N PATTAY GOUNDER Vs. P L BAPUSWAMI

JUDGEMENT

(1.) The main question to be decided in this second appeal filed by the first defendant from the judgment and decree of the learned Subordinate Judge, Coimbatore, in A. S. No. 1 of 1958, is whether the conveyance under Ex. B-T dated 28-5-1946 is an out and out sale with a covenant for repurchase or a mortgage by conditional sale. The trial Court with which the lower appellate Court agreed held that Ex. B-1 was a mort-gage by conditional sale and granted a decree for redemption. The aggrieved first defendant has preferred this second appeal.

(2.) The property in question Originally belonged to one Palani Moopan. He executed Ex. B-1 in favour of the first defendant for a consideration of Rs. 4000. The document was styled as a sale-deed and purported to convey the property absolutely to the first defendant by way of sale. Out of the consideration, a sum of Rs. 2000 was reserved with the vendee to pay off and an earlier mortgage on the suit property and certain other properties. The balance of Rs. 2000 was paid to the vendor in cash. The first defendant discharged the earlier mortgage in accordance with the directions in the sale deed. The sale deed recited that the property having been conveyed to the vendee absolutely, the vendee should thereafter enjoy the property with all rights of ownership. The Tamil recital was: (Portion In Tamil script deleted -- Ed.) After the schedule Jo the sale deed appeared a covenant that if after five years and before the expiry of seven years from the date of the sale deed, the vendor paid to the vendee the sum of Rs. 4000, the vendee should reconvey the property to the vendor. The Tamil recital ran thus: (Portion in Tamil script deleted -- Ed.) After the death of Palani Moopan his sons executed in favour of the plaintiff Ex, A-1" dated 10-5-1950 for a consideration of Es. 1500. The document is described as a deed ot assignment of the right to repurchase (Portion in Tamil script deleted -- Ed.) Ex. A-l refers to the condition for repurchase in Ex. B-l and states that as the executants namely the sons of Palani Moopan were unable to find the necessary funds to get a reconveyance from the first defendant, they were conveying to the plaintiff their right to repurchase the property from the first defendant. Basing his right under Ex. A-1, the plaintiff instituted the suit out of which the second appeal arises for a decree directing the first defendant to reconvey to him the suit property for Rs. 4000 Or for such other sum as might be determined by the Court. The plaintiff claimed that Ex. B-l must be deemed in law to be a mortgage by conditional sale and that he was entitled to redeem as the assignee of the equity of redemption. On that basis, the plaintiff also claimed that himself and his predecessors-in-title being agriculturists, they were entitled to the benefits of Act IV of 1938, as amended from time to time. The plaintiff pleaded alternatively that if Ex. B-l' was held to be an outright sale with a condition to repurchase, the first defendant was bound to reconvey the property to him on payment of a sum of Rs. 4000. The plaintiff averred that he tendered the amount to the first defendant several times but the first defendant refused to accept the same, The first defendant of course denied that Ex. B-l was a mortgage by conditional sale and maintained that it was an out and out sale with a covenant for repurchase and that inasmuch as no offer was made by the plaintiff or his assignees within the time stipulated in the document, the suit to enforce a reconveyance was barred by time.

(3.) The trial Court reached the conclusion that Ex. B-l was only a mortgage by conditional sale relying on the following circumstances, namely, (1) there was a stipulation that on payment the vendee should retransfer the property to the vendor absolutely; (2) the covenant as to repurchase is embodied in the same document; (3) the patta had not been transferred to the first defendant; (4) the amount agreed upon as the price for repurchase was the same as the consideration for the original sale and (5) the sale price of Rs. 4000 was much less than the real value of the property which fact was born out by Exs. A-4 and A-5, The trial Court also found that as it had held that Ex. B-1 was a mortgage by conditional sale, the suit for redemption was within time. On those findings, a preliminary decree for redemption under Order 34 Rule 7 of the C.P. Code for taking accounts and for a declaration of the amounts due to the first defendant under Ex. B-1 was passed. The appeal by the first defendant against that decree was unsuccessful. The lower appei'iate Court too took the same view as the trial Court as to the nature of Ex. B-1. The circumstances relied on by the lower appellate Court for agreeing with the view of the trial Court' were (1) that a price below the true value indicated a mortgage, (2) that there was in Ex. B-l a clause for reconveyance on payment ot the sale price within a certain date and that (3) the vendee did not apply for transfer of patta and the patta admittedly continued in the name of Palani Moopan even after Ex. B'l. In the view of the lower appellate Court, it was clear from those, circumstances that the intention of the parties was to treat the transaction covered by Ex. B-l only as a mortgage by conditional sale. The suit was filed originally in the Court of the learned Subordinate Judge as O. S. No. 216 of 1953 on 26-6-1953 when the Court reopened after summer vacation. Considered as a mortgage by conditional sale, the lower appellate Court held that the suit was within time. The lower appellate Court was also of the view that if the suit had been filed on 28-5-1953, it would have been within time but as the Court remained closed on that day, the suit filed on the date when the Court reopened would still be within time. The first defendant having failed in both the courts below has come up to this Court in second appeal.