1962 Supreme(MP) 151

High Court Of Madhya Pradesh
V. R. Newaskar and P. K. Tare, JJ.
TRUSTEES OF MOTIDAS BERAGI SADHU RATLAM TRUST BOARD - Appellant
Versus
RAMJATAN RAMPRASAD SONAR - Respondents
Letters Patent Appeal 5 Of 1962
Decided On : 10/04/1962

A court cannot ignore the legal form of a transaction and read it as something else merely because it suits one of the parties to it at a particular moment.

Headnote:

MORTGAGE - Usufructuary mortgage with lease back - Whether a rent-note executed as a sequel to the mortgage is an incomplete document for want of lessor's signature and hence unenforceable - Whether the defendants are the plaintiff's tenants on rent of Rs. 55/- P. M. - Interpretation of the terms of the mortgage and lease-back deeds.

Fact of the Case:

The appellants, trustees of Motidas Beragi Trust, filed a suit against the respondents, father and sons, for ejectment, arrears of rent Rs. 885/- and mesne profits Rs. 75/-. The suit was based on a rent-note dated 24-9-1947 executed by defendants Ramjatan and his major son Ram-sajjan, the former signing the rent-note for himself and his minor son Bapulal. This rent-note was a sequel to a deed of mortgage executed by them in favor of the plaintiff. The mortgage transaction was for Rs. 11,000/-. The deed contained a stipulation to pay interest at Annas 8 per cent per month. The mortgage was of an anomalous sort and it was mentioned to be a possessory mortgage with a stipulation to pay the mortgage amount in two installments one of Rs. 3000/- at the end of nine months and the balance of Rs. 8000/- at the end of a year and a half this being the period for which the mortgage transaction was to subsist. The deed further provided that the house was being leased back to the mortgagor on a monthly rent of Rs. 55/- which was equal to the interest which the mortgagor was liable to pay. The rent-note was in the usual printed form and the executants namely the defendants referred therein to their having mortgaged this house with the plaintiffs and stated that they had taken it back on rent of Rs. 55/- P. M. There was a term in the rent-note that in case the rent for more than six months was in arrears the landlords were entitled to eject them. This rent-note too was registered.

Finding of the Court:

The trial court found that the document sued upon was a rent-note and was not an incomplete one due to the absence of the lessor's signature. Reliance in this connection was placed on the commentary of Mulla on the Transfer of Property Act page 658 (page 627 of the 4th edition) which refers to the decision in AIR 1951 Pat 160, Hari Prosad v. Abdul Haq. Dealing with the second issue the trial court referred to and relied upon the decision in AIR 1957 Pat 24, Ramnarain v. Sukhi, and held that though the documents have taken shape of a usufructuary mortgage bond and a lease back both constitute parts of the same transaction and the second document though in form purports to be a rent-deed was really a mere device for regular payment of interest and that no relationship of landlord and tenant was created thereby. On this view he held that although the plaintiffs were entitled to a decree for rent which is the same thing as interest they were not entitled to a claim for ejectment. The first appellate Court affirmed the conclusions of the trial Court. It was held in para 8 of its judgment: - "it cannot then be disputed that no relationship of landlord and tenant was created under the Rent Note and the plaintiffs were not entitled to enforce the rent note for the purposes of evicting the defendants". The learned Single Judge proceeded to consider whether the rent-note sued upon created a relationship of landlord and tenant. He referred to the grounds on which the lower appellate court had held that no relationship of landlord and tenant had been created between the parties and that it was merely a device for securing regular payment of interest. These grounds were (1) Kent payable by the defendants was liable to be appropriated towards interest, (2) the amount of rent agreed to be paid and the interest which had been agreed to be payable by the defendants were equal to each other, and (3) interest was payable every month. The conclusions thus reached by the lower appellate Court were conclusions on a question of fact that question being whether the rent-note was merely a device to pay interest. Reliance was placed upon the observations of their Lordships of the Supreme Court reported in AIR 1959 SC 1204 Paras Nath v. Mohani Dasi, where their Lordships have held that the finding as to the fictitious character of a trust-deed was a finding of fact and not of law. On this view he dismissed both the appeals but granted leave in both cases.

Issues: 1. Whether the rent-note dated 24-9-1947 is an incomplete document for want of lessors' signature and hence unenforceable? 2. Whether the defendants are the plaintiff's tenants on rent of Rs. 55/- P. M.?

Ratio Decidendi: The court held that the refusal of the learned single Judge to consider the propriety of the findings of the learned Additional District Judge on the ground that they involve pure findings of fact clearly involves refusal to exercise jurisdiction vested in him by law. Reliance placed upon the decision of the Supreme Court in AIR 1959 SC 1204 in this connection is erroneous. It further contended that the Learned Additional District Judge, as the first appellate court erroneously held that the right of the plaintiffs to secure defendants' eviction, which is based on the rent-note executed by defendants Nos. 1 and 3 cannot be enforced because it was merely a device to secure regular payment of interest and that his only right is to sue for the mortgage money by enforcing the mortgage bond. The effect of this view, according to the learned counsel, is to convert what is really a usufructuary-cum-simple mortgage into a simple mortgage simpliciter. This the learned Judge was not entitled to do as that would involve giving effect to a document in terms different from what the parties intended.

Final Decision: Letters Patent Appeal No. 4 of 1962 is allowed and plaintiff's claim for ejectment is decreed. Letters Patent Appeal No. 5 of 1962 is dismissed.