Bibi Fatima vs M. Ahamed Hussain

CIVIL APPELLATE JURISDICTION CIVIL APPEAL No.7023 of 2012

BIBI FATIMA & ORS. .... Appellant(s) Versus M. AHAMED HUSSAIN & ORS. ….Respondent(s)

JUDGMENT

L. NAGESWARA RAO, J.

The first Respondent-Plaintiff filed a suit for redemption of

a mortgage and for re-conveyance of the suit schedule

property which was decreed. The Appeal filed by the

Appellant-first Defendant in the suit was allowed and the

judgment and decree of the Trial Court were set aside. The

High Court reversed the judgment of the first Appellate Court

and restored the judgment of the Trial Court in favour of the

first Respondent-Plaintiff. Hence, this appeal.

2. For the sake of convenience, the parties will be referred to

as they were arrayed before the Trial Court. The father of the Signature Not Verified

Plaintiff, Mavada Mokthesar Ummar Saheb (hereinafter referred Digitally signed by NEETU KHAJURIA Date: 2017.08.01 17:57:24 IST Reason:

to as Ummar Saheb), obtained a loan from Vijaya Bank and

1 defaulted in repayment of the loan. The suit filed by Vijaya

Bank was decreed. In the execution petition filed by the Bank,

the land and building belonging to Ummar Saheb were brought

to sale. He approached his son-in-law, the first Defendant and

took Rs.5,900/- for which he executed a document on

02.07.1964, which was exhibited as P-1 in the suit. It was

stated therein that he needed the money for repayment of his

debts which were to the tune of Rs.5,900/-. The breakup of

Rs.5,900/- was also given in the document as Rs.4,577/- for

payment to the Bank and Rs.1,323/- for clearing other debts.

The suit schedule property was sold to the first Defendant who

was given an absolute right to enjoy the property and the

income realised therefrom. It was mentioned in the deed that

if the amount of Rs.5,900/- was repaid after two years and

within five years, the first Defendant would have to re-transfer

the property to Ummar Saheb and in case the re-transfer is not

made on payment of Rs.5,900/-, damages not exceeding

Rs.5,900/- would have to be paid.

3. Ummer Saheb died on 17.07.1978. Thereafter, the

Plaintiff requested for re-conveyance of the property which was

the subject matter of the document dated 02.07.1964. The

2 first Defendant refused the request of the Plaintiff which led to

the filing of a suit for redemption and re-conveyance of the

property in dispute. Plaintiff asserted that the document was a

mortgage by conditional sale governed by Section 58 (c) of the

Transfer of Property Act, 1882 (hereinafter referred to as ‘the

Act’). He averred that his father took a loan of Rs.5,900/- from

the first Defendant to clear his debts. He further urged that the

property was worth more than Rs.10,000/-. Reliance was

placed on the condition pertaining to re-conveyance of the

property on payment of Rs.5,900/- which according to the

Plaintiff would show that the document was a mortgage by

conditional sale. It was also pleaded by the Plaintiff that his

father continued to be in possession of the property till the

date of his death i.e. 14.07.1978.

4. The first Defendant through a general power of attorney

filed a written statement in which he contended that the

document is a sale deed with a condition of re-purchase. The

first Defendant stated in the written statement that Ummar

Saheb requested him to purchase the property as he had to

clear his debts. He further submitted that the condition of

re-purchase by itself does not make the document a mortgage

3 deed. Though Ummar Saheb offered to give possession of the

house, the first Defendant permitted him to continue in

possession. According to the first Defendant, a Badige Karar

(rental agreement) was executed by the first Defendant in

1969 pursuant to which Ummar Saheb resided in the house as

a tenant.

5. Amongst others, the Trial Court framed an issue as to

whether the transaction covered by the document dated

02.07.1964 is a mortgage by conditional sale or an outright

sale. After appreciating the evidence on record, the Trial Court

accepted the case of the Plaintiff and held that the condition of

re-conveyance of the property on payment of Rs.5,900/- by

Ummar Saheb created a relationship of debtor and creditor

between him and the first Defendant. The Trial Court held that

the transaction covered by document Exhibit P-1 dated

02.07.1964 was a mortgage by conditional sale and decreed

the suit.

6. The First Appellate Court reversed the judgment of the

Trial Court by holding that Exhibit P-1 was a sale deed and not a

mortgage by conditional sale. The First Appellate Court held

that Ummar Saheb sold the property to the first Defendant to

4 clear his debts. It was also held that the possession of Ummar

Saheb was pursuant to a rental agreement. The First Appellate

Court further held that the amount of consideration shown in

the sale deed was at par with the market price at the relevant

time. The Plaintiff filed a second appeal which was allowed by

the High Court. The High Court restored the findings of the

Trial Court and decreed the suit.

7. The question whether a transaction is a mortgage by

conditional sale or a sale with a condition of re-purchase has to

be decided on the basis of interpretation of the document itself.

The intention of the parties is the determining factor. The

intention has to be gathered, in the first place, from the

document. If the words are express and clear, effect must be

given to them and any extraneous enquiry into what was

thought or intended is ruled out. The real question in such a

case is not what the parties intended or meant but what is the

legal effect of the words which they used. If, however, there is

ambiguity in the language employed, then it is permissible to

look into the surrounding circumstances to determine what was

intended (See: Pandit Chunchun Jha v. Sheikh Ebadat Ali,

(1955) 1 SCR 174). The extrinsic evidence of surrounding

5 circumstances, as may be required to show in what manner the

language of the document is relating to the existing facts, is a

relevant criteria. (See: Balkishen Das v. Legge [(1899) L.R.

27 IA 58]).

8. This Court in Pandit Chunchun Jha’s case (supra)

considered the background in which the amendment was made

to Section 58 (c) of the Act by the Transfer of Property

(Amendment) Act, 1929 and held as follows:

“Because of the welter of confusion caused by a multitude of conflicting decisions the legislature stepped in and amended Section 58(c) of the Transfer of Property Act. Unfortunately that brought in its train a further conflict of authority. But this much is now clear. If the sale and agreement to repurchase are embodied in separate documents, then the transaction cannot be a mortgage whether the documents are contemporaneously executed or not. But the converse does not hold good, that is to say, the mere fact that there is only one document does not necessarily mean that it must be a mortgage and cannot be a sale. If the condition of repurchase is embodied in the document that effects or purports to effect the sale, then it is a matter for construction which was meant. The legislature has made a clear cut classification and excluded

6 transactions embodied in more than one document from the category of mortgages, therefore it is reasonable to suppose that persons who, after the amendment, choose not to use two documents, do not intend the transaction to be a sale, unless they displace that presumption by clear and express words; and if the conditions of Section 58(c) are fulfilled, then we are of opinion that the deed should be construed as a mortgage”.

9. One circumstance which favours the document being read

as a mortgage by conditional sale is that the relationship

between the parties is of a debtor and creditor and the

transaction is a loan (See: Bhaskar Waman Joshi v. Narayan

Rambilas Agarwal, (1960) 2 SCR 117, at p.122-123). The

consideration amount being lesser than the market value is

another circumstance by which the document can be treated

as a mortgage by conditional sale. (See: P.L. Bapuswami v. N.

Pattay Gounder, (1966) 2 SCR 918 at p. 923). The mutation not

being done in favour of the transferee (See: Tulsi v. Chandrika

Prasad, (2006) 8 SCC 322 ¶9), the possession being with the

transferor and the length of the period for re-transfer of the

property (See: Indira Kaur v. Sheo Lal Kapoor, (1988) 2 SCC

488¶5), are all circumstances which are indicative of a

7 document being a mortgage by conditional sale.

10. On the other hand, it is settled law that a mere condition

of repurchase will not make a document a mortgage by

conditional sale as there can be an absolute sale with a

condition for repurchase. It is also no more res integra that the

mere title of the document is not determinative of the nature of

the document and the document must be looked at in its

entirety. (See: P.L. Bapuswami v. N. Pattay Gounder (1966) 2

SCR 918 at p. 921).

11. In the light of the principles laid down by this Court

regarding the resolution of a dispute as to whether a document

is a mortgage by conditional sale or a sale with a condition for

repurchase, we proceed to interpret the sale deed dated

02.07.1964 which is reproduced below:

“ABSOLUTE SALE DEED OF IMMOVABLE PROPERTY AND BUILDINGS HELD ON MOOLY RIGHTS FOR RUPEES 5,900/-

This sale deed is executed on this the 2 nd day of July 1964 by Moktesai Ummer Saheb, S/o. Mavada Koktesai Moidin Saheb, Farmer, Majkooru Taluk and Village,

In favour of

Mohammed Hussain Athra Miraja Saheb, S/o. Haji Borappa yane Ummer Saheb, Farmer, resident of No.2, Yedthare Village, Kundapur Taluk, WITNESSETH AS FOLLOWS:

WHEREAS, myself and 4 others had obtained a loan from Vijaya Bank Ltd., Mangalore through its Byndoor Branch, AND WHEREAS, the said bank had obtained a money decree against us in O.S. No. 190 of 1961 on the file of the sub-ordinate Judge of Udupi and had also filed an execution petition in Ex. Case No. 45 of 1963 and in the said execution case, the lands and buildings mentioned below were brought for auction,

8 And whereas out of the said sums, as I could not repay the amounts due by me namely Rs. 4577-00, I, after thought, in the interest of my family decided to sell the below mentioned land and buildings for payment of the debts of (Mavada Mattesra Ummer Saheb) upon receipt of Rs. 5900/- in the manner stated here below, hereby execute this sale deed in your favour in respect of the land and buildings mentioned hereinbelow. Hence hereafter you should hold and enjoy the property hereby sold and held Muli rights and also the income thereof from this Krodhi year and also to pay assessment to the Government from 1965 and also shall enjoy the profit and income thereof as well as land and the buildings sold hereby absolutely by you and your family from generation to generation. Hereafter I shall have no rights over the said land and buildings or over the produce or income thereof or over the land and buildings and neither myself nor my legal heirs shall have any right to make any claim demanding payment of any more sums for whatever reasons. Particulars of the receipt of consideration under this sale deed. I have received a consideration of Rs. 4577/- for payment of debts due in Ex. Case No. 190 of 1961 and another sum of Rs. 1323/- to pay off the debts arisen on account of the legal necessities of the family. Thus, in all I hereby acknowledge the receipt of a sum of Rs. 5900/- as consideration for this sale deed.

Particulars of the property sold Immovable property situated in No. 2, Yothere Village, Kundapur Taluk within the registration sub-district of Byndoor sub-division of D.K. District held on absolute rights and comprised within the limits of Kundapur Taluk Development Board.

Boundaries East : Portion of Survey No. 77/1 West : Road North : Portion of Survey No. 75/12B

Including the tree growth, right of way, water right, residential house, bathroom, toilet room etc. etc.

The sum of Rs. 5900/- which is the consideration of this sale deed if repaid after 2 years and within 5 years from this date in one lumpsum, you deserve to make a transfer deed to give the same to me. Thus, when the Vendor makes the repayment of Rs. 5900/-, if the PURCHASER fails to give back, the PURCHASER and his family members are liable to make good to the Vendor an amount of loss not exceeding the amount of consideration under this sale deed to the Vendor or his successors subject to which this sale deed of muli rights is executed.

Sd/-

M.H.M. Mirana (M.H. Ahmed Mirana in Husain)

Witnesses

M. Mohammed Hussain, S/o. Mukta Ummer Saheb,

9 Adthare Village.

Written by

Mary Muthu Shunge, S/o. S. Suhaya Shunge, H.O.S.O.R.P. Village, Book No.1, Volume No. 207, Pages 407 in the year 1964, Registered as No. 2531 16th July 1964 Sd/-

Govindan Naidu Sub-registrar” (Underlining supplied)

12. It is clear from a plain reading of the document that there

has been an absolute transfer of rights in the property by

Ummar Saheb in favour of the first Defendant for a

consideration of Rs.5,900/-, which was the exact amount he

required to clear his debts. There is a condition in the

document that the first Defendant had to transfer the property

back to Ummar Saheb on repayment of Rs.5,900/- after two

years and within five years from the date of execution of the

document i.e. from 02.07.1964.

13. It is the admitted case of both sides before us that the

transaction was entered into by Ummar Saheb for clearing his

existing dues, which were to the tune of Rs.5,900/-. A breakup

of the said dues was also mentioned in the sale deed dated

02.07.1964. It is apparent from the document that there has

been an absolute sale. It is also clear that there is a condition

10 for transfer of the property in favour of the transferor on

repayment of Rs.5,900/-. It is very difficult to decide the

present dispute only on the basis of the aforesaid two facts.

14. As it is very difficult to find out the intention of the parties

on a plain reading, it is necessary to look into the surrounding

circumstances for the purpose of determining whether the

document dated 02.07.1964 was intended to be a genuine sale

deed or was merely an ostensible sale.

15. The Defendant, who appeared through his general power

of attorney, contended that the transaction was an outright

sale. According to the first Defendant, Rs.5,900/- represented

the then existing market value of the schedule property.

Though the First Appellate Court found this point in favour of

the first Defendant, the Trial Court and the High Court did not

accept the submission of the first Defendant.

16. We are unable to accept the submission on behalf of the

first Defendant that Rs.5,900/- was the market value of the

property in 1964. It is clear from the sale deed dated

02.07.1964 that there was a decree obtained by the Bank

against Ummar Saheb for Rs.4,577/-. Ummar Saheb also

required Rs. 1,323/- on account of debts incurred for domestic

purpose. The amount of Rs.5,900/- was the exact amount

11 which Ummar Saheb needed to repay his creditors. By no

stretch of imagination can it be said that the parties even

considered the market value of the property at the time of

execution of the document in 1964.

17. The first Defendant further submitted that he permitted

Ummar Saheb to continue in possession of the property after

execution of the sale deed dated 02.07.1964. He further urged

that Ummar Saheb continued in the property as a tenant. In

support of this contention, the first Defendant relied upon a

Badige Karar (rental agreement) executed by Ummar Saheb.

Though the First Appellate Court placed heavy reliance on this

document, the Trial Court and the High Court held that the first

Defendant could not prove the Badige Karar. After a detailed

examination of the record, we are unable to find any evidence

regarding the actual amount of rent or the details of payment

of such rent by Ummar Saheb. Hence this submission of the

first Defendant also deserves to be rejected.

18. Having rejected the submissions of the first Defendant, we

have to examine the points urged on behalf of the Plaintiff to

find out whether the document is a mortgage by conditional

sale. There is no dispute that there is only one document

which was executed on 02.07.1964 which, according to the

12 presumption postulated in Section 58 (c) of the Act should be

construed as a mortgage. Undisputedly, Ummar Saheb

continued to be in possession from 02.07.1964 till the date of

his death i.e. 17.07.1978. Evidence was adduced by the

Plaintiff to show that notices from the Electricity Department,

etc. were received in the name of Ummar Saheb. The mutation

was also not affected by the first Defendant in his name till

17.07.1978. In light of the above, the Plaintiff’s case that his

father raised a loan to discharge his debts for which purpose he

executed the mortgage dated 02.07.1964, merits acceptance.

The Plaintiff is also right in submitting that there is no condition

in the deed that the sale will become absolute after the expiry

of five years’ period. Ummar Saheb’s continuance in

possession until the time of his death, payment of statutory

dues and absence of mutation by the first Defendant of the

property during Ummar Saheb’s lifetime would all point to the

document being a mortgage by conditional sale. One of the

conditions of sale was that the transferor would be entitled for

the loss incurred, not exceeding Rs. 5,900/-, in the event of the

first Defendant not re-transferring the property after the

re-payment by the transferor. It is evident from this condition

13 that Rs. 5,900/- is a debt and a relationship of debtor and

creditor existed between the parties. In view of the above, we

hold that the document dated 02.07.1964 is a mortgage by

conditional sale.

19. For the aforesaid reasons, we uphold the judgment of the

High Court and dismiss the appeal.

.…...............................J [L. NAGESWARA RAO]

.....................................J [NAVIN SINHA]

New Delhi, August 01, 2017

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