1. In this case the parties are Muhammadans. The plaintiff is the son of defendant No. 1 his mother. Defendant No. 2 is said to be the foster daughter's husband of defendant No. 1. The plaintiff came of age at the end of 1916. His mother and as he alleges, defendant No. 2 managad his properties during his minority. In O.S. No. 55 of 1911 on the file of the Sub-Court, North-Arcot, the plaintiff brought a suit against defendant No. 1 to recover the value of alienations improperly made by her of his property during his minority and got a decree for Rs. 3,885-14-0. On 19th July, 1908, defendant No. 1 executed to defendant No. 2 an ostensible sale-deed of her own properties (Ex. A) and on the same day a counter-agreement Ex. B. for the re-purchase of these properties was executed between the same parties. On 27th November 1919, two days after the institution of the suit O.S. No. 55 of 1919 above referred to, defendant No. 1 executed another deed (Ex. G) in favour of defendant No. 2 whereby she purported to release to defendant No. 2 her right of purchase under Ex. B. The plaintiff seeks to have it declared (a) that defendant No. 1's right of redemption in her properties still subsists and, therefore, that it is liable to attachment 1o satisfy plaintiff's decree in O.S. No. 55 of 1919, in other words that Exs. A and B are in fact a mortgage by conditional sale and not a sale with an option of re-purchase and (b) that Ex. G is voidable and should be avoided under Section 53 of the Transfer of Property Act.
2. Defendant No. 1 has been ex parte throughout.
3. The District Judge found that the transaction was not a mortgage but a sale with option of re-purchase and further that Ex G did not offend against the provisions of Section 53 of the Transfer of Property Act. Hence this appeal by plaintiff.
4. The first question, therefore, for decision is whether Exs. A and B really evidence an intention to effect a mortgage by conditional sale. Exhibit A was, as stated, executed on 19th July, 1908, and according to P. W. No. 1 at 9 a.m. in the morning. It purports to be an out and-out sale the consideration being Rs. 700 in cash and the payment of Rs. 2,800 due on a prior possessory mortgage and promissory note in favour of one Ibrahim Sahib. There is no mention of Ex. B in Ex. A. Exhibit B said to have been executed at 11 a.m. on the same day refers to Ex. A and stipulates that at the end of any fasli before 30th June 1911, defendant No. 1 may re-purchase the property conveyed by Ex. A, on paying the said total sale price Rs. 3,500' 'according to the followings particulars, the expenses incurred by digging and constructing new wells or by re pairs to be paid back. Defendant No. 1 was to bear the expenses of the deed of re-conveyance. The executant of Ex. B defendant No. 2 was out of possession of the properties purported to be transferred by Ex. A till 30th June 1910 the possessary mortgagee Ibrahim being in possession till then. He, therefore, stipulated that defendant No. 1 should pay him 12 percent. on the Rs. 800 (or Rs. 700) said to have been advanced by himself. The expenses for wells and repairs were also to be ascertained and re-paid. Is this a mortgage or an outright sale with option of re-purchase? To begin with, the lands purport to be sold for Rs. 3,500. They are about 8 acres in extent. Plaintiff witness No. 1 (an attestor) declares that the lands are worth more than Rs. 3,500. Plaintiff witness No. 3 says that 10 or 12 years ago (he was giving evidence in 1922) the lands would be worth Rs. 800 (a cawni). He himself purchased adjoining lands at Rs. 800 a cawni and sold them for Rs. 1,450. Four of the 5 1/2 or 6 cawnies of the suit lands are 'best'. He purchased lands in 1912 for Rs. 520 to Rs. 675 an acre. Objection is made that these transactions are not supported by documents whereas D. W. No. 2 purchased lands in the same village 2 acres (Ex. 5) at Rs. 485 an acre. He had, however, to build a new well at a cost of Rs. 300. The lands of defendant No. 1 have good irrigation. Defendant witness No. 3 purchased 1 acre 64 cents at Rs. 350 per acre (Ex. VI, 1906). On a consideration of the whole evidence, on this point, I have come to the conclusion that the value of the lands in question in 1908 was about Rs. 6,500; at all events, very much more than Rs. 3,500. This is a strong indication that a sale was not intended: Narasingerji Gyanagerji v. Panuganti Parthasaradhi 47 M.L.J 809 : 51 I.A. 305 : 26 P.L.R. 18 : 23 A.L.J. 161 : L.R. 6 A. (P.C.) 41 : 1 C.W.N. 684 (P.C.). Again interest is payable on the Rs. 800. There is no evidence of bargaining over the sale price: see Narasingerji Gyanagerji v. Panuganti Parthasaradhi A.I.R.. & 10 O 1172 : 29 C.W.N. 246 : 1 C.W.N. 684 (P.C.). It is said for the respondent that this was payable for two years only as defendant No. 2 was necessarily out of possession for this period that is, of course, assuming that payment had to be made by 30th June, 1910. If time was really of the essence of the contract, what was the need for Ex. G in 1919 nine years after the lands had passed according to respondents irrevocably into the possession of defendant No. 2? Further there is no defeasance clause on the grantor or vendor failing to pay by the fixed date. Again, the grantor or mortgagor (defendant No. 1) had to pay the costs of the re-conveyance; this is a sign of a mortgage, (cf. Section 60, Transfer of Property Act), whereby the mortgagor has a right to redeem on payment of the costs. Was there a power in the vendee, to recover the sum named as the price of re-purchase? I think there was.
I undertake to execute a sale-deed in your favour according to your request (another sign of a mortgage (cf. Section 60 of the Transfer of Property Act) at your expense within the said fixed time, on condition of your paying the sale price, interest and other expenses'. Moreover the price payable by the grantor on the re-purchase was not fixed but was subject to an account for the cost of the well and repairs. In addition to these facts, we have the two deeds (Exs. A and B) executed within two hours of each other. They were registered together, the stamp papers bear consecutive numbers (cf. cross-examination of defendant No. 2 as D. W. No. 4). In my opinion these two documents really and substantially form a single transaction within the ruling in Palaniappan v. Subbaraya Gounden (1914) M.W.N. 222 for although Ex. A does not refer to Ex. B. Exhibit B does refer to Ex. A. The question is whether Exs. A and B taken together were intended as a security for money. I have no hesitation in holding they were. Some of the indicia of such a transaction are classically set out in Butler's Coke on Litleton cited in Bapuji Apaji v. Senavaraji Marvadi 1 Ind. Dec. 580. The passage is as follows:In many of these cases the Courts have found it necessary, not only to apply their general principles, but to determine the fact, whether the conveyance was intended as an absolute sale, or as a security for the money. If the money paid by the grantee was not a fair price for the absolute purchase of the estate conveyed to him, if he was not let into the immediate possession of the estate; if, instead of receiving the rents for his own benefit, he accounted for them to the grantor, and only retained the amount of the interest; or, if the expense of preparing the deed of conveyance was borne by the grantor, each of these circumstances has been considered by the Courts as tending to prove that the conveyance was intended to be merely pignorititious.
5. With many of these particulars the plaint transactions agree and the passage fortifies my own opinion of them.
6. As my conclusion on the first point must be in favour of the appellant, it seems hardly necessary to discuss the second as to which the District Judge has given no reasons for his finding. Exhibit G does not purport to be a release of the equity of redemption. The words translated 'right of purchase' should, it is said, more properly be 'the right belonging to me' I give up. In para. 10 of his written statement defendant No. 2 denies that defendant No. 1 had any right of redemption in the suit properties or that Ex, G parted with any such right. Defendant No. 2 as D. W. No. 4 says he took Ex. G from defendant No. 1 as the period fixed in Ex. B 1919 was over and he asked defendant No. 1 for the money he had lent her.
He said she would file a suit. She said she had time to get back the lands and frightened me with threats of a suit.
7. This confirms the view taken of the transactions. The threatened suit could have been nothing but a suit for redemption. Defendant No. 1 said 'she had time'. If the property had become the defendant No. 2's on 30th June, 1910, this was of course absurd in 1919. Defendant No. 1 does not come forward to say that it was the equity of redemption she parted with by Ex. G. Defendant No. 2 admits that nothing was paid under Ex. G the consideration for which was the amount previously paid to defendant No. 1 by defendant No. 2 under the promissory note referred to in the document. The witness to this promissory-note transaction was admittedly alive and was not called. The promissory note is not forthcoming and no reasons for the borrowing are alleged. It is said to have been delivered up to defendant No. 1 when Ex. G was executed. If it was in existence, it could have been produced though defendant No. 1 was ex parte. No reference is made in the written statement of defendant No. 2 to the promissory note but in para. 10, defendant No. 2 says he advanced defendant No. 1 money for maintenance. This he in cross examination admits to be untrue. He says, he had no knowledge of the institution of the Suit No. 55 of 1919. No summons had been served on him at the date of Ex. G. This is by no means conclusive as to defendant No. 2's knowledge.
8. An effort was made to show that there was no collusion between defendant No. 1 and defendant No. 2 but I am not satisfied as to this. In O.S. No. 55 of 1919 it is true defendant No. 1 was ex parte. Plaintiff withdrew the suit against defendant No. 2 with liberty to bring another. He was apparently not then in a position to prove that defendant No. 2 had anything to do with the alienation of his (plaintiff's) properties. Defendant No. 2 admits that defendant No. 1 is the widow of his wife's maternal uncle. I think that under the circumstances in which Ex. G came to be executed, as far as appears from the document and from the evidence, it was a collusive and fictitious document got up between defendant No. 1 and defendant No. 2 for the purpose of attempting to place the property of defendant No. 1 beyond the reach of plaintiff in his execution proceedings. In my opinion it falls within the mischief of Section 53, Transfer of Property Act, and should be set aside.
9. The result is that the appeal is allowed with costs throughout and a decree will be passed for plaintiff as prayed.
10. I agree.