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Munshi Bishan Lal Vs. Lala Banwari Lal and ors. - Court Judgment

LegalCrystal Citation
Subject Civil
CourtAllahabad
Decided On
Reported inAIR1939All713
AppellantMunshi Bishan Lal
RespondentLala Banwari Lal and ors.
Excerpt:
- - 4. it appears to us to be clear upon a consideration of this clause of the deed that the executant realized that if a suit were brought upon the basis of prior encumbrances nothing of the property would in the end of the day be left and that she determined that the best course open to her with to get rid of the property entirely and to take what was left out of the purchase price after paying off the amount due upon the prior encumbrances. it would be unsafe however to draw any definite conclusion from the acts, independent and not fully explained, of the plaintiff......before whom the case came in second appeal. on 10th november 1932, one mt. kishan piari executed a sale deed by which she conveyed the property in dispute to the respondents for the sum of rs. 550. the deed contained a condition that if she should repay the amount of the sale consideration to the respondents with, in one year the respondents would be bound to re-transfer the property to her provided she paid the money out of her pocket. in, other words it was a condition of the transaction that the obligation to re-transfer would not bind the respondents if the vendor mortgaged or transferred the property to a third party for the purpose of raising, the money to pay back the amount of the sale consideration to the respondents. later, mt. kishan piari sold her interest in the property to.....
Judgment:

1. This is a plaintiff's appeal against the decision of the learned Single Judge of this Court. The appeal arises out of a suit for redemption. The plaintiff sought to redeem certain house property on payment to the defendants of the sum of Rs. 550. The trial Court decreed the claim. The lower Appellate Court dismissed the suit. The decision of the lower Appellate Court has been upheld by the learned Single Judge before whom the case came in second appeal. On 10th November 1932, one Mt. Kishan Piari executed a sale deed by which she conveyed the property in dispute to the respondents for the sum of Rs. 550. The deed contained a condition that if she should repay the amount of the sale consideration to the respondents with, in one year the respondents would be bound to re-transfer the property to her provided she paid the money out of her pocket. In, other words it was a condition of the transaction that the obligation to re-transfer would not bind the respondents if the vendor mortgaged or transferred the property to a third party for the purpose of raising, the money to pay back the amount of the sale consideration to the respondents. Later, Mt. Kishan Piari sold her interest in the property to the plaintiff-appellant who filed the present suit within a year of the sale of 10th November 1932.

2. The defence to the suit is that the transaction of 10th November 1932 is a sale and not a mortgage by conditional sale and that therefore the plaintiff who purchased the vendor's interest cannot redeem the property. Whether a deed is a mortgage by conditional sale within the meaning of Section 58(c), T.P. Act, or an out and out sale is a question which falls to be determined on a consideration of the terms of the deed itself and of the surrounding circumstances.

3. In this connexion reference may be made to the decision of the Privy Council in Jhanda Singh v. Wahiduddin (1916) 3 A.I.R. P.C. 49. The document of 10th November 1932 is upon the face of it a sale; the executant Mt. Kishan Piari purports to convey for the sum of Rs. 550 the property in suit. In the earlier part of the deed there is a recital of the fact that the property is subject to prior encumbrances and that the amount due upon these encumbrances is Rs. 495. The document then proceeds:

The creditors are making pressing demands and are ready to file a suit. In case a suit is instituted I shall be put to unnecessary expense. It appears to me to be proper to sell the said house and to pay of the said debt. In this way some money will be left for me, the executant.

4. It appears to us to be clear upon a consideration of this clause of the deed that the executant realized that if a suit were brought upon the basis of prior encumbrances nothing of the property would in the end of the day be left and that she determined that the best course open to her with to get rid of the property entirely and to take what was left out of the purchase price after paying off the amount due upon the prior encumbrances. There are further passages in the deed which support the view that the intention of the executant wan to sell and not merely to mortgage her property, for example in the body of the deed there is the following passage:

I have received the sale consideration from the said vendees as specified below. I have taken out the property sold from the possession of the mortgagee and have put the same in possession of the vendees. Now neither I nor my heirs and representatives have or shall have any claim to or share Soft in the house sold. Either the vendees should live therein themselves or let it out on rent or make any constructions or alterations therein. In short from this date the vendees have all proprietary rights in respect of the property sold.

5. These provisions in the document appear to us to be absolutely inconsistent with the relationship of mortgagor and mortgagee. It is further to be remarked that the deed provides that the executant shall not sell or hypothecate the property to a third party for the purpose of raising money to repay the amount of the sale consideration to the vendees. The provision is as follows:

I, the executant or my heirs and representatives shall not pay the amount by transferring or hypothecating the said house sold to any one for this purpose, nor shall they transfer or hypothecate the property to any one else for five years after taking it buck on payment of the amount of consideration.

6. This restriction upon the executant in regard to her right to have the property retransferred to her within one year is also in our opinion inconsistent with the relationship of mortgagor and mortgagee. In thin connexion we would refer again to the decision of the Privy Council in Jhanda Singh v. Wahidudin (1916) 3 A.I.R. P.C. 49. It is true that in that case the agreement between parties was embodied not in onE document but in two separate deeds. Nevertheless, the condition restricting the vendor's right in regard to the repurchase of the property was substantially the same an is the restriction imposed upon the vender in the present case. The Board considered that such a restriction was not consistent with an intention merely to mortgage the property.

7. It was maintained for the appellant that in view of the plain provisions of Section 58(c), T.P. Act, and the fact that the sum of Rs. 550 did not represent the real value of the property transferred by the deed of 10th November 1932 that deed must be taken to be a mortgage by conditional sale. Learned Counsel founded specially upon the amendment to Section 58(c) effected in the year 1929. The amendment is as follows:

Provided that no such transaction shall be deemed to be a mortgage unless the condition (i.e. of repurchase) is embodied in the document which effects or purports to effect the sale.

8. The object of this amendment was to put an end to the confusion which had resulted from innumerable decisions of the High Courts in India on such transactions embodied sometimes in two documents and which had occasioned disputes, the question in each case being as to whether the transaction was a sale or a mortgage by conditional sale. It is to be noted that the amendment does not provide that if a trans, action is embodied in one document it must of necessity be regarded as a mortgage by conditional sale and not an out and out sale. We are therefore thrown back upon the principle that the intention of the parties to the document must be gathered from the terms of the document itself and from the surrounding circum. stances.

9. The main circumstance urged by learned Counsel for the appellant in favour of the view that the document of 10th November 1932 was a mortgage by conditional sale was that the sale consideration was much less than the true value of the property. In support of this contention he referred to the fact that the plaintiff shortly after the execution of the deed on 10th November 1932 had purchased from another branch of the family to which the executant belonged the share which they claimed in the same house for Rs. 300. Learned Counsel further pointed to the fact that on 16th June 1933 the appellant purchased Mt. Kishan Piari's interest in the property for the sum of Rs. 765; Rs. 550 of this sum was to be appropriated to the repayment of the sale consideration to the respondents. Therefore it was contended that in all the plaintiff had paid Rs. 1,065 for the property. It cannot however be maintained that because the plaintiff paid Rs. 300 for the alleged interest of third parties in the property which was conveyed by the deed of 10th November 1932 that the property was then necessarily of greater value than Its. 550. Neither can it be concluded from the fact that the plaintiff was willing to pay Rs. 7.65 for Mt. Kishan Piari's interest in the property that the property was worth more than Rs. 550. The Court it is true in interpreting the deed of 10th November 1932 has to look to the surrounding circumstances; it would be unsafe however to draw any definite conclusion from the acts, independent and not fully explained, of the plaintiff. These acts may be an indication of the true market value of the property, on the other hand they may not. It is not at all certain what considerations induced the plaintiff to pay the price he did. We are not in a position to say from the Information before us whether on 10th November 1932, Rs. 550 was or was not a fair market value for the property. If the property had been worth over Rs. 1000 as is claimed by the appellant it would have been easy for him to have adduced definite and independent evidence to prove this. We hold therefore that there is nothing upon the record to entitle the Court to come to the conclusion that, all things considered, Rs. 550 was not a reasonable price for the property in the condition in which It was on 10th November 1932.

10. The terms of the document of 10th November 1932 appear to us to be consistent only with an intention upon the part of the executant Mt. Kishan Piari to sell the property absolutely to the defendants and to retain for herself the right to repurchase within one year. In this view of the matter the appeal fails. In the result the appeal is dismissed with costs. There is a cross-objection. There is no force in the objection; it is therefore dismissed with costs. The injunction order is discharged.


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