S. B. CHANDIRAMANI, J.

( 1 ) IT appears that on the 10th April, 1934, Debi Singh, one of the appellants, executed a deed described as a deed of conditional sale in favour of one Atbal Singh (predecessor of some of the respondents) in respect of a one-third share of mahal Chaudhri Harpal Singh in village bangarmau, District Unnao. Debi Singh applied under Section 4 of the Encumbered Estates Act showing the property covered thereby as his own. He claimed that the transaction evidenced by the sale-deed of 1934 was in fact a mortgage by conditional sale. Atbal Singh objected saying that it was an out and out sale subject to a condition of repurchase within a specified time. The Special Judge held that Section 58 (c) of the Transfer of Property Act when correctly construed does not indicate that every deed of sale containing a condition for repurchase operated only as a deed of mortgage and the true test still is the intention of the parties which may be gathered from the language of the deed and the surrounding circumstances at the time of execution. On the facts and circumstances of the case he held that the transaction was an out and out sale with the condition of repurchase and not a mortgage by conditional sale. In the circumstances the property in dispute was held to be the property of Atbal Singh and not of the landlord applicant Debi Singh.

( 2 ) DEBI Singh has filed an appeal in this Court contending that the transaction is really a mortgage by conditional sale and he relied on the express terms of Section 58 (c) itself.

( 3 ) THE matter came up before a Bench of this Court consisting of M. H. Kidwai and C. B. Agarwala JJ. These learned Judges pointed out that there was considerable authority for the view of construction of Section 58 (c) adopted by the Special Judge as was clear from sham-BHU singh v. JAGDISH BAKHSH SINGH, 17 Luck 198: (AIR 1941 Oudh 582); bishan LAL v. BANWARI LAL, AIR 1937 All 724, which was affirmed in appeal in bishan LAL v. BANWARI LAL, AIR 1939 All 713 and THAKRA SINGH v. SHEO NATH SINGH, A I R 1940 All 227, but they thought that air 1940 All 227 showed that there are authorities also to the contrary and they observed:

"further it appears to us that the plain meaning of Section 58 (c) is that, if a deed purporting to be a deed of sale, contains any one of the three conditions mentioned in that section, it is to be construed as a mortgage by conditional sale. "

Having regard to the importance of the question involved, and the difference of opinion which according to them existed, they referred the matter to a Full Bench for an authoritative decision. The matter has accordingly come before us.

( 4 ) WE consider that the scope of this reference is limited to the interpretation of Section 58 (c)and the whole appeal is not before us for decision.

( 5 ) THE question before us has not been formulated in specific words, but I apprehend the question to be as follows:

"if a deed effecting or purporting to effect a sale after the amendment in Clause (c) of Section 58 of the Transfer of Property Act came into force, contains any one of the three conditions mentioned in that clause, is it in every case a deed of mortgage by conditional sale. " a reference to Section 58 of the Transfer of Property Act will show that it defines a "mortgage", "mortgagor", "mortgage money", "mortgagee" and at the same time defines and enumerates the various forms of mortgages in Sub-sections (b), (c), (d), (e), (f) and (g ). We are concerned in this case with a mortgage by conditional sale as defined in Sub-section (c ). Sub-section (c) lays down the statutory requirements which must be fulfilled before a transaction can be considered to be a mortgage by conditional sale. As the real transaction as opposed to the ostensible transaction described in the sub-section is a mortgage, the parties involved are referred to as "mortgagor" and "mortgagee" and the money is referred to as the "mortgage money" and the security as "mortgaged proper

Click Here to Read the rest of this document