KALLAPPA SHETTAPPA CHOUGULE Vs. MAHADEV LAXMAN SHAHAPURKAR

JUDGEMENT

(1.) The appellant is the first defendant respondent 1 is plaintiff, respondents 2 & 3 are defendants 2 & 3. Defendant 2 is the brother of the plaintiff and defendant 3 is his mother. Defendants 2 & 3 executed a sale deed Ext.43, in tavour of the first defendant on 3-5-1960 in respect of the suit property bearing RS.207 of Gojage village, measuring 1 acne 12 guntas for a consideration of Rs.1800 and delivered possession of the samr to defendant 1. The sale deed was executed not only on their own behalf but also on behalf of the plaintiff who was then a minor. The plaintiff filed a suit for redemption of the mortgage or in the alternative for specific performance of the contract of reconveyance since, according at him. Ext.43 is a deed of mortgage by conditional sale, Both the lower Courts have held that the documtnt is a deed of mortgage by conditional sale and decreed the suit for redemption.

(2.) In Chunchun Jha v. Ebadat Ali, AIR. 1054 SC. 345. the question was whether the document was a mortgage by conditional sale or a sale with condition of re-purchase. The principles which guide the determination of the real nature of the transaction have been laid down in that decision. The first principle is that the intention of the parties is the determining factor and the intention must be gathered in the first place from the document itself. If the words are express and clear effect must be given to them and any extraneous enquiry into what was thought or intended by the parties is ruled out. In such a case the real question is not what the parties intended or meant but what is the legal effect of the words which they used. If however there is ambiguity in the language employed then it is permissible to look to the surrounding circumstances to determine what was intended. What prima facie is an absolute conveyance does not cease to be an absolute conveyance and become a mortgage merely because the vendor stipulates that he shall have a right to re-purchase. Conversely if on the face of it the document clearly purports to be a mortgage it cannot be turned into a sale by a reference to a host of extraneous and irrelevant considerations. The mere fact that there is only one document embodying the sale as well as the agreement to re-purchase does not necessarily mean that it must be a mortgage and not a sale. It is a matter for construction of the document In each case to ascertain the real meaning. Since the Legislature by the amendment to S.58 of the Transfer of Property Act has made a clear cut classification and excluded transactions embodied in more than one document from the category or mortgages it is reasonable to suppose that persons who choose not to use two documents after the amendment do not intend the transaction to ba a sale unless they displace that presumption by clear and express words and that if the conditions of S.58(c) are fulfilled the deed should ba construed as a mortgage. In such circumstances the document must be taken to be a mortgage by conditional sale unless there are express words to indicate to the contrary or in case of ambiguity the attendant circumstances necessarily lead to the opposite conclusion.

(3.) In the case before their Lordships the language of the document was ambiguous. One of the circumstances which was considered significant in that case was that there was no clause for retransfer but there was a term in the document to the effect that if the executants pay the money within the stipulated period the property should come to the exclusive possession and occupation of the executants. The term was clear about the possession but silent about the title. The term was construed as meaning that if there is payment within the specified time then the title will continue to reside in the executants. The silence abput the title was held to be proper in a mortgage since the owner's title remains in him all the while and so a reconveyance would be unnecessary but if there is an out and out sale the title could not revert to the original owner without proper reponveyance. Another clause in the document was to the effect theft if the money is not paid within the stipulated period then the sale would become absolute. Considering the terms of the document as a whole and the circumstances of the case it was held in that case that the document was a deed of mortgage by conditional sale In P. L. Bapuswami v. N.Pathay, AIR. 1966 SC. 602. the document was in (the form of a sale deed but contained a stipulation that the vendee should reconvey the property to the vendor on his repaying the amount of Rs.4000 during the stipulated period. The condition for repurchase was embodied in the same document. The consideration for the transaction was Rs, 4000 whereas the real value of the property was Rs.8000. But the patta was not transferred to the vendee after the execution of the document. The assessment for the land was continued to be paid by the vendor and after his death by his sons. The consideration for reconveyance was Rs.4000 the same amount as thei consideration for the original transaction. It was held that the document was a deed of mortgage by conditional sale. While dealing with the principles to be adopted in deciding whether the transaction is a mortgage by conditional sale or an out and out sale it was observed as follows :