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Chodhari Madhaji Ganeshiji Vs. Patel Magandas Bechardas - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtGujarat High Court
Decided On
Case NumberSecond Appeal No. 64 of 1969
Judge
Reported inAIR1973Guj190
ActsTransfer of Property Act, 1882 - Sections 58
AppellantChodhari Madhaji Ganeshiji
RespondentPatel Magandas Bechardas
Appellant Advocate S.K. Zaveri, Adv.
Respondent Advocate M.B. Shah, Adv.
Cases ReferredBapuswami v. N. Pattay
Excerpt:
property - nature of document - section 58 of transfer of property act, 1882 - plaintiff was in need of money for paying his debts - document executed between plaintiff and defendant - dispute arose between parties that whether transaction was mortgage by conditional sale or sale outright with condition of repurchase - as per recitals in document condition to reconvey land if consideration paid on appointed day - document was ostensible conditional sale and intended as security for debt - held, suit document was mortgage by conditional sale. - - but his evidence read as a whole clearly indicates that what the witness meant to say was that the filed was to be placed with him meaning 'kept' with him as stated by ambalal......language used in and the tenor of the document is not such as are ordinarily used in an outright sale transaction. in a sale transaction, the executor to will say that he is selling the property to the person in whose favour the document is executed for the stated consideration and not that for a consideration taken by him he is giving the land and handing over possession thereof.7. it was contended by mr. m. b. shah for the respondent that the document in question was written not by a solicitor or an advocate, but by a bond writer in a village in mehsana district and therefore, the language used should be considered liberally as in a mofussil pleading. it is true that the document is written by one ramanlal m. ganesh as stated in the document. presumably he was a bond-written but the.....
Judgment:

1. This is original plaintiff second appeal direct and the decision of the learned Assistant Judge Mehsana. given on October 26, 1967 in Regular Civil Appeal NO. 19. of 1966. The leaned Judge had thereby allowed the appeal of the respondent-defendant and dismissed the plaintiff Regular civil Suit No. 27 of 1965 which suit was decree by the learned Civil Judge, Kalol. by his judgment a and decree dated December 27, 1965. The plaintiff suit was for redemption of an alleged mortgage Ex. 20 dated June 22 1953. The said document is an estensible sale-deed. There is a condition incorporated in the document provided for the reconveyanced of the property to the plaintiff on a fixed date which would fall on the completion of five years of the execution was a mortgage by conditional sale and not a sale outright with a condition of re-purchase. It was his case that by incorporation of the said condition, the transaction which was ostensibly a sale was in its true character a mortgage transaction,. The learned trial Judge construed the suit document Ex. 20 in the context of the surrounding circumstances. namely:--

I. That certain date was fixed for repayment and for reconveyance.

II. That the price fixed originally was Rs. 1,551/- but as the plaintiff was to meet the expenses of the registered document the consideration was raised to Rs. 1,650/-.

III. That the amount of consideration which was costly and no land-holder was prepared to sell the same.

IV. That the document did not reply to plaintiff notice Ex. 24 dated 15-8-64 which was admittedly served on the defendants and in which notice the plaintiff had alleged that the transaction was one of mortgage by conditional sale.

V. That the plaintiff was in need of money to meet his debts.

VI. That the defendants did not produce the previous document which was executed in the defendants account-book and which would have shown the real natural of the transaction.

VII. That the defendants did not hold a money-lending licence.

Having regard to these circumstance and in the context of the language used in the document the learned trial Judge found that the real character of the document was a mortgage by conditional sale and not a sale outright with a condition of repurchase. He thus passed a preliminary decree of redemption to be drawn under Order 34, Rule 7 of the Code Civil Procedure and in Form No. 7B of Appendix D of the Code. In defendants appellant the learned Assistant Judge, Mehsana has found that the language of the document was not ambiguous and that even otherwise the circumstance showed that the document was one of outright sale. He thus accepted the appeal of the defendants and dismissed the suit and reversed the Preliminary decree of the redemption of the property that was passed by the learned trial Judge. It is against this decision that the present second appeal is directed.

2. It is not dispute that the parties reside in village Amja of Taluka Kalol, District Mehsana. they are owners of neighbouring agricultural lands. ?The transaction which is evidence by registered document Ex. 20 dated June 22. 1953 and which is the suit document was preceded by negotiations between the parties to which defendants witness Ambalal examined at Ex. 39. was a party. Ambalal who happened to the Sarphanch of the Gram village was instrumental in bringing about the transaction. A 'Kachha; writing for this transaction on a consideration of Rs. 1,151/- was made in the account-book of the defendants and this was written by the said witness Ambala and attested as admitted by the him in his evidence. This writing has not been produced by the document although it was in his possession. According to the plaintiff if the writing had been produced it would have shown the real character of the transaction as one of mortgage by conditional sale. The plaintiff was in need of money at the relevant point of the time as admitted by witness Ambalal who haw stated that the plaintiff wanted money for paying his debts to Chandubhai and of some others. The defendants did not posses the money lending licence as admitted by him in his evidence at Ex. 32 in paragraph 8. It was in these circumstance that the suit document came to be executed on the day next to the writing taken by the defendants in his own account-book and not now produced in Court.

3. It is settled law that the question whether a given transaction is a mortgage by conditional sale or a sale outright with a condition of repurchase must be decide on its own facts. In such case, the intention of the parties is the determining factors as observed by the Supreme Court in Chunchun Jha v. Ebadat Ali AIR 1954 SC 345. The Supreme Court has observed that the rule of law on this subject is one dictated by commonsense: that prima facie an absolute conveyance containing nothing to show that the relation of debtor and creditor is to exist between the parties does not cease to be an absolute conveyance and become a mortgage merely because the vendor stipulates that he shall have a right to repurchase. In every such case, the question is. what, upon a fair construction, is the meaning of the instrument? The Supreme Court has further observed that where a document has to be constructed. 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 though to intended is ruled out. The real question in such a case, is not what the parties intended or meant but what is the legal effect the words which they used. If, however, there is ambiguity in the language employed then it is premissible to look to the surrounding circumstance to determine what was intended:

4. This position of law has been reaffirmed by the Supreme Court in Bapuswami v. N. Pattay . AIR 1966 SC 902 wherein the Supreme Court has, inter alia, observed.

'The distinction between the two transaction is the relationship of debtor and creditor and the transfer being a security for the debt. The forms in which the deed is clothed is not decisive. The question in each case is one of determination of the real character of the transaction to be ascertained from the provisions of the document viewed in the light of surrounding circumstance'. It has been contended by Mr. Jhaveri. learned advocate appearing on behalf o the appellant, that the real nature of the transaction sale and is one of mortgage by conditional sale and not of sale outright with a condition of repurchase. For the purpose he has invited my attention to the language used in the document itself Ex. 20. Mr. M. B. Shah appearing on behalf of the respondents has commended to the contrary. Mr. Shah's submission is that the instrument, namely document Ex. 20 is not ambiguous and legal effect must be given to the language used therein and surrounding circumstance should not be taken into consideration in this situation. He has alternatively contended that none of the surrounding circumstance show that the real character of the transaction was a mortgage by condition sale. There are two rival contention which are urged before me and relevant circumstance in the evidence in the point have been discussed before me.

5. Now the instrument Ex. 20 which is in Gujarati language and which had been incorporated by the learned Assistant Judge in paragraph 12 of his judgment and by the trail Judge in paragraph 16 of the judgment is styled as conditional sale of land. The document is executed on a valid stamped paper and has been registered. The document begins with the statement that Madhaji Ganeshji. an agriculturist (plaintiff herein) execution the document in favour of Patel Magandas Bechards. an agricultural (defendants herein) on 22-6-1953. 'To wit: I have taken from you Rs. 1.650/- one thousand six hundred and fifty which have been received and in consideration of this one-third of our 'Barkhali' land situated in the Sim of village Amja and consisting of one field known as 'Katardu' bearing survey No. 298 and admeasuring Bigha 1 Vasa and Anna 2/3 together with my right to draw 1/3rd water from the 'Pucca' was situated therein and also with the standing trees is conveyed to you and possession handed over. The land is conveyed to you as by way of sale (Vechanna Dave) till the sun and the moon shine and you are to give entitled to use to as by way of sale and to give it in mortgage or gift'. Some others parties of this document following his recital are not material. The there is condition which is incorporated and which provides that if the executor of the document the pay the amount of the consideration of the sale on completion of the five year from the date of execution of the document the person in whose favour the document is executed (defendants ) was to recovery that land at the cost of the executor of the document : that if the payment was not made on the appointed day the executor will not have the right to purchase the land. This in substance is the English translation of the Gujarati material extracts of the document which are incorporated in the judgment of the Court below.

6. It will appear from these relevant recitals in the suit document that there is a condition incorporated therein and that condition is to reconvey the land if payment of the consideration amount is made on the appointed day, that is to say on completion of the period of five years from the date of the execution of the document. The document is thus of an ostensible conditional sale and was intended as security for the debt. Section 58(c) of the Transfer of Property Act 1882 provides:

'(c) Where the mortgage ostensibly sells the mortgaged 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 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 mortgage 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 effect or purports to effect the sale'.

It is clear that in document Ex. 20 the condition is embodied that on payment of the consideration amount the being made on a certain date, the ostensible buyer shall transfer the property to the seller. It is true that mere incorporation of such a condition such would not mean that the transaction was of necessity intended to be a mortgage by conditional sale or vice versa. The from in which the deed is clothed is not decisive. The real character of the transaction has to be ascertained from the document itself in light of the surrounding circumstance. If the language is plain and ambiguous, it must in the light of the surrounding circumstance be given its true legal effect. As aforesaid the suit document begins with the materiel recital that the executed of the document (plaintiff herein) has taken Rs. 1, 650/- from the person in whose favour the document is executed. It is then stated that the significantly stated that in consideration of the receipts of this amount (Tena Avejma), the executor was executing the document in respect of the stated property and was handing over possession thereof to him. This is the landlord language employed in the document and indicates the real character of the transaction to be not of an outfight sale. but of the mortgage by conditional sale. The clause providing for reconveyance of the land on a certain date on the payment, of same amount of consideration namely Rupees 1,650/- is significant. It is condition providing for reconveyance and is embodied in the same document. The language used in and the tenor of the document is not such as are ordinarily used in an outright sale transaction. In a sale transaction, the executor to will say that he is selling the property to the person in whose favour the document is executed for the stated consideration and not that for a consideration taken by him he is giving the land and handing over possession thereof.

7. It was contended by Mr. M. B. Shah for the respondent that the document in question was written not by a Solicitor or an advocate, but by a bond writer in a village in Mehsana District and therefore, the language used should be considered liberally as in a mofussil pleading. It is true that the document is written by one Ramanlal M. Ganesh as stated in the document. Presumably he was a bond-written but the document has been executed in Kalol which is a two in Mehsana District and registered before the Sub-Registrar of Kalol. Ordinarily the bond-written would known the essentials and the difference between the two transactions namely mortgage and a sale. The bond-wittier has not been examined to show what was the real intention of the parties. In absence of his evidence. I must taken it that the document haws been drawn up by a competent person who knew that distinction between a sale and a mortgage. Assuming that the document is ambiguous, the intention must be gathered from the contents of the document with permissible extrinsic evidence on record to show in what manner the language of the deed was related to existing facts. Such facts which in my opinion, would clinch the issue are that on the day previous to the execution of the document Ex. 20 the writing was made in the account-book of the defendant himself and this was for the consideration of Rs. 1,551/- and which was entered into by defendants witness Ambalal Prabhudas Ex. 39 who had negotiated the transaction. As aforesaid. Ambalal Prabhudas has stated that the plaintiff wanted money for paying his debts of Chandubhai and of others and that the plaintiff had told him that he wanted to sell away his filed. He then contacted the defendants . The price was fixed at Rs. 1,555/- 'Kachha' waiting and attested. The document namely the writing in the defendants account-book if produced, would have shown the real nature of the transaction. Ambalal has admitted that the writting was in the possession of the defendants. He has stated in paragraph 7 of his deposition that it was a fact that the plaintiff had a right to redeem the land at the expiry of five years. He has stated that if the defendants had not kept this land nobody else would have advanced him any money. The defendants himself was examine at Ex. 32 and he has, in paragraph 8 of his deposition in cross-examination state that it was a fact that in the beginning the plaintiff came 'to and place the filed' with him for Rs. 1,551/- and a writing for this was passed in his book of account. In the re-examination made by the Court, the defendants tried to say that by using the words 'pleading of the filed' he meant selling of the filed. But his evidence read as a whole clearly indicates that what the witness meant to say was that the filed was to be placed with him meaning 'kept' with him as stated by Ambalal. when this particular answer which is a materiel circumstance is kept in view while reading the text of the document itself and the beginning portion there of referred to by me above . it is clear that the transaction intended to be was one of mortgage by conditional sale. The other existing face namely, that the plaintiff was in need of the money as he had to pay debt of one Chandubhai and of some others as admitted by defendant's own witness lends support to this view. The other material circumstance that the defendants did not possess the money lending licence indicates the reason why the document was couched in the language of sale with a condition of re-purchase,. but the real character of the transaction is one of mortgage. Still an-other circumstance to be taken into account is that although the plaintiff had served the defendants with notice Ex. 24 demanding redemption of the property stating that it was a mortgage transaction, the defendants did not send any reply to this notice which was admittedly served on him. In any view of the matter, therefore the suit document must be construed as one of a mortgage by conditional sale.

8. Mr. Shah has contended that there was no previous relationship to the between the parties as a of a debtor and a credit and therefore the transaction must be treated as of an out-right sale with a condition of re-purchase. But, in my opinion, even if it were so, that circumstance would not make any the difference to the ultimate conclusion to be arrived at in this case, having regard to the aforesaid discussion. Mr. Shah contended that the consideration is not show to be inadequate and that the period of reconveyance was a very short one, such indication that the transaction was on of sale with a condition of repurchase. I cannot accept Mr. Shah's contention that the short span indicates that way. Inadequacy of the consideration or adequacy therefore is not the circumstance which I am taking into account in arraying at the final conclusion . I am not taking into account some other circumstance found by the learned trail Judge in favour of this view. I am resting my judgment only on language employed in the suit document itself . the tenor of the document and the three surrounding circumstance referred to by me in this judgment. I must, therefore, accept Mr. Jhaveri's contention and reject the one raised by Mr. Shah . Accordingly, I allow this appeal and set aside the decree passed by the learned Assistant Judge Mehsana, in Regular Civil Appeal No. 19 of 1966 and restore the preliminary decree passed by the learned Civil Judge. Kalol, in Regular Civil Suit No. 27 of 1965. There will be no order as to costs in this appeal.

9. Appeal allowed.


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