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Mathura Kurmi Vs. Jagdeo Singh and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtAllahabad
Decided On
Reported inAIR1927All321
AppellantMathura Kurmi
RespondentJagdeo Singh and ors.
Cases ReferredNarasingerji Jyangerji v. Panuganti Parthasaradhi Rayanam Garu
Excerpt:
- - it was recited in the deed that the executant had received the entire amount of consideration from the vendee according to the details set out at the bottom of the deed, and it was declared by the executant that from the date of the execution of the deed the vendee was to take possession and to enjoy the income of the property generation after generation. the subordinate judge held that if the transaction between the parties were to be held one of an absolute conveyance with an option for repurchase the plaintiff could not succeed inasmuch as he had failed to observe the conditions upon which the option was granted. 14. these cases occur with considerable frequency and have given rise to a good deal of discussion in the courts. it is to be observed here that in the well-known case.....lindsay, j.1. on the 22nd of may, 1915 babu jagdeo singh, who is one of the plaintiffs in this suit, executed a sale-deed marked ex. a which is printed at p. 51 of our record. by this deed he purported to sell absolutely to the defendant mathura kurmi a 6 anna 3 pies share situated in village in the basti district named mundila khurd. it was recited in the deed that the executant had received the entire amount of consideration from the vendee according to the details set out at the bottom of the deed, and it was declared by the executant that from the date of the execution of the deed the vendee was to take possession and to enjoy the income of the property generation after generation. the deed was declared to be a deed of absolute sale.2. the sum of rs. 15,000 is mentioned in the.....
Judgment:

Lindsay, J.

1. On the 22nd of May, 1915 Babu Jagdeo Singh, who is one of the plaintiffs in this suit, executed a sale-deed marked Ex. A which is printed at p. 51 of our record. By this deed he purported to sell absolutely to the defendant Mathura Kurmi a 6 anna 3 pies share situated in village in the Basti district named Mundila Khurd. It was recited in the deed that the executant had received the entire amount of consideration from the vendee according to the details set out at the bottom of the deed, and it was declared by the executant that from the date of the execution of the deed the vendee was to take possession and to enjoy the income of the property generation after generation. The deed was declared to be a deed of absolute sale.

2. The sum of Rs. 15,000 is mentioned in the document as being the consideration for the sale. This sum, with the exception of an item of Rs. 242-4-0, consists of various items constituting debts which were owing by Jagdeo Singh to Mathura Kurmi and to others.

3. On the same date Babu Jagdeo Singh executed what is described as, a deed of relinquishment (see page 55 of the record). By this document he purported to relinquish all his rights to the sir and khudkasht lands included in the 6 anna 3 pies share which had been sold to Mathura Kurmi under the deed just mentioned.

4. A third deed, marked Ex. 21(see p. 61 of the record), was executed on the same date, 22nd of May 1915. This document was executed by Mathura Kurmi and Jagdeo Singh.

5. This document begins by reciting that Jagdeo Singh had absolutely sold a 6 anna 3 pie share in Mundila Khurd to Mathura Kurmi for a sum of Rs. 15,000. It goes on to say that Babu Jagdeo Singh is a rais whose wishes Mathura Kurmi was anxious to gratify. Accordingly by this deed Mathura Kurmi declares of his own free will and accord, in order to give satisfaction to Babu Jagdeo Singh and his heirs.

That whenever after seven years Babu Jagdeo Singh aforesaid or his heirs out of their own funds and income actually and duly pay the whole consideration for the said sale-deed to me or to my heirs, or make a deposit of the money in our favour, then I and my heirs shall certainly return to him the whole of the sold share mentioned in the aforesaid sale-deed.

6. A further clause in this document provides that if Jagdeo Singh violates any of the terms of this agreement by contracting debts or by executing a registered sale-deed, a mortgage with possession or a hypothecation deed in order to raise funds to repay the sum of Rs. 15,000 to Mathura Kurmi, the agreement is to be void.

7. All these three documents were presented for registration on one and the same day.

8. We have now a suit brought by Babu Jagdeo Singh on the 27th July 1922, that is to say, just over seven years after the execution of the three documents just mentioned. In his plaint Babu Jagdeo Singh alleged that the three documents, to which I have referred, were evidence of a single transaction which he described as being a transaction of mortgage by way of conditional sale. On this footing, therefore, he claimed to be entitled to redemption on payment of the sum of Rs. 15,000. Alternatively the Court was asked to give a decree to Babu Jagdeo Singh even if it should be held that the transaction evidenced by these two deeds was a transaction of absolute sale with a covenant for repurchase.

9. It is to be noticed here that certain persons were subsequently joined as plaintiffs in the suit; the reason for this was that in order to enable him to bring this suit for redemption or re-purchase, Babu Jagdeo Singh had to resort to raising money by means of sale and mortgage. The persons from whom he raised the money were therefore joined as co-plaintiffs under an order, dated the 24th of October 1923.

10. The defendant Mathura Kurmi took up the position that the relation between himself and Babu Jagdeo Singh was not that of mortgage and mortgagor at all. His case was that he had purchased the property in suit absolutely from Jagdeo Singh. He admitted that he had, by the document of agreement printed at page 61 of the record, given Babu Jagdeo Singh an option to repurchase the property. He claimed, however, that this was a totally distinct transaction from the transaction of sale and he pleaded that Babu Jagdeo was not entitled now to avail himself of the option inasmuch as he had violated one of the conditions upon which the option to purchase was granted. This plea had reference to the fact that Babu Jagdeo Singh had to resort to the borrowing of money in order to enable him to make an offer of this sum of Rs. 15,000 to Mathura Kurmi.

11. Evidence, both oval and documentary, was put in before the Subordinate Judge who eventually came to the conclusion that, although these three documents were executed as separate documents on the same day, nevertheless they were evidence of a single transaction. The Subordinate Judge was of opinion that this single transaction between the parties was in reality a transaction of mortgage by way of conditional sale and not a transaction by which there had been an absolute sale with a subsequent grant of option of repurchase. The Subordinate Judge held that if the transaction between the parties were to be held one of an absolute conveyance with an option for repurchase the plaintiff could not succeed inasmuch as he had failed to observe the conditions upon which the option was granted.

12. I agree with the Subordinate Judge that, if the dealings between the parties are to be treated as a transaction of sale with a covenant for repurchase the plaintiffs were out of Court. It is quite clear that if Mathura Kurmi was, in fact giving the plaintiffs an option of repurchase, the plaintiffs were strictly bound by the terms of the option and they could not ask the defendant to accept money which Jagdeo Singh had to raise by means of borrowing or by selling other property in his possession.

13. The question which we have to determine in this appeal is whether the Subordinate Judge was right in holding that, on a true construction of the documents in question and having regard to the surrounding circumstances of the case, the parties stood in the relation of mortgagor and mortgagee.

14. These cases occur with considerable frequency and have given rise to a good deal of discussion in the Courts. We have had a strenuous and able argument advanced before us on both sides, and practically every case bearing upon the point has been cited to us, from the case of Alderson v. White down to the latest case decided by their Lordships of the Privy Council, Narasingerji v. Panuganti 47 Mad. 729.

15. The law on the subject has been definitely laid down by their Lordships of the Privy Council in the case of Balkishen Das v. Legge [1900] 22 All. 149. It was there stated that in cases of this kind what has to be determined is the intention of the parties at the time the transaction was entered into, and in order to ascertain this intention it was ruled that regard might be had to the surrounding circumstances which show how the language of the documents to be construed was related to then existing facts. On the other hand it was definitely ruled that no oral evidence could be given by the parties in order to show what their intention was. It is to be observed here that in the well-known case of Alderson v. White oral evidence of intention was given on both sides. Their Lordships in the case of Balkishen Das v. Legge [1900] 22 All. 149 held that this could not be done regard being had to the rule of evidence laid down in Section 92 of the Indian Evidence Act.

16. To come now to the circumstances surrounding the transaction or transactions which took place on the 22nd of May 1915. I have come to the conclusion that on the whole these circumstances do not afford much help in arriving at a decision as to the real intention of the parties. (His Lordship then examined the circumstances and continued.) I come now to discuss the language of the documents in the case for it appears to me that the questions now before us must be decided on the language of the instruments themselves, and in dealing with this matter it is, I think, an important circumstance to be considered that the document of sale and the deed of agreement for repurchase were executed on one and the same day. I have little doubt in my own mind that although these deeds purport to be evidence of separate and distinct transactions they nevertheless do represent in substance one transaction and it is on that footing that I proceed to an examination of the language contained in them.

17. To take first the document of sale. This purports to be an absolute sale free of any condition whatever. There is no reference in the document to any understanding for an agreement for the reconveyance of the property. As it stands the document professes to be nothing more nor less than a deed of out and out sale. We come then to the document providing for the repurchase of the property. I have already set out the substance of this deed but I have now to refer to the particular clause in which is contained the option of repurchase which is professedly given to Babu Jagdeo Singh. This clause reads as follows:

Whenever after seven years Babu Jagdeo Singh or his heirs out of their own funds actually and duly pay the whole consideration for the sale-deed to me or to my heirs or make a deposit of this money in our favour then I and my heirs shall certainly return to him the whole of the share mentioned in the aforesaid sale-deed.

18. I have already referred to the fact that the Subordinate Judge was impressed with the manner in which this clause giving a right of repurchase was expressed. It is clear that on a strict interpretation of this clause the right of repurchase was to be exercisable by Babu Jagdeo Singh at any time after the expiry of seven years from the date of the deed. There was no provision made for the giving of notice of intention to exercise the option. No period is fixed within which the option must be exercised nor is any date laid down upon which the money is to become payable. As it stands the clause gives Babu Jagdeo Singh the option of getting this property back at any time after the expiry of seven years from the 22nd of May. 1915. It will, I think be conceded that this is a most unusual form in which to draw a clause giving an option of repurchase. The ordinary form is one by which the exercise of the option is limited to a particular period. The person who has the right to purchase must exercise the option within a definite period or upon particular dates.

19. Clearly having regard to the language of this clause for repurchase it must be held that time was not of the essence of this arrangement between Mathura Kurmi and Jagdeo Singh. It is well settled that if an owner of land and an intending purchaser enter into a contract which constitutes between them the relation of vendor and purchaser and there is a stipulation in the contract that the purchase money shall be paid and the contract completed on a certain date, the principle is that time is not of the essence of the contract and the circumstance of the day fixed for payment of the money and completion of the purchase being passed does not entitle either party to refuse to complete. But on the other hand it is equally well settled that where there is a contract between the owner and another person that if such person shall do a specified act then the owner will convey the land to him the relation of vendor and purchaser does not exist between the parties unless and until the act has been done as specified. The condition for repurchase must be performed strictly and it is therefore held that in all agreements by which an option to repurchase is given time is of the essence of the contract.

20. When we find a document like this agreement executed by Mathura Kurmi in favour of Jagdeo Singh, on the 22nd of May 1915, in respect of which it cannot possibly be argued that time was of the essence of the contract, it seems to me that we must hold that this agreement is not evidence of a contract for sale with a covenant for repurchase, but should be treated rather as evidence that the parties intended that the relation between them should be that of mortgagor and mortgagee. This point came prominently to notice in a recent case decided by their Lordships on appeal from the High Court of Madras Narasingerji v. Panuganti 47 Mad. 729. At page 744 of the reports the judgment reads as follows:

But if time was of the essence for such repurchase it could in no circumstances be postponed beyond six years from the date of the conveyance. Clearly, therefore, and within the intendment of the documents themselves, time is not of the essence in this matter; so soon as that is established all pretence for holding this ostensible sale and repurchase to be anything else than a mortgage by conditional sale disappears.

21. The case which is now before me is a much stronger one than that which was under the consideration of their Lordships in the judgment just mentioned. I have referred to the language of the clause by which the right of repurchase of the property is reserved to Jagdeo Singh and, as I have said, this language is altogether inconsistent with any notion that time was of the essence of the matter. If that be so then, to repeat the words of the authority just referred to,

all pretence of holding this ostensible sale and repurchase to be anything else than a mortgage by conditional sale disappears.

22. I have only to refer to one other circumstance which was brought to notice during the course of argument and upon which strong reliance has been placed for the purpose of showing that the transaction was a transaction of out and put sale with agreement for repurchase.

23. It is proved from the document Ex. G at page 67 of our record that on the l0th of March 1918, that is to say, almost three years after the execution of the agreement under consideration, Jagdeo Singh received from Mathura Kurmi a sum of Rs. 5,522, principal, and Rs. 1,314, interest, totalling Rs. 6,836 which according to this receipt, was owing to Babu Jagdeo Singh under the sale-deed. It is argued that having regard to what is stated in this receipt the Court ought to come to the conclusion that the transaction between the parties was one of sale and that this document is proof that portion of the purchase money was paid some three years after the sale-deed was executed.

24. Jagdeo Singh was in the witness-box and this document was not put to him nor again was it put to Mathura Kurmi who also gave evidence in the case. It is, therefore, not possible to arrive at any accurate conclusion as to the reasons why this money was paid and why this document of receipt was executed in this particular form. However, we have to refer back to the sale-deed Ex. A executed on the 22nd of May 1915. The various items which go to make up the consideration of Rs. 15,000 are set out in detail in this document, and Item No. 5 shows that a sum of Rs. 5,500 was left with Mathura Kurmi for payment to Ram Kishen and others, persons to whom Babu Jagdeo Singh was indebted under a deed of simple mortgage executed by himself and his brother on the 31st January 1912. This sum of Rs. 5,500 was supposed to represent the half-share of this debt owing by Jagdeo Singh.

25. The deed of sale set out that,

should the creditor aforesaid not take the money or if for some reason the said amount be not deposited in the Court, the vendee (that is Mathura Kurmi) should pay the amount assigned to him, the executant, personally or by money order.

26. The receipt Ex. G does recite that after the execution of the document of the 22nd May 1915 Mathura Kurmi offered the money to Ram Kishen and the other creditors who refused to receive it and the consequence, therefore, was that this sum remained with Mathura up to the 10th of March 1918 when, in pursuance of the arrangement set out in the document of the 22nd May 1915, he handed it over with interest to Jagdeo Singh. There can be no doubt that under the contract Jagdeo Singh was entitled to claim this sum from Mathura Kurmi in case it was not received by the creditors Ram Kishen and others, and the fact that interest was paid by Mathura Kurmi on this sum of Rs. 5,500 odd may be explained on the ground that Mathura was in possession of the property in dispute from the 22nd of May 1915 in lieu of interest. Consequently, if he held back this sum of Rs. 5,500, he would be liable under the contract to hand this money over to Jagdeo Singh and Jagdeo Singh would be entitled to interest inasmuch as Mathura was in possession and getting interest on money which he had not advanced.

27. It is to be regretted that the parties were not called upon to explain this transaction and in the circumstances I think it better to ignore it altogether.

28. For the reasons I have given, I have come to the conclusion that the decision of the Subordinate Judge is correct and should not be disturbed here in appeal. I would, therefore, dismiss this appeal with costs.

Sulaiman, J.

29. The question whether a particular transaction was a mortgage by conditional sale or a sale with an independent agreement for re-purchase is often one of considerable difficulty. For transfers, not governed by the Transfer of Property Act, the main question for enquiry used to be the true intention of the parties, that is to say, whether they intended it to be a sale or a mortgage. Oral evidence of intention was of course not admissible for the purpose of construing the deed or ascertaining the intention of the parties, as it was excluded by Section 92 of the Indian Evidence Act. The case had to be decided on a consideration of the contents of the document with such extrinsic evidence of surrounding circumstances as might be required to show in what manner the language of the document was relied to existing facts. Balkishan Das v. W.F. Legge [1900] 22 All. 149. The cases of Situl Purshad v. Luchmi Purshad [1884] 10 Cal. 30 and Bhagwan Sahai v. Bhagwan Din [1890] 12 All. 387 had been decided on the same principle. As observed by their Lordships of the Privy Council in Jhanda Singh v. Wahid-ud-din [1916] 38 All. 570 it was not disputed that the test in such cases was the intention of the parties to the instrument.

That intention, however, must be gathered from the language of the documents themselves viewed in the light of the surrounding circumstances.

30. Even in a case of a dead governed by the Transfer of Property Act their Lordships disposed of the case with no reference to any oral evidence other than that of surrounding circumstances such as was clearly required to show in what manner the language of the document was related to the existing facts. Narasingerji Jyanagerji v. Panuganti Parthasaradi Rayanam Garu 47 Mad. 729. Undoubtedly therefore the real intention is the primary question.

31. The Transfer of Property Act of 1882 has, however, codified the law and defined what a mortgage by conditional sale is. That definition is both exhaustive and conclusive. A transaction cannot amount to a mortgage by conditional sale unless it fulfills the conditions of Section 58(c). Nor can a transaction be not a mortgage by conditional sale if it comes within that section. The ascertainment of the true intention used to be a matter of considerable difficulty. The legislature has come to the rescue of the Courts and laid down certain conditions which, if fulfilled, would make the sale a mortgage. If the mortgagor ostensibly sells the mortgaged property on condition (a) that on default of payment of the mortgage money on certain date the sale shall become absolute or (b) that on such payment being made the sale shall become void or (c) that on such payment being made the buyer shall transfer the property to the seller, the transaction, though in the garb of a sale, is, in the eye of the law, a mortgage by conditional sale. Sales with an independent covenant for repurchase have a resemblance to the third class of ostensible sales mentioned above. The section provides that where a mortgagor has ostensibly sold his property on condition that on payment of the mortgage money the buyer shall transfer the property to the seller, the transaction is a mortgage by conditional sale. I take it that this would be so even though the language of the document itself does not use the words 'mortgagor,' 'mortgaged property' or 'mortgage money.' The conveyance may ostensibly be a deed of sale, that is to say, with all the phraseology employed in drafting sale-deeds, but if that sale is in reality subject to a condition of a re-transfer on payment of the amount the law regards it as a mortgage by conditional sale, If it were necessary that the document itself should contain the words that it was a mortgage, in many cases the transaction would not look an ostensible sale. In my opinion the presence in the deed of such words as literally imply a mortgage is not absolutely necessary. The cardinal point is whether the sale is subject to a condition of re-purchase on payment.

32. It seems to me that if a document is in the form of an ordinary conveyance usually found in India and executed by the transferrer only, and it contains a covenant for repurchase on payment of the consideration, the transaction would come exactly within the definition of a mortgage by conditional sale. In such cases I would have the utmost difficulty in trying to take it out of the scope of Section 58. Such was the case in Mohindra Mansingh v. Maharaj Singh A.I.R. 1923 All. 48. It is true that a somewhat similar case arose in Bishambharnath v. Mohammad Ubaid Ullah Khan A.I.R. 1923 All. 586 where a different view was taken. But apparently the learned Judges who decided that case were considerably influenced by the circumstances that the deed which was of 1886 was being attacked after a long period of years. The learned Judges strongly relied on the Full Bench case of Muthuvelu Mudaliar v. Vythilinga Mudaliar [1919] 42 Mad. 407. But in this Full Bench case there were two separate documents.

33. In the present case we have two separate documents of the same date. In order to determine whether the sale was subject to the condition entered in the agreement one test to apply is whether the two documents were part and parcel of the same transaction, or whether they were mutually independent. If the two were separate transactions altogether the sale could not possibly be said to have been subject to any condition for repurchase. As remarked by their Lordships of the Privy Council in Jhanda Singh v. Wahid-ud-din [1916] 38 All. 570:

If no such Agreement was made before the deed of sale was executed and the latter deed was an after thought, only suggesting itself after the sales-deed had been executed and delivered it would not suffice. The execution of the deed of sale and of the contract of re-purchase would then form two separate and independent transactions, not two connected and interdependent parts of one and the same transaction.

34. It is only when the two are one and the same transaction that the sale could be conditional. Logically speaking the converse of the proposition laid down in the passage quoted above may not necessarily be true. The Full Bench of the Madras High Court in Muthuvelu Mudaliar v. Vythilinga, Mudaliar [1919] 42 Mad. 407 held that their Lordships did not mean to lay down that if there was a single settlement and the two documents were connected and interdependent, it necessarily led to the inference that there was a mortgage and not a sale. The Bench thought that all that was said was that an essential requisite for construing such documents as a mortgage was that they should be dependent upon a single arrangement, and not that such a test was a conclusive criterion of the transfer transaction being a mortgage. The question referred to the Bench was whether In one and the same transaction land was sold absolutely but that a right of repurchase was to be exercised before a certain date, the transaction necessarily became, by virtue of Section 58 of the Transfer of Property Act, a mortgage by conditional sale, whatever the intention of the parties might have been. The Full Bench answered this question in the negative. It may perhaps be possible to conceive of a rare case in which the sale and the agreement to re-transfer, though part and parcel of the same transaction, are yet independent in the sense that the sale is not subject to that condition and that the parties intend that the transaction should remain a sale and not a mortgage. Without definitely saying that such a thing is possible, I am prepared to assume that it is so and that the singleness of the transaction, though a strong test, is yet not an absolutely conclusive test that the transaction was a mortgage and that in spite of the single transaction it may nevertheless be shown that the intention of the parties was otherwise. In most cases, however, the circumstances that the sale by the transferrer and the agreement by the transferee are both part and parcel of the same transaction would undoubtedly justify the inference that the sale was subject to the condition of re-purchase.

35. The cases before their Lordships of the Privy Council, except the Madras one were cases of deeds not governed by the Transfer of Property Act. In Situl Prasad's case [1884] 10 Cal. 30, though the documents were of the same date, full price had been paid. In Bhagwan Sahai's case [1890] 12 All. 387 the suit was brought more than fifty years after when the burden lay heavily on the person alleging that the transaction was not what, on the face of it, it appeared to be. On the other hand, in the cases of Ramsaranlal v. Amirta Kuar [1880] 3 All. 369(F.B.) and Balkrishna Das v. W.F. Legge [1900] 22 All. 149, though there were separate documents of the same date, transactions were held to be mortgages. Jhanda Singh's case [1916] 38 All. 570 requires special consideration. The deed of conveyance was dated the 29th of August 1852. The deed of agreement was dated the 5th of September 1852. Under the law as it then stood, registration was not at all necessary and title passed with the execution of the first document. Next year, namely in May 1853, the two documents were presented for registration separately by the executants on the 18th and the 19th. They however were entered in the register by the Sub-Registrar on the same date. The transaction was being challenged more than 50 years after these documents when the parties thereto and the witnesses had all died. Their Lordships held that the burden to show that the second deed was not an after thought but a part and parcel of the same transaction as the first, had not been discharged. When sitting on the Full Bench, which had heard this case before the appeal to their Lordships of the Privy Council, Richards, C.J., remarked Jhanda Singh v. Wahid-ud-din [1911] 33 All. 585 that there could be no doubt that if the two deeds were of even date, an almost irresistible presumption would arise, in favour of the transaction being a mortgage. The identity of the date however is by no means absolutely conclusive as is clearly shown by the remarks of their Lordships of the Privy Council in the same case Jhanda Singh v. Wahid-ud-din[1916] 38 All. 570.

36. If the conveyance and the agreement were interdependent it is obvious that there would be reciprocal consideration. On the other hand, if the agreement were either an after thought or at any rate wholly gratuitous, it may be difficult to see how it will become specifically enforcible in a Court of law, if the vendee subsequently refuses to abide by it. A mere voluntary promise to reconvey without any corresponding consideration would be void as a contract. In such cases therefore it is necessary to consider whether where a conveyance and an agreement are part and parcel of the same transaction the transferrer was really content to have a mere voluntary and gratuitous promise from the transferee, which he could enforce against the transferee's will, or whether he intended to convey the property subject to the condition of re-transfer, in which case there would be consideration passing from either party.

37. Coming to the facts of this case, there are several circumstances which point to the sale being subject to the condition of re-purchase. It is true that none of these by itself may be conclusive, but the cumulative effect of all these circumstances is undoubtedly in favour of the respondents.

38. The sale-deed, the deed of relinquishment and the agreement were all executed on the same date, namely, on the 22nd of May 1915. They were faired out by the same scribe Kalapnath. They were attested by the same attesting witnesses and at the same place. It is clear from the evidence that they were completed at one and the same sitting. They were presented for registration on the same date, namely, the 14th of June 1915, and presented one after the other. The stamp of the sale-deed was purchased by the transferrer. Ordinarily speaking, the duty is payable by the mortgagor or the vendee, and not the vendor. The property transferred consisted of sir plots to a very large extent. It is reasonable to believe that the transferee would try to make sure that the relinquishment must therefore have been a part and parcel of the contract of sale and the consideration paid must have been in respect of both the conveyance and the relinquishment. And yet this one transaction was evidenced by two separate documents. Is it not more likely that the agreement evidenced by a third document was also a part and parcel of the same transaction? Had the agreement been entirely gratuitous and voluntary and made out of mere grace, there was no necessity to complete the document simultaneously with the other deeds. It could have been executed and registered later on. Even prior to this transaction there was a relation of a debtor and creditor existing between the parties. Although the plaintiffs have not given any convincing evidence to show that the real value of the property was much more than that of the amount paid as consideration, there is also no conclusive evidence on behalf of the defendant that full price was in fact paid. Various previous transactions, e.g., the mortgage of 1914 in favour of the defendant himself and the earlier sale-deed of 1900 by which this property was acquired by the vendors undoubtedly show that the rates of purchase prevailing in this locality are enormously high.

39. The sale-deed contains an express provision that

If the executant or his heirs put forth a claim as regards the sir or khudkasht or exproprietary land...or there be any obstruction or defect in the vendee's possession or enjoyment of the produce then he or his heirs may duly recover the entire amount of consideration or to the extent of the loss together with costs and interest at the rate of four annas per rupee per annum from the property sold or other property of the executant.

40. There was thus not only a warranty of title, but a right was given to the vendee to recover the consideration money if there was any obstruction in the delivery of possession. The agreement also expressly provided that if possession of the sir cultivation was not given then the transferrer would have no right to have the property reconveyed to him. Another significant provision is that the transferee was secured in his possession for at least a period of seven years which meant a certain investment for a definite time; and after the expiry of that period the transferrer and his heirs had an unlimited time to get the property reconveyed. Ordinarily for a mere covenant for repurchase there is a time limit in which the option is to be exercised. But here the time apparently was not of the essence of the contract If it were not a mortgage in which case the sixty years limitation would apply, the transferee and his heirs would be able to come at any time in future and ask that the property be restored to them. This would be an intolerable burden on the vendee and his heirs. As to the case of Jhanda Singh [1916] 38 All. 570, the agreement is quoted at length in the judgment of the learned Chief Justice reported in Jhanda Singh v. Wahiuddin [1911] 33 All. 585. Although some parts of it were somewhat self-contradictory and the time fixed was 'after the lapse of nine to ten years' there was a further clear provision that:

if they be not ready to purchase the property and to pay the purchase money within the aforesaid time, they shall have no claim to the aforesaid property after the expiry of the period of ten years.

41. In the present case there is no such limitation. The time for repayment is not of the essence of the contract, which circumstance was prominently relied upon by their Lordships of the Privy Council in the case of Narasingerji Jyangerji v. Panuganti Parthasaradhi Rayanam Garu 47 Mad. 729.

42. The reason for adopting a cumbersome method instead of drawing up a mortgage-deed might very well have been the desire to have a separate deed of relinquishment of the ex-proprietary rights executed and to have a separate deed of agreement conditional on the relinquishment of those rights. As the property transferred consisted of nearly 119 bighas of sir plots out of a total of 297 bighas, the anxiety of the vendee to make sure that he would obtain actual possession of the cultivatory holdings is intelligible. The payment to Jagdeo Singh of the balance of the consideration which had been left in the hands of the transferee for payment to a prior creditor as evidenced by the receipt, dated the 10th of March 1918, can be easily explained by the circumstance that the transferee was to remain in possession of the property and appropriate the profits and there was to be no account taking at the time of the re-conveyance. The amount had therefore to be kept intact and a convenient way for doing that was to pay back the balance to Jagdeo Singh himself rather than enter into a complicated calculation of the actual proportionate profits.

43. Having regard to these circumstances I have no doubt in my mind that the sale was subject to the condition of reconveyance on payment of the entire consideration and that it fell within the definition of mortgage by conditional sale as given in Section 58(c) of the Transfer of Property Act.


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