1. This is plaintiffs second appeal. He filed the suit for redemption of the suit house. The respondent-defendant contested the suit on various grounds, namely, on the basis of Exhibit D-5 an unregistered document written on a 'stamp paper of the value of Rs.1.50.
2. The plaintiff disputed the execution of Exhibit D-5. But the two Courts below have held that he has executed Exhibit D-5 in favour of the defendant.
3. The facts of the case are that the plaintiff is the owner of the put property. It consists of two portions. On 5-3-1956 the plaintiff mortgaged one portion of the suit house in favour of the defendant for a sum of Rs.600/-. This document is registered. The period stipulated is four years i.e. up to 5-3-1960. On 20-5-1958 the plaintiff once again created another usufructuary mortgage over the same property taking a sum of Rs.400/- from the defendant. The period is four years i.e. up to 20-5-1962. This again is a registered deed. On 9-2-1960 the plaintiff mortgaged the remaining portion of the suit house in favour of the defendant, namely, usufructuary mortgage and put him in possession. The period. is three years i.e. up to 9-2-1963. The two Courts below have held that the plaintiff executed Exhibit D5 on 19-2-1960 i.e. ten days immediately after the last mortgage deed dated 9-2-1960.
4. Exhibit D-5 is in Urdu. Its true translation is made available and is found the records. It has been acted upon as correct by the two Courts below. It records that on 192-1960 the plaintiff borrowed a sum of Rs.400/as loan from the defendant on the following conditions :
(1) The plaintiff would repay the said amount of Rs.400/- within ten months from that date.
(2) In case he failed to pay the said amount within the stipulated period, he would sell his two houses namely two portions of the suit house which bore municipal Nos. 809 and 810 at that time and which were mortgaged in favour of the defendant, Gangamma and Nagamma, to the defendant by executing a registered sale deed for the same amount, and
(3) If he failed to do so, it necessarily means, if he failed to sell the suit house by executing a registered sale deed, the defendant was entitled to get a sale deed registered through this agreement. (underlining is mine)
5. Plain reading of Exhibit D-5 makes it clear that it would mature into an agreement of sale in favour of the defendant on the plaintiff failing to repay the sum of Rs.400/-by or on 19-12-1960 i.e. ten months from the date of Exhibit as and thereafter would be liable to execute a sale deed by way of performance of the contract of sale as aforementioned.
6. It has been held by the two Courts below that Exhibit D-5 is by itself an agreement of sale entered into by the parties on 19-2-1960. The reasoning of the two Courts below is that on the failure of the plaintiff to repay the amount of Rs.400/- within the stipulated period of ten months, the possession of the suit house by the defendant continued to be with him and that amounted to his possession as contemplated by S., 53A of the Transfer of Property Act and therefore the defendant was, in law, entitled to defend the suit for redemption and non-suit the plaintiff.
7. I am clear in my mind that the two Courts below have failed to proceed step by step while developing the aforestated reasoning to non-suit the plaintiff as on the date 19-2-1960, Exhibit D-5 could not, in law be considered as an agreement of sale by which the plaintiff agreed to sell the suit house to the defendant As already pointed out, it could mature itself into an agreement of sale only on the failure of the plaintiff to repay the sum of Rs.400/- within the stipulated period of ten months. It is an undisputed fact that the plaintiff failed to repay the said sum of Rs.400/- within the stipulated period Therefore, the best that can be said in favour of the defendant is that Exhibit as matured into an agreement of sale on or after 19-12-1960. Even then, it remained an agreement of sale or a contract to sell entered into by the plaintiff with the defendant. This agreement, being an unregistered one cannot, in law, create any interest in the suit property or extinguish any one's interest in the suit property in view of S. 17(l)(b) of the Registration Act. This aspect of the matter has been totally ignored by, the two Courts below. It appears that the two Courts below have proceeded on the assumption that Exhibit D-5 created an interest in the suit property in favour of the defendant.
8. Then it should be considered whether by entering into this agreement maturing into an agreement of sale or contract of sale with effect from 19-12-1960 or 20-12-1960, the right of the plaintiff to redeem the suit property was extinguished or in other words the, plaintiffs right of equity of redemption was, in law, extinguished. Here again the bar contained in S. 17(l)(b) of the Registration Act applies. The terms of Ex. D-5 make it abundantly clear that Exhibit D-5 itself will be a document falling within the ingredients of S. 17(2)(v) of the Registration Act as by Exhibit D-5 the defendant can be said to have acquired a right to have a document creating title in himself executed and which document would be compulsorily registrable under S. 17(l) of the Registration Act. Therefore, I have no hesitation in holding that Exhibit D-5 by itself cannot, in law, lead to the conclusion that the right of the plaintiff to redeem the mortgage of the suit property came to be extinguished. It might have been otherwise if he had sold the property by a registered sale deed or if he had relinquished the right of equity of redemption by a registered document executed by him in favour of the defendant.
9. In regard to the reasoning developed by the two Courts below by applying the provisions of S. 53A of the Transfer of Property Act, the law laid down by a Division Bench of this Court in Mallappa Bhimanna v. Land Tribunal, (1979) 2 Kant LY218 would be applicable. The facts in the said decision may be narrated briefly as follows. Mallappa had entered into possession. of the land under a registered lease deed dated 24-3-1964. Even after the expiry of the lease he continued to be in possession as a tenant. On 6-6-1966 written agreement to sell the land was executed by the landlord in his favour and he paid a sum of Rs.10,200. No sale deed was executed in his favour. He applied for grant of occupancy right under S. 48A(l) of the Karnataka Land Reforms Act, 1961. The Land Tribunal held that the leasehold right of Mallappa stood extinguished or merged on his entering into an agreement of sale and therefore he was not entitled for conferment of occupancy rights. It was argued before the Division Bench that when the agreement to sell the land was entered into, Mallappa continued to be in possession of the land as owner from that date onwards. Support was sought from the decision in Annamalai Goundan v. Venkatasami Naidu; : AIR1959Mad354 . The Division Bench disagreed with the view taken in : AIR1959Mad354 and followed the decision of this Court rendered by a single Judge of this Court in Ranga Rao Rama Rao Deshpande v. Channappa Basappa, : AIR1975Kant155 and held that agreement to sell was nothing but contract to sell and it was different from sale and therefore possession of Mallappa even after the agreement to sell continued to be that of a lessee and S. 53A of the Transfer of Property Act had no application. Therefore, it is to be held that the law applied by the two Courts below is not correct. The possession of the defendant continued to be possession as a mortgagee even after -19-121960 or to be accurate from 20-12-1960 i.e. expiry of the period of ten months from 192-1960 the date on which Exhibit D-5 came to be executed.
10. In view of the foregoing reasons, I conclude that Exhibit D-5 is not a hurdle in the way of the plaintiff in redeeming the mortgage and securing possession of the suit house.
11. In the result, this appeal is allowed with costs throughout. The judgments and decrees passed by the two Courts below are set aside. It is directed that a preliminary decree as contemplated under 0. 34 R. 7 C.P.C. be drawn up and thereafter a final decree as provided under 0. 34-R. 7 C.P.C. be passed in favour of the plaintiff.
12. Appeal allowed.