. Ramchandra (supra) and Keshavrao v. Raya (8 Bom. L. R. 287 ). In these two cases the question was the same as in Balkishan Dass case. The plaintiffs sued to redeem and to recover possession of the land conveyed by them on the allegation that the transaction though purporting to be a sale was intended to operate as a mortgage and they relied on the surrounding circumstances in support of that contention. The court held that this amounted to proving contemporaneous oral agreement but evidence of that character was excluded by sec. 52 of the Evidence Act. The court followed the decision in Balkishan Dass case. ( 16 ) WE may now refer to certain observations of the Supreme Court in Sundram Finance Ltd. v. State of Kerala (supra ). That was a case where the challenge was to the levy and recovery of sales tax. The appellate were a company of financiers as in the present case providing money for purchase of vehicles on hire purchase agreement. The transactions when they fructified into sales were purported to be taxed by the sales tax authorities under the provisions of the Travankore-Cochin General Sales Tax Act. The appellants contended that the transactions were in reality loan transactions and therefore no sales tax was leviable. The procedure followed by the appellants was that the owner of the vehicle sold it to the appellants and then took it on hire. The appellants contended that the transactions were in reality loan transactions and therefore no sales tax was leviable. The procedure followed by the appellants was that the owner of the vehicle sold it to the appellants and then took it on hire. There used to be regular sale letters to be passed and a bill for the sale also used to be made out. Certain other documents used to be passed including a promissory note. The written agreement that was made between the appellants and the customer was substantially similar to the hire purchase agreement as in the present case. His Lordship Shah J. observed (page 1183) :-THE true effect of a transaction may be determined from the terms of the agreement considered in the light of the surrounding circumstances. In each case the Court has unless prohibited by statute power to go behind the documents and to determine the nature of the transaction whatever may be the form of the documents. An owner of goods who purports absolutely to convey or acknowledges to have conveyed goods and subsequently purports to hire them under a hire purchase agreement is not estopped from proving that the real bargain was a loan on the security of the goods. If there is a bona fide and completed sale of goods evidenced by documents anterior to and independent of a subsequent and distinct hiring to the vendor the transaction may not be regarded as a loan transaction even though the reason for which it was entered into was to raise money. If the real transaction is a loan of money secured by a right of seizure of the goods the property ostensibly passes under the documents embodying the transaction. but subject to the terms of the hiring agreement which be one part of the buyers title and confer a licence to seize. When a person desiring to purchase goods and not having sufficient money on hand borrows the amount needed from a third person and pays it over to the vendor the transaction between the customer and the lender will unquestionably be a loan transaction. The real character of the transaction would not be altered if the lender himself is the owner of the goods and the owner accepts the promise of the purchaser to pay the price or the balance remaining due against delivery of goods. Mr. The real character of the transaction would not be altered if the lender himself is the owner of the goods and the owner accepts the promise of the purchaser to pay the price or the balance remaining due against delivery of goods. Mr. Nanavati points out that this was not a case between the parties to the transaction but between one party to the transaction and a stranger namely the sales tax authority. Therefore. so far as the construction of the document was concerned the bar of sec. 92 was not attracted as between those parties. It is true that sec. 92 excludes oral evidence on matters stated therein as between the parties to any such instrument or their representatives in interest. The Supreme Court has pointed out in Hira Devi v. Official Assignee Bombay (A. I. R. 1958 S C. 448) to which Mr. Nanavati has invited our attention that from the terms of sec. 92 itself it is clear that strangers to the document are outside the scope of sec. 92 and sec. 99 has presumably been enacted to clarify the same position. The true position their Lordships say appears to be that if the terms of any transfer reduced to writing are in dispute between a stranger to a document and a party to it or his representative in interest the restriction imposed by sec. 92 in regard to the exclusion of evidence of oral agreement is inapplicable and both the stranger to the document and the party to the document or his representative in interest are at liberty to lead evidence of oral agreement notwithstanding the fact that such evidence if believed may contradict vary add to or substract from its terms. Mr. Nanavati is right when he says that in Sundarrams case the Supreme Court was not concerned with evidence sought to be led as between the parties to the document; even so the above observations of the Supreme Court in so far as they relate to the courts power to go behind a document and determine the nature of the transaction were germane to the issues for decision in the case and were obviously in accordance with the position of law as laid down by the Privy Council earlier in the two decisions which have been earlier referred to and which go to show that when sec. 91 itself is not attracted on the ground that the written instrument does not embody the agreement between the parties and the agreement was different the court is not powerless in determining the true agreement between the parties. [ The rest of the judgment is not material for the reports ] appeal allowed. .