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1925 Supreme(Mad) 82
IN THE HIGH COURT OF MARAS
C G Spencer, Odgers
S.A. Muhammad Yakub Sahib
Versus
Mahaboo Bi Bi And Anr.
Decided On : 2 February, 1925
The judgment establishes the interpretation and application of the provisions of the Transfer of Property Act, particularly regarding the characterization of transactions as a mortgage by conditional sale and the avoidance of collusive and fictitious deeds under Section 53.
Headnote:
Muhammadans - Property Dispute - Transfer of Property Act - Section 53
Fact of the Case:
The plaintiff, a Muhammadan, sought to recover the value of alienations improperly made by defendant No. 1 of his property during his minority. The plaintiff alleged that the transactions were a mortgage by conditional sale and that another deed executed by defendant No. 1 in favor of defendant No. 2 should be avoided under Section 53 of the Transfer of Property Act.
Finding of the Court:
The District Judge found that the transactions were not a mortgage but a sale with an option of re-purchase and that the deed in favor of defendant No. 2 did not offend against Section 53 of the Transfer of Property Act.
Issues: The main issue was whether the transactions constituted a mortgage by conditional sale and if the deed in favor of defendant No. 2 should be avoided under Section 53 of the Transfer of Property Act.
Ratio Decidendi: The court analyzed the transactions and found that the value of the properties indicated that a sale was not intended. It also considered the absence of bargaining over the sale price, the payment of interest, and the absence of a defeasance clause, concluding that the transactions were intended as a security for money. The court also found the deed in favor of defendant No. 2 to be collusive and fictitious, falling within the mischief of Section 53 of the Transfer of Property Act.
Final Decision: The appeal was allowed, and a decree was passed for the plaintiff as prayed.
Odgers, J.
1. In this case the parties are Muhammadans. The plaintiff is the son of defendant No. 1 his mother. Defendant No. 2 is said to be the foster daughters husband of defendant No. 1. The plaintiff came of age at the end of 1916. His mother and as he alleges, defendant No. 2 managad his properties during his minority. In O.S. No. 55 of 1911 on the file of the Sub-Court, North-Arcot, the plaintiff brought a suit against defendant No. 1 to recover the value of alienations improperly made by her of his property during his minority and got a decree for Rs. 3,885-14-0. On 19th July, 1908, defendant No. 1 executed to defendant No. 2 an ostensible sale-deed of her own properties (Ex. A) and on the same day a counter-agreement Ex. B. for the re-purchase of these properties was executed between the same parties. On 27th November 1919, two days after the institution of the suit O.S. No. 55 of 1919 above referred to, defendant No. 1 executed another deed (Ex. G) in favour of defendant No. 2 whereby she purported to release to defendant No. 2 her right of purchase under Ex. B. The plaintiff seeks to have it declared (a) that defendant No. 1s right of redemption in her properties still subsists and, therefore, that it is liable to attachment 1o satisfy plaintiffs decree in O.S. No. 55 of 1919, in other words that Exs. A and B are in fact a mortgage by conditional sale and not a sale with an option of re-purchase and (b) that Ex. G is voidable and should be avoided under Section 53 of the Transfer of Property Act.
2. Defendant No. 1 has been ex parte throughout.
3. The District Judge found that the transaction was not a mortgage but a sale with option of re-purchase and further that Ex G did not offend against the provisions of Section 53 of the Transfer of Property Act. Hence this appeal by plaintiff.
4. The first question, therefore, for decision is whether Exs. A and B really evidence an intention to effect a mortgage by conditional sale. Exhibit A was, as stated, executed on 19th July, 1908, and according to P. W. No. 1 at 9 a.m. in the morning. It purports to be an out and-out sale the consideration being Rs. 700 in cash and the payment of Rs. 2,800 due on a prior possessory mortgage and promissory note in favour of one Ibrahim Sahib. There is no mention of Ex. B in Ex. A. Exhibit B said to have been executed at 11 a.m. on the same day refers to Ex. A and stipulates that at the end of any fasli before 30th June 1911, defendant No. 1 may re-purchase the property conveyed by Ex. A, on paying the said total sale price Rs. 3,500" "according to the followings particulars, the expenses incurred by digging and constructing new wells or by re pairs to be paid back. Defendant No. 1 was to bear the expenses of the deed of re-conveyance. The executant of Ex. B defendant No. 2 was out of possession of the properties purported to be transferred by Ex. A till 30th June 1910 the possessary mortgagee Ibrahim being in possession till then. He, therefore, stipulated that defendant No. 1 should pay him 12 percent. on the Rs. 800 (or Rs. 700) said to have been advanced by himself. The expenses for wells and repairs were also to be ascertained and re-paid. Is this a mortgage or an outright sale with option of re-purchase? To begin with, the lands purport to be sold for Rs. 3,500. They are about 8 acres in extent. Plaintiff witness No. 1 (an attestor) declares that the lands are worth more than Rs. 3,500. Plaintiff witness No. 3 says that 10 or 12 years ago (he was giving evidence in 1922) the lands would be worth Rs. 800 (a cawni). He himself purchased adjoining lands at Rs. 800 a cawni and sold them for Rs. 1,450. Four of the 5 1/2 or 6 cawnies of the suit lands are "best". He purchased lands in 1912 for Rs. 520 to Rs. 675 an acre. Objection is made that these transactions are not supported by documents whereas D. W. No. 2 purchased lands in the same village 2 acres (Ex. 5) at Rs. 485 an acre. He had, however, to build a new well at a cost of R
