Doman Kamar Sabu v. Gurucharan Mandal — 1993 DIGILAW 394 (PAT)

JUDGMENT S. B. Sinha, J. This appeal is directed against the judgment and decree dated 20.7.1989 passed by Shri S. Prasad, Subordinate Judge-II, Seraikella, in Title Suit No. 25 of 1988 whereby and whereunder he decreed the plaintiff's suit. The plaintiff respondent filed the aforementioned suit claiming, interalia, the following reliefs : - "(i) for declaration that the defendant is a mortgagee and the sale deed No. 1167 dated 23.03.1976 is not an out and out sale of the suit land described in the Schedule ‘A below and that by virtue of this Sale deed the defendant never acquired nor could acquire any title there-over. (ii) for all costs of this suit. (iii) for any other relief or reliefs to which the plaintiffs shall be deemed entitled in law or equity. 2. The fact of the matter is not much in dispute. The plaintiff purchased the suit land by a registered deed of sale dated 17.9.1965. He was in urgent need of money and, therefore, be allegedly approached the defendant for advancement of a loan of Rs. 3,000/- (three thousand) and pursuant thereto a deed of sale dated 23.3.1976 was executed by the plaintiff and on the same day an agreement was also executed by the defendant whereby it was agreed that if within two years, the plaintiff return the said sum of Rs. 3000/- to the defendant, the defendant would execute a registered a sale deed in favour of the plaintiff. According to the plaintiff, despite the fact that he tendered Rs. 3000/- and requested the defendant to execute a deed of re-convenyance in his favour, he did not do so pleading that the time for execution of the deed should be extended by three years, as allegedly he could not realise the interest from the usufructs of the suit land. According to the plaintiff, the aforementioned period was further extended upto 1985. 3. The plaintiff stated that the defendant had filed an application for mutation of his name in the office of the Circle Officer and he, therefore, suspected that the defendant had no intention to execute the deed of reconveyance in his favour. 4. The defendant, on the other hand, inter alia, denied that any agreement was entered into by and between the plaintiff and the defendant on 23.3.1976. 4. The defendant, on the other hand, inter alia, denied that any agreement was entered into by and between the plaintiff and the defendant on 23.3.1976. According to him the deed of Bale dated 23.3.1976 was not a deed of mortgage and thereby the plaintiff had transferred all his right, title and interest in his favour. All the other allegations made in the plaint were also denied and disputed. 5. The learned court below, in view of the aforementioned pleading of the parties framed the following issues : 1. Is the suit as framed maintainable ? 2. Have the plaintiffs any valid cause of action for the suit ? 3 1st the suit barred by law of limitation, estoppel, waiver and acquiescence ? 4. Whether the transaction between the plaintiff and defendant was an out and out sale or it was a mortgage ? 5 Whether the case of the plaintiffs that the plaintiffs tendered Rs, 3000/- in the month of March 1978, to the defendant and on the request of the defendant, the plaintiffs allowed him to use and suit land for three years more and again this period was extended till 1985, is correct ? 6. Whether the cue of the plaintiffs that they dispossessed the defendant from the suit land in the year 1986 and have been coming in possession or the suit land is correct ? 7. Whether the suit is hit by section 34 of the Specific Relief Act ? 8. Whether the plaintiffs are entitled to a decree as prayed by them? 9. To what relief or reliefs. If any, are the plaintiffs entitled ? 6. The learned court below first tock up issue no. 4 and inter alia opined that the real character of the transaction must be ascertained in the surrounding circumstance. The learned court below enumerated ten circumstances for coming to the conclusion that the aforementioned deed dated 23.03.1976 was, in fact, a deed of mortgage. 7. While deciding the issue no. 5. he further held that the plea of the plaintiff that he had approached the defendant and tendered Rs. 3000/-and requested for reconveynce of the suit land is correct. While deciding issue no. 6, he found that the story of the plaintiffs that he dispossessed the defendant from the suit land in the year 1976 and are ever since coming in possession of the suit land was not correct. 3000/-and requested for reconveynce of the suit land is correct. While deciding issue no. 6, he found that the story of the plaintiffs that he dispossessed the defendant from the suit land in the year 1976 and are ever since coming in possession of the suit land was not correct. While deciding issue no. 7, the learned court below held that the suit is not hit by section 34 of the Specific Relief Act and no decree for confirmation of possession or recovery of the possession could be granted unless the plaintiff brings another suit for redemption of the mortgage end recovery of possession. 8. Mr. Debi Prasad, learned counsel, appearing on behalf of the appellant submitted that as the purported mortgage was evidenced by two documents, in terms of Section 58 (c) of the Transfer of Property Act, the same cannot be held to be a mortgage by way of a conditional sale. The learned counsel further submitted that the suit is barred under the provisions of Section 34 of the Specific Relief Act. 9. Mr. Sumir Prasad, learned counsel, appearing on behalf of the plaintiff-respondent, on the other: hand, submitted that in this case the learned court below has assigned sufficient and cogent reasons for coming to the conclusion that the parties had intended to execute a deed of mortgage and not a deed of sale and, thus, no interference with the judgment and decree passed by the learned court below is called for. In support of his contention, the learned counsel has placed reliance upon P. L. Bapuswami Vs. N. Pattay A.I.R. 1966 S. C. 902 : Man Mohan Dass Vs. Bahab Uddin-A.I.R. 1957 Allahabad 740 Tamboli Ram anlal Motilal Vs. Ghanchi Chimanlal Keshav Vs. AIR 1992 S. C. 1236 : Indira Kaur Vs. Sheolal Rapoor A.I.R. 1988 S.C, 1074 and Chunchun Jha Vs. Ebadat All: AIR 1954 SC 345 10. The question, therefore, which arises for consideration in this appeal is : (i) whether the deed dated 23.3.1976 (Ext. A) coupled with the agreement for sale dated 23.3.1976 (Ext. 1) constitutes a deed of mortgage or a deed of sale coupled with an agreement to recover the suit property ? 11. A bareperusal of the averments made in the plaint clearly demonstrates that the plaintiff himself procceeded on the basis that ostensibly a deed of Bale was executed. A) coupled with the agreement for sale dated 23.3.1976 (Ext. 1) constitutes a deed of mortgage or a deed of sale coupled with an agreement to recover the suit property ? 11. A bareperusal of the averments made in the plaint clearly demonstrates that the plaintiff himself procceeded on the basis that ostensibly a deed of Bale was executed. Paragraphs 3 and 4 or the plaint read thus : "3. That, while the plaintiffs were possessing the suit land in the manner stated above, they took a sum of Rs. 3000/- for their urgent need, from the Defendant some times in the year 1976 and gave the suit land in security there of the plaintiffs also executed a registered Deed of conveyance No. 1167 dated 28.3.76 there by ostensibly selling the suit land to the Defendant on condition that on repayment of the said amount of Rs. 3000/- (three thousand) to the defendant within a period of two years from the date of Registration of the said Deed, it shall be incumbent upon him to recovery the propery to the plaintiffs by executing necessary registered Deed of conveyance in favour of the plaintiffs," 4. That, the said registered Deed of sale was also accompanied by a Deed of Ekrarnama duly executed by Defendant, in presence of witnesses on that day i.e. on 28.3.1976 in which the said condition was embodied clearly and specifically. This Deed of Ekrarnama formed part of the same transaction." 12. In para 6 of the plaint also, he pleaded that In the month or March, 1978, be bad asked the defendant to reconvey the property In para 11 of the plaint, he clearly stated as follows :- "It is an ostensible sale with express condition of repurchase........ .......” 13. The question as to whether a particular transaction constitures a mortgate with conditional sale or sale with condition of repurchase is essentially a question of fact. The intention or the parties is primarily to be gathered from the deed (d) executed by the parties. It is, however, not a case where the plaintiff pleaded that he was not aware of the contents of the deed, or that any fraud, coercion or misrepresentation was made which would invalidate the document. 14. The plaintiff accepts the position that the said deed was ostensibly a deed of sale. A bare perusal of the said deed (Ext. It is, however, not a case where the plaintiff pleaded that he was not aware of the contents of the deed, or that any fraud, coercion or misrepresentation was made which would invalidate the document. 14. The plaintiff accepts the position that the said deed was ostensibly a deed of sale. A bare perusal of the said deed (Ext. A) does not leave any room for doubt that in terms thereof, the plaintiff transferred his right, title and interest in favour of the defendant and pot him in possession there of. He on his own showing, had all along been banking upon the agreement of repurchase as contained in Ext. 1 15. The learned court below has held that Ext. A read with Ext. 1 constitutes one transaction. 16. However, in order to recover tide in respect of the property in question the only remedy of the petitioner was to enforce the said agreement of repurchase as contained in Ext. 1 filing a suit for specific performance of contract. In respect of immovable property, time may not be always the essence of the contract, as the same depends on the facts and circumstance of the case. (See Smt. Chand Rani Vs. Smt. Kamal Rani reported in 1993(2) B.L J.R. 842, wherein it was held: "24. From an analysis of the above case law it is clear that in the case of sale of immovable property there is no presumption 8S to time being the essence of the contract. Even if it is not of the essence of the contract, the Court may infer that it is to be performed in a reasonable time if the conditions are; (1) from the express terms of the contract; (2) from the nature of the property; and (3) from the surrounding circumstances, for example, the object of making the contract". Even if it is not of the essence of the contract, the Court may infer that it is to be performed in a reasonable time if the conditions are; (1) from the express terms of the contract; (2) from the nature of the property; and (3) from the surrounding circumstances, for example, the object of making the contract". In terms of the said agreement the defendant was bound to reconvey the property within a period of two years from the date of execution thereof and in the event the defendant failed and/or neglected to perform his part of the contract, whereas the plaintiff had all along been ready and willing co perform his part of contract, the suit for specific contract could have been instituted within a period of three years thereafter., After the time for filing a suit for specific performance of contract expired, evidently, the plaintiff filed the aforementioned suit for a mere declaration. 17. So far as the grounds enumereted by the learned court below for coming to the conclusion that the said deed of sale dated 23.3.1976 coupled with the agreement of the same day constituted a transaction of mortgage is not correct in the eye of law, 18. In this case, the plaintiff has not pleaded that the transaction constituted a mortgage by way of conditional sale. In this connection, it will be relevant to quote section 58(c) of the Transfer of Property Act, 1862 : "58, Mortgage by conditional sale-(o) Whole mortgage of obtensibly sells the mortgaged property-- on condition that on default of payment or the mortgage- money on a certain date the sale shall become absolute, or on condition that – on such payment being made the sale shall become void, or on condition that on such payment being made the buyer shall transfer the property to the seller, the transaction is called a mortgage by conditional sale and the mortgagee a mortgagee by conditional sale; Provided that no such transaction shall be deemed to be a mortgage, unless the condition is embodied in the document which effects or purports to effect the sale. 19. It is apparent that in this case, none of the ingredients of the aforesaid provisions are fulfiled in the present Case. 19. It is apparent that in this case, none of the ingredients of the aforesaid provisions are fulfiled in the present Case. Further the proviso appended to the said provision clearly raises a legal fiction that unless the condition as contained in the main provision is embodied in the document, the transaction shall not be deemed to be mortgage. It is now well known that a legal fiction has to be given its full effect. 20 Further, a party to a contract is debarred in terms of Section 91 and 92 of the Evidence Act from adducing any oral evidence for the purpose of contracting, varying and/or subtracting from the terms and conditions of an agreement or other dispossession of the property. The only execution to the aforementioned provision is contained in the provison appended thereto. The provision of section 92 of the Indian Evidence, Act applies where on the basis or a written installment, a concluded contract has been entered into. It is true that where a transaction is contained in more than one document, all the documents should be read together for proper interpretation In relation to the nature thereof. Both the Exts. A and Ext. 1, if read together, leave no room for doubt that the deed of sale was executed on the same day and by reason of deed of agreement the vendee agreed to retransfer the property. The said document therefore, exfacie, evidenced two sepaorate transactions. The plaintiff transferred all his right title and interest in favour of the petitioner by reason of Ext. A and the defendant in his turn had executed an agreement to re-convey he said property on the term and conditions mentioned therein. 21. It is now well known that the intention of the parties have to be primarily gathered from the terms and conditions of the document itself. In cases where the nature of the transaction has to be deciphered, the conduct of the parties and the circumstances attending there to would be admissible in evidence. It is also open to a party to show that although a deed of sale bad been executed but the same was done by practising fraud, misrepresentation of fact or coercion, etc. In this case, as noticed hereinbefore, no such plea was advanced by the plaintiff. 22. It is also open to a party to show that although a deed of sale bad been executed but the same was done by practising fraud, misrepresentation of fact or coercion, etc. In this case, as noticed hereinbefore, no such plea was advanced by the plaintiff. 22. In Man Mohan Dass vs. Bahab Uddin reported in A.I.R. 1957 Allahbad 740, the Division Bench of the Allahabad High Court was considering the question as to whether the transaction in question was mortgage by conditional sate or an absolute sale with condition to repurchase. It is the case of the plaintiff that Ext. A read with Ext. 1 constitutes transaction of mortgage by conditional sale but such a contention evidently could not have been raised in view of section 58 (c) of the Transfer of Property Act. In P. L. Bapuswami Vs. N. Pattay reported in A.I.R 1986 S.C. 902, again the question was as to the construction or a document viz. whether the transaction in question was a mortgage by conditional sale or a sale with condition to re-purchase. In that case before the Supreme Court, the condition to repurchase was embodied in the same document and the consideration for transaction was Rs. 4000/--while the real value of the property was Rs. 8000/- The Supreme Court in the facts of the case laid down the law in the following terms; “The definition of a mortgage by conditional sale postulates the creation by the transfer of a relation of mortgagor and mortgagee the price being charged of the property conveyed. In a sale coupled with an agreement to re-convey there is no relation of debtor and creditor nor is the price charged upon the property conveyed but the sale is subject to an obligation to re-transfer the property within the period specified. The distinction between the two transactions is the relationship a debtor and the creditor and the transfer being a security for the debt. The form in which the deed is clothed is not decisive. The question in each case is one of determination of the real character of the transaction to be ascertained from the provisions of the document viewed in the light of surrounding circumstances. If the language is plain and unambiguous it must in the light of the evidence of surrounding circumstances be given its true legal effect. The question in each case is one of determination of the real character of the transaction to be ascertained from the provisions of the document viewed in the light of surrounding circumstances. If the language is plain and unambiguous it must in the light of the evidence of surrounding circumstances be given its true legal effect. If there is ambiguity in the language employed, the intention mar be ascertained from the contents of the deed with such extrinsic evidence as may by law be permitted to be adduced to show in what manner the language of the deed was related to existing fact ................” 23. In that case, as noticed hereinbefore, the condition to purchase was embodied in the same document. In this view of the matter, in terms of section 58 (c) of the Transfer of property Act, the court is prohibited from raising a presumption that the ext. A coupled with Ext.1 constituted mortgage. The learned court below evidently failed to take into consideration this vital aspect of the matter and thus committed a serious error of law. 24. In Indra Kaur Vs. Sheo Lal Kapoor: AIR 1988 SC, 1074 the Supreme Court has observed that the transaction was in fact and substance a mortgage, but the Supreme Court itself held as follows : "(5)(5) These factors clearly spell out the real intention of the parties that it was a transaction of mortgage to secure the sum of Rs. 7000/- at approximately 13½ % interest. But then it is not necessary to examine this dimension or the matter Inasmuch as the plaintiff has not prayed for redemption though in the plaint an averment has been made that the real Intention of the parties was to create a mortgage. As the plaint stands, and as the plaintiff himself has preferred to enforce the agreement for specific performance, it is not necessary to examine the question as to whether or not the real nature of the transaction was mortgage though it was given an appearance of a transaction of a sale. As the plaint stands, and as the plaintiff himself has preferred to enforce the agreement for specific performance, it is not necessary to examine the question as to whether or not the real nature of the transaction was mortgage though it was given an appearance of a transaction of a sale. For the same reason we need not examine the question as to whether or not S. 58 (c) of the Transfer of Property Act would have disabled the plaintiff from claiming the relief of redemption on the basis that the real intention of the parties was to create a mortgage and not an absolute sale coupled with an agreement for reconveyance ......... ... 25. In Tamboli Ramanlal Motilal Vs. Ghanchi Chimanlal Keshavlal : A.I.R. 1992 SC. 1236 again a question arose as to whether a transaction constituted a mortgage with conditional sale or sale with condition or repurchase. The Supreme Court laid down the law thus : "13. The attendant circumstances could be looked into only to gather the intention. Such an intention, If explicitly expressed in the document it self, there is no scope for looking at the attendant circumstances. If therefore, there is no relationship of the debtor and the creditor, the question of it being a mortgage by conditional sale does not arise." "14. On the date of the execution the title is transferred. The option for repurchase is to be exercised within a period of five years. Upon such payment there will be reconveyance in favour of the executant of the document. But strangely, there is no corresponding right for the mortgagee to foreclose the right of redemption. There were the points held in favour of the respondent. and each one of the reasons is valid." 15. The decision in pandit Chunchun Jha's case ( AIR 1954 SC 345 ) (supra), has no application because that was a case in which the transferor did not mention any thing about title passing to the transferee, nor about the reconveyance of the title. That makes all the difference." 26. Tamboli’s case (supra) applies in all (ours in the present case. 27. From reading the deed of sale (Ext. A), it is evident that thereby no relation of debtor and creditor is created. The plaintiff by reason of the said transaction transferred his entire interest in lavour or the defendant. That makes all the difference." 26. Tamboli’s case (supra) applies in all (ours in the present case. 27. From reading the deed of sale (Ext. A), it is evident that thereby no relation of debtor and creditor is created. The plaintiff by reason of the said transaction transferred his entire interest in lavour or the defendant. The defendant bid also been given a right to mutate his name in the office of the State of Bihar and it was stipulated by the plaintiff that he or his successor in interest would have no objection there to. 28. The pleading of the plaintiff in his plaint in this regard as also the purported cause of action for the suit is contrary to the aforementioned term. A tansaction cannot be held to be a mortgage only because the defendant did not get his name mutated for a “long time”, as it is well known that payment of rent does not create any title, nor payment extinguishes any. The plaintiff has also not assigned any reason in the plaint as to under what circumstances the period for re-payment of the alleged loan was extended from 1981 to 1985. 29. The plaintiff has also failed to bring about any documentary evidence in support of his plea that the period for alleged repayment of loan was extended from 1978 to 1981 for the reasons stated in the plaint. If the story put forward by the plaintiff was correct he ought to have obtained an endorsement to that effect by the defendant in the agreement (Ext.1) itself. 30. It is also now well known that a lesser amount of consideration for the transaction itself does not vitiate the same, nor the instrument becomes void for that purpose. In the deed of sale itself, no condition of purchased has been mentioned. In terms of the said deed, the vendee is entitled to enjoy the property as owner thereof. There cannot, therefore, be any doubt whatsoever that by reason of he said transaction, the plaintiff devested himself of the right, title, interest and possession of the property in question. This intention of the party also becomes clear from Ext.1 as thereby the defendant is to reconvey the property, if the consideration amount is offered therefore within a period of two years. 31. This intention of the party also becomes clear from Ext.1 as thereby the defendant is to reconvey the property, if the consideration amount is offered therefore within a period of two years. 31. The amount of consideration of the deed of sale being lesser than the market value may be one of the consideration for considering that the transaction was, in fact a mortgage one, but that by itself is not the determining factor as the consideration amount is arrived at upon an agreement between the parties. 32. Further, admittedly, the suit for merely a declaration has been filed. The plaintiff in his plaint has stated that he had entered into possession of the suit property forcibly. This contention of the plaintiff has been negatived by the learned court below. The aforementioned finding of the court below has not been questioned before me. It is therefore clear that the plaintiff himself proceeded on the basis that unless he could prove that he had been in possession of the property in question, the suit would be hit by the proviso to section 34 of the Specific relief Act, 1963. In view of the fact that the plaintiff has failed to prove the possession in respect of the property in question, the suit for declaration without any further relief was not maintainable. 33. In the Case of D. M. & D. C. v. N. B. Mahanth A. D. Chela reported in 1993 41(1) BLJ.R. 196, it was held as follows : '85. However, in this case, there has been no valid order of attachment as the properties in suit was not in costodia legis and in view of the fact that the plaintiff himself admitted that he had not been in possession of the land as in the date of the institution of the suit, he was bound to pray for consequential reliefs in terms of the proviso appended to section 34 of the Specific Relief Act.” 34. There is another lacuna in the suit. The plaintiff has not prayed for any decree for redemption of the mortgage. The learned court below held that no decree for recovery of the possession can be passed unless the plaintiff deposits the mortgage amount in court. It is not a case that the came of action for redemption of the mortgage did not arise on the date of Institution of the suit. The learned court below held that no decree for recovery of the possession can be passed unless the plaintiff deposits the mortgage amount in court. It is not a case that the came of action for redemption of the mortgage did not arise on the date of Institution of the suit. In fact, the period of two years had expired long ago. The suit, therefore, in my opinion would also be barred under Order 2 Rule 2 of the code of Civil Procedure. 35. For the reasons aforementioned, this appeal is allowed; the judgment and decree passed by the learned court below is set aside and the plaintiff's suit is dismissed. However, in the facts and circumstances of the case, the parties shall bear their own costs throughout. Appeal allowed.