MUTHUVELU MUDALIAR Vs. VYTHILINGA MUDALIAR

JUDGEMENT

(1.) It is in my opinion not open to us to answer the question referred to us in the affirmative consistently with the decisions of the Privy Council in Pattabhiramier v. Venkatarow Naicken (1871) 13 M.I.A 560, Thumbusawmy Moodaly v. Hossain Rowthen (1875) I.L.R. 1 Mad, Sithal Pershad v. Luchmi Pershad (1883) I.L.R. 10 Cal. 30, Bhagwan Sahai v. Bhagwan Din (1890) I.L.R. 12 All. 387, Balkishen Das v. W.F. Legge (1899) I.L.R. 22 All. 149 and Jhanda Singh Wahiduddin (1916) I.L.R. 38 All. 570. All these decisions lay down that in cases in India not governed by Bengal Regulation XVI of 1806 instruments of this kind are to take effect according to their tenor, unless it appears from the terms of the instrument or the surrounding circumstances, excluding oral evidence of intention as inadmissible, that the intention was to effect a mortgage. In Thumbuswamy Moodaly v. Hossain Rowthen (1875) I.L.R. 1 Mad. 1 the Privy Council refused to disturb a decision of this Court which took a different view, because it considered that the parties might have been misled by a course of decisions in this Court which their Lordships held to be erroneous, but they also indicated with sufficient clearness that there was no room for any such misconception in future.

(2.) In Balkishen Das v. W.F. Legge (1899) I.L.R. 22 All. 149 there were held to be sufficient indications that the transaction was intended to be a mortgage, and this decision was explained as proceeding on this ground in the subsequent decision in Jhanda Singh v. Wahiduddin (1916) I.L.R. 38

(3.) It is true that all these cases dealt with transactions before the passing of the Transfer of Property Act, but I do not think that Act made any difference in the law on this subject in this part of India. In Balkishen Das v. W.F. Legge (1899) I.L.R. 22 All. 149 their Lord-ships observed that it might be assumed that the frarners of the Transfer of Property Act intended in Section 58 to state the existing law and practice in India. The section begins with a definition of the terms "mortgage" "mortgagor." and " mortgagee", and proceeds, as pointed out by Napier, J., to describe or define the different sorts of mortgages which are met with in India. Sub-section (c) deals with mortgages by conditional sale in which the transaction is ostensibly a sale or transfer of ownership in exchange for a price (Section 54), but is really intended to be a mortgage or transfer of an interest in specific immoveable property for the purpose of securing the payment of money, Section 55(a). As the transaction is really a mortgage and only ostensibly a sale, Sub-section (c) refers to the transferor as the mortgagor, and speaks of the ostensible sale of the mortgaged property subject to certain conditions as to the payment of the mortgage money. Whether a particular transaction is really a sale, or ostensibly a sale and really a mortgage, must still be decided in accordance with the decisions of the Privy Council in the cases already cited. There is in my opinion nothing in the definition in Section 58 (c) which favours the view that wherever the sale-deed and the agreement to reconvey from one transaction it must necessarily be a mortgage and not a sale. On the other hand both in Sithal Pershad v. Luchmi Pershad (1890) I.L.R. 12 All 387 and Bhagwan Sahai v. Bhagwan Din (1888) I.L.R. 10 Cal. 30 there was clearly only one transaction, and it was none the less held by the Privy Council to be a sale and not a mortgage. For these reasons I am of opinion that the decision in Palauiappan v. Subbaraya Goundan (1913) I.L.W. 80 should be overruled and the question answered in the negative. Oldfield, J.