ABDUL RAHMAN Vs. MTBISMILLAH BEGAM

JUDGEMENT

(1.) This is a defendant's appeal arising out of a suit brought by the plaintiffs for redemption of a mortgage executed in favour of the defendant on 6 July 1928. The suit was contested by the defendant on the ground that the transaction was an out and out sale and that no suit for redemption was maintainable. The Courts below upon a consideration of evidence and circumstances came to the conclusion that the transaction was a mortgage by conditional sale and accordingly decreed the suit for redemption. It appears that the plaintiffs executed a sale deed with respect to the house in dispute for a consideration of Rs. 350. This deed was executed on 6 July 1928. On the same date the purchaser executed an agreement in favour of the vendors undertaking to retransfer the property within three years for a consideration of Rs. 350. The present suit for redemption was instituted some years after the expiry of the period provided in the deed of agreement. The question for determination is whether the transaction was an out and out sale as it purports to be, or was a mortgage by conditional sale. The lower Appellate Court has given reasons for holding that the transaction was not what it purported to be but was a mortgage as alleged by the plaintiffs.

(2.) A sale with a condition of retransfer is a common form of transfer in vogue in this country. It is often a matter of some difficulty whether a particular document or sot of documents disclose a transaction of mortgage by conditional sale or out and out sale. In order to bring a transaction within the category of mortgage the relationship of debtor and creditor must subsist between the parties and if there is no debt for which the transfer is a security it is impossible to hold that the transaction is a mortgage. When a document on the face of it appears to be a sale deed, in the absence of fraud, it must be held to embody a transaction of sale. The burden of proving it to be a deed of mortgage will rest heavily on the party alleging it to be so in Bhagwan Sahai V/s. Bhagwan Din (1890) 12 All. 387 their Lordships of the Judicial Committee quoted with approval the following passage from Alderson V/s. White (1858) 2 De G. & J. 97 : The rule of law on this subject is one dictated by common tense; that prima facie an absolute conveyance containing nothing to show that the relation of debtor and creditor is to exist between the parties does not cease to be an absolute conveyance and become a mortgage merely because the vendor stipulates that he shall have a right to repurchase.

(3.) To discharge the burden the contemporaneous conduct of the parties may be proved if it is permissible to do so under Proviso (b) to Section 92, Evidence Act. This Section excludes evidence of an inconsistent, oral agreement and provides only for cases of fraud invalidating a document. In Balkishen V/s. Legge (1900) 22 All. 149 their Lordships of the Privy Council observed: Their Lordships do not think that oral evidence of intention was admissible for the purpose of construing the deeds or ascertaining the intention of the parties. By Section 92, Evidence Act, no evidence of any oral agreement or a statement can be admitted as between the parties to any such instrument or their representatives in interest for the purpose of contracting, varying, or adding to, or subtracting from, its terms subject to the exceptions contained in the several provisos.... The case must therefore be decided on a consideration, of the contents of the documents themselves with, such extrinsic evidence of surrounding circumstances as may be required to show in what manner the language of the document is related to existing facts.