Murugan vs Jayarama Pillai and Others

N.S. Ramaswami, J.—The only question in this appeal under the Letters Patent is whether the document, Ex. A-1, is a mortgage by

conditional sale or whether it I an outright sale, with a right to repurchase. The suit was for redemption by the executants of the document Ex. A-1,

on footing that that was a mortgage by conditional sale. The defendant contended that it is an outright sale with a right to repurchase and that the

plaintiffs having not exercised their right to repurchase, they have no further remedy. The first two courts held that the document was an outright

sale and therefore the plaintiffs were not entitled to redemption. However, on a second appeal filed by the plaintiffs, Venkatadri, J., reversed the

finding of the courts below and allowed the appeal, holding that Ex. A-1 is a mortgage by conditional sale. Now, the defendant in the suit has filed

this Letters Patent Appeal.

The terms of Ex. A-1 are that the property in question was sold for a sum of Rs. 3826.50, consisting of five items of consideration, and the

property would be reconveyed if the vendors (the plaintiffs in the suit) repaid the said sum of Rs. 3826.50 after five years and within seven years

from the date of the document. The document is styled as Kedukirayam. Admittedly, the document comes under the purview of S. 58(c) of the

Transfer of Property Act, as amended by Act XX of 1929. That provision says that where the mortgagor ostensibly sells the mortgaged property,

on condition of such payment of the mortgage amount being made, the buyer shall transfer the property to the seller, the transaction is called a

mortgage by conditional sale. In the present case the condition to repurchase is in the very document of the ostensible sale. Therefore, it is not

contended by the learned Counsel for the defendant-appellant that this document does not come under the purview of Section 58(c) of the

Transfer of Property Act. That being so, the burden is heavy on the defendant to establish that the document is really an outright sale. In Pandit

Chunchun Jha Vs. Sheikh Ebadat Ali and Another, , it is pointed out that the Legislature has made a clear cut classification and excluded

transactions embodied in more than one document from the category of mortgages and that therefore it is reasonable to suppose that the persons,

who, after the amendment of Section 58(c) of the Transfer of Property Act, choose not to use two documents, do not intend the transaction to be

a sale, unless they displace that presumption by clear and express words, and if the conditions of Section 58(c) are fulfilled, then the deed should

be considered as a mortgage. However, the learned Counsel for the appellant referred to three other decisions of the Supreme Court and

contended that these decisions support his contention that this document is really an outright sale and not a mortgage by conditional sale.

In Bhaskar Waman Joshi (deceased) and Others Vs. Shrinarayan Rambilas Agarwal (deceased) and Others, , the finding is that document in

question in that case was really a mortgage by conditional sale. The learned Counsel points out that the circumstances that were present in that

case are not present in the present case, and therefore, the document in the present case should not be held to be a mortgage by conditional sale. It

is needless to point out that there cannot be two cases exactly similar on facts. The mere fact that the circumstances that were present in the above

case are not so present in the present case is not a ground to hold that the document, Ex. A-1, is not a mortgage by conditional sale. We would

presently advert to several other circumstances which do indicate that the parties intended that the document is only a mortgage by conditional sale,

and not an outright sale. In Bhoju Mandal Vs. Debnath Bhagat, , on the facts of that case, it was held that the transaction was a sale and not a

mortgage by conditional sale. That decision would not help the appellant in the present case P.L. Bapuswami Vs. N. Pattay Gounder, , which is

also referred to by the learned counsel, is against his contention. That is a case where the document, which was an ostensible sale, was held to be a

mortgage by conditional sale and not an outright sale. The Supreme Court pointed out four circumstances to come to the conclusion that that

document was a mortgage by conditional sale. They are: (1) the condition for repurchase was embodied in the same document; (2) the

consideration for the transaction was Rupees 4,000/- while the real value of the property was Rs. 8,000/- ; (3) the patta was not transferred to the

vendee after the execution of the document and the cist for the land was also continued to be paid by the vendor; and (4) the consideration for the

reconveyance was Rs. 4,000/- ; namely, the same amount as the consideration for the original transaction. As we said, this decision is really against

the contention of the learned counsel for the appellant, for, in the present case, at least three circumstances relied on by the Supreme Court in the

above case are present. In fact, over and above those three circumstances, there are several other circumstances indicating that the document is a

mortgage by conditional sale. In this case also, the reconveyance is for the same amount as the consideration for the ostensible sale. The condition

regarding the reconveyance is embodied in the very same document. Patta has not been transferred to the defendant. These are three of the

circumstances relied on by the Supreme Court in the above case for holding that the document in that case, and they are also present in the present

case. In addition to the above three circumstances in the present case, there are several other circumstances. As we said, the document is styled as

Kedukirayam. As we understand, the term Kedukirayam means a sale which is to take effect after a particular time-limit. The learned Judge who

heard the second appeal has also pointed out that according to the Lexicon, the words Kedukirayam refer to a time-limit. If it is an outright sale,

the document would be termed as a Suddikirayam. The very fact that the parties chose to call the document a Kedukirayam indicates that the

ostensible vendee was not to get the title to the property immediately on the execution of the document but only after time-limit fixed in the

document. In this connection, the learned Counsel for the appellant referred to the decision reported in S.R. Kulathu Iyer Vs. S. Manickavasagam

Pillai and Another, . That is a decision of a learned Single Judge of this court add one of the points considered in that case was regarding the

meaning of the term Voidakirayam. The learned Judge remarked that the words Voidakirayam in the context appeared to him as meaning nothing

more than the fact that the document was a sale, with a condition to repurchase within a fixed period. However, we are unable to share the view of

the learned Judge regarding the meaning of the term Voidakirayam which is more or less equivalent to Kedukirayam, Voidakirayam or

Kedukirayam cannot possibly refer to the condition to repurchase. As we said, as the term refers to a time-limit as per the meaning given in the

lexicon, it should mean that the sale is to take effect after a particular time-limit. In the decision referred to above 1956-1 MLJ 385, the learned

Judge of this Court referred to several circumstances appearing in that case, explained away each and every circumstance and ultimately held that

the document in that case was really an outright sale. But the same learned Judge had to consider similar document in the case reported in B.A.

Khan alias Bahadur Ali Khan Vs. Nawaz Khan and Others, . In the latter case, that is, 1956-1 Mad LJ 388, the learned judge has held on similar

circumstances referred to in the earlier case that the document in question is really a mortgage by conditional sale. Anyway, we are unable to take

1956-1 Mad LJ 385, as a precedent regarding the present question whether the document is to be treated as a mortgage by conditional sale or an

outright sale.

Apart from the document having been styled as a Kedukirayam there are two or three other circumstances indicating that the document is really

a mortgage by conditional sale. The most important circumstance is that the consideration is an odd sum, namely, Rs. 3826.50. If it is an outright

sale, we do not understand as to why the parties should agree upon such an odd figure as the consideration for the same. It is significant to note

that the entire sum of Rupees 3826.50 paid by the defendant under the document went towards the discharge of loans due by the plaintiffs. As we

said, there are five items of consideration making up the total sum of Rs. 3826.50. The first four items are mortgages and promissory notes which

had been executed by the plaintiffs and which were directed to be discharged by the defendant himself. The fifth item is a cash consideration of Rs.

797.50. But even this amount is really for discharging sundry debts due by the plaintiffs. This fact, namely, that the consideration is for an odd

amount, is clearly indicative of the fact that the document is really not an outright sale. The learned Counsel for the appellant contends that the first

two Courts have found that the value of the property dealt with under document was not Rs. 7,000/- as claimed by the plaintiffs, and that the

consideration mentioned in the document was adequate. But, as pointed out by the learned Judge, there is some evidence in the case that the

property was worth much more than Rs. 3826.50 as on the date of the document. That apart, it is impossible to hold that the value of the property

was exactly Rupees 3826.50 as on the date of the document.

There is yet another circumstance against the appellant. The plaintiffs gave notice calling upon the defendant to accept the sum of Rs. 3826.50

and hand over possession of the property to them, on the footing that the document, Ex. A-1, is only a mortgage by conditional sale. The

significant fact is that the appellant, after receiving the notice, did not protest. He did not send any reply at all.

In view of all these circumstances, we agree with the learned Judge that the document is only a mortgage by conditional sale.

The learned Counsel for the appellant is not right in his contention that as there is no mention of interest for the sum of Rs. 3826.50 in the

document, it should be treated not as a mortgage, but as an outright sale. Admittedly, the defendant was put in possession of the property

immediately on the execution of the document. He was to enjoy the property in lieu of interest. Therefore, one cannot expect any mention of

payment of interest for the said sum in the document.

The result is, the appeal fails and is dismissed with costs.

Appeal dismissed.