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2015 DIGILAW 1111 (KAR)

Rajamma v. B. Renuka Murthy

2015-09-21

S.ABDUL NAZEER

body2015
JUDGMENT : S. Abdulnazeer, J. This is a plaintiffs appeal challenging the judgment and decree in R.A.No.27/2009 dated 1.2.2011 passed by the Senior Civil Judge & JMFC, Nelamangala, where by the judgment and decree in O.S.No.358/1995 dated 22.11.2006 on the file of the Civil Judge (Jr.Dn.) and JMFC, Nelamangala has been confirmed. 2. The appellants are the wife and children of B.P. Siddalingappa. B.P. Siddalingappa, the first plaintiff (since deceased by his L.Rs.) and B.P. Siddanna, father of the second plaintiff are brothers. Smt. Ammayamma is the younger sister of B.P. Siddanna and B.P. Siddalingappa. She was married to Rajashekharappa. The defendant is the son of Smt. Ammayamma and Rajashekharappa. 3. It is the case of the plaintiffs that during the year 1975, they borrowed a sum of Rs.2,000/- from the defendant to meet their family necessity. Since the plaintiffs could not repay the said amount, the defendant insisted for security for his debt. The defendant made the plaintiffs to execute a document staling that it is a deed of mortgage for securing loan of Rs.2,000/-. The contents of the document was not read over to them. At no point of time, the defendant was in possession of the suit schedule property. The plaintiffs are in possession and enjoyment of the suit schedule property as absolute owners thereof. Plaintiffs received a notice from the Tahsildar, Nelamangala, informing them that the defendant has filed an application for change of RTC on the basis of the registered document dated 1.7.1976. They have never intended to sell the property in favour of the defendant. The amount of Rs.2,000/- borrowed by them was refunded to the defendant with interest. The defendant began asserting title over the suit property as the plaintiffs relationship with the defendant strained and the market value of the property increased enormously. Therefore, they have filed the suit for declaration of their title to the suit schedule property and for injunction restraining the defendant from interfering with their peaceful possession and enjoyment of the said property. In the alternative, the plaintiffs have also sought for a declaration that the transaction dated 1.7.1976 is only a mortgage transaction and if the Court comes to a conclusion that the amount has not been paid, for redemption of the mortgage on payment of Rs.2,000/- to the defendant. 4. In the alternative, the plaintiffs have also sought for a declaration that the transaction dated 1.7.1976 is only a mortgage transaction and if the Court comes to a conclusion that the amount has not been paid, for redemption of the mortgage on payment of Rs.2,000/- to the defendant. 4. The defendant has filed his written statement by contending that the plaintiffs have executed a registered sale deed in his favour knowing fully well that the same is an absolute sale deed and that they have received full sale consideration. Plaintiff Nos. 1 and 2 have divided their properties under a palu patti dated 15.3.1982 wherein the suit schedule property has been excluded from partition since the property has already been sold in his favour. The defendant is the absolute owner of the property and that the suit is barred by time. 5. On the basis of the pleadings of the parties, the trial Court has framed the following issues: "(1) Whether the plaintiff proves that they are the absolute owners of plaint schedule property? 2. Does the plaintiffs prove their lawful possession and enjoyment of the suit schedule property? 3. Whether the plaintiffs prove the lawful obstruction or interference by the defendant? 4. Whether the plaintiffs are entitled for the relief of declaration and permanent injunction as prayed? 5. Alternatively, whether the plaintiffs are entitled to the relief of declaration that the transaction dated 1.7.1976 is only a mortgage transaction? 6. Whether the defendant proves that the plaintiff had executed an absolute registered sale deed in favour of the defendant? 7. Whether the defendant proves that the suit is barred by law of limitation? 8. To what order or decree?" 6. On behalf of the plaintiffs, plaintiff No. 2 was examined as P.W1 and two witnesses were examined as P.W2 and P.W3. The defendant was examined as D.W1. 7. On appreciation of the evidence on record, the trial Court has dismissed the suit. Feeling aggrieved, the plaintiffs filed an appeal in R.A.No.27/2009. The first appellate Court on re-appreciation of the entire materials on record has dismissed the appeal. 8. The defendant was examined as D.W1. 7. On appreciation of the evidence on record, the trial Court has dismissed the suit. Feeling aggrieved, the plaintiffs filed an appeal in R.A.No.27/2009. The first appellate Court on re-appreciation of the entire materials on record has dismissed the appeal. 8. While admitting the appeal, this Court has framed the following substantial questions of law: "(1) In the light of the specific clause in the document Ex.P1 providing an option to the appellants-plaintiffs to repurchase the property within the specific period, whether the transaction under Ex.P1 is a mortgage by conditional sale as contemplated under Section 58 of the Transfer of Property Act? (2) Whether in the facts and circumstances of the case and in the light of the evidence, the courts below are justified in law in holding that the document Ex.P1 is out and out sale and not mortgage by conditional sale?" 9. The appellant/plaintiffs have filed an application-I.A.No. 1/2012 under Order 41, Rule 27 of the CPC seeking production of certain additional documents. Along with the application, they have produced certain sale deeds. In the affidavit filed in support of the application, they have stated that the value of the property was more than about Rs.20,000/- per acre. As they had borrowed a sum of Rs.2,000/-, the same had been indicated as the value of the property in the document executed by them in favour of the defendant, which in reality was not the market value. 10. Sri T. Seshagiri Rao, learned Counsel appearing for the appellants would contend that the document-Ex.P8 is only a mortgage deed and it is not a sale deed with condition to repurchase. He has taken me through the said document and also the evidence of the parties. It is contended that the value of the property when Ex.P8 was executed was far higher and that the consideration paid under this document was only Rs.2,000/-. It is further submitted that the condition for repurchase has been embodied in the document itself. RTC in respect of the property in question has not been transferred to the name of the defendant on the execution of Ex.PB. The plaintiffs returned the amount borrowed by them within the period prescribed. It is further submitted that the condition for repurchase has been embodied in the document itself. RTC in respect of the property in question has not been transferred to the name of the defendant on the execution of Ex.PB. The plaintiffs returned the amount borrowed by them within the period prescribed. In support of his contentions, he has placed reliance on the decision of the Supreme Court in the case of P.L. Bapuswami v. N. Pattay Gounder, AIR 1966 SC 902 . 11. On the other hand, learned Counsel appearing for the respondents submits that the transaction is an outright sale with a condition to repurchase. There is no relationship of debtor and creditor between the plaintiffs and the defendant. The real character of the transaction has to be ascertained from the provisions of the document viewed in the light of surrounding circumstances. He prays for dismissal of the appeal. 12. Therefore, the first question for consideration is whether the application-I.A.No. 1/2012 filed by the appellant under Order 41, Rule 27 of the CPC for production of additional documents requires to be allowed? The suit was filed by the plaintiffs in the year 1995. The additional document sought to be produced were available to the plaintiffs during the pendency of the suit. There is enormous delay in production of additional documents. The only reason assigned by plaintiff No. 5 is that he is a rustic villager and has no knowledge about the legal aspects of the matter. His learned Counsel after filing of the appeal informed him to secure some documents relating to the year 1976 to establish the market value of the property. The respondent has filed objections opposing the application. He has also produced some sale deeds in respect of the properties situated very' close to the suit schedule property. The subject-matter of sale deeds produced along with I.A.No.1/2012 are situated adjacent to National Highway No. 4 and that the said lands are wet lands, whereas the property sold by the plaintiffs under Ex.P8 is a dry land, situated 7 kms. away from the National Highway No. 4. In my opinion, the reasons assigned for the delay cannot be accepted. Hence, the application- I.A.No. 1/2012 is dismissed. 13. The second question for consideration is whether the document-Ex.P8 in its true effect a mortgage by conditional sale or a sale deed with a condition for repurchase? 14. away from the National Highway No. 4. In my opinion, the reasons assigned for the delay cannot be accepted. Hence, the application- I.A.No. 1/2012 is dismissed. 13. The second question for consideration is whether the document-Ex.P8 in its true effect a mortgage by conditional sale or a sale deed with a condition for repurchase? 14. Section 58(c) of the Transfer of Property Act, 1882 ('TP Act' for short) defines 'mortgage by conditional sale' as under: "Sec.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-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." 15. 'Sale' has been defined in Section 54 of the TP Act as under: "Sec.54: "Sale" defined: "Sale" is a transfer of ownership in exchange for a price paid or promised or part paid and part-promised." 16. There is a distinction between the two concepts, mortgage by a conditional sale and a sale with a condition to repurchase. The former is a mortgage, the relationship of debtor and creditor subsists and the right to redeem remains with the debtor. The latter is an out and out sale whereby the owner transfers all his rights in the property to the purchaser reserving a personal right to repurchase. The question to which category a document be longs presents real difficulty which can only be solved by ascertaining the intention of the parties on a consideration of the contents of a document and other relevant circumstances See Bhoju Mandal v. Debnath Bhagat, AIR 1963 SC 1906 . 17. In P.L. Bapuswami's case (supra), the Hon'ble Supreme Court while pointing out the difference between a mortgage by conditional sale and a sale with a condition for repurchase has held that the real character of the transaction has to be ascertained from the contents of the document and the surrounding circumstances. 17. In P.L. Bapuswami's case (supra), the Hon'ble Supreme Court while pointing out the difference between a mortgage by conditional sale and a sale with a condition for repurchase has held that the real character of the transaction has to be ascertained from the contents of the document and the surrounding circumstances. It has been held thus: "The question whether by the incorporation of such a condition a transaction ostensibly of sale may be regarded as a mortgage is one of intention of the parties to be gathered from the language of the deed interpreted in the light of the surrounding circumstances. The definition of mortgage by conditional sale postulates the creation by the transfer of a relation of mortgagor and mortgagee, the price being charged on 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 of debtor and 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. If there is ambiguity in the language employed, the intention may 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 facts." 18. In Tamboli Ramanlal Motilal (Dead) by L.Rs. v. Ghanchi Chimanlal Keshavlal (Dead) by L.Rs. and another, AIR 1992 SC 1236 , the Hon'ble Supreme Court was considering a similar case. In the said case, the document was styled as a deed of conditional sale. The executant under the document took a sum of Rs.5,000/- in cash. The purpose was to repay miscellaneous debts and domestic expenses. This amount was not taken as a loan. By executing this document, the executant discharged all the prior debts and outstandings. In the said case, the document was styled as a deed of conditional sale. The executant under the document took a sum of Rs.5,000/- in cash. The purpose was to repay miscellaneous debts and domestic expenses. This amount was not taken as a loan. By executing this document, the executant discharged all the prior debts and outstandings. The Hon'ble Supreme Court observed that whether a document is a mortgage by conditional sale or a sale with an option to repurchase, one should be guided by the terms of the document alone. It was held that nomenclature of the document is hardly conclusive and much importance cannot be attached to the nomenclature since it is the real intention which requires to be gathered. 19. In Vidhyadhar v. Mankikrao and another, AIR 1999 SC 1441 , the Supreme Court has held as under: 'The real test is the intention of the parties. In order to constitute a "sale", the parties must intend to transfer the ownership of the property and they must also intend that the price would be paid either in praesenti or in futuro. The intention is to be gathered from the recital in the sale deed, conduct of the parties and the evidence on record." 20. In Vanchalabai Raghunath Ithape (Dead) by L.R. v. Shankarrao Baburao Bhilare (Dead) by L.Rs.and others, AIR 2013 SC 2924 , the Hon'ble Supreme Court was considering an identical case. It was held that the document in question is a sale with an option to repurchase. The observations of the Supreme Court is at paragraph 14, which is as under: "14. From a perusal of the aforesaid provisions especially, Section 58(c), it is evidently clear that for the purpose of bringing a transaction within the meaning of 'mortgage by conditional sale', the first condition is that the mortgagor ostensibly sells the mortgaged property on the condition that on such payment being made, the buyer shall transfer the property to the seller. Although there is a presumption that the transaction is a mortgage by conditional sale in cases where the whole transaction is in one document, but merely because of a term incorporated in the same document it cannot always be accepted that the transaction agreed between the parties was a mortgage transaction." 21. Keeping in view the aforesaid principles, let us examine the document at Ex.P8. Keeping in view the aforesaid principles, let us examine the document at Ex.P8. The name given to this document by the parties is 'conditional sale deed'. The property is agreed to be sold absolutely for family necessity and to pay the family debts. The property is sold for a consideration of Rs.2,000/-. Under this document, the vendors have also delivered possession of the property. The purchaser is asked to pay the taxes. There is a further clause that after execution of the documents, the defendant and his successors may enjoy the property peacefully by remitting the tax payable to the Government. It is further stated that the defendant is entitled to enter into all four types of transactions including sale and that the vendors or their legal representatives have no manner of right whatsoever. The last important clause is an undertaking that the vendors will repay the amount within five years and get executed a sale deed. 22. The language employed in this document is plain and unambiguous and intention of the parties is also very clear. As per its recitals, possession was delivered to the defendant on the same day of the execution of the document. As such, the title of the property was transferred to the defendant. The plaintiffs have not taken any steps for payment of the amount received by them within a period of five years. After the execution of the document, the name of the defendant finds a place in column No. 9 of the RTC from the year 1978-1979 till 1993-1994. Column No. 10 of the RTC shows the source of title the defendant derived. He has paid the tax. The purchaser was given the right of ownership and possession of the property with a stipulation that he has to pay the tax in future. In the entire plaint, plaintiffs have not pleaded that the transaction was mortgage and not a sale. A careful perusal of all the clauses contained in Ex.P8 are clearly consistent with the express intention of making the transaction a conditional sale with an option to repurchase. The substantial questions of law are accordingly answered. 23. In the result, the appeal fails and it is accordingly dismissed. 24. In view of the dismissal of the appeal as above, Misc.Cvl.No. 8928/2011 does not survive for consideration. It is accordingly dismissed. No costs. Appeal dismissed.