Common Prayer in S.A.Nos.608 to 611 of 1995:
Appeal filed under Section 100 Code of Civil Procedure against the Judgment and decree of the learned Subordinate Judge, Chidambaram passed in A.S.21,22,23,24/94 dt.23.12.1994 reversing the judgment and decree of the Learned District Munsif, Chidambaram, passed in O.S.11,12,29,30 of 1989 dt.28.02.1994.
For appellants : M/s.J.Antony Jesus for K.Srinivasan For respondents : Mr.Srinath Sridevan COMMON JUDGMENT The respondents in second appeal nos.608 and 609 of 1995 filed the suits in O.S.Nos.29 and 30 of 1989 praying for permanent injunction as against the appellants therein. The appellants in second appeal no.610 of 1995 filed the suit in O.S.No.11 of 1989 and the appellant in S.A.No.611 of 1995 filed O.S.No.12 of 1989 seeking for a direction to the respondents therein either to receive the sum of Rs.5,000/- deposited by the appellants into court and deliver possession of the suit properties to the appellants or in the alternative to receive the sum of Rs.5,000/- in discharge of the mortgage and execute sale deed in favour of the appellants and deliver vacant possession of the suit property.
2.The plaintiffs in O.S.No.29 and 30 of 1989 were non-suited by the trial court. The defendants in O.S.No.11 and 12 of 1989 suffered a decree. The first appeals preferred by the plaintiffs in A.S.Nos.23 and 24 of 1994 preferred by the plaintiffs in O.S.Nos.29 and 30 of 1989 respectively were allowed. The appeals in A.S.Nos.21 and 22 of 1994 preferred by the defendants as against the judgment in O.S.Nos.11 and 12 of 1989 were also allowed. The present second appeal nos.608 and 609 of 1995 have been preferred by the defendants in O.S.Nos.29 and 30 of 1989 and the S.A.Nos.610 and 611 of 1995 were preferred by the plaintiffs in O.S.Nos.11 and 12 of 1989.
3.It is the case of the appellants that they having received a sum of Rs.5,000/- as loan instead of executing a mortgage deed as the Debt Relief Act was in force, as demanded by the respondents, executed a Deed of conditional sale. The suit properties are valued at Rs.11,000/-. But the sale deed was executed with the condition that the respondents would reconvey the property to the appellants after four to five years. Inspite of the demand made by the appellants right from the month of August 1985 to reconvey the suit properties, the first respondent refused to do it. The second respondent who claims to be in possession of the suit property was never in possession of the same. With the aforesaid pleadings, the appellants seek for the prayers as stated supra.
4.The respondents resisted the claim of the appellant. They would submit that on payment of sale consideration of Rs.5,000/- by the first respondent to the appellants, the latter executed the sale deed. They dispute, the claim of the appellants that the market value of the suit property was Rs.11,000/- on the date of the sale. It is contented that only after negotiations, the price was fixed at Rs.5,000/- which was the prevailing market value. The first respondent having become the absolute owner of the suit properties got possession of the same and has been in possession and enjoyment through the second respondent who is a cultivating tenant of the suit properties. The appellants fail to exercise their right of reconveyance reserved in the sale deed within the stipulated period. There was no demand made by the appellants for reconveyance. The first respondent had made improvements in the lands by spending more than Rs.2,000/-. The suit is hopelessly barred by limitation. With the aforesaid pleadings, the respondents seek to dismiss the suit.
5.The trial court having adverted to the evidence on record has returned a finding that Exhibit A1 is a Deed of Mortgage by conditional sale and the second respondent has not established that he has been in possession and enjoyment of the suit property.
6.In the appeal preferred by the respondents herein, the First Appellate Court having adverted to the evidence on record arrived at a conclusion that the value of the suit property was only Rs.5,000/- at the time of execution of sale deed Exhibit A1. The attending circumstances also were referred to by the first Appellate Court to fortify its finding that Exhibit A1 is only a sale deed executed with the condition to reconvey the suit property within the time frame fixed therein. The First Appellate Court also found that the suits filed by the appellants are hopelessly barred by limitation as there was no demand made by the appellants to execute the sale deed within the specified period stipulated in the sale deed Exhibit A1.
7.The following common substantial questions of law were framed at the time when all these four appeals were admitted by this court.
"1.Whether the findings of the Lower Appellate court holding that Ex.A.1 is an outright sale and not mortgage by conditional sale under
section 58(c) of the Transfer of Property Act, is vitiated by its failure to consider the specific recitals in Ex.A.1 and the presumption in law that a transaction embodying a condition for repurchase is only a mortgage by conditional sale.
2.Whether the lower appellate court is right in holding that the suit is barred by Limitation."
8.The learned counsel appearing for the appellant would submit that P.W.2 and P.W.3 have spoken to the that there was only a mortgage by conditional sale contemplated by the appellants and the first respondent. The evidence of P.W.2 and P.W.3 were not properly considered by the First Appellate Court, it is submitted. Though Exhibit B10 to B12 were produced by the respondents to show that the guideline value for the suit properties and other properties in the same area was fixed only at Rs.5,000/-, the same cannot be treated as market value. The very fact that the adangal and the chitta still stand in the name of the appellants would go to show that the parties clinched only a deed of mortgage by conditional sale under Exhibit A1. It is his further submission that the stamp duty and the registration charges borne by the first respondent for execution of the sale deed Exhibit A1 will not alter the character of the deed of mortgage by conditional sale intended by the parties. It is further submitted that the second respondent was set up by the first respondent in order to knock away the right and title of the appellants. Therefore, he would submit that the judgment of the First Appellate Court is liable to be set aside.
9.Per contra, the learned counsel appearing for the respondents would vehemently submit that the appellants fail to establish the existence of debtor and creditor relationship between the appellants and the first respondent in order to drive home the point that Exhibit A1 is nothing but a deed of mortgage by conditional sale. Outright sale with a condition of re-conveyance is totally different from a mortgage by conditional sale. The transaction under Exhibit A1 clinched by the parties falls squarely under the category of absolute sale with a condition for re-conveyance. Exhibit B10 to B12 would establish that the market value of the suit property was only Rs.5,000/- and not Rs.11,000/- as contended by the appellants. The very fact that the first respondent chose to bear the expenditure towards stamp duty and the registration charges for execution of Exhibit A1 would go to unerringly indicate that the parties intended to clinch an absolute sale transaction, of-course with a condition for re-conveyance and not mortgage by conditional sale. There was no restriction put on the enjoyment of the property admittedly handed over to the first respondent by the appellants. Therefore, the learned counsel appearing for the respondents would submit that there is no necessity to interfere with the well considered judgment of the First Appellate Court.
10.These appeals can be disposed of by proper interpretation of the terms of the conditional sale deed Exhibit A1 executed by the appellants in favour of the first respondent. Of-course the attendant circumstances will also have to be borne in mind while determining the intentment of the parties while clinching the conditional sale transaction under Exhibit A1.
11.The appellants would contend that the Exhibit A1 is a mortgage by conditional sale. Whereas, the respondents would set up a plea that it is an absolute sale with a condition attached for re-conveyance within a stipulated period.
Section 58(c) of The Transfer of Property Act, 1882 which speaks of mortgage by conditional sale reads as follows:
"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 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.Exhibit A1 is titled as a conditional sale. Of-course, the nomanclature assigned to a particular document will not determine the real transaction clinched by the parties. The content of the document will have to be gone into deeply to arrive at a conclusion whether the content of the document matches with the nomanclature.
13.Firstly, it is found that Exhibit A1 does not even distantly refer to the debtor and creditor relationship that existed between the parties and the first respondent. The document speaks about the receipt of consideration of Rs.5,000/- and the absolute sale made by the appellants in favour of the first respondent. Absolute right and title was conferred on the first respondent under Exhibit A1. The enjoyment of the property entrusted to the first respondent was not saddled with any condition. Absolute entrustment of the suit property with un-restricted enjoyment thereof by first respondent was contemplated under the conditional sale deed Exhibit A1. Of-course there is a Clause in the conditional sale deed Exhibit A1 that the first respondent shall re-convey the property described under Exhibit A1 after the payment of a sum of Rs.5,000/- by the appellants to the first respondent after a period of four years but before the expiry of five years. If such re-conveyance was not made on account of the failure on the part of the appellants to pay the sum of Rs.5,000/- to the first respondent, it has been stated thereunder that the first respondent becomes the absolute owner of the suit property.
14.The admitted fact is that it was only the first respondent who paid the stamp duty and the registration charges for the execution of the sale deed Exhibit A1. The normal practice is that it is only the mortgagor who would bear the stamp duty and registration charges for execution of the mortgage deed but as far as the execution of the sale deed is considered it is only the purchaser who would bear the stamp duty and the registration charges. Quite against such a normal practice Exhibit A1 contemplates that the appellants would bear the entire stamp duty charges and the registration charges for execution of the re-conveyance deed.
15.Exhibits B10 to B12 would establish that the market value of the suit property is only Rs.5,000/- at the time when the conditional sale deed Exhibit A1 was executed. There is no dispute to the fact that the guideline value for the suit properties at the time of execution of Exhibit A1 was only Rs.5,000/-. Therefore, it is found that the sale deed Exhibit A1 was executed for the total consideration of Rs.5,000/- paid by the first respondent in favour of the appellants.
16.Of-course, the adangal and chitta extracts still stand in the name of the appellants. There is no dispute to the fact that the possession of the suit properties were handed over to the first respondent on the date of execution of the Exhibit A1. The admitted position of the parties belies the entries in the revenue record namely, the adangal which stands in the name of the appellants. Just because there was no mutation of revenue records in the name of the first respondent, we cannot come to a conclusion that the mutation did not take place as the parties clinched only a mortgage transaction with conditional sale under Exhibit A1. Of-course, P.W.2 and P.W.3 would depose that the parties clinched only mortgage transaction. But the oral testimony of P.W.2 and P.W.3 goes against the spirit of Exhibit A1 and the attendant circumstances made available in this case.
17.There is a lot of difference between mortgage by conditional sale as contemplated under
section 58 (c) of The Transfer of Property Act, 1882 and the absolute sale with a condition of re-conveyance. The facts and circumstances of this case would indicate that Exhibit A1 is a deed of absolute sale with a condition for re-conveyance on payment of the consideration contemplated thereunder.
18.The learned counsel appearing for the appellants cited the decision in Chennammal Vs. Munimalaiyan and others (2006)2 M.L.J. 7 (S.C.). It was observed therein as follows:
"16.A careful perusal of the document would clearly show that the document has been couched in a simple Tamil language. The recitals are clear and unambiguous. It is seen from the document that Munimalaiyan was unable to discharge the simple mortgage. Pancha-yatdars intervened and amicable settled the matter. A deed was executed thereupon by Munimalaiyan in favour of the appellant herein and in and by the said deed one of the properties which was given as security for the simple mortgage was sold to the appellant with a right reserved to the said Munimalaiyan to re-purchase the same within a period of 3 years on payment of Rs.3,000/-. The right to redeem the property within a period of 3 years was specifically reserved. The recitals, in our opinion, would only show that the deed in question is not a deed of sale but a mortgage by conditional sale."
19.That was a case where the mortgagor who already executed simple mortgage could not discharge the loan obtained by him thereunder. At the intervention of the panchayatdars the dispute was settled and the property given as security for the simple mortgage was sold to the appellant therein with a right reserved for the mortgagor to re-purchase the property. The recital in the document referred to in the aforesaid decision gives ample scope to conclude that there existed a relationship of debtor and creditor between the mortgagor and the mortgagee. In the instant case, no such relationship could be established by the appellants.
20.The learned counsel appearing for the appellants cited yet another decision in Srinivasaraghavan alias Srinivasa Chakravarthi and others Vs. Kalianna Goundan and others 1946 II M.L.J. 75. That was a case where a transaction of usufructuary mortgage with the right of redemption at the end of five years was specifically contemplated in the document referred to therein. The parties contemplated to vest ownership only on the failure to redeem the property by the mortgagor. The mortgagee was given only a conditional enjoyment in the mortgaged property. In such circumstances, the deed of conditional sale was considered as a deed of mortgage by conditional sale in the aforesaid case.
21.The observations made in those decisions will not apply to the facts and circumstances of this case where there was no debtor and creditor relationship contemplated in the transactions of the parties nor was there any restricted ownership or possession entrusted by appellants to the respondent.
22.In B.A.Khan alias Bahadur Ali Khan Vs. Nawaz Khan and others 1956 I MLJ 388, it has been held as follows:
"There are five circumstances in this case showing the document under consideration is a mortgage by conditional sale. First of all, the period fixed for re-payment, viz., six years cannot be considered to be a long period for a mortgage in the circumstances of this case, because the document was executed in 1937 which was a period of economic depression. In fact Madras Act IV of 1938 and other ameliorative measures came into existence for that reason. Though generally speaking a short period is indicative of sale and a long period of a mortgage, in the context in which this document has been executed the period seems to be indicative of a mortgage. Secondly, the amount agreed upon as the price of repurchase is the same as the consideration for the original sale and this is generally considered to be a circumstance indicative of a mortgage by conditional sale. Thirdly, the fact that the document has been drafted in the form of a sale deed would not make any difference because a mortgage by conditional sale is an ostensible sale; that is, it is executed in the form of sale with a condition attached to it. Fourthly, the fact that there are no two documents in this case but only one in which the condition regarding repurchase is embodied would be indicative of the transaction not being an outright sale. Fifthly, there is another point in favour of the appellant and that is that the surrounding circumstances show that there was the relationship of debtor and creditor between the parties existing at the date of the suit transaction."
23.That was a case where the relationship of debtor and creditor between the parties existed on the date of the disputed transaction. In the present case, as already held, the sale deed Exhibit A1 was executed at the expenses borne by the first respondent. The charges for re-conveyance was specifically directed to be borne by the appellants. Therefore, the subject transaction is found to be an absolute sale with a condition for re-conveyance and not a mortgage by conditional sale and therefore the aforesaid observations of this Court in the above case will not apply to the facts and circumstances of this case.
24.In Sokkuthai Ammal and another Vs. Pandiaraj and others 1997 II MLJ 136 the stamp papers for the execution of the mortgage by conditional sale was purchased in the name of the mortgagor himself. Here in the instant case the entire stamp duty and the registration charges for the execution of Exhibit A1 were borne by the first respondent. There is also an averment in Exhibit A1 that the re-conveyance will be done at the expenses of the appellants herein. In the aforesaid case, absolute right of possession was not handed over to the mortgagee, but in the instant case, as already pointed out, the first respondent was given absolute right of enjoyment without any restriction whatsoever. Therefore, the aforesaid decision of this Court also will not apply to the fact and circumstances of this case.
25.Exhibit A1 was executed on 24.06.1981. The conditional sale deeds Exhibit A1 marked in the respective suits were executed on 24.06.1981 and 02.07.1981 respectively. The time frame fixed under the document Exhibit A1 for re-conveyance is four to five years. There is also a condition that if the amount of Rs.5,000/- is not paid and re-conveyance is not executed within the aforesaid time frame, the first respondent will become the absolute owner of the suit property. The time fixed under Exhibit A1 marked in the respective suits expired on 23.06.1986 and 01.07.1986 respectively. The appellants have not whispered anything for about two long years even after the expiry of the time frame fixed under Exhibit A1. Only on 01.09.1988 they issued a notice calling upon the first respondent to reconvey the property as contemplated under Exhibit A1. A lame excuse is projected by the appellants that the first respondent kept on postponing the execution of re-conveyance on the pretext that he had to harvest the produce in the field. Such a reason is not found to be plausible as more than two years have lapsed from the date of expiry of the time stipulated under Exhibit A1. There is no crop which last long for two long years to mature for its harvest. Therefore, the excuse given by the appellants does not appeal to the mind of this Court.
26.In this context, it is quite relevant to refer to the decision of this court in N.Pattay Gounder Vs. P.L.Bapuswami A.I.R.1961 Madras 276 wherein it has been categorically held as follows:
"Considered as a mortgage by conditional sale, it is admitted the suit is not barred. Thus either way the suit is not barred by limitation." In my opinion, this is obviously a misdirection. Where the condition for repurchase has under the terms of the agreement to be performed within the stipulated time and the time limit has not been adhered to with the result that the right is lost, I fail to see what the Limitation Act has to do with it.
Sri.K.S.Desikan, the learned counsel for the plaintiff-respondent referred me to Sec.4 and
Article 113 of the Limitation Act and contended that as the Court remained closed on 28-5-1953, the suit filed on the date of the reopening should be considered to be within time. In my opinion, the argument has only to be stated to be rejected. The period fixed in the document is a condition for the performance and after the expiry of the period, the right reserved is itself at an end. The period fixed in the deed is not the period of limitation prescribed for any suit.
Section 4 of the Limitation Act can, therefore, have no application to the present case.
No offer was made at any time within the stipulated period by tendering the required amount for repurchase. There is nothing in Ex.A-8 to which my attention was drawn by Sri.K.S.Desikan to show that any offer or tender was made by the plaintiff within the stipulated time to repurchase the property. That being the case, and the right to re-purchase having been lost after the expiry of the period, by reason of the very terms of the covenant, it seems to me that
Art.113 of the Limitation Act can have no application. The plaintiff having defaulted and as a result lost the right to repurchase, he cannot resurrect and save the right by resort to the Limitation Act."
27.This court has already laid down that the law of limitation will not have any application in a case where re-conveyance has been contemplated within a stipulated time in the deed of conditional sale. The moment the performance contemplated therein could not be executed on account of expiry of the period referred in the deed the right reserved under the conditional sale comes to an end. As already pointed out by this court, the time fixed under Exhibit A1 expires on 23.06.1986 and 01.07.1986 respectively. After two long years, the appellants have issued a notice calling upon the first respondent to re-convey the property.
28.As rightly pointed out by the learned counsel appearing for the respondents, the suit filed after the expiry of the period contemplated under Exhibit A1 is hopelessly barred by limitation.
29.As regards the plea set up by the second respondent that he has been let in possession of the suit property in his capacity as cultivating tenant does not have a leg to stand upon in as much as no evidence worth referring to is forth-coming from the second respondent to establish that he started enjoying the suit property as cultivating tenant.
30.The substantial questions of law are decided against the appellants. Therefore, confirming the judgments of the First Appellate Court, the second appeals nos.608 to 611 of 1995 stand dismissed. There is no orders as to cost.
05.11.2009 Index:Yes/No Internet:Yes/No pri To
1. The learned Subordinate Judge, Chidambaram.
2. The Learned District Munsif, Chidambaram.
M.JEYAPAUL,J pri S.A.Nos.608 to 611 of 1995 05.11.2009