JUDGMENT N.K. Mehrotra, J.
1. This is second appeal under Section 100 of the Code of Civil Procedure against the judgment and order dated 16.1.1981 passed by the IVth Additional District Judge, Hardoi in Civil Appeal No. 178 of 1979 arising out in Regular Suit No, 46 of 1979 decided by the Munsif West, Hardoi by the judgment and order dated 7.9.1979.
4. The defendant No. 2 Lalman Kapoor filed a written statement wherein he asserted that the deed dated 13.12.195(r) executed by Roop Narain Kapoor was an outright sale with a condition of repurchase and Ram Bharosey Lal became owner of the property in suit and he obtained possession in that capacity. It has also been asserted that the plaintiffs or their predecessors in title did not exercise the right of repurchase within five years and they have lost the right to get back the property. The finding in the Civil Suit No. 585 of 1954 does not operate as res judicata. Smt. Sunder Devi was the real owner of this property and by the sale deed dated 8.4.1958 Smt. Siddha Devi became the owner thereof and continued to be in possession in that capacity. The defendant No. 2 had succeeded to her on the basis of the registered Will and he is the owner of the shop and is not mortgagee. The plaintiffs have no right to redeem the property and the suit filed by him is also not within time.
5. The learned trial court has framed the following issues :
"(1) Whether the deed dated 13.12.1950 is a mortgage deed?
(2) Whether the decision in suit No. 585 of 1954 operates as res judicata?
(3) Whether the possession was delivered to Smt. Sunder Devi on 26.8.1956?
(4) Whether the suit is barred by time?
6. The learned Munsif after considering the evidence on record held that the deed dated 13.12.1950 is a mortgage deed and has further held that the findings in the earlier suit operate as res judicata. He has further held that the possession was delivered to Smt. Sunder Devi on 16.8.1956. On issue No. 4, he has held that the suit is not barred by time and the plaintiffs are entitled to relief of redemption. On the basis of these findings, the plaintiffs' suit has been decreed with costs by trial court.
7. Aggrieved by the impugned judgment of the trial court the defendant No. 2 Lalman Kapoor filed the first appeal. The first appeal has been dismissed by the impugned judgment dated 16.1.1981 by the IVth Additional District Judge, Hardoi. On issue No. 2 the first appellate court held that the findings in suit No. 585 of 1954 do not operate as res judicata. The learned first appellate court further held that the deed Ext. A-1 is a deed of mortgage by conditional sale and confirmed the findings of the learned trial court on this issue. On issue No. 4, it has been held by the learned first appellate court that the suit for redemption is within time. After recording the aforesaid findings, the first appellate court passed the preliminary decree for redemption of mortgage under Order XXXIV, Rule 7 of the Code of Civil Procedure and dismissed the appeal of the defendant-appellants.
8. The first appellate court has recorded the finding on issue of res judicata in favour of the defendant-appellants but the other findings on which the impugned judgment in first appeal is based has been recorded against the defendant-appellants. Aggrieved by the impugned judgment in the first appeal, the defendant-appellants have preferred the instant second appeal.
9. This appeal was admitted on the following substantial questions of law :
"(1) Whether the document dated 13.12.1950 clearly stipulating that no rights of ownership having been left with the transferor and absolute right of ownership having come to the transferee with the only condition of repurchase within the stipulated time, the said document will amount to mortgage with the conditional sale or it will be a sale outright with a condition of repurchase?
(2) Whether the Courts below while construing the said document dated 13.12.1950 could travel beyond the contents of the document and should take into account the subsequent document and are deprived from taking subsequent conduct of the parties while construing the said document?
(3) Whether a registered sale deed with respect to the property in question having come into existence on 8.4.1958 and the suit having been filed beyond 12 years, the provisions contained in Article 61 (b) of the Indian Limitation Act, 1963 will not apply to the instant case? (4) Whether in a transaction with respect to a mortgage and a sale deed also having come into existence before the mortgage could be redeemed, the question of limitation will be determined according to the provisions contained in Article 61 (b) or 61 (a) of the Indian Limitation Act, 1963? (5) Whether the suit for redemption can be filed against the subsequent purchaser of so-called mortgagee in case the deed in question is found to be mortgaged deed? FINDINGS ON SUBSTANTIAL QUESTIONS OF LAW Question Nos. 1 and 2 :
10. Both these substantial questions of law relate to the interpretation of the deed dated 13.12.1950. According to the defendant-appellants this document Ext. A-1 is "an out and out sale with a condition to repurchase" and according to the plaintiff-respondents, it is a mortgage by conditional sale as defined under Section 58(c) of the Transfer of Property Act, 1882 :
"58 (c). Mortgage by conditional sale.-Where the mortgagor ostensibly sells the mortgaged property-- on condition that on default of payment of the mortgage-money on a certain date the sale shall become absolute, or on condition that on such payment being made the sale shall become void, or on condition that on such payment being made the buyer shall transfer the property to the seller, the transaction is called a mortgage by conditional sale and the mortgagee a mortgagee by conditional sale : Provided that no such transaction shall be deemed to be a mortgage, unless the condition is embodied in the document, which effects or purports to effect the sale." 11. Both the Courts below have held that this document Ext. A-1, the deed dated 13.12.1950 is a mortgage by conditional sale. 12. The second appeal can be entertained only if, there is a substantial question of law which arises for entertaining the second appeal. In Ramchandra Sakharam v. Raman Bandhu, , it has been held by the Supreme Court that the question whether a document is an outright sale with right to repurchase or it is a mortgage with conditional sale is a question of law. 13. In Pandit Chunchun Jha v. Sheikh Ebadat Ali, , the Apex Court has interpreted the effect of the proviso to Section 58(c) of Transfer of Property Act in the following words :
"Under the Proviso to Section 58(c) T.P. Act 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 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 the deed should be construed as a mortgage."
14. Here in the instant case under appeal, there is only one document in which the condition to repurchase is embodied. The aforesaid decision of the Supreme Court was discussed by a Bench of this Court in Shyam Lal v. Shayam Narain, (LB) in which it was held that where by a document the executant conveyed certain property absolutely to the purchaser and the document did not impose any obligation on the part of the vendor but gave him only an option to recover the property on payment of the price but the document did not create any relationship of debtor and creditor and neither was there any stipulation of payment of interest nor that the property was given by way of security for any loan, the transaction evidenced by the document was not a mortgage by conditional sale but an outright sale. In Tamboli Ramanlal v. Ghanchi Chimanlal, , it was held by the Apex Court that if, there is no relationship of the debtor and creditor, the question of it being a document being mortgage by conditional sale does not arise. In this case also the Apex Court has followed the earlier decision in Pandit Chunchun Jha v. Sheikh Ebadat Ali (supra).
15. Before coming to the contents of the documents together with the contentions of the parties, I may like to refer the decision cited by the learned counsel for the respondents also on these two substantial questions of law to interpret the document. The learned counsel for the respondents has referred a decision of the Supreme Court in Vidhyadhar v. Manikrao and Anr., . It was held by the Supreme Court that the basic principle is that the form of transaction is not the final test and the true test is the intention of the parties in entering into the transaction. If the intention of the parties was that the transfer was by way of security, it would be a mortgage. The Privy Council as earlier as in Balkishen Das v. Legge, (1899) 27 IA-58 had laid down that as between the parties to the document, the intention to treat the transaction as an out and out sale or as a mortgage has to be found out on a consideration of the contents of the document in the light of surrounding circumstances. The decision of this Court in Bhaskar Waman Joshi v. Shrinarayan Rambilas Agarwal, and P.L. Bapuswami v. N. Puttay Gounder, are also to the same effect. Thus, it is clear from the aforesaid decisions of the Supreme Court in Vidhyadhar's case (supra) and other cases referred to in that judgment that the intention of the parties is to be gathered to interpret the document as to whether it is a mortgage by conditional sale or it is an outright sale with condition to repurchase.
16. The learned counsel for the respondent has also referred a decision of the Supreme Court in Mushir Mohammad Khan (Dead) by LRs. v. Sajeda Bano (Smt.) and Ors., . It was a case in which the parties had executed more than one document. It was held by the Supreme Court that true nature of the transaction has to be ascertained having regard to all the documents. It was also held that the two documents read together would not constitute a "mortgage" as the condition of repurchase is not contained in the same documents by which the property was sold. The proviso to clause (c) of Section 58 would operate in the instant case also and the transaction between the parties cannot be held to be a "mortgage by conditional sale."
17. Since in this case there is only one document, therefore, the ratio of this case will not be relevant for the purpose of the case under judgment. The learned counsel for the respondents has also referred a decision of this Court in Masaryadin and Ors. v. Special Judge (Economic Offences) Allahabad and Ors., 1999 (3) AWC 2491 : 1999 (17) LCD 1264 in which it was held by this Court that a transaction in which the stipulation for reconveyance is contained in a separate document cannot be a mortgage of any kind.
18. I do not dispute the principle laid down by this Court in the aforesaid cases. The result of the aforesaid decision of the Apex Court is that it is not a universal rule that if, only one document is executed and it contains the condition of repurchase, it will necessarily be treated as a mortgage by conditional sale but the law is that the intention of the parties are to be gathered by reading the document. The document Ext. A-1, the deed dated 13.12.1950 contains certain material averments. This deed shows that Roop Narain Kapoor is the sole owner of the property as contained in the deed and has a right to transfer it. It further shows that he transferred the entire rights for the said shop for a consideration of Rs. 4,000 in favour of Ram Bharosey Lal. It further shows that Ram Bharosey Lal shall have all the rights of ownership in the said shop but in case vendor pays all the entire amount of Rs. 4,000 within a period of five years, the vendee shall execute the sale-deed in favour of the vendor. It also provides that this right shall continue even with the heirs of the vendor. It also shows that if the right is not exercised within five years the vendor and his heirs shall lose the right.
19. I would also refer that in the document there is no mention that the executant is in any way a mortgagor or vendee is in any way a mortgagee. There is also no mention that Rs. 4,000 is being taken as loan. There is no mention that the property is being kept as security to secure the repayment of the loan. There is no recital to create an obligation in favour of the vendor, the executant of the deed to take back the property necessarily. It gives only an option to repurchase.
20. I would like to quote here a few lines observation of the first appellate court in the impugned judgment which are as follow :
"The learned Munsif has considered these recitals in the deed which on the face of it show that it is a sale deed with a condition to repurchase."
21. Now I would like to refer the evidence on the basis of which the two courts below had drawn a conclusion that the document in question is a mortgage by a conditional sale. The learned Munsif has based his finding on a subsequent document dated 16.8.1956 executed by one Smt. Sunder Devi and the finding of res judicata in Civil Suit No. 585 of 1954. The first appellate court has discarded both these evidences. I may refer the portion of the judgment of the first appellate court to discard these two evidences for holding the disputed document as a mortgage by conditional sale which is as follows :
"I agree with the learned counsel for the appellants that the learned Munsif has committed legal flaws in this respect. The subsequent conduct of the parties to determine the nature of transaction cannot be taken into consideration as has been held in Bhaskar Waman Joshi and Ors. v. Shrinarayan Rambilas Agarwal, . The observation of the Hon'ble Court says that the evidence of contemporaneous conduct is always admissible as a surrounding circumstance ; but evidence as to subsequent conduct of the parties is inadmissible. In that case also the question involved was the determination of the nature of such a transaction. Obviously, the learned Munsif committed this legal flaw by considering the subsequent conduct of the parties. His observation that the finding in the earlier Civil suit No. 585 of 1954 operates as res judicata is also not correct....
The civil suit No. 585 of 1954 was filed for recovery of arrears of rent on the basis of a 'Kirayanama', This 'kirayanama' itself established the relationship of landlord and tenant between the parties. What were the actual rights of the landlord and whether he was an owner or a mortgagee were not to be decided in order to grant the relief claimed by him i.e. the recovery of the arrears of rent."
22. In the earlier suit, the finding that the disputed document is a mortgage by conditional sale was recorded against the plaintiff of that case but the suit was decreed. Therefore, it was held by the first appellate court that this finding will not operate as res judicata in the subsequent suit between the parties.
23. The aforesaid findings of the first appellate court discarding the evidence, which was taken into consideration, by the trial court are in accordance with law. In Janki and Anr. v. Deputy Director of Consolidation, 1979 RD 159 it has been held by this Court that a finding in an earlier decision would not operate as res judicata between the petitioners and the contesting opposite parties because in that suit the petitioner opposite party No. 7 and father of the contesting opposite parties Nos. 4 to 6 were defendants and the suit of Bhagauti, the plaintiff was dismissed ; hence, the father of the contesting opposite parties has no right to prefer an appeal against the judgment of the trial court. Similar are the facts here in the earlier suit between the parties. The view of the learned first appellate court that the subsequent document and the subsequent circumstances cannot be taken into consideration for interpretation of a document, is also supported by the provisions under Sections 91 and 92 of the Indian Evidence Act and the decision of the Supreme Court in Fort Gloster Industries Ltd. v. Sethla Mercantile (P.) Ltd., ; Bhaskar Waman Joshi and Ors. v. Shrinarayan Rambilas Agarwal, and Bhoju Mandal v. Debnath, 1963 SC 1906.
24. The learned first appellate court after rejecting the evidence considered by the learned Munsif has held the document in question to be a mortgage by conditional sale after taking into consideration the proviso to Section 58(c) of the Transfer of Property Act. It. has been held by the first appellate court that it is true that the language of the deed shows that it is a sale but it contains the condition of repurchase within five years. Further, it provides for repurchase on the same consideration for which the sale was. effected. It is because of this recital, the learned first appellate court has held that the document in question is a mortgage by a conditional sale. The learned first appellate court also held that there is another circumstance, which fortified his conclusion. It has been pointed out that in the year 1958 when this property was again sold the sale consideration was again Rs. 4,000. It means, the parties have been under the impression that it is a mortgage by conditional sale as otherwise the consideration for sale after eight years would have been more than what was in the year 1950 ; so because of the amount of sale consideration, the learned first appellate court has drawn a conclusion that the document in question is a mortgage by conditional sale but it appears to me that the first appellate court has forgotten the earlier finding that the subsequent conduct in interpreting the document cannot be taken into consideration. At the time of recording finding, he has again considered that the sale consideration of a deed of the year 1958 which is subsequent document executed eight years after the execution of the deed in question.
25. I have referred the contents of the document in question. It appears to me after reading the document itself that although the condition of repurchase is embodied in the same document but the recital of the document makes it clear that it cannot be a mortgage but it is an outright sale. There is no mention of either a mortgagor or mortgagee. There is also no mention about taking of loan or keeping a property as security. The vendor did not exercise his option within a stipulated period of five years. The plaintiff-respondents remained silent even after the transfer of the mortgaged property by the mortgagee. The recitals in the document in question are to be read independent of the subsequent document dated 16.8.1956 Ext. A-2 which is an unregistered document written between Roop Narain Kapoor and Mst. Sunder Devi.
26. There is one more aspect of the matter with regard to possession. The judgment of the appellate court gives an impression that the , first appellate court was under the impression that the mortgagor was allowed to remain in possession of the shop and to pay rent in lieu of interest but this impression is based on the plaint allegations in which it is written that the mortgaged property remained in possession of Roop Narain Kapoor, the mortgagor upto 18.8.1956 and he was making payment of rent in lieu of interest to the mortgagee upto that date. But this fact is not admitted to the defendant-appellants in the written statement. The two courts below must have decided the issues whether the possession was given by the mortgagor to the mortgagee in any way on the date of execution of the disputed deed on 13.12.1950. The trial court decided an issue No. 3 whether Smt. Sunder Devi, the widow of Sita Ram, the brother of initial mortgagee Ram Bharosey Lal was given possession on 26.8.1956 by Roop Narain Kapoor. After seeing the document Ext. A-2 the learned Munsif has decided in plain words that in view of this document Smt. Sunder Devi wife of Sita Ram, the brother of Ram Bharosey Lal was given possession on 26.8.1956 but the fact which is admitted and established from the evidence on record is that at the time of execution of the disputed document on 13.12.1950, the property was in the possession of the tenant who had executed a rent note in favour of the mortgagee. That the tenant was Thakur Mahesh Singh and he was making payment of rent to Sita Ram, the brother of initial mortgagee Ram Bharosey Lal and when he committed default in payment of rent, after 14.6.1952 Sita Ram filed a suit for recovery of rent and eviction of the tenant Thakur Mahesh Singh impleading the mortgagor Roop Narain Kapoor also. A perusal of the recital of the disputed document dated 13.12.1950 goes to show that it is the statement of the mortgagor in the disputed document that he had transferred all the rights and interest of title which he was having on the date of execution of the deed. The phrase as used in Hindi in the disputed document is as follows :
^^mä nwdku ij vkt ls Øsrk dks viuh Hkk¡fr LoRo o vf/kdkj ns fn;k o djk fn;k A**
27. Here, it would be relevant to refer the provisions of Section 54 of the Transfer of Property Act, which is as follows :
"54. 'Sale' defined.-'Sale' is a transfer of ownership in exchange for a price paid or promised or part-paid and part-promised.
Sale how made.-Such transfer, in the case of tangible immovable property of the value of one hundred rupees and upwards, or in the case of a reversion or other intangible thing, can be made only by a registered instrument.
In the case of tangible immovable property, of a value less than one hundred rupees, such transfer may be made either by a registered instrument or by delivery of the property.
Delivery of tangible immovable property takes place when the seller places the buyer, or such person as he directs, in possession of the property.
Contract of sale.-A contract for the sale of immovable property is a contract that a sale of such property shall take place on terms settled between the parties.
It does not, of itself, create any interest in or charge on such property."
28. The learned counsel for the defendant-appellants has referred the amendment carried out by the State Legislature in Section 54 of the Transfer of Property Act which is as follows :
"Uttar Pradesh.-In its application to the State of Uttar Pradesh, in Section 54 :
(a) In the second paragraph, the words "of the value of one hundred rupees and upwards" shall be omitted ; (b) The third and fourth paragraphs shall be omitted ; and (c) After the last paragraph, the following paragraph shall be inserted, namely ; Such contract can be made only by a registered instrument."
But the amendment by the State of U.P. in Section 54 of Transfer of Property Act will not be relevant because of the simple reason that this amendment was inserted with effect from 1.1.1977 and the document in question was executed on 13.12.1950. For the purpose of question about definition and the mode of sale, the provisions under Section 54 cited above alone will be relevant. It is clear from the aforesaid provision that a sale or a mortgage of the immovable property of the value of more than Rs. 100 can be effected only by a registered document. Section 54 of the Transfer of Property Act requires that the transfer of ownership by way of sale, in the case of tangible immovable property of the value of Rs. 100 and upwards can be made only by a registered instrument. The provisions of Section 54 as to mode of transfer are exhaustive and do not admit being sale in question in other manner. So in the instant case it is clear that the sale was effected by the disputed document which is a registered document. Besides the above, there is one more circumstance, which is apparent from the recital of this document. Roop Narain Kapoor, the mortgagor has mentioned in this deed that he had purchased this disputed shop on 22.6.1948 in consideration of Rs. 1,500 while the sale consideration of the impugned property is Rs. 4,000. It means that after purchasing the property in consideration of Rs. 1,500, in 1948 the executant was transferring this property in consideration of Rs. 4,000 in December, 1950. In Bhoju Mandal v. Debnath, there was a transaction in which the amount of Rs. 1,600 was advanced one years before the disputed document and after one year the said land was transferred by the document in question for a sum of Rs. 2,800 in the circumstance that a smaller extent of the land was mortgaged by a higher amount. It was held that it was improbable that a mortgagee would advance an additional amount and take a mortgage of a smaller extent in discharge of an earlier mortgage whereunder a larger extent of land was given as security. It was also held that this would be a clinching circumstance in favour of holding that a document was a sale. In the instant case also, it is evident from the document itself that just before two years, the shop was purchased for Rs. 1,500 therefore, it cannot be mortgaged by taking Rs. 4,000 and in this case also it will be a clinching circumstance to gather the intention of the party at the time of execution of the deed to hold that it was not a mortgage but it was an outright sale.
29. It appears to me that the deed in question is not a mortgage by a conditional sale but it is an outright sale and the plaintiff has not exercised his option to repurchase within the period prescribed in the document itself.
30. In this case the mortgagee has executed a sale deed on 8.4.1958 in favour of the defendant-appellants. The case of the defendant-appellants is that the suit has been filed beyond 12 years in the year 1979, therefore. It is barred by limitation as provided under Article 61(b) of the Indian Limitation Act, 1963. Article 61 of the Schedule of the Indian Limitation Act provides limitation in a suit by a mortgagor, which is as follows :
"Part V-Suits relating to immovable property
61. By a mortgagor-
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(a) to redeem pr recover possession 30 years When the right to of Immovable property redeem or to recover mortgaged. possession accrues. (b) to recover possession of 12 years When the transfer immovable property mortgaged becomes known to and afterwards transferred by the plaintiff the mortgagee for a valuable consideration. (c) to recover surplus collections 3 years When the mortgagor received by the mortgagee after re-enters on the the mortgage has been satisfied. mortgaged Property." ----------------------------------------------------------------------
31. The learned first appellate court has decided this issue in favour of the plaintiff-respondents. I find that if, a disputed document is taken to be a mortgage by conditional sale, the suit for redemption in both the cases whether it is covered under clause (a) of Article 61 or clause (b) of Article 61, it will be well within time as has been held by the learned first appellate court.
32. The learned counsel for the defendant-appellants has argued that the suit for redemption cannot be filed against the subsequent purchaser of so-called mortgagee in case the deed in question is found to be a mortgage deed. In view of the above finding recorded above, it has been held that the deed in question is not a mortgage by conditional sale but it is an outright sale with condition to repurchase. Therefore, this question is not a substantial question of law for the purpose of deciding the second appeal.
33. In view of the findings recorded on substantial questions of law Nos. 1 and 2, I hold that the document in question is an outright sale with condition to repurchase and it is not a mortgage by conditional sale.
34. Therefore, the instant second appeal is allowed with costs. The impugned judgment and order dated 16.1.1981 passed by the IVth Additional District Judge, Hardoi in Civil Appeal No. 178 of 1979 and also the impugned judgment and order dated 7.9.1979 passed by the Munsif West, Hardoi in Regular Suit No. 46 of 1979 are set aside.