A document which incorporates the condition of repurchase in the same document is presumed to be a mortgage and the burden of proving it to be otherwise is upon the party claiming it to be an absolute conveyance with a bare right of repurchase.

1. This appeal is against the judgment of Choudhuri J., (with the leave of the learned Single Judge) in Second Appeal No. 206 of 1947 decided on 30-1-1952.

2. The present appellant is the plaintiff who wrought his suit to enforce a right of redemption on respect of what he said was a mortgage dated 26-6-1940 (Exhibit D-l). The two Courts below held that the document in question was a deed of mortgage and that the appellant was entitled to redeem the mortgage.

The learned Single Judge reversed the concurrent decision of the two Courts below, holding that the transaction was an absolute conveyance of the property with merely an option of repurchase.

3. It was also contended in the Courts below by the plaintiff-appellant that the transaction itself was invalid in view of die provisions of S. 15(1), Relief of Indebtedness Act, because on the date of the transfer an application For conciliation of the plaintiff -mortgagor's debts was pending before the Debt Relief Court.

This point, which was decided in favour of the appellant by die learned Judge of the first appellate Court, appears to have been lost sight of by the learned Single Judge, and no decision on it has been rendered- At first, we were at pains to consider whether in view of this omission in the judgment under the appeal we should not send the case back on remand to the learned Single Judge for disposal on this point.

We. however, went on to consider whether the conclusion that the transaction was a sale and rot a mortgage was correct in the circumstances o; the case. Having heard the entire case, we are of opinion that the appeal must succeed on that point.

4. The document with which we are concerned in this case is Exhibit D-l. It incorporates ostensibly - as such documents ordinarily do - an absolute conveyance of the property and says further that possession of the property was delivered on the same day. It, however, makes a provision which is the subject-matter of dispute here. It is better to quote an extract embodying that condition: If I pay the sum of Rs. 1,300/- on dated the 26th June 1945 you shall have to take, the same and return the house- And within five years (I) will neither mortgage the aforesaid house nor will I sell the same, and I will also not effect any changes in the building.

There can be no doubt that there is here a right of repurchase at the expiry of five years. This condition and the subsequent sentence are differently interpreted by the contestants in this case. It is the claim of the plaintiff that the transaction was one of mortgage and that he is entitled to redemption on payment of Rs. 1,300/-. The contention on the other side is that the transaction was an absolute sale with an option of repurchase which had to be exercised strictly in terms of the provisions of the deed, and that inasmuch as it has been held that the appellant did not exercise his right in the manner so laid down he is not entitled to claim the benefit of that condition.

5. The law on the subject of interpretation of documents which by their ambiguous words are capable of being construed either as sale coupled with an option of repurchase or mortgage by conditional sale, is a difficult one. Earlier under the Transfer of Property Act, there was no compulsion that a mortgage by conditional sale should be incorporated in one document. In the year 1929, the legislature enacted a proviso to S. 58(c), T.P. Act by which before a document can be construed as a mortgage by conditional sale both the conditions of repurchase as well as the sale? must be found in one document. The law was not made applicable from the Way it was enacted, but a period of six months was allowed to pass and it was brought into effect from 1-4-1930.

This was probably done because it was thought necessary that persons accustomed to the taking of two separate documents should have notice of the disability which the law was about to create. As a result of this proviso, it is now necessary to incorporate