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Smt. Swarnalata Tat Vs. Chandi Charan Dey and anr. - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtKolkata High Court
Decided On
Case NumberS.A. No. 1159 of 1974
Judge
Reported inAIR1984Cal130,88CWN551
ActsBengal Money Lenders Act, 1940 - Sections 2(12), 36, 37A, 38 and 40(6); ;Evidence Act, 1872 - Section 92; ;Transfer of Property Act, 1882 - Section 58
AppellantSmt. Swarnalata Tat
RespondentChandi Charan Dey and anr.
Appellant AdvocateMadan Mohan Mullick, Adv.
Respondent AdvocateDilip Dhar, Adv.
DispositionAppeal dismissed
Cases ReferredSmt. Sailabai Sett v. Provash Chandra Dutt (supra
Excerpt:
- ajit kumar sengupta, j.1. the question of law involved in this appeal is whether the document executed by the plaintiff's father in favour of the first defendant is, in its true effect, mortgage by conditional sale or an outright sale. the facts of the case leading to the present appeal preferred by the plaintiff are set out hereinafter.2. the plaintiff, sm. swarnalata tat, instituted the suit for declaration that the transaction between the plaintiff's father and the defendant no. 1 made on 9th december, 1968 was a loan transaction and that the deed in question was an ostensible sale deed as a security for repayment of the loan taken by the plaintiff's father from the defendant no. 1 and for a declaration that the said loss (loan) was repaid. the plaintiff also claimed a decree for.....
Judgment:

Ajit Kumar Sengupta, J.

1. The question of law involved in this appeal is whether the document executed by the plaintiff's father in favour of the first defendant is, in its true effect, mortgage by conditional sale or an outright sale. The facts of the case leading to the present appeal preferred by the plaintiff are set out hereinafter.

2. The plaintiff, Sm. Swarnalata Tat, instituted the suit for declaration that the transaction between the plaintiff's father and the Defendant No. 1 made on 9th December, 1968 was a loan transaction and that the deed in question was an ostensible sale deed as a security for repayment of the loan taken by the plaintiff's father from the Defendant No. 1 and for a declaration that the said loss (loan) was repaid. The plaintiff also claimed a decree for permanent injunction restraining the Defendant No. 1 from claiming any right of ownership in the property in suit in terms of the deed of sale.

3. It has been alleged by the plaintiff that she is the sole heiress and legal representative of her late father Tara Pada Pal who died on 2nd May. 1971. Her father owned the properties described in the schedule to the plaint. After the death of the plaintiff's father the plaintiff allegedly had been in possession of the properties in her own right a.s legal heiress through the Bhagidar, the pro forma defendant No. 2. The said Bhagi-dar was inducted into the land in dispute for cultivation of the suit land and was in possession of the land in suit as Bhagidar since the time of the plaintiff's father. It has further been alleged that the defendant No. 1 has close relationship with the plaintiff's father who secured a loan of Rs. 800/- from the defendant No. 1 by means of an ostensible deed of sale for Rs. 1,200/- which included interest of Rs. 400/- for 2) years at the rate of 20% per annum. It has also been alleged in the plaint that the value of the suit property would be around Rs. 3,000/-. The said deed was executed and registered on 9th December, 1968 by the plaintiff's father in favour of the defendant No. 1 in respect of the land in suit as security towards repayment of the said loan with interest by means of an oral agreement made by the defendant No. 1 in favour of the plaintiff's father on the same day. It has further been alleged that the said loan was taken by the plaintiff's father for the purpose of his family expenses other than commercial purpose and the defendant No. 1 to avoid the stringency of the Bengal Money Lenders Act, had mentioned the alleged purpose as commercial purpose in the said deed. It is the case of the plaintiff that the plaintiff's father and the defendant No. 1 agreed that the property in suit would remain in the possession of the plaintiff's father. It is also the case of the plaintiff that the plaintiff's father repaid Rs. 1,200/- through the plaintiff's husband when the plaintiff's father was lying seriously ill in Mayo Hospital, Calcutta. Thereafter, the defendant No. 1 was requested by the plaintiff's father through the plaintiff's husband to execute a deed of relinquish-ment in favour of the plaintiff's father but the defendant No. 1 avoided the same on various pleas. Since the defendant No. 1 refused to execute and register the deed of relinquishment, the plaintiff was compelled to institute the said suit allegedly under the Money Lenders Act praying for the declarations as stated earlier.

4. The defendant No. 1 filed the written statement and denied the allegations made in the plaint. It was contended, inter alia, by the defendant No. 1 that the impugned transaction was out and out sale and it was not a loss (loan) transaction. It was further alleged by the said defendant that the plaintiff's father put him in possession of the said suit property and instructed the pro forma Defendant No. 2 to deliver the share of produce to defendant No. 1 after the date of the suit property. According to defendant No. 1, he realised share of produce from the defendant No. 2 in 1376 and 1377 B. S. After the death of the plaintiff's father in 13.78 B. S., the Pro forma defendant No. 2 having been influenced by the plaintiff, refused to deliver the share of produce to the defendant No. 1, However, the neighbour intervened and settled the dispute between the defendant No. 1 and the defendant No. 2 and directed sale of half of the produce, and accordingly half of the produce was sold at Rs. 99.31. The said sum was kept in deposit with one Gangadhar Dey.

5. The learned Munsif found that Rupees 1,000/- was paid by the defendant No. 1 to the plaintiff's father at the time of the impugned transaction and not Rupees 800/- as alleged by the plaintiff. He also found that no repayment as claimed by the plaintiff was made by the plaintiff to defendant No. 1. The learned Munsif came to the finding that the transaction in question is a loan transaction on the basis of the market value of the property, which according to him, too low and on the evidence of the pro forma Defendant No. 2 who said that even after the transaction he delivered share of produce to plaintiff's father. The learned Munsif, accordingly, decreed the suit.

6. Being aggrieved by the said Judgment and Decree, the defendant No. 1 preferred an appeal before the learned Sub-Judge. The plaintiff also preferred a cross-appeal challenging the findings of the learned Munsif regarding the amount of money advanced and the repayment of dismissed on the ground that it was preferred beyond time.

7. The learned Sub-Judge held that the present suit was not a suit under the Bengal Money Lenders Act. The suit was for declaration and injunction under the provisions of Specific Relief Act. The learned Sub-Judge held that the plaintiff cannot be permitted to say that there was an oral agreement contradicting, varying or adding to or subtracting from the impugned deed which clearly shows that it was a out and out sale deed. He further held that the plaintiff cannot be allowed to say in the absence of any written agreement for reconveyance that it was a mortgage by conditional sale and not an out and out sale.

8. After considering the evidence, the learned Sub-Judge came to the conclusion that the plaintiff had failed to prove any agreement contemporaneous or otherwise for reconveyance of the property. The plaintiff also failed to prove that any demand was made for reconveyance of the property in terms of the oral agreement. The finding of the learned Munsif that the defendant No. 1 had paid Rupees 1200/- to the plaintiff's father was not challenged. It is an admitted fact that the Defendant No. 1 paid Rs. 1200/-to the plaintiff's father. The plaintiff also failed to prove that there was any stipulation for payment of interest. hP held that it is absurd that a professional money lender, as the defendant No. 1 is alleged to be, should lend money without any stipulation for payment of interest. The transaction according to him, cannot come within the purview of loan as defined under Section 2(12) of the Bengal Money Lenders Act, 1940. The learned Sub-Judge agreed with the finding of the learned Munsif that no repayment as claimed by the plaintiff was made. He thoroughly disbelieved the story of repayment of the said loan.

9. The learned Munsif proceeded to hold the impugned transaction to be a loan transaction in substance on the finding that the market value of the suit property at the relevant time should have been much more than Rs, 1200/-. The learned Sub-Judge held that 3 (three) deeds which were relied on by the plaintiff did not throw any light on the market value of the suit property at the material time. He also held that the plaintiff had not produced the parties to the said deeds and the defendants did not have any opportunity to cross-examine the parties to the said deeds to ascertain the circumstances under which the price mentioned in the deeds wrre paid. He also took into consideration the fact that the suit property was in actual physical possession of the bargadar and not in khas possession of the vendor which affected the market value of the suit property. Having considered the evidence he was unable to agree with the findings of the learned Munsif that the market value of the suit property would be more than Rs. 1200/-. So far as the question of possession was concerned, the learned Sub-Judge held that the plaintiff's father was not in actual physical possession of the suit property. He was in constructive possession through the bargadar. Thus the question of possession would not be of much importance in the case. He held that if the vendor was in constructive possession of the land through bargadar at the time of sale, which is the case of the plaintiff and managed to get share of produce of the land from the bargadar even after the sale, it cannot extinguish the title of the vendee who required the land from the said vendor for proper consideration. Having considered all the facts and circumstances of the case and materials on record as aforesaid, the learned Sub-Judge came to the conclusion that the transaction in question was an out and out sale and not a loan transaction in substance. He, therefore, set aside the Judgment and Decree of the learned Munsif and dismissed the suit.

10. Mr. Madan Mohan Mullick, learned Advocate appearing for the appellant, has assailed the judgment of the learned Sub-Judge on (Sic) various grounds. He contended that the finding of the learned Sub-Judge on various grounds. He has contended that the finding of the learned Sub-Judge is either contrary to the evidence on record or without any evidence at all. The learned Sub-Judge has not given any reason while he has differed from the finding or conclusion of the learned Munsif. It is his contention that the finding of the learned Sub-Judge to the effect that the present suit is not a suit under the Bengal Money Lenders Act is wholly incorrect and contrary to the evidence on record. He has drawn ray attention to the paragraph 13 of the plaint where it has been alleged that 'for the purpose of court fees, fixed Court-fee of Re. 1 under Section 36 of the Bengal Money Lenders Act. 1940 is given'. He, therefore, contends that the present suit is a suit under Bengal Money Lenders Act, 1940. Mr. Mullick further submits that when a suit is governed by the Bengal Money Lenders Act, the plaintiff is entitled to show by oral evidence the real nature and character of the transaction contrary to what has been stated in the deed itself. He also submits that the learned Munsif was perfectly justified in admitting oral evidence to show that the impugned deed is an ostensible sale deed which in substance is a loan transaction. He has cited several decisions in support of his aforesaid contentions.

11. Mr. Dilip Dhar, learned Advocate appearing for the respondent, on the other hand, has contended that merely because there is an averment to the effect that fixed court fee of Re. 1 has been paid under Section 36 of the Bengal Money Lenders Act will not make it a suit under the said Act. From the averments made in the plaint, it is manifest that the present suit is not a suit under the said Act inasmuch as none nf the requirements as adjoined by the Money Lenders Act is satisfied. He submits that the learned Sub-Judge took into consideration the relevant facts in determining the issues involved in the suit and camp to a correct conclusion. He has relied on a decision of the Supreme Court in support of his aforesaid submission.

12. The first question which calls for determination is whether the present suit is a suit under the Bengal Money Lenders Act, 19,40 (hereinafter referred to as the said Act). Section 36(1) of the said Act empowers the Court to re-open a decree in any suit to which the Act applies or in any suit brought by a borrower for relief under the Section, to re-open the transaction whether the suit has been heard ex parte or otherwise. Nowhere in Section 36, it is provided that a fixed court fee of Re. 1 is to be paid for initiating proceeding under Section 36 of the said Act. Section 38 provides that any borrower may make any application at any time to a Court which would have .jurisdiction to entertain suit by the lender for the recovery of the principal and interest of a loan before or after the commencement of the said Art for taking accounts and for declaring amount due to the lender. Such application shall be in the prescribed form and shall be accompanied by a fee of onr rupne and on receipt of such application the Court shall cause a notice thereon to be served on the lender. The Court shall thereafter take an account of the transaction between the parties and declare the amount, if any. due and payable but not due by the borrower to the lender, whether as principal or interest or both. A proceeding under Section 38 shall be deemed to be a suit for the purpose of Section 11 of the Civil P. C., 190R. Admittedly, the plaintiff has not filed any application under Section 36 of the Art far less in the prescribed form. As such the question of payment of a fixed court fee of one rupee would not arise. Section 38 rlnes not contemplate any suit. It enables a borrower to make an application in the prescribed form asking the Court to take an account and to declare the amount due to the lender. Merely because a fixed court fee of one rupee has been paid, the spit cannot be corrected into an application under Section 38 of the said Act. Assuming that the Court should have treated the suit as an application under Section 38 of the said Act, even then the plaintiff cannot succeed in her contention. The requirements of Section 38 have not been complied with. There is no prayer for taking account and for declaring the amount due to the lender. No borrower can call in aid the procedure prescribed under Section 38 unless he asks for account and determination of the amount due to the lender. Even if the loan is secured, the borrower need not ask for redemption. He will be at liberty to file an application for determination only of the amount due from him. This was not done by the plaintiff, who claims to be the successor-in-interest of the borrower. On the contrary, the plaintiff has asked, inter alia, for the following reliefs in the plaint:--

(a) For a decree declaring the aforesaid transaction is a loan transaction and declaring that the aforesaid deed of sale is an ostensible deed of sale as a security to repayment of the said loan is repaid.

(b) For a decree of permanent injunction restraining the defendant No. 1 from claiming any right of ownership in the property in suit by virtue of the aforesaid deed of sale.

Having regard to the provisions of Sections 36 and 38 of the said Act and the averments made in the plaint and the reliefs claimed in the suit, I am unable to accept the contention of Mr. Mullick that the present suit is suit under the Bengal Money Lenders Act, 1940.

13. Even assuming that the said Act applies to the present suit, contentions based on Sections 37A and 40(6) of the said Act cannot also succeed, Sub-section (6) of Section 40 of the said Act reads thus :--

'Notwithstanding anything contained in the Evidence Act, 1872, (I of 1872). evidence adduced by a borrower in a suit to which this Act applies or a suit brought by a borrower for relief under Section 36 or in any criminal proceedings under Section 41 or Section 42, of any oral agreement or statement contradicting, varying, adding to or subtracting from the terms of any document creating or witnessing a loan shall be admitted.'

14. Sub-section (6) of Section 40 of the said Act overrides the operation of Section 92 of the Evidence Act in a suit under the Bengal Money Lenders Act. The effect of Sub-section (6) is that in a suit governed by the Bengal Money Lenders Act the sorrower may adduce oral evidence of any agreement, statement contradicting, varying, adding to or subtracting from the terms of any document witnessing a loan. It is only when in a suit where the Bengal Money Lenders Act applies a document creating or witnessing a loan comes before the Court for consideration, a borrower can lead evidence of oral agreement or statement contradicting, varying, adding to or subtracting from the terms thereof. Sub-section (6) of Section 40 may not come to the rescue of the plaintiff unless it can be established that the impugned document creates or witnesses a loan. The borrower must satisfy firstly that the Bengal Money Lenders Act applies to the suit and secondly the document impugned creates or witnesses a loan. None of these conditions is satisfied in this case.

15. The next contention of Mr. Mul-lick is to be examined in the light of Section 37A of the said Act which reads as follows:--

'Saving as to mortgage by conditional sale. In the case where any loan is secured by a mortgage and the mortgagor ostensibly sells the mortgaged property on any of the conditions specified in subsection (c) of Section 58 of the Transfer of Property Act, 1882 (IV of 1882) then, notwithstanding anything to the contrary contained in the proviso to the said sub-section, the transaction shall always be deemed to be a mortgage by conditional sale and the mortgages a mortgagee by conditional sale for the purpose of the said sub-section.'

16. Section 37A of the said Act seeks to override the proviso to Section 58(c) of the Transfer of Property Act.

17. Section 58(c) of the Transfer of Property Act reads 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 made the , sale shall become void, orthe transaction is called a mortgage by conditional sale and the mortgages a mortgagee by conditional sale (pp. 382 385).

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.'

18. A borrower in order to get the protection of Section 37A of the Bengal Money Lenders Act must show firstly, that there is a loan, secondly, such loan has been secured by executing a mortgag and thirdly, the borrower ostensibly sells the mortgaged property on any of the conditions enumerated in Section 58(c) of the Transfer of Property Act. namely :--

(i) that on default of payment of the mortgaged money on a certain date the sale become absolute, or

(ii) that on condition of such payment being made such sale shall become void, or

(iii) that on such payment being made the buyer shall transfer the property to the seller.

19. If the above conditions are fulfilled, then only the transaction is to be treated as a mortgage by conditional sale. The impugned document does not show that the loan was obtained by the alleged borrower. There is a no intrinsic evidence in the document itself to spell out a loan nor does the document purport to show that any loan has been secured by any mortgage. A sale with a condition of re-transfer is not a mortgage, for the relationship of the debtor and creditor does not subsist and there is no debt for which the transfer is a security.

20. The effect of proviso to Section 58(c) of the Transfer of Property Act is that if the condition of re-transfer is not embodied in the document which effects or purports to effect the sale, the transaction will not be regarded as a mortgage. Section 37A. of the Bengal Money Lenders Act overrides the said proviso.

21. Mr. Dilip Dhar, learned Advocate appearing for the respondent, has relied on the decision in the case of Chunchun Jha v. Ebadat All reported in : [1955]1SCR174 , in support of his contention that since the alleged stipulation for reconveyance did not contain in one document there cannot be a mortgage by conditional sale. The Supreme Couit in the said case observed (Para 8):

'The legislature has made a clear cut classification and excluded transaction embodied in more than one document from the category of mortgages, therefore it is reasonable to suppose that persons who, after the amendment, choose not to use two decuments, do not intend the transaction to be a sale, unless they displace that presumption by clear and express words; and if the conditions of Section 58(c) are fulfilled, then we are of opinion that the deed should be con-ttrued as a mortgage.'

22. It is however, the contention of Mr. Mullick, the learned Advocate appearing for the appellant, that in view of the provisions of Section 37A, it is not necessary that the whole transaction of mortgage and re-transfer has to be embodied in one document. He submits that there was an oral agreement for re-transfer by and between the borrower, that is to say, the plaintiff's father and the defendant No. 1. The oral evidence adduced by the plaintiff however failed to prove that there was any oral agreement for reconveyance of the suit property to the plaintiff's father. The suit was not instituted by the plaintiff's father who could have deposed about the alleged oral agreement. It is significant that the suit was instituted after his death by the daughter who has no personal knowledge of any such oral agreement. The learned Munsif has held that from the stories stated by the contesting parties about the payment, it is difficult to arrive at a decision regarding the exact nature of the impugned deed. The learned Munsif has not found that there was any oral agreement of re-transfer as alleged by the plaintiff. The onus lay on the plaintiff to prove that there was an agreement to re-transfer or repurchase. Even if oral evidence is admissible to prove an oral agreement of re-transfer, on the state of evidence tendered, it is not possible to hold that such oral agreement has been proved at all. No satisfactory explanation has been given by the plaintiff as to why the alleged agreement for re-transfer was not incorporated in the impugned deed or why the another document for re-transfer not executed. The impugned deed was registered on 9th December, 1968 by the plaintiff's father who died on 2nd May, 1971 and the suit was instituted on 3rd December, 1971. During his lifetime there was not a whisper about the alleged oral agreement for reconveyance.

23. The next contention of Mr. Mullick is that in deciditing the question whether the impugned transaction is a mortgage by conditional sale or sale outright, the Court should find out the intention of the parties. It is no doubt true that the distinction between the said two types of transaction is purely one of intention. Unless the relationship of debtor and creditor is intended to subsist, there cannot be any mortgage. Oral evidence cannot be admitted to prove the intention of the parties. Section 92 of the Evidence Act provides that no evidence of any oral agreement or statement can be admitted as between the parties to any such instrument or their representatives in interest for the purpose of varying or adding to, or substracting from its terms subject to the exceptions contained in several provisions of Section 92 of the Evidence Act. The Supreme Court in the case of Chunchun Jha v. EbadatAli : [1955]1SCR174 (supra) observed as follows (Para 6):--

'Where a document has to be construed, 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 thought or 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 of the words which they used. If, however, there is ambiguity in the language employed, then it is permissible to look to the surrounding circumstances to determine what was intended.'

24. The impugned deed does not contain any term of re-transfer to or repurchase by the vendor of the suit property. It does not establish any relationship of debtor and creditor. There is no stipulation for payment of interest. Nor there is any stipulation of the consideration for re-transfer. Oral evidence was permitted to be adduced which also failed to prove that there was any intention to create any mortgage. On the contrary, the attesting witnesses to the impugned deed deposed that there was no intention of the vendor to create any mortgage. The property in dispute was absolutely sold by the vendor. The learned Subordinate Judge preferred to rely on the evidence of the attesting witnesses to the evidence of the plaintiff and her husband who are interested witnesses. The recitals show that the intention was to effect a sale. There is absolute transfer of the rights in the property reserving no right whatsoever to the vendor himself. The language is unambiguous. The deed, on the face of it, conveys the title to the vendor. Three sale deeds relied on by the plaintiff to show that the market value of the property at the material time, are expressed in almost identical terms. The Supreme Court in Chunchun Jha v. Ebadat Ali (supra) quoted with approval the following passage from Alderson v. White, reported in (1858) 44 ER 924 at 928 :--

'The rule of law on this subject is one dictated by common sense, 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 right to re-purchase.'

25. Having regard to the facts and circumstances of the case as narrated hereinabove, it must be held that the impugned document was intended to be acted upon as a conveyance and not to cover a loan transaction.

26. The last but not the least contention of Mr. Mullick is that the real nature of the impugned transaction has to be found out by applying the tests laid down by judicial pronouncements. The tests which are relevant to determine the question whether the giving transaction is loan in substance or a sale outright with a condition to re-purchase are many. He has relied on a decision of this Court in the case of Chhabi Bari v. Debendra Nath Das, reported in : AIR1980Cal16 . However, the Supreme Court in the case of Chunchun Jha v. Ebadnt Ali : [1955]1SCR174 (supra) has observed as follows :--

'We think that this is a fruitless task because two documents are seldom expressed in identical terms and when it is necessary to consider the attendant circumstances the imponderable variables which that brings in its train make it impossible to compare one case with another. Each must be decided on its own facts.'

27. The following tests have, however, been applied :

(1) the existence of a debt;

(2) the period of repayment, a short period being indicative of a sale, and a long period of a mortgage; but the fact that time was made the essence of the contract to re-purchase is not decisive;

(3) the continuance of the grantor Jn possession indicates a mortgage;

(4) a stipulation for the payment of interest on repayment indicates a mortgage;

(5) a price below the true value indicates a mortgage; a fair market value is strong evidence that the transaction is a sale,

(See Mulla : Transfer of Property Act, 6th Edition at p. 367).

28. Mr. Mullick has contended that two of the said tests which have been applied in the present case are with regard to the possession of the property conveyed and the valuation of the property. He has also submitted that even where there is no document at all for reconveyance of the property, the Court can still find out the real nature of the impugned transaction by applying any or more of the above tests. In this connection, he has relied on a decision in the case of Buddhu Sau v. Mangal Sau reported in (1966) 70 Cal WN 982. In that case 3 (three) documents were executed on the same day namely, a sale deed, an agreement to re-convey and a lease. Bijayesh Mukherjee, J., summed up the 4 (four) factors which weighed with him in coming to the conclusion that the transaction was not an absolute sale. The conclusion of the learned Judge is summed up in paragraph 35 at page 999 as follows :

'To sum up, the four existing facts, that is to say, facts which exist at the time of the controversial transaction are (i) existence of a debt of Buddhu Sau to Panchanan Das in a sum of Rs. 1000/-, (ii) payment of that debt that day by Buddhu Sau out of Rs. 2500 (not Rupees 4000) he had received from Mangal, (iii) Rs. 4000/-, the consideration money for '72/6', having no relation to its marketprice then, as high as Rs. 12,000/-. if not more, & (iv) possession of the vendor Buddhu Sau remaining undisturbed and continuing in defiance of the sale deed extinguishing his possession. Such existing facts point to one, and only one, thing : that the transaction is not an absolute sale it purports to be. it is in substance a loan.''

29. Mr. Mullick also relied on an un-reported decision of this Court in the case of Smt. Sailabati Sett v. Provash Chandra Dutt. The judgment in that case was delivered by A. N. Sen, J., (as His Lordship then was) on 18th June, 1976 in Suit No. 1497 of 1945. Mr. Mullick submits that in that case although there was no deed of re-conveyance, the learned Judge held that the transaction in substance was a loan transaction. To appreciate the contention of Mr. Mullick the facts of the said case are set out hereafter briefly :

The plaintiff No. 1 was the (sic) of Satish Chandra Sett and the plaintiff No. 2 was the son of Satish Chandra Sett. Satish Chandra Sett borrowed from one Provash Chandra Dutt, the defendant No. 1 in the said suit, various sunn of money from time to time. On the 5th of August, 1958 Satish Chandra executed a Deed of Mortgage in favour of Provash Chandra. Dutt for a sum of Rs. 10,000/- in respect of the premises No. 21/1A, Beadon Street, Calcutta, Satish Chandra required further loan for the marriage of his daughters. It is the case of the plaintiff in that suit that when Satish approached Provash for further advance for the marriage of his daughter, Provash insisted on having a conveyance in Ms favour in respect of the said premises No. 21/1A, Beadon Street for circumventing the provision of Bengal Money Lenders Act. It has been alleged that on the 12th of Marclx, 1941 Satish Chandra Sett executed a conveyance in favour of Provash Chandra Dutt which has been challenged in that suit on the basis of that agreement and understanding that the said document would not be acted upon and would not be operative and upon the amount advanced being repaid to Provash Chandra Dutt, Provash Chandra would convey the property to Satish Chandra Sett. Though the conveyance was exe-cuted on the 12th of March, 1941, no action was taken on the basis of the said conveyance so long as Satish Chandra Sett was alive and Satish remained the owner of the property and continued to exercise all rights of ownership of the property so long as he was alive. The suit was not contested by the defendant. On the evidence of plaintiff, the learned Judge was satisfied that the document dated 12th March, 1941 in the form of conveyance was indeed intended to be a document to cover a loan transaction between Satish Chandra Sett and Provash Chandra Dutt and the document was never intended to be acted upon as a conveyance.

30. In that case admittedly, the loan was obtained by Satis Chandra Sett from Provash Chandra Dutt. In other words, there was existence of a debt, The defendant did not contest and no evidence was tendered on behalf of the defendant. On the evidence of the plaintiff which was not disputed, the Court came to the conclusion that the document was intended to be a document to cover a loan transaction.

31. Each cast? has to be decided on its own facts, The facts of the instant case are different from the facts of the other two cases mentioned hereinabove. In the instant case there was no debt in existence, whereas in Buddhu Sau v. Mangal Sau (1966 (70) Cal WN 982) Smt. Sailabai Sett v. Provash Chandra Dutt (supra), there was existence of debt. The fact of payment of Rs. 1200/- by the defendant No. 1 to the plaintiff's father is admitted. There was no other transaction by and between the plaintiff's father and the defendant No. 1. Both the Courts below found that the case of repayment by the plaintiff was untrue. It is no doubt true that in the said two cases, possession of the property after sale was taken to be one of the determining factors. But in the instant case, the question of possession, as rightly observed by the learned Subordinate Judge, was not relevant in this case as the borrower was not in actual physical possession of the property. He was in constructive possession through Bhagidar or Bargadar. The case of defendant No. 1 is also that he was in possession through the Bhagidar or Bargadar, the pro forma defendant No. 2. The evidence of the Bhagidar could not be decisive in determining the issue. The learned Subordinate Judge was right in holding that the evi-dence of Bargadar or Bhagidar should be considered in the light of other facts and circumstances. Fact remains that there was a dispute between the defendant no. 1 and defendant No. 2 with regard to the share of produce which was settled upon the intervention of the villagers.

32. Next comes the question of valuation of the property. In Sailabati Sett's case (supra), valuation of the properly conveyed was not taken into consideration. In any event, the criticism that the consideration set out in the sale deed is much below the market value, is not justified. The learned Munsif, on the basis of 3 (three) sale deeds relied on by the plaintiff, came to the conclusion that the reasonable market price of the suit property at the material time should have been much more than Rupees 1200/-. He did not find out that was the market value. The learned Subordinate Judge gave reasons for differing with the learned Munsif on this issue. The 3 (three) sale deeds relied on in support of the contention that the market value was more than Rs. 1200/- at the material time, if analysed, would reveal that there would not be any appreciable difference in the value shown in the impugned deed in this proceeding. The oral evidence of the plaintiff is that the market price of the suit property would be about Rs. 2,500/- to Rs. 3,000/-. The nature, character and the area of the land are different in three different cases. The lands sold under the said three several deeds, as it appears, were not subject to the rights of any other person. In the instant case the suit property was in the possession of Bargadar. When a property being in the possession of tenant or a bargadar or Bhagidar is sold as in the case here, the market value is bound to be affected thereby. A vacant property if sold would generally if not invariably fetch better price than a property which is in the possession of a tenant or a Bargadar. The learned Subordinate Judge has taken into consideration this aspect of the matter, which is a relevant factor, in coming to his conclusion.

33. The market value of the property is no doubt a question of fact. The value of the property depends mainly on the nature, size and locality of the property, the amenities available and the price prevailing for similar property in the same locality or its neighbourhood. It is not possible to have an exact valuation with mathematical precision. The principle is well established that market value has to be ascertained in each case having due regard to the condition of the time and factors which affected the transaction between a willing seller and a willing buyer. Bargadar or Bhagidar being in possession of the suit property at the time of sale is crucial factor affecting the value of the suit property.

34. On the facts and in the circumstances of the case, I am of the opinion that the learned Subordinate Judge came to correct conclusion that the market value of the property was more than Rs. 1200/- could not be established by the plaintiff. It cannot be laid down as a general principle that whenever there is a sale of property at a value lower than its worth it will lead to an irresistible inference that the transaction is in substance a loan. A price below the true value by itself cannot indicate a mortgage nor a fair market value can be the conclusive evidence that the transaction is a sale.

35. Where there is no evidence of the relationship of creditor and debtor and there is no prior transaction by and between the parties to the conveyance, even if the consideration of sale does not represent the market price, the transaction cannot be treated as a loan transaction in substance. There may be very many factors which may compel a person to sell a property at a price which may not reflect the market value. The cumulative effect of all the relevant facts will determine the real character of the transaction and not one or two factors considered in isolation.

36. Having regard to the evidence on record and the language used in the deed which is unambiguous and on a fair construction of the deed upon reading as a whole, and taking everything into consideration, I am of the opinion that the impugned transaction is not a mortgage by conditional sale. Nor I have been able to persuade myself to hold that the transaction in substance is a loan transaction within the meaning of Section 2(12) of the Bengal Money Lenders Act, 1940. This is a case of sale out and out. This is an absolute sale and not an ostensible sale.

37. In the result, the appeal fails and is dismissed. There will be, however, no order as to costs.


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