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Asvath Narayan Astaputre Vs. Chimabai Gopalrao Sadekar - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtMumbai
Decided On
Case NumberSecond Appeal No. 200 of 1923
Judge
Reported inAIR1926Bom107; (1925)27BOMLR1246
AppellantAsvath Narayan Astaputre
RespondentChimabai Gopalrao Sadekar
DispositionAppeal dismissed
Excerpt:
.....to the defendant in consideration of the amount due. the document was stamped and registered as a sale deed. the plaintiff having sued to redeem, treating the document as a deed of mortgage :; on a construction of the document, that it was in reality a sale deed and not a deed of mortgage and that it evidenced a contingent sale of the kind contemplated in chapter iii of the indian contract act. - - if for any reason we fail to pay the amount during the stipulated time, then in lieu of the aforesaid sum, the government land survey no. we shall not fail therein. it is of course true that one of the main tests in considering a question like that now before us is the relation of the consideration mentioned in the document to the real value of the property transferred, and if the former..........the khata of the land transferred from my name to that of yours. we shall not fail therein. this sale deed is therefore executed while in sound state of mind.signed on 17th february 1894 of the christian era shake 1785 rudhirod. garinam sumvatsara magh shudh 10th, mark of huvappa bin umana advekar.2. it is to be remarked that the words in this document translated as ' is sold to you ' do not give full force to the words in the vernacular, which contain the word ' lagchat.' this has the meaning of an ' absolute ' sale, as noted by the translator in the translation that has been prepared for the purpose of this appeal. on its face, therefore, the document is one by which, in the event of the executant huvappa not paying the sum of rs. 100, with intercut at the rate mentioned in the.....
Judgment:

Fawcett, J.

1. The only point that arises in this second appeal is whether the lower appellate Court has erred in holding that the document Exhibit 50 was a sale, and not a mortgage, transaction. In taking this view it differed from the trial Court which held the document to be a mortgage that could be redeemed by the plaintiff, who brought thin suit for redemption within sixty years from the date of the document. The document has been translated in the judgment of the trial Court as follows:-

We have borrowed from you the sum of Rs. 100 in words Rs. one hundred) for oar necessity. Be it so. The rate of interest agreed on this is half an anna per rupee per mensem Be it so. How the period to repay the same is fixed to be within two months from today, during which period we shall repay you the aforesaid principal and the interest also and we shall take back this deed. If for any reason we fail to pay the amount during the stipulated time, then in lieu of the aforesaid sum, the Government land Survey No. 93, 5 acres -21 gunthas assessed at Km. 12,, together with the pimpal tree standing in my Khata, is sold to you for the aforesaid amount in full satisfaction. Be it so. Accordingly yon should occupy and use the land and go on paying the Government assessment. No sight, title and interest in the said land remains to me. We shall give a Rajinama to Government and get the Khata of the land transferred from my name to that of yours. We shall not fail therein. This sale deed is therefore executed while in sound state of mind.

Signed on 17th February 1894 of the Christian Era Shake 1785 Rudhirod. garinam Sumvatsara Magh Shudh 10th, Mark of Huvappa Bin Umana Advekar.

2. It is to be remarked that the words in this document translated as ' is sold to you ' do not give full force to the words in the vernacular, which contain the word ' Lagchat.' This has the meaning of an ' absolute ' sale, as noted by the translator in the translation that has been prepared for the purpose of this appeal. On its face, therefore, the document is one by which, in the event of the executant Huvappa not paying the sum of Rs. 100, with intercut at the rate mentioned in the document, within two months from the date of the document, the land mentioned in it was absolutely sold to Nageshappa Naik. The document has the heading ' sale deed ' and in its concluding sentence it is also referred to as a sale deed. It has also been pointed out that the stamp paid on the document is one that was correct for a sale deed under the Indian Stamp Act then in force, viz., Act X of 1862, whereas a mortgage deed or an agreement to sell only required a stamp of annas eight. But the appellant's counsel is of course correct in saying that the above considerations are not in themselves conclusive; and although we have to give them due weight, the main thing we have to consider is the terms of the document itself and the surrounding circumstances so far as they appear in evidence and are relevant, in order to determine whether the real intention of the parties in executing this document was to enter into a mortgage transaction or a sale transaction.

3. There are two considerations, which are relied upon by the Subordinate Judge in his judgment as indicating that the document evidences a mortgage and not a sale, that can first be disposed of. The first of these is that, as the land is described in the document as assessed at Rs. 12, it might reasonably be expected to bring in an income of Rs. 40 to 50, and it would be absurd to suppose that such land would be sold for Rs. 100 only. It is of course true that one of the main tests in considering a question like that now before us is the relation of the consideration mentioned in the document to the real value of the property transferred, and if the former sum is grossly inadequate, then it affords an indication that the vendor did not intend to sell the land out and out. But of course, before this view is taken, there must be reliable ground for holding that there has been an inadequacy of price such as I refer to. In the present case no evidence has been adduced to show what wore the net profits from the land that were realized or probably realizable in or about the year 1864, when the document was executed. The Court in considering the question of probable net profits can of course take into consideration the assessment of the land. For it has long been an important element in fixing assessments in this Presidency that, it bears a certain relation to the fertility and other circumstances of the land, and us a rough valuation the capital value of a piece of land is often taken as so many times the assessment. But I think that while this may be a fairly safe method of calculating net profits of land that has been assessed at the original survey of about 1880 onwards, it would be very dangerous to hold this equally applicable to assessments fixed some time prior to 1864. I should first of all like to know what were the principles that guided the survey officers in fixing assessments on land at that time. In the absence of some evidence or work of reference to indicate this, I should hesitate to hold that it is a safe basis to go upon in a case like the present. It is to my mind not unlikely that the assessment of Rs. 12 in force at the time of this document was relatively heavier than what would have been imposed, if the assessment had been fixed on the principles followed in the original survey, with due regard to local conditions and prices at the time when the assessment was fixed. Thus the plaint shows that at the date of the suit the same hind was assessed at Rs. 16 or only Rs. 4 more, and that seems to me to give some indication that the land was somewhat over-assessed in 1864. Consequently, I do not think that the Subordinate Judge was justified in holding that the land could not have been intended to have been sold for Rs. 100, plus the interest of Rs.10, in 1864.

4. Then, secondly, the Subordinate Judge has relied upon the question of possession as being in plaintiff's favour. He says : ' Lastly the land was to be the vendee's (I use the term for the sake of convenience) only if there be a default in the payment of the principal sum and interest, it was then only that the Rajinama was to be given and Khata changed and the Khata of the land stood in the name of the son of Huvanna.' This last statement is one which is not supported by any evidence on the record. On the contrary, it seems to me to be contradicted by the extracts from the record of rights, Exhibits Nos, 51 to 56, which show that this land at a partition had gone to the share of a member of the Nagesh family, who sold it in 1902, and that in 1909 the vendee Nageshrao brought a suit to set aside the sale an i succeeded in it. That does not seem to have been controverted by the appellant's pleader in the appeal to the District Judge. It was apparently taken as a fact that Nageshrao had come into possession of the property sometime about the execution of the deed. Therefore this point, in my opinion, also goes out.

5. The main contention for the appellant is that the document says that there was a debt due to Nageshappa on which interest was to be paid and that the circumstances show that the main idea was to give the land as security for the loan. But against this is the fact that, as the document stands, there was no mortgage on the land in respect of the debt during the two months' period referred to in the document. If it had been intended that the land should be a security for this debt during those months, then there would be nothing easier than to express that by a few words. I cannot accede to the contention put before us that there was an implied mortgage, as I think very much stronger circumstances are requisite for the Court to read such an implication into the terms of the document. Then coming to what was to happen on the expiry of the period of two months in default of payment, the document says that the land is to be absolutely sold to Nageshappa, he is to carry on the Vahivat of the land and the Khata is to be transferred to his name. Certainly so far, words could hardly be clearer to show that the intention was to have an absolute sale. It is suggested that this is merely an ostensible sale, and that the case is one fulling under Clause (c) of Section 58 of the Transfer of Property Act, namely, a mortgage by conditional sale. It is, however, to my mind quite clear that the case cannot fall under any of those cases mentioned in this particular clause It is not one where the mortgagor ostensibly sells the mortgaged property on condition that on default of payment of the mortgage money on a certain date the sale shall become absolute. This is a case where, as a matter of fact, there is no mortgage of the property by the terms of the document, during the two months' period. Even if there had been a condition that within a certain period from the sale taking effect the sale should become absolute unless this debt of Rs. 100 and interest wore paid, it still could not be held to be a case covered by this Clause (c) for the reason given in Kandulit Venkiah v. Donga Pallaya I. L. R. (1920) Mad. 589 which points out that to bring a case under this Clause (c) there must be an ostensible sale to begin with. Nor is the case one that can be held to fall under either of the two other cases mentioned in Clause (c), namely, on condition that on such payment being made the sale shall become void, or on condition that on such payment being made the buyer shall transfer the property to the seller. I think that at the most it could only he treated as an anomalous mortgage of the kind referred to in Section 98 of the Transfer of Property Act. But if that view is accepted, the further difficulty faces the plaintiff that according to the Madras High Court there is no right of redemption under Section 60, which can be relied upon as superseding the express terms of the contract (see Hakeem Patte Muhammad v. Shaik Davood I. L. R. (1915) Mad. 1010 But I do not consider it necessary to go into that particular point, because I think there are no sufficient grounds for holding that this document Can be treated as a mortgage transaction.

6. The appellant's counsel relied upon the decision in Kola Venkaianarayana v. Vuppala Ratnam I. L. R. (1900) Mad. 531 which relates to a document somewhat similar to the one in the present case. There the deed contained a promise to pay the principal with interest by a certain date, and it was provided that if there is failure to pay accordingly, the land shall be given up as if it was a sale. It was held that this document was a mortgage by conditional sale, but unfortunately in so far as the judgment of the Court proceeds upon the case being one falling under Section 58 (c) of the Transfer of Property Act, it is distinctly overruled by the subsequent case already mentioned, and this ruling was in fact cited in one of the referring judgments at page 593. The authority of this case is further affected by the contrary decision of the same High Court in Butchiraju v. Ramalingamurty (1903) 14 M. L. J. 337 . A similar document was there held not to be a mortgage but to be a sale. That case has been distinguished in Kola Venkatanarayana v. Vuppala Ratnam (1006) I. L. R. Mad. 531 on the ground that the document was described by a certain vernacular term, which denoted that there was a mortgage with an option to treat the transaction as a sale in certain events But no such consideration can apply to the present case where, as already mentioned, the document itself is described as a sale deed and the wording several times mentions that it is a sale. Then I may also refer to the reasoning of Batchelor J. in Narayan v. Vigneshvar (1916) 18 Bom. L R. 250 in support of my view that this document cannot be treated as in any way a mortgage by conditional sale under Section 58 (c) of the Transfer of Property Act, inasmuch as the preliminary requirements of a mortgage under Section 58 are not satisfied.

7. It is perhaps unnecessary to go into that part of the District Judge's judgment, which discusses whether any interest in the land was transferred by this document, but I differ from him for the following reasons. He holds that it could not have transferred any interest for the purpose of securing payment of the money advanced. No doubt, so far as it is a contract for sale, it did not create any interest in or charge on the property, in view of the express provisions of Section 54 of the Transfer of Property Act. But the document does not say that, if the amount is not paid on the due date, the executant will execute a regular sale-deed in favour of Nageshappa, or words to that effect, but it states that on the default in payment, the land is actually sold in consideration of the amount due. Taking the wording of the document us it stands, it seems to me that the proper construction to put on it is that it evidences a contingent sale of the kind contemplated in Chapter III of the Indian Contract Act. It is an actual sale, subject to the condition that it is not enforceable if the executant Huvana Advekar pays a certain sum within a certain time. If he made that payment, the sale would be void under Section 35 of the Indian Contract Act. If he did not make that payment, the sale was one which became enforceable by law under the same section. Therefore I do not support this part of the District Judge's argument. But I am of opinion that there is nothing which shows that the intention of the parties was that the land should merely be taken by Nageshappa by way of security for repayment of Rs. 100 plus interest. I think that the District Judge is correct in holding that the parties intended that there should be an actual sale, and that no sufficient grounds have been shown for our interfering with his decree. I would, therefore, dismiss the appeal with coats.

Madgavkar, J.

8. The question in this appeal is whether the deed; Exh. 50, is a mortgage or sale. The answer must be sought in the terms of the deed itself and the evidence of surrounding circumstances to show in what manner the language of the document is related to existing facts : Narasingerji v. Parthasaradhi Rayanam Garu I. L. R.(1924) Mad. 720 .

9. The word 'mortgage' is not to be found in the deed whereas the word 'sale' is stated three times, and it is registered as a sale and not as a mortgage. The period of repayment is two months under the deed itself and refers to a prior debt, and it is not apparent that the debt was continued thereafter. Whether the possession passed is not clear from the evidence and the trial Court is in error on the point. The present suit is only brought after two transfers.

10. There is no sufficient evidence of inadequacy of price. The argument in the judgment of the trial Court is in effect a surmise. It is difficult to appreciate its reference as to prices the values and the land settlement in 1865, about which there is no evidence on the record Without referring to any of the numerous other cases it appears to me that the terms most resemble the document in Butchiraju v. Ramalingamurty (1903) 14 M.L.J. 337 I agree, therefore, that the document is in terms and appears to have been intended to be a sale and not a mortgage by conditional sale. The appeal, therefore, fails and must be dismissed with costs.


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