VEERAVUNNI HAJI Vs. KOYAMMU

JUDGEMENT

(1.) The defendants 1 and 2 are the special appellants.

(2.) The suit was for redemption of what according to the plaintiff-respondent was a mortgage executed by his assignor Pokker in favour of the 1st defendant and assigned by the 1st defendant to the 2nd defendant. Ext. B1 which evidences the transaction was executed on 15-7-1949 and styled itself as an 'avadhi teer' or sale with a limit of time. The consideration of Rs. 100 raised under it was recited to be for the purpose of depositing the rent due from the executant to the jenmi of the property in respect of certain other items. On the date of the deed Pokker surrendered possession of the property to the transferee 1st defendant with liberty to enjoy and deal with the property as if he was the owner but subject to the reservation that if repayment of the consideration of Rs. 100 was made Within two years the property would be reconveyed by the 1st defendant. If however repayment was not made within that period, Pokker was to lose all his rights in the property for ever more. The question was whether the deed amounted only to a mortgage by conditional sale as the plaintiff would have it or as contended by the defendants was an out and out sale with a clause for repurchase which had become incapable of enforcement on account of the lapse of the period of two years limited therefor. The Munsiff held in favour o the defendants and dismissed the suit without more while the District Judge has upheld the plaintiff's claim and remanded the suit for consideration of the rest of the issues.

(3.) The question whether a given transaction is an out-right sale with a condition of repurchase or a mortgage by conditional sale is a vexed one and must be decided on its own facts. Broadly speaking it depends on the intention of the parties to be gathered from the contents of the document and the surrounding circumstances, as to whether an absolute right in the property is to vest forthwith in the transferee subject only to the condition regarding retransfer or on the other hand a sale is to come into effect on a future date. If the transferee became entitled to all the rights of the transferor on the date of the execution of the document the document will be regarded as a sale. But it the absolute transfer of right is intended to be postponed so as to take effect only on a future date the transaction will be held to be one by way of mortgage. In the former case the ownership vests in the transferee from the date of the document and there is no question of any debt coming into existence after the date of the transaction, while in the latter case the debt subsists and the right to redeem remains with the debtor. The leading case on the point in India is Bhagwan Sahai v. Bhagwan Din, ILR 12 All 387 (A), where their Lordships of the Privy Council quoted with approval the following observations of Lord Cranworth in Alderson v. White, (1858) 44 ER 924, at p. 928 (B):