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Kalappa Kamthi and anr. Vs. Kachur Sakha Rama Rao - Court Judgment

LegalCrystal Citation
CourtChennai
Decided On
Judge
Reported inAIR1916Mad1074; 29Ind.Cas.898
AppellantKalappa Kamthi and anr.
RespondentKachur Sakha Rama Rao;mageshwar Krishnaya and anr.
Cases ReferredVenkappa Chetti v. Alttu
Excerpt:
construction of document - sale or mortgage--test--suit to cancel reconveyance--limitation act (ix of 1908), schedule i, article 143. - .....transaction between plaintiff's father 'and 1st defendant's father (exhibit iii) was an absolute sale-deed and not a mortgage and that the deed of release impeached in the plaint (exhibit iv) was not a fraudulent transaction unsupported by consideration. he, however, held that exhibit iv was not binding on the plaintiff as it was executed after the right of the 1st defendant's father to obtain a reconveyance became barred and as the plaintiff's mother had no power to give up the right to improvements which had been effected on the property. contrary to the terms of exhibit iii, he gave a decree in favour of the plaintiff, but directed him to re-pay rs. 572-15-0 being made up of rs. 400 and the value of the improvements l)y tenants. on appeal the district judge held that there was no.....
Judgment:

Coutts-Trotter, J.

1. The plaintiff's father and the 1st defendant's father were brothers. They divided their family property in 1879, and on that division the property in question in the suit was allotted to the share of the 1st defendant's father by a deed dated the 22nd of October 1880. The 1st defendant's father sold this property to the plaintiff's father for Rs. 400 and the document contains a provision that if Rs. 400 should be re-paid together with the value of any improvements effected, the land should be surrendered to the 1st defendant's father. The plaintiff's father died and his mother, acted as his guardian and managed his affairs. While she was so acting and while the plaintiff was still a minor, the 1st defendant's father paid the Rs. 403 referred to in the tleed of the 22nd of October 1830 and she conveyed the land back to him by a document dated the 16th of February 1905. Both the Courts below have found that this was a perfectly genuine transaction untainted by any fraud and honestly executed for the benefit and supposed benefit of the plaintiff. The plaintiff's suit is brought to declare that the transaction of the 16th February 1905, is not valid or binding upon him and that he is entitled to get back the land on condition of paying the Rs. 400. His case is that the right, if any, of the 1st defendant's father to get back the lands on payment of Rs. 400 was statute-barred in 1905 and that the mother of the plaintiff had no authority to-carry out a transaction giving effect to a statute-barred right. The defendant contends, first, that the document of the 22nd October 1880 was, in its true construction, a mortgage or alternatively, that even if it was not a mortgage, the right conveyed by it to re-purchase was not statute-barred in 1905. The lower Courts have decided against the defendant on both issues and against their decision he appeals.

2. As to the first contention, the line of division between mortgages by conditional sale and sales with provision for re-purchase is a very fine one. It must ultimately depend upon what was the intention of the parties to be gathered from the instrument and a consideration of the surrounding circumstances. As pointed out in Swaminatha Aiyar v. Appasami Aiyar 27 Ind. Cas. 305 : 27 M.L.J. 686; (1914) M.W.N. 906 that does not mean that extrinsic evidence is to be admitted to qualify or expand the terms, of a written instrument, but only that circumstances in which the contracting parties stood and their relation to one another may be taken into consideration in order to ascertain what the real intention was. The words of the document in this case cannot be said to be conclusive either way. The fact that all the earlier transactions between the parties are set out and the balance due from the 1st defendant's father to his creditor is struck at Rs. 960, a larger sum than the Rs. 400 allocated to the land conveyed, points slightly in the direction of the document being a mortgage. The fact that no time limit is fixed for the exercise of the option to re-purchase also slightly points in the same 'direction. Much stronger, in my opinion, is the fact that the two parties to the deed were members of a united family who had only recently divided their property and the fact that the land conveyed was part of the share just recently allocated on partition to the 1st defendant's father. On the whole the balance of my opinion inclines, though not strongly, towards regarding the document as a mortgage.

3. But even if this be not so, I think the defendant is entitled to succeed on another ground. The Courts below have held that the 1st defendant's father's right to obtain a reconveyance was statute-barred on the authority of Venkappa Ghetti v. Akku 7 M.H.C.R. 219. That case was decided under the old Limitation Act, which contained no Article corresponding to Article 113 of the first Schedule of the Act of 1808 now in force. I think the right which the 1st defendant's father acquired under the option of re-purchase was in effect a right to demand specific performance of the contract to reconvey. No date being fixed for the performance, the period of limitation will begin to run 'from the time when the plaintiff had notice that the performance was refused'. As there was no refusal in this case, no question of limitation arises and the transaction of February 1905 was unimpeachable.

4. The plaintiff's case, therefore, fails and the appeal must be allowed and the suit dismissed with costs throughout.

5. Kumaraswami Sastri, J.--The 6th and 7th defendants are the appellants. The plaintiff sued for a declaration that the deed of release executed by his mother in favour of the 1st defendant's father is not binding upon him and for possession of the property specified in the plaint. The case for the plaintiff was that the property specified in the plaint belonged to the ancestor of plaintiff and 1st defendant and fell to the share of 1st defendant's father at partition, that the 1st defendant's father conveyed the property to the plaintiff's father by outright sale.-on 22nd October 1880 for Rs. 400, that after his (plaintiff's father) death, the plaintiff's mother in collusion with the 1st defendant's father executed a document purporting to be a deed of relase with fictitious recitals and put 1st defendant's father in possession of the property, that plaintiff's mother was not competent under Hindu Law to execute the release and convey the property to 1st defendant's father and that the document is not valid as it is not supported by consideration and is fraudulent. The case for the defendant was that the property was not conveyed to plaintiff's father absolutely but only by way of mortgage, that the deed expressly provided that it should be recon-veyed on re-payment of Rs. 400 and that the transaction impeached in the plaint was a bonafide one for consideration and was binding on the plaintiff.

6. The District Mursif was of opinion that the transaction between plaintiff's father 'and 1st defendant's father (Exhibit III) was an absolute sale-deed and not a mortgage and that the deed of release impeached in the plaint (Exhibit IV) was not a fraudulent transaction unsupported by consideration. He, however, held that Exhibit IV was not binding on the plaintiff as it was executed after the right of the 1st defendant's father to obtain a reconveyance became barred and as the plaintiff's mother had no power to give up the right to improvements which had been effected on the property. Contrary to the terms of Exhibit III, he gave a decree in favour of the plaintiff, but directed him to re-pay Rs. 572-15-0 being made up of Rs. 400 and the value of the improvements l)y tenants. On appeal the District Judge held that there was no evidence that plaintiff's mother acted collusively and observed as follows: There can be no doubt that the transaction was a reconveyance in accordance with the stipulation in Exhibit 111 and under the rulings quoted by the District Munsif, the 1st defendant's father's claim for reconveyance had become barred. The fact that Exhibit 111 does not provide for any period for the purchase does not affect the question (statutory limitation). The Munsif was right in holding that the plaintiff's mother acted beyond the scope of the powers as guardian of the plaintiff in executing Exhibit IV. Her conduct could only be regarded as having been induced by a mistaken impression that the claim was not barred.'

7. It is argued for the appellants that Exhibit 111 is cm a true construction a deed of mortgage, that both the lower Courts having found on the evidence that Exhibit IV was not fraudulent or collusive, the release which was executed in pursuance of the obligations created under Exhibit III is valid and binding on the plaintiff and that no question of limitation arises having regard to the terms of the document (Exhibit 111). As regards the first contention, I am of opinion that Exhibit ] II has not been shown to be a deed of mortgage. It purports to be a deed of sale executed in consideration of Rs. 400. The material portion runs as follows: As mentioned in the said deed of partition above referred to the principal payable by me to you in the matter of sale of Kukkaje property is Rs. 900, the interest due thereon till now is Rs. 95, in all the amount due by me to yoa is Rs. 995 deducting herefroru the sum of Rs. 35, being the rent due to mo till now in respect of the said garden land pertaining to my share, the balance dueis Rs. 960. Out of this amount of Rs. 960 a portion (viz., Rs. 400.) having been sot off by yon against this sale-deed you have thereby paid to me the sum of Rs. 400. Rupees four hundred have been paid to me as per particulars noted above. Therefore 1 have forthwith surrendered to you the garden land, building and all else pertaining to my share and comprised within the boundaries shown below. You may happily enjoy the same hereditarily. You shall yourself pay to the heirs of the wargdar the sum of annas twelve, being the mulgani hereof. Hereafter I and my heirs have no right or interest whatever in the said garden land and house, Further, if this sum of Rs. 400 now set off against the sale-deed in respect of the land and house together by four persons in respect of such improvements as may be effected by you is paid to you out of my self-earning, you shall, surrender to me the said land and house belonging to my share. To this effect is this deed of sale executed'.

8. It is argued by the appellants' Vakil that the fact that no time is fixed for the execution of the reconveyance and that the agreement is embodied in-the same document as the sale-deed, indicates that the document is a mortgage; reference has also been made to the cases of Palaniappan v. Subbaraya Grounden 22 Ind. Cas. 4 : 14 M.L.T. 579 : (1914) M.W.N. 222 : 1 L.W. 80 and Singaram Ghettiar v. Kalyanamndaram Pillai 26 Ind. Cas. 1 : (1914) M.W.N. 735 : T.L.W. 687 where it waff held that the presumption in such cases should be that the transaction was a mortgage. Numerous cases have been cited on both sides as to the construction of an agreement to reconvey, but I think that each case has to depend upon its peculiar facts and that no general rule can be laid down in the matter. The points to be taken into consideration in determining the question have been set out by their Lordships of the Privy Council in Balkishen Das v. W.F. Legge 22 A.p 149 : 27 I.A. 58 : 4 C.W.N. 153 : 2 Bom. L.R. 523 where their Lordships observe as follows: 'Their Lordships do not think that oral evidence of intention was admissible for the purpose of construing the deeds or ascertaining the intention of the parties. By Section 92 of the Indian Evidence Act (1 of 1872) no evidence of any oral agreement or statement can be admitted as between the parties to any such instrument or their representatives-in-in-terest for the purpose of contradicting, varying or adding to or subtracting from its terms, subject to the exceptions contained in the several provisos. It was conceded that this case could not be brought within any of them. The cases in English Court of Chancery which were referred... have not, in the opinion of their Lordships, any application to the law of India as laid down in the Acts of the Indian Legislature. The case must, therefore, be decided on a consideration of the contents of the documents themselves with such extrinsic evidence of surrounding circumstances as may be required to show in what manner the language of the document is related to existing facts.'

9. It is, therefore, unnecessary for me to consider the various cases where Courts have applied the principles of English Law in determining whether a transaction is an out right sale or a mortgage. Two tests, howovor, have been generally applied in deciding whether a transaction which is on its face a sale is only a mortgage, because of the condition to reconvey. One is whether there was a debt subsisting at the time to discharge which the document was executed, and the other is whether the value of the land conveyed is so disproportionate to the amount mentioned in 'the document as the alleged consideration for the sale as to raise a reasonable presumption that the parties intended only a security. In the present case there is no satisfactory evidence on either of the above points; On the meagre materials before me, I cannot hold that the District Mnnsif was wrong in construing Exhibit III as a deed of sale.

10. The next contention of the appellants is that at the date of Exhibit IV the right to claim the reconveyance under Exhibit 111 was not barred and consequently both the Courts were wrong in holding that it was beyond the competence of plaintiff's mother to have executed the release. The clause relating to the reconveyance has already been set out by me in dealing with the contents of the document (Exhibit III). There can be little doubt that the contract defcween the parties was that the plaintiff's father should reconvey the property to the 1st defendant's father on the latter paying the former the sum of Rs 400. The claim for a reconveyance would, therefore, be a claim to enforce specifiij performance of contract to reconvey and would fall under Article 113 of the 2nd Schedule to the Limitation Act, which provides a period of three years from the date fixed for the performance, or if no such date is fixed when the plaintiff has notice that performance is refused. There is no date fixed for the performance in Exhibit III and there is no evidence that any performance was demanded or refused within three years prior to the date when the plaint; iff's mother executed, Exhibit IV. It is difficult to see how it can be said that, when Exhibit IV was executed the right to claim reconveyance was barred. Reference has been made by the lower Court to Venkappa Chetti v. Alttu 7 M.H.C.R. 219. This case was decided before the Limitation Act of 1877 was passed and there was no provision corresponding to Article 113 in that Act. The suit was, therefore, treated as a suit to recover prossession of property and the 12 years' rule was applied. It is argued that even assuming that the' claim was not barred by limitation, the plaintiff's mother had no power to give up the value of the improvements and accept Rs. 400. Both the lower Courts found that the mother acted bona fide and so far as the improvements are concerned there is no definite evidence as to what the improvements were. Such evidence as there is as regards the improvements made between the dates of Exhibits III and IV shows that the improvements were about Rs. 20 or Rs. 30 in value. Exhibit IV states that there was no improvement and I do not think it can be said that the plaintiff's moth'er in taking the principal amount of Rs. 400 and giving up the small sum of Rs. 20 acted in a manner prejudicial to the interests of the plaintiff.

11. I reverse the decrees of both the lower Courts and dismiss the plaintiff's suit with costs throughout.


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