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2020 DIGILAW 61 (CHH)

Nand Kishore Choubey (died)and Others v. Maniram

2020-01-14

SANJAY K.AGRAWAL

body2020
JUDGMENT 1. This second appeal preferred by the appellants/LRs. of original plaintiff - Tilak Prasad was admitted for hearing on the following substantial question of law : ''Whether the lower appellate Court has erred in holding that Ex. P1 was not sale and was document of transaction of loan ?'' (For the sake of convenience, parties would be referred hereinafter as per their status and ranking shown in the suit before the trial Court.) 2. Suit land admeasuring 4.71 acres in total situated at Village Khapri, Tahsil Kawardha was originally held by one Ramu Chouhan who was the father of defendant No. 2 namely Hagroo. 3. Original plaintiff - Tilak Prasad instituted a suit on 05/05/1981 stating inter alia that he purchased the suit land from defendant No. 2''s father Ramu Chouhan by registered sale deed dated 14/07/1970 (Ex. P/1) and thereby, came into possession of the suit land and though title had been passed in his favour, yet after the death of Ramu Chouhan, defendant No. 2 Hagroo started interfering with his possession and sold the suit land in favour of defendants No. 7 and 8 by sale deed dated 02/06/1990, as such, decree be granted in his favour for declaration of title and for declaration to the effect that sale deed dated 02/06/1990 executed by Hagroo in favour of defendants No. 7 and 8 namely Maniram and Dhaniram is not binding on him. 4. Defendants No. 1 to 3 denied the plaint allegations stating inter alia that the sale deed dated 14/07/1970 (Ex. P/1) executed by Hagroo''s father Ramu Chouhan in favour of plaintiff was, in fact, a loan transaction as Ramu Chouhan was in need of money, therefore, in lieu of the loan amount, he executed the said sale deed (Ex. P/1) in favour of the original plaintiff - Tilak Prasad with an oral agreement to reconveyance of the suit land upon repayment of the loan amount, as such, it was not an outright sale, but a loan transaction, therefore, plaintiff is not entitled for decree as claimed by him. 5. Learned trial Court, upon appreciation of oral and documentary evidence on record, by its judgment and decree dated 30/10/1996, decreed the suit of the plaintiff holding that the sale deed dated 14/07/1970 (Ex. 5. Learned trial Court, upon appreciation of oral and documentary evidence on record, by its judgment and decree dated 30/10/1996, decreed the suit of the plaintiff holding that the sale deed dated 14/07/1970 (Ex. P/1) executed by Ramu Chouhan in favour of the plaintiff was an outright sale and the sale deed dated 02/06/1990 executed by defendant No. 2 Hagroo in favour of defendants No. 7 and 8 is not binding on plaintiff. 6. Assailing the judgment and decree of the trial Court, defendants No. 7 and 8 namely Maniram and Dhaniram preferred an appeal under Section 96 of the CPC wherein learned first appellate Court, by its judgment and decree dated 01/11/2004, allowed the appeal thereby setting aside the judgment and decree of the trial Court holding that sale deed dated 14/07/1970 (Ex. P/1) was not an outright sale, but was a loan transaction against which this second appeal under Section 100 of the CPC has been preferred by the appellants/legal representatives of the original plaintiff Tilak Prasad wherein substantial question of law has been framed and set out in the opening paragraph of this judgment. 7. Mr. Rohishek Verma, learned counsel for the appellants/legal representatives of original plaintiff would submit that the first appellate Court is absolutely unjustified in holding that sale deed dated 14/07/1970 (Ex. P/1) is a loan transaction in absence of any condition embodied in the said sale deed that it is a mortgage deed with a condition of re purchase in view of the proviso to Section 58(c) of the Transfer of Property Act, 1882, therefore, the appeal deserves to be allowed by setting aside the judgment and decree of the first appellate Court. 8. None appears for respondents/defendants No. 7 and 8, though served. 9. Mr. Akash Pandey, learned State counsel would submit that State of Chhattisgarh is a formal party. 10. I have heard learned counsel for the appellants/LRs. of original plaintiff, considered his submissions and went through the records with utmost circumspection. 11. Section 58(c) of the Transfer of Property Act, 1882 defines ''mortgage by conditional sale'', and reads as under : ''58. (c) Mortgage by conditional sale. 10. I have heard learned counsel for the appellants/LRs. of original plaintiff, considered his submissions and went through the records with utmost circumspection. 11. Section 58(c) of the Transfer of Property Act, 1882 defines ''mortgage by conditional sale'', and reads as under : ''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 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.'' 12. The effect of this proviso is that no document of sale can be treated as mortgage unless the document effecting the sale itself contains a recital to that effect. The whole object is to exclude or shut out the oral evidence to be adduced in the case when such a condition is contained in a separate document. Thus, if the document effecting a sale does not contain a stipulation regarding the conversion of the sale into a mortgage and such a stipulation is contained in a separate document, in such a case, it is not at all open in law to enquire into the nature of the transaction and to take extrinsic evidence for holding that the document which purports to be an absolute sale is in reality, a mortgage. 13. The question arising herein would be whether the mere transaction contained in Ex. P/1, which is in the nature of sale, is a loan transaction or it is an outright sale ? Learned trial Court has held that it is an outright sale whereas the first appellate Court has held it to be a loan transaction. 14. The question so posed for consideration is no longer res integra and stood adjudicated authoritatively by Their Lordships of the Supreme Court which may be referred herein usefully and profitably as well. Learned trial Court has held that it is an outright sale whereas the first appellate Court has held it to be a loan transaction. 14. The question so posed for consideration is no longer res integra and stood adjudicated authoritatively by Their Lordships of the Supreme Court which may be referred herein usefully and profitably as well. The Supreme Court in the matter of Chunchun Jha v. Ebadat Ali and another, AIR 1954 SC 345 considered the matter by posing a question in paragraph 5 as under: ''(5) The question whether a given transaction is a mortgage by conditional sale or a sale outright with a condition of repurchase is a vexed one which invariably gives rise to trouble and litigation. There are numerous decisions on the point and much industry has been expended in some of the High Courts in collating and analysing them. We think that is a fruitless task because two documents are seldom expressed in identical terms and when it is necessary to consider the attendant circumstances the imponderable variables which that brings in its train make it impossible to compare one case with another. Each must be decided on its own facts. But certain broad principles remain.'' 15. The question so posed for consideration was answered by Their Lordships in paragraphs 9 and 13 as under : ''(9) The document with which we are concerned (Ex. A) is in the following terms and our first duty is to construe the language used and see whether it is ambiguous. (We have paragraphed the document for convenience of construction and have omitted unnecessary words.) (1) "Rs. 634 principal with interest under a registered rehan bond " (simple mortgage) "dated the 6th May 1927 is justly due by us the executants. Now we further require Rs. 6560 more to meet costs of the suit under section 40." (Bihar Tenancy Act.) (2) ''and at present there is no other way in view rather it seems impossible and difficult to arrange for the money without selling the property let out in rehan " (simple mortgage) "under the above mentioned bond". (3) "Therefore, we the executants declare that we . sold and vended the properties detailed below on condition (given below) for a fair and just price of Rs. 700 " (4) "That we set off Rs. (3) "Therefore, we the executants declare that we . sold and vended the properties detailed below on condition (given below) for a fair and just price of Rs. 700 " (4) "That we set off Rs. 634100 against the consideration money " (torn) "payable under the aforesaid bond in favour of the said vendee and received Rs. 6560 in cash from the said vendee. In this way the entire consideration money was realised from the said vendee." (5) "and we put the said vendee in possession and occupation of the vended property detailed below and made him an absolute proprietor in our places." (6) "If we, the executants, shall repay the consideration money to the said vendee within two years the property vended under this deed of conditional sale attached shall come in exclusive possession and occupation of us, the executants." (7) "If we do not pay the same, the said vendee shall remain in possession and occupation thereof, generation after generation, and he shall appropriate the produce thereof." (8) "We, the executants, neither have nor shall have any objection whatsoever in respect of the vended property and the consideration money. Perchance if we do so it shall be deemed null and void in Court." (9) "and we declare also that the vended property is flawless in every way and that if in future any kind of defect whatsoever be found on account of which the said vendee be dispossessed of a portion or the entire property vended under this deed of conditional sale and will have to pay the loss or damage, in that event we, the executants, (a) shall be liable to be prosecuted under the possession against the said vendee or his (b) we shall pay the entire consideration money together with loss and damage and interest at the rate of Rs. 2 per mensem per hundred rupees from the date of the execution of this deed till the date of realisation from our person and other properties (c) and we shall not claim the produce of the vended property for the period of vendee''s possession against the said vendee or his heirs and representatives." (10) "Therefore we, the executants have executed this deed of conditional sale so that it may be of use in future." (13) We next turn to the conditions. The ones relevant to the present purpose are contained in Clauses (6) and (7). The ones relevant to the present purpose are contained in Clauses (6) and (7). Both are ambiguous, but we have already said that on a fair construction clause (6) means that if the money is paid within the two years then the possession will revert to the executants with the result that the title which is already in them will continue to reside there. The necessary consequence of that is that the ostensible sale becomes void. Similarly, clause (7), though clumsily worded, can only mean that if the money is not paid, then the sale shall become absolute. Those are not the actual words used but, in our opinion, that is a fair construction of their meaning when the document is read as a whole. If that is what they mean, as we hold they do, then the matter falls squarely within the ambit of Section 58(c).'' 16. The decision rendered in Chunchun Jha (supra) has been followed by Their Lordships of the Supreme Court in the matter of Srinivasaiah v. H.R. Channabasappa (since dead) by his Legal Representatives and others, (2017) 12 SCC 821 . 17. Reverting to the facts of the present case in light of the proviso to Section 58(c) of the Transfer of Property Act, 1882 and in light of the principles rendered by Their Lordships of the Supreme Court in Chunchun Jha (supra) followed in Srinivasaiah (supra), examining Ex. P/1, it is quite vivid that the sale deed in question purports to be an absolute sale, as it does not contain any stipulation for treating the sale as mortgage. The agreement of reconveyance has not been recited in the sale deed (Ex. P/1) or in a separate document, as such, in absence of embodiment of such a clause in Ex. P/1, the transaction cannot be regarded as a mortgage or a loan transaction as no oral evidence is admissible to contradict Ex. P/1 which is an outright sale transferring title by defendant No. 2 Hagroo''s father Ram Chouhan in favour of the original plaintiff Tilak Prasad. Therefore, the transaction in question (Ex. P/1), in absence of embodiment as contained in the proviso to Section 58(c) of the Transfer of Property Act, 1882, cannot be regarded as a mortgage or loan transaction and it is held to be an outright sale. Therefore, the transaction in question (Ex. P/1), in absence of embodiment as contained in the proviso to Section 58(c) of the Transfer of Property Act, 1882, cannot be regarded as a mortgage or loan transaction and it is held to be an outright sale. The first appellate Court is absolutely unjustified in holding that the sale deed dated 14/07/1970 (Ex. P/1) is a loan transaction, as such, the said finding recorded by the first appellate Court is contrary to facts and law available on record. 18. Consequently, the substantial question of law is answered in affirmative and the judgment and decree passed by the first appellate Court is hereby set aside and that of the trial Court is restored. 19. The Second appeal is allowed to the extent indicated hereinabove leaving the parties to bear their own cost(s). 20. Decree be drawnup accordingly.