Khumansing Adesing v. Nanabhai — 1998 DIGILAW 113 (GUJ)

D. C. SRIVASTAVA, J. ( 1 ) THIS is plaintiffs Second Appeal. ( 2 ) THE plaintiffs filed Suit for redemption of mortgage on the allegation that their deceased father owned agricultural land. Deceased Adesing Vazir was in need of money. He executed a mortgage deed on 3. 12. 1996 in favour of deceased Nanabhai Vaghjibhai, deceased father of the plaintiff, for Rs. 699/ -. The mortgagee agreed to reconvey the property on repayment of Rs. 699/ -. These two transactions are contained in one document Ex. 28 dated 3. 12. 1996. The plaintiffs alleged that Nanahhai Vaghjibhai was requested to accept Rs. 6997- and reconvey the property, hut he refused to do so. According to the plaintiff the mortgage deed is a mortgage by conditional sale and since the defendants refused to reconvey the mortgaged property hence the Suil was filed by the plaintiff. ( 3 ) THE Suit was resisted by defendant on the ground that it was time barred and that the document was not mortgage by conditional sale. According to them it is a document in the nature of sale with condition to repurchase. Agreement of reconveyance was denied. It is also denied that the amount was offered within five years which was refused. It was further pleaded that because the plaintiff and their predecessors failed to repurchase the property within five years they are not entitled to have reconveyance of the same. ( 4 ) THE Trial Court interpreted the document to he a mortgage by conditional sale. Accordingly Decree for redemption was passed. An Appeal was preferred. The appellate court interpreted the mortgage Deed in a different manner and held that it was not a mortgage by conditional sale, but sale with condition to repurchase. Accordingly the judgment and Decree of the Trial Court were set aside and the Suit of the plaintiffs for redemption and possession was dismissed. It is, therefore, this Second Appeal. ( 5 ) ONLY one substantial question of law arose in this Appeal which was formulated as under: whether in the facts and circumstances of the case the document Ex. 28 is a sale with condition to repurchase or mortgage by a conditional sale ? ( 6 ) LEARNED Counsel for the parties were heard on interpretation of document Ex. 28 and the cases cited by them were also taken into consideration. 28 is a sale with condition to repurchase or mortgage by a conditional sale ? ( 6 ) LEARNED Counsel for the parties were heard on interpretation of document Ex. 28 and the cases cited by them were also taken into consideration. ( 7 ) THE Supreme Court in the case of Tamboli Ramanlal Motilal (dead) by L Rs. vs. Ghanchi Chimanlal Keshavlal (dead) by L Rs. and Anr, reported in AIR 1992 SC 1236 made the following observations while interpreting a Deed to be a mortgage Deed or transaction in the nature of conditional sale. It observed that having regard to the nice distinction between a mortgage by conditional sale and a sale with an option to repurchase, one should be guided by the terms of the document alone without much help from the case law. Thus the first test according to the Supreme Court is terms of the document which should be considered and interpreted to find out the intention of the parties. Of course the cases could be referred to for interpreting a particular clause to gather the intention of the parties. The next test laid down by the Supreme Court in this case is that the nomenclature of the document is hardly conclusive and much importance cannot be attached to the nomenclature alone. Since it is the real intention which requires to be gathered. ( 8 ) IN the case before the Supreme Court the document was styled as a Deed of conditional sale, but that was not held to be conclusive of the matter. Other circumstances be taken to consideration. Those facts and circumstances were that the executant of the document took a sum of Rs. 5000/- by cash for paying miscellaneous dues, for meeting the domestic expenses and for business purposes. This amount was not taken as loan at all. Of course the amount was utilised for discharging prior debts and outstanding dues. The Supreme Court accordingly laid down that where on a consideration of a sum of Rs. 5000/- a deed of conditional sale is executed no relationship of debtor and creditor can be forged in. It, therefore, goes without saying that for the mortgage the relationship of debtor and creditor must come into existence. This relationship may be created in the document itself or it may be subsisting from before the execution of the Deed. 5000/- a deed of conditional sale is executed no relationship of debtor and creditor can be forged in. It, therefore, goes without saying that for the mortgage the relationship of debtor and creditor must come into existence. This relationship may be created in the document itself or it may be subsisting from before the execution of the Deed. ( 9 ) THE next test laid down by the Supreme Court was that if there is stipulation in the deed permitting transferree and his heirs and legal representatives to use, enjoy and lease the property under the ownership rights it will be a sale with condition to repurchase. ( 10 ) ANOTHER test laid down was that if the amount is not paid within the stipulated period and there is stipulation that on failure to repay the amount within the stipulated period, the executor or his heirs will have no right to take back the property, it will be treated as a sale with condition to repurchase. Likewise if there is agreement that the transferree will have right to get municipal records mutated in his name and pay tax it will be a sale with condition to repurchase. The last test was that if there is a stipulation that the transferree will have absolute right to mortgage, sell or gift the suit property it will be sale with condition to repurchase. ( 11 ) COMING to the Deed Ex. 28 it is styled as conditional sale Deed, As stated above this recital itself is not conclusive for determining the real nature of the transaction. The intention of the parties has to be gathered from other recitals in the agreement. The basic condition, viz. , relationship of debtor and creditor is not disclosed in Ex. 28 nor is there any evidence, oral or documentary, that this relationship was created before the execution of Ex. 28. It is also not mentioned that the amount of Rs. 699/- was taken as loan. Of course receipt of this amount is admitted by the executant. It is further mentioned that on consideration of this amount the possession of immovable property of my independent ownership, possession and enjoyment is given by way of conditional sale subject to following conditions. 28. It is also not mentioned that the amount of Rs. 699/- was taken as loan. Of course receipt of this amount is admitted by the executant. It is further mentioned that on consideration of this amount the possession of immovable property of my independent ownership, possession and enjoyment is given by way of conditional sale subject to following conditions. From this recital it is further clear that it was not a case of mere transfer of possession, rather transfer of possession along with absolute ownership rights of enjoyment and that too by way of conditional sale. ( 12 ) THERE is yet another clause in this Deed that the aforesaid land together will all rights attached thereto has been given to you by way of conditional sale. Therefore, you may enjoy and manage the same in all respects by way of ownership right and the same is given to you with trust that if anybody else raises any obstruction we will get the same removed and that nobody else has any right title or interest therein. Thus, in the Deed at three places the document was described in the nature of conditional sale and this could not be the result of confusion. The party clearly intended to create document in the nature of sale with condition of repurchase and that the ownership rights were also transferred no matter for five years only. It was not the case where vesting of title was postponed. The learned Counsel for the appellant was not right in his contention that absolute title was not transferred. The aforesaid words "that you may enjoy and manage the same in all respects by way of ownership right" will indicate that the property together with ownership rights was transferred and there was immediate vesting of ownership rights and title. Consequently the cases cited by the learned Counsel for the appellant where vesting of title was postponed between 5 to 20 years is of no help for up-setting the Decree of the lower Appellate Court. ( 13 ) SIMPLY because there is one document it cannot be said that it must be held to be a mortgage by conditional sale within the meaning of Sec. 58 (c) of the Transfer of property Act. ( 13 ) SIMPLY because there is one document it cannot be said that it must be held to be a mortgage by conditional sale within the meaning of Sec. 58 (c) of the Transfer of property Act. The proviso to Sub-sec, (c) of Sec. 58 contemplates that no such transaction shall be deemed to be a mortgage unless the condition is embodied in the document which affects or purports to affect the sale. ( 14 ) THE above proviso cannot be interpreted in the manner that in every case where there is one document it should be treated to be a mortgage by conditional sale. Of course where two documents are executed simultaneously the intention may be for creating transaction in nature of sale with condition to repurchase, but such transaction can be created in a single document as well. ( 15 ) ADEQUACY of price is not sole consideration nor the document can be held to be mortgage simply because the reconveynace amount was the same which was received by the executant at the time of execution of the Deed. Likewise absence of stipulation for interest may indicate that it was not a loan transaction. However, there may be reasons for such omission and as such this circumstances alone is not of much value. ( 16 ) ORAL evidence can be accepted only for clarifying ambiguity in the Deed. Since the Deed under consideration is unambiguous and clear neither oral evidence can be accepted contrary to the terms of the Deed nor interpretation other than that taken by the lower Appellate Court can be taken on the facts and circumstances of the case. ( 17 ) IF reconveyance was agreed to be made in favour of the executant it is no circumstance indicating the relationship of debtor and creditor. There is another circumstances that the executant Adesing Vazir during his life time did not exercise option of reconveyance, the Suit was filed by his legal representatives. The provision in the Deed is that if the property is not reconveyed within five years the executant will have no right to repurchase the same. This clause in the Deed shows that it was personal right and the heirs of the executant were not given right or option to repurchase. The Suit was filed by the heirs of the executant after the expiry of the stipulated period. This clause in the Deed shows that it was personal right and the heirs of the executant were not given right or option to repurchase. The Suit was filed by the heirs of the executant after the expiry of the stipulated period. ( 18 ) APPLYING the test laid down by the Supreme Court in AIR 1992 SC 1236 (Supra), it can safely be said that the document in question before me is a sale with condition to repurchase and not mortgage by conditional sale. ( 19 ) THE learned counsel for the appellant cited various cases of this Court and the supreme Court in support of his contention that the document is mortgaged by conditional sale. He further contended that since the document was mis-interpretated by the lower appellate Court it amounts to a question of law which can be considered in Second appeal. There can be no doubt about the above proposition of law that error in construction of a document can be corrected in Second Appeal, but it seems from the document and surrounding circumstances as stated above that in the instant case the lower appellate Court has not mis-interpreted this document. ( 20 ) THE cases cited by the learned Counsel for the appellant are distinguishable on facts. In Babubhai Jethabhai Shah vs. Chhaganbliai Bamanbhai, reported in AIR 1991 Guj 85 the facts were all together different. Here the relationship of debtor and creditor in all the three matters before, the High Court were in existence. Thus, on this ground alone the case is stands distinguished and the interpretation given in this case can be of no help in reaching to a contrary conclusion. . ( 21 ) THE Supreme Court decision in P. L. Bapuswami vs. W. Pattay Gounder, reported in AIR 1966 SC 902 is also distinguishable. In this case on several circumstances the document was held to be a mortgage by conditional sale. Those circumstances were firstly that the condition for repurchase was embodied in the same document. This I have discussed earlier and it is not necessary that if the terms are embodied in one document the deed must be interpreted to be a mortgage by conditional sale. The second circumstance was that the consideration for transaction was Rs. 4000/- while real value of the. property was Rs. 8000/ -. This is also distinguishing feature. This I have discussed earlier and it is not necessary that if the terms are embodied in one document the deed must be interpreted to be a mortgage by conditional sale. The second circumstance was that the consideration for transaction was Rs. 4000/- while real value of the. property was Rs. 8000/ -. This is also distinguishing feature. On facts it is not in evidence on record before me that the market value of the property was higher than mentioned in the deed. The third circumstance was that Patta was not transferred to the first defenant after execution of the document meaning thereby that there was no absolute transfer of title with immediate vesting of rights in the property. The next circumstance that the kist of the land alse ontinued to be paid by the executant and after his death by his son. This also indicates at ownership rights were not transferred. There is no such circumstances before me ir the case in hand. On this ground this case can safely be distinguished on facts. ( 22 ) THE case of Bai Kanku w/o Punamchand Kanjibhai Khristi vs. Victorbhai kanjibhai Khristi and Ors. , reported in 10 GLR 811 is also distinguishable on facts. No doubt in this case right of repurchase was to be exercised within five years and the document was described as conditional sale, but it was found that no absolute title passed to the vendee, but only right to stay or collect rent was provided. On these facts it was held that the document was not a conditional sale, but a mortgage by conditional sale. The distinguishing feature is in the first place that in that case no absolute title passed and in the second place mere right to stay in possession over the property and to collect the rent was given. These are not the acts of ownership which were transferred to or exercised by the transferree. ( 23 ) THE ease of Patel Atmaram Nathudas vs. Patel Babubhai Keshavlal, reported in 16 GLR 509 is likewise distinguishable. In this case vesting of property was postponed for 21 years, whereas in the case before me there was immediate vesting of property in the transferree. The period of five years was not the period during which vesting was postponed. In this case vesting of property was postponed for 21 years, whereas in the case before me there was immediate vesting of property in the transferree. The period of five years was not the period during which vesting was postponed. ( 24 ) THE case of Asmal Bagas Abharam vs. Raj Mahijibhai Parbatsingh, reported in air 1974 Gujarat 19 is also distinguishable inasmuch as it lays down that agreement to rcconvey the land is valid and when other requirement of Sec. 58 (c) of the Transfer of property Act are satisfied the Deed must be held as mortgage by conditional sale and not an out-right sale. ( 25 ) IN the case before me the ingredients of Sec. 58 (c) of the Transfer of Property act are not made out. The reason is that herein it was not a case where alleged mortgagor ostensibly sold his property. Since there was no relationship of debtor and creditor within the meaning of Sec. 58 (c) of the Transfer of Property Act, the document cannot be interpreted as mortgage by conditional sale. ( 26 ) IN view of the foregoing discussion I am of the view that the lower Appellate court was right in interpreting that the Deed Ex. 28 is not mortgage by conditional sale rather sale with condition to repurchase and as such it was justified in reversing the decree for redemption passed by the Trial Court. ( 27 ) NO other point was raised. The Appeal has no merit. It is therefore dismissed with costs. .