SHEIKH USMAN Vs. MOHAMMAD SHAFI KHAN

JUDGEMENT

(1.) This is a defendants appeal arising out of a suit for pre-emption. The plaintiffs claimed to pre-empt property transferred under a deed which ostensibly was a simple mortgage-deed under the following circumstances:

(2.) A one-anna four-pies share had been originally mortgaged with possession by the transferrer to the plaintiff himself for Rs. 1,100. Subsequently the transferrer executed the document in question transferring two-thirds out of one-anna four- pies share and leaving the entire amount of the first mortgage in the hands of the transferee for payment to the plaintiff. The profits of the property transferred admittedly amounted to Rs. 30. Even calculating consideration at the rate of 2 per cent, per mensem (i.e., 50 years purchase) the value of the property could not exceed Rs. 1,500 which was the ostensible mortgage-money. The document, however, made it clear that the money could be recovered from the property and there was no personal undertaking by the transferrer to pay the amount. The time fixed for payment was seven years, within which the mortgagor could not redeem the property. After the lapse of the fixed period the principal and interest would amount to at least Rs. 4,000 and it would be impossible for the mortgagor to redeem the property on payment of that amount. As time passed the mortgage debt would increase still more. There was in addition to this some oral evidence also adduced by the parties. Having regard to all these circumstances and the terms of the mortgage-deed the learned District

(3.) Judge has come to the conclusion that the transaction though clothed in the garb of a mortgage was in reality a sale, and that the intention of the parties was that the transferee would by redeeming the first mortgage enter into effective possession of the property without any risk of redemption.