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2000(3) Supreme 286
SUPREME COURT OF INDIA
(From Madhya Pradesh High Court)
S. Saghir Ahmad & Y.K. Sabharwal, JJ.
Mushir Mohammed Khan (dead) by LRs. -Appellant
versus
Smt. Sajeda Bano & Ors. -Respondents
Civil Appeal No. 9 of 1988
Decided on 2-3-2000
Counsel for the Parties :
For the Appellant : S.K. Gambhir, Anil K. Sharma, Awanish Sinha, Vivek Gambhir, Advocates.
For the Respondents : Dr. R.B. Masodkar, K.L. Taneja, Advocates.
Held : The two documents read together would not constitute a mortgage as the condition of re-purchase is not contained in the same documents by which the property was sold. Proviso to Clause (c) of Section 58 would operate in the instant case also and the transaction between the parties cannot be held to be a "mortgage by conditional sale." (Para 12)
(ii) Transfer of Property Act, 1882-Section 58(d)-Usufructuary mortgage-Plaintiff executing sale deed-Defendant executing separate agreement to reconvey property if amount paid on or before specified date-Plaintiff executing rent note agreeing to pay monthly rent to defendant-High Court holding transaction as not mortgage by conditional sale but as usufructuary mortgage-Unsustainable-Transaction neither constitute mortgage by conditional sale nor usufructuary mortgage.
Held : The three documents read together do not constitute a mortgage or mortgage by conditional sale inasmuch as the condition to repurchase was not contained in the sale deed itself. If the documents cannot be treated as creating a mortgage on account of the prohibition contained in the Proviso to Clause (c) of Section 58, it is difficult to accept that these documents would create a mortgage of another kind. The basic fact which has been ignored by the High Court is that though in a usufructuary mortgage, the possession has necessarily to be delivered to the mortgagee, an agreement for reconveyance is not obtained from him. While recording a finding on the question of usufructuary mortgage, the High Court did not take into consideration the second document which represented an agreement between the parties that if the amount in question, namely, the price money for which the sale was executed by the plaintiff in favour of the defendant was returned within the time stipulated by that agreement, the defendant would reconvey the property to the plaintiff. An agreement of reconveyance does not normally constitute part of the transaction by which usufructuary mortgage is created. Where the parties executed three documents almost contemporaneously, all the three documents have to be taken into consideration to find out the true nature of the transaction. (Para 14)
Though we, on the facts of this case, cannot hold the transaction to constitute a mortgage with a condition of repurchase, we also cannot hold the transaction to be usufructuary mortgage as held by the High Court which, in our opinion, was in error in recording that finding by excluding from its consideration the agreement of reconveyance. (Para 17)
(iii) Transfer of Property Act, 1882-Section 58-Mortgage-Plaintiff executing sale deed for Rs. 1,000 while he purchased property few years earlier for Rs. 3,000-Defendant executing agreement to reconvey property on plaintiff repaying amount within two years-Defendant executing rent note in favour of defendant-Suit for redemption of mortgage-Held, transaction constituted neither mortgage by conditional sale nor usufructuary mortgage-Property ostensibly sold not for real value-Plaintiff might have been persuaded to execute sale deed instead of mortgage deed-High Court not correct in decreeing mortgage suit-Defendant directed to pay Rs. 2 lakhs to and give up rental arrears within time stipulated by Supreme Court-Failure to give amount as above would result in dismissal of appeal. (Paras 18 to 22)
JUDGMENT
S. Saghir Ahmad, J.-Habibur Rehman, who is since dead and is represented by the present respondents, was the owner of a house situated in Gali Masjid Peerji in Ibrahimpura, Bhopal, which he had purchased for a sum of Rs. 3,000/- through a registered sale deed dated 24.2.1949. On 28.12.1955, he executed a sale deed in respect of this house in favour of the appellant, Mushir Mohammed Khan, who also is dead and is represented by the present appellant, for a sum of Rs.1,000 only. A few days later, namely, on 3rd January, 1956, Mushir Mohammed Khan executed an agreement in favour of Habibur Rehman agreeing to re-convey the said house if the amount of Rs. 1,000/- was paid back to him within a period of two years. Habibur Rehman also executed a rent note in favour of Mushir Mohammed Khan on the same day. Both the documents, namely, the sale deed dated 28.12.1955 and the agreement for re-conveyance, executed on 3rd January, 1956, were registered on 5th January, 1956. In terms of the rent note, Habibur Rehman started paying Rs. 20/- as rent for the house in question to Mushir Mohammed Khan.
2. Treating the above documents as mortgage, Habibur Rehman, who shall hereinafter be referred to as plaintiff, filed a suit for redemption which was dismissed by the trial Court on 5th of July, 1979. The appeal filed thereafter was also dismissed by the Vth Addl. District Judge, Bhopal on 21.12.1982. But the second appeal filed by the plaintiff was allowed by the Madhya Pradesh High Court by the impugned judgment dated 27.8.1987.
3. Learned counsel appearing on behalf of the appellant (hereinafter referred to as defendant ) has contended that the High Court was in error in treating the transaction between the plaintiff and the defendant as mortgage. He contended that since the condition of re-conveyance was not contained in the same document by which the property was sold by the plaintiff to the defendant, the document could not be treated to be a deed of mortgage. It is contended that the agreement by which the defendant agreed to re-convey the property in question to the plaintiff was an entirely separate transaction between the parties and even if that document was read along with the sale deed executed earlier, the cumulative effect of both the transactions would not result in a "mortgage" and they will remain two separate transactions, namely, a sale deed by which the property was transferred to the defendant and an agreement by which the defendant agreed to re-convey the property to the plaintiff.
4. Learned counsel for the plaintiff, on the contrary, contended that the judgment passed by the High Court, in the circumstances of the case, was wholly justified inasmuch as the property which was purchased by the plaintiff himself for a sum of Rs. 3,000/- was transferred to the defendant for a sum of Rs.1,000/- only which was far less than the real value of the property which, with the lapse of time, escalates specially in big cities like Bhopal where the property in question is situate and, therefore, the transaction cannot be treated as an out and out sale but a mortgage which was executed by the plaintiff to secure the loan of Rs.1,000/- advanced by the defendant. He also contended that the plaintiff who has remained in possession throughout, has already invested huge amount of money in the improvement of the house and has made additional room on the first floor which the plaintiff would not have done if he had sold the property absolutely in favour of the defendant. He contended that the conduct of the plaintiff in selling the property for a lower price than its actual value and investing huge amount even after the sale transaction indicated that the plaintiff knew and believed that he was still the owner of that property, which he would redeem one day. The transaction, by conduct, was, therefore, a mortgage and not a sale.
5. Let us first analyse the High Court judgment on this question before proceeding to consider the respec
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