Sale with an agreement for reconveyance by conditional sale.

The short question for determination in this Second Appeal is whether the document Exhibit B-1 was an outright sale with an agreement to reconey, or a mortgage by conditional sale as defined in section 58 (c) of the Transfer of Property Act. The view of the Courts below was that it was a mortgage by conditional sale ; hence the defendant, the aggrieved party, has filed this Second Appeal.

The plaintiffs’ case was briefly the following. The suit properties are situated within the municipal limits of Thanjavur, and belonged to one Kaliaperumal- Pillai, the undivided father of the plaintiffs, and his younger brother Krishnaswami. They borrowed amounts from one Janaki Ammal and in settlement of these debts the suit document, Exhibit B-1, dated 18th April, 1939, was executed, ostensibly as a sale deed, but, in essence, it was only a mortgage. Janaki Animal died shortly before the suit, and before her death, she appointed the defendant as her executor, to manage her estate, and the defendant is in management of the suit properties. The plaintiffs’ father died fifteen years ago, and the plaintiffs have succeeded to his estate by survivorship. The plaintiffs filed the suit for redemption of the mortgage, Exhibit B-1. The defendants pleaded that the document was an out-right sale with a covenant for repurchase. They also denied the plaintiffs’ right to the benefits of section 9-A of Act IV of 1938.

The document is in Tamil and can be rendered thus in English:

" We have today executed the sale deed in your favour of the under-mentioned property and the consideration therefor of Rs. 2,550 is made up in the following manner:

(1) by discharge of a prior simple mortgage, dated 20th July, 1924 for Rs. 2,000 over item No. 1 — amount received Rs. 1,850 ;

(2) by discharge of a mortgage, dated 12th July, 1937 for Rs. 600 over item No. 2 and other items after scaling down the interest under Act IV of 1938 — Rs. 450 ;

(3) amount due towards principal and interest on a promissory note, dated 12th July, 1937, for Rs. 250 — total Rs. 2,250.

We have given you the abovesaid property with absolute rights to it. Excepting the two mortgages aforementioned, there are no other encumbrances on this property. Out of the consideration of Rs. 2,550 for this sale deed, if we pay you Rs. 2,050 within three years from today, you shall reconvey the properties to us. Subject to this condition this deed of sale is executed. "

The main circumstances to be borne in mind in regard to this transaction are the following: For the entire amount of consideration of Rs. 2,550 no amount by way of cash was paid. The entire amount represented prior debts under two simple mortgages and a promissory note. An effort was made deliberately to show in the document that the amount of consideration represented the amount of the prior debts after adjusting amounts already paid or after scaling down amounts by way of interest under Act IV of 1938. A conscious intention to show that the relationship of debtor and creditor subsisted between the two parties up to the time of the execution of the document is thus apparent. In 1924 item No. 1 property was capable of raising Rs. 2,000 by way of simple mortgage. In 1939 item No. 1 property supplemented by three more items, which include four mahs or 11 /3 acre of cultivable land, a garden land containing topes and gardens and another garden land containing bamboo clusters, were all sold for Rs. 2,550. No attempt was made in the lower Courts to show how the price of the property varied in the locality between 1924 and 1939, whether there was an upward trend or a downward trend. The lower appellate Court, however, was prepared to consider that from the recital of the document alone, it would appear that the property covered by Exhibit B-1 was worth on the date of Exhibit B-1 much more than Rs. 2,550. This is a finding of fact and I am not prepared to interfere with it, though it would have been a better if the lower appellate Court had suppleme