ORDER Janardan Sahai, J.
1. The plaintiff Smt. Beni Bai is a widow. Ram Charan Lal her husband was the owner of two houses numbered 135 and 136 in Mohalla Nai Basti, Jhansi. House No. 135 was purchased by her husband in the year 1953 in a court auction for a sum of Rs. 1150 and house No. 136 was purchased by him in the year 1958 for a sum of Rs. 250/-. Defendant No. 4 Sri Ram Rastogi is a moneylender. Ram Charan Lal borrowed some money from Sri Ram Rastogi, which he could not repay. In the year 1966, Ram Charan Lal executed a sale deed of the two houses in favour of Sri Ram Rastogi for a consideration of Rs. 500/-. Ram Charan Lal died in 1980. After his death both the houses were sold by Sri Ram Rastogi to defendant No. 1 Smt. Bhagwan Devi for a sum of Rs. 8,000/-. The defendant No. 2 Narain Das Verma, husband of Bhagwan Devi, was a tenant of house No. 135 and defendant No. 3 Bhaiya Lal was a tenant of house No. 136. Their tenancy was continuing since the days of Ram Charan Lal. After the sale deed in favour of Smt. Bhagwan Devi. The plaintiff Smt. Beni Bai, widow of Ram Charan Lal filed a suit for declaration that Ram Charan Lal was the owner of the two houses and that the sale deed executed in the year 1966 by him in favour of defendant No. 4 Sri Ram Rastogi and the subsequent sale deed executed by Sri Ram Rastogi in favour of defendant No. 1 Smt. Bhagwan Devi in the year 1980 were void documents.
2. The plaintiff's case is that Ram Charan Lal was an illiterate person and could only write his name and that defendant No. 4 who was a moneylender had advanced him a sum of Rs. 500/-, to secure which, a mortgage deed was intended to be executed by Ram Charan Lal but defendant No. 4 played fraud and obtained a sale deed from him. The case of the defendant-appellants Bhgwan Devi and Narain Das is that the transaction in question was a sale out right and not a mortgage and that no fraud was practiced upon Ram Charan Lal. It was also alleged that an agreement was executed by defendant No. 4 Sri Ram Rastogi to reconvey the property In favour of Ram Charan at his option to be exercised within a period of three years but Ram Charan failed to get it reconveyed. Similar stand was taken in the written statement filed by defendant No. 4 Sri Ram Rastogi.
3. The trial court dismissed the suit holding that fraud was not established and that the nature of the transaction was not of mortgage but that of a sale out right. The trial court relied upon an admission made by the plaintiff Smt. Beni Bai that she had knowledge of the sale deed for the past 20-25 years and held that the suit was barred by limitation. The plaintiff preferred an appeal, which was allowed. The lower appellate court has held that the sale deed was executed as a security for the loan and that the transaction was not a sale but a mortgage. In recording this finding, the lower appellate court has considered the oral evidence of the parties and also the material facts and circumstances. It has also been found by the lower appellate court that the defendant Bahgwan Devi is not a bonafide purchaser
4. I have heard Shri B.N. Agarwal counsel for the defendant-appellants and Shri A.N. Bhargava, counsel for the plaintiff-respondent No. 1. The appeal was admitted on two substantial questions of law. They are:
i) Whether the lower appellate court was legally correct in reversing the judgement of the trial court and holding that the transaction entered into between the deceased husband of the plaintiff and the vendor of the appellant was a mortgage?
ii) Whether in absence of any document on record to show that there was any agreement between the parties to the said sale that there was an agreement for resale of the property, the court could correctly assume that the transaction amounted to mortgage by conditional sale?
Subsequently a third question was framed at the time of hearing.
This question is:
iii) Whether on the facts and circumstances mentioned in the plaint, the relief claimed in the plaint for declaration of the sale deed as null and void could be granted, inasmuch as from the pleadings it is clear that the foundation of the suit is that the registered sale deed dated 30.3.1966, was in fact a mortgage executed to secure the amount borrowed by the plaintiff predecessor?
5. Question No. (i): Whether the lower appellate was legally correct in reversing the judgement of the trial court and held that the transaction entered into between the deceased husband of the plaintiff and the vendor of the appellant was a mortgage?
6. It is submitted by Shri B.N. Agarwal counsel for the appellants that the appellate court has merely set aside the decree without meeting the findings recorded by the trial court. I am not inclined to accept this contention. It has been found by the appellate court that the sale deed was executed as a security for the loan. For coming to this conclusion the appellate court has analysed the evidence and has set out a chain of circumstances. In a nutshell these circumstances are:- (i) House No. 135 which contained a substantially built up portion was purchased in the year 1953 by Ram Charan Lal for a sum of Rs. 1150 in a court auction, in which, it is common knowledge, properties fetch less than their real market value. The other house was purchased by Ram Charan Lal in the year 1958 for a sum of Rs. 250/-. The sale of these houses after 13 years and 8 years respectively during which time property prices had been going up, for a total sum of Rs. 500/- alone, clearly indicates that the properties had been sold at a price far below their market value. One of the tests applied for clearing the confusion between a transaction of mortgage described as a sale on the one hand and a real sale on the other is the consideration paid for the property in relation to its market value. If the transfer is made for a consideration far below the market value of the property it suggests of a mortgage even though it is described as a sale. In this case the property was sold for a sum far below its market value. (2) Moreover Narayan Das the tenant of house No. 135 continued to pay rent at the rate of Rs. 18/- per month to Ram Charan Lal upto the year 1976 and subsequently he began depositing the rent under Section 30 (2) of Act No. 13 of 1972 in court. The other tenant Bhaiya Lal continued to pay rent at the rate of Rs. 10/- per month to Ram Charan until Ram Charan was alive. In case the two houses had been actually sold to Sri Ram Rastogi it is difficult to understand why he did not start realizing the rent from the tenants - Narayan Das and Bhaiya Lal. (3) It has also beens found that Sri Ram Rastogi did not get his name mutated over the properties in dispute, which he would have got done had he really purchased them. He also did not pay the taxes no effected repairs. All this was done by Ram Charan. (4) The defendants relied upon a rent note dated 30.3.1966 by which Ram Charan is said to have taken the two houses on a rent of Rs. 30/- from Sri Ram Rastogi on the same date when Ram Charan Lal executed the sale deed of the two houses in favour of Sri Ram Rastogi. I have examined the rent note. Undisputedly, the two houses were in occupation of the tenants Narayan Das and Bhaiya Lal who were paying Rs. 18 and Rs. 10 to Ram Charan. It is difficult to understand why Ram Charan would have executed the rent note for Rs. 30/- per month as rent, agreeing also to pay the taxes and to spend on repairs when the houses were in actual occupation of the tenants who were paying Ram Charan less than Rs. 30/-. The lower appellate court has inferred from the circumstances that the sum of Rs. 30/-, which was paid by Ram Charan for some time, was really interest for the loan. The rent note it appears therefore was not intended to create any relationship of landlord and tenant. (5) Reliance has also been placed by the appellate court upon the statement of Suraj Singh, brother of Ram Charan Lal that defendant No. 4 Sri Ram Rastogi was a moneylender and that his practice was of getting sale deeds executed to secure the loans advanced by him. Suraj Singh had himself borrowed money from Sri Ram Rastogi and had executed a sale deed to secure the loan. An agreement was also executed. Both the documents were kept by Sri Ram Rastogi. Later on when the money was repaid by Suraj Singh the deed was re-turned to him. Suraj Singh produced from his custody the original sale deed executed by him. The lower appellate court has also made reference to three other instances similar to that of Suraj Singh wherein sale deeds were obtained from the borrowers to secure the loan given to them and later on the properties sold were reconveyed to the borrower's son or wife. These facts show that obtaining a sale deed from the borrower was the usual mode by which Sri Ram Rastogi would secure the loans advanced by him. The sale deeds were not intended to convey any ownership rights but were obtained for the purposes of the money lending business carried on by Sri Ram Rastogi to secure the repayment of the loan. It has also been found that Ram Charan Lal continued to be in possession of the properties in dispute. These facts and circumstances and the oral evidence relied upon are sufficient to sustain the finding of the appellate court that the sale deed was obtained to secure the loan. In view of this finding that the sale deed was obtained as a security for the loan and was not intended to convey any absolute title, the question of the suit being barred by limitation does not arise. For the same reason if the sale deed was executed by Ram Charan Lal as a security for the loan the omission of Ram Charan Lal to challenge the deed in his life time is well explained and is of no consequence. Having given effective reasons for differing with the view of the trial court it was not necessary for the first appellate court to have dealt with mechanically with each and every point considered by the trial court it was not necessary for the first appellate court to have dealt with mechanically with each and every point considered by the trial court in support of its finding. While it is true that when reversing a finding an appellate court should advert to the material facts and circumstances which weighed with the trial court to show application of mind but a mechanical approach is not expected. The trial court found that fraud was not proved by the plaintiff and therefore Sri Ram Rastogi had become owner on the basis of the sale deed executed by Ram Charan. The approach of the trial court is not quite correct in the face of the evidence regarding the manner in which Sri Ram Rastogi carried on his money lending business and as the trial court failed to examine material facts and circumstances. In A.I.R. 1936 Privy Council 70 Tyagaraja Mudaliyar and Anr. v. Vedathanni, the validity of a maintenance deed was challenged by the plaintiff on the ground that it was understood between the parties that the document was not to be the final contract for the plaintiff's maintenance. It was held that if a party to an agreement embodied in a document is told that any stipulation in the agreement embodied in a document is told that any stipulation in the agreement would not be enforced, he cannot be held to have assented to it. The document does not amount to real agreement between the parties and the other party cannot sue on it. The decision has been followed by a Division Bench of our court in Yadav Ram v. Laxman Singh Bisht. It was held in that case that whether transaction is sham or fictitious and not real may be proved by inferences which may reasonably be drawn from the intrinsic evidence respecting the transaction itself or from extrinsic circumstances surrounding the transaction. Oral evidence is admissible therefore to show that a document executed by a person was never intended to operate as an agreement, but was brought into existence solely for the purpose of creating evidence about some other matter. The reasons given by the appellate court are strong and weighty and there is no good reason to differ from the view taken by it. The question is therefore answered against the defendant-appellants.
7. Question No. (ii): Whether in absence of any document on record to show that there was any agreement between the parties to the said sale that there was an agreement for resale of the property, the court could correctly assume that the transaction amounted to mortgage by conditional sale?
8. It was submitted by Shri B.N. Agarwal counsel for the appellants that there were three documents executed on 30.3.1966. One is the sale deed executed by Ram Charan Lal in favour of defendant No. 4 Sri Ram Rastogi, the other is a rent note executed in favour of defendant No. 4 and the third is an agreement of reconveyance executed by defendant No. 4 in favour of Ram Charan Lal. On its terms the sale deed in this case, it is submitted, cannot be considered as a mortgage by conditional sale. Section 58(c) of the Transfer of Property Act defines a mortgage by conditional sale, as follows:
58. 'Mortgage', 'mortgagor', 'mortgagee', 'mortgage-money' and 'mortgage-deed' defined
(a) xxx xxx (b) xxx xxx 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 sale.
9. Shri B.N. Agarwal relying upon Section 58(c) of the Transfer of Property Act contends that in this case the agreement to reconvey the property executed by Sri Ram Rastogi was a separate document and the condition for reconveyance was not incorporated in the sale deed and therefore the document could not have been regarded as mortgage by conditional sale. In my view the submission does not have any force and is also misconceived, as it is not the finding of the lower appellate court that the transaction was a mortgage by conditional sale. In their written statement the defendants No. 1 and 2 as well as the defendant No. 4 had stated that an agreement to reconvey the property was executed by Sri Ram Rastogi in favour of Ram Charan Lal. The lower appellate court relied upon the statement of Narain Das, the second defendant in the case that he was shown the copy of the reconveyance deed by Sri Ram Rastogi, defendant No. 4. Suraj Singh PW4 has stated that defendant No. 4 Sri Ram Rastogi used to keep the conveyance and the agreements with himself. The appellate court has relied upon this statement. It was therefore for the defendants to have produced the agreement of reconeyance to prove its terms. Assuming however that it was copy of the agreement, which was in possession of defendant No. 4 which had been seen by defendant no. 2, the said copy could have been filed by the defendants if the original was not with them. Neither the original nor the copy of the agreement has been filed.
10. Counsel for the appellant submitted that the lower appellate court has based its decision upon Indra Kaur v. Sri Lal Kapoor , which is inapplicable to this case. There appears to be some merit in this contention. In Indra Kaur's (supra) case, the suit was for specific performance of an agreement of reconveyance and the court did not base its decision upon Section 58(c) of the Transfer of Property Act. No doubt certain inferences have been made by the Apex Court in that case relying upon circumstances almost similar as those in the present one that the nature of the transaction in that case was a mortgage but that finding was not the basis of the decision. In Museer Mohd. Khan v. Sajeda Bano relied upon by Sri B.N. Agarwal a sale deed was executed by the plaintiff in favour of the defendant and an agreement of reconveyance was executed by defendant in favour of the plaintiff and a rent note was also executed by the plaintiff in favour of the defendant. The question was whether the transaction was a sale outright or a mortgage by conditional sale. The first appellate court found that it was a sale. The High Court reversed the finding and held that it was a usufructuary mortgage. The Apex Court observed that in an usufructuary mortgage, possession has necessarily to be delivered to the mortgagee but an agreement for reconveyance is not obtained from him. On facts it was found by the apex court that the transaction was a sale outright. Section 58(c) of the Transfer of Property Act was applied and it was held that the condition of reconveyance not being incorporated in the sale deed the transaction could not be deemed a mortgage by conditional sale. This decision is distinguishable on facts. In that case it was not disputed that there was a deed of reconveyance about the terms of which also there was no dispute. In the present case the alleged deed of reconveyance has not been filed and its terms are not known. The evidence which has been believed by the lower appellate court in the present case is that Sri Ram Rastogi was a money lender. It was his practice to obtain such documents as a sale deed from the borrowers and to execute reconveyance agreement to secure the loans given him. The sale deed and rent note were never intended to be acted upon on the terms they contained. They did not reflect the intention of the parties. The appellate court has referred to a host of circumstances which established that Sri Ram Rastogi never acted as the owner on the basis of the sale deed. He never got his name mutated. He never realized the rent from the tenants. Rather the tenants continued to pay rent to Ram Charan. In the rent note there is a condition that Ram Charan would pay all the taxes and spend on repairs. The lower appellate court has referred to the defendant's evidence that Ram Charan paid rent for 3-4 years and then stopped payment. But no steps were taken by Sri Ram Rastogi to realise the rent from Ram Charan. On facts it has been found that what Ram Charan had in fact paid was interest and not rent.
11. Reliance was also placed upon Uma Bai and Anr. v. Nilkanth Dhondiba Chavan (dead) by LRs and Anr. . In that case it was held there exists a distinction between a mortgage by conditional sale and a sale with a condition of repurchase. In a mortgage the debt subsists and a right to redeem remains with the debtor but in a sale with a condition of repurchase there is no relationship of debtor and creditor. Uma Bai's case is also not applicable to the facts of the present case. In Uma Bai, the proviso to Section 58(c) was relied upon as there was a separate reconveyance agreement and the condition for transfer was not embodied in the sale deed. The observations of the Apex Court were made in the facts of that case in is which the question was whether the transaction was a mortgage by conditional sale or sale outright. It is to be noted that in the present case it has not been found by the appellate court that transaction was a mortgage by conditional sale. The decision is cited by Sri B. N. Agarwal have no application on facts as it has been found that the documents executed by Ram Charan were never intended to operate on the terms they purport to contain. Sri. Ram Rastogi was obtaining these documents to secure the loan advanced by him. The oral evidence of Suraj Mal has been believed by the lower appellate court.
12. It was then submitted that Section 92 of the Evidence Act precludes oral evidence being considered against the terms of the sale deed. Section 92 of the Evidence Act forbids leading of oral evidence against the terms or conditions contained in the contract but it does preclude oral evidence being led to prove the character of the document. It is open to a party to prove that the nature of the document was not really that which it purports to be. Thus it is open a to party to show by oral evidence that the document is sham and it was never meant to be acted upon. Rather oral evidence cannot be led to prove the terms of a contract reduced into writing in view of Section 91 of the Evidence Act. In this case the agreement of reconeyance was relied upon by the defendant but they failed to produce either the original or the copy of the document. The lower appellate curt was therefore right in holding that the sale deed was obtained to secure the loan. The lower appellate court has not held that the transaction was a mortgage by conditional sale. The finding is not affected by Section 58(c) of the Transfer of Property Act. The second question is therefore answered against the appellants.
13. Question No. (iii):- Whether on the facts and circumstances mentioned in the plaint, the relief claimed in the plaint for declaration of the sale deed null and void could be granted, inasmuch as from the pleadings it is clear that the foundation of the suit is that the registered sale deed dated 30.3.1966, was in fact a mortgage executed to secure the amount borrowed by the plaintiff predecessor?
14. It was submitted by Shri B.N. Agarwal counsel for the appellants that the averments made in the plaint were that Ram Charan Lal had borrowed a sum of Rs. 500/ - from the defendant No. 4 and that a mortgage deed was intended to be executed but instead by playing fraud the defendant No. 4 got the sale deed executed. This being the plaint case, the plaintiff ought to have sought the relief for redemption of the mortgage. To advance this contention Shri Agarwal relied upon Section 60 of the Transfer of Property Act, which provides that at any time after the principal money has become due, the mortgagor has a right, on payment or tender, at a proper time and place, of the mortgage-money, to require the mortgagee to deliver to the mortgaged property which are in the possession or power of the mortgagee. He submits that the prayer in the plaint is not consistent with the averments made in the body of the plaint. Reliance is placed upon N.V. Srinivasa Murthy and Ors. v. Mariyamma (dead) by proposed Lrs and Ors. In that case a sale deed was executed by the plaintiff in favour of defendant and a deed of reconveyance was also executed by the defendant in favour of the plaintiff. The relief sought was for a declaration that the plaintiffs were absolute owners of the suit lands and for permanent injunction restraining the defendants from wrongfully entering the scheduled property and from interfering with the peaceful possession and enjoyment of the scheduled lands by the plaintiffs. It was held by the Apex Court that the proper relief for the plaintiff to claim was a declaration that the sale deed in question was actually a loan transaction or to claim specific performance of the oral agreement of reconveyance.
It was held that the plaintiff having not sought any of the aforesaid reliefs', the plaint was liable to be rejected. This decision also does not apply to the facts of present case. In N.V. Srinivasa Murthy's case no relief for declaration that the sale deed is void was sought and the only declaration sought was for the title of the suit property. The present suit is for a declaration that the sale deeds in question are void. Such a declaration was necessary on the facts of this case. The sale deeds in question had cast a cloud upon the plaintiff's title. Sri Ram Rastogi had executed the sale deed in favour of the appellant on the strength of the title which he claims to have acquired by the sale deed executed by Ram Charan. The finding is that the sale deed was obtained from ram Charan merely as a security for the loan. The sale deed was not intended to convey the ownership rights to Sri Ram Rastogi. The sale deed by Sri Ram Rastogi in favour of Bhagwan Dei was therefore also void. The relief for declaration that the sale deeds are void sought in the suit cannot therefore be faulted with. That apart the finding of fact recorded by the lower appellate court is that the interest on the loan was paid by Ram Charan in the form of rent of the property for 3-4 years at the rate of Rs. 30/- per month. The suit has been decreed on the condition that the plaintiff will deposit interest at the rate of 15% per annum from 1.4.1970 onwards as well as the principal sum of the loan of Rs. 500/-. The decree thus fully protects the interest of the appellants.
15. Turning now to Sri B.N. Agarwal's argument based on Section 60 of the Transfer of Property Act. The offer of payment of money and prayer for return of the mortgage deed is contemplated in a case where a deed executed is in terms a mortgage deed. In the present case that is not so. The document in question is described as a sale deed although its real nature was different and it was meant to be a security for the loan. The relief for return of the mortgage deed contemplated in Section 60 was therefore not the appropriate relief. For this reason the declaration sought by the plaintiff is the proper relief and not the relief for return of the documents. The deed was creating a cloud upon the title of the plaintiff, as it purports to be a sale. The declaration sought by the plaintiff was therefore proper.
16. The appeal therefore lacks merits and is accordingly dismissed.