1. Plaintiffs are the appellants. The suit was for declaration of title and confirmation of possession, or, in the alternative, for recovery of possession with a prayer for permanent injunction. Plaintiffs base their title on a registered document (Ex. 1) dated 12th April 1950 executed by Lakshmidhar Das, the original defendant (since deceased), in favour of plaintiffs 3 and 4 and the deceased father of plaintiffs 1 and 2 for a consideration of Rs. 300/-Plaintiffs' case is that this document is a sale out and out with a condition for repurchase. Plaintiffs were in possession but the defendant caused disturbance of possession in 1957.
2. The defence case is that Ex. 1 is a mortgage by conditional sale. Plaintiffs were in possession till 1957 when after having been fully satisfied, they gave up possession of the suit land.
3. The Courts below dismissed the suit on a concurrent finding that Ext. 1 was a mortgage by conditional sale.
4. The recitals of document, Ext. 1 may be enumerated --(i) From the date of the execution the purchases are made owners-in-possession from generation to generation, and they would be paying rent in the serista of the landlord and obtain receipts.
(ii) If anybody would dispossess the transferees the transferor and his heirs would be liable to pay damages which would be refund of the consideration money with interest at 12 percent per annum.
(iii) If the consideration of Rs. 300/- is paid back within four years of the date of execution of the document without payment of interest, the transferee would give up possession of the suit land transferred in favour of the transferor.
5. The document has been described as a Kantakabala which means conditional sale. On the face of it, it cannot be clearly stated whether it is a sale or a mortgage. It is ambiguous. The amended Section 58(c) of the Transfer of Property Act now makes it clear that if the sale and the agreement to repurchase are embodied in separate documents, then the transaction cannot be mortgage. But the converse is not true. If both are embodied in the document, the intention as to whether it is a mortgage or sale must be gathered from the terms of the document, and it would be a matter of pure construction of the document itself. It has, however, been held that after the amendment of Section 58(c), if persons choose not to utilise two documents, prima facie they do not intend the transaction to be a sale. In other words, if one document is used for the purpose, there would be a presumption that it is a mortgage unless it is displaced by clear and express words. In this case, there is no clear recital in the document that it is not a mortgage.
In case of a mortgage, however, there must exist relationship of debtor and creditor and the price must becharged upon the property conveyed. If the words are plain and unambiguous, they must be given their true legal effect in the light of the evidence of surrounding circumstances. But if there is ambiguity in the language employed, evidence of contemporaneous conduct is always admissible as a surrounding circumstance. But evidence as to subsequent conduct of the parties is inadmissible. The essential characterise tic features to distinguish the two classes of cases have been authoritatively settled in two decisions of the Supreme Court reported in Chunchun Jha v. Ebadat All, AIR 1954 SC 345 and Bhaskar v. Shrinarayan, AIR 1960 SC 301. Each case must however be ultimately decided on its own facts, the intention of the parties to be gathered from the documents being the real factor.
6. In this case, as would appear from the terms already enumerated, there is no clause for reconveyance if the consideration is paid within four years. The reconveyance is to be effected only by redelivery of possession. The value of the property being more than Rs. 100/- no reconveyance is valid in law unless it is effected by a registered document. By the terms of the agreement, therefore, parties intended that reconveyance is valid on mere redelivery of possession. This is only consistent with the theory that the original title still vested in the transferor which is compatible with the only view that the transaction is a mortgage and not a sale.
7. The term in the document that the transferor would, reimburse the transferee on the contingency of their being dispossessed not being restricted to cases of grantor's defective title is indicative of the fact that the transfer was a mortgage and not a sale. The 3rd term that if the consideration money is paid back without payment of interest within the stipulated period, the transferees would redeliver possession indicates the relationship of debtor and creditor, on the essential elements of a transaction of mortgage. The word used is Parishodha.
8. It was contended that the transferees would gel their names mutated in the zamindari sheristha only tits in with the theory of sale. I have carefully gone through the document, Ex. 1 and I am satisfied that the Courts below committed an error of record in holding that there is a term in the document that the transferees would get their names mutated in the Zamindar Sherista. There is no such term. All that the document says is that the transferees would pay rent in landlord's sherista and obtain receipts. Such an obligation can be taken either by we mortgagor or the mortgagee and the circumstance is Innocuous.
9. The Courts below came to the correct conclusion inholding that the document Ex. 1 is a mortgage and not asale. The appeal fails and is dismissed with costs.