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Moulvi Ghulam Nabi Khan Vs. Musammat Niaz-un-nissa - Court Judgment

LegalCrystal Citation
CourtAllahabad
Decided On
Judge
Reported in9Ind.Cas.140
AppellantMoulvi Ghulam Nabi Khan
RespondentMusammat Niaz-un-nissa
Cases ReferredBasudeo v. Basu
Excerpt:
mortgage or sale - construction of deed--sale accompanied by a contemporaneous agreement to reconvey--mortgage by way of conditional sale, or sale with a right of re-purchase. - - clearly so. here there is clearly no doubt. having failed to do so, he must abide the consequences......out of a suit for redemption of an alleged mortgage of the 12th of august 1894. on that date a sale-deed was executed and a contemporaneous agreement whereby the vendee undertook to reconvey the property comprised in the sale-deed on re-payment of the amount of the purchase money within a period of five years. the period of five years has long since elapsed and consequently the agreement to reconvey is not capable of being enforced unless the transaction is regarded as in the nature of a mortgage by way of conditional sale.2. both the lower courts dismissed the plaintiff's suit on the ground that the sale-deed represented an out and out sale and that the agreement whereby the vendee undertook to reconvey the property on payment of the purchase money within a limited time did not.....
Judgment:

1. This appeal arises out of a suit for redemption of an alleged mortgage of the 12th of August 1894. On that date a sale-deed was executed and a contemporaneous agreement whereby the vendee undertook to reconvey the property comprised in the sale-deed on re-payment of the amount of the purchase money within a period of five years. The period of five years has long since elapsed and consequently the agreement to reconvey is not capable of being enforced unless the transaction is regarded as in the nature of a mortgage by way of conditional sale.

2. Both the lower Courts dismissed the plaintiff's suit on the ground that the sale-deed represented an out and out sale and that the agreement whereby the vendee undertook to reconvey the property on payment of the purchase money within a limited time did not convert the sale into a mortgage by way of conditional sale.

3. The second appeal has been preferred and reliance has been placed upon the language of Section 58 of the Transfer of Property Act. It is to be observed in this case that there are two documents to be interpreted and that the decision of it depends upon the true construction to be placed on those documents. If we come to the conclusion that the sale-deed represented, and was intended to be, an out and out sale, then it appears to us that there being nothing illegal in the agreement of the parties, we should hold it to be an out and out sale, and that inasmuch as the purchase money was not paid within the time agreed upon the plaintiff is not entitled to recover the property. It appears to us that the case is concluded by the decision of their Lordships of the Privy Council in Bhagwan Sahai v. Bhagwan Din 12 A. 387 : 17 I.A. 98. In that case, a document purporting to be one of sale was accompanied by a contract whereby a right was reserved to the vendor of re-purchasing the property sold on payment of the purchase money within a certain time and it was held that the transaction was not to be regarded as a mortgage by conditional sale. Their Lordships, in their judgment quote a statement of the law pronounced by Lord Chancellor Cram worth in the case of Alderson v. White 2 De. G. & J. 97 : 4 Jur. (N.S.) 125 : 6 W.R. 242, dealing with the question whether or not what purported to be a deed of sale on its face was really a mortgage, and read the following passage: In every such case the question is, what open a fair construction is the meaning of the instruments? Here the first instrument was on the face of it an absolute conveyance; the second gave a right to repurchase on payment not of what should be due but of the full amount of the purchase money of 4,739 exactly corresponding to the terms of the two documents in the present case, whereby the vendee gave the right to the vendors to take back the property if within the period of 10 years they should pay the same amount, namely, Rs. 4,000. Was that, if taken according to its terms a lawful contract? Clearly so. What then is there to show that it was intended to be a mere mortgage? I think that the Court after a lapse of 30 years ought to require cogent evidence to induce it to hold that an instrument is not what it purports to be; and I see but little evidence to that effect here.' It seems to us that this language of the Lord Chancellor is closely applicable to the facts of the present case. We find in the document, which is described as a deed of sale, a recital that the sale had become absolute and final and that the contracting parties had no right to cancel the sale and to demand restitution of the consideration money and that the vendor has no right to any share left in the property sold.' In view of this language, can we say that what purports to be a sale is in reality a mortgage? A stipulation for repurchase will not of itself convert case of sale into one of mortgage. To make a mortgage, there must be a debt, Basudeo v. Basu 31 B. 528. If there be a right to redeem property from a debt, there must also be the correlative right to enforce payment of the debt. Here there is clearly no doubt. Whether a transaction is a bona fide sale with an agreement for re-purchase or a mere mortgage in the form of a sale must depend on the intention of the parties to be gathered from the language in which the transaction is carried out supplemented it may be by oral evidence. If we attach their true meaning to the recitals which we have referred to above, it must, we think, be held that the transaction was intended by the parties to be an out and out sale with an agreement, for repurchase. In view of the language used, we are of opinion that the Courts below rightly held that the plaintiff had no right to redeem the property. If he intended to rely upon the agreement for re-purchase, he ought to have paid his money within the time limited by the document. Having failed to do so, he must abide the consequences. We dismiss the appeal with costs including fees in this Court on the higher scale.


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