KARUPPANNA GOUNDER Vs. THIRUMALSI GOUNDER

JUDGEMENT

(1.) IT is unfortunate that this matter has to be remanded again to the lower appellate Court, and a suit which was instituted in 1965 has yet to be kept pending. The plaintiffs in O. S. No. 598 of 1965 on the file of the Court of the District Munsif, Erode are the appellant herein. The suit was one for redemption of Ext. B -2 mortgage and for recovery of possession. The case of the appellants was that Ext. B -2 was a mortgage by conditional sale and therefore they were entitled to redeem the mortgage. As against this, the case of the respondents was that Ext. B -2 constituted an absolute sale accompanied by an agreement for re -purchase and therefore, the suit for redemption would not lie. The trial Court decreed the suit. On appeal preferred by the defendants in the suit, the lower appellate Court, on an earlier occasion reversed the conclusion of the learned Principal District Munsif who decreed the suit. The matter came up to this court in Second Appeal No. 667 of 1960. By judgment and decree dated 7th Oct., 1971, I allowed the second appeal and remanded the first appeal for fresh disposal. The reason for my remand order was that one of the tests to find out whether a particular transaction was an absolute sale or a mortgage by conditional sale is the adequacy of the price having regard to the value of the property and with reference to that, the learned Subordinate Judge had made a mistake which would have influenced him in coming to the conclusion as to whether the price was adequate or not. After the remand, the matter was disposed of by the learned Principal Subordinate Judge, Erode on 8th March, 1972, In this case, there was no oral evidence at all. In the absence of oral evidence, the learned Subordinate Judge expressed his difficulties in arriving at the value of the property for the purpose of showing that the consideration mentioned in Ext. B -2 was adequate or inadequate, on the basis that the transaction was a sale. However, he recorded a definite finding that Ex. B -2 was not a mortgage by conditional sale and that it was an out -and -out sale and that the plaintiffs were not entitled to maintain the suit for redemption treating Ex. B -2 as a mortgage by conditional sale. The result was, the learned Subordinate Judge dismissed the suit for redemption instituted by the appellants herein. It is this dismissal that is being challenged in the present Second Appeal.

(2.) THE learned counsel for the appellants contends that the language or Exhibit B -2 fulfills the requirements of Section 58(c) of the T. P. Act and consequently, the transaction under Ex. B -2 must be construed to be only a mortgage by conditional sale unless there are express words in the document or other attendant circumstances to establish that the parties intended to treat the transaction as an absolute sale accompanied by an agreement for reconveyance. I am of opinion that this contention is well -founded. Section 58(c) of the T. P. Act states: '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 conditional sale is embodied in the document which effects or purports to effect the sale.' The proviso was introduced, for the first time, by the amending Act XX of 1929. Prior to that, there was no stipulation as to whether the condition for re -purchase should be embodied in the same document or not.

(3.) WITH reference to such a situation, the Supreme Court, in Chunchun Jha v. Ebadat Ali, : [1955]1SCR174 , has observed, at page 347.