B RAMACHANDRAYYA Vs. J NARAYANA

JUDGEMENT

(1.) The appellant is the plaintiff in the suit O.S.No. 530 of 1970 on the file of the 5th Additional Judge, City Civil Court, Hyderabad, which was filed for redemption of the mortgage said to have been executed by the plaintiff in favour of the first defendant on 24-12-1954; for taking accounts and for passing a decree in favour of the plaintiff for surplus amount due to him or in the alternative, for specific performance of the agreement of sale in pursuance of the agreement to reconvey and to direct ths 1st defendant to execute the sale deed after receipt of the amount that may be found due from the plaintiff after taking accounts and for possession of the suit house. The suit property is a house bearing door No A-6-196 situated Dattanagar, Narayanaguda, Hyderabad. The admitted facts are that Ex. A-1 is the sale deed executed by the plaintiff in favour of the 1st defendant for a consideration of a sum of Rs. 6, 000/-in respect of the suit house. The 1st defendant also executed an agreement Ex. A-2 on the same day i.e. on 21 -12-1954 agreeing to reconvey the suit house to the plaintiff on payment of the same amount within 3 years from 21-12-1954. The plaintiff executed a rental deed in favour of the 1st defendant in respect of the same house to pay the rent at the rate of Rs. 120/- per month and continued to be in possession of the suit house. The plaintiff did not pay Rs. 6000/- to the 1st defendant on the expiry of 3 years from 21-12-1954, but he continued to be in possession of the suit house paying rent to the 1st defendant at the rate of Rs. 120/- per month The 1st defendant sold away the suit house to defendants 2 and 3 under a registered sale deed Ex. B-2 dated 26-12-1963 for a consideration of Rs. 25,000/-. The plaintiff executed a rental deed Ex. B-1 on 26-12-1963 in favour of defendants 2 & 3 agreeing to pay the rent at the rate of Rs. 120/- per month, but the plaintiff did not pay the rents to defendants 2 & 3. Hence defendants 2 and 3 filed eviction petition O.P.No. 80 of 1965 on the file of the Additional Rent Controller, Hyderabad which was subsequently transferred to the file of the Principal Rent Controller, Hyderabad and was renumbered as R.C.No. 759/1966. The Rent Controller directed the plaintiff to pay the arrears under Section 11 of the A. P. Buildings (Lease, Rent and Eviction) Control Act (hereinafter referred to as the "Act"). Against that order, there was an appeal before the Chief Judge, Small Causes Court. The learned Chief Judge allowed that appeal. Against that order, defendants 2 and 3 filed a Revision Petition C.R.P.No. 937/1967 in the High Court. This Court was pleased to allow that revision and directed the plaintiff to pay the arrears In pursuance of that order, the plaintiff paid Rs. 5880/-. Ultimately the Rent Controller allowed the eviction petition filed by defendants 2 and 3 and the plaintiff was evicted from the possession of the suit house. While the proceedings were pending in the Rent Control Court the plaintiff filed this suit. The plaintiff contends that though Ex. A-1 was styled as sale deed, it was in fact not a sale deed, but it was only a mortgage deed as it was executed on his borrowing Rs. 6000/- from the 1st defendant at the rate of 2% per month. He further contends that the 1st defendant represented to him that he would execute a reconveyance deed as soon as the said amount of Rs. 6000/- was paid within the stipulated period of three years and the 1st defendant in fact executed Ex. A-2, according to which he agreed to reconvey the suit house to the plaintiff on the plaintiff repaying the borrowed amount of Rs. 6000/-to him within the period of three years from 21-12-1954 (i.e. when Exs. A-1 and A-2 were executed) and also on the plaintiff paying interest at the rate of Rs. 120/- i.e. at 2% per month and on the plaintiff executing a rental deed for the same. To ensure the payment of the interest at Rs. 120/- per month, the plaintiff executed the rental deed, though 'n fact, it was not a rental deed. The plaintiff, therefore, contends that as the transaction related to mortgage, he is entitled to redemption and the question of payment of the amount of Rs. 6000/- within three years as stipulated in the reconveyance deed. Ex. A-2 does not arise at all. He also contends that even if the court does not accept that the transaction relates to mortgage and if the court feels that it is an out and out sale, he is entitled to specific performance of Ex. A-2 as time is not the essence of the contract since the 1st defendant permitted him to continue to be in possession of the suit house.

(2.) The 1st defendant, on the other hand, contends that the transaction is not of mortgage and it is an out-right sale and as the plaintiff wanted to be in possession of the suit house as his tenant, he agreed to for the same and permitted him to be in possession of the suit house as his tenant on his executing a rental deed. Accordingly, the plaintiff executed the rental deed while he executed Ex. A 2 agreeing to reconvey the Suit house to the plaintiff if he paid him the amount of Rs. 6000/- within three years from 21-12-1954. As the plaintiff did not pay the amount of Rs. 6000/- as perthe terms of Ex. A-2 within three years from 21-12-54, the plaintiff forfeited his right to have the recoveyance of the suit house and the 1st defendant had therefore, right to sell away the property to persons of his choice and accordingly he sold away the suit house to defendants 2 and 3 for a consideration of Rs. 25,000/- under Ex.B-2. He therefore, contends that the plaintiff is neither entitled to redemption nor to specific performance as prayed for by him.

(3.) Defendants 2 and 3 contend that the plaintiff executed a rental deed, Ex. B-1 in their favour, but he did not pay the rents as per the terms of Ex.B-1. Hence, they filed the eviction petition and also for the payment of arrears. The Rent Controller directed the plaintiff to pay the arrears and alscTpassed eviction orders against the plaintiff and the plaintiff is therefore, evicted according to law. They also contend that they purchased the suit house for consideration of Rs. 25,000/- and they are the bona fide purchasers without notice of the transactions between the plaintiff and the 1st defendant.