1. By this appeal under section 100 of the Code of Civil Procedure, 1908 (hereinafter referred to as 'the Code'), the appellant has challenged the judgment and decree dated 5th January, 1984 passed by the learned District Judge, Nadiad in Civil Appeal No.28/1982 whereby he has allowed the appeal and set aside the judgment and decree dated 31st December, 1981 passed by the learned Joint Civil Judge (J.D.), Nadiad in Regular Civil Suit No.519/1975.
2. The respondent herein instituted the above referred suit contending that deceased Ranchhodbhai Dhoribhai Patel was the owner of lands bearing survey No.714/2 and 715/2 paiki 0-17 gunthas and 0-25 gunthas, respectively (hereinafter referred to as the 'suit lands') situated at village Mitral. Both the suit lands were adjoining each other. Ranchhodbhai Dhoribhai who was the father of the plaintiffs expired in the year 1957. Deceased Ranchhodbhai had taken Rs.1,800/- from the defendant Lallubhai Haribhai to put up an oil engine on his well. In respect of the said amount, deceased Ranchhodbhai executed a mortgage deed (Exh.26) in favour of the defendant on 16th July, 1952 which was duly registered. It was the case of the plaintiffs that the deed was a conditional mortgage deed by virtue of which deceased Ranchhodbhai had handed over the possession of lands bearing survey No.714/2 and 715/2 to the defendant. In the deed, it was mentioned that the plaintiffs were entitled to recover possession by paying Rs.1,800/- within five years from the date of execution thereof. The specified date mentioned therein was 15th July, 1957. It was the case of the plaintiffs that though they had tried to give the aforesaid amount to the defendant and asked for possession, the defendant did not respond to the same. Subsequently, a written notice (Exh.33) came to be issued on 21st November, 1975. Despite service of notice, the defendant did not reply to the same hence, the plaintiffs instituted the suit on 9th December, 1975.
3. In response to the averments made in the plaint, the defendant filed his written statement at Exh.14 wherein he denied the contentions of the plaintiffs. It was denied that deceased Ranchhodbhai Dhoribhai was cultivating the suit property and that the deed (Exh.26) was a conditional mortgage deed. It was denied that the suit property was handed over to him on 16th July, 1952, that is, on the day of the execution of the deed (Exh.26). It was the case of the defendant that he was in possession of the suit land prior to the execution of the said deed and that deceased Ranchhodbhai was not the sole owner of the suit lands. The defendant denied that the plaintiffs' father required Rs.1,800/- for installment of pump on his well and, therefore, had mortgaged the properties to the defendant. It was the case of the defendant that in fact, the properties were sold to the defendant with a condition to re-convey the properties on payment of consideration within the stipulated period of five years failing which the defendant would become the full and absolute owner. It was the case of the defendant that the suit lands were fragments and the defendant being the owner of contiguous lands, the suit lands were sold to him and not given to him by way of mortgage. That the defendant was in possession of the suit lands as tenant prior to 1952 and because of the above referred circumstances, the lands were sold to him at Rs.1,800/-. Even otherwise, the defendant being tenant of the suit lands, the plaintiffs were not entitled to get back the possession thereof.
4. The trial court after appreciating the evidence on record held that the plaintiffs had failed to prove that the document (Exh.26) was a conditional mortgage sale deed and accordingly dismissed the suit. Being aggrieved, the plaintiffs went in appeal before the lower appellate court. The lower appellate court after re-appreciating the evidence on record held that the transaction in question was a mortgage rather than a sale and allowed the appeal.
5. While admitting the appeal, this court had formulated the following substantial question of law:
“Whether the document dt. 16-7-52 is a document of mortgage with conditional sale or it is a sale out and out with a condition of repurchase?”
6. Ms. Trusha Patel, learned advocate for the appellant vehemently assailed the impugned judgment and decree submitting that the lower appellate court was not justified in holding that the document in question was a mortgage with conditional sale. Referring to the contents of the deed (Exh.26), it was submitted that on a plain reading of the said deed, it is apparent that the same reflects that it is an outright sale. It was submitted that as per the recitals of the deed, the title of the deed is “conditional sale deed” (Sharati Vechan Dastavej). That Rs.1,800/- had been paid by the defendant Lallubhai and possession was handed over. Under the conditional sale deed, the purchaser and his heirs are entitled to possess and cultivate the lands, etc. and the taxes are also to be paid by the purchaser. The purchaser is also at liberty to use the land in any manner he wishes. If the amount was returned before 15th July, 1957, the purchaser was required to sell back the property to the vendor. However, on expiry of five years from the date of the said deed, the purchaser, being the owner, would be free to do whatever he wishes to do with the suit lands. Thus, the property was sold for Rs.1,800/- for installation of a water pump in another field of the vendor and the conditional sale deed was binding upon the heirs of the vendor. Under the said deed, the vendor also undertook to give statements before the village accountant for mutation of the suit lands in the name of the purchaser. It was submitted that the condition of re-conveyance which is incorporated in the deed, suggests that the ownership is vested in the purchaser by the execution of the disputed deed. The learned counsel further pointed out that on 27th August, 1954, vide Mutation Entry No.3246 (Exh.29), the name of the defendant was entered in the Record of Rights, however, the plaintiffs had not objected to its certification.
6.1 Attention was invited to Mutation Entry No.6147 which evidences the partition that had taken place between the plaintiffs subsequent to the execution of the conditional sale deed, to submit that the suit properties have not been shown in the partition deed which is clearly indicative of the fact that the plaintiffs were aware that the disputed land had been sold to the appellant by an outright sale.
6.2 Another contention raised by the learned counsel for the appellant was that the suit was apparently time barred inasmuch as the last date for repayment of the amount of Rs.1,800/- to the defendant was 15th July, 1957. In the year 1957, the fencing between the suit lands and the adjoining land of the defendant was removed and fields were consolidated, thereby giving rise to a cause of action for the plaintiffs. In 1959-60, the heirs of Ranchhodbhai effected a partition of their properties, wherein the suit properties were not included. That the plaintiffs in their deposition have stated that in the year 1960, they had gone to pay the amount to the defendant; however, he did not accept the said amount. Thus, the cause of action for instituting the suit had arisen in the year 1960 whereas the suit came to be instituted on 9th December, 1975. It was argued that the limitation for the purpose of instituting a suit of this nature is twelve years and as such, the suit was hopelessly time barred. It was submitted that the lower appellate court has erred in holding that the deed in question is a deed of mortgage with conditional sale.
6.3 On the question of interpretation of the deed in question, it was submitted that the heading of the document, though not conclusive, plays a significant role in deciding its nature. Referring to the decision of the Supreme Court in the case of C. Cheriathan v. P. Narayanan Embranthiri, (2009) 2 SCC 673, wherein on the construction of the document involved in the said case, the trial Judge had opined that the transaction represented a sale. On an appeal preferred by the respondent therein, the first appellate court held that the transaction was a mortgage by conditional sale and as the respondent did not exercise his option to repurchase the property within a period of three years, the sale had become absolute. The respondent filed a second appeal before the High Court which allowed the appeal interpreting the said document to be a deed of mortgage and consequently held that the suit for partition and redemption was maintainable. The Supreme Court observed that the deed in question was said to be a deed of sale. The source of title had been disclosed. What was sought to be conveyed thereby was the leasehold interest. Assignment was in respect of the vendor's one half-share in the property. Possession of the properties had been handed over. A stipulation was made therein that the vendor shall repurchase the same at his expense within a period of three years from the date of execution thereof. He acknowledged receipt of sale consideration of Rs.2,000/- in cash. The vendor relinquished all his right over the scheduled property. However, the nature of assignment was sought to be clarified as the words “till the period is over” and “efflux of time and thereafter as an absolute sale” were used. The court observed that it was significant that thereby the vendee in terms of the said instrument became entitled to attorn to the landlord by paying the stipulated rent evidently as a tenant and not as a mortgagee. The vendor accepted that he would have no right to deal with the property in any manner. The reason why the original deed of sale had not been handed over was also explained. Declaration had been made that no encumbrances had been created in respect of the vendor's share in the property. The court allowed the appeal holding that the intention of the appellant therein that by reason of the said transaction, he would become the owner of the entire property was obvious.
6.4 Referring to the deed (Exh.26), Ms. Patel pointed out that both, the document in dispute in the above referred case as well as in the present case, have common recitals of (i) handing over possession, (ii) right of repurchase by the vendor, (iii) acknowledgment receipt of amount, (iv) relinquishment of all his rights over the property by the vendor, acceptance by the vendor that he would have no right to deal with the property in any manner and (v) declaration that there was no encumbrance on the property. It was submitted that moreover, there is no evidence on record that any relationship of debtor and creditor had come into being between the plaintiffs and the defendant. Besides, if the property had been mortgaged, it would have been for a longer period. Under the circumstances, the present case would be directly covered by the aforesaid decision of the Supreme Court and as such, it is evident that the deed in question is a sale with a condition of repurchase and not a mortgage by conditional sale. It was, accordingly, urged that the appeal, therefore, deserves to be allowed.
6.5 Alternatively, it was submitted that even if the court comes to the conclusion that the deed in question is a mortgage by conditional sale and not a sale with a condition of repurchase, the matter is required to be referred to the tenancy authority for deciding the issue as regards tenancy. Referring to the provisions of section 85, 85A and 25A of the Bombay Tenancy and Agricultural Lands Act, 1948, the learned counsel placed reliance upon a decision of this court in the case of Motibhai Bijalbhai Bhoi and another v. Sakinabibi, wd/o Sadatali Sahebali and others rendered in Second Appeal No.279/1981 on 18th February, 1983 wherein one of the contentions raised by the defendants in the written statement was that they were tenants of the suit field prior to the mortgage hence, under section 25A of the Bombay Tenancy Act, their tenancy had remained in abeyance. The court had revived the appeal on the file of the lower appellate court and had directed that a reference be made to the Mamlatdar concerned for deciding as to whether the defendants were tenants at the time when the mortgage came to be effected. It was submitted that in the facts of the present case, in case the court decides against the appellant on the first issue, then alternatively, the matter is required to be remitted to the Mamlatdar for deciding the issue of tenancy.
7. It may be noted that though notice has been served upon the respondent and learned advocates, Mr. Jayprakash Umot and Mr. D.R. Bhatt, have filed appearance on behalf of some of the respondents, despite the fact that the matter was called out from time to time, the learned advocates have not remained present before this court. Under the circumstances, the court has no option but to proceed with the matter ex parte.
8. A perusal of the judgment and decree passed by the trial court shows that the trial court had framed two issues: (i) Whether plaintiffs prove that as per document dated 16.7.1952 they are entitled to take possession of survey No.714/2 and 715/2 belongs to Mitral? And (ii) Whether plaintiffs prove that the document dated 16.7.1952 is in the nature of a mortgage? The trial court dismissed the suit of the plaintiffs holding that the plaintiffs have failed to prove that the document (Exh.26) is a conditionally mortgage sale deed.
9. The lower appellate court had framed the following point for determination:
“Whether the transaction in question is a mortgage by conditional sale or an outright sale with a condition to reconvey the property?”
10. Thus, the crucial question that arises for consideration is as to whether the deed in question is a deed of mortgage by conditional sale or a deed of sale with a condition of repurchase. The said question can be answered only on the basis of the contents of the deed in question. Exh.26 namely, the document dated 16th July, 1952, is in the vernacular language. The said deed bears the heading:
“Document of conditional sale of property situated in the sim of Mauje – village Mitral, Rupees 1800/-.”
The document further reveals that a conditional sale deed had been executed between Lallubhai Haribhai and Patidar Kasab. The document bears a detailed description of the suit property and it also indicates that towards the south of the property, the defendant has another field. The document further reveals that all rights in the said property are vested in the vendor without any encumbrance and that he was the cultivator thereof and that the same was in his actual possession. It is further recorded that the said property is being conditionally sold to the vendee for Rs.1,800/- alongwith possession with a right to cultivate the same. That the vendor and his heirs can cultivate the property by virtue of the conditional sale and can use the same in any manner under the rights obtained under the conditional sale. It is further declared therein that the property has been sold on the condition that if the entire amount is paid by the vendor or his heirs within a period of five years, that is, on or before 15th July, 1957, the vendee and his heirs would execute a conditional sale deed in favour of the vendor. However, if the amount is not paid within the specified period, the vendor would thereafter lose his right to repurchase the land and, therefore, the vendee would become the absolute owner thereof and it would be open for the vendee to use the same in any manner he deems fit and the vendor cannot raise any dispute in that regard. It is further recorded that under the conditional sale deed, Rs.1,800/- has been paid for putting up an engine on the well as well as for other reasons and that the property has been given by way of conditional sale and that the vendor would not create any obstruction in the use of the said land by the vendee. It is further stated that the vendor would make a statement before the Talati that the name of the vendee be entered in the record of the property.
11. Before adverting to the merits of the case, it may be necessary to notice the provisions of section 58(c) of the Transfer of Property Act, 1882 which defines mortgage by conditional sale in the following terms:
“58. 'Mortgage', 'mortgagor', 'mortgagee', 'mortgage money' and 'mortgage deed' defined.-
(a) xxx
(b) xxx (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.”
12. At this juncture reference may be made to the law laid down by the Supreme Court in this regard. In the case of Bishwanath Prasad Singh v. Rajendra Prasad and Another, (2006) 4 SCC 432, the Supreme Court, in the context of the above referred provision, observed that a bare perusal of the said provision clearly shows that a mortgage by conditional sale must be evidenced by one document whereas a sale with a condition of retransfer may be evidenced by more than one document. A sale with a condition of retransfer, is not a mortgage. It is not a partial transfer. By reason of such a transfer all rights have been transferred reserving only a personal right to the seller, and such a personal right would be lost, unless the same is exercised within the stipulated time.
13. In Pandit Chunchun Jha v. Sk. Ebadat Ali, AIR 1954 SC 345, the Supreme Court held that the question whether a given transaction is a mortgage by conditional sale or a sale outright with a condition of repurchase is a vexed one. Each case must be decided on its own facts. But there are certain broad principles. The first is that the intention of the parties is the determining factor. Where a document has to be construed, the intention must be gathered, in the first place, from the document itself. 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 they used. If, however, there is ambiguity in the language employed, then it is permissible to look to the surrounding circumstances to determine what was intended. The converse also holds good and if, on the face of it, an instrument clearly purports to be a mortgage it cannot be turned into a sale by reference to a host of extraneous and irrelevant considerations.
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, i.e. 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 was a matter for construction which was meant.
14. In Bhaskar Waman Joshi and others v. Shrinarayan Rambilas Agarwal and others, AIR 1960 SC 301, the Supreme Court held that 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 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 the 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 document 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.
15. The facts of the present case are required to be examined in the light of the principles enunciated in the above referred decisions.
16. On a perusal of the deed in question, it is apparent that the same has been termed to be a conditional sale deed. The consideration reflected in the said document is towards the sale of the suit land. In the entire document in question, there is not even a whisper as regards the property being mortgaged. The deed in question is a registered deed wherein the suit property is described in detail. There is reference to the title of the vendor and his absolute unencumbered rights over the same. The recitals in the deed reflect that pursuant to the conditional sale, the possession of the property is handed over to the vendee with all rights therein subject to the condition that in case the vendor or his heirs repay the amount within a period of five years, that is, on or before 15th July, 1957, the vendee shall execute an unconditional sale deed in favour of the vendor. The document also specifically lays down that in case the amount is not paid within the stipulated period, the property would vest absolutely in the vendee and that the vendee would no longer have any right, title or interest in the same. The deed also reflects that it is permissible for the vendee to enter his name in the record in respect of which the vendor would make appropriate statement before the concerned Talati. From the language employed in the deed in question, it is apparent that there is no ambiguity therein. The same appears to be a deed of sale with a condition of repurchase. From the recitals contained in the deed, there is nothing indicative of any relationship of a creditor or a debtor between the vendor and the vendee. Under the circumstances, the said deed can, in no manner, be termed to be a deed of mortgage by conditional sale.
17. The trial court, upon appreciation of the evidence on record as well as on a reading of the deed in question, was of the opinion that upon expiry of the period of five years, the deed in question became a sale deed. It found that the plaintiffs had led no evidence to establish that they had deposited or tried to deposit the amount in question within the period stipulated in the deed and that the same had been refused by the defendant. The trial court further took note of the fact that a partition had been effected between the members of the plaintiffs’ family, however, there was no mention of the suit property in the partition deed. The trial court was, accordingly, of the view that the intention of the parties was that the sale had become absolute.
18. The lower appellate court was of the view that the stipulation included in the deed for repurchase of the property by the vendor gives an indication that the deed was a mortgage by conditional sale rather than an outright sale. Instead of referring to the recitals in the deed for the purpose of ascertaining the intention of the parties, the lower appellate court has placed more emphasis upon the attendant circumstances for the purpose of coming to the conclusion that the deed in question was a deed of mortgage by conditional sale and not a deed of sale with a condition for repurchase. The lower appellate court has placed great stress on the fact that in the record of rights, the name of the original owner was still reflected and has held the inaction on the part of the defendant in getting the name of Ranchhodbhai Dhoribhai deleted from the record to be a circumstance against the defendant amounting to tacit recognition of the right of Ranchhodbhai to get the property redeemed even after the year 1957. The lower appellate court has also placed reliance upon the evidence of the attesting witness Husenbhai Namdar who was examined at Exh.25 on behalf of the plaintiffs wherein he has stated that the defendant had explained that he was taking the lands of Ranchhodbhai Dhoribhai by way of mortgage. This has been considered as an important corroboration suggesting that the transaction is a mortgage rather than sale. The lower appellate court brushed aside the contentions raised on behalf of the appellant - defendant to the effect that while effecting partition of properties between the plaintiffs and the family members, there was no reference to the suit property. Laying great stress upon the evidence of witness Husenbhai, the lower appellate court has ultimately held that the transaction appears to be a mortgage and not a sale with condition to repurchase as submitted by the defendant and has allowed the appeal.
19. As already noted hereinabove, on a clear interpretation of the deed in question, there is nothing indicative therein to show that the same is a deed of mortgage by conditional sale. The deed in question evidently is a deed of sale with a condition of repurchase. From the evidence on record, it is apparent that there is nothing to show that prior to the specified date, that is, 15th July, 1957, any attempt had been made by the plaintiffs to repurchase the suit land by paying the amount of consideration as stipulated in the deed in question. Under the circumstances, by virtue of the recitals contained in the deed itself, upon the stipulated period of five years having come to an end on 15th July, 1957, and the amount in question not having been repaid by such time, the conditional sale in favour of the defendant became absolute and thereafter the defendant became the absolute owner of the suit land. By operation of the conditions in the deed in question, upon the specified date, that is, 15th July, 1957 having passed without repayment of the amount in question, the plaintiffs ceased to have any right over the suit land including the right of repurchase. Under the circumstances, any attempt to pay the amount in question after 15th July, 1957 was an exercise in futility inasmuch as the sale in question had become absolute in favour of the defendant.
20. From the facts noted hereinabove, it is apparent that within the time stipulated under the deed in question, no attempt was made by the plaintiffs to pay the amount in question and repurchase the suit land. A perusal of the plaint indicates that there is no averment as regards the date on which the first attempt was made to pay the amount by the plaintiffs. Only a vague averment has been made to the effect that from time to time attempts had been made to repay the amount, however, the defendant had not accepted the same and lastly a notice (Exh.33) came to be issued to the defendant on 21st November, 1975. In the light of the aforesaid facts, it is apparent that the plaintiffs have failed to establish that the deed in question is a deed of mortgage by conditional sale and have also failed to establish that any attempt had been made to repurchase the suit land within the period stipulated under the deed. Under the circumstances, the trial court was justified in holding that the sale had become absolute upon the expiry of the stipulated period and that the plaintiffs had no right, title or interest in the same. The lower appellate court, therefore, erred in holding that the deed in question was a deed of mortgage by conditional sale by placing reliance upon the evidence of the witness Husenkhan. As held by the Supreme Court in the case of Bhaskar Waman Joshi and others v. Shrinarayan Rambilas Agarwal and others (supra), oral evidence of intention is not admissible in interpreting the covenants of the deed. Moreover, the deed itself being clear and unambiguous, there was no necessity to make reference to the surrounding circumstances to determine the intention of the parties.
21. In the light of the aforesaid discussion, the appeal succeeds and is accordingly allowed by holding that the document dated 16th July, 1952 is a deed of sale with a condition for repurchase and not a deed of mortgage with conditional sale. The question stands answered accordingly. The impugned judgment and decree passed by the lower appellate court is hereby quashed and set aside. The judgment and decree passed by the trial court stands restored and the suit stands dismissed. The decree shall be drawn, accordingly.
( Harsha Devani, J. ) hki