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Ramachandrayya Vs. Laxminarayana Rao - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtChennai High Court
Decided On
Reported in(1956)2MLJ565
AppellantRamachandrayya
RespondentLaxminarayana Rao
Excerpt:
- - from now, you shall, with absolute right, become the swadheenagar (owner), get the said property entered in the patta in your name, pay theerva, carry on any cultivation and enjoy the same at your pleasure and hereditarily, in the matter of which, i or my representatives, etc. should i fail to pay the money by the said vaide, you shall, on the strength of this same sale deed, enjoy (the said property) with permanent right, in which matter, i and my representatives shall not be entitled to raise objection in respect thereof......a mortgage by conditional sale, and that the plaintiff was entitled to redeem. in appeal, the learned district judge took a contrary view and held that the document amounted to an absolute sale and that therefore there was no question of any redemption arising in the case.2. the plaintiff purchased the suit properties from one ranga rao under exhibit a-10, dated 29th january, 1949. exhibit a-9, which purports to be a sale deed, was executed by ranga rao in favour of the defendant for a consideration of rs. 900, it is conceded that the sum of rs. 900 mentioned as consideration was the amount of a pre-existing debt due by ranga rao to the defendant and for that sum the document was executed, the following recitals in the document may be extracted for appreciating the contentions.....
Judgment:

Krishnaswami Nayudu, J.

1. This appeal arises out of a suit for redemption of a mortgage by Conditional sale. The trial Court, on a construction of the document, Exhibit A-9, Which is an ostensible sale, dated 19th May, 1942, held that the document evidenced a mortgage transaction, i.e., a mortgage by conditional sale, and that the plaintiff was entitled to redeem. In appeal, the learned District Judge took a contrary view and held that the document amounted to an absolute sale and that therefore there was no question of any redemption arising in the case.

2. The plaintiff purchased the suit properties from one Ranga Rao under Exhibit A-10, dated 29th January, 1949. Exhibit A-9, which purports to be a sale deed, was executed by Ranga Rao in favour of the defendant for a consideration of Rs. 900, It is conceded that the sum of Rs. 900 mentioned as consideration was the amount of a pre-existing debt due by Ranga Rao to the defendant and for that sum the document was executed, The following recitals in the document may be extracted for appreciating the contentions regarding its construction:

From now, you shall, with absolute right, become the swadheenagar (owner), get the said property entered in the patta in your name, pay theerva, carry on any cultivation and enjoy the same at your pleasure and hereditarily, in the matter of which, I or my representatives, etc., any one shall not have any right, interest, etc., of any kind therein. The said property is one which has not been subjected by me to any manner of alienation or liability in favour of anyone and which is not subject to any Court impediments. As I have represented to you that if I should by the ensuing 19th May, 1948, pay to you the consideration of Rs. 900 of this sale deed, you should sell back the said property to me with a sale deed at my cost, you have agreed thereto, and so, if I should accordingly by the said vaide pay the said amount, you shall sell and give back the said property with a sale deed at my cost. Should I fail to pay the money by the said vaide, you shall, on the strength of this same sale deed, enjoy (the said property) with permanent right, in which matter, I and my representatives shall not be entitled to raise objection in respect thereof.

3. This document came into existence after the amendment of Section 58(c) by the introduction of the Proviso by the amending Act of 1929. 'Mortgage by conditional sale' is defined in Section 58(c) of the Transfer of Property Act as follows:

Where the mortgagor 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 mortgagee 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 effects or purports to effect the sale.

4. The terms of the document satisfy the requirements of the definition given in Section 58(c). There is a condition that on payment the vendee should transfer the property to the vendor with absolute permanent rights and it is significant that the condition as to re-purchase is embodied in the document and is not the subject of a separate transaction. Prima facie there can be no reason to hold otherwise than to construe the document as a mortgage by conditional sale as defined in the Transfer of Property Act.

5. Apart from that, there are several other circumstances relied on by the learned District Munsif, viz., that there was a prior relationship of debtor and creditor, that the stamp papers for the document were purchased in the name of the transferor and that the price was not as a result of bargaining but represented the exact amount of a pre-existing debt due by the vendor to the vendee. Further, in the view of the learned District Munsif, on an appreciation of the evidence before him, the price of Rs. 900 could not be said to be the proper price, though it cannot be said to be grossly inadequate. These and other circumstances were relied on by the District Munsif, in addition to the terms and language of the document, to arrive at his conclusion that what was intended was a mortgage by conditional sale. The learned District Judge, however, has not accepted the evidence as to the price and is of the opinion that the price of Rs, 900 would be a reasonable price for the property. Further, he has not given due weight to the several circumstances referred to and relied on by the learned District Munsif, and has apparently erred in assuming that to establish that a particular document is a mortgage by conditional sale as per the definition in Section 58(c) it must be first of all established that there is a mortgagor, mortgagee, mortgaged property and mortgage money and that without showing that there was a mortgage relationship at the time of the execution of the ostensible sale deed, Section 58(c) cannot be invoked. I am tillable to appreciate the reasoning of the learned judge when he says that a person who wants a document to be construed as a mortgage by conditional sale should show that he was the mortgagor, that there was a mortgagee, a mortgaged property and mortgage amount. There need not be a pre-existing mortgage transaction in order to create mortgage by conditional sale: it is enough if the document is in accordance with the requirements of Section 58(c) of the Transfer of Property Act. In order to further support the intention of the parties that they contemplated only a mortgage by conditional sale there are the circumstances referred to as to the price, the pre-existing creditor and debtor relationship, the purchase of the stamp papers in the name of the transferor, etc, I am unable to agree with the learned District Judge in the view he has taken as to the construction of the document, and the learned District Munsif has properly construed the document as a mortgage by conditional sale and passed a decree for redemption.

6. In the result, the appeal is allowed and the suit is decreed with costs throughout.

7. No leave.


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