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2013 DIGILAW 398 (KAR)

ABDUL JABBAR v. SYED ABDUL RAZACK

2013-03-25

H.BILLAPPA

body2013
JUDGMENT H. BILLAPPA, J.-This appeal by the first defendant is directed against the judgment and decree, dated 7.7.2006, passed by the Fast Track Court V, Chickballapur, in R.A. No. 228/2002 reversing the judgment and decree passed by the Addl. Civil Judge (Jr. Dn.) and JMFC, Chickballapur, in O.S. No. 384/1989. 2. By the judgment and decree dated 4.11.2002, the Trial Court has dismissed the suit of the plaintiff. Aggrieved by that, the first respondent-plaintiff has preferred an appeal in R.A. No. 228/2002. The Appellate Court by its judgment and decree dated 7.7.2006 has allowed the appeal and reversed the judgment and decree passed by the Trial Court declaring that the plaintiff is the owner of the suit schedule property and directing the appellant to hand over vacant possession of the room in the occupation of the appellant. 3. Aggrieved by that, the appellant-first defendant has filed this appeal. 4. Briefly stated the facts are: The first respondent-plaintiff filed suit in O.S. No. 384/1989 for declaration and possession of portion of the suit schedule property. The case of the first respondent-plaintiff was that he is in possession and enjoyment of the house property described in the suit schedule having acquired it through registered sale-deed dated 24.12.1974 from Sri. Abdul Rehaman. The vendor of the plaintiff acquired the suit schedule property through registered sale-deed dated 15.11.1971 executed by Sri. Shaik Hussain, the father of the first defendant. The sale in favour of the plaintiff was made by his vendor with the consent of Shaik Hussain. After the sale, the plaintiff has been in possession and enjoyment of the suit schedule property. 5. A few months ago, the first defendant illegally trespassed into the schedule property and occupied a room. The first defendant illegally obtained the katha of the suit schedule property. The second defendant advised the plaintiff to approach the Civil Court. The plaintiff requested the first defendant to give back possession. A legal notice dated 24.6.1989 was issued. The first defendant refused to comply with the demand made in the notice. Therefore, the plaintiff has filed suit for declaration and possession of portion of the suit schedule property. 6. The first defendant, i.e., the appellant herein has filed his written statement denying the plaint averments and execution of sale-deed in favour of the plaintiff by Abdul Rehaman and also sale-deed in favour of Abdul Rehaman by his father. Therefore, the plaintiff has filed suit for declaration and possession of portion of the suit schedule property. 6. The first defendant, i.e., the appellant herein has filed his written statement denying the plaint averments and execution of sale-deed in favour of the plaintiff by Abdul Rehaman and also sale-deed in favour of Abdul Rehaman by his father. It is denied that the plaintiff is in possession and enjoyment of the suit schedule property. It is contended that the suit schedule property originally belonged to the father of the first defendant Sri. Shaik Hussain and his brother. Shaik Hussain mortgaged the suit schedule property by conditional sale in favour of Abdul Rehaman in the year 1971 with a condition to redeem the property within five years. In the year 1974, Abdul Rehaman sold the suit schedule property to the plaintiff in violation of the condition embodied in the document dated 15.11.1971. The father of the first defendant died in the year 1988. The first defendant has been in possession and enjoyment of the suit schedule property. The katha of the suit schedule property stands in the name of the first defendant. It is denied that legal notice was issued to the first defendant. It is contended that the plaintiff and Abdul Rehaman have played fraud and obtained sale-deed in favour of the plaintiff. The father of the first defendant had mortgaged the property by conditional sale with a condition to redeem the property within five years. The vendor of the plaintiff had no title to execute the sale-deed dated 24.12.1974. The plaintiff is not entitled for declaration and possession. Therefore, the first defendant has prayed for dismissal of the suit. 7. The second defendant has filed its written statement contending that it is not a necessary party and the suit is bad for mis-joinder of parties. 8. The Trial Court considering the material on record has held that the plaintiff has failed to prove that he acquired title to the suit schedule property through registered sale-deed dated 24.12.1974. The first defendant has proved that Ex.P2 is only a mortagage by conditional sale. Consequently, the Trial Court has dismissed the suit. 9. In the appeal, the Appellate Court has reversed the judgment and decree passed by the Trial Court holding that the document Ex.P2 is a conditional sale with option to repurchase the property. The option has not been exercised. Consequently, the Trial Court has dismissed the suit. 9. In the appeal, the Appellate Court has reversed the judgment and decree passed by the Trial Court holding that the document Ex.P2 is a conditional sale with option to repurchase the property. The option has not been exercised. Therefore, the sale has become valid. Ex.P1 is a valid sale-deed. The first defendant is in permissive possession. Consequently, the Appellate Court has decreed the suit and directed the first respondent to hand over vacant possession of the room in his occupation. 10. Aggrieved by that, the appellant-first defendant has filed this second appeal. 11. At the time of admission, this Court has formulated the following substantial questions of law for consideration; (1) Whether the lower Appellate Court has properly considered the document dated 15.11.1971 at Ex.P2 to come to its ultimate conclusion that the said document is only a document of re-conveyance and not a deed of mortgage? (2) Whether in that circumstance, the lower Appellate Court has committed perversity in the manner of appreciation of the evidence while re-appreciating the same as against the manner done by the Trial Court at the first instance? 12. The learned counsel for the appellant contended that the Appellate Court has erred in holding that Ex.P2 is not a mortgage by conditional sale. Further he submitted that the Appellate Court has failed to notice that the recitals in Ex.P2 clearly show, if the amount is paid within five years with tax and repair charges, the property shall be reconveyed. The condition is embodied in the document itself. Therefore, the document is mortgage by conditional sale. Further he submitted that the Appellate Court has erred in holding that Ex.P2 is a conditional sale with option to repurchase the property and not mortgage by conditional sale. He also submitted that the Appellate Court has erred in holding that the appellant and his father have not exercised their right to redeem the property. In fact the appellant has filed suit for redemption of the mortgage. He also submitted that the appellant has been in possession and enjoyment of the suit schedule property. Further he submitted that Ex.P2 is a mortgage by conditional sale. The plaintiff cannot be declared as owner of the suit schedule property. The Appellate Court has erred in declaring the first respondent as owner of the suit schedule property. 13. He also submitted that the appellant has been in possession and enjoyment of the suit schedule property. Further he submitted that Ex.P2 is a mortgage by conditional sale. The plaintiff cannot be declared as owner of the suit schedule property. The Appellate Court has erred in declaring the first respondent as owner of the suit schedule property. 13. Placing reliance on the decisions of the Hon'ble Supreme Court reported in AIR 1988 SC page 1074, AIR 1999 SC page 1441 and the decisions of this Court reported in ILR 2001 Kar. page 4529, 1976(1) KLJ page 114, 2011(4) KCCR page 2850, 2011(4) AIR Kar. R. 376 and ILR 1988 Kar. page 1987, the learned counsel for the appellant submitted that Ex.P2 is a mortgage by conditional sale and it does not convey any title to the first respondent. The appellant is entitled for redemption. He therefore submitted that the impugned judgment and decree passed by the Appellate Court cannot be sustained in law. 14. As against this, the learned counsel for the first respondent submitted that the impugned judgment and decree passed by the Appellate Court does not call for interference. He also submitted that the Appellate Court on proper consideration of the material on record has rightly held that Ex.P2 is a conditional sale with option to repurchase the property. Further he submitted that Ex.P2 shows, if the amount is paid within five years with tax and repair charges, the property shall be reconveyed. The appellant's father has not tendered the amount within five years and asked for reconveyance. In fact the appellant's father has signed Ex.P1 as an attesting witness. By conduct, the appellant's father has surrendered his right. Therefore, the title has become perfect. 15. Placing reliance on the decision reported in AIR 1959 MP page 221, the learned counsel for the first respondent submitted that in case of mortgage by conditional sale with a condition to repurchase within certain period, if the mortgagor fails to repurchase, he relinquishes his right. 16. Placing reliance on the decision of this Court reported in AIR 1993 Kar. page 208, the learned counsel for the first respondent submitted that Ex.P2 is a sale transaction with an option to repurchase. The appellant's father has failed to exercise his option. Therefore, the sale has become valid. 17. 16. Placing reliance on the decision of this Court reported in AIR 1993 Kar. page 208, the learned counsel for the first respondent submitted that Ex.P2 is a sale transaction with an option to repurchase. The appellant's father has failed to exercise his option. Therefore, the sale has become valid. 17. Further he submitted that the Appellate Court on proper consideration of the material on record has rightly held that Ex.P2 is a conditional sale with option to repurchase the property. The sale has become valid. Therefore, the impugned judgment and decree passed by the appellate Court does not call for interference. 18. I have carefully considered the submissions made by the learned counsel for the parties. 19. The substantial questions of law raised for consideration are inter-linked and therefore, they are considered together. 20. The first respondent-plaintiff has filed suit for declaration and possession. It is contended that the first respondent-plaintiff acquired title to the suit schedule property through registered sale-deed dated 24.12.1974. One Abdul Rehaman executed the sale-deed in his favour. Abdul Rehaman acquired the suit schedule property through registered sale-deed dated 15.11.1971 from Shaik Hussain, the father of the appellant. The sale in favour of the first respondent was with the consent of Shaik Hussain. The first defendant, i.e., the appellant herein has no right, title or interest in the schedule property. The appellant has illegally trespassed into the schedule property and occupied a room. It is stated, katha has been transferred and the first respondent is the absolute owner of the suit schedule property. 21. The first defendant, i.e., the appellant herein has contended that the schedule property belonged to his father Shaik Hussain. He had mortgaged the suit schedule property by conditional sale in favour of Abdul Rehaman through registered deed dated 15.11.1971 with a condition to redeem the property within five years. In the year 1974, Abdul Rehaman sold the property in favour of the plaintiff. It is stated, the first defendant, i.e., the appellant herein has been in continuous possession and enjoyment of the suit schedule property. It is contended that the plaintiff and Abdul Rehaman have played fraud and obtained sale-deed dated 24.12.1974. The father of the first defendant had executed only mortgage by conditional sale with a condition to redeem the property within five years. The plaintiff has not derived any title to the property and not entitled for any relief. It is contended that the plaintiff and Abdul Rehaman have played fraud and obtained sale-deed dated 24.12.1974. The father of the first defendant had executed only mortgage by conditional sale with a condition to redeem the property within five years. The plaintiff has not derived any title to the property and not entitled for any relief. 22. The Trial Court considering the material on record has held that the plaintiff has failed to prove that he acquired title to the suit schedule property through registered sale-deed dated 24.12.1974. The deed Ex.P.2 isonly a mortgage by conditional sale. Consequently, the Trial Court has dismissed the suit. 23. In the appeal, the Appellate Court has reversed the judgment and decree passed by the Trial Court holding that Ex.P2 is a conditional sale with option to repurchase the property. Shaik Hussain has not repurchased the property. Therefore, the sale in favour of the first respondent is valid. The first respondent is declared as the owner and the appellant is directed to hand over vacant possession of the room in his occupation. 24. Exhibits P.1 and P.2 are the relevant documents. Ex.P2 is a conditional sale-deed dated 15.11.1971 executed by Shaik Hussain, the father of the appellant in favour of Abdul Rehaman. It is stated, the sale consideration is Rs. 1,200/-. A sum of Rs. 500/- was received prior to Ex.P2 and a sum of Rs. 435/- was received before the Sub-Registrar. A sum of Rs. 265/-was borrowed. Further it is stated, if the amount with tax and repair charges is paid within five years, the seller can get re-conveyance of the property. It is also mentioned, the document is a conditional sale-deed. Section 58(c) of the Transfer of Property Act reads as follows: "58(c) Mortgage by conditional sale.-Where, the mortgagor ostensibly sells the mortgaged property- on condition that on default of payment of 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 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." 25. It is clear, the recitals of Ex.P2 show that there is a condition, if the amount is paid within five years, the buyer shall transfer the property to the seller. The condition is embodied in the document itself. Therefore, Ex.P.2 is a mortagage by conditional sale. 26. In the following decisions, the Hon'ble Supreme Court and also this Court have held, if the condition to reconvey the property is embodied in the document itself, the transaction amounts to mortgage by conditional sale. AIR 1988 SC page 1074, AIR 1999 SC page 1441, ILR 2001 Kar. page 4529, AIR 2000 Kar. page 359, AIR 2000 Kar. page 372, 1976(1) KLJ page 114, 2011(4) KCCR page 2850, 2011(4) AIR Kar. R. 376 and ILR 1988 Kar. 1987. 27. In the present case, Ex.P2 shows that a sum of Rs. 500/- was received prior to Ex.P2, a sum of Rs. 265/- was borrowed and a sum of Rs. 435/- was received before the Sub-Registrar. There is a stipulation embodied in the document itself if the amount is paid within five years, the buyer shall transfer the property to the seller. The document is described as conditional sale. Therefore, Ex.P2 is a mortgage by conditional sale. 28. The next question is, whether Ex.P.1 conveys title to the first respondent. Ex.P2 is a mortgage by conditional sale. There is a stipulation, if the amount is paid within five years, the buyer shall transfer the property to the seller. Ex.P2 is dated 15.11.1971. Ex.P1 sale-deed is dated 24.12.1974. Abdul Rehaman had no title to convey. No doubt, Shaik Hussain has signed Ex.P1 as a witness. That does not mean, Ex.P1 conveys title to the first respondent. Shaik Hussain cannot be treated as party to Ex.P1 sale-deed. Therefore, Ex.P1 does not convey any title to the first respondent. It is stated, the appellant has filed redemption suit. Ex.P2 is a mortgage by conditional sale. It can be redeemed within limitation period. Ex.P1does not convey title to the first respondent. Therefore, the Appellate Court was not justified in declaring that the first respondent is the owner of the suit schedule property. The Appellate Court has erred in holding that Ex.P2 is a conditional sale-deed with option to re-purchase the property. Ex.P2 is a mortgage by conditional sale. The first respondent is not entitled for declaration. Therefore, the Appellate Court was not justified in declaring that the first respondent is the owner of the suit schedule property. The Appellate Court has erred in holding that Ex.P2 is a conditional sale-deed with option to re-purchase the property. Ex.P2 is a mortgage by conditional sale. The first respondent is not entitled for declaration. Therefore, the Trial Court was justified in dismissing the suit holding that Ex.P2 is a mortagage by conditional sale. The Appellate Court has erred in reversing the judgment and decree passed by the Trial Court. Therefore, the impugned judgment and decree passed by the appellate Court cannot be sustained in law. The questions of law raised for consideration are answered accordingly. Accordingly, the appeal is allowed and the impugned judgment and decree passed by the Appellate Court in R.A. No. 228 of 2002 is hereby set-aside. The judgment and decree passed by the Trial Court in O.S. No. 384 of 1989 is restored.