Sale with an option to repurchase.

These are two connected second appeals preferred against the decrees and Judgments of the learned Subordinate Judge, Tuticorin, in A.S. Nos. 76 and 77 of 1951, arising from the orders made by the learned District Munsif of Kovilpatti in O.P. Nos. 19 and 20 of 1950.

The facts are: The respondents’ father had become indebted to the appellant’s vendor. This indebtedness had come to a head in 1932, which, as the preamble to-Act IV of 1938 shows, was a year of great depression. In fact the beneficial Madras Act IV of 1938 and the other statutory legislation came to relieve the ryots of the overwhelming indebtness under which they were groaning. Therefore, in these circumstances, the respondents’ father wanted to settle his debts with the vendor of the appellant. The appellant’s vendor, on account apparently of the long transactions with these people, has taken a sympathetic view and has settled the amounts at much lower rates and has agreed to take the properties of these respondents’ father in discharge of those debts. The respondents’ father apparently being an agriculturist seems to have also pressed that if better times came he should be given an opportunity to purchase back the property for the lower amounts for which these debts had been settled. The appellant’s vendor seems to have agreed to that also and it is in these circumstances that the two documents which are under consideration came into existence.

The documents are described as “vayida crayam” a phrase which I shall explain presently. The substance of these sales is that in discharge of the debts of a much higher sum and which had been settled at a lower figure the properties were being fold to the appellants vendor for a round sum of money and that the vendee was also put in possession of these properties and that if, after a period of nine years, the vendor was able to pay back the sum for which the sales had been effected the vendee should retransfer the properties to him. It was stipulated that the vendee should apply for transfer of the registry after a period of ten years. The documents wound up by saying that if the vendor fails to get the repurchase, the vendee will enjoy the properties without any further claim from him in the shape of the clause, apparently referring to the clause for right to repurchase.

In fact, nothing further would have happened on account of the economic depression ‘But subsequently by the amendment to Act IV of 1938, usufructuary mortgages have also been brought within the ambit of Act IV of 1938. In other words, it has now become profitable to contend that these sales with a condition to repurchase are in reality mortgages by conditional sale.

The present applications have been filed on the ground that these are all mortgages with a conditional sale to which the amended Act IV of 1938 applies and which point is disputed by Mr. Bhashyam and which need not be gone into in these proceedings, because I shall dispose of the appeals on a shorter point, and which may be properly considered in other proceedings. On the other hand, the contention, among other things of these appellants before me is that they are all sales only with a condition to repurchase. If that contention is found in favour of the appellants, then the other points need not be gone into.

I shall, therefore, examine whether the two documents under consideration are sales with a right to repurchase, as contended for by the appellants, or not.

It has been recently pointed out by the Supreme Court in Chunchun Jha v. Sheikh Ebadat Ali1, that the question whether a given transaction is a mortgage by conditional sale or a sale outright with a condition of repurchase is a vexed one which invariably gives rise to trouble and litigation and that there are numerous decisions on the point and much industry has been expended in some of the High Courts, to which I also, plead guilty, in collating and analysing them, and that this is a fruitless task because two documents are seldom