RAMNARAYAN RAMRAKH Vs. RAMRATAN RADHAKISHAN

JUDGEMENT

(1.) NIYOGI , A.J.C. 1. This second appeal arises out of a suit instituted by the appellant to recover possession of the property in suit together with mesne profits by virtue of a sale deed dated 28th October 1925 for Rs. 5,500 executed in his favour by Ramratan, respondent 1. Some other persons were impleaded in the suit as defendants as holding possession on behalf of defendant 1. The suit proceeded ex parte against them as they did not care to enter appearance. The principal contesting party was Ramratan, respondent 1, who contended that the instrument, which was ostensibly a sale deed with a condition of re-purchase was in reality a mortgage and that consequently the plaintiff had no right to sue for possession and mesne profits. The Court of first instance held that the sale deed was in reality a sale deed and not a mortgage deed, and decreed the plaintiff's suit in full. The lower appellate Court which sought to interpret the terms of the document in view of its recitals and the surrounding circumstances took a contrary view of the document as being a mortgage deed. It accordingly dismissed the plaintiff's suit.

(2.) THE question as to whether such an instrument which is drawn up in the form of a conveyance with a condition of reconveyance amounts to an absolute sale of the property or only a mortgage by conditional sale, has been the subject of consideration in numerous cases. In Balkishen Das v. W.F. Legge (1900) 22 All 149 their Lordships of the Privy Council laid down that the dispute must be decided on a consideration of the contents of the documents themselves with such extrinsic evidence of surrounding circumstances as may be required to show in what manner the language of the document is related to existing facts. It is therefore necessary to advert to the recitals of the sale deed in question. The document is described as a sale deed and it recites that in consideration of Rs. 5,500 received by the vendor he sold the four fields in question which he delivered into the possession of the vendee devoid of the crops of the year 1335 Fasli. It contains a promise that within the period of four years the vendor would repay the purchase money in full and that the vendee would reconvey the property to him. On failure to repay within the time aforesaid, the vendee was declared to have been entitled to enjoy the property from generation to generation. Having regard to the terms of the document showing that it is a sale deed, the burden is incumbent on the defendant who contends that it was a mortgage deed. The burden is always with him who contends against the tenor of the deed: see Abdul Latif Kazi v. Abdul Huq Kazi AIR 1924 Cal 523 and Muthuvelu Mudaliar v. Vythilinga Mudaliar AIR 1919 Mad 1. Although it was open to him to plead the existence of certain facts to show how the contents of the document were related to them, he offered no pleadings in that behalf. The lower appellate Court, however, referred to certain surrounding circumstances which it thought contributed to throw light on the intention of the parties. It took into consideration the fact the stamp on which the sale deed was engrossed was purchased by the vendor, (in view of Section 29, Stamp Act, which provides that the expense of providing proper stamp shall be borne in the case of a mortgage deed by the person executing the instrument, and' in the case of a conveyance by the grantee and inferred that the intention-was to execute a mortgage deed). The lower appellate Court ignored the fact that the actual stamp duty paid was on the basis of its being a conveyance and not a mortgage deed. This circumstance is therefore inconclusive. The lower appellate Court further took into consideration the fact that in the extract of the Record of Rights exhibited with the plaint the sale dead was entered in Col. 11 which was intended for recording encumbrances on the land. This circumstance also appears to be immaterial as the subsequent conduct of the parties cannot be considered in interpreting the nature of an instrument of title: see Achutaramaraju v. Sutbaraju (1902) 25 Mad 7. It is argued on behalf of the respondents that the agreement of sale with a covenant of repurchase having been embodied in the document, it must be regarded as a mortgage by conditional sale within the meaning of Section 58(c). This argument is based on the proviso added to Section 58(c) by Act 20 of 1929 which runs as follows: Provided that no such transaction shall be deemed to be a mortgage, unless the condition is embodied in the document which effects or purports to effect the sale.

(3.) THE same view was expressed by their Lordships of the Allahabad High Court in the case reported in Ram Das v. Brindaban Ram A.I.R. 1931 All. 113. The newly added proviso came in for consideration before their Lordships of the Bombay High Court in Kuppa Krishna Hedge v. Mhasti Goli Naik AIR 1931 Bom 371 and their Lordships held that the object of the proviso was only to restrict the inference to be drawn in favour of the mortgage only when the condition of repurchase is embodied in the document which purports to effect the sale, but that the inference of mortgage does not necessarily arise from the mere fact that the condition was embodied in the same document. The respondents' learned counsel's argument cannot prevail to the extent of regarding the proviso to Section 58(c) as laying down any hard and fast rule of interpretation. Section 58(c), T.P. Act, does not by itself make any transaction to be a mortgage. It is Section 58(a) which declares what transactions are mortgages. It is only when the relation of mortgagor and mortgagee is created in terms of Section 58(a) that Section 58(c) comes into operation. The word "mortgagor" occurring in Section 58(c) must be understood in the light of the definition of the "mortgage" given in Section 58(a). Section 58(c) presupposes the existence of a mortgage given in Section 58(a). There can be no mortgage unless there is a debt to be secured by a transfer of interest in immoveable property, which, in other words, means that the parties stand to each other in the relation of creditor and debtor. Section 58(c) therefore treats of those transactions which are mortgages within the meaning of Section 58(a) in whatever form the transaction may be expressed.