1963 Supreme(MP) 55

High Court Of Madhya Pradesh
T. P. Naik and Shiv Dayal, JJ.
BUDHILAL DEVIPRASAD - Appellant
Versus
JAGANNATHDAS BAJRANGDAR - Respondents
Letters Patent Appeal 6 Of 1962
Decided On : 04/24/1963

An antecedent agreement that a sale deed was intended as a mortgage can be proved by oral evidence, if the plea of an antecedent agreement, which was followed by the execution of a document which was a mere evidence of an advance and which, though containing stipulations as regards an out-and-out sale, was meant to be a security for the money, was not within the mischief of Section 92 of the Evidence Act.

Headnote:

TRANSFER OF PROPERTY ACT - SECTION 53-A - EVIDENCE ACT - SECTION 92 - MORTGAGE - REDEMPTION - SALE DEED - ORAL EVIDENCE - ADMISSIBILITY - MADHYA PRADESH ABOLITION OF PROPRIETARY RIGHTS (ESTATES, MAHALS, ALIENATED LANDS) ACT, 1950 - APPLICATION - SIR LAND - VESTING IN STATE - EFFECT ON SUIT FOR REDEMPTION.

Fact of the Case:

Plaintiff filed a suit for redemption of a usufructuary mortgage, alleging that though he needed Rs. 600/- for payment of land revenue, the defendants-creditors were unwilling to advance the amount on a simple transaction of money-lending but insisted on a deed of sale with a condition that they shall remain in possession of the property sold in lieu of interest and that the possession of it would be returned to him when he repaid the loan; that in terms of the aforesaid agreement, the plaintiff put the defendants in possession of two sir fields and executed a formal deed of sale which, however, was never registered, as it was never intended to be an effective document; and that the defendants remained in possession for a few years; but when the plaintiff offered to repay the debt and claimed back possession of the land, they refused.

Finding of the Court:

The trial Court dismissed the suit, holding that the plaintiff could not be permitted to lead oral evidence to show that the suit transaction was as between a creditor and a debtor and not as between a vendee and a vendor, in view of the fact that there was a written document embodying the terms of the contract which prohibited proof of such agreement under Section 92 of the Evidence Act. The dismissal of the suit was affirmed in appeal; but the High Court (B. P. Sinha, C. J. (as he then was)) in second appeal No. 499 of 1947, decided on 30-10-1952, reversed both the aforesaid judgments and decrees, holding that the plea of an antecedent agreement, which was followed by the execution of a document which was a mere evidence of an advance and which, though containing stipulations as regards an out-and-out sale, was meant to be a security for the money, was not within the mischief of Section 92 of the Evidence Act. Reliance was placed on the decision of the Judicial Committee of the Privy Council in Tyagaraja Mudaliar v. Vedathanni, 63 Ind App 126: (AIR 1936 PC 70 ). The case was, therefore, remanded to the trial Court for a fresh decision in accordance with law after permitting the parties to lead such evidence for proof or disproof of the antecedent agreement pleaded by the plaintiff as they may choose to lead.

Issues: 1. Whether oral evidence is admissible to prove an antecedent agreement that a sale deed was intended as a mortgage? 2. Whether the Madhya Pradesh Abolition of Proprietary Rights (Estates, Mahals, Alienated Lands) Act, 1950 bars the right of the plaintiff-respondent to possession of the suit land?

Ratio Decidendi: 1. Yes, oral evidence is admissible to prove an antecedent agreement that a sale deed was intended as a mortgage, if the plea of an antecedent agreement, which was followed by the execution of a document which was a mere evidence of an advance and which, though containing stipulations as regards an out-and-out sale, was meant to be a security for the money, was not within the mischief of Section 92 of the Evidence Act. 2. No, the Madhya Pradesh Abolition of Proprietary Rights (Estates, Mahals, Alienated Lands) Act, 1950 does not bar the right of the plaintiff-respondent to possession of the suit land, as the suit is not for possession based on proprietary rights, there is no evidence that the defendants-appellants have been accepted as occupancy tenants by the State, nor that they had acquired the rights of malik makbuja therein; nor is there evidence to show that the respondent could not have claimed the suit fields as his sir, nor that he had not so claimed them in the compensation proceedings.

Final Decision: The appeal fails and is dismissed. The costs of this appeal shall be borne as incurred.