Smt. Purnima Rani Das and Others vs Banamali Manna

Subhro Kamal Mukherjee, J.—This second appeal is directed against the judgment and decree dated March 31, 1979 passed by the learned Additional District Judge, Fourth Court, Midnapore in Title Appeal No. 17 of 1975 reversing those dated December 7, 1974 passed by the learned Munsif at Danton in Other Suit No. 105 of 1972. The plaintiff/respondent, on June 28, 1972, instituted Other Suit No. 105 of 1972 for declaration that the kobala dated September 25, 1964 was an ostensible sale deed and for, further, declaration that the transaction between the parties was in substance loan transaction and for reopening of such transaction and for accounting under the Bengal Money-lenders Act, 1940. The said plaintiff alleged that he was a poor man while the defendant was a rich money-lender and as the plaintiff was in need of money for meeting his domestic needs, he approached the defendant in the month of Chaitra 1370 B.S. for grant of a loan Rs. 500/- (Rupees five hundred) only. The defendant agreed to advance the said sum of Rs. 500/- (Rupees five hundred) only subject, however, to payment of interest at the rate of 15% per cent per annum and stipulated that the plaintiff should deposit a blank stamp paper of Rs. 1.50 paise with his left thumb impression as also the dakhila concerning the" suit plot towards security for the said loan. The plaintiff was asked to repay the loan by Bhadra 1371 B.S. Pursuant to such agreement the plaintiff obtained a loan of Rs. 500/- (Rupees five hundred) only from the defendant on April 6, 1964 and handed over a blank stamp paper of Rs. 1.50 paise and a cartridge paper with his left thumb impressions as also the dakhila. As the plaintiff was unable to repay the loan with interest within the stipulated period of time, he approached the defendant for extension of time to repay the loan. The defendant agreed to grant time to the plaintiff, but asked the plaintiff to execute an ostensible sale deed in respect of the suit land as security for the loan. It was alleged that the said deed of sale was executed on September 25, 1964 ostensibly conveying the suit property for Rs. 1000/- (Rupees one thousand) only, but the document was executed as security for the loan and the plaintiff continued to possess the suit properties. The kobala was prepared using the said blank stamp paper of Rs. 1.50 paise and the cartridge paper deposited by the plaintiff with the defendant while he took the loan from the defendant. It is alleged that the plaintiff approached the defendant for accounting, but the defendant denied the title of the plaintiff and threatened to dispossess him. The plaintiff paid rent in respect of suit land up to 1375 B.S., but, at the instance of the defendant, local Tahasildar refused to accept the rent from the plaintiff in the year 1376 B.S.

The defendant contested the suit and in the written statement contended that the transaction evidenced by the kobala dated September 25, 1964 was an out and out sale and the defendant actually purchased the suit properties from the plaintiff on payment of Rs. 1,000/- (Rupees one thousand) only which was the actual market price of the properties and that the defendant was in possession of the suit properties. It is stated that the plaintiff voluntarily executed the kobala in favour of the defendant and there was never any transaction of loan between the parties.

The learned Munsif by the judgment and decree dated December 7, 1974 dismissed the suit.

The plaintiff being aggrieved preferred Title Appeal No. 17 of 1975 in the court of the learned District Judge, Midnapore, which was eventually transferred to the court of the learned Additional District Judge, Fourth Court, Midnapore.

By the judgment and decree dated March 31, 1979 the learned Additional District Judge reversed the judgment and decree passed by the learned Munsif and consequently, decreed the suit in preliminary form for reopening the transaction for loan and accounting as prayed for by the plaintiff. The parties were granted three months time to settle the accounts amicably. In default, liberty, however, was granted to the plaintiff to apply to the court for appointment of a commissioner for accounting. The defendant was restrained perpetually from interfering with the plaintiffs peaceful possession over the suit properties.

Being aggrieved the substituted defendants have come up with this second appeal.

Mr. Mrinal Kanti Ray, learned Advocate, appearing for the appellant, argued that the learned judge in the lower appellate court substantially erred in law in decreeing the suit upon reversal of the judgment and decree of the learned trial judge and the impugned judgment and decree passed by the lower appellate court was not a proper judgment of reversal. Mr. Roy argued that the plaintiff neither could explain the long delay in filing the suit nor he has been able to prove the plaint case at the trial. The price mentioned in the document concerned was sufficient for the properties conveyed under the said document and as the properties were conveyed by the plaintiff to the defendant for procuring fund for business of the plaintiff, the learned judge in the lower appellate court substantially erred in law in applying the Bengal Money-lenders Act. 1940, which had no application in the facts and circumstances of the case. Mr. Ray in support of his contentions advanced before me cited the decisions in the cases of Pandit Chunchun Jha Vs. Sheikh Ebadat Ali and Another, and Bhaskar Waman Joshi (deceased) and Others Vs. Shrinarayan Rambilas Agarwal (deceased) and Others, . Mr. Ray argued that when the words in the document are express and clear effect must be given to them and the intention of the parties must be gathered from the document itself and any extraneous enquiry into what was thought or intended should be ruled out. The real question in such a case is not what the parties intended or meant, but what is the legal effect of the words which they have used in the document. Mr. Ray argued that there is no ambiguity in the language used in the document and it was impermissible, in the facts and circumstances of the case, to look to extraneous matters to determine the real nature of the transaction. Mr. Ray, also cited the decision in the case of Sm. Chhabi Barui and Others Vs. Debendra Nath Das, and with reference to the same argued that the learned judge in the lower appellate court in decreeing the suit substantially erred in law in applying wrong tests in determining the nature of the disputed transaction. Mr. Ray argued that there is no intrinsic evidence in the document to spell out a loan nor the document purports to show that any loan has been secured and as such the plaintiff was not entitled to lead oral evidence to prove his case. Mr. Ray cited the decision in the case of Smt. Swarnalata Tat Vs. Chandi Charan Dey and Another, and he has drawn my attention to the following observations:

It cannot be laid down as a general principle that whenever there is a sale of properly at a value lower than its worth it will lead to an irresistible inference that the transaction is in substance a loan. A price below the true value by itself cannot indicate a mortgage nor a fair market value can be the conclusive evidence that the transaction is a sale.

Finally, the learned judge in the lower appellate court, submits Mr. Ray, ought not to have reversed the findings of the learned trial judge merely because another view was possible. Mr. Ray in this connection cited the case of Smt. Sona Devi Vs. Nagina Singh and Others, .

I have examined the disputed document, that is the purported deed of sale dated September 25, 1964. corresponding to Ashwin 9, 1371 B.S.. which has been exhibited as exhibit A in the suit By the said document total area of 1.07 decimals of land was purportedly transferred at a consideration of Rs. 1,000/- (Rupees one thousand) only. It, further, appears that the first page of the document was written on a stamp paper of Rs. 20/ - (Rupees twenty) only purchased on September 23, 1964. the second page was written by utilising a stamp paper of Rs. 1.50 paise purchased on April 6, 1964. the third page was written on a stamp paper of Re. 1 purchased on September 23, 1964 and the fourth and last page of the same was written on a cartridge paper.

In decreeing the suit the learned judge in the lower appellate court came to the following findings of fact:

(a) Admittedly, the defendant was a money-lender by profession.

(b) The defendant advanced the loan to the plaintiff for domestic purposes and the purpose alleged in the deed was not true.

In coming to such findings of fact the learned judge accepted the deposition of Banamali Manna, the plaintiff, who deposed as plaintiffs witness no. 4 and noted that Narayan Chandra Das. the plaintiff''s witness no. 1, corroborated the statements of the plaintiff. The learned judge found that the defendant''s witnesses failed to testify that the money was advanced to the plaintiff for hade or business.

(c) The learned judge in the lower appellate court accepted, upon consideration of the evidence on record, that on April 6, 1964 the plaintiff was compelled to hand over to the defendant a blank stamp paper of Rs. 1.50 paise bearing his thumb impression to obtain a loan of Rs. 500/- (Rupees five hundred) only and that the disputed deed was created by using the said blank stamp paper, which according to the learned judge in, the lower appellate court went a long way to support the plaintiff''s version. It was categorically found that the left thumb impressions were put before the writings in the deed.

(d) The learned judge in the lower appellate court held that the possession of the suit properties was with the plaintiff and rejected the contentions of the defendant that with the execution of the document the plaintiff simultaneously delivered possession to the defendant. It was found, as findings of tact, that the plaintiff paid rent up to 1374 B.S. for the suit properties although the disputed deed was executed on Ashwin 9, 1371 B.S.

(e) The learned judge, on scrutiny of the evidence, came to the findings of fact that there was no justifiable reason to reject the version of the plaintiff that the transaction was loan in substance. The learned judge carefully noticed that even the defendant''s witness no. 1. Khagendra Nath Das Mahapatra, deposed that the said witness could not remember whether there was any talk for execution of a deed as security for loan. The learned judge held that the rate of interest stipulated was 15% per cent.

(f) With regard to the subsequent payment of rents by the defendant the learned judge held that it was quite obvious that with the intention to grab lands of the plaintiff, the defendant started payment of rents. The learned judge preferred to rely on the witnesses of the plaintiff on the questions of the nature of the transaction and possession of the suit lands. He took the broad fact on the consideration that while the plaintiff was a poor and illiterate person, the defendant was a rich money-lender.

(g) The learned judge weighed the evidence on record on the question of actual price of the disputed properties and came to the conclusion, as findings of fact that actual market price of the suit properties was more than what has been advanced to the plaintiff.

Upon ultimate analysis the learned judge in the lower appellate court held the disputed deed was only an ostensible sale deed executed towards security of loan advanced by the defendant money-lender to the plaintiff-borrower sometime in Chaitra 1370 B.S. and the transaction was loan in substance and as such the plaintiff was justified in praying for reopening of the transaction and for accounting under the Bengal Moneylenders Act. 1940.

In my view, it has been established that the impugned deed creates or witnesses a loan and as such the learned judge in the lower appellate court was right in considering the oral evidence from the side of the plaintiff to come to the conclusion that the intention of the plaintiff was not to convey the properties. In my view, it has been rightly held by the learned judge in the lower appellate court that the deed was an ostensible deed of sale for security of the loan advanced by the defendant to the plaintiff and not an actual deed of sale.

Section 40(6) of the Bengal Money-lenders Act. 1940 was inserted by the Bengal Money-lenders (Amendment) Act, 1965. The said sub-section (6) of Section 40 runs as under:

(6) Notwithstanding anything contained in the Indian Evidence Act, 1872 (1 of 1872). evidence adduced by a borrower in a suit to which this Act applies or a suit brought by a borrower for relief u/s 36 or in any criminal proceedings u/s 41 or Section 42. of any oral agreement or statement contradicting, varying, adding to or subtracting from the terms of any document creating or witnessing a loan shall be admitted.

This amendment was incorporated to relax the provisions of the proviso to Section 58(c) of the Transfer of Property Act. 1882, on mortgage by conditional sale in the case of a loan against mortgage to give an opportunity to a borrower to prove that the transaction was in substance a mortgage by conditional sale. It was noticed that the borrower is sometimes compelled by circumstances to agree to an inflated amount being shown as the principal in the instrument creating the loan. As Section 92 of the Indian Evidence Act, 1872 is a bar to oral evidence to show that the principal advanced is different from that stated in the instalment, the borrower is helpless in fighting the machinations of the moneylenders. Therefore it was proposed to enact some provisions making oral evidence admissible in any suit or criminal proceedings instituted, under the Bengal Money-lenders Act. 1940.

Therefore, the plaintiff was entitled to adduce oral evidence contradicting the terms mentioned in the disputed deed. Moreover, the defendant has failed to establish to the satisfaction of the last court of fact that the document was an out and out sale deed and that the plaintiff conveyed the properties to the defendant to procure fund for trade and business.

The defendant being admittedly a money-lender, the price of the disputed property assumes special significance and in my view, the learned judge committed no substantial error of law in holding that the actual market price was more. It has been established beyond any doubt from the surrounding circumstances that the transaction was not an out right sale, but it was a loan in substance. The learned judge did not apply any wrong legal tests nor there is any defect in the procedure prescribed by law in coming to the findings of fact.

I am unable to accept the contentions advanced before me that the learned judge in the lower appellate court substantially erred in law in decreeing the suit. I, therefore, dismiss the appeal and affirm the judgment and decree passed by the lower appellate court.

There will be no order as to costs.

Let xerox certified copy of this judgment and decree, if applied for, be supplied to the parties expeditiously.