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Harkisandas Bhagvandas and ors. Vs. Bai Dhanu - Court Judgment

LegalCrystal Citation
Subject property
CourtMumbai
Decided On
Reported inAIR1926Bom497
AppellantHarkisandas Bhagvandas and ors.
RespondentBai Dhanu
Excerpt:
- - the lower court's view that exhibit 39 cannot be treated as a separate document entirely apart from the sale-deed, exhibit 38, is, in my opinion, clearly correct. in the present case,,on the facts found, the weight of the evidence is clearly against the transaction being really a mortgage; 114, though a contract like this might be enforced against the promisor himself during his lifetime, this does not affect the applicability of the rule against perpetuities, when it is sought (as here) to enforce the contract against the heirs of the covenantor. consequently, the english decisions like london and south. section 40 in paragraphs 1 and 2, also clearly distinguishes between such an interest and mere obligations arising out of contract such as a contract for sale of land. if the.....fawcett. j.1. the main question in this appeal is whether the lower courts have erred in holding that the document, exhibit 39, is inadmissible in evidence for want of registration. the sale-deed, exhibit 38, was passed on the same day, november 1, 1898, and both documents were written by the same writer, nathabhai jayachand, one of the attesting witnesses to exhibit 38, rajaram narbheram, signed exhibit 39 for the executant, bai jivi. it, therefore, seems clear that the two documents evidence one transaction, and that the second document; exhibit 39, was not an independent transaction arranged, as an afterthought, subsequent to the execution of exhibit 38. the plaintiffs also treated the two documents as one transaction by their allegation that they evidenced a mortgage. the lower.....
Judgment:

Fawcett. J.

1. The main question in this appeal is whether the lower Courts have erred in holding that the document, Exhibit 39, is inadmissible in evidence for want of registration. The sale-deed, Exhibit 38, was passed on the same day, November 1, 1898, and both documents were written by the same writer, Nathabhai Jayachand, One of the attesting witnesses to Exhibit 38, Rajaram Narbheram, signed Exhibit 39 for the executant, Bai Jivi. It, therefore, seems clear that the two documents evidence one transaction, and that the second document; Exhibit 39, was not an independent transaction arranged, as an afterthought, subsequent to the execution of Exhibit 38. The plaintiffs also treated the two documents as one transaction by their allegation that they evidenced a mortgage. The lower Court's view that Exhibit 39 cannot be treated as a separate document entirely apart from the sale-deed, Exhibit 38, is, in my opinion, clearly correct.

2. Also I agree with the view of both the lower Courts that the transaction is not shown to have been one of mortgage, as alleged by the plaintiffs. The Subordinate Judge has considered all the circumstances and found that the transaction was one of sale and not of mortgage (p. 14, line 32). The Assistant Judge has come to the same conclusion : see his Issue No. 3 and remarks thereon. It is true he has considered the question on the basis of Exhibit 39 being inadmissible in evidence; but this does not make any material difference, apart from a contention that Mr. Jayakar for respondent put before us. This is that the provision in Exhibit 39 for interest being added to the purchase-money, and for finding the amount due at the time of payment and reconveyance, shows that the transaction was intended to be a mortgage. In support of this, reference was made to the judgment in the leading case of Alderson v. White [1858] 2 De.G. & J. 97, followed by the Privy Council in Bhagwan Sahai v. Bhagwan Din [1890] 12 All. 387. No doubt, the Lord Chancellor there lays stress on the second instrument giving a right of a re-purchase on payment not of what should be due but of the actual amount of the purchase-money, but this cannot be taken as intending to lay down that, in every case where the payment for re-purchase is to include some interest, the transaction must be treated as a mortgage. It can undoubtedly be an important circumstance in favour of its being a mortgage-transaction, but it may be outweighed by other circumstances. In the present case,, on the facts found, the weight of the evidence is clearly against the transaction being really a mortgage; and it is not unnatural, in view of no time-limit being fixed within which the option of repurchase was to be exercised, that provision should be made for the payment of interest.

3. The question, whether in a case of this kind the second document requires registration, was fully considered by this Bench in Vaman v. Changi 27 Bom. L.R. 1261. We held that we were bound by the current of decisions of this Court to hold that in the case of a transaction which is not a mortgage, an agreement to reconvey, even though it may be argued to limit the right of the purchaser, is not compulsorily registrable. Otherwise we were disposed to refer the question to a Pull Bench. Since that decision, however, our attention has been drawn to the contrary ruling of the First Division Bench in Gajanan v. Jivangiri 27 Bom. L.R. 1465 given about a month later. In his judgment the learned Chief Justice says (p. 1467):

From the evidence in that case it was shown how Exhibit 30 came to be executed. Although the sale-deed is dated March 2, 1897, it was really executed after Exhibit 30. The chelas would not execute the sale-deed until they obtained the agreement from their creditors. It is obvious, therefore, that these documents evidence one transaction, and therefore the principle which was laid down in Bala v. Sadashiv : (1921)23BOMLR1066 after a consideration of the decision in Sayad Mir Gazi v. Miya Ali [1914] 38 Bom. 703 would be applicable. Each case must stand on its own facts. If the agreement to reconvey can be treated as a separate transaction, as it was in the case last cited, then under Section 54 of the Transfer of Property Act, it vests no interest in the property and need not be registered. But if the document which has not been registered, is really a part and parcel of the transaction, which is only partly evidenced by the registered document, then it is clear that the other document also requires to be registered. In other words, when a transaction is evidenced by a document, which is in effect divided into two parts, one of which is registered and the other is not, then the law looks to what is the real transaction between the parties, and demands that the whole document evidencing that transaction must be registered, whether it consists of one part or two.

4. Coyajee, J., says (p. 1469):

Chamelgiri has given the reasons why he and the other vendors would not execute the sale-deed unless and until the purchasers agreed by a separate document (Exhibit 30) to reconvey the property, that is, not to deal with the property as full owners for a period of twenty-one years. The transaction, then, was one and indivisible; it was to be found partly in one document and partly in the other. Exhibit 33 purports to be a deed of absolute sale and has been duly registared. Exhibit 30, which purports to limit the purchaser's interest in the property conveyed under, the former document, has not been registered, This latter document came under Section 17(1)(6) of Act III of 1877 and its registration was compulsory; it did not fall within the exception contained, in Section 17(h) of that Act which now corresponds to Section 17(2)(v) of Act 16 of 1908 : Achutaramaraju v. Subbaraju [1902] 25 Mad. 7. The facts of this case distinguish it from those cases in which a registered dead of absolute sale is followed, soon or late, by an unregistered agreement to reconvey the same property. The question whether an agreement to convey immovable property exceeding Rs. 99 in value does or does not require to be registered must, in each case, be decided on a consideration of the contents of the document itself and of such facts as might hi proved for the purpose of showing in what manner the language of the document is related to existing facts. Proximity of time, or even the identity of the dates of the two documents, is not the decisive circumstance in all cases.

5. In his further remarks Coyajee, J., distinguishes our decision in Vaman v. Changi 27 Bom. L.R. 1261 on the ground that in the latter case the documents embodied each a separate and distinct transaction. With due respect, that is contrary to my treatment of the documents, for I say in my judgment (p. 1266):

It is a case of a contemporaneous agreement to reconvey, forming part of the actual transaction by which the owner acquires title.

6. However that may be, the two documents in the present case constitute, as already held by the lower appellate Court, one single transaction, and this case cannot be similarly distinguished.

7. It seems to me to be an unsatisfactory position for two Benches of this Court to take different views on an important question of this kind, which is frequently wising. I still feel a difficulty about the current of previous authority in this Court which is referred to in my judgment in Vamun v. Changi 27 Bom. L.R. 1261. Also, on further consideration, the decision in Sayad Mir Gazi v. Miya Ali [1914] 38 Bom. 703, though it deals with the case of an intended mortgage, seems to me to cover the present question. It decides, in effect, that in a single transaction, whether of mortgage or sale, the agreement to reconvey can be treated as entirely separate from the accompanying conveyance. Coyajee, J., in his judgment in Gajanan's case 27 Bom. L.R. 1465 treats do as a decision relevant to the present question, but distinguishes it on the ground that the two documents embodied each a separate and distinct transaction. This seems to me entirely opposed to the finding of the High Court that the transaction was really a mortgage. Without the second document, it would have been a sale, and the real transaction was recorded in the two documents. In such a case, the property transferred being worth more than Rs. 100, it could only 'be effected by a registered instrument tinder Section 59 of the Transfer of Property Act; and, as pointed out in Bala v. Sadashiv : (1921)23BOMLR1066 and Mutha Venkatachelapati v. Pyanda Venkatachelapathi [1903] 27 Mad. 348, this involves that the second document should also be registered. This consideration appears to have been overlooked by the Court in Sayad Mir Gazi's case [1914] 38 Bom. 703 and the law laid down as to the possibility of separating the two documents in such a case is, I submit, with due deference, erroneous. But the case, although criticized as an 'extreme case' in Bala v. Sadashiv : (1921)23BOMLR1066 has not yet been overruled, and the result is, in my opinion, unsatisfactory. For instance, the District Judge in Vaman's case 27 Bom. L.R. 1261 followed it because it had not been overruled and as Bala v. Sadashiv : (1921)23BOMLR1066 has not been reported in the authorized reports, even the criticism of the other decision can technically be disregarded by a Subordinate Court (Section 3 of Act 18 of 1875) and cf. Swryaprakasam v. Mimuswamy Chetty A.I.R. 1925 Mad. 348. Though this: cant no doubt, be corrected by having Bala v. Sadashiv : (1921)23BOMLR1066 reported in the Indian Law Reports, I think in any case it is desirable to have the question and previous authorities considered by a Full Bench and a definite rule laid down on the subject. I would, therefore, refer the following question to a Full Bench:

Whether when a registered deed of sale (A) of immovable property worth Rs. 100 or over is passed, and as part of the same transaction and not as an independent transaction, the vendee executes an unregistered agreement (B) to re-convey the property to the vendor on payment of a certain sum of money, the document (B) is inadmissible in evidence for want of registration under Section 17(1)(b) and Section 49 of the Indian Registration Act, either:

(a) where the transaction constitutes a mortgage, or

(b) where it is a bona fide sale with a contract for re-purchase.

8. I would add that, although the suit is one for redemption on the basis of the transaction being a mortgage, the plaintiffs in the lower appellate Court applied to be granted relief for specific performance of the agreement. Exhibit 39, if they were held not entitled to the relief prayed for. If the document is held to be admissible in evidence, then the question of their being allowed to amend the plaint and to have such reliefs should be separately considered. I do not think it would be just to reject the suit, merely because the plaintiffs did not ask for this alternative relief.

9. Mr. Jayakar has supported the decrees of the lower Courts by raising a new objection to the plaintiffs' suit. As it is a pure point of law it can be taken in second appeal. Relying on the ruling in Dinkarrao Ganpatrao v. Narayan Vishwanath A.I.R. 1925 Bom. 84, he urges that he agreement, Exhibit 39, is void as of finding the rule against perpetuities. No time limit is fixed by it; but it Was contended for appellants that both parties to it were over fifty, and the agreement therefore mentioned the heirs of each party, the meaning being that only the immediate heirs would be bound by it. I do not think that the general word 'heirs' can properly be so limited; but even assuming this to be the right construction, it does not really make any difference. The possibilities at the time of the execution of the document have to be considered, and at that time the combined lives of Ranchod (the vendor) and his next heir who might not be in existence at the date of the document could possibly extend over the statutory limit of time fixed in Section 14 of the Transfer of Property Act. As is pointed out in Kolathu Ayyar v. Ranga Vadhyar [1912] 38 Mad. 114, though a contract like this might be enforced against the promisor himself during his lifetime, this does not affect the applicability of the rule against perpetuities, when it is sought (as here) to enforce the contract against the heirs of the covenantor.

10. On the main question, there is a considerable conflict of authority. I need not set out all the cases : they will be found referred to in the judgments in Charamudi v. Raghavulu [1916] 39 Mad. 462, Dinkarrao Ganpatrao v. Narayan Vishwanath A.I.R. 1925 Bom. 84 and Basdeo Rai v. Jhugru Rai 46 All. 333, which are the latest authorities on the subject. The Bombay decision is in favour of Mr. Jayakar's contention, but the remarks in the judgments as to the law applicable to cases to which the Transfer of Property Act applies (such as the present case) are obiter dicta and not binding upon us. This is clear from the fact that the contract under consideration in Dinkarrao's case A.I.R. 1925 Bom. 84, was one of 1878 and it was held that prior to Transfer of Property Act, 1882, a contract for the sale of immovable property created an equitable interest on the property and made the purchaser an owner in equity. Consequently, the English decisions like London and South. Western Railway Co. v. Gomm [1882] 2 Ch. D. 562, which are based on such contracts creating an equitable interest, and so infringing the rule against perpetuities, would apply. It was not, therefore, really necessary to decide the question whether the law would be the same in cases governed by the Transfer of Property Act. But, of course, the views expressed on this point must have the greatest weight with us. On the other hand, the judgment in Charamudi v. Raghavalu [1916] 39 Mad. 462 is not considered in Dinkarrao's case A.I.R. 1925 Bom. 84 and one of the judgments in Basdeo Rai v. Jhagru Rai 46 All. 333 criticies the view taken in Dinkarrao's case A.I.R. 1925 Bom. 84. Both these decisions are against the Bombay ruling.

11. In the circumstances I shall not discuss the question at length, but briefly indicate the conclusion I have come to.

12. I do not think that Section 14 of the Transfer of Property Act can properly be held to cover a case of a contract far sale, which under Section 54, does not create an interest, in the land. Section 40 in paragraphs 1 and 2, also clearly distinguishes between such an interest and mere obligations arising out of contract such as a contract for sale of land. The general rule is that a word which occurs more than once in the same Act should be construed so as give it the same meaning throughout the Act, unless some definition in the Act or the context shows that the Legislature used the word in different senses : cf. Baij Nath v. Sital Singh [1882] 2 Ch. D. 562. The word 'interest' in Section 14 should, accordingly, be construed in a sense consistent with the provisions of Sections 40 and 54 : so construed it cannot be held to cover a contract of the kind in question. On this point I agree generally with the view taken in Basdeo Rai's case 46 All. 333.

13. Also, I think that a contract of this kind does hot fair under the word 'transfer' within the meaning of Section 14, read with Section 5. There is no conveyance of property in present or in future by such' a contract, as is also shown by the distinction drawn in Section 40 to which I have already referred. It is on the same footing as a covenant for renewal of lease from time to time, which was held in Pichi Naidu v. Jefferson [1921] 44 Mad. 230 not to be a 'transfer.' Consequently, for this reason also, the case cannot be held to fall under Section 14. I may add that, even in Kolathu Ayyar v. Ranga Vadhyar [1912] 38 Mad. 114, which is relied upon in Dinkarrao's case A.I.R. 1925 Bom. 84 it was held that (p. 117):

Saetion 14 of the Transfer of Peoperty Act, which makes the rule against the perpetuities applicable In this country does not apply to merely contractual rights.

14. But the Court further held that there is no reason why the principle of the rule should not be applied to contractual rights of the kind under consideration. On this point I think there are very weighty considerations against holding fact the principle can be so applied, in spite of the fact that the Transfer of Property Act does not enact any such extension of the rule in the case of contracts for sale. If the Legislature had intended any such extension, the presumption is that it would have been clearly enacted, especially as the Act covers the case of contracts for sale (as shown by Sections 40 and 54) and the rule against perpetuity is the subject of a specific section. I should say, in these circumstances, that the maxim 'expressio unius est exclusio alterius' applies against this view of the principle being applicable in spite of the eactment not being applicable.

15. On the other hand, we have the authority of the Privy Council for applying the principle of res judicata to cases not covered by Section 11 of the Civil Procedure Code, so I do not mean to say the above argument is necessarily conclusive.

16. The Transfer of Property Act is, so far as it relates to contracts, to be taken as art of the Indian Contract Act (Section 4.); and so it is, of course, open to the Courts to hold that such contracts are 'opposed to public policy ' and therefore void under Section 23 of the Indian Contract Act. But it does not follow that merely because such contracts have been held void and opposed to public policy in England, they should be similarly dealt with in India. Thus, an agreement, champertous according to English law, is not necessarily void in India : cf. Bhagwat Dayal Singh v. Debi Dayal Sahu [1921] 44 Mad. 230. And it seems to me that, as such contracts can only be enforced (if there is a dispute) by a suit for specific performance, and the Court has a discretion to refuse specific performance, each case can be dealt with as it arises; and there is no real reason for saying that such a contact should be void ab initio in every case. If specific performance is sought at the time when the principle of the rule against perpetuity may be said to operate, or rather when the estate would be unduly 'tied up' by holding the contract still enforceable, I conceive, the Court might legitimately refuse the plaintiff relief by specific performance, and would at moat give him only nominal damages under Section 19 of the Specific Relief Act. I may refer in this connexion to the remarks of Farwell, L.J. in South Eastern Railway v. Associated Portland Cement Manufacturers (1900) Limited [1910] 1 Ch. 12, cited in Charamudi V. Raghavulu [1916] 39 Mad. 462, which seems to me to support this view. As mentioned in Vithoba Madhav v. Madhav Damodar [1918] 42 Bom. 344

The sentiment of the agricultural, classes in this country towards their land is well known to every Judge of experience.

and there is no reason to discourage agreements allowing for the re-purchase of land by a vendor or his descendants within a reasonable time. Such documents in the mofussil are generally drafted by persons without any legal attainments and with no idea of such technicalities of English Law as the rule against perpetuity. To make every such document void, if it fails to fix a proper time limit, will, in my opinion, result in much more injustice than is ever likely to result from holding the rule against perpetuity not applicable to such contracts.

17. Again, is there any real Current of authority for holding such a contract to be 'opposed to public policy?' I do not go so far as to say, like Sulaiman, J., in Basdeo Rai v. Jhagru Rai 46 All. 333:

I know of no authority' for saying that where no interest in land; legal or equitable, present or future, is purported to have been created and the, rule against perpetuities does not apply, the principle underlying the rule can apply.

18. Kolathu Ayyar v. Ranga Vadhyar [1912] 38 Mad. 114 can, for instance, be cited, as already mentioned, as such an authority. There is also an old authority S.M. Krishnaramani Dasi v. Ananda Krishna Bose [1869] 4 B.L.R. (O.C.) 231, cited in Asutosh Mukhopadhay's Law of Perpetuities in British India (Tagore Law Lectures - 1898), p. 77. But there certainly is no strong current of such decision; and a point to bear in mind is the arbitrary and accidental nature of the period fixed by the rule against perpetuities, which is referred to in the work just mentiond at p. 76.

19. The Privy Council case of Maharaj Bahadur Singh v. Balchand [1920] 48 I.A. 376 deals with a deed of 1872, before the Transfer of Property Act came into force and when, therefore, the law in India was different under the view taken in Dinkarrao's case [1882] 2 Ch. D. 562, Their Lordships did not consider the question with reference to the provisions of the Transfer of property Act or the Indian Contract Act. I may refer in this connexion to Sulaiman, J'.s remarks in Basdeo Rai's case [1882] 2 Ch. D. 562. For these reasons I do not think it is a real authority on the question now before us. I, therefore, hold that we are not bound by the decision in Dinkarrao's case A.I.R. 1925 Bom. 84 and that the contract, Exhibit 39, is not void on ground put forward by Mr. Jayakar.

20. As my learned brother agrees, we make a reference to a Full Bench in the terms I have already given.

Madgavkar, J.

21. This was a suit by the plaintiffs-appellants to recover possession from the defendant-respondent of certain property. On November 1, 1898, the father of the Plaintiff-appellant No. 2 passed a registered deed to the predecessor-in-title of the defendant-respondent, and took from the latter on the same day an unregistered agreement to re-convey in favour of the vendor or his heirs at any time on payment of the purchase amount in the registered sale-deed together with interest at six per cent, per annum. The Appellant No. 1 was assignee for Appellant No. 2. The appellants sued on the footing that the transaction was a mortgage. The respondent challenged the genuineness of the unregistered deed, denied the mortgage, and contended inter alia that the deed was inadmissible for want of registration. The trial Court held that the unregistered agreement was not executed by the predecessor-in-title of the defendant-respondent and was inadmissible for want of registration and also that the transaction was not a mortgage transaction. The suit was, therefore, dismissed with costs. In appeal by the plaintiff's the District Court held that the unregistered agreement was executed but that it was inadmissible for want of registration Achutaramaraju v. Subbaraju [1902] 25 Mad. 7, and that on the remaining evidence the transaction was not a mortgage. The appeal of the plaintiffs was dismissed. In addition to the question of the admissibility of the unregistered agreement Mr. Jayakar for the respondent argues that the agreement is also void for prepetuity, For the appellants it is contended that in the District Court they had, by an application Exhibit 23 in appeal, asked for an' alternative relief for specific performance on the basis of the agreement; and reliance was placed on their behalf on the case of Sayad Mir Gazi v. Miya Ali [1914] 38 Bom. 703. The respondent on the other hand in support of his contention relies on the case of Bala v. Sadashiv : (1921)23BOMLR1066 .

22. On the question of the admissibility of the agreement, Exhibit 39, Mr. Thakor for the appellants argued that ones portion of the document should be separated and admitted. I am Of opinion, that it is impossible to separate the agreement from the registered sale deed of the same date, much less one portion of the agreement, after referring to the registered sale deed and its consideration,, goes on as follows:

But if at any time you or your heirs shall pay to me or to my heirs the amount of rupees-specified above together with interest thereon; at the rate of annas eight from to-day's date (i.e.) the whole of the amount that may be found due (then), I or my heirs shall give over the said house by way of sale to you or your heirs.

23. If this is a single transaction, embodied in two simulataneous documents, it is a sale with an agreement to re-convey at any future time at the option of the vendor, which should have been embodied in a single document falling under Section 17. Clouse (1)(b), of the Indian Registration Act,, and therefore, compulsorily registrable in its entirety : Achutaramaraju v. Subbaraju [1902] 25 Mad. 7. It is not, I think, open to a party to divide it into two, as in the case here, and then to register one part, and not the other, seeking support under Section 17 Sub-section (2)(v), of the Indian Registration Act. The logical consequence is the reductio ad absurdum in the shape of the argument for the appellants that, even this latter unregistered document should be farther sub-divided into two parts, the Court apparently closing its, eye to the first part. The legal objection is that it does not merely create a, right to obtation another document and fall under Section 17, Sub-section (2)(v), but that it limits the right of ownership under the registered sale-deed.

24. The legislature, in enacting Section 17, Sub-section (2)(v), contemplated the ordinary agreements to sell or purchase passed prior to the registered conveyance, in order to enable the would be purchaser to investigate the title, not a document of the kind in question, which embodies a right to re-purchase; The ignorance if the public and of the class of writers, who usually draw up these documents, the desire and the hope of the vendor to re-possess himself at some future date, often vague, of the property conveyed, the idea that by taking and keeping with himself such a document this right is retained, and the attempt to save registration fees - all these combined are probably the genesis of most documents of this class. The vendor is often an agriculturist or land owner in whose regard the Courts, following the legislature in India, have always, and naturally, shown great leniency. But the result in this class of cases has been, I think, to defeat the object of the legislature in regard to registration and to cloud and unsettle the title of subsequent purchasers of the property. To repeat what I said in a previous judgment in which we held en the meagre evidence that the transaction was not a mortgage, and did not therefore fall within the scope of the ruling either in Sayad Mir Gazi v. Miya Ali [1914] 38 Bom. 703, or in Bala v. Sadashiv : (1921)23BOMLR1066 (though certain observations in the latter case perhaps go further), and that the second document was separable from the first, and, therefore, not compulsorily registrable under the current of decisions such as Sangawa v. Huchangowda A.I.R. 1924 Bom. 174, Vaman v. Changi 27 Bom. L.R. 1261:

These documents are of frequent occurrence in this Province as well as in other parts of India. The question raised by them has usually been defined to be whether the two documents evidence a single transaction of mortgage by conditional sale or whether the second document evidences an agreement to reconvey, separable from the first sale and sale-deed. And the answer depends upon the intention of the parties, as expressed in the language of the documents themselves in the light of the surrounding circumstances, Balkishen Das v. W.F. Legge [1899] 22 All. 149, such as is...clearly required to show in what manner the language of the documents, was related to existing facts' : Narastngerji v. Parthasaradhi Rayanam Garu A.I.R. 1924 P.C. 226.

The answer is not always easy. The difficulty arises partly from the lack of definiteness of the intention actual and legal, of the parties, partly perhaps from the fact Clause (1)(b) and Clause (2)(v) of Section 17 of the Indian Registration Act are not contradictory, nor, taken together, exhaustive. There maybe a third category of documents which create a right to obtain another document but do not merely create it or which also limit a right. And documents such as the one in suit maybe argued to fall under it and to be excluded from the category of Clause 2(v). Each party generally puts forward the interpretation which suits itself. Either party may be out of possession. The period if any, specified in the second agreement may or may not have expired. Thus in the last case. Narasingerji v. Parthasaradhi A.I.R. 1924 P.C. 226 the Madras High Court held that it was an agreement to reconvey while their Lordships of the Privy Council held it was a mortgage by conditional sale as in Balkishen Das v. W.F. Legge [1899] 22 All. 149. The other view of the transaction was taken in cases of some what similar documents in Bhagwan Sahat v. Bhagwan Din [1890] 12 All. 387 and in Jhanda Singh v. Wahiduddin [1916] 38 All. 570, though in both these cases the two deeds were passed on the same day. This fact is not, therefore, of itself, deoisive, any more than in the case of Namdev v. Dhondu [192] 22 Bom. L.R. 797, or Muthuvelu Mudaliar v. Tythilinga Mudaliar [1919] 42 Mad. 407.

25. The law in regard to such documents does not, therefore, appear to be settled. Even where it is held on the facts that the two documents evidence a single transaction and that transaction one of mortgage, the ruling in Sayad Mir Gazi's case [1914] 38 Bom. 703 is to the effect that the second document can be considered singly and in its ostensible form and is not compulsorily registrable - a view opposed to the view in Bala v. Sadashiv : (1921)23BOMLR1066 and to the dictum of the Privy Council in Sripal Singh v. Tagore [1917] 44 Cal. 524 that the substance and not the technicalities of the transaction should be regarded. With all respect, I find it impossible to reconcile the finding in the former case Sayad Mir Gazi v. Miya Ali [1914] 38 Bom. 703 that the transaction was a single transaction of mortgage with the decision that the second document, which converts the sale into a mortgage, is nevertheless, not compulsorily registrable. And, speaking for myself, the second decision, Bala v. Sadashiv : (1921)23BOMLR1066 appears to me to lay down a rule, which is both logical and intelligible, and if I may say so, more in accordance with the intention of the Legislature. If the reasoning in Sayad Mir Gazi's case [1914] 38 Bom. 703 is correct, then a fortiori in this case the second document does not need registration and is admissible. I, therefore, agree in the proposed reference not merely in regard to the case of Sayad Mir Gazi v. Miya Ali [1914] 38 Bom. 703 but because, speaking for myself, and with the greatest respect, I should like to see the view affirmed that even in cases such as Sangawa v. Huchhangowda A.I.R. 1924 Bom. 174 or at least where, as in that case, the sale-deed is not a mere paper, transaction, the Legislature intended that an agreement, not merely to convey to a would-be purchaser, but to reconvey to a former vendor, and thus affecting his rights and those of purchasers from him, should be compulsorily registrable.

26. As for the second contention for the respondent, there appears to be a conflict of authorities. As held by this Court in Dinkarrao Ganpatrao v. Narayan Vishvanath A.I.R. 1925 Bom. 84 the deed Ex. 39, with its words 'at any time' 'heirs,' and 'heirs,' prescribes no limit of time, and on the principles of English common law, at least if it had been executed prior to the passing of the Transfer of Property Act, would be void for perpetuity : London and South Western Railway Co. v. Gomm [1882] 2 Ch. D. 562. The same view appears to have been taken in Balli Singh v. Raghubar Singh A.I.R. 1923 All. 511 and Nabin Chandra Sarma v. Rajani Chandra Chahrabarti [1920] 25 C.W.N. 901 even in documents passed subsequent to the Transfer of Property Act. The contrary view has, however, been taken in Charamudi v. Raghavulu [1916] 39 Mad. 462 and in a very recent case, Basodeo Rai v. Jhagru Rai 46 All. 333, in which all the preceding authorities are reviewed and considered including Maharaj Bahadur Singh v. Balchand [1920] 48 I.A. 376.

27. In this last case of Basdeo Rai v. Jhagru Rai 46 All. 333 the document provided for a right of pre-emption. The document we are now considering goes further. It is in terms a right to repurchase to be exercised at any future date at the option of the vendor or his heirs. It is possible, on an absolutely literal interpretation of Sections 14, 40 and 54 of the Transfer of Property Act, to hold that such a document is not void for perpetuity. But it appears to fall within the scope of the observations of the Privy Council in Maharaj Bahadur Singh v. Balchand [1920] 48 I.A. 376.

such a covenant as this does not, and cannot, run with the land, and could not be so enforced; Further, if the case be regarded in another light - namely, an agreement to grant in the future whatever land might be selected as a site for a temple - as the only interest created would be one to take effect by entry at a later date, and as this date is uncertain, the provision is obviously bad as offending the rule against perpetuities, for the interest would not then vest in presenti; but would vest at the expiration of an indefinite time which might extend beyond the expiration of the proper period.

28. It is true that the deed under consideration by the Privy Council was of 1872, prior to the Transfer of Property Act, as in Dinkarrao Ganpatrao v. Narayan Vishvanath A.I.R. 1925 Bom. 84. But, on the other hand, the considerations as to the prevalence and validity of the right to pre-emption, which, I think, was one of the deciding factors in Basdeo Rai v. Jhagru Rai 46 All. 333 are absent in the deed we are now considering. And, on the whole, there is, I think, much to be said for the view that the agreement is void on the reasoning of their Lordships of the Privy Council in the case referred to above. That question, however, we need not refer and can await the reference.

29. For these reasons, I agree in the reference proposed by my learned brother.

ORDER

Macleod, C.J.

30. The following question has been referred to us for our; decision:

Whether, when a registered deed, of sale (A) of immovable property worth Rs. 100 or over, is passed, and as, part of the same transaction and not as an independent transaction, the vendee executes an unregistered agreement (B) to re-convey the property to the vendor on payment of a certain sum of money, the document (B) is inadmissible in evidence for want of registration under Section 17(1)(b) and Section 49 of the Indian Registration Act, either:

(a) where the transaction constitutes a mortgage; or,

(b) where it is a bona fide sale with a contract for re-purchase.

31. It will be necessary first to set out the history of the case before I can attempt. to answer an abstract question of law which at first sight would appear to be an extremely simple one, admitting of only one possible solution.

32. The plaintiffs sued to recover from the defendant possession of the plaint property on payment of whatever amount might be found due on a proper settlement of accounts, and for an order to the defendant to reconvey the property to Plaintiff No. 1. Plaintiff No. 1 had purchased the property from Plaintiff No. 2 by a registered deed, dated October 29, 1918, for Rs. 999. Plaintiff No. 2's father, Ranchod Abheram, had passed a deed of sale, dated November 1, 1898, in favour of the defendant's grandmother, Jivi, and, on the same day, Jivi executed, an unregistered agreement in favour of Ranchod agreeing to reconvey the property to the vendor or his heirs at any time on receipt of the consideration mentioned in the deed of November 1, 1898, with interest thereon at six per cent. It was alleged that the two documents effected a transaction of mortgage. The defendant did not admit the agreement to reconvey was executed, and contended that the transaction was one of sale and not of mortgage.

33. The Subordinate Judge held that the agreement to reconvey had not been proved. Even if it had been held proved the learned Judge was of opinion that being unregistered it would not be received in evidence as the plaintiffs had set up a mortgage and not a sale with a condition to re-purchase. The suit was, accordingly, dismissed.

34. In appeal the Assistant Judge differed from the Subordinate Judge on the question of fact and found that the agreement was proved. He held, however, that the agreement, Ex. 39, could not be treated as a separate document entirely apart from the sale-deed, Ex. 38, and that, therefore, it required registration. On the issue whether the lower Court ought to have held that the transaction, dated November 1, 1898, was really a mortgage, though ostensibly a sale, the Assistant Judge decided that as Ex. 39 could not be looked to for want of registration, there was nothing on the record to show that Ex. 38, though ex facie a sale, was really a mortgage. He expressed no opinion on the question whether, if Ex. 39 could have been considered, the transaction was one of mortgage, or of sale with a contract to re-purchase. In second appeal Fawcett, J., said:

The main question in this appeal is whether the lower Courts have erred in holding; that the document, Exhibit 39, is in admissible for want of registration. The sale-deed. Exhibit 38, was passed on the same day, November 1, 1898, and both documents were written by the same writer, Nathabhai Jayachand. One of the attesting witnesses to Exhibit 38, Rajaram Narbharam, signed Exhibit 39 for the executant, Bai Jivi. It, therefore, seems clear that the two documents evidence one transaction, and that the second document, Exhibit 39, was not an independent transaction arranged, as an afterthought, subsequent to the execution of Exhibit 38.

35. The learned Judge then considered whether the one transaction was a sale with a contract to re-purchase or a mortgage, and expressed the opinion that it was the former. Madgavkar, J., was of opinion that it was impossible to separate the agreement from the registered sale-deed of the same date, much less one portion of the agreement from another, but I cannot find in his judgment a finding whether the transaction was a mortgage or a sale with a contract of repurchase. Fawcett, J., then referred to a Bench decision in Vaman v. Changi 27 Bom. L.R. 1261, in which it was held, by himself and Madgavkar, J., that they were bound to follow a current of decisions of this Court that in the case of a transaction, which was not a mortgage, an agreement to reconvey, even though it might be argued to limit the right of a purchaser, was not compulsorily registrable. A month later, a similar question arose in Gajanan v. Jivangiri 27 Bom. L.R. 1465 which came before myself and Coyajee, J. It was held that the two documents in the case, one registered, the other unregistered, evidenced one transaction and that, therefore, the principle laid down in Bala v. Sadashiv : (1921)23BOMLR1066 after a consideration of the decision in Sayad Mir Gazi v. Miya Ali [1914] 38 Bom. 703, would be applicable. In Bala v. Sadashiv : (1921)23BOMLR1066 , the plaintiff sued to recover possession of a certain property on the basis of a registered sale-deed, and an unregistered, karar to reconvey passed on the same day. I said (p. 1067):

He (the plaintiff) can only succeed if he can satisfy the Court that Ex. 28 (the karar) was an entirely separate transaction from Ex. 22 (the sale-deed), since it will be conceded that if the defendant as owner of the property had, alter the sale had been executed, agreed to reconvey the property to the plaintiff after a certain date, that might be a document which need not be registered.

36. In Sayad Mir Gazi v. Miya Ali [1914] 38 Bom. 703, although the two documents in the case were contemporaneously executed and the Court held it was the intention of the parties to create a mortgage, it came to the conclusion that the two could be treated as separate, so that the second document was nothing more than an ordinary agreement to sell. With due respect, I think that the decision in Say ad Mir Gazi v. Miya Ali [1914] 38 Bom. 703, cannot be supported,

Beaman, J., said (p. 707):

On the 9th of September 1903 the plaintiff and the defendant undoubtedly intended to mortgage the property now in suit. The defendant being a good Musalman scrupled to take interest, it was accordingly agreed that the plaintiff should nominally sell the property out and out to the defendant and thereafter attorn to him for an amount of rent which would represent reasonable interest. This conveyance was executed and duly registered. Contemporaneously the defendant executed an agreement to the plaintiff to reconvey the property for the same consideration, namely Rs. 1,499, when called upon to do so. If we look at the true intention of the parties we should have no doubt but that this was really, though in form a sale, a mortgage.... The lower appellate Court refused to give effect to the agreement to re-convey on the ground that it was a document compulsorily registrable under Section 17, Clause (b) of the Registration Act, In our opinion, the learned Judge was wrong. Separated entirely from the conveyance of the defendant we can see in this document nothing more than an ordinary agreement to sell, and such agreements are expressly exempted from the operation of Section 17, Clauses (a) and (b) of Act III of 1877 by Clause (h) as it stood in that section and now exception (v).

37. Both the referring Judges have expressed the opinion that this decision was erroneous, and agreeing with them I am of opinion that it must be overruled, adhering to what I said in Gajanan v. Jivangiri 27 Bom. L.R. 1465:

when a transaction is evidenced by a document which is in effect divided into two parts one of which is registered and the other, is not, then the law looks to what is the real transaction between the parties, and demands that the whole document evidencing that transaction must be registered, whether it consists of one part or two.

38. In Narasingerji v. Parthasaradhi Rayanam Garu A.I.R. 1924 P.C. 226 two deeds of the same date were so phrased as to be ostensibly a sale of certain villages with an agreement for a re-sale and re-purchase at the same price at a certain date. In considering the question whether the transaction did or did not amount to a mortgage, their Lordships thought they could dispose of the case with no reference to any oral evidence other than that of surrounding circumstances such as in Lord Davey's words in Balkishen Das v. Legge [1899] 22 All. 149 was clearly required to show in what manner the language of the document was related to existing facts.

39. At p. 742, the judgment says:

Their Lordships do not conceal from themselves the fact that the transaction as phrased in these documents is ostensibly a sale, with a right of re-purchase in the vendor.... But a closer examination, of the documents discloses their clear character.

40. And at p. 744:

When all these provisions of the documents are viewed in the light of surrounding circumstances, the inference is, in their Lordships' view, irresistible that here a mortgage and a mortgage only was in the direct contemplation and intention of both parties to the transaction.

41. I may also refer to the decision of the Privy Council in Jhanda Singh v. Wahid-ud-din [1916] 38 All. 570 which affords a useful guide to the Courts in such cases. Their Lordships say at p. 575:

The appellant's contention is, and to be effective must be, that an agreement was come to between the parties that the twenty biswas zamindari property in the mauza should be mortgaged to the so-called vendees for a sum of Rs. 5,500, and next that that agreement should be carried out by a deed of 'sale and' a contract for re-purchase. If no such agreement was made before the deed of sale was executed and the latter deed was an afterthought, only suggesting itself after, the sale deed had been executed and delivered, it would not suffice. The execution of the deed of sale and of the contract of re-purchase would then form two separate and independent transactions, not two connected and interdependent parts, of one and the same transaction.

42. The deed of sale and the agreement, reserving to the vendor a right to repurchase in that case were both registered but were executed on different dates, but it would appear from the passages in their Lordships' judgment which I have quoted, that if the execution of both documents had been contemplated before the first document was executed, the fact that the second document was executed at a later date would not stand in the way of the Court holding that the two documents read together evidenced one-transaction. In Sangawa v. Huchangowada A.I.R. 1924 Bom. 174, referred to by Madgavkar, J., a registered sale-deed was passed on December 13, 1913, by the plaintiff's husband in favour of Defendant No. 1, and, on December 25, 1913, Defendant No. 1 executed a receipt in favour of plaintiff's husband in terms as follows : 'I shall without any objection give up your land at any time you may ask me to give up.' That document was not registered. The appellate Court held that it did not require registration and decreed the plaintiff's claim, but it does not appear to have been contended that the two documents evidenced one transaction.

43. The difficulty I find in answering the second question lies in the fact that it is not what I consider a fair question capable of being answered by a direct affirmative or negative. It involves the fallacy that where two parties agree upon a particular course of conduct between themselves with regard to a dealing in immovable property, their resultant action necessarily forms one transaction whereas there may be several transcations all dependent on each other and arising out of one previous arrangement between the parties.

44. If two parties agree beforehand that one party shall sell immovable property to the other, and that the purchaser shall agree to re-sell the property at a price to be tendered by the vendor within a certain time, the latter agreement to be contained in a separate document, when the relative documents are executed, they evidence not one transaction but two transactions, The sale-deed passes the title absolutely to the purchaser, the agreement to re-sell in no way limits his right as owner. If he breaks the agreement and sells to a third party, he lays himself open to an action for damages while the right of the third party to retain the property will depend upon whether or not he had notice of the agreement. When the parties intend to create a mortgage the situation is different. The ostensible vendor does not lose all interest in the property, he retains for himself a transferable and hereditable right, so that the sale-deed and the agreement to reconvey do evidence a single and inseparable transaction. Consequently, I do not find it possible to answer the several questions by a direct affirmative or negative. The intention of the parties must be proved by the Court according to the facts of each case, and, ordinarily speaking, I should say that when the agreement to sell is evidenced by a separate document that would be proof that, although the parties had come to a previous arrangement with regard to a particular course of conduct between themselves, there was an intention to give effect to that arrangement by entering into two transactions.

Shah, J.

45. The question referred to the Full Bench is in these terms:

Whether, when a registered deed of sale (A) of immovable property worth Rs. 100 or over is passed, and as part of the same transaction and not as an independent transaction, the vendee executes an unregistered agreement (B) to reconvey the property to the vendor on payment of a certain sum of money, the document (B) is inadmissible in evidence for want of registration under Section 17 (1)(b) and Section 49 of the Indian Registration Act, either

(a) where the transaction constitutes a mortgage, or

(b) where it is a bona fide sale with a contract for repurchase.

46. I do not consider it necessary to examine the facts of the case; but I take the facts as found or assumed for the purposes of the reference by the referring Judges.

47. I would answer the first part of the question in the affirmative.

48. In determining the real nature of the transaction, the intention of the parties must be ascertained in each case, and when it is found that the transaction really intended was a mortgage, the second document, viz., the unregistered agreement, is intended by the parties to affect the right to immovable property worth Rs. 100 or over, though in terms it may not purport to do so. Where the transaction is a mortgage, the registered document does not represent the whole of the transaction, the other document, which is not registered, represents, as it is intended to represent, a real limitation upon the right created by an ostensible sale. Such a document is not covered by Section 17, Sub-section (2), Clause (v), as it does not; give merely a right to get another; document but limits the right of the ostensible vendee to the immovable property in question, and as such requires to be registered under Section 17, Sub-section (1), Clause (b).

49. When we have such a document as part of the same transaction and not as an independent transaction, it cannot be separated from the deed of ostensible sale with which it is connected and of which it forms a part. The decision in Sayad Mir Gazi v. Miya Ali [1914] 38 Bom. 703, so far as it conflicts with the above view, does not appear tome to be correct. It was a case in which the transaction was found to be a mortgage, and still the Court dealt with the unregistered agreement as entirely separated from the registered ostensible sale-deed. In my opinion, the Court could not do so in view of the, provisions of Section 49 of the Indian Registration Act.

50. As regards the second part of the question, it presupposes a case of a genuine and real sale and a simultaneous agreement on the part of the vendee to reconvey the property. I do not think that there is any ambiguity about the meaning of the expression 'bona fide sale,' On reading the referring judgments, I feel no hesitation in accepting the question as meaning whether the agreement to reconvey the property requires to be registered, when the parties really intend to effect an out and out sale and when the vendee executes an agreement in favour of the vendor to reconvey the property on payment of money meaning it to be an agreement to reconvey though the agreement is arrived at simultaneously with and as part of the sale trans-faction. Now, in my opinion, it is indisputable, and it has not been disputed, that such an agreement to reconvey would not require to be registered, if it were an independent or separate transaction apart from the transaction of sale. But it is urged that, if it is part of the same transaction and connected with the sale, at must be registered. I am unable to accept this contention. Of course, it must depend upon the terms of the particular document and the intention of the parties to the particular transaction; but when the intention is to effect a bona fide sale, and where the terms of the document are such as we have in this case, I am of; opinion that the document evidencing j merely an agreement to recenvey is not compulsorily registrable.

51. It is not compulsorily registrable in view of the provision of Section 17, Sub-section (2), Clause (v) because it merely creates a right to obtain another document which will, when executed create an interest in immovable property; but by itself it creates no right in the immovable property nor does it limit any right created by the deed of sale. On principle, I am unable to see any distinction between the case of an agreement subsequently and separately executed apart from the sale, and the case of an agreement contemplated in the question referred to us where it forms part of the transaction of a bona fide sale between the parties. The intention of the parties in both cases is the same, viz., to separate an agreement, which by itself creates no interest in immovable property from the sale. There is nothing in law to prevent parties from haying separate documents as to terms simultaneously agreed upon, provided the terms really admit of being evidenced by different documents, which are permissible in law or rather which are not prohibited by law.

52. The real test, in, my opinion, is not whether ,the transaction is the same, but whether the intention of the parties in a given case is to create or limit the right in immovable property worth Rs. 100 and over by an agreement not registered or to keep strictly within the limits contemplated by Clause (v) of Section 17, Sub-section (2). Where there is nothing in the terms of the agreement to show that by, itself it creates or limits any right in immovable property, but merely gives a right to obtain another document and where the intention of the parties ex hypothesi, as contemplated by the question, is to treat the document as strictly limited by the terms, I do not see any reason why the exemption allowed under the said clause of the section should not take effect with reference to it.

53. I have considered the various cases referred to in the course of the arguments before us as also in the referring judgments. As instances of sale with contract to re-purchase I may refer to the cases of Bhagwan Sahai v. Bhagwan Din [1890] 12 All. 387 and Jhanda Singh. Wahid-ud-din [1916] 38 All. 570. There was no question of registration involved in either of these cases. On the other hand, there is the case of Narasingerji Gyanagerji v. Panuganti Parthasaradhi A.I.R. 1924 P.C. 226 in which the transaction was held to be a mortgage by conditional sale. I have also considered the ratio decidendi in Bala v. Sadashiv : (1921)23BOMLR1066 , Vaman v. Changi 27 Bom. L.R. 1261 and Gajanan v. Jivangiri 27 Bom. L.R. 1465. It may be possible to deal with these decisions as being referable to the particular facts of these cases. But there is undoubtedly some conflict in the ratio decidendi of these cases. Now that, the question is referred to the Full Bench it seems to me to be unnecessary to examine these cases in detail. I may, however, mention that the decision in Vaman v. Changi 27 Bom. L.R. 1261 is in accordance with the view which I now take. The decision in Gajanan v. Jivangiri 27 Bom. L.R. 1465 is apparently based upon he terms of the document in question which limited the interest of the vendee in the property. At any rate, it was not a document which merely gave a right to the vendor to obtain another document in future. It was understood as meaning that the vendees were not to deal with the property as full owners for twenty-one years. In Bala v. Sadashiv : (1921)23BOMLR1066 , to which I was a party, the observations are directed to the case of a mortgage. But I am not prepared to extend them to the case of a bona fide sale; and if they are read as applying to such a case, I am not prepared to accept them as correctly stating the position with reference to an agreement to reconvey in the case of a bona fide sale.

54. The question, whether a particular agreement satisfies the requirements of Clause (v) of Section 17, Sub-section (2), must depend upon the terms of the document. For instance, if the agreement purports to create some right in immovable property, and also gives a right to obtain another document in future, it would not satisfy the requirements of that clause. But in the present case, the terms of the document do not go beyond the requirements of the clause and where the intention of the parties as found or assumed in the question is to keep it strictly within the limits of its terms, the mere fact that it is a part of the same transaction and is not an independent transaction is not sufficient to render the said clause inapplicable or to treat the document as anything more than what it purports to be, viz., an agreement by the vendee to reconvey the property to the vendor on payment of money by him.

55. I would, therefore, answer the second part of the question, which relates to a bona fide sale, in the negative,

56. It may be desirable to make such an agreement compulsorily registrable when it forms part of the simultaneous transaction of sale. But it is for the Legislature to consider the point. We have to give effect to the law, as we find it. In the absence of any provision of law prohibiting such separation of terms in two documents, I think it must be held that it is open to the parties to separate them in two documents, as they have done in this case. So long as the real intention of the parties is in accordance with the terms of the documents the question, whether the agreement requires to be registered must be answered with reference to the provisions-of the Indian Registration Act as contained in Section 17, Sub-section (2), Clause (v); and it cannot be treated as compulsorily registrable, because it forms part of the transaction of sale and is not an independent transaction.

Coyajee, J.

57. In his referring judgment Mr. Justice Fawcett says:

The main question in this appeal is whether the lower Courts have erred in holding, that the document, Exhibit 39, is inadmissible in evidence for want of registration. The sale-deed, Exhibit 38, was passed on the same day, November 1, 1898 and both documents were written by the same writer. One of the attesting witnesses to Exhibit 38...signed Exhibit 39 for the executant. Bai Jivi. It, therefore, seems clear that the; two documents evidence one transaction, and, that the second document, Exhibit 39, was not an independent transaction arranged, as an afterthought, subsequent to the execution of Exhibit 38. The plaintiffs also treated the two documents as one transaction by their allegation, that they evidenced a mortgage. The lower Court's view that Exhibit 39 cannot be treated as a separate document entirely apart from the sale-deed, Exhibit 38, is; in my opinion, clearly-correct. Also, I agree with the view, of both the lower Courts that the transaction is not shown to have been one of mortgage, as alleged by the. plaintiffs.

58. Where, as here we have two documents bearing the same date one purporting to be an out-and-out sale of certain immovable property, and the other an agreement to re-sell the same property, the main difficulty lies in discovering the real character of the documents, that is, whether they constitute a single transaction of mortgage or whether they operate as a 'bona fide sale with a contract for re-purchase.' The test in such cases is the intention of the parties; and that intention must be gathered from the language of the documents themselves viewed in the light of the surrounding circumstances. Jhanda Singh v. Wahid-ud-Din [1916] 38 All. 570.

59. Where the intention of he parties was to create a single transaction of mortgage, that transaction would necessarily have to be found partly in one document and partly in the other. In such a case, the agreement (B) in the question referred to us would clearly be intended to limit the right, title or interest created by the deed of sale (A). The two documents would then constitute 'two connected and interdependent parts of one and the same transaction' Jhanda Singh v. Wahid-ud-din [1916] 38 All. 570 and both would require to be registered [Section 59, Transfer of Property Act, and Section 17(1)(b) of the Indian Registration Act.] In Sayad Mir Gazi v. Miya Ali [1914] 38 Bom. 703, the plaintiff executed a registered deed of sale in favour of the defendant. Contemporaneously, the defendant executed on agreement to the plaintiff to re-convey the property for the same consideration when called upon to do so. The learned Judges held that the parties undoubtedly intended to mortgage the property. They, however, held that the second document was admissible in evidence. They said (p. 708):

Separated entirely from the conveyance of the defendant we can see in this document nothing more than an agreement to sell, and such agreements are expressly exempted from the operation of Section 17, Clauses (a) and (b) of Act III of 1877 by Clause (h) as it stood in that section and now exception (v).

60. The intention of the parties being to create a mortgage, and the two documents being connected and interdependent parts of one single transaction of mortgage, both the documents came within Section 17(1)(b) of the Indian Registration Act. That decision, therefore, with due respect, is not correct.

61. Where, however, it is clear that the parties intended that the first document should operate as an absolute deed of sale, and the second document merely evidenced a contract for re-purchase, the latter document did not need to he registered; for it did not itself create, declare, assign or limit a right, title or interest of the value of one hundred rupees and upwards to or in immovable property [Section 17, Sub-section (2), Clause (v), Indian Registration Act]. They did not constitute two connected and interdependent parts of one and the same transaction of sale. The deed of sale was there : it was intended to operate as - what upon its face it purported to be - an absolute deed of sale. The agreement to reconvey was -expressly saved from registration by Section 17, Sub-section (2), Clause (v). The decision to Gajanan v. Jivangiri 27 Bom. L.R. 1465 to which I was a party, is consistent with this view. There, the intention of the parties was that the vendees 'should not deal with the property as full owners for a period of twenty-one years.' The second document did limit the right and interest of the vendees to and in immoveable property, of the value of upwards of one hundred rupees; it did not merely create a right in the vendor to obtain, another document which, when executed, would limit such right of interest. I may be permitted to re-state what I said there, namely (p. 1469):

The question whether an agreement to reconvey immovable proparty exceeding Rs. 99 is value does not require to be ragisterad must, in each case, be decided on a consideration of the contents of the document itself and of such facts as might be proved for the purpose of showing in what manner the language of the document was related to existing facts. Proximity of time, or even the identity of the dates of the two documents, is not the decisive circumstance in all cases.

62. I referred to the three oases cited before us, one of which was that of Vaman v. Changi 27 Bom. L.R. 1261 decided by Fawcett and Madgavkar JJ., and said (p. 1470):

It is sufficient to say that the facts of this case, as set out above, are entirely different. It is true that in each of those three cases, the two documents under consideration bore the same date; and, moreover, in cases (2) and (3) the agreement had, not been registered. But in all the three oases, the documents embodied, each a separate and distinct transaction. Whereas, in this case, there is but one transaction and it is contained partly in a registered document and partly in an unregistered one.

63. The execution of the deed of sale was, in my opinion, one transaction, and that of the contract for re-purchase a separate transaction. I am aware that in Vaman's case Mr. Justice Fawcett regarded the contemporaneous agreement to reconvey the property as forming part of the actual transaction by which the vendee acquired title. Mr. Justice Madgavkar (as he points out in his referring judgment) regarded the agreement to reconvey as separable from the sale-deed and, therefore, not compulsorily registrable. In my opinion, however, the real test is not whether the transaction is the same, but whether the parties intended by the second document to create, declare or limit a right, title or interest of the statutory value, to or in immovable property, or merely to create a right to obtain another document which would, when executed, create, declare or limit such right, title or interest. For two documents of this nature, executed contemporaneously, might, upon the language of those documents view in the light of the surrounding circumstances, constitute a mortgage, as in Balkishen Das v. Legge [1899] 22 All. 149; or they might upon a true construction, operate as a bona fide sale with a contract for re-purchase, as in Bhagwan Sahai v. Bhagwan Din [1890] 12 All. 387.

64. I would, for these reasons, answer the first part of the question in the affirmative and the second part in the negative.


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