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Babu Bishambhar Nath Vs. Muhammad Ubaid Ullah Khan and ors. - Court Judgment

LegalCrystal Citation
CourtAllahabad
Decided On
Judge
Reported in77Ind.Cas.572
AppellantBabu Bishambhar Nath
RespondentMuhammad Ubaid Ullah Khan and ors.
Cases ReferredJhanda Singh v. Wahid
Excerpt:
.....really a mortgage. the vendors also failed to deliver possession to the purchaser and he was compelled to bring a suit (suit no. the plaintiff based his claim very clearly on his proprietary title as purchaser under the sale-deed. the defendants asserted that when a mortar e pad been agreed on, the plaintiff bad fraudulently caused a sale-deed to be prepared......parties by reason of the decision in suit no. 124 of 1886. the document was on the face of it a sale-deed with a condition that if the purchase-money and any arrears of rent which happened to remain due at the time of re-payment were re-paid to the vendee on the last day of jeth sixteen years alter the purchase, the vendors would be entitled to get back the property. it was clearly stipulated that unless payment was made on this particular date 110 right of re-purchase was reserved-to the vendors.2. the question has been argued on the footing that the test of whether the document was sale or mortgage was 1he intention of the parties at the time of entering into the transaction. this rule was originally laid down by the privy council in bhagwan sahai v. bhagwan din 12 a. 387 : 17 i.a......
Judgment:

1. The question for decision in this appeal is whether a deed dated, 25th June 1886 executed by Durga Prasad and others in favour of one Qudrat Ullah Khan was an out and out sale or a mortgage by conditional sale. There is a subsidiary question as to whether this issue is res judicata between the parties by reason of the decision in Suit No. 124 of 1886. The document was on the face of it a sale-deed with a condition that if the purchase-money and any arrears of rent which happened to remain due at the time of re-payment were re-paid to the vendee on the last day of Jeth sixteen years alter the purchase, the vendors would be entitled to get back the property. It was clearly stipulated that unless payment was made on this particular date 110 right of re-purchase was reserved-to the vendors.

2. The question has been argued on the footing that the test of whether the document was sale or mortgage was 1he intention of the parties at the time of entering into the transaction. This rule was originally laid down by the Privy Council in Bhagwan Sahai v. Bhagwan Din 12 A. 387 : 17 I.A. 98 : 5 Sar. P.C.J. 557 : 6 Ind. Dec. (N.S.) 992 (P.C.) and was re-affirmed by their Lordship in Jhanda Singh v. Wahid-ud-din 36 Ind. Cas. 38 : 38 A. 570 : 31 M.L.J. 750 : 21. C.W.N. 66 : 20 M.L.T. 529 : 14 A.L.J. 1189 : (1916) 3 M.W.N. 570 : 19 Bom. L.R. 1 : 5 L.W. 189 : 25 C.L.J. 324 : 10 Bur. L.T. 131 : 43.

3. Dr. Sen in one portion of his very able argument on behalf of the appellant took the position that any deed which profession to be a sale-deed with a condition allowing the vendor to re-purchase came within the definition of a mortgage by conditional sale contained in Section 58(c) of the Transfer of Property Act, aid must be presumed to be such unless the surrounding circumstances were such as absolutely to exclude the possibility of a mortgage having been intended' This idea is supposed to derive some support from the decision in Mohindra Man Singh v. Maharaj Singh 70 Ind. Cas. 132 : 20 A.L.T. 810. (1923) A.I.R : (A.) 48 : 45 A. 72. A reference to Section 58(C) is sufficient to show that this is a misleading of the law. A mortgage by conditional sale is there defined as a mortgage in which the mortgagor 'ostensibly sells the property 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 (i.e., payment of the mortgage-money) being made the sale shall become void, or on condition that on such payment (again referring back to the payment of the mortgage-money) being made the buyer shall transfer the property to the seller.'

4. The repetition of the terms 'payment of the mortgage-money,' or 'such payment' in each of the definition makes it clear that before a document can be a mortgage by conditional sale it must first be a mortgage, i.e., the property must be transferred as security for a debt. The definition of a mortgage is given in Clause (a) of the section and the subsequent clauses are merely particular cases of this definition. The neglect of this obvious fad has in some cases led-to serious confusion. The view suggested by Dr. Sen was rejected by a Full Bench of the Madras High Court in Muthuvelu Mudaliar v. Vythilinga Mudaliar 50 Ind. Cas. 205 : 42 M. 407 : 9 L.W. 365 : 25 M.L.J. 332 : (1919) M.W.N. 393 : 36 M.L.J. 385.

5. In determining the intention of the parties as expressed in the deed two principles have been laid down for the guidance of the Courts. The first is that the intention of the parties must be gathered from terms of the deed itself and the surrounding circumstances. Oral evidence is excluded by Section 92 of the Evidence Act. This was laid down by the Privy Council in Balkishen Das v. W.F. Legge 22 A. 149 : 4 C.W.N. 153 : 2 Bom. L.R. 523 : 27 I.A. 58 : 7 Sar. P.C.J. 601 : 9 Ind. Dec. (N.S.) 1130 (P.C.). The second is that where a deed is attacked after a long period of years the burden of proving that it is not what it purports to be lies heavily on the person attacking it. This rule was originally laid down by Lord Cranworth in the case of Alder son v. White (1858) 2 De G. & J. 97 at p. 105 : 4 Jur. (N.S.) 125 : 6 W.R. 242 : 119 R.R. 38 : 44 E.R. 924 and has been followed and approved by the Privy Council both in Bhagwan Sahai v. Bhagwan Din 12 A. 387 : 17 I.A. 98 : 5 Sar. P.C.J. 557 : 6 Ind. Dec. (N.S.) 992 (P.C.), and in Jhanda Singh v. Wahid-ud-din 36 Ind. Cas. 38 : 38 A. 570 : 31 M.L.J. 750 : 21. C.W.N. 66 : 20 M.L.T. 529 : 14 A.L.J. 1189 : (1916) 3 M.W.N. 570 : 19 Bom. L.R. 1 : 5 L.W. 189 : 25 C.L.J. 324 : 10 Bur. L.T. 131 : 43. In the first of these two cases the document in suit was two years old. In the present case it was 32 years old at the time or the institution of the suit, and sixteen years had. elapsed from the date fixed for re-purchase before it occurred to any one to treat the document as a mortgage and not as a sale. The present plaintiff is a speculator who has purchased a half share in the property from the original vendors or mortgages, in return for financing the litigation.

6. Now here the document is very clearly expressed to be a sole. The language is not of that technical and obscure kind referred to in the concluding portion of the judgment in Muhammad Hamid-ud-din v. Fakir Chand 58 Ind. Cas. 717 : 42 A. 437 : 11 A.L.J. 478 : 2 U.P.L.R. (A.) 341. The language used is clear beyond all possibility of misconception and the words 'sale' 'purchaser' 'purchase-money,' and 'property sold' are repeated again and again in the course of the deed.

7. What then are the circumstances relied on to prove that the transaction was not what it appears to be. Three such circumstances have been mentioned.

8. That at the time of re-purchase the vendors were to pay in addition to the purchase-money any arrears of rent that might at that time be outstanding against the tenants.

9. That one of the parties to the transaction was a Muhammadan.

10. That if the purchaser had been put to loss by having, to pay any undisclosed incumbrance on the property or in any similar way, he should be identified for this at 1he time of re-purchase.

11. The fourth argument that the document must necessarily, or at any rate until the contrary is shown, be treated as a mortgage by reason of the definition contained in Section 58(c) of the Transfer of Property Act has already been dealt with.

12. Neither of the three points relied on by the appellant is at all decisive. As regards the first, if the document was a mortgage and the rents represented the interest payable on the land no doubt this condition would find a place in it. It was, however, equally natural if the transaction was one of re-purchase, as it purports to be, that if the repurchase wan made at a time when the rents for the half year were largely outstanding, the original purchaser who was parting with the property should receive those rents before doing so. The same argument applies to the condition of repayment of loss to which the first purchaser had been put by reason of there being a prior incumbrance or in any other similar way. The purchaser was making a concession in allowing the vendor an opportunity of buying the property back and was entitled to see that he got full value.

13. One of the parties being 3 Muhammadan may in a doubtful case lend some additional probability in favour of a document being construed as a mortgage, but it does not in my way do away with 1he rule laid down by the Privy Council that of document is to be construed in accordance with the intention of the parties as evidenced by its terms. It may be remarked here that if the intention of the parties had been to effect a mortgage and the document had been drawn in this particular form solely out of regard to the susceptibilities of the mortgagee or might have expected more regard to be paid to the interests of the alleged mortgagors. There was, for instance, no reason why the right of re-purchase should be limited, as is the case here, to one single date at the expiration of sixteen years from the date of the mortgage.

14. One further observation fails to be made at this point. So far as the nature of the contract is to be gathered from the language used this is a question of construction which is a question of law. So far, however, as it is to be gathered from external facts proved in evidence it is a question of fact, and the judgment of the Court below is that the intention of the parties was to effect an out and out sale and not a mortgage. If the test is, as has been laid down in Bapu v. Bhavani 22 B. 245 : 11 Ind. Dec. (N.S.) 746 and other cases, whether a debt remained outstanding which was to be repaid on redemption of the property, there is nothing in the circumstances relied on by the appellant to establish the existence of such debt. In most of the cases which have been cited on behalf of the appellant such circumstances were apparent. In the recent case of Mohindra Man Singh v. Maharaj Singh 70 Ind. Cas. 132 : 20 A.L.T. 810. (1923) A.I.R : (A.) 48 : 45 A. 72 the word 'mortgage-money' was used in the deed and was indeed deliberately substituted for the terms 'sale price' and this the learned Judges pointed out brought the case exactly within the definition in Section 58(c) of the Transfer of Property Act, In the Privy Council case of Balkishen Das v. W.F. Legge 22 A. 149 : 4 C.W.N. 153 : 2 Bom. L.R. 523 : 27 I.A. 58 : 7 Sar. P.C.J. 601 : 9 Ind. Dec. (N.S.) 1130 (P.C.), it was found that a-debt on account of certain factories was consolidated with the principal sum mentioned in the deed and the Bankers were given a security on the property for this amount. This as their lordships of the Privy Council themselves pointed out in Jhanda Singh v. Wahid-ud-din 36 Ind. Cas. 38 : 38 A. 570 : 31 M.L.J. 750 : 21. C.W.N. 66 : 20 M.L.T. 529 : 14 A.L.J. 1189 : (1916) 3 M.W.N. 570 : 19 Bom. L.R. 1 : 5 L.W. 189 : 25 C.L.J. 324 : 10 Bur. L.T. 131 : 43 was probably the determining factor'in the case. In Muhammad Hamid-ud-din v. Fakir Chand (7) there was a distinct covenant for the payment of interest at 10 annas per month at the time of re-sale and this in itself was quite sufficient to confer on the transaction the character of a mortgage. In the case of Wajid Ali Khan v. Shafkat Husain 7 Ind. Cas. 911 : 33 A. 122 : 7 A.L.J. 998, the vendor was 10 get back the property at any time after the expiry of six years when the consideration money was tendered by him. The strongest case on behalf of the appellants is the decision in Ali Ahmad v. Rahmat Ullah 14 A. 195 : A.W.N. (1892) 42 : 7. Ind. Dec. (N.S.) 495. In that case, however, the learned Judges who decided it strongly hinted that the case of Bhagwan Singh v. Bhagwan Din 12 A. 387 : 17 I.A. 98 : 5 Sar. P.C.J. 557 : 6 Ind. Dec. (N.S.) 992 (P.C.), had been wrongly decided by the Privy Council owing to certain important considerations not having been placed before them. It is quite clear from the decision in Jhanda Singh v. Wahid-ud-din 36 Ind. Cas. 38 : 38 A. 570 : 31 M.L.J. 750 : 21. C.W.N. 66 : 20 M.L.T. 529 : 14 A.L.J. 1189 : (1916) 3 M.W.N. 570 : 19 Bom. L.R. 1 : 5 L.W. 189 : 25 C.L.J. 324 : 10 Bur. L.T. 131 : 43 that the Privy Council have not adopted this view. On the contrary in the later case the remarks in Bhagwan Din's case 12 A. 387 : 17 I.A. 98 : 5 Sar. P.C.J. 557 : 6 Ind. Dec. (N.S.) 992 (P.C.) are repeated and reaffirmed.

15. An argument has been based by the learned Counsel for the appellant on the fact that the date of re-payment was the date of the full moon in the month of jeth, which is the date on which usufructuary mortgages are usually made payable. The reason for this date being chosen is the same in both cases, namely, that it is the time of the year in which there is no crop on the land at which a transfer of possession can be made with the least possible disturbance to the outgoing possessor. It may also be noted that in the case of a usufructuary mortgage the mortgage-money is usually made payable on the full moon of Jeth in any year whereas in this case it is limited to one particular year and there is a special covenant that unless payment is made on this date the right of re-purchase shall be lost. It has not been suggested that the price paid under the deed was in anyway inadequate to the value of the property at the time when the sale was effected. On the contrary according to the pleadings it represents sixteen years purchase on the income of the property. It is common ground that the property has since increased very greatly in value, and the appeal to this Court was valued at over Rs. 11,000.

16. For all these reasons our conclusion is that the document is very clearly expressed to be a sale and that there is nothing either in its terms or in surrounding circumstances to show that it was really a mortgage.

17. It remains to refer briefly to the question of res judicata. It is in. evidence that when the document was originally executed the vendors refused to get it registered and it was compulsorily registered at the instance of the purchaser. The vendors also failed to deliver possession to the purchaser and he was compelled to bring a suit (Suit No. 124 of 1886). Copies of the pleadings and judgment in that case are on the record. The plaintiff based his claim very clearly on his proprietary title as purchaser under the sale-deed. The defendants in their written statement did not contest the nature of the deed as drawn. They pleaded, however, that the contract between the parties had been one of usufructuary mortgage and alleged that the plaintiff had fraudulently altered its terms and got a deed drawn up which did not represent the real contract between the parties. On these pleadings the case went to trial. Two issues were framed. The first was as to whether one particular defendant, Musammat Jit Kunwar, had joined in executing the deed. The second was whether the other defendants agreed to a transaction of 'tai mashrut' or to one of mortgage with possession. The judgment is in Urdu. The words 'bai mashrut' used in the issue and in the finding literally mean 'a conditioned sale'. They may refer, as the appellant wishes us to interpret them, to a mortgage by conditional sale. They may also refer to a sale with a condition of re-purchase. It appears to us that they must be interpreted with reference to 1he pleadings on which the parties went to trial, and on those pleadings there can be no doubt that the contest between the parties was whether the document was as alleged by the plaintiff, a sale-deed with a condition of re-purchase, or whether 1he true contract between the parties was, as alleged by the defendants, ore of possessory mortgage. The finding of this issue was in favour of the plaintiff. It seems to us doubtful, however, whether this finding can operate as res judicata in the present suit, because the plaintiff was entitled to recover possession, of the property on the basis of his sale-deed on the case of fraud set up by the defendants being rejected; whether the, document was an out and out sale or a mortgage by conditional sale. At the same time the pleading s in the case serve to show how the document was understood by the parties at the time. Neither party asserted that the deed actually prepared was a mortgage. The plaintiff sued on it as a sale. The defendants asserted that when a mortar e pad been agreed on, the plaintiff bad fraudulently caused a sale-deed to be prepared.

18. For the reasons already giver, we dismiss this appeal with costs including in this Court fees on the higher scale.


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