SRINIVASARAGHAVAN ALIAS SRINIVASA CHAKRAVARTHI Vs. KALIANNA GOUNDAN

JUDGEMENT

(1.) The question in this appeal is whether a transaction entered into on the 25 June, 1934, constituted an absolute sale or a mortage by conditional sale.

(2.) In O.S. No. 380 of 1935 of the Court of the District Munsiff of Namakkal the first defendant in the present suit obtained a money decree against the defendants 2 to 4 and in execution proceedings he attached the property in suit, 2.58 acres of agricultural land. The plaintiffs entered an objection. They claimed by virtue of the deed of the 25 June, 1934, to be the absolute owners of the property. By an order dated the 11 June. 1941, their petition was dismissed on the ground that it was belated. Thereupon they filed a suit under the provisions of Order XXI, Rule 63 of the Civil P. C.. They asked for a decree setting aside the order dismissing the claim petition and an injunction restraining the first defendant from proceeding in execution. This suit was originally filed in the Court of the District Munsiff, but as the value of the property exceeded the pecuniary limits of that Court's jurisdiction, the plaint was returned for presentation in the Court of the Subordinate Judge of Salem. The suit was tried by the Subordinate Judge, who held that the deed constituted a mortgage by conditional sale. This decision was upheld by the Additional District Judge of Salem on appeal. The plaintiffs then appealed to this Court. The appeal was heard by Chandrasekhara Aiyar, J., who disagreed with the Courts below. He was of the opinion that the transaction amounted to an absolute sale with a condition for re-purchase. The appeal is by defendants 2 to 4 under Clause 15 of the Letters Patent.

(3.) The instrument of the 25 June, 1934, must be read with an agreement, dated the 18th June, 1934. This agreement was entered into with the plaintiffs by the third defendant as the manager of the joint family consisting of himself and his sons, the second and fourth defendants. It reads as follows: We have stipulated these conditions that I shall within two weeks time execute a deed of usufructuary mortgage in your favour in respect of the land belonging to me and described hereunder for Rs. 7,000 .... stipulating a period of five years, that, at the expiry of the period of five years aforesaid, I shall pay to you the aforesaid usufructuary mortgage amount of Rs. 7,000 and redeem the same and that in default of payment as aforesaid you shall take the land described hereunder for the aforesaid sum of Rs. 7,000 itself by way of absolute sale and therefore I have agreed that I would within the two weeks aforesaid execute the deed giving all the particulars, get the same registered and hand over the same to you and out of the said amount I have received from you on this date a sum of Rs. 500 in cash and as regards the balance remaining, I shall adjust the same towards the debts to be quoted in the deed when the document is executed, execute the document, get the same registered and deliver it to you; and I shall also deliver possession of the land to you; I shall deliver -possession of the property described hereunder free of all encumbrances. This itself shall be the receipt for the payment of the said sum of Rupees five hundred. It will be observed that there is no agreement here for an absolute conveyance to the plaintiffs. The agreement is for the execution of a usufructuary mortgage with the condition that if the mortgage amount was not repaid within five years, the mortgagees should then have the right to retain the property as vendees.