Ramaswami, J.-This is an appeal preferred against the order made by the learned District Judge of Krishna in O.P.No.11 of 1945.

The facts are: The respondent before us and his late undivided brother Narasimha Rao borrowed a sum of Rs.1,500 from the deceased Anjaneyulu, father of appellants 1 to 3 and executed a registered mortgage deed in his favour. Subsequently on 9th May, 1931, the mortgagors executed Exhibit B-1 styled as a deed of sale in respect of the immovable property for a sum of Rs.1,682-8-0 of a portion of the hypotheca plus an additional extent making the total extent sold larger in extent and undoubtedly in value though we have no specific evidence on that point, than the original hypotheca. This deed of sale contained the usual covenants of sale and stipulated the following condition to reconvey:

“You and we have agreed that in case, within three years from now onwards, that is, before 8th May, 1934, we pay to you the amount remaining after deducting from out of the amount of principal and interest accruing due on the sale amount of Rs.1,682-8-0 with compound interest from now onwards at the rate of Re.1 per cent. per mensem with annual rests, that net income realised from the lands under sale after excluding the cists, etc., from now onwards till then, you shall, at our cost, reconvey the property to us. Moreover, it is agreed that the said instalment shall be the essence of this agreement”.

The property alleged to be sold seems to have been continued in the possession of the vendor, because the vendor has neither filed patta in his name nor the kist receipts in his name for these lands. On the other hand the petitioner in the lower Court has filed kist receipt book Exhibit A-5 covering Aswaraopalam lands. It is in these circumstances that the petitioner has filed the Original Petition for a declaration of the amount due under this document of 9th May, 1931, on the plea that he is an “agriculturist” and that this 1931 document is not an outright sale deed but only a mortgage by conditional sale.

The position taken by the respondents in the lower Court was that the transaction represented as a mortgage, namely, the 1931 document was a deed of sale with a condition of reconveyance within the time fixed thereunder and that time was the essence of contract and that condition not having been fulfilled the contract had become null and void and that this document not being a mortgage by conditional sale the question of declaration does not arise and the petition has got to be dismissed.

The learned District Judge of Krishna upheld the contention of the petitioner that the deed of 1931 is a mortgage by conditional sale and that he had jurisdiction under the Act IV of 1938 to give the declaration asked for, and allowed the petition. The defeated respondents in the lower Court appeal.

In appeal two points are taken before us, namely, that first of all on the facts the learned District Judge went wrong in holding that this 1931 document was a mortgage by conditional sale and that it is not really an outright sale and secondly that Act IV of 1938 is ultra vires of the Constitution of India by reason of its provisions being repugnant to and offending Article 14 and 19(1)(f) of the Constitution of India.

We shall take up the contention on facts first and deal with the contention based upon Articles 14 and 19(1)(f) of the Constitution of India.

The facts of this case clearly show that the deed in question has got all the indicia of a mortgage by conditional sale and cannot be construed as an outright sale. The following tests have been collected in Mulla’s Transfer of Property Act, 3rd Edition, 1949, for deciding whether a given document should be construed as an outright sale or a mortgage by conditional sale:

(1) Existence of debt.

(2) Period of payment, short period indicating of sale and the long period of mortgage.

(3) Continuance of the grantor in possession indicates mortgage.

(4) The stipulation for interest on repayment indicate

Click Here to Read the rest of this document