Ramu Ammal and Others vs Nathamuni Naidu and Another

V. Bakthavatsalu, J.—The plaintiff are the appellants. The plaintiffs filed the suit for specific performance.

The case of the plaintiffs is as follows: The suit property belonged to Lakshmi Ammal, wife of Maila Maistry father-in-law of first plain-tiff. She purchased the same from one Chengamma Raja for a sum of Rs. 500 under sale deed dated 12.9.1943. This property was exchanged with Buchi Ammal, another wife of Maila Maistry under registered exchange deed dated 18.11.1948. Since then Buchi Ammal was in possession and enjoyment of the same. She settled the property in favour of her son Sriramulu Maistry, husband of the first plaintiff and father of plaintiffs 2 to 6 and second defendant under settlement deed dated 10.12.1952. Under settlement deed dated 13.8.1958, the husband of first plaintiff and father of defendants 2 to 6 and second defendant gifted the suit property to his parents Buchi Ammal and Maila Maistry who got it in equal moieties. Malia Maistry died in 1969 on which Buchi Ammal his widow and his only son Sriramulu inherited the properties. Buchi Ammal''s share was augmented to 3/4th share while Sriramulu got 1/4th share. Sriramulu died on October-November, 1971 leaving the plaintiffs, second defendant and his mother Buchi Ammal. Buchi Ammal''s share got augmented to 73/96 share, the fourth plaintiff and second defendant got 9/96 share each and plaintiffs 1 to 3, 5 and 6 got each 1/96th. share. Buchi Ammal executed a sale deed in favour of defendants on 10.4.1972 for a sum of Rs. 6,000. Prior to, Buchi Ammal and Sriramulu executed a mortgage deed to the defendants on 22.2.1971, which got merged and discharged by the defendants becoming the purchaser of the property. Notwithstanding the above sale, since the sale by Buchi Ammal transferred only her fractional interest in the properties, the same continues in the possession of the plaintiffs till today. The first defendant a stranger did not take any steps to have his share divided. The first defendant has been recovering money from the first plaintiff and second defendant representing the share of the income. The first plaintiff and second defendant are totally illiterate. The first defendant appears to have got all the payments made by them towards the income endorsed on the discharged mortgage deed as payment towards it. Under the document dated 10.4.1972 the vendor Buchi Ammal has reserved a right to repurchase the property conveyed under it before 4.9.1982 for Rs. 6,000. Buchi Ammal died in or about 1974 and the plaintiffs 3 to 6 and the second defendant are entitled to enforce the right of reconveyance. Since the second defendant has gone to Bombay, he was impleaded as second defendant for proper adjudication. As the date fixed in the agreement has not been expired and as some of the persons entitled to enforce the agreement are minors, there is no bar of limitation to enforce the agreement of reconveyance. The plaintiffs are ready and willing to perform their part of the contract by paying the price fixed. Though the first plaintiff is not entitled in her own right to enforce the contract of reconveyance, she is interested in a portion of the property and therefore, she is added as a formal party. Hence, the suit is filed for specific performance.

The case of the 1st defendant is as follows:

The suit as framed is not maintainable. The suit property belonged to Buchi Ammal and she alone is the absolute owner of the same. The said Buchi Ammal and her son executed a simple mortgage for Rs. 6,000 on 22.2.1971 and the said mortgage is not discharged. The allegation that the mortgage got merged in the sale deed dated 10.4.1972 is not true. The alienation made by Buchi Ammal is for family necessity and therefore, it is binding on the plaintiffs and second defendant. The first plaintiff and second defendant executed lease deed in favour of the defendant for a period of three years on 27.3.1975. The first plaintiff and second defendant committed default in payment of lease amount and therefore, the defendant was forced to file C.T.P. No. 25 of 1978 before the Authorised Officer Kacheepuram for eviction. In the above proceedings, the first plaintiff and second defendant denied the title of the defendant over the suit properties and contended that there is no relationship of landlord and tenant between them. Ultimately, the above petition was dismissed, on technical grounds. Time fixed for the agreement of reconveyance is over on 9.4.1981. Since they have not taken steps to get reconveyance agreement within time fixed in the document, the suit is barred by limitation. The plaintiffs and second defendant have not deposited the amount of Rs. 6,000 within the time allowed in the document dated 10.4.1972 and it will show that the plaintiffs and second defendant are not ready to perform their part of the contract. The plaintiffs and second defendant have not exercised their right to get the document of reconveyance within the stipulated time. Hence, the defendant alone is the absolute owner of this property.

On the above pleadings, the trial court has framed five issues. On a consideration of oral and documentary evidence, the trial court dismissed the suit with costs. Aggrieved on the said judgment and decree, the plaintiffs preferred an appeal in A.S.No. 80 of 1983. The learned Principal Subordinate Judge, Vellore by judgment dated 28.2.1985 dismissed the appeal and confirmed the judgment and decree passed by the trial court. Aggrieved on the said judgment and decree, the plaintiffs have come forward with this second appeal.

The following contentions are raised in the grounds of appeal:

The appellate court erred in holding that the suit is barred by limitation. The courts below failed to see that the plaintiffs have always been ready and willing to perform their part of the contract. The courts below failed to note that some of the plaintiffs are minors and therefore, the cause of action did not arise until they become majors. In any event, the appellate court failed to see that Ex.A-6 is not a sale deed but mortgage by a conditional sale and that therefore, the suit is will within time. The appellate court should have allowed the plaintiffs to amend the plaint. As per their application in I.A.No. 75 of 1984, to claim the alternative relief of redemption of mortgage. The courts below failed to see that Ex.A-6 is not an out right sale and that it is only a mortgage by conditional sale.

The following substantial questions of law are formulated while admitting this second appeal;

Whether the suit for specific performance is barred by limitation?

When some of the plaintiffs are minors can it be said that the suit is barred by limitation as the cause of action subsists till three years after their attaining majority?

Whether Ex.A-6 is not a mortgage by a conditional sale and whether the plaintiffs are in the alternative entitled to claim redemption of Ex.A-6 properties?

The appellant filed C.M.P.No. 9547 of 1986 to permit the plaintiffs to amend the plaint. It is alleged in the affidavit that the document in question is only a mortgage and not an absolute sale and that the properties even at the time of conveyance were worth Rs. 50,000 and that the mortgagor sold the property for low price of Rs. 6.000 and that the major portion of the consideration stated in the document was for discharge of several debts and that the relationship of debtor and creditor will show that the document is only a mortgage by conditional sale and that therefore, plaintiffs may be permitted to raise additional ground in the plaint and-accordingly, the prayer for alternative relief for redemption of the mortgage deed dated 10.4.1972 may be inserted in the plaint.

The respondent/first defendant filed counter in which he has raised the following contentions:

The petition is not maintainable. The petitioner has filed a similar petition before the lower appellate court in C.M.P.No. 75 of 1984 and the appellate court has elaborately considered the point and has given its finding. The appellate court has held that the document cannot be construed as a mortgage by conditional sale. The plaintiff has come forward with a definite case in the plaint, wherein it is stated that what was executed on 10.4.1972 is an outright sale with a condition for reconveyance. Therefore, the plaintiffs cannot come forward with a new case. There are no materials to substantiate that the properties were worth about Rs.50,000 on the date of the mortgage.

Points: The plaintiffs claiming to be the legal representatives of Bucrri Animal have filed this suit for specific performance. It is the case of the plaintiffs that the second defendant is also one of these heirs and that as he has gone to Bombay, he could not be present to file the suit and that therefore, lie has been impleaded as second defendant in the suit. There is no dispute that the deceased Buchi Ammal executed sale deed on 10.4.1972 for Rs. 6,000 in favour of the first respondent in respect of the suit property which is comprised in S. No. 521/3 and tin-extent of the property is 1 acre 10 cents. It is also not in dispute that Buchi Ammal and her son Sriramulu Maistry executed a simple mortgage in favour of first defendant on 22.2.1971 for Rs. 6,000. The document Ex.B-1 is styled as sale with agreement to repurchase. It is recited in the above document that vendor was to discharge certain debts mentioned therein and that the vendee first defendant agreed to discharge the said debts totalling to Rs. 4,280 and that for the balance received from the first defendant, the sale deed is executed for Rs. 6,000. It is also further stated that possession was delivered on the date of the sale deed to first defendant. It is, further, agreed under the above document that the vendor has agreed to repurchase the property on or before 9,4.1981 by paying Rs. 6,000 and that if the executants of the document i.e., vendor failed to obtain the reconveyance within the stipulated time, the document should be treated as an outright sale and that if the vendee refused to execute the reconveyance, vendor would be entitled to file suit and obtain possession. It is, thus, seen from the above document that option was given to vendor to repurchase the property within the stipulated time i.e., 9.4.1981. Ex.A-6 is the copy of Ex.B-1. It is seen from Ex.A-7 the notice issued by plaintiff to first defendant that the plaintiffs offered to repurchase the property and accordingly they issued notice to first defendant on 17.2.1975 directing him to receive Rs. 6,000 and register the document. Ex.A-9 is the reply issued by the first defendant, wherein the first defendant has directed the plaintiffs to discharge the debts. Even though, as per the stipulations contained in Ex.B-1 reconveyance should be obtained on or before 9.4.1981, the suit was filed only on 8.6.1981, Both Courts have held that the suit is barred by limitation. But, it is alleged in the plaint that some of the persons entitled to enforce the agreement are still minors and that therefore, there is no bar of limitation. It is seen that the plaintiffs 5 and 6 were minors on the date of presentation of the plaint. The first appellate Court had rejected the above contention holding that the other major plaintiffs did not take steps to file the suit on or before 9.4.1981.

It is well-settled that time is not an essence of an agreement relating to immovable property and the specific performance of the contract cannot be refused on the ground of delay. But the above principle will not apply in respect of suit for specific performance relating to agreement to re-purchase. Learned Counsel for the respondents relies upon a decision reported in Varadarajulu Iyer v. Arumugha Goundan (1960)1 M.L.J. 380. In the above decision it is held thus:

It has been held that as a general rule time would not be of the essence of the contract in regard to an agreement for sale of immovable property. But in regard to contract of repurchase or reconveyance of immovable property there is generally an outright sale accompanied by an agreement to reconvey the same within the stipulated time. This could be considered only as conferring a power or privilege and in the nature of an option on the original vendor. Being thus in the nature of power of privilege it should be construed strictly and any stipulation as to the time for the exercise of the power would govern the same and would be an essential term of the contract.

In a recent decision of this Court reported in Periyaswamy and Others Vs. Kaliammal and Others, , it is held thus:

For all the reasons stated above, the judgment and decree of the learned first appellate judge, dismissing the suit and also holding that the plaintiffs, on account of the default committed by them in not enforcing the agreement for reconveyance in the manner agreed to and according to the terms and conditions contained therein including the stipulation regarding the time, which does not merely operate as period of limitation, but more as a condition precedent for such enforcement are not entitled to the relief sought for, do not call for any interference in my hands.

It is thus seen from the above decisions that time is the essence of the contract in a suit for specific performance filed on the basis of the agreement or right of purchase. It cannot be disputed that the right to repurchase being optional must be exercised according to stipulations and conditions embodied in the document. Therefore, the findings of the courts below that the suit is barred by limitation do not call for any interference.

It is no doubt true that the plaintiffs 5 and 6 were minors on the date, of the suit. Section 7 of the Limitation Act states thus:

Disability of one of several persons Where one of several persons jointly entitled to institute a suit or make an application for the execution of a decree is under any such disability, and a discharge can be given without the concurrence of such person, time will run against them all, but, where no such discharge can be given, time will not run as against any of them until one of them becomes capable of giving such discharge without the concurrence of the others or until the disability has ceased.

Section 6 of the Limitation Act relates to '' legal disability''. The above section empowers the person to institute a suit after the disability i.e. minority has ceased. It is admitted that the plaintiffs other than plaintiffs 5 and 6 are majors. An arguments was advanced before the appellate court that when several persons jointly entitled to institute a suit and that one or some of them can give a full discharge of the whole claim without the concurrence of the others, time will run against all and the minority, insanity shall not entitle him or his co-plaintiffs to any extension of time. The appellate court has held that second defendant or other plaintiffs should have instituted the suit within the period of time and that as they failed to do so, the suit was barred by limitation, even against minors i.e., plaintiffs 5 and 6. Sections 6 and 7 of Limitation Act will not apply to this case. When several persons are entitled to sue in respect of joint claim or common property the limitation will run against all even though one of the said persons was under disability. In fact, the plaintiffs issued notice in the year 1975. Therefore, there was no bar for major plaintiffs to institute a suit for specific performance within the stipulated time. In the above circumstances, the findings of the courts below that the suit is barred by limitation do not suffer from any infirmity. The contention of the plaintiffs that some of the plaintiffs were minors on the date of the suit and that therefore, there is no bar of limitation has got to be rejected, in view of reasons stated above.

In this appeal, the appellants have come forward with another contention. The appellants have filed C.M.P. for amending the plaint and under the proposed amendment, the appellants want a decree for redemption. In other words, the appellants want to treat Ex.B-1 as a mortgage by conditional sale. The appellants filed similar application before the appellate court in I. A.No. 75 of 1984 and the said petition was dismissed by the appellate court. It is open to the appellants u/s 105, C.P.C. to set out as a ground of objection in the memorandum of appeal regarding the defect and irregularities caused in interlocutory application. It is open to the appellants to canvass in this appeal that the reason given by the first appellate court for negativing the alternative claim is not sustainable. Therefore, there is no need to file another application for amendment of plaint.

Before deciding the question whether the plaintiffs can be permitted to amend the plaint, it becomes necessary to give a finding on the question whether Ex.B-1 is a sale or mortgage by conditional sale. It is well settled that the question whether a particular document is a mortgage by conditional sale or outright sale would depend upon the terms of a particular document. Certain tests have been laid down by several decisions for deciding the question whether the document is a mortgage by conditional sale. They are, the existence of debt, relationship of creditor and debtor between vendor and vendee and possession of property and stipulation for the payment of interest and value of the property.

Learned Counsel for the appellants contended that the properties were worth about Rs. 50,000 and that the very fact that the document was executed for a low price of Rs. 6,000 will show that it is a mortgage. It is contended that the first defendant already obtained mortgage from Buchi Ammal and Sriramulu under Ex.A-5 on 22.2.1971. In support of his contention, learned Counsel for the appellant relies upon a decision reported in P.L. Bapuswami Vs. N. Pattay Gounder, . It is held in the above decision that the value of the property was Rs. 8,000 and that the document was executed for Rs. 4,000 and that patta was not transferred to the first defendant. Taking into consideration, the above facts, the Supreme Court has held that the document in question which was the subject matter of the above appeal was only a mortgage by conditional sale. In Pandit Chunchun Jha v. Sheikh Ebadat All and Anr. 1955 S.C.R. 175. It is held that if the condition of repurchase is embodied in the document that effects or purports to effects the sale, then it is a matter for construction which was meant. The factors which determine the character of the document are also enunciated thus in the above decision:

There is no hard and fast rule for determining whether a given transaction is a mortgage by conditional sale or sale outright with a condition for repurchase. Each case must be decided on its own facts. The numerous decisions of the High Courts on the point are of no help because two documents are seldom expressed in identical terms.

The intention of the parties is the determining factor but the intention must be gathered from the document itself which has to be construed to find out the legal effect of the words used by the parties. 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. If however there is ambiguity in the language employed then it is permissible to look at the surrounding circumstances to determine what was intended.

In Natesa Pathar (died) and others Vs. Pakkirisamy Pathar and others, , it Is held that taking together the most vital aspect alongwith valuation of the property and substantial difference between the actual value of the property, there can be no difficulty in holding that the document in question was only a mortgage by conditional sale and not a sale with a condition on for retransfer.

But, in this case, it is not averred in the plaint that the property worth about Rs. 50,000 only long after the disposal of the suit the plaintiffs have come forward with a plea in the amendment petition that the properties were worth about Rs. 50,000 on the date of Ex.B-1. Regarding possession, it is recited in the document that possession was delivered to first defendant on the date of document. It is contended by the defendants in the written statement that the first plaintiff and second defendant executed a lease deed in favour of the defendants for a period of three years on 27.3.1975 agreeing to repay the early lease. The first defendant seems to have filed petition before the Authorised Officer, Kacheepuram for eviction of first plaintiff and that the same was dismissed. It is admitted in the plaint that Buchi Ammal was in possession of the property. But, it is not stated that Buchi Ammal and plaintiffs were in possession of the property as mortgagors. It is alleged in the plaint that the first defendant has been recovering from first plaintiff and second defendant the amount representing the share of the income to the undivided share owned by him. As the possession of Buchi Ammal is explained by the defendants, the case of the plaintiffs that Buchi Ammal was in possession of the property in her own right even after execution of Ex.B-1 cannot be accepted. The appellate court on consideration of the lease deed Ex.B-4 has observed that the above lease deed was executed by 1st plaintiff and 2nd defendant and that if Ex.B-1 is a mortgage, there was no need to execute a lease deed Ex.B-4. Therefore, the evidence adduced by the defendant, will show that possession of Buchi Ammal heirs was only that of a lessee. In view of the above facts, the contention of the plaintiffs that the executant of the document Ex.B-1 was in possession in other capacity cannot be accepted.

There is no stipulation as to payment of interest in Ex.B-1. It is only stated that the vendor is entitled to repurchase for a sum of Rs.6,000 only. The fact that patta was not transferred in favour of first defendant will not advance the case of the plaintiffs that the document is only a mortgage by conditional sale.

Learned Counsel for the respondents contended that the relationship of creditor and debtor did not exist at the time of executing the document Ex.B-1. It is recited in Ex.B-1 that the first defendant undertook to discharge the debt due by the vendor in favour of some other third party. It is significant to note that the mortgage debt due under Ex.A-5 is not even mentioned in Ex.B-1. Learned Counsel for the respondents also relies upon a decision reported in Venkatammal and Others Vs. Kadhirappa Naidu and Others, . It is held in the above decision that the document was executed to discharge the debt due to the society. It is held in the above decision that existence of debtor and creditor relationship is necessary to construe a document as mortgage by conditional sale.

The mere fact that already a mortgage deed was executed in the year 1971 in favour of the first defendant will not show that the relationship of debtor and creditor existed on the date of Ex.B-1. It is clear from the terms of the document that intention of the executant is only in order to discharge the debt due to third parties. She sold the property. It is significant to note that the plaintiffs themselves treating the document as sale deed with right to repurchase issued notice. There is no whisper in the original plaint to the fact that the parties treated the above document as mortgage by conditional sale. For the above reasons, I hold that the document Ex.B-1, is only sale with option to repurchase not mortgage by conditional sale.

This takes us to the next question, whether the appellants can be permitted to amend the plaint. There can be no dispute that the application for amendment is belated. Learned Counsel for the appellants contended that under certain circumstances, the court can permit the amendment even at the appellate stage, if the amendment does not alter the character of the suit. In support of the same, learned Counsel for the appellants relies upon a decision reported in SP. Arumugam alias Chinnadurai Chettiar and Another Vs. SP. Muthuraman Chettiar and Others, . The amendment sought for in the above case is with reference to the existence of partnership deed between the plaintiffs and the defendants. In Dhanapal Chettiar and Others Vs. Govindaraja Chetty and Others, , it is held that it is permissible for the plaintiffs to set up as many roots of title as possible and sometimes they may even be mutually conflicting and inconsistent and that amendment setting up an alternative root of title to suit properties can therefore be allowed. It is seen from the facts of the case that the parties claim right under the Will executed by Ammayee Animal. In the proposed amendment it is stated that even if Ammayee Animal got properties as absolute owner by reason of the will and even if the properties could be said to belong to Ammayee Ammal, they were still the heirs entitled to succeed to Ammayee Ammal, if Ammayee herself did not make a testamentary disposition of the property. It is thus, clear that the facts of the above case will not apply to this case.

In this case, the plaintiffs elected themselves to exercise option to repurchase the property as per the terms of Ex.B-1. Now by way of proposed amendment, they want to obtain relief on the ground that the document is mortgage by conditional sale. Claiming relief for specific performance and prayer in the alternative for a mortgage decree is mutually inconsistent in this case. If the proposed amendment is allowed, it would definitely change the nature of the suit. If the proposed amendment is to expand and substantiate the pleadings already contained in the original plaint, than the amendment can be allowed. But, in this case, only at the later stage the plaintiffs have come forward to allege that the property was worth about Rs. 50,000 on the date of Ex.B-1 and that the document is a mortgage. The issues, evidence and findings regarding the amount due towards mortgage are entirely different from the issue involved in the suit for specific performance. The plaintiffs seem to have come forward with alternative prayer only on coming to know that they would not be entitled to decree, since the claim is barred by limitation. 1 or the above reasons 1 hold that the reasons given by the appellate court for disallowing the amendment petition cannot be said to be vitiated by any illegality or infirmity. No reasons are given in the affidavit as to why the petition for amending the plaint has been filed belatedly. Thus, looked at from any angle, I am unable to accept the case of the appellants that they are entitled to amend the plaint and claim a decree for redemption. I see no reason to differ from the concurrent findings of the courts below. I hold that there are no merits in the appeal. C.M.R. No. 9547 of 1986 is dismissed.

In the result, the second appeal is dismissed. The judgment and decree of the courts below are continued. No costs.