PADMANABHA AIYAR Vs. SITARAMA AIYAR

JUDGEMENT

(1.) My learned brother and myself have recently had quite a number of cases in which the question that arose for determination was the same as in this second appeal, namely, whether on a proper construction of certain documents, read in the light of surrounding circumstances, the transaction between the parties should be held to be mortgage by conditional sale or merely a sale with an agreement to resell. We may observe with regret in passing that, in spite of the differences and variety of judicial opinion with regard to such cases, the legislature, which is clearly in a position to set at rest such questions being raised, has not yet thought fit to do so. Though the question that has arisen in this case is the same as in several other cases, there is at least one distinguishing feature in this case and that is that the transaction has been brought about not as in nearly all other cases by two documents, one of sale and the other an agreement of resale, but that the whole of the contract between the parties is contained in one and the same document.

(2.) The facts necessary for appreciating the bearing of the questions that arise may be briefly set out. The document in question was executed by the father of the plaintiffs and the 5th defendant in favour of the father of defendants 2, 3 and 4, one Kamakshi Aiyar. The property however was sometime afterwards sold by defendants 2, 3 and 4 to the 1 defendant. The 1 defendant therefore is the person at present in possession of the property and claiming title thereto. The suit was for redemption on the ground that the document in question was one that effected a mortgage by conditional sale. The defence set up was that on a proper construction the transaction was not a mortgage by conditional sale but was merely a sale with an agreement for a resale, that the condition for resale was not specifically performed and further that the claim for specific performance is barred by the law of limitation. Both the lower courts have found on a construction of the document against the plaintiffs claim and dismissed their action. Reference may in this connection also be made to an application for amendment of the plaint that was made on behalf of the plaintiffs even in the Court of first instance, when probably it was perceived that the chances were little of the plaintiffs succeeding in their contention on the footing of the transaction having been a mortgage by conditional sale. It was sought by that application to amend the plaint by setting up in the alternative the agreement to resell and praying on that footing for specific performance of such agreement. The application for amendment was refused not only by the Court of first instance, but, when it was repeated, also by the lower appellate Court. Curiously enough, Mr. Alladi Krishnaswami Aiyar, the learned Vakil for the appellants in this second appeal, wished to argue mainly the question of leave to amend the plaint, though he also indicate-ed the other question with regard to the nature of the transaction on a proper construction of the document. If it should have become necessary for us to deal with and dispose of this question of the amendment of the plaint, we might have had a great deal of difficulty in the matter. Without discussing the question whether the amendment was in substance within the scope of the cause of action laid in the plaint or not, it is clear that, if such an amendment should be allowed, the Defendant should be accorded another opportunity of pleading to the amended claim or cause of action and the result would practically be allowing the plaintiff to begin a fresh suit de novo. But in the view we have taken of the case on the construction of the document, it seems to us unnecessary to discuss this question with regard to the application for amendment.

(3.) It is no doubt true that all such questions which have to be solved on a reading of the document, considering the language employed in the light of surrounding circumstances, and so forth, are generally fraught with great difficulty and we have, after giving the matter our earnest and serious consideration, come to the conclusion that, on a proper construction of the document before us, it is a mortgage by conditional sale. We have already adverted to the fact that this is not a case in which the transaction was brought about, as in most cases it is, by two documents either contemporaneous or, though not contemporaneous, as really parts of the same transaction. When parties to a transaction deliberately choose to conclude the transaction and embody it in writing not in one document but in two separate documents, there is always considerable room for the contention that the intention of the parties as disclosed by the fact that they required two documents to embody the transaction is indicated to be that they wished the sale and the resale to be separate legal transactions. Such consideration however is not available in the present case, because the parties have deliberately put in all the terms of the contract in the same document. It is unfortunate that there has been no satisfactory evidence of the surrounding circumstances, including the value of the property at the time of the transaction, which might be looked at for the purpose of helping the court in coming to a conclusion as to the real intention of the parties as disclosed in the language employed. We therefore begin this case with the fact that the parties really regarded it as not only a single transaction but as one that was fit and proper to be concluded by the instrument. The clause relating to the agreement for resale comes after the clauses effecting the conveyance and that clause begins with the Tamil word (Anal). The expression (Anal) clearly indicates that what follows is or should be regarded as a detraction or subtraction from the absoluteness of the sale previously in the document stated to have been made and effected. It may in this connection be noticed that, in form and apart from any personal covenants to pay, a mortgage by conditional sale is effected in all well-established English precedents of conveyancing first by what is purported to be an absolute conveyance of the property with a habendum that the purchasers should have and hold the premises absolutely for himself and his heirs, executors, administrators and assigns, subject however to the equity of redemption. The clause relating to the equity of redemption always begins with some such expression as "provided however that" or "provided always". Now in the Tamil language in which this document is drawn up it is impossible to conceive of a word more apt for the purpose of conveying the connotation and significance of a proviso of that character than the word (Anal). No doubt it might at first sight shock certain susceptibilities that the decision of such question should be made to depend upon the use of a single word like that. But after all the expression itself must be regarded as clearly indicating the intention and meaning of the parties, and if they did not contemplate by the use of that word to delimit in some manner the absoluteness of the sale therein before in the document stated to have been effected, there is no purpose in the use of the word. The whole of the document must be regarded in construing documents and no single word should be left out of consideration. Giving therefore its true and proper weight to the expression, the only conclusion that is possible to arrive at is that the estate granted by the previous clause, namely an absolute sale, is qualified by the conditions of provisos in this clause. The result then is that this Tamil document has somehow or other come to be framed and worded exactly in the same manner as a document of mortgage by Conditional sale in English precedents of conveyancing. I shall later on have occasion to refer to the definition in the Transfer of Property Act of a mortgage by conditional sale with special reference to this document, and also deal with the contention of Mr. B. Somayya for the respondents with regard thereto.