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1994 Supreme(Raj) 236

High Court Of Rajasthan
Judgename : Milap Chandra Jain
Askaran - Appellant
Versus
Madan Lal - Respondent
S.B. Civil Miscellaneous Appeal No 137 of 1992
Decided On : 07/04/1994

Advocates Appeared:
K.C. Samdariya, for the Appellant
R.R. Chacha, for the Respondents

A transaction cannot be deemed as a mortgage if the sale deed and agreement for resale are executed on different dates, as per the proviso to Section 58(c) of the Transfer of Property Act.

Headnote:

TRANSFER OF PROPERTY ACT, 1882 - SECTION 58(C) - SALE DEED AND RENT NOTE EXECUTED ON DIFFERENT DATES - TRANSACTION CANNOT BE DEEMED AS MORTGAGE - SUIT FOR SPECIFIC PERFORMANCE ON THE BASIS OF AGREEMENT FOR RE-SALE NOT FILED - DOCTRINE OF TIME BEING OF THE ESSENCE OF THE CONTRACT APPLIES TO CONTRACTS FOR RE-SALE OF PROPERTY CONVEYED - DECREE FOR RECOVERY OF ARREARS OF MEANSE PROFITS AND EJECTMENT OBTAINED BY DEFENDANT AGAINST PLAINTIFF - ISSUE ON TITLE OF SUIT PROPERTY NOT NECESSARY TO BE FRAMED AND DECIDED IN SUIT FOR RECOVERY OF ARREARS OF RENT AND EJECTMENT.

Fact of the Case:

Plaintiff filed a suit for declaration and redemption against the defendant, alleging that the sale deed and rent note executed by him were actually a mortgage transaction. The defendant contended that it was a genuine sale and rent agreement. The trial court dismissed the plaintiff's application for temporary injunction.

Finding of the Court:

The court held that the transaction could not be deemed as a mortgage since the sale deed and agreement for resale were executed on different dates, as per the proviso to Section 58(c) of the Transfer of Property Act. The court also noted that the plaintiff had not filed a suit for specific performance on the basis of the agreement for resale and that the doctrine of time being of the essence of the contract applied to contracts for the resale of property conveyed. The court further held that the issue on the title of the suit property was not necessary to be framed and decided in the suit for recovery of arrears of rent and ejectment.

Issues: Whether the transaction between the plaintiff and defendant was a mortgage or a sale.

Ratio Decidendi: The court relied on the proviso to Section 58(c) of the Transfer of Property Act, which states that a transaction cannot be deemed as a mortgage if the sale and agreement to repurchase are embodied in separate documents. The court also referred to the principle that time is of the essence of the contract in cases of resale of property conveyed.

Final Decision: The court dismissed the plaintiff's appeal and upheld the trial court's order dismissing the application for temporary injunction.

Judgment

Milap Chandra Jain, J.-This appeal has been filed against the order of the learned District Judge, Bikaner dated March 25, 1992 by which he has dismissed the plaintiff-appellant’s application moved under Order 39, Rules 1 and 2 and Section 151, c.r.c. for ad interim injunction, seeking stay of the execution of the decree passed in suit No. 95/87 against him on 10-9-87.

2. On May 18, 1991, the plaintiff-appellant has filed a suit for declaration and redemption against the defendant-respondent in the Court of the District Judge, Bikaner with the averments in short, as follows: He was in need of some money. He approached the defendant to lend it. He told him (plaintiff) that he had to mortgage his house but a sale-deed and a rent-note have to be executed for it in his favour instead of a mortgage-deed. Accordingly, he executed a sale-deed showing sale consideration of Rs. 10,000/-and rent-note showing monthly rent Rs. 150/-. The defendant also executed a document agreeing to resell the house within a year. Out of the sale consideration of Rs. 10,000/-, Rupees 5,000/-only were paid in cash and remaining amount was adjusted towards old debts outstanding against him. All the expenses required in executing the aforesaid two documents were borne by him. Mutation has not been effected in favour of the defendant in the government and municipal records in respect of the suit property. He tendered to the defendant money several times with a request to reconvey his house but the defendant always avoided on one pretext or the other and lastly refused to execute a sale-deed in his favour. On the contrary, he filed a suit for ejectment against him (plaintifi). In his written-statement filed in the ejectment suit, he averred all these facts. The suit was decreed against him on 10-9-87. Execution application has been moved. Along with the plaint, an application for temporary injunction was moved. It was seriously opposed by the defendant-respondent. In his reply, the defendant has averred that it is absolutely incorrect that the plaintiff mortgaged his house, in fact he had sold his house for Rs. 10.000/-and rent-note was executed by him agreeing to pay rent Rs. 150/-per month for the house. Issue of title was framed and it was decided against him. After hearing the learned Counsel for the parties, the learned District Judge, Bikaner dismissed the application by his order under challenge.

3. It has been contended by the learned Counsel for the plaintiff-appellant that the learned District Judge has seriously erred in dismissing, the application for temporary injunction and holding that the plaintiff has failed to establish a prima facie case and balance of convenience in his favour. He also contended that the learned District Judge did not take into consideration the following important and material facts and circumstances:

.(1) The alleged sale consideration was Rs. 10.000/ - and the agreement for resale was also for the same consideration.

.(2) Stamps for the execution of the sale-deed and agreement for resale were purchased the same day.

.(3) That the agreed rate of interest was 18% p.a. and rent-note was executed showing monthly rent to be Rs 150/-per month.

.(4) Electricityand water connections in respect of the disputed property remained in the name of the plaintiff-appellant,

.(5) Agreement for re-sale has a reference for the return of the original rukka, sale-deed and patta.

.(6) All the expenses incurred in executing the alleged sale-deed, rent-note and agreement for re-sale were borne by the plaintiff-appellant.

.(7) Theplaintiff-appellant has spent a huge amount in the suit property and the defendant-respondent

never raised any objection. He further contended that all these aforesaid facts and circumstances leave no manner of doubt that the suit property was in fact mortgaged and was not sold. He relied upon Smt. Indra Kaur vs. Sheolal Kapoor, AIR 1988 SC 1074.

4. Thelearned Counsel for the defendant-respondent duly supporte















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