PUTTI SESHA AIYAR Vs. KUPPACHAR

JUDGEMENT

(1.) I see no reason to differ from the conclusion of the District Judge in this case that the sale deed, Exhibit F, executed by the defendants in favour of the plaintiffs was not a Benami transaction. The evidence shows that it was executed pursuant to an agreement, Exhibit G, by which the suit properties were to be sold to the plaintiff for Its. 6,000. of which Rs. 5,000 was to be paid into Court by the plaintiff, as was actually done, to set aside the Court sale of the properties. It is also the defendants own case, and has been found to be true, that there was a contemporaneous unregistered agreement for reconveyance, Exhibit XIII, executed by the plaintiffs in favour of the defendants on the same day. These and other facts in the case sufficiently negative the defendants case that the transaction was Benami.

(2.) A suit for specific performance of the contract to reconvey was barred at the date of the present suit, and in these circumstances the defendants raised the contention in the lower Court and again before us that the effect of the sale-deed, Exhibit F, by the defendants to the plaintiffs, read with the contemporaneous unregistered agreement to reconvey by the plaintiffs in favour of the defendants, Exhibit XIII, was to create a mortgage by conditional sale. There is express authority in this Court that an unregistered agreement to reconvey cannot have that effect, Achutaramaraju v. Subbaraju 25 M. 7 : 11 M.L.S. 370; Mutha Venkataehelapati v. Pyanda Venkataehelapati 27 M. 348; Rao Sahib Pydah Venkatachalapathi Garu v. Muthu Venkatachalapathi 23 Ind. Cas. 409 : 26 M.L.J. 151 : (1914) M.W.N. 178 : 1 L.W. 157, which was a decision of three Judges. As observed in the last case, the party setting up that the transaction amounted to a mortgage by conditional sale has to show that by virtue of the unregistered instrument (Exhibit XIII here) the sale deed (Exhibit F here) did not affect the immoveable property which is comprised both in the sale-deed and the unregistered letter, in the way in which the sale deed purports to affect the property, and would affect the property if the unregistered letter had never been written. That being so, the Court held in that case that the unregistered document was relied on as evidence of a transaction affecting immoveable property and, being unregistered, was inadmissible in evidence. A mortgage by conditional sale consists of an out and out conveyance and a defeasance clause, and as Mr. K. Srinivasa Aiyanar has pointed out, the unregistered agreement, Exhibit XIII, is tendered as evidence of the defeasance clause affecting immoveable property. It is, therefore, a document which requires registration under Section 17 of the Registration Act and is inadmissible for the purpose tendered under Section 49. Farther: Section 59 of the Transfer of Property Act provides that a mortgage can be effected only by a registered instrument signed by a mortgagor. The registered instrument signed by the mortgagor, the sale-deed, Exhibit F, does not effect a mortgage, and it would be contrary to this section also to allow it to be effected by a registered sale-deed and an unregistered agreement to reconvey.

(3.) Nor can it be used as evidence that the intention of the parties to Exhibit F was to create a mortgage. Exhibit F is on the face of it a sale deed, and it is now well settled that extrinsic evidence of the intention of the parties that it should only be a mortgage is inadmissible in India as again expressly ruled by the Judicial Committee in Maung Kyin v. Ma Shwe La 42 Ind. Cas. C. 320 : 15 A.L.J. 825 : 33 M.L.J. 648 : 3 P.L.W. 185 : 6 L.W. 777 : 22 C.W.N. 257 : 23 M.L.T. 36 : 27 C.L.J. 175 : 20 Bom. L.R. 278 : (1918) M.W.N. 300 : 9 L.B.R. 114 : 11 Bur. L.T. 21 : 44 I.A. 236 : (P.C.). The appeal fails and is dismissed with costs. Seshagiri Aiyar, J.