Back
IN THE HIGH COURT OF JUDICATURE AT BOMBAY, BENCH AT AURANGABAD
S.G. MEHARE, J.
Premchand Lakichand Jain Died through his L.Rs. & Ors. - Appellants
Versus
Bansilal Manikchand Jain Since deceased through his Lrs. & Ors. - Respondents
Second Appeal No. 30 of 2023 With CA/8839/2023
Decided On : 29-11-2023
mortgage - Civil Procedure Code, Indian Evidence Act, Transfer of Property Act - The transaction was not a mortgage by conditional sale, but it was usufructuary mortgage. In the facts and circumstances of the case, the extrinsic evidence about the intention of the parties is admissible. Hence, oral evidence prevailed over the documentary evidence. The defendant is not entitled to specific performance of the contract. However, he is entitled to refund of the earnest amount with interest. There was delay and laches in claiming the specific performance. The present appellant, the defendant, was not ready and willing to perform his part of contract.
Fact of the Case:
The case involved a dispute over a transaction that was claimed to be a mortgage by conditional sale or a usufructuary mortgage. The plaintiff alleged that the defendant engaged in illegal money lending and sought redemption of the mortgaged property, while the defendant denied the allegations and counter-claimed for specific performance of the contract.
Finding of the Court:
The Court found that the transaction was a usufructuary mortgage, and the extrinsic evidence about the intention of the parties was admissible, favoring oral evidence over documentary evidence. The defendant was not entitled to specific performance of the contract but was entitled to a refund of the earnest amount with interest. The Court also found delay and laches in claiming the specific performance and that the defendant was not ready and willing to perform his part of the contract.
Issues: The issues involved in the case included determining the nature of the transaction (mortgage by conditional sale or usufructuary mortgage), admissibility of extrinsic evidence, entitlement to specific performance, delay and laches in claiming specific performance, and readiness and willingness to perform the contract.
Ratio Decidendi: The Court's decision was based on the finding that the transaction was a usufructuary mortgage, the admissibility of extrinsic evidence favoring oral evidence, the denial of specific performance to the defendant, the delay and laches in claiming specific performance, and the defendant's lack of readiness and willingness to perform the contract.
Final Decision: The appeal was partly allowed, the impugned judgments and decrees denying the refund of earnest money to the defendant were set aside, and the defendant was entitled to recover Rs.2000/- with simple interest @ 8% p. a. from the date of agreement to sell till its realization. No orders as to costs were made, and the record and papers were returned to the learned Court of the first instance.
JUDGMENT :
1. The appellant, who was the original defendant, had impugned the judgment and decree of the learned Civil Judge Junior Division, Jamner, passed in R.C.S. No.27 of 1982,, dated 26.07.1988 and of the learned District Judge-5, Jalgaon passed in R.C.A. No.256 of 1988, dated 30.06.2022.
2. The appellants would be referred to as the 'defendants', and respondents as the 'plaintiffs'.
3. Both plaintiffs and defendants died and their legal representatives continued the suit. This appeal is a second round of litigation. Against the judgment and decree of the Trial Court, the first appeal bearing R.C.A. No.256 of 1988 was preferred. It was decided on 01.02.1993. Against the said judgment and decree of the First Appellate Court, Second Appeal No.325 of 1993 was preferred. It was decided on 09.09.2021. This Court had set aside the judgment and decree of the First Appellate Court passed in R.C.A. No.256 of 1988 dated 01.02.1993 and relegated the matter to the First Appellate Court for de novo consideration of the appeal with a direction to frame appropriate points for determination in compliance with Order XLI Rule 31 of the Civil Procedure Code and decide the matter on merits. In view of the order of this Court, the First Appellate Court framed in all 21 points for determination and passed the impugned judgment and decree on 30.06.2022.
4. This Court, by order dated 25.07.2023 (Coram: Arun R. Pednekar, J.), asked the learned counsel for the respondents how questions of law formulated by this Court by order dated 05.09.2019 in the earlier round of litigation between the parties as questions of law at nos. A, B and C would not arise for consideration. It has been further observed that the learned counsel submits that the same are not dealt with by the First Appellate Court on remand. It was directed to file a reply limited to that extent. The Court has perused the submissions of the learned counsel for the plaintiff as per the above order.
5. Both learned counsels agreed for final hearing at the admission stage. Hence, the appeal was admitted and heard finally by consent, as the original suit was filed in 1982. The following substantial questions of law have been formulated :
(a) Whether the document in question about the filed survey no. 278/3 was a sale deed or deed of mortgage by conditional sale.
(b) Whether oral evidence would prevail over documentary evidence?
(c) Whether defendants/present appellants are entitled to specific performance of the field survey no.278/1?
(d) Whether there was a delay and laches in claiming the specific performance?
(e) Whether the defendant was ready and willing to perform his part of the contract?
6. The plaintiff had a case that he intended to purchase adjoining land bearing field Survey No. 278/1. However, he had no money. He knew that the defendant does money lending. Hence, he approached the defendant and asked for money. The defendant asked him to give something in writing or pledge something. He also asked for 2% interest per month on the loan amount. He executed the sale deeds of the field against the loan of Rs.6000 and the house property against the loan of Rs.3000 on 21.1.1971. The sale deeds were executed as security against the loan. It was agreed that the possession of the house would not be delivered to the defendant, but the possession of the agricultural field Survey No.278/3 would be delivered and the defendant would maintain the account of the income fetched from the field, and it would be appropriated against the loan amount and the interest. From the loan taken from the defendant, the plaintiff purchased field Survey No. 278/1 on 15.4.1971. Instead of producing the account, in May of 1974, the defendant started demanding the loan amount. The plaintiff had no money. The defendant took advantage of the situation, took possession of field Survey No. 278/1 and obtained an agreement to sell. He did not receive any earnest money. In 1975, the plaintiff could arrange for Rs.3000/-. He paid
AI
The main legal point established in the judgment is the admissibility of extrinsic evidence in determining the nature of a transaction, favoring oral evidence over documentary evidence, and the entit....
(1) Type of mortgage depends upon terms of contract – Oral evidence of intention is not admissible in interpreting covenants of deed.(2) Agreement to Sell – Plaintiff is not debarred from enforcing r....
A sale deed must explicitly state conditions for re-transfer to qualify as a mortgage by conditional sale under Section 58(c) of the Transfer of Property Act.
The court established that a transaction could be classified as a mortgage rather than a sale, emphasizing the burden of proof and admissibility of oral evidence.
The court established that a transaction must clearly indicate its nature, and the absence of a reconveyance clause in a deed typically signifies an outright sale rather than a mortgage.
Redemption of mortgage – Mortgagor has right to redeem at any time provided his right is so extinguished by act of parties.
A plaintiff seeking specific performance must demonstrate readiness and willingness to perform the contract; failure to do so negates the right to enforce the agreement.
It is clear that in order to contend that transaction was a mortgage and not out and out sale, it requires compliance with provisions of law set forth hereinabove and in absence of same, such content....
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
