1.0 The present Second Appeal under Section 100 of the Code of Civil Procedure has been preferred by the appellants hereinoriginal plaintiffs to quash and set aside the impugned judgment and order dated 30.8.1983 passed in Regular Civil Appeal No.34 of 1982 by which the learned Appellate Court has allowed the said appeal preferred by the respondents original defendants and has quashed and set aside the judgment and decree passed by the learned Civil Judge (J.D.), Gandhinagar passed in Regular Civil Suit No.125 of 1978.
2.0 That the appellants herein original plaintiffs instituted Regular Civil Suit No.125 of 1978 in the Court of learned Civil Judge (J.D.), Gandhinagar to pass decree for redemption of mortgage with respect to the suit property. It was the case on behalf of the plaintiffs that the suit property was mortgaged for Rs.2500/ on 10.8.1951 in favour of Ambalal Ishwarlal. That as the said Ambalal Ishwarlal did not hold Money Lending License, document of sale with a condition to repurchase on payment of Rs.2500/ was executed and 5 years limit was fixed. It was the case on behalf of the plaintiffs that thereafter they have shown their willingness to pay Rs.2500/ and asked for possession for redeeming the mortgage but defendants have not responded though they were served with notice. It was the case on behalf of the plaintiffs that as there was a mistake in description of the property and by mistake survey no.7 was mentioned and therefore, another agreement was executed on 11.9.1951 rectifying the mistake. It was the case on behalf of the plaintiffs that despite the suit notice to redeem the mortgage and return the possession on payment of Rs.2500/, the defendants did not return the possession and redeemed the mortgage and therefore, the plaintiffs instituted the aforesaid suit.
2.1. That the suit was resisted by the defendants by filing writtne statement at Exh.10. It was the specific case on behalf of the defendants that as such deed dated 10.8.1951 and 11.9.1951 was a deed of absolute sale; that the actual possession was with defendants even prior to 10.8.1951 as tenants and the defendants have become the tenants since 30.7.1949. It was specifically denied that the deed dated 10.8.1951 was the deed of mortgage as contended on behalf of the plaintiffs. Therefore, it was to requested to dismiss the suit.
2.2. That the learned trial Court framed the following issues at Exh. 24.
(1). Whether plaintiffs proves that the suit transfer is a mortgage by conditional sale ? If yes what is effect ?
(2). If plaintiffs are not able to prove that the suit property is not mortgaged whether they are entitled to recover the suit property by a deed of conveyance ?
(3). Whether defendants prove that there is a defect of necessary party ?
(4). What reliefs plaintiffs are entitled to ?
(5). Whether defendants prove that the property was in their possession as tenant before the suit transaction ? If yes, what is its effect ?
(6). What order and what decree ?
2.3. That on behalf of the plaintiffs, plaintiff no.2 came to be examined at Exh.64. On behalf of defendants, defendant no.2 Manibhai Ambalal Patel came to be examined at Exh.68. The suit deeds dated 10.8.1951 and 11.9.1951 were exhibited at Exhs. 59 and 60. The issue whether the defendants are tenants or not was referred to Agriculture Land Tribunal however the same was decided against the defendants. On appreciation of evidence and considering the documents dated 10.8.1951 and 11.9.1951, the learned trial Court held that transaction was mortgaged by conditional sale and consequently learned trial Court decreed the suit and directed that to deposit of Rs.2500/ by the plaintiffs, the defendants shall deliver into the Court all the original deeds of suit transaction. The learned trial Court directed to draw preliminary decree in the form no.7B.
2.4. Feeling aggrieved and dissatisfied with the judgment and decree passed by the learned Civil Judge (J.D.), Gandhinagar passed in Regular Civil Suit No.125 of 1978 dated 30.1.1982, the defendants herein preferred Regular Civil Appeal No. 34 of 1982 before the learned District Court, Ahmedabad (Rural) and learned 2nd Extra Assistant Judge, Ahmedabad (Rural) by impugned judgment and order dated 30.8.1983 has allowed the said appeal by quashing and setting aside the judgment and decree passed by the learned trial Court by holding that the transaction in question cannot be said to be a mortgage by conditional sale and in fact it was conditional sale with a right to repurchase the same within the period of 5 years. Being aggrieved and dissatisfied with the impugned judgment and order passed by the learned Appellate Court, the appellants hereinoriginal plaintiffs have preferred the present Second Appeal under Section 100 of the Code of Civil Procedure.
3.0 Shri Mehul Shah, learned advocate for the appellants original plaintiffs has vehemently submitted that the learned Appellate Court has materially erred in not holding the transaction as mortgage transaction. It is submitted that as such, as rightly observed and held by the learned trial Court that title in the deed cannot be decisive factor what is required to be considered is the intention of the parties. Therefore, it is submitted that merely a deed dated 10.8.1951 it was stated to be a conditional sale considering the consideration mentioned in the agreement that on repayment of Rs.2500/ within five years th suit property was to be transferred in favour of original owner considering Section 58(c) more particularly explanation to Section 58 of the Transfer of Property Act, the transaction was required to be treated as mortgage transaction. It is submitted that learned Appellate Court has not properly interpreted the documents dated 10.8.1951 and 11.9.1951 and has wrongly treated the transaction as conditional sale and / or deed for conditional sale.
3.1. It is further submitted that as such it was the specific case on behalf of the plaintiffs that Rs.2500/ was given by way of loan and it was a loan transaction however as the defendant / person in whose favour the document was executed, was not having the Money Lending License, the word conditional sale was mentioned with the aforesaid condition. Therefore, it is requested to treat the transaction as mortgage transaction and to treat the transaction as mortgage by conditional sale. In support of his above submission, Shri Shah, learned advocate for the appellants original plaintiffs has heavily relied upon the decision of the Full Bench of this Court in the case of Kantilal M. Kadia vs. Somabhai Dahyabhai Kadia reported in 2003(1) GLH 524. He has also relied upon the decision of the Hon'ble Supreme Court in the case of Vishwanath Dadoba Karale vs. Parisa Shantappa Upadhye reported in AIR 2008 SC 2510 in support of his submission to treat the transaction as mortgage by conditional sale.
3.2. Shri Shah, learned advocate for the appellants original plaintiffs has further submitted that as the defendants challenged the preliminary decree only before the learned Revisional Court and though the final decree was passed by the learned trial Court, the same was not challenged and therefore, the learned Appellate Court was not justified in allowing the appeal and quashing and setting aside the preliminary decree only. It is submitted that as such by not challenging the final decree and only preliminary decree was challenged, which came to be set aside, there shall be in complying with decree which is not permissible. In support of his above submission, he has relied upon the decision of the Bombay High Court in the case of Dattatrya Ramchandra Savale and others vs. Ajmuddin Fakruddin and others reported in AIR 1916 (Bom) 228. By making above submissions and relying upon above decisions, it is requested to allow the present Second Appeal.
4.0. Present appeals is opposed by Shri Baxi, learned advocate for the respondent. It is submitted that considering the condition stipulated in the document dated 10.8.1951 to the effect that property has been sold on payment of Rs.2500/ however if the said amount of Rs.2500/ is returned within the period of five years, the defendants have to reconvey the title and execute the fresh document and transfer the said property in favour of person who executed the documentoriginal owner, the learned Appellate Court has rightly not treated the transaction as mortgage transaction and has rightly not treated the document as mortgaged by conditional sale. It is submitted that in the facts and circumstances of the case and considering the condition imposed in the document dated 10.8.1951, the learned Appellate Court has rightly held that the document was a document of conditional sale and therefore, has rightly allowed the appeal and has rightly quashed and set aside the judgment and decree passed by the learned trial Court and has rightly dismissed the suit for redemption of the mortgage.
4.1. Now, so far as contention on behalf of the appellants that relying upon the decision of the Bombay High Court in the case of Dattatrya Ramchandra Savale (supra) that what was challenged in the appeal was preliminary decree only and final decree though drawn was not challenged and therefore, the learned Appellate Court could not have set aside the preliminary decree without challenging the final decree is concerned, Shri Baxi, learned advocate for the respondents has submitted that as such no such plea / objection was raised before the learned Appellate Court at the relevant time. It is submitted that at the relevant time when the defendants preferred the appeal challenging the preliminary decree it was not brought to their notice that final decree is already drawn. It is submitted that it appears that the amount of Rs.2500/ was deposited by the plaintiffs immediately after passing the final decree and even without any intimation to the defendants and even the final decree came to be drawn by the learned trial Court on the very day on which the amount of Rs.2500/ deposited by the plaintiffs (pursuant to the preliminary decree). Therefore, it is submitted that as the defendants original appellants were not aware of passing of final decree, they did not challenge the same. It is further submitted that even otherwise it makes no difference so far as decree for redemption of mortgage is concerned. It is submitted that as such there was no material difference between the preliminary and final decree so far as redemption of mortgage is concerned. The decision which has been relied upon by the learned advocate for the appellants preliminary decree was passed with respect to partition and therefore, a final decree was passed. Therefore, it was submitted that what can be applicable to the decree for partition, the same cannot be applicable to the decree for redemption of the mortgage as there is no difference between the preliminary decree and final decree. It is further submitted that even otherwise when the final decree was drawn on the basis of the preliminary decree and preliminary decree came to be challenged in that case, automatically final decree will fall. It is submitted that therefore, on the aforesaid ground the impugned judgment and order passed by the learned Appellate Court is not required to be quashed and set aside.
5.0. Heard the learned advocates for the respective parties at length. The short question which is posed for consideration of this Court is whether on the facts and circumstances of the case both the documents dated 10.8.1951 and 11.9.1951 which is described as document of conditional sale with a condition that if the amount of Rs.2500/ is returned within a period of 5 years in that case, the property is to be retransferred by executing fresh document, would it be a document of conditional sale or a mortgage by conditional sale ? This Court heard the learned advocates for the respective parties at length and has considered the impugned judgment and order passed by both the Courts below as well as evidence on record oral as documentary from the record and proceedings which has received from the learned trial Court. On considering the oral evidence, it appears that it was never the case on behalf of the plaintiffs original owners that amount of Rs.2500/ mentioned in the document at Exhs. 59 and 60 was given by way of loan. It was also not the case on behalf of the plaintiffs that person in whose favour document at Exhs. 59 and 60 were executed was doing the business of money lending and the said amount of Rs.2500/ was given during the course of money lending transaction. On the contrary, it has come on record that in fact the defendant person in whose favour documents at Exh. 59 & 60 were executed was already cultivating the said land which prior to even transaction in question. Therefore, it cannot be said that there was a relationship of debtor and creditor at the time when the document at Exhs. 59 and 60 came to be executed.
5.1. Now, interpreting the document at Exhs. 59 and 60 as such intention of the parties and the condition stipulated in the said document would be decisive factor to consider whether the document was conditional sale or document was of a mortgage with condition sale. It cannot be disputed that form in which the deed is clothed is not decisive. It also cannot be disputed that in given case merely because in the document “word” document is title as document of conditional sale, the transaction does not become transaction of conditional sale and all other surrounding circumstances inclusive of intention of the parties are required to be considered. Therefore, as such intention of the parties and the condition stipulated surrounding circumstances and condition stipulated in the document would be decisive.
5.2. In the document Exh.65, the relevant and important averment and condition read as under:
“In this manner, the abovementioned immovable property is admeasuring its land bigha 2.8 mtr the aforesaid land along with its rights and all the trees and leaves standing on it is hereby sold absolutely with all its rights for aforesaid consideration. The possession of the said property has been handed over to you today. Therefore, you are entitled to use it, enjoy it, mortgage or sell it to others or give it as a gift. Now we or our heirs have no rights or claims thereon. You have become an independent owner from today. No other except us is the partner or having share in the said property, in this way, it is not given in writing to anybody else except you. However, if anybody comes forward creating hindrance therein, then we or our heirs are responsible for the same. It is true. You are liable to pay the government taxes to be paid for this farm. If this farm is registered in your holding, we shall transfer it in your name. It is true. If we do not do so, you will get it registered in your holding on the basis of this deed. You are owner and entitled for the same. It is true. Said property sold to you subject to condition that, if we pay Rs.2500/ within 5 years from this day, then you shall have to execute the deed of this property again in our favour at our own cost”.
5.3. As stated above, neither in the pleadings nor in the evidence it was the case on behalf of the plaintiffs that amount of Rs.2500/ was given by way loan and / or it was loan transaction and / or that the person in whose favour document was executed he was doing business of money lending and during the course of the said money lending business the amount of Rs.2500/ was given. It is also required to be noted that it was never the case on behalf of the plaintiffs that there were no pleadings and / or case on behalf of the plaintiffs and even there was relationship of debtor and creditor. On fair reading of the document at Exh. 59, it appears that the said document is a document of conditional sale with a right to repurchase the property by the original owner if the aforesaid amount of Rs.2500/ is returned within a period of five years and on return of the said amount of Rs.2500/ within five years, purchaserperson in whose favour document is executed, the defendants have to reconvey the title by executing the fresh document and return the possession. Under the circumstances, the learned Appellate Court has rightly believed the said document as document of conditional sale and has rightly disbelieved the case on behalf of the plaintiffs that document was document of mortgage by conditional sale. On fair reading of the entire document as a whole, this Court is of the opinion that as such the document at Exh. 59 can be said to be document of conditional sale with right to repurchase by the owner within the period of 5 years on the return of the aforesaid amount and if that right is not exercised in that case, the sale would become after a period of 5 years. At this juncture, it is required to be noted that it is not the case on behalf of the plaintiffs that they tendered and / or offered to return the amount of Rs.2500/ within a period of 5 years from the date of execution of the said document. It is required to be noted that the suit has been preferred in the year 1978 and 5 years after a execution of the said document has expired in the year 1956. It cannot be disputed that there is distinction between conditional sale with right to repurchase if the amount is repaid within stipulated time and mortgage by conditional sale. If the condition was that the conditional sale was for a period of five years and after a period of five years and / or particular period mentioned in the said document on repayment of the amount mentioned in the document the same was to be returned then in that case the position would have been different and in that case, it can be said that transaction is a mortgage with conditional sale. In the present case, such condition is not there. In the present case, as stated above, the sale is absolutely sale with condition and right in favour of the original owner to repurchase the same within a period of five years. Under the circumstances, no illegality has been committed by the learned Appellate Court in interpreting and considering and / or holding the said document at Exh. 59 as conditional sale.
5.4. Now, so far as reliance placed upon the decision of the Full Bench of this Court in the case of Kantilal M. Kadia (supra) by the learned advocate for the appellants is concerned, on considering said decision, it appears that the said decision would not be applicable to the facts of the present case. In the case before the Full Bench the condition mentioned in the document was that “ however on completion of five years, the plaintiff has returned the above amount to you, you have returned the property to me. The above document of conditional sale by taking Rs.1500/ today”.
Considering the above condition in the document, the Full Bench held that the document was a document of mortgage by conditional sale. As stated above, in the present case there was under such condition to return the property after completion of five years and whenever owner or excutant of the document returned the amount. As stated above, condition stipulated in the document is to execute the document and reconvey the title in case the executant of the document returned the amount of Rs.2500/ within a period of five years.
5.5 Similarly the decision of the Hon'ble Supreme Court in the case of Vishwanath Dadoba Karale (supra) would not be applicable on facts. It is to be noted that in the case before the Hon'ble Supreme Court, the Hon'ble Supreme Court found that transaction was a loan transaction and there was a relationship of debtor and creditor. Such is not case here. Under the circumstances, the aforesaid decision of the Hon'ble Supreme Court would not be of any assistance to the appellants in the facts and circumstances of the case. At this stage, the decision of the Hon'ble Supreme Court in the case of Bhaskar Waman Joshi vs. Shrinarayan Rambilas reported in AIR 1960 SC 301 is required to be referred. In the said decision the Hon'ble Supreme Court enunciated the following principles.
"The question whether by the incorporation of a condition a transaction ostensibly of sale may be regarded as a mortgage is one of intention of the parties to be gathered from the language of the deed interpreted in the light of the surrounding circumstances. The circumstance that the condition is incorporated in the sale deed must undoubtedly be taken into account, but the value to be attached thereto must vary with the degree of formality attending upon the transaction. The definition of a mortgage by conditional sale postulates the creation by the transfer of a relation of mortgagor and the mortgagee, the price being charged on the property conveyed. In a sale coupled with an agreement to reconvey there is no relation of debtor and creditor nor is the price charged upon the property conveyed, but the sale is subject to an obligation to retransfer the property within the period specified. What distinguishes the two transactions is the relationship of debtor and creditor and the transfer being a security for the debt. The form in which the deed is clothed is not decisive.
The circumstance that the transaction as phrased in the documents is ostensibly a sale with a right of repurchase in the vendor, the appearance being laboriously maintained by the words of conveyance needlessly reiterating the description of an absolute interest or the right of repurchase bearing the appearance of a right in relation to the exercise of which time was of the essence is not decisive. The question in each case is one of determination of the real character of the transaction to be ascertained from the provisions of the deed viewed in the light of the surrounding circumstances.
If the words are plain and unambiguous they must in the light of the evidence of surrounding circumstances be given their true legal effect. If there is ambiguity in the language employed, the intention may be ascertained from the contents of the deed with such extrinsic evidence as may by law be permitted to be adduced to show in what manner the language of the deed was related to existing facts. Oral evidence of intention is not admissible in interpreting the covenants of the deed but evidence to explain or even to contradict the recitals as distinguished from the terms of the documents may of course be given. Evidence of contemporaneous conduct is always admissible as a surrounding circumstance; but evidence as to subsequent conduct of the parties is inadmissible."
5.6. Even the decision of the Hon'ble Supreme Court in the case of Tamboli Ramanlal Motilal vs. Chanchi Chimanlal Keshavlal AIR 1992 SC 1236 is also required to be referred to.
“In Tamboli Ramanlal Motilal vs. Chanchi Chimanlal Keshavlal, AIR 1992 SC 1236, the Court relied upon the following features to indicate that the transaction was a conditional sale and not a mortgage :
(i) The consideration amount of Rs.5,000/was not taken as a loan at all, but by executing the document, the executant discharged all the prior debts and outstanding. Hence, the consideration for conditional sale did not create any relationship of debtor and creditor.
(ii) The property was sold conditionally for a period of 5 years and the possession was handed over. The document further stated that "Therefore, you and your heirs and legal representations are hereafter entitled to use, enjoy and lease the said houses under the ownership right".
(iii) The document further stated that the executant shall repay the amount within a period of five years and in case he fails to repay neither he nor his heirs or legal representative will have any right to take back the properties. After the period of five years, the transferee will have a right to get the municipal records mutated in his name and pay tax and thereafter the transferee will have an absolute right to mortgage, sell or gift the suit property. Neither the executant nor any one else could dispute the title.
The Supreme Court held that the aforesaid circumstances were clearly consistent with the express intention of making the transaction a conditional sale with an option to repurchase.
5.7. In the present case also as such the amount of Rs.2500/ was not given to the mortgagor as a loan but has been paid by full sale consideration on executing the document of sale and even the possession has been handed over to the mortgagor / in his favour. In the document, it is further stated that “therefore, you and your legal representative hereinafter are unable to use, sale, lease, gift the disputed land in question”. As stated above, in the document it is further stated that if the executant return the amount of Rs.2500/ within a period of 5 years from the execution of the said document he would have right to take back the property and property is to be reconveyed to him. As stated above, even it is not the case on behalf of the plaintiff' that within the period of five years he offered and / or tried to return the amount of Rs.2500/.
5.8. Considering the aforesaid facts and circumstance of the case, it cannot be said that the document at Exh.59, can be said to be a document by document of mortgage by conditional sale. As rightly held by the learned Appellate Court that document Exh.59 is document of conditional sale and therefore, the learned Appellate Court has rightly quashed and set aside the judgment and decree passed by the learned trial Court and has rightly dismissed the suit filed by the original plaintiff's.
6. In view of the above and for the reasons stated above, appeal fails and same deserve to be dismissed and is accordingly dismissed. No costs.
“kaushik”
sd/ ( M. R. Shah, J. )