BISHAMBHAR NATH Vs. MUHAMMAD UBAIDULLAH KHAN

JUDGEMENT

(1.) The question for decision in this appeal is whether a deed, dated the 25 of June, 1886, executed by Durga Prasad and others in favour of one Qudratullah Khan was an out and out sale or a mortgage by conditional sale. There is a subsidiary question as to whether this issue is res judicata between the parties by reason of the decision in suit No. 124 of 1886. The document was: on the face of it a sale-deed with a condition that if the purchase-money and any arrears of rent which happened to remain due at the time of repayment were repaid to the vendee on the last day of Jeth, sixteen years after the purchase, the vendors would be entitled to get back the property. It was clearly stipulated that unless payment was made on this particular date, no right of re-purchase was reserved to the vendors.

(2.) The question has been argued on the footing that the test of whether the document was a sale or a mortgage was the intention of the parties at the time of entering into the transaction. This rule was originally laid down by the Privy Council in Bhagwan Sahai V/s. Bhagtoan Din (1890) I.L.R. 12 All. 387 : L.R. 17 I.A. 98 .and was re-affirmed by their Lordships in Jhanda Singh V/s. Wahid-ud-din (1916) I.L.R. 38 All. 570.

(3.) Dr. Sen, in one portion of his very able argument on behalf of the appellant, took the position that any deed which professes to be a sale-deed with a condition allowing the vendor to re-purchase came within the definition of a mortgage by conditional sale; contained in Section 58(c) of the Transfer of Property Act, and must be presumed to be such unless the surrounding circumstances were such as absolutely to exclude the possibility of a mortgage having been intended. This idea is supposed to derive some support from the decision in Mohindra Man Singh v. Maharaj Singh (1922) I.L.R. 45 All. 72. A reference to Section 58(c) is sufficient to show that this is a misreading of the law. A mortgage by conditional sale is there defined as a mortgage in which the mortgagor " ostensibly sells the 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 (i.e., payment of the mortgage-money) being made, the sale shall become void, or on condition that on such payment (again referring back to the payment of the mortgage money) being made, the buyer shall transfer the property to the seller."