Gujarat High Court
Kantilal M. Kadia vs Somabhai Dahyabhai Kadia on 4 March, 2003
Equivalent citations: AIR2003GUJ205, (2003)1GLR817, AIR 2003 GUJARAT 205, (2004) 13 ALLINDCAS 73 (GUJ), (2003) 3 GCD 2386 (GUJ), (2003) 1 GUJ LH 524, (2003) 4 ICC 210, (2003) 1 GUJ LR 817, (2003) 3 LANDLR 646, (2003) 3 RECCIVR 273, (2003) 6 INDLD 149, (2004) 3 CURCC 104, (2003) 3 CIVLJ 841
Author: M.S. Shah
Bench: J.M. Panchal, M.S. Shah
JUDGMENT M.S. Shah, J.
1. The following question has been referred to the Full Bench for opinion :-
"Whether on the facts and in circumstances of the case Exh. 65 which is described as a document of mortgage by conditional sale with a right to repurchase on expiry of the period of five years on repayment of the amount, can be said to be a document of outright sale or would it remain to be a document of mortgage by conditional sale as there is no separate document as stipulated by the proviso to Section 58(c) of the Transfer of Property Act."
2. The learned single Judge before whom the Second Appeal was placed for hearing has observed in his order of reference that the question about applicability of the provisions of Section 58(c) read with proviso thereto was already concluded by the decision of the Apex Court in K. Simrathmull v. Nanjalingiah Gowder, AIR 1963 SC 1182; however, the said decision of the three learned Judges of the Supreme Court was not brought to the notice of the Bench of two learned Judges of the same Court which decided Tamboli Ramanlal Motilal v. Ghanchi Chimanlal Keshavlal, AIR 1992 SC 1236 : [1993 (1) GLR 889 (SC)]. The learned single Judge, was therefore, of the view that the decision of the Smaller Bench in Tamboli Ramanlal Motilal (supra) was per incuriam and runs counter to the statutory provisions as well as to the earlier decisions of the Supreme Court reported in Bhaskar Waman Joshi v. Shrinarayan Rambilas Agarwal, AIR 1960 SC 301 and K. Simrathmull v. Nanjalingiah Gowder, AIR 1963 SC 1182. The learned single Judge, has therefore, referred the above quoted question for the opinion of the Full Bench.
3. Before enumerating and dealing with the submissions made by the learned Counsel for the appellant, we would like to set out the brief facts leading to filing of this appeal which is directed against the concurrent finding recorded by the trial Court as well as by the District Court that the document in question is a document of mortgage by conditional sale.
4. Respondent herein, Somabhai Dahyabhai Kadia, filed Regular Civil Suit No. 17 of 1986 in the Court of the learned Civil Judge (Junior Division), Prantij in Sabarkantha District, for redemption of mortgage on the basis of the following facts :-
On 18-8-1975, the respondent-plaintiff had mortgaged a portion admeasuring 17 sq. yards out of the house admeasuring 51 sq. yds. bearing Municipal No. 1412 at Prantij. The appellant-defendant had given a loan amount of Rs. 1,500/- and the respondent-plaintiff had executed a document of mortgage with conditional sale, the condition being that after five years when the plaintiff refunds the amount of Rs. 1,500/- to the defendant, the defendant has to return the property to the plaintiff. The plaintiff is ready and willing to refund the amount of Rs. 1,500/- and to take back the mortgaged property, but the defendant is not complying with the said condition. The plaintiff also gave a notice to the defendant to which the defendant gave an evasive reply. Hence, the plaintiff filed the above numbered suit for redemption and the plaintiff also deposited an amount of Rs. 1,500/- before the trial Court on 4-4-1986.
The defendant filed his written statement and contended that the document did not create a mortgage, but it was a document of conditional sale of the property and the condition for payment of Rs. 1,500/- by the plaintiff to the defendant was to be complied with within five years. Since, the suit was filed after five years from the date of execution of the document, the plaintiff had no right to the property. The defendant also raised a plea that the defendant had spent about Rs. 5,000/- for repairs and renovations of the property.
At the commencement of the discussion in the judgment, the trial Court recorded that the only dispute between the parties was that according to the defendant, the plaintiff could have redeemed the mortgage within five years from the date of execution of the document dated 18-8-1975 whereas, according to the plaintiff, the mortgage could be redeemed after expiry of the five years from the date of execution of the document. The trial Court came to the conclusion that as per document Exh. 77 (copy of the original document at Exh. 65), the mortgage could be redeemed after expiry of five years from the date of execution of the document and during the five year period, the defendant could use and enjoy the property, and thereafter, as and when the plaintiff so desired, he could return the mortgage amount and get back the mortgaged property. The learned trial Judge also referred to the document at Exh. 86 which was executed by the defendant on 18-8-1975 wherein also the defendant had agreed that when the plaintiff returns the amount of Rs. 1,500/- after five years, the defendant will have to return the property. As regards the claim for expenses for repairs and renovations, the learned trial Judge held that no definite figure or evidence was produced to show whether any such expenditure was incurred. The learned trial Judge decreed the suit and directed the defendant to execute the document releasing the suit property from all encumbrances and to return the same to the plaintiff and permitting the defendant to withdraw the amount of Rs. 1,500/- deposited by the plaintiff.
Aggrieved by the aforesaid judgment and decree, the defendant filed Civil Appeal No. 24 of 1991 before the District Court, Sabarkantha. By the judgment and decree dated 22-11-1991, the learned Extra Assistant Judge, Sabarkantha at Himrnatnagar dismissed the appeal after confirming the finding given by the trial Court that the document was in the nature of a mortgage by conditional sale.
5. Dissatisfied with the aforesaid judgments and decrees, the original defendant moved this Court by filing the present Second Appeal. When the appeal reached hearing before the learned single Judge, the question quoted hereinabove came to be referred.
6. We have heard Mr. J.N. Jadeja, learned Counsel for the appellant. The respondent-original plaintiff does not appear to have been served. However, since the reference has remained pending for a number of years and the appellant does not appear to have taken adequate steps for service of summons on the respondent-original plaintiff, in the facts and circumstances of the case, the question of law referred to us has been taken up for consideration.
7. The document Exh. 65 reads as under :-
Executant - Somabhai Dahyabhai Kadia (plaintiff), aged 60 years, Occupation : Mason, residing at Prantij ... in Tapodhan Vas Maholla in Kadia Vas at Prantij I have the following property of which the portion of the East side on the ground floor and the first floor, I am transferring by conditional sale.
Description of the property Area 17 sq. yards out of 51 sq. yards.
The said portion of the property, I am transferring to you with all my rights and possession by way of conditional sale for a consideration of Rs. 1,500/ - (Rupees One thousand five hundred) subject to the condition that you may use and enjoy by way of conditional sale to which none of my heirs will raise any objection and if any obstruction is created, I will take responsibility. However, upon completion of five years, whenever I return the above amount to you, you have to return the property to me. The above document of conditional sale by taking Rs. 1,500/- today, I have executed this document of conditional sale of my own free will on this 18th day of August, 1975.
Sd/- Kadia Somabhai Dahyalal Witnesses :
Sd/- Nagarbhai Revandas Patel Sd/- Vitthaldas Himmatlal The document registered at Sr. No. 2449 of Registration Book No. 1 on 18-8-1975.
Sd/-
Sub Registrar, Prantij."
On the same day i.e. on 18-8-1975, appellant-defendant Kantilal Manilal Kadia executed the following document (Exh. 86) in favour of plaintiff Somabhai Dahyabhai Kadia :- Executant : Kantilal Manilal Kadia, aged 38 years, Occupation : Mason, residing at Prantij. I hereby bind myself that from out of the property described below admeasuring 51 sq. yards, you have given me by conditional sale a portion of the property admeasuring 17 sq. yards for a period of five years. Upon completion of which period of five years, when you return the amount of Rs. 1,500/-, I bind myself to return the aforesaid property to you. In case of improvement (of the property), you will have to pay me the amount as may be determined by the arbitrators. Sd/- Kadia Kantilal Manilal (defendant) Witnesses ;
Sd/- Kadia Kachrabhai Mangaldas Sd/- Kadia Dahyalal Dalsukhram
8. Mr. Jadeja, learned Counsel for the appellant-defendant has submitted that since the promise given by the defendant to return the property upon the plaintiff returning Rs. 1,500/- after five years was contained in a separate document, the proviso to Section 58(c) was clearly attracted, and therefore, the document (Exh. 65) cannot be considered as a document of mortgage by conditional sale, but it has to be treated as a document of sale. The learned Counsel has submitted that the amount of Rs. 1,500/- was not taken by the plaintiff as a loan at all, and that therefore, the payment of consideration of Rs. 1,500/- for the conditional sale did not create any relationship of debtor and creditor between the parties. The property is sold, may be conditionally, but possession is also handed over to the defendant-purchaser and the defendant and his heirs and legal representatives are to use and enjoy the property. If there was a mortgage by conditional sale, the document would have conferred a right on the mortgagee to foreclose the mortgage, but no such clause is provided, and therefore, also, the document is not a document of mortgage but is a document of conditional sale. The learned Counsel has placed reliance on the decision of the Apex Court in Tamboli Ramanlal Motilal v. Ghanchi Chimanlal Keshavlal, AIR 1992 SC 1236 : [1993 (1) GLR 889 (SC)].
9. The relevant provisions of Section 58(c) which have come up for our interpretation read as under :-
"Section 58. "Mortgage", "mortgagor", "mortgagee", "mortgage-money", and "mortgage-deed" defined :- (a) A mortgage is the transfer of an interest in specific immovable property for the purpose of securing the payment of money advanced or to be advanced by way of loan, an existing or future debt, or the performance of an engagement which may give rise to a pecuniary liability.
The transferor is called a mortgagor, the transferee a mortgagee; the principal money and interest of which payment is secured for the time-being are called the mortgage-money, and the instrument (if any) by which the transfer is effected is called a mortgage-deed.
(b) Simple mortgage - ... ... ... ...
(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.
(d) Usufructuary mortgage - ... ... ... ... ...
(e) English mortgage - ... ... ... ... ...
(f) Mortgage by deposit of title-deeds - ... ... ... ... ...
(g) Anomalous mortgage- ... ... ... ... ..."
The proviso quoted above was added by Amendment Act No. 20 of 1929, in view of the conflict of decisions of various High Courts on the question whether the condition relating to reconveyance contained in a separate document could be taken into consideration for finding out whether a mortgage was intended to be created by the principal deed purporting to be a transaction of sale. The Legislature set the said controversy at rest by providing that a transaction shall not be deemed to be a mortgage by conditional sale, unless the condition for reconveyance is contained in the document which purports to effect the sale. The proviso does not require that the condition for reconveyance embodied in the purported sale deed has to be signed by the ostensible purchaser.
We will now turn to the case-law on this controversy.
10. In Chunchun Jha v. Ebadat Ali, AIR 1954 SC 345, a Constitution Bench of the Apex Court recognized 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 which invariably gives rise to trouble and litigation. The Court held that once a transaction is embodied in one document and not two and once its terms are governed by Section 58(c), then it must be taken to be a mortgage by conditional sale, unless there are express words to indicate the contrary, or in a case of ambiguity, the attendant circumstances necessarily lead to the opposite conclusion. The question in such case is not whether the words purport to make the transferee an absolute proprietor, for of course they must under Section 58(c), but whether that is done only ostensibly and not in substance. The Court held that in the circumstances of a given case, there may be no need to keep a reasonable margin between the debt and the value of the property as is ordinarily done in the case of a mortgage. When there was a relationship of debtor and creditor between the parties existing on the date of the suit transaction and the bulk of the consideration goes in satisfaction of such debt, it is legitimate to infer, in absence of clear indications to the contrary, that the relationship of debtor and creditor was intended to continue.
11. In Bhaskar Waman Joshi v. Shrinarayan Rambilas Agarwal, AIR 1960 SC 301, the Supreme Court enunciated the following principles :-
"The question whether by the incorporation of a condition a transaction ostensibly of sale may be regarded as a mortgage is one of intention of the parties to be gathered 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 circumstance that the transaction as phrased in the documents is ostensibly a sale with a right of repurchase in the vendor, the appearance being laboriously maintained by the words of conveyance needlessly reiterating 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 the 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."
12. In K. Simarathmull v. Nanjalingiah Gowder, AIR 1963 SC 1182, the plaintiff borrowed a certain amount from the defendant and in lieu thereof executed deed of conveyance of certain land with a house thereon in favour of the defendant. On the same day, another deed of reconveyance was executed by the defendant. By this deed the defendant agreed to reconvey the house, but the exercise of the right of demanding reconveyance by the plaintiff was subject to two conditions : (1) that the right must be exercised within two years, and (2) that the rent payable by the plaintiff should not be in arrears for more than six months at any time. The plaintiff broke the second condition. The defendant refused to reconvey. In a suit for specific performance, the plaintiff prayed that the Court should exercise its equitable jurisdiction and give relief against the forfeiture clause.
The Apex Court held that : (1) the sale-deed, the deed of reconveyance and the rent note were parts of the same transaction, but the transaction was not one of mortgage by conditional sale, and (2) that the Court could not relieve the plaintiff against the forfeiture clause. If the original vendor i.e. the plaintiff failed to act punctually according to the terms of the contract, the right to repurchase would be lost and could not be specifically enforced. Refusal to enforce the terms specifically for failure to abide by the conditions did not amount to enforcement of a penalty and the Court had no power to afford relief against the forfeiture arising as a result of breach of such a condition.
13. In P.L. Bapuswami v. N. Pattay Gounder, AIR 1966 SC 902, the Apex Court relied upon the following circumstances to indicate that the document was a transaction of mortgage by conditional sale and not a sale with a condition for retransfer :-
(i) the condition for repurchase was embodied in the same document,
(ii) the consideration for the transaction was Rs. 4,000/- while the real value of the property was Rs. 8,000/-.
(iii) the patta was not transferred to the mortgagee after the execution of the document. The land revenue also continued to be paid by the mortgagor and after his death, by his sons.
(iv) the consideration for reconveyance was Rs. 4,000/-, the same amount as the consideration for the original transaction.
14. In Tamboli Ramanlal Motilal v. Ghanchi Chimanlal Keshavlal, AIR 1992 SC 1236 : [1993 (1) GLR 889 (SC)], the Court relied upon the following features to indicate that the transaction was a conditional sale and not a mortgage :-
(i) The consideration amount of Rs. 5,000/- was not taken as a loan at all, but by executing the document, the executant discharged all the prior debts and outstandings. Hence, the consideration for conditional sale did not create any relationship of debtor and creditor.
(ii) The property was sold conditionally for a period of 5 years and the possession was handed over. The document further stated that "Therefore, you and your heirs and legal representations are hereafter entitled to use, enjoy and lease the said houses under the ownership right".
(iii) The document further stated that the executant shall repay the amount within a period of five years and in case he fails to repay neither he nor his heirs or legal representative will have any right to take back the properties. After the period of five years, the transferee will have a right to get the Municipal records mutated in his name and pay tax, and thereafter, the transferee will have an absolute right to mortgage, sell or gift the suit property. Neither the executant nor any one else could dispute the title.
The Supreme Court held that the aforesaid circumstances were clearly consistent with the express intention of making the transaction a conditional sale with an option to repurchase.
15. In Vidhyadhar v. Manikrao, 1999 (3) SCC 573, defendant No. 2, who owned a plot of land, executed a document dated 24-3-1971 in favour of defendant No. 1 for a sum of Rs. 1,500/- and delivered possession of the land to the latter. There was a stipulation in the document that if the entire amount of Rs. 1,500/- was returned to defendant No. 1 within two years, the land would be given back to defendant No. 2. The land was subsequently transferred by defendant No. 2 in favour of the plaintiff for a sum of Rs. 5,000/- by a registered sale-deed which was executed three months after expiry of the aforesaid time-limit of two years. The plaintiff, thereafter, filed a suit on the basis that defendant No. 2 had offered the entire amount to defendant No. 1, but the latter did not accept the amount even though defendant No. 2 had subsequently sent it by Money Order also. It was pleaded that since the document dated 24-3-1971 was a mortgage by conditional sale, the property was liable to be redeemed. While defendant No. 2 admitted the above case of the plaintiff, defendant No. 1 contested the same and contended that the document dated 24-3-1971 was an out and out sale and since the amount of consideration had not been tendered by defendant No. 2 within the time stipulated in the said document, the plaintiff could not claim reconveyance of the property in question. The trial Court as well as the lower appellate Court held that the document in question created a mortgage by conditional sale, that defendant No. 2 was entitled to redeem the mortgage and in view of the transfer from defendant No. 2 to the plaintiff, the plaintiff was entitled to the decree. However, the High Court intervened and held that the sale transaction made by defendant No. 2 in favour of the plaintiff was not proved. The High Court further held that the document in question was not a mortgage deed, but it constituted an out and out sale.
In appeal, the Supreme Court held that the finding of fact concurrently recorded by the trial Court as also by the lower appellate Court could not have been upset by the High Court in a second appeal under Section 100 C.P.C., unless it was shown that the findings were perverse, being based on no evidence or that on the evidence on record, no reasonable person could have come to that conclusion. The Apex Court held that the true test to find out whether a transfer is a sale or a mortgage is the intention of the parties entering into the transaction. If that is a transfer by way of a security, it would be a mortgage. The intention has to be found out on a consideration of the contents of the document in light of the surrounding circumstances. In the facts of the case, the Apex Court held that the condition of repurchase was contained in the same document by which the mortgage was created in favour of defendant No. 1, and therefore, the deed in question cannot but be treated as a mortgage by conditional sale as held by the two Courts below.
16. In Mushir Mohammed Khan (Dead) by LRs. v. Sajeda Bano (Smt.) and Ors., 2000 (3) SCC 536, the plaintiff purchased the suit property for a sum of Rs. 3,000/- in 1949. In 1955, he executed a sale-deed in respect of the house in favour of the defendant-appellant for a sum of Rs. 1,000/- only. A few days later, the defendant executed an agreement in favour of the plaintiff agreeing to reconvey the said house if the amount of Rs. 1,000/- was paid back to him within a period of two years. The plaintiff delivered the possession of the property only symbolically and executed a rent note promising to pay Rs. 20 per month as rent to, the defendant. Treating the above documents as constituting a mortgage, the plaintiff filed a suit for redemption which was dismissed by the trial Court and the lower appellate Court. In second appeal, the High Court took into consideration the sale-deed and the agreement of reconveyance together in the light of the surrounding circumstances and held that the transaction was a mortgage and not an absolute sale. However, it could not be treated as a mortgage by conditional sale in view of the proviso to Clause (c) of Section 58 and further held that the prohibition contained in the above proviso would operate only in respect of a mortgage by conditional sale, but not in respect of any other mortgage and held that the transaction between the parties was a usufructuary mortgage. The High Court accordingly decreed the suit of the plaintiff.
The Supreme Court held that the two documents read together would not constitute a mortgage by conditional sale as the condition of repurchase is not contained in the same document by which the property was sold. Even while holding that the transaction did not constitute a usufructuary mortgage either, the Court held that where the parties executed three documents almost contemporaneously, all the three documents have to be taken into consideration to find out the true nature of the transaction. However, considering the fact that the property was ostensibly transferred to the defendant not for its real value, but for a price which was far less than the market value and that the price to be paid on reconveyance was the same original price of Rs. 1,000/-, the Supreme Court observed that it appeared that though the intention was that of creating a mortgage, the plaintiff was persuaded to execute a sale-deed in favour of the defendant who executed a separate agreement of reconveyance in favour of the plaintiff. In the facts of the case, therefore, the Apex Court passed an order under Article 142 of the Constitution to do complete justice between the parties. In the said decision, the Court reviewed its previous decisions from Chunchun Jha v. Ebadat Ali, (supra) and the other decisions referred to hereinabove.
17. Upon a review of the aforesaid authorities, the following legal position and principles emerge :-
(i) The proviso to Clause (c) of Section 58 was added by Act 20 of 1929 so as to set at rest the conflict of decisions on the question whether the condition relating to reconveyance contained in a separate document could be taken into consideration in finding out whether a mortgage was intended to be created by the principal deed purporting to be a transaction of sale. The legislature enacted that a transaction shall not be deemed to be a mortgage by conditional sale unless the condition for reconveyance is contained in the document which purports to effect the sale.
(ii) But merely because the condition for reconveyance is incorporated in the same document purporting to be a sale, it does not necessarily mean that a mortgage transaction was intended. 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 to be gathered from the language of the deed interpreted in light of the surrounding circumstances. Of course, the condition has to be taken into account, but the value to be attached thereto must vary with the degree of formality attending upon the transaction.
(iii) The form in which the deed is clothed is not decisive, because the definition of a mortgage by conditional sale by itself contemplates an ostensible sale of the property.
(iv) The mortgage by conditional sale postulates the creation by the transfer of a relationship of mortgagor and mortgagee, the price being charged on the property conveyed. In a conditional sale, there is no relationship 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. Hence, what distinguishes the two transactions is the relationship of debtor and creditor and the transfer being a security for the debt.
(v) If the language is plain and unambiguous it must in light of the evidence of surrounding circumstances be given its 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. The oral evidence of intention is not admissible in interpreting the covenants of the deed, but the evidence to explain or even to contradict the recitals as distinguished from the terms of the documents may be given. The evidence of contemporaneous conduct is always admissible as a surrounding circumstance, but evidence as to subsequent conduct of the parties is inadmissible.
(vi) Once, a transaction is embodied in one document and not two and once its terms are governed by Section 58(c), then it must be taken to be a mortgage by conditional sale, unless there are express words to indicate the contrary, or in a case of ambiguity, the attendant circumstances necessarily lead to the opposite conclusion. The question in such case is not whether the words purport to make the transferee an absolute proprietor, for of course they must under Section 58(c), but whether that is done Only ostensibly and not in substance.
18. Examining the contents of the documents in the instant case in light of the aforesaid principles, while it is true that the transaction comprises of two documents (Exh. 65 and Exh. 86), this is not a case where one document is a document of out and out sale and the other one contains an agreement for reconveyance. In the first document itself, the owner of the property ostensibly sells a part of his property subject to the specific condition that upon return of Rs. 1,500/- (consideration for ostensible sale) by the plaintiff to the defendant, the property will be "returned to the plaintiff". Hence, once the condition of reconveyance is incorporated in the document of ostensible sale executed by the owner, the applicability of Section 58(c) is not ruled out merely because the ostensible purchaser's promise to reconvey the property after the specified period is contained in a separate document. In the peculiar facts of this case, one document (Exh. 65) is executed by the owner as an ostensible sale subject to a specific condition that the purchaser shall reconvey the property on the seller returning the same amount and the other document (Exh. 86) is executed by the ostensible purchaser agreeing to reconvey the property on receiving the same amount after the stipulated period of five years. Obviously, the defendant claimed all rights in the said property (admeasuring 17 sq. yards out of the property admeasuring 51 sq. yards) under the deed dated 18-8-1975 (Exh. 65), by the same document the plaintiff has ostensibly sold the property to the defendant conditionally. Under the circumstances, it has to be held that the condition for reconveyance was a part of the same document, which was therefore, not merely a document of ostensible sale, but it was by itself a document of ostensible conditional sale. Hence, we hold that the document Exh. 65 is not hit by the proviso to Section 58(c) of the Transfer of Property Act.
19. Once, the above conclusion is reached, we have to apply the principles laid down by the Constitution Bench in Chunchun Jha v. Ebadat Ali, AIR 1954 SC 345, that once it is held that the condition of reconveyance is treated as a part of the sale document and its terms are governed by Section 58(c) it must be taken to be a mortgage by conditional sale unless there are express words to indicate the contrary, or in a case of ambiguity, the attendant circumstances necessarily lead to the opposite conclusion.
20. In light of the above discussion and considering the fact that the suit property admeasuring 17 sq. yards out of a constructed property admeasuring 51 sq. yards, and that as against the ostensible sale consideration of Rs. 1,500/- paid by the defendant to the plaintiff on 18-8-1975, the plaintiff is to return the same amount after 5 years to the defendant in order to get the property back and in absence of any other material circumstance emerging from the record, we are of the view that there are no express words to displace the presumption raised by the Apex Court in Chunchun Jha v. Ebadat Ali (supra).
21. As regards the question whether there was an existing relationship of debtor and creditor between the parties on the date when the documents in question were executed i.e., on 18-8-1975 or whether the relationship of debtor and creditor was for the first time created on that day, the parties seem to have proceeded on the basis of such relationship having been created, because the trial Court has clearly recorded in Para 5 of its judgment that the only dispute between the parties was whether the plaintiff's right to redeem the property was available only in the first five years from the date of transaction or whether it was available after expiry of the five year period. A bare perusal of the documents clearly indicates that the right to redeem the property was available to the plaintiff after expiry of five years period from the date of execution of the documents. We are, therefore, not inclined to disturb the finding of fact given by both the Courts below that the transaction was one of mortgage by conditional sale and not an absolute sale.
22. We have accordingly no hesitation in holding that the document Exh. 65 constituted the transaction of mortgage by conditional sale and not a transaction of sale.
23. The appeal shall now be placed before the learned single Judge for passing appropriate orders in light of the above opinion.