Kerala High Court
E. Mohammed vs Velayudhan And Anr. on 27 January, 1997
Equivalent citations: AIR1997KER173, AIR 1997 KERALA 173, (1997) 1 KER LJ 213
JUDGMENT K.A. Mohamed Shafi, J.
1. The plaintiff in O.S. No. 118/ 80 on the file of the Munsiffs Court, Manjeri is the appellant herein. The suit is filed by the appellant claiming redemption of a mortage by conditional sale alleged to have created by him as per the document dated 7-4-1962 exected in favour of the 1st respon-dent-lst defendant.
2. The 1st respondent has contended that the document dated 7-4-1962 executed by the appellant in his favour is not a mortgage by conditional sale and it is an outright sale with the condition to repurchase and therefore, the suit for redemption is not maintainable.
3. The trial Court after trial found that the document dated 7-4-1962 marked as Ext. A1 in the suit is not a mortgage deed as contended by the appellant and dismissed the suit with costs. The appellant challenged the judgment and decree passed by the trial Court before the Sub Court, Manjeri in A.S. No. 1/1984. The lower appellate Court by judgment dated 19-10-1988 confirmed the judgment and decree passed by the trial Court and dismissed the appeal. Hence the plaintiff has preferred this Second Appeal before this Court.
4. The only point raised before me in this appeal is whether the document Ext. A1 created a mortgage by conditional sale or an outright sale with condition to repurchase.
5. The elaborate arguments advanced by the counsel for the appellant and the respondents were heard.
6. The execution of Ext. A1 by the appellant in favour of the 1st Respondent on 7-4-1962 is admitted. The above appeal is preferred against the concurrent finding of the trial Court as well as the lower appellate Court that Ext. Al is a sale deed with condition to repurchase.
7. The counsel for the appellant argued that it is clear from the recitals made in Ext.. A1 as well as the other evidence material available in this case that Ext. Al is a mortgage by conditional sale and is not an outright sale. He argued that the property is situated in the heart of Kondotty Bazar and 9 cents of land in the heart of the town will not be sold for a paltry sum of Rs. 250/- and the fact that Ext. (sic) is a mortgage deed is admitted by the appellant and the 1st respondent in Ext. T1 which has been executed by the appellant and the 1 st respondent jointly in favour of the Kondotty Panchayath. He also argued that Exts. B1 to B3 produced by the 1st respondent to show that the consideration recited in Ext. Al is fair and adequate, are not in respect of similar lands situated in Kondotty town but they are in respect of lands situated far away from the town and therefore the consideration for the properties sold as per Exts. B1 to B3 is no comparison at all in this case. He further argued that the finding of the trial Court that there is no debtor-creditor relationship between the appellant and the 1st respondent in this case is also not sustainable since it is against the facts and circumstances of the case and the evidence on record.
8. The recitals made in Ext. Al would go to show that it is an absolute sale divesting all the rights of seller with a condition to repurchase and the entire consideration for the-sale is received by the appellant. No features of mortgage or conditions stipulated in Section 58(c) of T. P. Act are is found in Ext.A1.
9. The 1st respondent has deposed that he met all the expenses for execution of Ext. Al and he paid the consideration to the appellant from the residence of the appellant.
He also contended that the appellant was in a much better financial position than him and though he was a mechanic working under somebody else, was out of job at the time of execution of Ext. Al and that there was absolutely no debtor-creditor relationship between the appellant and himself. He has also contended that the property covered by Ext. AI was a barren and wherein the Panchayath had been dumping the waste materials and therefore the consideration of Rs. 250/ - recited in Ext. Al for the sale of the 9 cents of land was fair and adequate at the time of sale.
10. Absolutely no'debtor-cradher relationship between the appellant the 1st respondent is mentioned in Ext. Al or in Ext. A2 notice or in the plaint, even though the appellant as P.W. 2 has stated that he was in financial difficulties at the time of execution of Ext. Al. But that contention of P.W. 2 is not supported by any material on record. The contention of the 1st respondent as D.W. 1 that the appellant was well-to-do and in a much better financial position than him and that he was a fitter who had lost job at the time of execution of Ext. Al and he was not in a position to lend money to the appellant, is not challenged in cross-examination. The intention of the parties is clear from Ext. A1 since it is clearly stated that it is an assignment deed and the entire rights of the assignee including possession are transferred as per the sale deed. There is no stipulation for payment of interest on the money advanced by the assignee to the assignor at the time of repayment of the amount, in Ext. Al. No charge is created on the property for the amount advanced. There is no stipulation to pay rent or any other dues to the jenmy etc. by the appellant-assignor is Ext. A1. The entire expenses for execution of Ext. Al is met by the assignee and the entire consideration is paid by the assignee to the assignor as per Ext. Al. All these facts and circumstances established in this case which are the salient features of a sale with condition to repurchase and not mortgage with conditional sale, militate against the contention of the appellant that Ext. Al is a mortage by conditional sale.
11. The counsel for the appellant argued that Ext. Al and the surrounding circumstances establish that it is a mortgage with conditional sale. It is well settled that the intention of the parties to a document should be gathered from the recitals made in the document itself and in case of any ambiguity in the document the surrounding circumstances can be considered to find out the intention of the parties. The law regarding this aspect is laid down by the Supreme Court in the following decision in Chunchun Jha v. Ebadat Ali, AIR 1954 SC 345, which is as follows:
"(5) 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 which invariably gives rise to trouble and litigation. There are numerous decisions on the point and much industry has been expended in some of the High Courts in collating and analysing them. We think that is a fruitless task because two documents are seldom expressed in identical terms and when it is necessary to consider the attendant circumstances the imponderable variables which that brings in its train make it impossible to compare one case with another. Each must be decided on its own facts. But certain broad principles remain.
(6) The first is that the intention of the parties is the determining factor: See --Balkishen Das v. Legge', (.1899) 27 Ind. App 58 (PC) (A). But there is nothing special about that in this class of cases and here, as in every other case, 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 which 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.
12. In the decision in Bhaskar v. Shri-narayan, AIR 1960 SC 301 the Supreme Court observed as follows : (Para 7) "The question whether by the incorporation of such a condition a transaction ostensibly of sale may be regarded as a mortgage is one of intention of the parties to be gatherd from the language of the deed interpreted in the light of the surrounding circumstances. The circumstance that the condition is incorporated in the sale deed must undoubtedly be taken into account, but the value to be attached thereto must vary with the degree of formality attending upon the transaction. The definition of a mortgage by conditional sale postulates the creation by the transfer of a relation of mortgagor and the mortgagee, the price being charged on the property conveyed. In a sale coupled with an agreement to reconvey there is no relation of debtor and creditor nor is the price charged upon the property conveyed, but the sale is subject to an obligation to retransfer the property within the period specified. What distinguishes the two transactions is the relationship of debtor and creditor and the transfer being a security for the debt. The form in which the deed is clothed is not decisive. The definition of a mortgage by conditional sale itself contemplates an ostensible sale of the property. As pointed out by the Judicial Committee of the Privy Council in Narasingerji Gyanagerji v. P. Parthasaradhi, 51 Ind App 305 : AIR 1924 PC 226, the circumstance that the transaction as phrased in the document is ostensibly a sale with a right of repurchase in the vendor, the appearance being laboriously maintained by the words of conveyance needlessly interating the description of an absolute interest or the right of repurchase bearing the appearance of a right in relation to the exercise of which time was of the essence is not decisive. 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 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 documents 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."
13. While construing a document which is, a mortgage by conditional sale or a sale with condition to repurchase, the intention of the parties should be decided by carefully considering and construing the recitals in the document and other attendant circumstance. In the decision in Bhoju Mandal v. Debnath Bhagat, (1963) Supp. (2) SCR 82 : (AIR 1963 SC 1906) the Supreme Court has held (sic).
14. In the decision in Tamboli R, Motilal v. Ghanchi C. Keshavlal, 1993 Supp (1) SCC 295 : (AIR 1992 SC 1236) the Supreme Court has observed as follows :
"12. The learned counsel for the respondents would urge that there is nothing to indicate by reading the document that there is any relationship of debtor and creditor. What the executant of the document did was in discharge of the prior debts he sold the property for a sum of Rs. 5,000. The fact that there was a previous relationship of debtor and creditor will have no bearing in construing the document.
13. The attendant circumstances could be looked into only to gather the intention. Such an intention, if explicitly expressed in the document itself, there is no scope for looking at the attendant circumstances. If, therefore, there is no relationship of debtor and creditor, the question of it being a mortgage by conditional sale does not arise.
14. On the date of the execution the title is transferred. The option for repurchase is to be exercised within a period of five years. Upon such payment there will be reconveyance in favour of the executant of the document. But strangely, there is no corresponding right for the mortgage to foreclose the right of redemption these were the points held in favour of this respondent, and each one of the reasons isvalid."
15. In the decision in Keshav Kumar Swarup v. Flowmore Private Ltd., (1994) 1 JT (SC) 137 : (1994 AIR SCW 2756) the Supreme Court has observed as follows (At p. 2758 of AIR):
"In interpreting a document the intention of the parties has to be ascertained, if possible from the expressions used therein. More often than not, this causes no difficulty, but if difficulty is felt owing to inarticulate drafting or inadvertence or other causes, the intention may be gathered reading the entire document and, if so necessary, from other attending circumstances also. If through such a process the intention of the parties can be culled out consistently with the rule of law, the Courts are required to take that course."
16. In the decision in A. Sreenivasa Pai v. Saraswathi Ammal, AIR 1985 SC 1359 the Supreme Court has observed as follows (Para 4):
"The decision in this case depends upon the true construction of the recitals in the settlement deed. In construing a document, whether in English or in any Indian language, the fundamental rule to be adopted is to ascertain the intention from the words employed in it. The surrounding circumstance may be considered for the purpose of ascertaining the intended meaning of those words, specially when there is some ambiguity in the words used in the document."
17. In this case the salient features of the document Ext. A1 are enumerated by me in para 10 of this judgment. Those recitals in Ext. A1 and the attendant circumstances at the time of execution of the document clearly spell out that the intention of the parties was to execute a sale deed with condition to repurchase and not a mortgage deed by conditional sale.
18. The contention of the appellant that the consideration recited in Ext. A1 is palpably low and 9 cents of land in the heart of Kondotty town would not have been assigned for a paltry sum of Rs. 250/- and that the property would have fetched a very large amount at the time of sale, is not supported by any evidence. On the other hand, Exts. B1 to B3 produced by the 1st respondent show that those properties though some distance away from the plaint schedule property and from Kondotty town have been assigned for much lesser price than recited in Ext. A1 during the relevant period. The fact that the property assigned as per Ext. Al was a barren land in which the town authorities were dumping garbage, is not in dispute. Therefore, in the absence of any tangible evidence adduced by the appellant to establish that the consideration for the assignment of the property recited in Ext. A 1 is palpably low and the property sold out would not have been assigned for such a low price and that the inadequacy of consideration is indicative of creation of a mortgage, the above contention of the appellant is not sustainable and the Courts below have rightly rejected the same.
19. The other important contention raised by the appellant to establish that Ext. A 1 is a mortgage by conditional sale, is based upon Ext. T 1. Ext. T 1 is a joint consent letter given by the appellant and the 1st respondent in favour of Kondotty Panchayath. The appellant vehemently contended that Ext. T 1 establishes that the 1st respondent has admitted the right of the appellant in the property long after the execution of Ext. A 1 and that fact proves that Ext. A 1 only creates a mortgage in favour of the 1st respondent as otherwise if Ext. A I conveyed absolute right in the property in favour of the 1st respondent, there was absolutely no necessity to execute a joint consent letter along with the appellant in favour of the Panchayath and the 1st respondent could have executed the consent letter by himself.
20. The 1st respondent has contended that he signed Ext. T 1 without understanding the contents. Even if the contention of the 1st respondent that he signed Ext. T 1 without knowing the contents is rejected, Ext. T1 of no help to the appellant. Admittedly Ext. T I was executed on 17-6-1972, more than 10 years after the execution of Ext. Al. It is settled law that while construing a document the attendant circumstances contemporaneous to the document alone can be looked into and the conduct of the parties subsequent to the execution of the document cannot be considered. Therefore, Ext. T 1 which was executed more than 10 years after the execution of Ext. A I is of no help to the appellant.
21. It is contended by the counsel for the 1st respondent that the parties cannot alter the character of the deed by their pleadings and the documents should be construed as they are. In support of this contention he relied upon the decision in Shanti Devi v. Amal Kumar Banerjee, AIR 1981 SC 1550 : (1981) 2 SCC 199 wherein the Supreme Court has observed as follows :
"The parties could not by their pleadings alter the intrinsic character of the lease or bring about a change of the rights and obligations flowing therefrom."
22. In the decision in Provash Chandra Dalui v. Bishwanath Banerjee, AIR 1989 SC 1834, the Supreme Court has observed as follows (Para 22):
"In Shanti Devi v. A. K. Banerjee, (1981) 2 SCC 199: AIR 1981 SC 1550, it was held that parties could not by their pleadings alter the intrinsic character of the lease or bring about a change of the rights and obligations flowing therefrom. The Court would only look into the terms of the lease irrespective of the averments in the pleading. In the instant case as we have already held the lease to have been for twenty years, its character could not have been changed by the pleadings, if any, in the above cases. Nor could the respondents be held to have waived their rights under the lease. We do not find any infirmity in the impugned High Court order on this count also."
23. Applying the principles laid down in the above decisions, it is clear that the appellant cannot at this distant point of time contend that Ext. A 1 is a mortgage by conditional sale and not an outright sale with condition to repurchase. The recitals made in Ext. A 1 and all the attendant circumstances establish that Ext. A I is executed by the appellant as a sale deed with condition to repurchase and not as a mortgage by conditional sale. The Courts below rightly found against the above contention raised by the appellant and the same is liable to be confirmed.
In view of what is stated above, the above Second Appeal is devoid of any merits and the same is dismissed. The parties are to bear their respective costs in this appeal.