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2004 Supreme(P&H) 513

PUNJAB & HARYANA HIGH COURT
Viney Mittal, J.
Banarsi Dass
Versus
Gian Chand
Regular Second Appeal No. 2563 of 1999,
Decided On : MAY 4, 2004

The main legal point established in the judgment is the importance of determining the true nature of a transaction and the applicability of relevant legal provisions, such as Sections 91/92 of the Evidence Act, in ascertaining the real relationship between the parties.

Headnote:

Mortgage - Possession by way of redemption - East Punjab Urban Rent Restriction Act - [Sections 91/92 of the Evidence Act, Smt. Gangabai v. Smt. Chhabubai, A.I.R. 1982 Supreme Court 20; Bakhshi Jawant Singh v. Smt. Pushpa Devi and Ors., (1988-1)90 P.L.R. 498; M/s Saran Singh Wary am Singh v. Panna Lal, 2001(2) Rent Control Reporter 243 (P&H) and Narain Dass v. Mulkh Raj Gulati and Ors., (2003-3)135 P.L.R, 443] - The court discussed the nature of the transaction between the parties, the intention behind the mortgage deed, and the real relationship between the parties. It highlighted the provisions of the East Punjab Urban Rent Restriction Act and the applicability of Sections 91/92 of the Evidence Act in determining the true nature of the transaction.

Fact of the Case:

The plaintiff filed a suit for possession by way of redemption with regard to a shop, claiming that the mortgage period had expired and the defendant had not delivered possession. The defendant contested, claiming the mortgage deed was a sham transaction and the relationship was that of landlord and tenant.

Finding of the Court:

The court found that the mortgage deed was a sham transaction and the relationship between the parties was that of landlord and tenant. The suit was dismissed.

Issues: Nature of the transaction, applicability of the East Punjab Urban Rent Restriction Act, validity of the mortgage deed, and the true relationship between the parties.

Ratio Decidendi: The court held that the mortgage deed was a sham transaction and the relationship between the parties was that of landlord and tenant. It emphasized the applicability of Sections 91/92 of the Evidence Act in determining the true nature of the transaction.

Final Decision: The appeal was dismissed with no order as to costs.

Judgment

Viney Mittal, J.

1. The plaintiff, having remained concurrently unsuccessful before the courts below, has approached this Court through the present regular second appeal.

2. Plaintiff, Banarsi Dass, filed a suit for possession by way of redemption with regard to the shop in dispute. It was averred by him that he is the owner of the shop in question which he had mortgaged with possession in favour of the defendant for a consideration of Rs. 17,000/- vide a registered mortgage deed dated January 29, 1981 with the stipulation that the said mortgage would not be redeemed for a period of 10 years. Later on April 9, 1986, he had filed an earlier suit for possession by way of redemption. However, vide judgment and decree dated June 5, 1988, the said suit was dismissed as pre-mature. Accordingly, the plaintiff maintained that the period of 10 years stipulated in the mortgage deed having expired on January 28, 1991, and the defendant having not delivered the possession to him inspite of a notice being served on this regard, the present suit was filed by the plaintiff for possession by redemption on payment of the mortgage amount of Rs. 17,000/-. A further claim of Rs. 100/- per day was made for recovery of mesne profits from the date of filing of the suit till the delivery of possession.

3. The suit was contested by defendants, Gian Chand. In the written statement filed by him, the ownership of the plaintiff with regard to the shop in dispute was admitted. However, it was denied by him that he was a mortgagee of the shop. It was claimed that the aforesaid mortgage deed was fake, sham and a paper transaction and was merely a camouflage for the tenancy created by the plaintiff in his favour. The defendant, however, admitted that the plaintiff had taken Rs. 17,000/- from him as an advance in order to keep him under pressure and that he was entitled to recover back the aforesaid amount from the plaintiff.

4. The defendant further maintained that the plaintiff had leased out the shop in dispute to him but with a view to avoid the protection of the provisions of East Punjab Urban Rent Restriction Act and with a view to override the same, he had termed the said transaction as a mortgage. It was specifically claimed that there was a relationship of landlord and tenant between the parties with regard to the shop in dispute and in fact the mortgage deed was in reality a lease deed whereby the plaintiff had leased out the shop in question to him.

5. The learned trial Court on the basis of the evidence available on the record held that the document Ex.P1 dated January 29, 1981 was duly executed between the parties and the plaintiff had received an amount of Rs. 17,000/- from the defendant. However, it was held that the aforesaid transaction was merely a camouflage for the tenancy which had been created by the plaintiff in favour of the defendant and the real intention of the plaintiff was to sidetraek the provisions of the East Punjab Rent Restriction Act when he executed the said deed Ex.P1. Accordingly, it was held that the said transaction was a sham transaction and the relationship between the parties was that of a landlord and tenant. It was also noticed by the learned trial Court that the plaintiff while appearing as PW5 had admitted that the shop in dispute was previously with Laxman Dass at a monthly rent of Rs. 50/ and later on it came into possession of one Kishan Lal as tenant at a monthly rent of Rs. 67/-. Thereafter, he obtained the possession of the shop in question from Kishan Lal through execution proceedings through the court of Rent Controller and after taking the possession of the same, delivered the possession thereof to the defendant after about 8-10 days of its vacation by Kishan Lal. The learned trial Court also noticed that the plaintiff had admitted that he had mortgaged his other shops with Prem Chand Singla and with M/s Punjab Traders and the aforesaid shops were also in possession of the tenants and he had got t































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