PHATTECHAND ANANDRAM Vs. UMA VALOO

JUDGEMENT

(1.) This is an appeal from a decree of the First Class Subordinate Judge s Court at Nasik. The facts are a little unusual. The defendants in 1919 passed a sale deed for Rs. 5,000 to the plaintiff, and this deed was registered through Court on August 20, 1923. The plaintiff sued on this sale deed in suit No. 345 of 1923, but the defendants contended that the document was not intended as a sale deed, but that it was to be accompanied by an agreement to reconvey by the plaintiff and both these documents were to be registered together, but the plaintiff failed to execute the agreement to reconvey, and therefore the whole transaction was incomplete and void. The First Class Subordinate Judge at Nasik held that the suit lands were only given as security to the plaintiff for the amount of the sale deed, and that the sale deed was to take effect only on his passing to the defendants a writing embodying the agreement to reconvey, and the above condition not having been fulfilled, the sale deed became void. He, therefore, dismissed the suit. The plaintiff appealed to the High Court, and in First Appeal No. 298 of 1929 the High Court confirmed the decree of the lower Court, holding that the plaintiff had broken the contract, as the sale deed which he had got from the defendants was merely one part of the transaction which had been agreed upon between them. The appeal was, therefore, dismissed, and the High Court remarked that it was too late for the plaintiff, when the Court had come to the conclusion that his conduct was improper, to fall back upon the case which he might have set up at the beginning that the land was mortgaged to him, and that he was entitled to possession. The plaintiff has brought the present suit, which is No. 835 of 1926, to recover the amount advanced under the sale deed, alleging that this operates as a mortgage, and that the same should be recovered by sale of the property. The First Class Subordinate Judge held that the sum could not be recovered by sale of the property as if the property was security for it, as a mortgage or the same was charged on the property, and gave the plaintiff a decree as if this was a simple suit for an unsecured loan or a suit for restoration of money which was intended to be secured by an immoveable property but was not so secured by reason of the plaintiff s own fault. He, therefore, passed a decree for Rs. 7,990, and costs and interest, in favour of the plaintiff, but did not make this a charge on the property.

(2.) The plaintiff appeals, and the only argument raised in appeal is that this amount should have been made a charge on the property, and it is contended by the learned counsel for the appellant that under Section 100 of the Transfer of Property Act, although the transaction does not amount to a mortgage, it will amount to a charge. Now it is quite clear from the authorities which have already been considered in the previous proceedings that this transaction did not amount to a sale, and was never intended to be a gale. It is also clear that it does not amount to a mortgage, because in order that it may amount to a mortgage it was necessary that the plaintiff should execute an agreement to re-convey, and that both documents should be registered together. This agreement to re-convey was never executed by the plaintiff. It has been held by the High Court on appeal, as well as by the First Class Court at Nasik, in the former litigation, that this is not a sale deed. It is also not a mortgage deed, and Section 100 would have no application to a case where the document falls short of being a mortgage not by reason of the intention of the parties but by the failure of one of the parties to carry out his part of the contract, that is, by the plaintiff s failure to execute the agreement of re-conveyance which had been agreed between the parties that he should execute. The result, therefore, is that no interest is created in the plaintiff by the sale deed. It has been held in P.R.P.B. Somasundram Chettiar v. Y.P.N. Nachiappa Chettiar (1924) I.L.R. 2 Ran. 429 that a transaction intended to be a mortgage, but not reduced to writing or registered, could not be considered to create a charge, and in Sir Hukumchand Kasliwal v. Radha Kishen (1929) 32 Bom. L.R. 533, P.C., which is a Privy Council case, it was held that where it was intended by the parties that a regular deed of mortgage was to be executed by one of them, but no such deed of mortgage was ever executed in the plaintiff s favour, the plaintiff had neither a mortgage nor a charge on the immoveablo properties of the defendants or the proceeds of sale thereof, and were not, therefore, secured creditors of the company. In these circumstances, I think where one party by his own default has failed to create a transaction which would be binding in law on the other party, he cannot by reason of any supposed intention of the parties claim a charge on the property. Whatever the intention of the parties may have been, the failure to carry it out was due to the plain-tiff s own default, and, therefore, there can be no question of a charge being created under a 100 of the Transfer of Property Act.

(3.) Some reference has been made to the equities of the case, but the equity does not seem to be in favour of the plaintiff, inasmuch as it was his failure to execute the agreement to re-convey which resulted in the difficulties with which he is now met.