ASMAL BAGAS ABHARAM v. RAJ MAHIJIBHAI PARBHATSING — 1972 DIGILAW 72 (GUJ)

S. H. SHETH, J. ( 1 ) THE plaintiffs filed against the defendant Regular Civil Suit No. 122 of 1964 in the Court of the Civil Judge Junior Division Karjan for redemption of mortgage of the suit property. The suit property consists of two parcels of land carved out of S. No. 260 of village Dhamanja in Baroda District. The plaintiffs mortgaged the suit land to the defendant on 4th May 1954 for a sum of Rs. 2925/under a registered document. It is the plaintiffs allegation that it is a mortgage by conditional sale. ( 2 ) IN defence the defendant contended that the transaction was an outright sale and not a mortgage by conditional sale. He also contended that on payment of six times the assessment in respect of the suit land he had become occupant thereof. ( 3 ) THE Trial Court held that the transaction was a mortgage by conditional sale that the plaintiff No. 2 alone was entitled to redeem the mortgage and that the defendant had not become an absolute owner of the suit land under the Bombay Tenancy and Agricultural Lands Act 1948 In that view of the matter the Trial Court passed preliminary decree for redemption of mortgage against the defendant. ( 4 ) THE defendant appealed to the District Court. The Appellate Court confirmed the findings recorded by the Trial Court. One more point was canvassed before the Appellate Court. It was contended by the defendant that under the Bombay Merged Territories (Miscellaneous Alienations Abolition) Act he had become the owner of the suit land. That contention was negatived by the Appellate Court. In that view of the matter the Appellate Court dismissed the appeal. ( 5 ) IT is that appellate decree which is called in question in this Second Appeal. [ His Lordship after discussing the facts held that the parties had entered into a transaction of mortgage by conditional sale. His Lordship further observed:- ] ( 6 ) MR. Shah has next contended before me that within the meaning of sec. 58 (c) of the Transfer of Property Act the document does not contain the condition to retransfer the suit land. According to him condition means an agreement between the parties to reconvey or retransfer the land to the plaintiffs. An agreement which has no consideration is void under sec. 25 of the Contract Act. 58 (c) of the Transfer of Property Act the document does not contain the condition to retransfer the suit land. According to him condition means an agreement between the parties to reconvey or retransfer the land to the plaintiffs. An agreement which has no consideration is void under sec. 25 of the Contract Act. According to him the agreement to reconvey or retransfer the suit land to the plaintiffs is without any consideration. He has relied upon the definition in clause (d) of sec. 2 of the Contract Act in that behalf. It reads thus. WHEN at the desire of the promisor the promisee or any other person has done or abstained from doing or does or abstains from doing or promises to do or to abstain from doing something such act or abstinence or promise is called a consideration for the promise. THE expression at the desire of the promisor governs the entire definition. Therefore at the desire of the promisor argues Mr. Shah the promisee must have done one of the following six things:- (1) He must have done something (2) He must have abstained from doing something (3) He does something. (4) He abstains from doing something. (5) He promises to do something (6) He promises to abstain from doing something. OUT of the six alternatives contends Mr. Shah the fifth alternative governs the present case. According to him therefore the plaintiffs have promised to pay the amount of Rs. 2925/to the defendant at the time of seeking the retransfer of the suit land to them. If therefore the plaintiffs have promised to pay to the defendant a sum of Rs. 2925/for getting the land retransferred to them the performance of that promise must be at desire of the promisor. The language in which the aforesaid recital is couched in Ex. 40 shows contends Mr. Shah that whereas the defendantthe promisor-is under an obligation to reconvey the land there is no obligation on the plaintiffs to purchase it. On the contrary the language suggests that the plaintiffs have an option to pay the amount or not to pay it and therefore to purchase the land or not to purchase it. He has placed this construction on the strength of that part of the aforesaid recital which says that the plaintiffs would pay before Vaishakh Sud 3 of any year. This expression used in Ex. He has placed this construction on the strength of that part of the aforesaid recital which says that the plaintiffs would pay before Vaishakh Sud 3 of any year. This expression used in Ex. 40does not satisfy the requirement arising out of the expression at the desire of the promisor used in sec. 2 (d) of the Contract Act. If that is the case the argument advanced by Mr. Shah will have to be upheld. In Vishveshvar Subrao Kulkarni v. Sadashiv Venkatramanayya Harite A. I. R. 1926 Bombay 54 the facts of the case show that there was a simultaneous agreement under which the defendant agreed to reconvey the land to the plaintiff whenever he tendered the sum of Rs. 1268. 00. A question arose whether the expression whenever he tendered the sum of Rs. 1268/amounted to a promise made at the desire of the promisor. The Bombay High Court found it difficult to say that the plaintiffs promise to pay Rs 1 268 at some indefinite time was a promise made at the desire of the promisor within the meaning of clause (d ). It is further observed in that decision that the words at the of the promisor in clause (d) imply a promise which has a real in conducing to the contract and that an option to buy is not equivalent to an agreement to buy because if there is an option it becomes an agreement if and when the option is exercised. However if in the facts and circumstances of the present case the tender of Rs. 2925/from the plaintiffs to the defendant on Vaishakh Sud 3 of any year Was the sole fact to constitute consideration it must be said that the language in which the aforesaid recital in Ex. 40 is couched indicates that there was an option for the plaintiffs to purchase the suit land or not to purchase it because they might as well not tender the amount of Rs. 2925/at any time. If that was the situation it would have been difficult for me to hold that the condition to retransfer the suit land to the plaintiffs incorporated in Ex. 2925/at any time. If that was the situation it would have been difficult for me to hold that the condition to retransfer the suit land to the plaintiffs incorporated in Ex. 40 constituted a contract between the parties because since the option was left to the plaintiffs and since the plaintiffs had nothing to do sat the desire of the defendant it would lack consideration within the meaning of that expression as given in sec. 2 (d) of the Contract Act. Mr. Nanavaty has however argued that the consideration for that agreement is not what the plaintiffs have option to do but it is what the plaintiffs have done. In other words out of the six alternatives into which I have broken the definition of `consideration as given in sec. 2 (d) it is the first alternative which governs the facts of the present case. According to him the plaintiffs would not have entered into the transaction evidenced Ex. 40 if the defendant inter alia had not agreed to retransfer the suit land. Therefore so far as the transaction evidenced by Ex. 40 is concerned the cash amount of Rs. 2925/and the agreement to retransfer the suit land constitute its consideration. But so far as the agreement to retransfer the land to the plaintiffs is concerned its consideration lies in what the plaintiffs have done viz. it lies in the ostensible sale of the suit land which the plaintiffs have made to the defendant. Therefore within the meaning of the first of the six alternatives specified in the definition of consideration the plaintiffs had ostensibly sold the land to the defendant because the defendant had agreed to retransfer it to the plaintiffs. According to Mr. Nanavaty that is a valid consideration. I think Mr. Nanavaty is correct in this submission of his. The plaintiffs would not have sold the suit land to the defendant if the defendant had not agreed to reconvey in to the plaintiffs. The consideration therefore for the agreement incorporated in Ex. 40 lies in something which the plaintiffs did in the past. If it renders the suit transaction a transaction of mortgage the plaintiffs have a right to redeem it on payment of the agreed amount not at any time they like but during the period of limitation. They cannot make any claim after the period of limitation has expired for redeeming the mortgage. If it renders the suit transaction a transaction of mortgage the plaintiffs have a right to redeem it on payment of the agreed amount not at any time they like but during the period of limitation. They cannot make any claim after the period of limitation has expired for redeeming the mortgage. ( 7 ) IT is next argued that payment on a certain date is the essence of such a transaction (sec. 58 (c) ). In Padmanabha Ayyar and another v. Sitaram Ayyar andothers A. I. R. 1928 Madras 28 it has been laid down that the expres sion such payment in second and third clauses of sec. 58 (c) refers only to the payment of the mortgage amount and the expression on a certain date governs the default and not the payment. In other words the expression on a certain date used in first clause of sec. 58 (c) in the context of `default of payment of the mortgage-money does not govern the second and third clauses of that section. I think the view taken by the Madras High Court is correct because the first clause does not use the expression `payment of mortgage-money on a certain date but uses the expression `default of payment of the mortgage-money on a certain date. Therefore whereas the first clause in sec. 58 (c) of the Transfer of Property Act provides for a situation arising out of the default of payment of the mortgage-money the second and third clauses contemplate situations of mortgage-money is to be made. Therefore the expression on a certain date used in the first clause in the context of the expression default of payment of the mortgage-money cannot be read in the second and third clauses of that section. In other words it qualifies `default of payment and not payment. ( 8 ) IN Kinuram Mondol v. Nitye Chand Sirdar (1906-7) 11 Calcutta Weekly Notes 400 it has been held by the Calcutta High Court that a certain date of payment is an essential element of a mortgage by conditional sale. ( 9 ) IN the later decision in Mahomed Mozaffer Ali Bhuyan v. Asraf Ali A. I. R. 1914 Calcutta 823 the Calcutta High Court has held that the expression on a certain date in sec. 58 (c) does not imply that the mortgagor cannot make a tender before that date. ( 9 ) IN the later decision in Mahomed Mozaffer Ali Bhuyan v. Asraf Ali A. I. R. 1914 Calcutta 823 the Calcutta High Court has held that the expression on a certain date in sec. 58 (c) does not imply that the mortgagor cannot make a tender before that date. The certain date means only the last date. It has also been laid down in that decision that the question whether a particular transaction is an out and out sale or a mortgage by conditional sale is to be decided on the strength of the intention of the parties to be gathered from circumstances. ( 10 ) IT appears to me that the aforesaid decision of the Madras High Court is based on sound reasoning because the expression on a certain date used in the context of default of payment within the meaning of the first clause of sec. 58 (c) cannot be read in the context of payment contemplated by second and third clauses of sec. 58 (c ). Payment of mortgage-money is contrary to default in payment of mortgage-money. I am therefore of the opinion that omission to fix a certain date is not fatal to the condition to retransfer the suit land to the plaintiffs. It is a valid agreement enforceable at law. ( 11 ) MR. Shah has invited my attention to the decision of the High Court of Bombay in Gurunath Balaji Mutalik Deshpande v. Yamanaya Kom Nalarav Divan I. L. R. (1911) 35 Bombay 258. In that case a deed of sale with option of repurchase contained the following clause:-I have given the land into your possession; if perhaps at any time I require back the land I will pay you the aforesaid Rs. 600 and any money you may have spent on bringing the land into good condition and purchase back the land. UPON construction of this clause it was held by a Division Bench of the Bombay High Court that it was a purely personal covenant to repurchase that therefore the suit was not maintainable. The principle laid down in that decision cannot be applied to the instant case because in that case there was really no agreement between the parties in regard to the repurchase of the land. The principle laid down in that decision cannot be applied to the instant case because in that case there was really no agreement between the parties in regard to the repurchase of the land. That there was no agreement between the parties is clearly indicated by the expression if perhaps at any time I require back the land used in the document of sale in that case. Under these circumstances I am unable to accede to the contention raised by Mr. Shah. I am of the opinion that the document Ex. 40 contains a valid agreement to repurchase the suit land because it is backed by consideration and also because it satisfies the requirements of sec. 58 (c) of the Transfer of Property Act. .