O.P. Saxena, J.
1. This is an appeal and cross-objection against the judgment and decree dated 15th April 1964 passed by the Civil Judge, Ballia decreeing the suit for redemption of mortgage dated 9th September 1947 on payment of Rupees 28,200/-.
2. The facts giving rise to this appeal are that plaintiff Ganesh Ram used to carry, on business at Ballia in the name of Durga Ram Ganesh Ram. DefendantsI and II set belong to the same family and their business used to be carried on in the name of Devdutt Pandey Kapildeo Pandey. Defendants Illset's business used to be carried on in the name of Lachchu Bhagat Sarju Prasad. The plaintiff used to look after the businesses of defendants I and II set and defendants III set. The plaintiff was the owner of the disputed property situated in the Municipal limits of Ballia. The total area is 46 acres. There is a built portion over a considerable part.
3. On 9th September, 1947 plaintiff executed deed Ex. A-1 whereby he transferred the disputed property in favour of defendant No. 1 Mst. Daulata Kuer, the ancestor of defendants II set for a sum of Rs. 45,000/-. Out of the sum of Rupees 45,000/- a sum of Rs. 28,200/- was paid in cash before the Sub-Registrar and the balance of Rs. 16,800/- was left with the defendants II set for payment to the Imperial Bank. It was provided that in case the plaintiff paid a sum of Rs. 45,500/- by 30th June, 1950, Mst. Daulata Kuer would re-convey the property to him and in case of her failure to do so, the plaintiff could obtain a re-conveyance through Court.
4. On 4-1-63 plaintiff filed the suit in forma pauperis for redemption of the mortgage and possession over the disputed property without payment of any amount to the defendants. It was said that the sum of Rs. 16,800/- was due on defendants II set, that the sum of Rs. 15,000/-was due on defendants III set and that on request of the defendants he included the sum also in the deed executed by him. The plaintiff claimed that a sum of Rupees 1200/- was due on defendants I andII set on account of arrears of salary and a sum of Rs. 12,000/- was otherwise due on them. He, therefore, claimed a redemption of the mortgage without any payment whatsoever.
5. The suit was contested by defendants NOS. 3 and 6 to 9 (II set) with, the allegations that the document executed by the plaintiff and was an out and out sale with a right of repurchase and was not a mortgage by conditional sale, that the plaintiff used to look after the business of the defendants II set and III set and he had incurred the liability to the extent of Rupees 16,800/- and Rs. 15,000/- that he obtained the lean from the Imperial Bank in the names of these Firms and misappropriated the money, that it was for this reason that he accepted the liability for these amounts and executed the document for Rs. 45,000/-, that he did not obtain any re-conveyance within the period fixed, that he is not entitled to redemption of the mortgage without the payment of Rs. 45,000/- and that the suit is frivolous and vexatious and defendants II set are entitled to special costs.
6. The learned Civil Judge accepted the plaintiff's version that the document dated 9th September, 1947 was a mortgage by conditional sale and not an out and out sale with a condition for repurchase. He further accepted the plaintiff's version that the sum of Rs. 16,800/- was in fact due against defendants II set arid the plaintiff was not liable to pay the same. He held that the plaintiff was liable to pay Rs. 28,200/-. He accordingly decreed the suit for redemption of the mortgage dated 9th September, 1947 and directed the plaintiff to deposit, Rupees 28,200/- in, court within six months. On this being done, he directed the defendants I and II set to deliver possession of the mortgaged property to the plaintiff, the plaintiff had been permitted to sue as pauper and it was directed that the court-fees would be realised from the defendants I and II set. The plaintiff was also awarded costs of the suit against the said defendants. Hence this appeal and cross-objection.
7. Sri Raja Rani Agarwal, learnedcounsel for the appellants submitted that the document dated 9th, September, 1947 was an out and out sale with a condition for repurchase and was not a mortgageby conditional sale. Sri G. C. Dwivedi,learned counsel for the plaintiff-respondent supported the finding of the trialcourt regarding the document being amortgage by conditional sale.
8. A 'Mortgage' has been defined by Section 58(a) of the Transfer of Property Act as below:--
'A mortgage is the transfer of an interest in specific immovable property for the purpose of securing the payment of money advanced or to be advanced by way of loan, an existing or future debt, or the performance of an engagement which may give rise to a pecuniary liability.
The transferor is called a mortgagor, the transferee a mortgagee; the principal money and interest of Which payment is secured for the time being are called the mortgage-money, and the instrument (if any) by which the transfer is effected is called a mortgage deed.'
9. A 'Mortgage by conditional sale'has been defined by Section 58(c) of theAct as below:--
'Where the mortgagor ostensibly sells the mortgaged properly-
On condition that on default of payment of the mortgage money on a certain date the sale shall become absolute, or
On condition that on such payment being made the sale shall become void, or
On condition that on such payment being made the buyer shall transfer the property to the seller, the transaction is called a mortgage by conditional sale and the mortgagee a mortgagee by conditional sale: Provided that no such transaction shall be deemed to be a mortgage, unless the condition is embodied in the document which effects or purports to effect the sale.'
10. In 0065/1939 : AIR1939All539 Abdul Rehman v. Bismilla Begum, it was held :--
'In order to bring a transaction with-in the category of mortgage the relationship of debtor and creditor must subsist between the parties and if there is no debt for which the transfer is a security it is impossible, to hold that the transaction is a mortgage. When a document, on the face of it appears to be a sale deed, in the absence of fraud, it must be held to embody a transaction of sale. The burden of proving it to be a deed of mortgage will rest heavily on the party alleging it to be so. To discharge the burden contemporaneous conduct of the parties and such, extrinsic evidence of surrounding circumstances as may be required to show in what manner the language of the document is related to existing facts, may be proved.
In order to determine whether the transaction amounts to an out and cut sale or was a mortgage by conditional, sale, the following tests may be applied to determine the case:--
(1) The existence of a debt.
(2) The period, of repayment: a short period being indicative of a sale and a long period of a mortgage.
(3) The continuance of the grantor in possession indicates a mortgage.
(4) A stipulation for interest on repayment indicates a mortgage.
(5) A price below the true value indicates a mortgage.
(6) A contemporaneous deed, stipulating for a re-conveyance indicates a mortgage. It may be however noted that any one of the circumstances mentioned above will not necessarily prove that, a sale deed with a condition of repurchase is in fact a mortgage by conditional sale.'
11. In Chunchun v. Ebadal Ali : 1SCR174 , it was field by the Supreme Court that the question whether a given transaction is a mortgage by conditional sale or a sale outright with a condition of repurchase is a vexed one and must be decided on its own facts. In such cases the intention of the parties is the determining factor. A reference was made to the proviso to Section 58(c) of the Transfer of Property Act and it was pointed out that where the sale and the agreement to repurchase are embodied in separate documents, the transaction cannot be a mortgage by conditional sale. A note of caution was struck when it was observed that the converse does not hold good, that is to say, the mere fact that there is only one document does not necessarily mean that it must be a mortgage and cannot be a sale. On the construction of the document it was held that the intention must be gathered, in the first place from the document itself. If the words are express and clear, effect must be given to them and any extraneous enquiry into what was thought or intended is ruled out. The real question in such a case is not what ,the party intended or meant but what is the legal effect of the words which they used. If, however, there is ambiguity in the language employed, it is permissible to look to the surrounding circumstances to determine what was intended. On considering the terms of the document and the intention of the parties, it was held to be a mortgage by conditional sale.
12. In Bhoju Mandal v. Debnath Bhagat : AIR1963SC1906 , besides the terms of the document, the, area of the land and the consideration paid was also taken into consideration for determining as to whether the document was a mortgage by conditional sale or sale with a condition of repurchase. The document was held to be a sale.
13. In Bishan Lal v. Banwari Lal : AIR1937All724 the circumstance that the consideration for the sale deed represented the full value of the property was also taken into consideration for holding that the transaction was an out and out sale with a right of repurchase and not a mortgage by conditional sale.
14. The same principles had been followed in the cases of Thakra Singh v. Sheo Nath Singh : AIR1940All227 , Mohd. Amin v. Bajrangi Singh : AIR1949All335 and Mst. Qayumunissa v. Rashidul Malik : AIR1952All200 .
15. The recitals in the earlier part of the deed Ex. A.1 dated 9th September, 1947 are as follows:--
'Min muqir ko bagaraz adayegi yaftni zimmogi apne Imperial Bank, Ballia Branch mubligh 13,200/- was Firm Deo Dult Pandcy Kapil Deo Prasad 16,800/-wa firm Lachchoo Bhagat Sarju Prasad 15,000/- jumla mubligh 45,000/- ki sakht zaroorat hai jo badoon tahrir wasiqa haza ke doosari savil se muhayya nahin ho sakta lihaza min muqir bahalat sehat zaat wa sabat-e-aql bakhushi wa raza-mandi apne nafa nuqsan khoob soch samajh kar bila kisi jabar wa dabao ke bil awaz mubligh 45,000/- zare qarza naqd ke apna qita gola pukhta. . ...'
16. The executant referred to his liability to the extent of Rs. 45,000/- and pointed out that it was not possible to raise this amount except by executing this document. If he was executing a sale deed he could have said that as it was, not possible to raise this amount, he had no choice but to sell the property for a sum of Rs. 45,000/-. It is significant that the sum of Rs. 45,000/- was described as 'Zare Qarza naqad'. The reference to the loan received in cash clearly points to the establishment of a relationship of a creditor and debtor and the consideration having been received as a loan rather than in lieu of a price paid as referred to in the definition of 'sale'' given in Section 54 of the Transfer of Property Act.
17. D. W. 1 Ram Gahan Ram who claims to have settled the terms of the document stated that 'Yen dastawez nizai 45,000/- rupaye ke qarza ke babat likha gaya tha.' He was the only witness examined on behalf of the contesting defendants and his statement is of considerable importance. It confirms the recitals of the deed that it was executed for a loan of Rs. 45,000/-.
18. The recitals of the deed contained the usual covenants of a sale and possession over the property in suit was also given to Mst. Daulata Kuer. The rights and liabilities of a buyer and seller are given in Section 55 of the Transfer of Property Act. There is a reference to the special covenants on page 573 of Indian Conveyancer by P. C. Mogha 1968 Edition. The form of a mortgage by conditional sale appears on page 366 of the said book. It is obvious that for a mortgage by conditional sale all the covenants of a sale are included. We are unable to accept the contention of the learned counsel for the appellants that the inclusion of these terms shows that the document was an out and out sale with a condition for repurchase and not a mortgage by conditional sale. We are of the opinion that these terms are included in a mortgage by conditional sale also.
19. In the end if was provided that the executant had persuaded Smt. Daulata Kuer to the condition that in case the executant paid Rs. 45,000/- on or before 30th June 1950, Smt. Daulata Kuer would re-convey the property to him and in case of her failure to do so, he would be entitled to obtain a re-conveyance through Court. We are unable to accept the contention of the learned counsel for the appellants that the absence of any provision for interest is a pointer towards the document not being a mortgage by conditional sale. In this case, there can be no doubt regarding the nature of relationship between the parties and the sum of Rs. 45,000/- was referred to as 'Zare Qarza naqad'. Possession of the property in suit was given to Smt, Daulata Kuer. Where possession is given to a mortgagee, interest is not usually provided for.
20. The most important circumstances in this case is the valuation of the property in suit, P. W. 1 Ganesh Ram stated that the property in suit was worth more than Rs. 45,000/- at the time of the execution of the document dated 9th September, 1947 and also on the date of his evidence. He was not cross-examined on this part of the statement. D. W. 1 Ram Gahan Rai did not refute his version and did not say that the property in suit was not worth more than Rupees 45,000/- on the date of the execution of the document. He stated that at the time of the settlement of the terms of the deed; Ganesh Ram told him that no one was prepared to offer more than Rupees 40,000/- for the property in suit. No such question was put to P. W. 1 Ganesh Ram. The witness admitted that there are 18 or 19 Pakka rooms in the building and it was newly built at the lime of the execution of the document. He could not refute that there is no house bigger than the house in suit in the town of Ballia. The area of the land was 46 acre. It was situated within municipal limits. There was a newly constructed building on a considerable part of the land, having 18 big rooms of which the roofs were laid with girders and stones. There is substance in the plaintiffs version that the properly in suit was worth much more than 45,000/-. D. W. 1 Ram Gahan Rai could not refute that the property in suit was worth Rs. 1 lac. The contesting defendants miserably failed to substantiate the plea raised in paragraph 18 of the additional pleas of their written statement in which it was said that the market value of the property in suit was Rs. 45,000/- at the time of the execution of the document. We are Inclined to accept the plaintiffs version in this regard and we do not consider it probable that the plaintiff would have agreed to sell the property in suit for a meagre sum of Rs. 45,000/-. This is a stronger pointer towards the document being a mortgage by conditional sale.
21. We are thus of the opinion that the learned Civil Judge rightly held that Ex. A1 dated 9th September, 1947 is a mortgage by conditional sale and not an out and out sate with a condition of re-purchase.
22. The learned counsel for the appellants submitted that the learned Civil Judge erred in directing redemption of the mortgage on payment of Rs. 28,200/-only and accepting the plaintiff's version that he was not liable for Rs. 16,800/- due on the Firm Devdutt Pandey Kapil Deo Pandey. The learned counsel for the plaintiff-respondent supported the finding on this point.
23. The learned Civil Judge did not take into consideration Section 92 of the Evidence Act. It provides that:
'When the terms of any such contract, grant or other disposition of property, or any matter required by law to be induced to the form of a document, have been proved according to the last section, no evidence of any oral agreement or statement shall be admitted, as between the parties to any such instrument or their representatives in interest, for the purpose of contradicting, varying, adding to, or subtracting from, its terms'.
24. In Ex. A-1, the executant clearly referred to his liability to the Imperial Bank, Ballia in respect of Rs. 13,200/-due on him and also owned liability for Rs. 16,800/- due on the Firm Devdutt Pandey Kapil Deo prasad and Rs. 15,000/-due on the Firm Lachchoo Bhagat Sarju Prasad. He referred to all these liabilities as 'Yaftni zimmegi apne', and in view of this specific admission there could be no room for doubt in this regard. Oral evidence was not admissible to vary or contradict the terms of the document.
25. The statement of P. W. 1 Ganesh Ram also shows that the business of all the three Firms used to be carried on from the same building and that he used to get Rs. 400/- per annum as salary from the Firm Devdutt Pandey Kapil Deo Prasad and Rs. 300/- per annum from the Firm Lachchoo Bhagat Sarju Prasad. He used to go to the Imperial Bank, Ballia in connection with the business of all the three Firms. He used to draw large amounts from the Bank and deposit the same in the accounts of the Firms. The defendants' version that the plaintiff admitted his liability for these amounts as he had misappropriated the same appears to be highly probable. It is true that the sum of Rs. 16,800/- was left with the defendants I and II set and they paid the amount to the Bank vide receipts Exs. A-4 to A-7. This would not mean that the plaintiff was not liable for this amount. The plaintiff had admitted his liability for the aforesaid amount and the learned Civil Judge erred in accepting the plaintiffs version to the contrary is holding that he was not liable to pay the same.
26. We accept the contention of learned counsel for the appellants that the plaintiff is liable to pay Rs. 45,000/- for redeeming the mortgage.
27. The learned counsel for the plaintiff-respondent submitted that the learned Civil Judge erred in rejecting the plaintiff's version that he was entitled to redeem the mortgage without any payment. Except for the bald statement of P.W. 1 Ganesh Ram, there is no guidance to show that a sum of Rs. 12,000/- was due to plaintiff's firm Durga Ram Ganesh Ram and defendants Firm Devdutt Pandey Kapil Deo Pandey was liable to repay the same. There is also no corroboration of his version regarding the sum of RS. 12,000/- being due as salary. The plaintiff did not file the extracts of the account books of his Firm. The record does not show that he ever gave any notice to the defendants II set for this amount. It was open for him to file a suit for the recovery of these amounts. He could not set off these amounts in the mortgage money due. The learned Civil Judge rightly refused the plaintiff's claim in this regard.
28. No other point was pressed.
29. The result is that the appeal succeeds partly and the cross-objection fails.
30. The appeal is partly allowed, the judgment and decree passed by the learned Civil Judge are modified to the extent that the plaintiff will be entitled to redeem the mortgage on payment of Rs. 45,000/- to the contesting defendants The plaintiff is given six months time to deposit the said amount in Court. The rest of the judgment and decree are confirmed. The cross-objection is dismissed. The costs of this Court shall be easy.
31. A sum of Rs. 3445/-' is payable as court-fee as the plaintiff was permitted to file the suit as a pauper. The said amount shall be paid by the defendants-appellants as directed by the trial Court, After the sum of Rs. 45,000/- is deposited, the sum of Rs. 3445/- will be deposited in the treasury in lieu of court-fees.