1. The plaintiffs brought their suit in the Court of the Subordinate Judge at Chitaldrug for redemption and possession of the plaint schedule house and for mesne profits. Their case was that the plaintiffs and Ismail Sab, the deceased father of plaintiffs 1 to 3, executed in favour of the defendant a deed of mortgage by conditional sale dated 22-10-1936 for Rs. 4,000/-. It was stipulated therein that II the plaintiffs paid 'Rs. 4,000/- within the time fixed in it the defendant should reconvey the property to them; that though they had arranged for the payment and tendered the amount within time, the defendant had deliberately evaded to receive it.
1a. The defendant denied that the deed of 22-10-1936 was in the nature of a mortgage by conditional sale. It was really a deed' of sale with a condition for reconveyance and as the plaintiffs had not paid or tendered the amount in time as stipulated therein they were not entitled to any relief. The Subordinate Judge held that the deed in question was really a sale deed and the transaction was really a sale with a condition for re-purchase and not a mortgage and that thversese plaintiffs had failed to prove that they tendered the amount within the time stipulated. He, therefore, dismissed the suit. The plaintiffs have preferred this appeal.
2. In this Court, it is contended by Mr. Iqtaal Hussain, learned Counsel for the Appellants, that the document Ex. A is in reality a deed of mortgage and not a sale deed. He urges that the value of the property at the time of its coming into existence, and the circumstance that the agreement to reconvey is embodied in the same document and not in two separate documents, are strongly in favour of his contention. He has referred to the proviso added to Section 58, Transfer of Property Act by Section 16 of the amending Act 16 of 1938 and relied on cases of this Court reported in '51 Mys HCR 187 (A)' and --'Puttasamiah v. Nagappa', 15 Mys L J 64 (B). As observed by Sulaiman, J. in -- 'Mathura Kurmi v. Jagdeo Singh' : AIR1927All321 the singleness of the transaction though a strong test is not a conclusive one to hold that the transaction is a mortgage. The proviso merely declares that a transaction which is to be treated as a mortgage by conditional sale shall be deemed to be a mortgage only if the condition is embodied in the document which effects or purports to effect the sale. It is no authority for holding that merely because the condition is embodied in the same document the transaction must be deemed to be a mortgage. The same view has been affirmed in '51 Mys H. C. R. '187' at p. 201 (A).
3. The learned Subordinate Judge has found that the market value of the suit house at the time of Ex. A was not much in excess of Rs. 4,000/- for which sum it was conveyed to the defendant. He has referred to the evidence of P. W. 1 who has stated that its value was about Rs. 8,000/- or 10,000/- when Ex. A was executed and that the plaintiffs agreed to sell it to him for Rs, 8,000/- under Ex. B dated 20-10-1340 and has not accepted that evidence and that of P. W. 2 who has attested Ex. B as that evidence relates only to the market value in October 1936. P. Ws. 1 and 2 have given a grossly exaggerated value of the property as Rs. 20,000/- at the time of their giving evidence and P. W. 1 is clearly interested in supporting the plaintiffs; the learned Subordinate Judge has referred to the improbability that the plaintiffs could have agreed to sell it to him for Rs. 8,000/-in 1940 if its value was Rs. 10,000/- or more in 1936 and that prices could not have fallen since 1935. Apart from the evidence of the defendant and his witnesses on which the learned Subordinate Judge has relied for his finding on this question of market value, there is the circumstance that the plaintiffs have asked for mesne profits for the property at Rs. 30/- per month which capitalized would give about Rs. 5,000/-as the value of the house at the time of the suit in September 1946. In 1936, it must have been much less. The annual assessment on the house is also only about Rs. 8/- and the house is described in the plaint as well as in Ext A as a country tiled house.
4. There are also some other strong circumstances which are against the plaintiffs' contention that Ex. A evidences a mortgage and not a sale. It is termed a conditional sale deed. After referring to the earlier registered deed dated 27-2-1929 executed by the executants (other than plaintiff 5) for Rs. 4,000/- mortgaging without possession the plaint schedule house at Davangere and another land in Igur village, it recites that as they were not in a position to discharge the debts due in cash they had agreed to sell the house, retaining the land for their own use out of the two hypothecated properties. It then provides that if Rs. 4,000/- is paid by them before the end of the 4th year thereafter the defendant would have to reconvey the property to them, failing which the deed may be treated as an absolute sale deed and after the expiry of the period the defendant may enjoy the property as he liked.
4a. It has been held that one of the main tests to distinguish a mortgage by conditional sale from a sale with a condition for repurchase is whether the relation between the parties is that of a creditor and a debtor and whether what was described as purchase money in the deed was intended to be treated as a loan. The nature of the document is to be determined from its contents and from such extrinsic evidence afforded by the surrounding circumstances to show the relation of the written language to the existing facts, see '51 Mys H C R 187 (A)'. In this case, it is in evidence that even the interest on the previous mortgage deed had not been paid regularly and a suit had been filed by the defendant for its recovery. The debt was outstanding for more than 7 years. Admittedly the plaintiffs were not in a position to discharge the loan. The creditor released one item of property for their benefit in consideration of their executing Ex. A. The defendant has sworn that he was getting Rs. 40/- per month as interest under the hypothecation bond and that the house could be leased for only Rs. 290/- per year after he took possession.
5. P. W. 1 Sha Veerachand has admitted that he used to tell the defendant that the plaintiffs were willing to sell the suit house to him but that the defendant told him that he wanted it for himself and that he had conveyed this to the plaintiffs. It is most improbable that a creditor in the position of the defendant would give up a part of his security unless Ex. A was to be a conditional sale. He would really have derived no benefit by taking such a document and in fact would be prejudiced by it. This giving up of a part of the security and the taking of a fresh document like Ex. A is a conclusive circumstance in favour of Ex. A being treated as a sale and not a mortgage. The intention to be gathered by this conduct is clearly that the relation of debtor and creditor should cease and that the parties should be governed by the new relationship created under the deed of conditional sale.
6. The short period of four years provided in Ext. A for repayment is another circumstance in favour of holding that it is a conditional sale and not a mortgage; see Gour's Transfer of Property Act, Vol. 2, 1948 Edn., para 1401 and Mulla's Transfer of Property Act, 1936 Edn., 330. If really the transaction was to be a mortgage with possession and that of a property which according to the plaintiffs was very valuable, there was no object in providing for such a short period for repayment. As observed in the extract at page 193 of '51 Mys. H C R 187 (A)' from Jones on Law of Mortgages, 'VIII Edition, Volume 1, paragraph 309:
'.....The Court is not restricted to any particular kind of evidence, but may consider almost any pertinent matter, including the preliminary negotiations and the statements of the parties at and after the execution of the instrument .....'
The burden is always on the person who contends against the tenor of a document and unless there is clear evidence the Court ought not to hold that an instrument of conveyance is not what it purports to be; see --'Alderson v. White', (1838) 44 ER 924 (D). The defendant who has been examined on commission, has deposed about the preliminary negotiations before Ex. A was executed. According to him, it was decided between the parties that a sale deed should be executed in his favour and later on the plaintiffs requested him to give back the property to them if within four years they paid the sale amount and to that he agreed. This is supported by the evidence of his witnesses D. Ws. 1 and 2 who have attested Ex. A. They; have stated that there was no intention at the time, of executing the deed of mortgage and that the parties really intended what is stipulated expressly in the document. We think therefore the Court below was right in holding that Ex. A evidences a conditional sale and not a mortgage.
7. Mr. Iqbal Hussain has contended that even so there is evidence in this case that the plaintiffs had arranged for payment of the amount due under Ex. A within the time stipulate therein and that the defendant evaded receiving that amount. The Court below has discusser this evidence fully and has come to the conclusion that there is no merit in this contention It does not seem to be necessary to refer in detail to the evidence, taut it might be observed that if really the amount was available it if impossible to believe that the plaintiffs would have waited from the end of October 1940 when they are said to have made the offer till 7-9-46 to file a suit to enforce their rights. They could easily have had the amount deposited in Court under Section 83, Transfer of Property Act or sent it by money order if the defendant refused to receive it personally. As has been held in --'Shanmugam Pillai v. Annalakshmi Ammal', AIR 1950 FC 38 (E) a stipulation as to payment in sn agreement to reconvey should be strictly fulfilled according to the terms of the contract as the reconveyance is in the nature of a privilege or concession.
8. In the result we see no reason to disturb the decision of the Court below and this appeal is dismissed with costs.
9. Appeal dismissed.