1. The plaintiffs sued as purchasers from the defendants to recover possession of the purchased lands which were subsequently leased to the defendants. The defendants pleaded that the transactions amounted really to a mortgage which they were entitled to redeem, and not to a sale and subsequent lease owing to a contemporaneous agreement for a resale. The original Court held in all the circumstances that the two documents effected a mortgage and not a sale. The first appeal Court held on a practically similar view of the circumstances that the two documents constituted a sale with an agreement for a re-sale.
2. The judgment of the learned Subordinate Judge is not as clear as it might have been and consists very largely of a vain repetition of the evidence without any indication of the particular Dearing of the evidence quoted upon the issues to be determined. But it appears that the following material facts were held established. On the 16th of September 1892 a relation on defendants sold ms interest in the lands for Rs. 300 to one Manikchand. On the 7th of November 1892 defendants bought out Manikchand for Rs. 300 raised by the sale and resale in suit. From 1895 onwards me defendants remained in possession as tenants of their purchaser with liability to pay the assessment amounting to Rs. 32 at a nominal rent of about Rs. 50. But as a matter of fact the assessment was not paid by the tenants but by the purchaser, so that the rent actually received was about Rs. 18 only, which would be interest at 6 per cent, on the purchase money Rs. 300, instead of the nominal rent of Rs. 50. There was, subsequent to the sale and resale, a transfer on the names in favour of defendant and not in favour of the purchaser in the revenue records. There was evidence to show that Rs. 300 was a wholly inadequate price for the lands. Two Kulkarnis stated that a fair rent would have been Rs. 75 a year, so that the real value of the lands would have been anything from Rs. 750 to Rs. 1,500. It appears that these were the facts up on which the original Court held that the real in ention of the parties in executing the two documents of sale and resale was to effect a mortgage and not an absolute sale with agreement of resale.
3. The first appeal Court appears to have accepted these facts generally, though the learned Judge, without stating definitely that he considered Rs. 300 a fair price, cast some doubt upon the value of the lands as estimated. On those facts he came to the opposite conclusion, namely, that the proper construction of the two documents was that they effected an absolute sale with an agreement for resale.
4. On second appeal to this Court it has-been urged that in view of the facts established and the contemporaneous nature of the two documents the proper construction would be that they constituted conditional sale. We have no doubt in all the circumstances that that is the proper construction and that the real intention of the parties was to effect a mortgage by conditional sale by the contemporaneous execution of the two documents of sale and resale. It was suggested on the other side that it was not open to us to speculate on the exact relations of the parties in this suit which was in form one between a landlord and tenant, but it appears to us that the real nature of the leases as well as of the transactions of sale and resale have been called in question in this litigation, and that we are bound to consider them in view of the very wide terms of Section 10A of the Dekkhan Agriculturists Relief Act.
5. We must, accordingly, allow this appeal and restore the decision of the original Court and reverse that of the appeal Court. Each party to bear his own costs of both appeals.
6. I concur in the judgment just delivered by my learned brother. I have no doubt but that the contemporaneous documents of 1892 do constitute what is known in this country as a mortgage) by conditional sale. Neither have I the least doubt that mat was the intention of the parties executing them. Such mortgages are legislatively recognised, and I have only to observe that in no true mortgage of this class will any debt be apparent. It is idle, therefore, to criticise mortgages by conditional sale by reference to the essential conditions of a mortgage in the English sense of that word. It only needs to peruse the judgments of the Courts relating to these mortgages to observe how necessary it is to bear this in mind when the question is whether upon an interpretation of documents alone the result is a mortgage by conditional sale or an out and out sale.