Bakshi Jaswant Singh vs Smt. Pushpa Devi and others

S.D. Bajaj, J.—The Plaintiff-Respondent Smt. Pushpawati mortgaged her shop No. 6 forming part of Rekhi Mansion situated outside Rekhi Cinema, Ludhiana in favour of Defendants for Rs. 5000/- vide registered mortgage deed dated 10th September, 190(sic) copy Exhibit P. W. 2/B, for a period of one year. Alleging that the Defendants had not redeemed the mortgaged property in dispute on the expiry of one year period, Plaintiff Respondent filed before the learned trial court a suit for recovery of possession of the mortgaged property by redemption on payment of Rs. 5000/- on 17th January, 1972.

The suit was contested by Defendant-Appellant alleging that the alleged mortgage was a sham transaction and in reality Defendant-Appellant had taken the shop on rent on payment of monthly rent at the rate of Rs. 150/- per mensem. A sum of Rs. 1800/- was alleged to have been paid in advance simultaneously with the execution of the alleged mortgage deed on account of rent for the stipulated period of one year and that further rent at the agreed rate had also been duly paid upto December, 1971. It was stated that the amount of Rs. 5000/- was, of course, to be returned to Defendants on their vacating the shop taken on rent by them from Plaintiff-Respondent. It was also asserted that relationship of land-lord and tenant having been brought about between the parties, civil court had no jurisdiction to entertain and adjudicate upon the suit for redemption.

On the pleadings of the parties learned trial court framed the following issues:

Whether the mortgage deed in dispute, dated 10.9.1970 is a sham document and the amount of Rs. 5000/- mentioned in it to have been paid as mortgage money was not paid, as such, but as a pugree to the Plaintiff, as alleged in the written statement ?

Whether there exists a relationship of landlord and tenant between the parties and not that of a mortggaor and mortgagee qua the property in dispute ?

If relationship of landlord and tenant is proved between the parties, has this Court jurisdiction to take cognizance of the subject matter in dispute ?

Relief.

Vide its judgment dated 31st May, 1975, learned trial court decided all the three issues against Defendants and decreed the suit. Appeal filed by Defendants against the decision of the learned trial court was also dismissed by the learned Additional District Judge, Ludhiana with costs on 31st July, 1978. Feeling aggrieved from the judgments and decrees of both the learned courts below, the Appellant has filed R. S. A. No. 1260 of 1978 in this Court.

First and foremost question which crops up for consideration is whether the concurrent finding of fact, recorded by the learned two courts below, can be disturbed by this Court in second appeal. Relevant Section 100 of the Code of Civil Procedure, 1908 reads. " (1) Save where other wise expressly provided in the body of this Code or by any other law for the time being in force, an appeal shall lie to the High Court from every decree passed in appeal by any Court subordinate to a High Court, on any of the following grounds, namely:- (a) the decision being contrary to law or to some usage having the force of law, (b) the decision having failed to determine some material issue of law or usage having the force of law; (c) a substantial error or defect in the procedure provided by this Code or by any other law for the lime being in force, which may possibly have produced error or defect in the decision of the case upon the merits. (2) An appeal may lie under this section from an appellate decree passed ex-parte. "It would thus appear that a second appeal will lie on the following grounds:-

(1) The decision being contrary to law.

(2) The decision being contrary to usage having the force of law

(3) Failure to determine some material issue of law.

(4) Failure to determine some material issue of usage having the force of law.

(5 Substantial error or defect in procedure which may possibly have affected the decision of the case on the merits. A Court will therefore be committing an error of law.........

(1) if it bases its decision on no evidence at all and on mere surmises and conjecture ;

(2) If it bases its decision on irrelevant and inadmissible evidence as such evidence is no legal evidence

(3) if it misreads the evidence, i. e., assumes certain evidence to exist where there is none or vice versa.

(4) if it disregards or fails to consider material evidence in arriving at the conclusion.---

Where in the process of arriving at the finding of fact the lower Appellate Court has committed an error of law or has adopted erroneous or defective procedure, the finding of fact will be open to attack on the grounds of such error or defect. Thus a finding of fact can be set aside in second appeal in the following cases:

(1) Where it is not based on any evidence or on a judicial conclusion of the evidence adduced

(2) Where it is based on a misconception of the real point in controversy in the case.

(3) Where the conclusion of fact is not warranted by the facts on which it is based, or is inconsistent with the other findings in the cases, or is opposed to the case set up by the party in whose favour it is drawn.

(4) Where it is contrary to the facts found, or is inconsistent with the statement of reasons therefor in the judgment, or is based on quaint reasoning, or is vague or indefinite.

(5) Where the finding has been given in reversal of the decision of the first Court either without properly appreciating or discussing the reasons given by the latter Court, or on unsatisfactory grounds.

(6) Where it is arbitrary, or vitiated by prejudice or is based on a distorted view of evidence, or where no reasons have been given for the finding.

(7) Where material facts have been ignored in arriving at the conclusion of fact.

In AIR 1949 342 (P & H.) , this Court ruled. "A finding of fact to be binding on a Court of second appeal must be a judicial decision reached on the consideration of the whole of the evidence Where all the evidence available is not considered, the High Court will and should interfere in second appeal "Again in Radhey Sham and Ors. v. Kaushalya Devi w/o Behari Lal 1984 C.L.J. (C. & Cr. 326.), learned brother J. v. Gupta J observed, "If the approach of the lower Appellate Court is based on surmises and conjectures the judgments and decree passed by it have necessarily to be set aside in second appeal."

Learned Counsel for the Plaintiff Respondents has on the other hand argued with reference to the observations made in Deity Pattabhi-ramasuamy v. S Hanymayya and others A. I. R. 1959 S. C. 57, Madamanchi Ramappa and Another Vs. Muthalur Bojjappa, and Sadhu v. Mst. Kishni (1979) 81 P. L. R. 577, that the provisions of Section 100 are clear and unambiguous. There is no jurisdiction to entertain a second appeal on the grounds of erroneous finding of fact, however gross the error may seem to be - Nor does the fact that the finding of the first appellate Court is based upon some documentary evidence make it any the less a finding of fact. A Judge of the High Court has, therefore, no jurisdiction to interfere in second appeal with the findings of fact given by the first appellate Court based upon an appreciation of the relevant evidence. (The practice of some Judges of the High Court disposing second appeals as if they were first appeal deprecated) A careful scrutiny of the three authorities aforesaid makes it abundantly clear that a finding of fact termed as unassailable in second appeal has necessarily to be based on appreciation of evidence and that the High Court in second appeal can alter a finding which is based on no evidence or surmises and conjectures and in cases where learned court of first appeal misreads the evidence or disregards or fails to consider material evidence in arriving at the conclusion.

A reference to the record would reveal that the learned trial court erroneously held that the evidence adduced by the Defendant-Appellants before it could not in terms of Sections 91 and 92 of the Indian Evidence Act be taken into account to contradict Exhibit P. W. 2/B-registered mortgage deed dated 10th September, 1970 forming the basis of the claim of Plaintiff Respondents. Relevant portion of its assailed judgment dated 31st May, 1975 reads. "The case of the Defendants also does not fall in any of the provisions of Section 92 of the Indian Evidence Act In these circumstances, the contentions raised, by the counsel for the Defendants Shri S. R. Wadhera, cannot be given any weight and the evidence led by him to contradict the evidence of the Plaintiff i. e. P. W. 2/B cannot be taken into account. The Defendants were bound to show definitely as to what were the terms and conditions of tenancy arid no document, so far has been brought on the file showing either the receipt of the rent by the Plaintiff from the Defendants. " It is simply unconscionable that a landlady who as per allegations in the written statement was trying to camouflage the deed as mortgage in place of tenancy would ever agree to execute a lease deed or get executed from Defendant-Appellants in her own favour a rent note or issue them any receipt for the payment of rent so that they may be able to produce it before the learned trial court to prove their case. Learned-trial Court thus acted illegally in applying the guillotine rule of excluding the evidence adduced by the Defendant-Appellants before it from consideration and basing its judgment on mortgage deed ; which was alleged to be a sham transaction. It would thus appear that the learned trial court committed an error of law in shutting out and not taking into consideration the evidence adduced by Defendant-Appellant, before it to prove their case. It would thus appear that the material facts were ignored by it in arriving at the conclusion and, therefore, its finding on issue Nos. 1 to 3 has to be set aside.

Similarly, learned court of first appeal no doubt corrected this error of the learned trial court in its assailed appellate judgment dated 31st July, 1978 but based its own conclusion on a distorted view of the evidence on record. The finding of fact recorded by it can, therefore, be set aside in second appeal because of its either being not based on any evidence or on legal evidence In any case the finding of fact returned by it does not appear to be based on a judicial consideration of the evidence adduced before the learned trial court.

One of the contentions raised by Defendant Appellants was that the Plaintiff-Respondent was a rich lady in affluent circumstances and as such there was no need for her to mortgage her property with them for securing a paltry sum of Rs. 5,000/- and therefore, in reality she had given the shop on rent and the execution of the mortgage deed was a sham transaction. Instead of appreciating the assertion in the light of the evidence adduced, learned court of first appeal brushed it aside by saying, "The Plaintiff-Respondent may be having her own reasons for mortgaging the property." Similarly two Advocates of this Court, namely, Shri S. S. Dhaliwal D. W. 5 and Shri Nirmal Singh D. W 6, both practising at Ludhiana, who are also attesting witnesses of the mortgage deed Exhibit P. W 2/B, Categorically asserted in unequivocal terms before the learned trial court, that a sum of Rs. 1800/- was paid by Defendant-Appellants to Plaintiff Respondent in their presence and that the rent of the shop was agreed to be paid at the rate of Rs. 150/-permerisum D W. 7 Shri Chander Kaushal and D. W. 8 Shri Tarsem Lal both proved payment of rent at this rate for a further period of two months and one month respectively for the remaining period of 3 months expiring before the institution of the suit ; after the expiry of initial period of one year for which according to the learned Advocates aforesaid, a sum of Rs 1800/- had been paid in advance. It would thus appear that the learned lower Appellate Court erred in basing its conclusion on no evidence or ignoring the evidence adduced before it. Its appraisal of the evidence cannot, therefore, be termed as judicial consideration of the evidence adduced by Defendant-Appellants before the learned trial court. This conclusion is obviously based on surmises and conjectures.

Much capital has been made by the learned Counsel for Plaintiff-Respondent, of the admission made by Sari S. S. Dhaliwal, Advocate, D. W. 5 in Cross-examination that a sum of Rs. 5000/- was paid in his presence as mortgage money at the time of the execution of the mortgage deed Exhibit P. W. 2/B and it has been urged that it service as a clincher for negativing the case set up by the Defendant Appellants that Exhibit P. W 2/B was a sham transaction. The argument in no way detracts from the case set up by the Defendant-Appellant because in the first instant Defendant-Appellants themselves stated in the written statement that they paid this amount which was, of course to be returned to them on their vacating the shop in dispute. There was thus nothing wrong in Shri S. S. Dhaliwal, Advocate, D. W 5 admitting this payment. In fact, there was no other go for him because this payment was recorded in the mortgage deed Exhibit P. W. 2/B which bore his attestation. The statement of Shri Dhaliwal was of course, required to be read as a whole for deciding the issue and not disected piece meal as has been done by the learned lower Appellate Court. Reading it as a whole, the deposition of Shri S S Dhaliwal, Advocate, D W. 5 does support out and out the ease set up by Defendant-Appellants before the learned trial court. To the same effect is the statement of Shri Nirmal Singh, Advo-cate, D. W. 6.

Consequantly the appeal succeeds ; the assailed judgments and decrees of both the learned courts below are set-aside and the suit filed by Plaintiff-Respondent before the learned trial court is dismissed. Plaintiff-Respondent shall pay the costs to Defendant-Appellants throughout.