1. The appeal arises out of a suit for redemption.
2. The defendant No. 9 executed a deed of sale in favour of defendants Nos. 1 and 2 and the father of defendant No. 7 on the 5th May 1899. There was a stipulation in the kabula that if the vendor paid the purchase-money within three years from the date of the execution of the document, the property would be given up by the vendee. The question which is involved in the appeal is whether the transaction was a deed of sale with a condition for re purchase or a deed of mortgage by conditional sale.
3. The Court below held that it was the latter and accordingly gave a decree for redemption in favour of the plaintiff. The defendants have appealed to this Court.
4. It is stated in the deed that the vendor was selling absolutely the lands after receiving Rs. 800, the real price. It then states: 'Becoming entitled to my rights in the above-mentioned lands sold to you and having possessed them through tenants or in khas possession as in my case and realising rents from tenants according to the touzi signed by me, by paying Government revenue and by mutation of your names, you and your sons and grandsons, enjoy, possess and deed with them in any way you like and shall be in proprietary right by realisation of arrears of rent due to me according to the touzi. At no time whatever shall I or my Sakulya heirs have or lay any claim to the lands sold.... Be it also known that if your principal amount be paid up within three years, you will release the deed of sale and the lands described. If money cannot be paid within the time as limited above, then this deed of sale having been regarded as a deed of absolute sale your kharida maliki (proprietary) rights will accrue up on the lands above mentioned.'
5. No money was paid within the term limited, viz. 3 years.
6. In coming to the conclusion that the transaction was a mortgage the Court below has relied mainly upon two points; the first is that the words used in connection with the payment of the amount within three years are the 'principal amount,' and secondly, that if the money be not paid within the time limited, the kabala will be regarded as a deed of absolute sale, These were held to be indications of the transaction being a mortgage.
7. We do not think, however, that they are sufficient, by themselves, for holding that it was a mortgage.
8. The word 'principal' was also used in the document before their Lordships in the case of Bhagwan Sahai v. Bhagwan Din 12 A. 387 : 17 I.A. 98 : 5 Sar. P.C.J. 657, 6 Ind. Dec. (N.S.) 992 (P.C.). Then as to the deed of sale being regarded as a deed of absolute sale in the event of the money for re-purchase not being paid and the kharida maliki rights being absolute, we think all that it means is that, after the expiry of the period limited, namely, three years, no claim could be advanced for re-purchasing the property and the words used in the document were, we think, having regard to the other terms of the document, so used in order to indicate that there was a chance of the property being liable to be reconveyed if the money was paid within three years, It does not show, however, that there was a relation of debtor and creditor between the parties and there is no doubt that there should not be a mortgage unless there was a debt.
9. In the present case, immediate possession was delivered to the vendee, and the documents of title were also delivered to him. The price paid was stated in the deed to be the real price and there was no mention of interest to be paid on the principal sum at the time of re-purchase. The vendee purchased the stamp for the conveyance and after the conveyance had been executed, the vendor got himself registered in the Collectorate. These are strong indications to show, that the transaction was not a mortgage.
10. We have been referred to a large number of cases by both sides but the question whether the transaction is a sale or a mortgage must be determined with reference to the intention of the parties as gathered from the document and surrounding circumstances. Necessarily, therefore, each case must turn upon the terms of the documents and particular circumstances. As already pointed out, in the case of Bhagwan Sahai v. Bhagwan Din 12 A. 387 : 17 I.A. 98 : 5 Sar. P.C.J. 657, 6 Ind. Dec. (N.S.) 992 (P.C.) there was also a clause for payment within 10 years of the principal, the difference being that in the present case the payment was to be made within three years; in the other it was within ten years.
11. There is no doubt that the vendee in the case before their Lordships agreed to recovery the property out of kindness by a subsequent agreement and that fact is mentioned in the judgment but that it not the only ground of decision of their Lordships.
12. The principle laid down in the case of Bhagwan Sahai v. Bhagwan Din 12 A. 387 : 17 I.A. 98 : 5 Sar. P.C.J. 657, 6 Ind. Dec. (N.S.) 992 (P.C.) has been followed in a number of cases and we do not think that the case of Balkishen Das v. W.F. Legge 22 A. 149 : 27 I.A. 58 atp. 65 : 4 C.W.N. 158 : 2 Bom L.R. 523 : 7 Sar. P.C.J. 601 : 9 Ind. Dec. (N.S.) 1130 (P.C.) lays down anything to the contrary. The ground of decision in Balkishen Das v. W.F. Legge 22 A. 149 : 27 I.A. 58 atp. 65 : 4 C.W.N. 158 : 2 Bom L.R. 523 : 7 Sar. P.C.J. 601 : 9 Ind. Dec. (N.S.) 1130 (P.C.) appears to have been that the real effect of the deeds was to consolidate the debt due on the factory account with the principal sum mentioned in the first deed, and thus to give the bankers a security on the taluk for the debt due on the factory amounts. This, as Lord Davey, in delivering the judgment of the Board, said 'gives the transaction the character of a mortgage so far as the factory accounts are concerned, and if it is to some extent a mortgage, it may well be held to be so entirely.'
13. In the case of Jhanda Singh v. Wahid-uddin 39 Ind. Cas. 38 : 21 C.W.N. 66 : 31 M.L.J. 750 : 20 M.L.T. 529 : 64 A. L.J.I 89 : 33 A. 570 : (1916 ) 2 M. W.N. 570 : 19 Bom L.B. 1 : 5 L.W. 189 : 25 C.L.J. 524.1 10 Bur. L.T. 131 : 43 I.A. 284 (P.C. ) notwithstanding the fact that there was a stipulation, (in the event of the vendee not taking the money from the vendor), that the latter would be entitled to deposit the amount in Court, their Lordships held that it was not a mortgage but a sale out and out. It was pointed out that the first portion of the document provided that the repurchase could only take place after the lapse of 10 years and that the latter portion provided that if the vendors were not ready to purchase the property within the aforesaid time, they would have no claim to the property after the expiry of the period of ten years and the vendees would then have every power in respect of the property. This last clause seems to be similar to the clause contained in the document in the present case, namely, that in the event of the vendor not paying the purchase money within three years, the sale shall become absolute.
14. We were referred to the cases of Wahid Ali Khan v. Shafkat Husain (9, Abdul Goffar [Shazadi Bibi] v. Sheikh Jamal 20 Ind. Cas 90 : 17 C.W.N. 10 3. 8 C.L.J.228 and Mahomed Mozaffer Ali v. Asraf Ali 25 Ind. Cas. 93 on behalf of the respondents.
15. These cases, however, are distinguishable. In the first all the terms and the surrounding circumstances do not appear from the report. It appears, however, that there was a separate agreement of even date with the deed of sale that whenever the consideration would be repaid on the expiry of 6 years from the date of sale, the property would be reconveyed, and further that if the remaining amount of consideration money was paid within 6 years, the property would be reconveyed, and the learned Judges in view of the language of the two deeds held that the transaction was a mortgage. In the second, as well as in the third case, there was no change of possession and the consideration for the sale was inadequate. As already pointed out, each case must turn upon the terms of the particular document and the circumstances.
16. Having regard to the circumstances which we have noticed above, we think that the deed in the present case is a deed of sale out and out and not a mortgage.
17. The decrees of the Court below Will accordingly be set aside and the suit dismissed without costs in all Courts as no costs were allowed in either of the Courts below.