GAUHATI HIGH COURT
M. C. PATHAK AND BAHARUL ISLAM, J.
Kameswar Singh and others -Appellant
Versus
Khaichow Singh and others -Respondent
Second Appeal No. 248 of 1968
Decided On : 04-08-1972
TRANSFER OF PROPERTY ACT - SECTION 58 (C) - SALE DEED WITH CONDITION OF REPURCHASE - INTERPRETATION - MORTGAGE BY CONDITIONAL SALE - DISTINCTION - INTENTION OF PARTIES - SURROUNDING CIRCUMSTANCES - ADEQUACY OF PRICE - POSSESSION - MUTATION - ABSENCE OF DEBT - STIPULATION OF INTEREST - PERIOD OF RECONVEYANCE - OUT AND OUT SALE - HELD.
Fact of the Case:
Plaintiffs filed a suit for redemption of 8 Bighas of land from Kot mortgage on payment of Rs. 500/- and for recovery of khas possession thereof. The Defendants contested the suit, claiming that the transaction was an out and out sale with a condition of repurchase and not a mortgage by conditional sale.
Finding of the Court:
The court held that the transaction was an out and out sale with a condition of repurchase and not a mortgage by conditional sale. The court found that the language of the sale deed was clear and unambiguous, indicating an intention to transfer ownership and possession of the land to the vendees. The court also considered the surrounding circumstances, such as the adequacy of the sale price, the possession of the land by the vendees, the mutation of the land in the vendees' names, and the absence of a debt or stipulation for interest, all of which supported the conclusion that the transaction was a sale.
Issues: 1. Whether the transaction under the registered deed dated 3-2-1925, Ex. A, is an out and out sale with a condition of repurchase or it is a mortgage by conditional sale. 2. Whether the Plaintiffs are entitled to a decree as claimed.
Ratio Decidendi: The court applied the principles laid down by the Supreme Court in Chunchun Jha v. Ebadat Ali and Bhaskar Waman Joshi v. Shrinarayan Rambilas Agarwal to interpret the sale deed. The court held that the proviso to clause (c) of Section 58 of the Transfer of Property Act, which was introduced in 1929, clarified that if the sale and the agreement to repurchase are embodied in two separate documents, the transaction cannot be a mortgage. However, the court also held that the mere fact that there is only one document does not necessarily mean that it must be a mortgage. The court found that the language of the sale deed in the present case was clear and unambiguous, indicating an intention to transfer ownership and possession of the land to the vendees. The court also considered the surrounding circumstances, such as the adequacy of the sale price, the possession of the land by the vendees, the mutation of the land in the vendees' names, and the absence of a debt or stipulation for interest, all of which supported the conclusion that the transaction was a sale.
Final Decision: The court allowed the appeal, set aside the judgment and decree of the learned Assistant District Judge, and restored the judgment and decree of the learned Munsiff. The plaintiffs' suit was dismissed with costs.
PATHAK, J. :- This appeal is by the Defendants.
2. The plaintiffs case in brief is that 8 Bighas of land described in the schedule to the plaint hereinafter referred to as the suit land, belonged to the Plaintiff No. 1, late Bidya Singh and late Basanta Singh, who borrowed Rs. 500/- from Late Madan Singh, predesessor-in-interest of the Defendants and executed a mortgage by conditional sale (Kotabaddha) in respect of the suit land on 21st Magh, 1331 B. S. corresponding to February 3, 1925 with the stipulation that the mortgagee would reconvey the suit land on payment of the said sum of Rs. 500/- within one year in favour of the mortgagors. Plaintiff No. 2 is the son and legal heir of Late Bidya Singh and Plaintiff No. 3 is the son and legal heir of Late Basanta Singh. Madan Singh died leaving Kameswar Singh. Defendant No. 1, widow Gidani Debi Defendant No. 2, daughter Parbati Debi Defendant No. 3 and minor son Krishna Babu Singh Defendant No. 4 and minor daughter Kutuma Debi Defendant No. 5 as his legal heirs. Defendants 6 to 12 with knowledge of the terms of the mortgage by conditional sale, have possessed some portion of the suit land by right of exchange. The Plaintiffs homestead is situated on about 1 Bigha of the mortgaged land and as they are entitled to redemption of the mortgaged land at any time, the Plaintiffs kept their homestead under their possession and they are living there even now. Late Madan Singh with whom the land was mortgaged took the remaining about 7 Bighas of the mortgaged land under his possession. The Plaintiffs requested Madan Singh several times during his lifetime to release the mortgaged land from Kot mortgage by accepting the mortgage money. But Madan Singh evaded the matter on various pleas and in the meantime he died. Hence the Plaintiffs requested the Defendants also several times for releasing the suit land from the Kot mortgage, but they have not yet released the suit land. In the circumstances the Plaintiffs have brought the suit for redemption of the suit land from the Kot mortgage on payment of the mortgage money amounting to Rs. 500/- and for recovery of khas possession thereof.
3. Defendants 1, 2, 3 and 6 have filed a joint written statement and contested the suit.
4. The Defendants have averred that there is no cause of action for the suit, that the suit is not maintainable in law in its present form, and that it is barred by limitation. The defendants case is that the Plaintiff No. 1, late Bidya Singh, and late Basanta Singh, while alive, sold the suit land by executing a registered sale deed dated 21st Magh, 1331 B. S. corresponding to 3-2-1925 for a consideration of Rs. 500/- and delivered possession thereof. At the request of the vendors, a condition was subsequently inserted in the sale deed to the effect that if within one year from the date of execution of the sale deed the vendors or their successors repaid the consideration money, the vendee or his successors would execute a sale deed in respect of the said land without any objection in favour of the vendors or their successors. That the transaction was a sale outright with a condition of repurchase and it was never a mortgage by conditional sale (Kot Kabala) as alleged. That time was of the essence of the contract and before the stipulated period expired Madan Singh requested Plaintiff No. 1, Bidya Singh and Basanta Singh to repay the sale price in terms of the condition of repurchase but they refused to take back the land by repaying the sale price representing that they had no necessity for the suit land. Thereafter Madan Singh with knowledge and consent of the Vendors got his name mutated in respect of the suit land in 1927 by right of purchase and possessed the same by paying the Government revenue etc. from year to year. The Plaintiff No. 1 or the predecessors-in-interest of Plaintiff Nos. 2 and 3 never objected to the mutation and possession of Madan Singh or his successors. Madan Singh possessed the suit land alo
AIR 1960 SC 301 : (1960) 2 SCR 117
AIR 1954 SC 345 : 1955 SCR 174
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