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M. Swaminatha Aiyar vs Appasami Aiyar And Ors. on 30 October, 1914

2. As to the first contention, the line of division between mortgages by conditional sale and sales with provision for re-purchase is a very fine one. It must ultimately depend upon what was the intention of the parties to be gathered from the instrument and a consideration of the surrounding circumstances. As pointed out in Swaminatha Aiyar v. Appasami Aiyar 27 Ind. Cas. 305 : 27 M.L.J. 686; (1914) M.W.N. 906 that does not mean that extrinsic evidence is to be admitted to qualify or expand the terms, of a written instrument, but only that circumstances in which the contracting parties stood and their relation to one another may be taken into consideration in order to ascertain what the real intention was. The words of the document in this case cannot be said to be conclusive either way. The fact that all the earlier transactions between the parties are set out and the balance due from the 1st defendant's father to his creditor is struck at Rs. 960, a larger sum than the Rs. 400 allocated to the land conveyed, points slightly in the direction of the document being a mortgage. The fact that no time limit is fixed for the exercise of the option to re-purchase also slightly points in the same "direction. Much stronger, in my opinion, is the fact that the two parties to the deed were members of a united family who had only recently divided their property and the fact that the land conveyed was part of the share just recently allocated on partition to the 1st defendant's father. On the whole the balance of my opinion inclines, though not strongly, towards regarding the document as a mortgage.
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