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Mohd. AmIn Vs. Bajrangi Singh and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtAllahabad
Decided On
Reported inAIR1949All335
AppellantMohd. Amin
RespondentBajrangi Singh and ors.
Excerpt:
- - mohammad amin had apparently satisfied the court that he was prevented by sufficient cause from filing the claim earlier and his claim was, therefore, admitted. 5. i have examined the sale as well as the agreement. the vendor bad no right or claim whatever left respect of the property sold or its price and if any claim was put forward by the vendor or any of his heirs in respect of the property or its price, then that claim was to be treated as false and untenable......mohammad amin, mohammad yakub and mohammad afzal as the mortgagees of the property and the sale deed of 13th june 1924, as a mortgage deed. it appears that they subsequently conceded that the deed of 1924 was a mortgage by conditional sale whereupon the special judge granted them a decree for two-thirds of the mortgage money. on 21st september 1940, mohammad amin who was away in burma having returned made an application on and january 1941, praying for restoration of the proceedings under the encumbered estates act and the admission of his claim under section 11 (2) of the act. mohammad amin had apparently satisfied the court that he was prevented by sufficient cause from filing the claim earlier and his claim was, therefore, admitted. his claim was that he was the owner of the.....
Judgment:

Ghulam Hasan, J.

1. The only question that arises-in this appeal is whether upon a true construction, the deed of transfer (Ex. 1) read with the agreement (Ex. A-1) is a sale with a condition of repurchase or a mortgage by conditional sale. The matter arises in this way.

2. Bajrangi Singh and others filed an application under Section 4, U.P. Encumbered Estates Act, on 20th October 1936. Decrees were passed in due course by the Special Judge under Section 14 and they were sent to the Collector under Section 19 on 21st July 1939. On 22nd April 1940 two per-sons Mohammad Afzal and Mohammad Yakub, sons of one Abdullah, filed a claim alleging that they are proprietors of certain plots under the deed of 13th June 1924, executed by the applicants in favour of their father Abdullah for :as. 6,000. The debtors-applicants had shown the three sons of Abdullah Mohammad Amin, Mohammad Yakub and Mohammad Afzal as the mortgagees of the property and the sale deed of 13th June 1924, as a mortgage deed. It appears that they subsequently conceded that the deed of 1924 was a mortgage by conditional sale whereupon the Special Judge granted them a decree for two-thirds of the mortgage money. On 21st September 1940, Mohammad Amin who was away in Burma having returned made an application on and January 1941, praying for restoration of the proceedings under the Encumbered Estates Act and the admission of his claim under Section 11 (2) of the Act. Mohammad Amin had apparently satisfied the Court that he was prevented by sufficient cause from filing the claim earlier and his claim was, therefore, admitted. His claim was that he was the owner of the property by virtue of the sale deed of 1924 but in case it was held a mortgage he claimed a money decree for Rs. 2,000 plus Rs. 800 costs of two wells constructed by him on the mortgaged property that is Rs. 2,800. in all. The issue framed by the trial Court was whether the claimant is a vendee of the property In suit as alleged.

3. The learned Special Judge interpreted the sale (Ex. 1) dated 13th June 1924, and the agreement (Ex. A-1) executed on the previous date, as embodying a transaction of sale with a condition of repurchase. Accordingly he allowed the claim and declared Mohammad Amin to be owner of one-third of the property. He decreed that this share was not liable to attachment and sale in satisfaction of the decree.

4. The learned District Judge differed from this view and held that it was a mortgage by conditional sale.

5. I have examined the sale as well as the agreement. It appears that the agreement was executed on 12th June 1924, in anticipation of the transfer of the property but the deed of transfer and the agreement were both registered on 13th June 1924. Exhibit 1 is throughout described as the sale deed and the consideration of Rs. 6,000 as the price. The property covered by the deed is 31 bighas and odd. It was recited in the deed that possession over the property sold with all rights and powers of a proprietor was given to the transferee. The transferee was to pay the Government revenue assessed on the land, was to appropriate the remaining profits to his use for ever generation by generation, significant words following this recital are:

The vendor bad no right or claim whatever left respect of the property sold or its price and if any claim was put forward by the vendor or any of his heirs in respect of the property or its price, then that claim was to be treated as false and untenable. If any deft in title was discovered, then the responsibility for meeting that claim would lie upon the vendor and if any portion of the property went out of the possession the transferee upon the claim of any person, the transferor would be bound in that case to give him other land according to his liking and the transferor and his heirs will have no objection to fulfilling this condition of the deed. If the land did not meet with the appro1 of the transferee, then he will be entitled to recover the entire claim along with damages from the movable and immovable property of the transferor.

6. Under the agreement (Ex. A-1) it was stipulated that whenever in any Jeth the transferor or his heirs paid in a lump sum the entire amount due under the deed of transfer out off his own earnings, the property transferred will be returned to the vendor. It was, however, agreed that money borrowed from a creditor for the return of the property was not to be accepted

7. These are the only material terms of the two deeds.

8. A careful consideration of the terms and conditions of the two deeds leaves no doubt that the parties entered into an out and out transfer. There is nothing in the deed to show that the relation of a creditor and a debtor was created between the parties. The property had to be returned to the vendor upon repayment of the consideration advanced and there was nothing to suggest that the parties were accountable to each other for interest or profits. The mere fact that the deed recited that the transferee shall after paying the Government revenue appropriate the balance of the profits to his own use cannot take away the character of the sale-deed. That is a stipulation which is not uncommonly to be found in sale-deeds. The learned District Judge considered that it was unusual in a sale-deed for the vendor to say that whatever rights he had in the land in preasenti or it might accrue in future were transferred to the transferee without any exception. I do not agree. This is a recital which is introduced into deeds with a view to emphasising that the vendor has divested himself of every vestige of right in the property transferred. This recital is more compatible with the existence of a sale-deed than a mortgage-deed. The condition that the vendor as a condition precedent to the return of the property to him shall pay only out of his own earning and not by borrowing is also consistent with a sale-deed rather than with a deed of mortgage.

9. In Alderson v. While (1858) 44 E.R. 924 Lord Cranworth laid down the principle applicable to such a case in the following words:

The rule of law on this subject is one dictated by common sense that prima facie an absolute conveyance containing nothing to show that the relation of debtor and creditor is to exist between the partie3 does not cease to be an absolute conveyance and become a mortgage merely because the vendor stipulates that he shall have a right to repurchase.

This statement of the law was approved by their Lordships of the Privy Council in Bhagwan Sahai v. Bhagwan Din and Ors. 17 I.A. 98.

10. In Jhanda Singh v. Wahid-ud-din A.I.R. (3) 1916 P.C. 49 the aforesaid observation was also quoted with approval. That was a case in which there was also the condition that the transferors would pay the original sum advanced out of their own pocket without mortgaging or selling the property to other persons. This condition was urged by counsel to be more consistent with the transaction being a mortgage than a sale. Their Lordships repelled the contention and held that the stipulation is wholly inconsistent with the relation of mortgagor and mortgagee. Indeed they doubted whether the condition was not illegal as amounting to an encroachment on the right of the mortgagor to redeem the mortgage from whatever funds he chose to do so.

11. A similar construction upon the right of the transferor to pay the money out of his own pocket was contained in the deed which fell for consideration in Munshi Bishan Lal v. Lala Banwari Lal and Ors : AIR1939All713 . In that case the property was subject to prior encumbrances and it was proper to sell the said property and pay off the debt. Under these circumstances, it was held, following Jhanda Singh's case A.I.R. (3) 1916 P.C. 49, that the terms of the document were consistent only with an intention on the part of the executant to sell the property absolutely to the vendee and to retain the right to repurchase it within one year.

12. The head-note of the decision in Ahmad Husain Rizwi v. Azhar Ali A.I.R. (31) 1944 Oudh 305 to which I was a party in my opinion enunciates the principle correctly:

To determine whether a transaction is a sale or a mortgage by conditional sale, the form in which the transaction is clothed is certainly not the only or the final test but where a transaction is apparently a sale, the onus of showing that it is a mortgage lies on the person who contends against the tenor of the deed. Prima facie, an absolute conveyance containing nothing to show that the relation of debtor and creditor is to exist between the parties does not cease to be an absolute conveyance merely because the vendor stipulates that he shall have a right to repurchase. There is no prevailing tendency in the province of Oudh for Mahomedans to conceal the real nature of the transaction and clothe a mortgage in the garb of an out and out sale, and the fact that the parties are Mahomedans raises no presumption that what appears to be a sale is really a concealed mortgage. The conduct of the vendor pursuant to the deed is also an important factor to be taken into consideration.

The contention on behalf of the respondents that the real nature of the transaction being a mortgage it was cloaked in the form of a sale on account of the scruples which Abdullah had as a Mahomedan is also satisfactorily met in this case.

13. On behalf of the respondents it was contended that the use of the words 'khali fasl Jeth' for the taking back of the property is associated with redemption of a mortgage and discloses the real intention of the parties. Reliance was placed on a decision of the Judicial Commissioner of Oudh in Mahabir v. Kunj Bihari A.I.R. (11) 1924 Oudh 417 in support of the fact that this date is generally a date more appropriate to redemption of a mortgage than to a reconveyance of the property by sale. A similar observation was made in Mehdi Husain v. Mohammad Jawad A.I.R. (28) 1941 Oudh 479 where it was said that 'khali fasl Jeth' is the most convenient time of the year for effecting the transfer of ownership. I scarcely think that if the intention of the parties is reconveyance of the property in a transaction of sale, any other time for transferring the ownership of the property would be more appropriate. It seems to me that 'khali fasl Jeth' is the most convenient time for transfer of the possession of property, whether it is as a result of the mortgage with conditional sale or a sale with a condition of repurchase. One of the important factors in transactions of this kind is the question of price, i.e., whether the price mentioned in the deed is adequate or reasonable. Unfortunately no evidence has been given on either side in this case and it is impossible to come to any conclusion one way or the other.

14. Upon a consideration of all the terms of the two deeds I am of opinion that the transaction entered into by the parties is one of an out and out sale.

15. The result is that I allow the appeal, set aside the decree of the District Judge and restore that of the Special Judge with the costs throughout.


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