WAJID ALI KHAN Vs. SHAFKAT HUSAIN

JUDGEMENT

(1.) The question in this appeal is whether two documents dated respectively the 30 April, 1897, are to be read together, and if so read constitute a transaction amounting to a mortgage. The lower appellate Court has read them separately and has treated the transaction as an out and out sale with an agreement to re- purchase within a limited period. The suit out of which this appeal has arisen was brought for redemption of the property. The Court of first instance decreed the claim, but upon appeal the lower appellate Court reversed the decision of the Court of first instance and dismissed the plaintiff's claim holding that the two documents in question were not to be read together, but separately and so read constituted a sale and an independent agreement for re-purchase. We are of opinion that the lower appellate Court was wrong in the construction which it placed on the documents. The first of the two documents purports to be an out and out sale, but at the fend of the instrument the vendor declares that he has executed "this sale-deed subject to the terms of the deed of agreement executed by the vendee on the 30 April, 1897." This incorporates by reference the documents of even date By the later document the vendee declares that the property was sold to him upon the condition that after the expiration of a period of six years from 1311 Fash to 1315 Fasli whenever the consideration is re-paid to him or his representative or tendered to him or deposited in his favour by the vendor or his representative with a view to take back the property sold, he (the vendee) shall without hesitation reconvey the property sold and execute a sale- deed in favour of the vendor or his representative and have it completed. ,

(2.) Further, in this document, the vendee undertakes that whenever during the period from 1811 to 1315 Fasli the vendor or his representative pays or tenders to or deposits for him or his representative a lump sum of Rs. 635 the remaining amount of consideration money, he shall, without hesitation, convey back the property. We have no doubt in view of the language of these two documents that they must be read together as constituting a mortgage by way of conditional sale. The case is unlike that which is relied on by the learned Vakil for the respondent, namely, Bhagwan Sahai V/s. Bhagwandin 12 A. 387 : 17 I.A. 98. In that case it was held by their Lordships of the Privy Council that a document purporting to be one of sale, though it was accompanied by a contract reserving to the vendor a right to re-purchase the property sold, or re-payment of the purchase-money within a certain time, was not on that account to be construed as if it were a mortgage. In that case the document first executed was in terms an out and out sale. The document which was afterwards executed though of the same date was not executed in pursuance of any agreement entered into between the parties, but, on the contrary, was executed by the vendee as a matter of favour, mercy, kindness and indulgence." Sir Barnes Peacock in delivering the judgment of their Lordships observed that it seemed clear from the decision of Lord Chancellor Cranworth in the case of Alderson V/s. White (1858) 2. De. Gex. and. J. 97 at p. 105 : 4 Jur (N.S.) 125 : 6 W.R. 242 that it was not a mortgage. He quoted the following words of the Lord Chancellor: "These deeds taken together do not on the face of them constitute a mortgage, and the only question is whether, assuming the transaction to be a legal one, it has been shown to be in truth such as in the view of a Court of equity ought to be treated as a mortgage transaction. The rule of law on this subject is one dictated by common sense the prima facie an absolute conveyance containing nothing to show that the relation of debtor and creditor is to exist between the parties does not cease to be an absolute conveyance and become a mortgage merely because the vendor stipulates that he shall have a right to re- purchase." Then his Lordship proceeds: In this case the vendors did not stipulate that they should have a right to re-purchase." It will be at once observed how different are the facts of that case from the case which is before us. Here the deed which is alleged to be a deed of sale is made expressly subject to the condition mentioned in the contemporaneous document and the contemporaneous document is an agreement on the part of the vendee to reconvey the property to the vendor upon repayment of the purchase-money.

(3.) We are of opinion that the view of the learned Additional Judge is erroneous and as he decided the appeal before him upon this point and we have overruled him in regard to it, we set aside the decree of the lower appellate Court and remand the case to it under the provision of Order XLI, Rule 23 with directions that it be re-admitted under its original number in the register and determined according to law. Costs here and hitherto will abide the event.