Respondent failed to pay the amount within period of 10 years then the
Respondent would lose the rights to the property and the Appellant will
become owner thereof. There cannot be a dispute regarding this position
as it is the clear recital in the deed. Both the Courts have rendered a
factual finding that the Respondent – Plaintiff did not make any attempt
to pay the amount within period of 10 years. When the Civil Judge
recorded this finding, the Respondent did not file any cross-objection.
Same is the position in this Second Appeal. The District Judge has also
confirmed that the Respondent did not pay the amount within period of
10 years. The learned Counsel for the Respondent contended that the
Respondent had gone with the amount but he was turned away by the
Appellant. This version has not been accepted by both the Courts and
this factual finding has become final. Both the Court after rendering this
factual finding failed to give effect to the sequitor. The sequitor being
that the sale had become absolute. Nothing stopped the Respondent to
send the money by money order if the Appellant was not accepting the
amount. Both the parties consciously signed the deed, which contained a
clear stipulation that if amount is not paid within ten years, the deed was
to be treated as a sale deed, and the Respondent was fully aware of the
same. In fact the Trial Court at one place came to the conclusion that
the sale had become absolute but again deviated therefrom to hold that
mortgage had to be redeemed. This error has been repeated by the
District Judge. Therefore, even if the Deed is termed in either forms, the
consequence of non-payment within 10 years cannot be lost sight of.
Going by the plain language of the Deed, if the amount was
not repaid by the Respondent within the stipulated period, the deed was
to be considered as an absolute sale deed and Appellant was to become
owner of the property. Both the Courts have rendered the finding of fact
that the amount was not paid within period of 10 years. Inspite of this
finding of fact, both the Courts have directed the Appellant to hand over
possession to the Respondent on the basis that the mortgage had to be
redeemed which is clearly erroneous.
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE SIDE JURISDICTION
SECOND APPEAL NO. 587 OF 1993
Mr. Shivaji Dagadu Mahangade,
V/s.
Aba Gopala Shinde,
CORAM : N.M. Jamdar, J.
22 April, 2016.
Citation: AIR 2016 Bom 213
This Second Appeal is filed by the Original Defendant
challenging the judgment and decree passed by the Civil Judge, Junior
Division, Wai and the dismissal of the Appeal filed by the Appellant by
the District Judge, Satara. The Civil Judge decreed the suit holding that
the Respondent – Plaintiff was entitled to redemption of mortgage, reconveyance
and possession of the suit property on his depositing the
mortgage money of Rs.19,850/-. This judgment and decree has been
confirmed by the District Judge.
2. The suit land is an agricultural land admeasuring 4 acres 3
gunthas bearing Gut No. 90 situated at Village Parkhandi, Taluka Wai,
District Satara. The genesis of the dispute is a document dated 1 March
1972. The Respondent filed a Suit bearing No. 254 of 1983 contending
that by a mortgage dated 1 March 1972, an amount of Rs. 19,850/- was
received as a loan from the Appellant and since the relation between the
parties were good, the Appellant was put in possession. In this mortgage
deed it was agreed that, upon repayment of the loan amount, the
Appellant would hand over the possession of the property. If the
Respondent failed to pay the amount, within period of 10 years, then the
document dated 1 March 1972 was to be considered a sale deed. It was
the case of the Respondent that the Respondent on many occasions went
to the Appellant to accept the amount as repayment and to re-convey the
property but the Appellant avoided to do so. On these averments the
Respondent filed the suit for redemption and re-conveyance.
3. A written statement was filed by the Appellant contending
that by the document dated 1 March 1972, the Respondent had agreed to
sell the land to the Appellant. The document was a conditional sale deed
and the sale was absolute after the period of 10 years if no repayment was
made. Only within the period of 10 years the Respondent had a right to
re-purchase the land, which option was never exercised. It was contended
that the Respondent had earlier filed a Suit bearing No. 275 of 1976
reforming the same document, which was dismissed. It was contended
that the deed of 1 March 1972 is not a document of mortgage but is of
sale.
4. The Civil Judge, Wai, framed issues as to whether the
Respondent proved that the document dated 1 March 1972 was a
mortgage deed and whether he was entitled for redemption and
possession, and answered those issues in affirmative. The Civil Judge
held that since the Deed was a mortgage deed and no ownership rights
were transferred to the Appellant, the Respondent was entitled for
redemption of mortgage upon his depositing the mortgage amount.
Accordingly, by the judgment and decree dated 31 August 1991, the Civil
Judge decreed the Suit. The Civil Judge however recorded a finding of
fact that the amount was not repaid by the Respondent during the period
of 10 years nor did he make a genuine attempt to do so. Appeal No. 422
of 1991 was filed by the Appellant in District Court, Satara. The District
Judge confirmed the conclusions reached by the Civil Judge. The District
Judge held that the document dated 1 March 1972 was a mortgage deed.
The District Judge held that the Appellant did not take any steps to get
the specific performance of the document and therefore, his case of an
conditional sale could be accepted. The Appeal was dismissed by the
District Judge on 23 September 1993.
5. The Second Appeal was admitted on 16 December 1993
after framing the following questions of law :-
“ 1. The lower Courts ought to have held that the
document (Ex.37) dated 1/3/1972 was a sale with condition
to repurchase and not a mortgage by conditional sale.
2. The lower Courts ought to have held that the Plaintiff
was bound to file a suit for reconveyance.
3. The lower Courts ought to have held that the
Plaintiff's suit for redemption of mortgage was not
maintainable.
6. Mr. Surel Shah, learned Advocate for the Appellant
submitted : As per the test laid down in the decision in the case of
Vanchalabai Raghunath Ithape v/s. Shankarrao Baburao Bhilar
1
and the
decision in the case of Nana Tukaram Jaikar v/s. Sonabai Madhav
Saindate
2
all the ingredients of a sale with a condition to repurchase have
been fulfilled, in respect of the Deed in question. There was no
relationship of debtor and creditor, and no charge was kept for the loan.
The Deed envisaged an absolute transfer. After period of ten years, it was
to become an absolute sale. The parameters which were laid down in the
above two decisions apply to the factual possession at hand. Merely
because the condition for repurchase is not contained in a separate
document, it will not be of much importance. Both the Courts have not
considered the document dated 1 March 1972 in its proper perspective
and have failed to apply the tests which are necessary to distinguish a
mortgage by way of conditional sale from a sale with condition of
repurchase. In the earlier Suit filed by the Respondent for injunction, the
Respondent specifically pleaded that the deed was a conditional sale.
Furthermore, the present Suit is barred under Order II Rule 2 of the Civil
Procedure Code. Only after the dismissal of the Suit for injunction, the
present Suit for mortgage has been filed. Both the Courts were not right
in placing the entire burden on the Appellant and the Respondent cannot
1(2013) 4 BCR 491
2(1982) Mh.L.J. 538
benefit from the case of the Appellant. Both the Courts have rendered a
clear finding of fact that the Respondent did not make a genuine attempt
to pay the amount within period of ten years and therefore, by virtue of
the clauses contained in the deed, the sale has become absolute. The
admission of the Appellant cannot be used against the Appellant since he
was never confronted with the same.
7. Mr. Mohan Dhamal, the learned Advocate for the
Respondent submitted : Perusal of the Deed clearly shows that it is a
mortgage by way of condition of repurchase. It is specified in the Deed
that the Respondent was indebted to a bank, because of which the Deed
was being executed. The yield received from the land was to be taken by
the Appellant and therefore, this could be treated as in lieu of the interest.
The land was fertile with a well in it and is of much higher value, as per
admissions of the Appellant than the one mentioned in the Deed. The
Respondent made all the efforts to pay the amount to the Appellant but
on some pretext or the other the Appellant avoided to accept the amount.
The Respondent even sold the bullocks to raise the amount. As regard
the case of the Respondent in the earlier Suit, that the Suit was for
injunction and therefore, question of the Deed being a mortgage or sale
did not arise therein. The Appellant in Suit No. 346 of 1984 filed by the
Appellant for compensation, had given admissions that the Deed was
mortgage. No error was committed by both the Courts in coming to the
conclusion that the Deed was a mortgage by way of conditional sale.
Pursuant to the decree passed by the Civil Judge, the amount has already
been deposited. The Second Appeal deserves to dismissed.
8. The dispute between the parties centers around the Deed
dated 1 March 1972. According to the Appellant, the Deed is a Sale with
a Condition to Repurchase. According to the Respondent it is a
Mortgage by way of Conditional Sale. The vexed issue as to whether a
Deed is a Mortgage by way of Conditional Sale or a Sale with a Condition
of Repurchase, comes up before the Court for consideration regularly.
9. Section 58(a) and 58(c) of the Transfer of Property Act deal
with Mortgages. Section 58(a) defines a Mortgage as a transfer of an
interest in specific immovable property for the purpose of securing
payment of money advanced or to be advanced by way of loan and also
existing or a future debt, or the performance of an engagement which may
give rise to a pecuniary liability. Section 58(c) defines a Mortgage by way
of Conditional Sale to cover a situation where a mortgagor ostensibly sells
the mortgaged property on the condition that on default of payment of
the mortgaged money on a certain date the sale shall become absolute, or
on the condition that on such payment being made, the sale will become
void and that the buyer shall transfer property back. In the case of Nana
Tukaram Jaikar v/s. Sonabai Madhav Saindate
(1982) Mh.L.J. 538
, the learned Single Judge
of this Court had an occasion to undertake the task of interpreting a deed
to ascertain as to whether the document in question was a mortgage by a
conditional sale or a sale with condition of repurchase. The learned
Single Judge referred to the decisions of the Apex Court in the case of
Chunchun Jha v/s. Ebadat Ali
AIR 1954 SC 345
and Bhaskar Waman Joshi v/s.
Shrinarayan Rambilas Agarwal
AIR 1960 SC 301
, and held that conveyance with nothing
to show a debtor creditor relationship does not seize to be an absolute
conveyance and become mortgage by mere stipulation of repurchase. In
the case of one Vanchalabai Raghunath Ithape v/s. Shankarrao Baburao
Bhilare
(2013) 4 BCR 491
, the Apex Court took a review of the earlier decisions on the
subject and laid down guidelines for interpreting a deed to ascertain its
character as to mortgage or a sale. In the present case however the crux is
what is the effect of non payment of the amount by the Respondent
within ten years as the deed admittedly stipulates that after ten years, and
upon non-repayment the sale will be absolute.
10. The Deed was executed on 1 March 1972. It refers to a
property situated at Village Parkhandi, Taluka Wai, District Satara. The
Deed is between Shivaji Dagadu Mahangade and Aba Gopala Shinde,
both are agriculturists. It is stated therein that one month before the
Deed, the Respondent had taken loan of Rs.9,000/- from a Co-operative
Bank and for that purpose Aba Shinde (Respondent) has taken
Rs.10,000/- from Shivaji Mahangade (Appellant). The Deed thereafter
states that to repay the amount with conditional sale is executed of the
ancestral property and the possession with all the annexures is handed
over to the Appellant. It is stated there the property will be used for a
period of 10 years and before 10 years the Respondent will hand over Rs.
10,000/- and after receipt of this amount, the property will be handed
over to Respondent. If Respondent fails to pay the amount within period
of 10 years, then the deed will not be considered as a conditional sale
deed but a final sale deed and thereafter, Respondent will have no interest
left himself or anybody claiming through him. It was specified that this
will be a document of mortgage. Thus, the document shows some
ingredients of sale and some of mortgage. It is precisely because this
language of the deed that dispute has arisen between the parties.
11. The Civil Judge held that the language of the Deed makes it
crystal clear that it was mortgage. The Civil Judge laid much emphasis on
the statement made at the bottom of the deed to hold that it is a
mortgage. The Civil Judge then considered whether the Respondent paid
the mortgage money within 10 years. The Civil Judge observed that the
Respondent gave no particulars as to when he went with the money and
how much money he had raised and kept ready. The Civil Judge
considered the evidence of the Respondent in detail and in fact held that
in absence of repayment, in view of the condition of Deed, the sale had
become absolute. But the Civil Court ignored that conclusion and
directed the Appellant to hand over the possession. As regard the
admission of the Respondent in the earlier suit, the Civil Judge held that,
no doubt the Respondent had changed his stand but it had to be seen
whether the ownership was transferred. The argument of the Appellant
based on Order II Rule 2 of the Code was rejected.
12. The judgment of the Civil Judge contains self-contradictory
reasoning at various places. The Civil Judge in fact held that for nonpayment
by the Respondent in time as per the Deed, the sale had become
absolute in favour of the Appellant. The District Judge held that the
Appellant was in possession of the property and also confirmed the
finding that the Respondent did not pay the amount in time. The
District Court held that the earlier Suit filed by the Respondent – Plaintiff
was only for perpetual injunction and therefore, the dismissal of the Suit
will not come in way of the Respondent. The First Appellate Court also
held that the document was a stop gap arrangement.
13. If the Deed is read as it is, it clearly provides that if the
Respondent failed to pay the amount within period of 10 years then the
Respondent would lose the rights to the property and the Appellant will
become owner thereof. There cannot be a dispute regarding this position
as it is the clear recital in the deed. Both the Courts have rendered a
factual finding that the Respondent – Plaintiff did not make any attempt
to pay the amount within period of 10 years. When the Civil Judge
recorded this finding, the Respondent did not file any cross-objection.
Same is the position in this Second Appeal. The District Judge has also
confirmed that the Respondent did not pay the amount within period of
10 years. The learned Counsel for the Respondent contended that the
Respondent had gone with the amount but he was turned away by the
Appellant. This version has not been accepted by both the Courts and
this factual finding has become final. Both the Court after rendering this
factual finding failed to give effect to the sequitor. The sequitor being
that the sale had become absolute. Nothing stopped the Respondent to
send the money by money order if the Appellant was not accepting the
amount. Both the parties consciously signed the deed, which contained a
clear stipulation that if amount is not paid within ten years, the deed was
to be treated as a sale deed, and the Respondent was fully aware of the
same. In fact the Trial Court at one place came to the conclusion that
the sale had become absolute but again deviated therefrom to hold that
mortgage had to be redeemed. This error has been repeated by the
District Judge. Therefore, even if the Deed is termed in either forms, the
consequence of non-payment within 10 years cannot be lost sight of.
14. Apart from this position, both the Courts have not
considered the conduct of the Respondent and the interpretation placed
by him. The Respondent had filed a Suit earlier for injunction bearing
No. 275 of 1976. The copy of the Judgment in the Civil Suit No. 275 of
1976 is part of the record. In this Suit it was the case of the Respondent
therein that the Deed was a conditional sale deed. It was the case of the
Appellant that it was an out and out sale deed. The contest between the
parties was only as to whether it is a conditional sale deed or an out and
out sale deed. Even the issue that was framed was whether the Deed was
a hollow document. The Respondent therefore went to Court with a clear
case that there was a conditional sale deed. There was no argument at all
that the deed was a mortgage. The Court came to the conclusion that no
fraud was proved by the Respondent while executing the conditional sale
deed and the Deed was valid. By a detailed discussion on rival contention
the learned Civil Judge dismissed the Suit by the judgment and order
dated 30 July 1983. Thereafter, the present Suit was filed. The District
Judge has noted that there is a change in stand by the Respondent.
Though the present suit cannot be said to be not maintainable but the
clear-cut stand of the Respondent as far as an interpretation of the deed is
concerned, was clinching. The Respondent was confronted with the
admission in the evidence and the Respondent had to accept the said
position. It is laid down by Apex Court in the case of Union of India v/s.
Ibrahim Uddin and Anr. reported in [2012(5) All MR 462] that
admission is a best piece of substantive evidence but an opportunity has
to be given to the person under cross-examination to tender his
explanation. This course of action was followed. As far as the so called
admission of the Appellant is concerned, no such course of action was
followed and therefore, it cannot be held against him. The argument that
the earlier Suit was only for injunction cannot be accepted.
15. The District Court also committed an error in placing the
burden on the Appellant who was the defendant in the Suit. It is settled
law that the initial burden always lies on the Plaintiff and because the
Appellant did not file the Suit for specific performance, the case of the
Respondent – Plaintiff is not strengthened. As regards the other
arguments regarding the price of land, etc. are considered, they lose
significance in view of the non-payment.
16. Going by the plain language of the Deed, if the amount was
not repaid by the Respondent within the stipulated period, the deed was
to be considered as an absolute sale deed and Appellant was to become
owner of the property. Both the Courts have rendered the finding of fact
that the amount was not paid within period of 10 years. Inspite of this
finding of fact, both the Courts have directed the Appellant to hand over
possession to the Respondent on the basis that the mortgage had to be
redeemed which is clearly erroneous.
17. In the circumstances, the judgment and order dated 23
September 1993 passed by the Additional District Judge, Satara in
Regular Civil Suit No. 422 of 1991 and the judgment and order dated 31
August 1991 passed by the Civil Judge, Junior Division Wai, District
Satara in Regular Civil Suit No. 254 of 1983 are required to be quashed
and set aside and are accordingly set aside. The Appeal is allowed in above
terms. No order as to cost.
(N.M. Jamdar, J.)
No comments:
Post a Comment