& Ors Vs. Chandrika Prasad. & Ors  Insc 531 (24 August 2006)
Sinha & Dalveer Bhandari
out of SLP (Civil) No. 19581 of 2004] S.B. SINHA, J :
the deed dated 30.12.1968 constitutes a sale with condition of purchase or
mortgage by way of conditional sale is the question which falls for
consideration in this appeal which arises out of a judgment and order dated
27.7.2004 passed by the High Court of Jharkhand in F.A. No. 23 of 1991 (R) .
basic fact of the matter is not in dispute. The property in question is a house
property. It belonged to one Jawala Prasad Sah, defendant No. 3 in the suit. On
30.12.1968, he transferred the northern part of the house property to one Balmukund
Chaudhary by way of mortgage for a consideration of Rs. 4,300/- repayable by
30.1.1971. He sold the entire property to the plaintiffs for a valuable
consideration of Rs. 14,000/-. It included the right to redeem the mortgage.
The transaction in question was also carried out on the same date, i.e.. 30.12.1968.
husband of the Appellant No. 1 herein Banshidhar Singhania was a tenant in the
Respondents filed a suit for a decree for redemption of the said mortgage as
also a decree for mesne profit for the period 3.1.1972 till the recovery of
possession of the mortgaged property. In the alternative, a prayer for a decree
of specific performance was made.
not in dispute that prior to filing of the suit by several notices, the
plaintiffs expressed their intention to redeem the mortgage. A personal tender
of the entire mortgage amount was made which was refused. An application under
Section 83 of the Transfer of Property Act was filed wherein an order for
deposit of the mortgage amount was passed. In the said proceedings an objection
was filed raising a contention that the instrument in question is a deed of
learned Trial Judge held that the document in question was a deed of mortgage
with conditional sale and not a deed of sale with a condition of purchase and
consequently a decree was passed. The First Appellate Court affirmed the said
decree. The Second Appeal filed by the Appellant herein, as noticed
hereinbefore, was dismissed.
instrument in question is peculiar in nature. The nature of the deed was
described as Kewala Baibulwafa. The expression 'Kewala' denotes sale. We would
a little later notice that use of the expression 'Baibulwafa' is not correct.
Paragraph 5 of the deed described the property under sale. The reason for
execution of the document is said to be pressing need of money on the part of
the plaintiff for augmenting business capital and for domestic expenses as also
for repaying debt to the moneylenders. The amount of consideration was
stipulated as adequate therefor. However, it was stipulated that the purchaser,
till the expiry of the specified time therein and till the sale became absolute
and perfect, would maintain the property in its present condition. She,
however, was permitted to exercise her option to carry on the reconstruction.
The parties agreed on request having been made by the plaintiff Appellant No.
1 that she be allowed time and opportunity to repay the entire consideration
money in cash whereupon a deed of reconveyance would be executed in her favour.
It was agreed that if the executant repays the entire amount by 30.12.1971, the
executee will execute a deed of reconveyance in respect of the property in her favour
and handover possession thereof. However, if the executant fails to repay
payment of the entire consideration on that date, then in that case the sale
would become absolute whereupon the executant or his heirs and successors will
have no objection; and if the executant or his heirs and successors raise
objection in respect of the stipulation therein, the same shall be ineffective
and useless and the sale shall become absolute. It was furthermore stipulated:
after having fully considered about his profit and loss as also out of his free
will and volition (the executant) writes (executes) this deed of Kewala Baibulwafa
with condition of repayment of consideration money for future use. Dated the 29th December, 1969 at Daltonganj." The following
circumstances weighed with the learned trial court as well as the High Court in
arriving at the finding that the transaction in question was a mortgage by way
of a conditional sale:
The husband of
the Appellant No. 1 was a tenant in respect of the property and he continued to
occupy the same in the same capacity.
bore the costs of stamp duty which is not the normal practice in a case of
essentially was a Baibulwafa, viz., mortgage by conditional sale.
The land was
required to be kept in the existing condition.
had an option to repay the entire consideration in one instalment whereupon a
deed of reconveyance was to be executed by the transferor in her favour. For
the said purpose a specific date was fixed, viz., 30.12.1971 and on obtaining
such amount the transferee was to restore possession of the land to the
plaintiff and only in the event of default on her part to repay the same; the
sale was to become absolute and perfect.
In the margin of
the deed, the transferor categorically stated that he had executed a deed of Baibulwafa
in respect of two parts of the shop.
The amount has
been received by the transferor in presence of the husband of the transferee.
may, at the outset, notice that almost a similar question came up for
consideration before a Division Bench of this Court in Bishwanath Prasad Singh
v. Rajendra Prasad and Another [(2006) 4 SCC 432], wherein it was held:
deed as is well known must be construed having regard to the language used
therein. We have noticed hereinbefore that by reason of the said deed of sale,
the right, title and interest of the respondents herein was conveyed absolutely
in favour of the appellant. The sale deed does not recite any other transaction
of advance of any sum by the appellant to the respondents which was entered
into by and between the parties. In fact, the recitals made in the sale deed
categorically show that the respondents expressed their intention to convey the
property to the appellant herein as they had incurred debts by taking loans
from various other creditors." However, in that case keeping in view the
recitals made in the deed and other circumstances surrounding thereto the Trial
Court as also the First Appellate Court came to finding that the Respondents
therein executed a deed of absolute sale in favour of the Appellant, who in
turn executed an agreement for reconveyance in favour of the Respondent.
term 'Baibulwafa' was held to be a deed of conditional sale with a contract of
purchase and not a mortgage with conditional sale. The said findings were
over-turned by the High Court.
terminology 'vaibulwafa' used in the agreement does not carry any meaning. It
could be either 'bai-ul-wafa' or 'bai-bil-wafa'.
will bear repetition to state that with a view to ascertain the nature of a
transaction the document has to be read as a whole. A sentence used or a term
used may not be determinative of the real nature of transaction.
it was held by the trial court connotes only an agreement for sale. In terms of
Section 91 of the Evidence Act, if the terms of any disposition of property is
reduced to writing, no evidence is admissible in proof of the terms of such
disposition of property except the document itself." Referring to Section
58(c) of the Transfer of Property Act, it was also held that the transaction in
question was not partial but an absolute one.
we consider the stipulations contained in the deed dated 30.12.1968, it may be
noticed that in terms of Section 58(c) of the Transfer of Property Act, a
transaction may be held to be a mortgage with conditional sale if it is
evidenced by one document. The condition precedent for arriving at a finding
that the transaction involves mortgage by way of conditional sale is that there
must be an ostensible sale. It must contain a condition that on default of
payment of mortgage money on certain date, the sale shall become absolute or on
condition that on such payment being made the sale shall become void, or on
condition that on such payment being made the buyer shall transfer the property
to the seller.
distinction exists between a mortgage by way of conditional sale and a sale
with condition of purchase. In the former the debt subsists and a right to
redeem remains with the debtor but in case of the latter the transaction does
not evidence an arrangement of lending and borrowing and, thus, right to redeem
is not reserved thereby.
proviso appended to Section 58(c) of the Transfer of Property Act was added by
Act No. 20 of 1929 for resolution of the conflict in decisions on the question
whether the condition relating to reconveyance contained in a separate document
could be taken into consideration in finding out whether a mortgage was
intended to be created by the principal deed.
transaction in this case has been evidenced by one document.
58(c) of the Transfer of Property Act will, therefore, apply.
instant case, the scribe of the document was examined. His categorical
statement was that he had been asked by the parties to scribe a deed of
mortgage and not a deed of sale. The Respondent No. 1, as noticed hereinbefore,
in the document itself categorically stated that he was executing a deed of
mortgage. Indisputably, the amount of stamp duty was also paid by him. In a
case of deed of sale ordinarily the transferee pays the stamp duty. Why such a
deviation from the normal practice was made has not been explained by the
have noticed hereinbefore that the nature of the deed described that the
document is ambiguous as both the terms, viz., Kewala and Baibulwafa, were mentioned.
The transaction, however, categorically states that the Appellant No. 1 was to
maintain the property in its present condition. Of course, permission for
reconstruction of the structure was granted. But, if the contention of the
parties was to transfer the property absolutely, no such stipulation was
required to be made at all. In a case of absolute transfer, the vendee has an
absolute right to deal with his property in any manner he likes. It was clearly
stipulated in the deed that in the event, the executant repayed the entire
consideration by 30.12.1971, the purchaser would reconvey the property and
furthermore deliver possession thereof. The sale was to become absolute only
when the transferee failed to pay the said amount within the stipulated period.
courts below have also taken into consideration the contemporaneous conduct of
the parties in treating the transaction to be one of mortgage and not of sale.
We are, therefore, of the opinion that the parties intended to enter into a
transaction of mortgage and not sale.
91 of the Evidence Act mainly forbids proving of the contents of a writing
otherwise than by writing itself and merely lays down the 'best evidence rule'.
It, however, does not prohibit the parties to adduce evidence, in a case, the
deed is capable of being construed differently to show how they understood the
notice that in Smt. Indira Kaur & Ors. v. Sheo Lal Kapoor [(1988) 2 SCC
488], this Court upon taking into consideration the stipulations made in the
deed to the effect that a period of 10 years was fixed for conveying the
property and the vendee was prohibited from selling and parting with his right,
title and interest for the said period and no order of mutation was passed in
his favour, construed the same to be a transaction of mortgage.
instant case also the transferees did not get their name mutated. The tenant in
the property was no other than the husband of Appellant No. 1. He continued to
be a tenant. The possession purported to have been delivered in favour of the
defendant was merely a symbolic one.
S.B. Upadhyay, learned counsel appearing on behalf of the Appellants strongly
relied upon Tamboli Ramanlal Motilal (Dead) By LRS. v. Ghanchi Chimanlal Keshavlal
(Dead) By LRS. and Another [1993 Supp (1) SCC 295].
Ramanlal Motilal (supra), having regard to the stipulations made in the
document the court was unable to conclude that there was a debt and the
relationship between the parties was that of the debtor and the creditor. The
stipulation "The property is sold conditionally for a period of five years
and possession is handed over.
you and your heirs and legal representatives are hereafter entitled to use,
enjoy and lease the said houses under the ownership right" was considered
to be one of the factors for coming to the conclusion that the transaction
evidenced thereby was an absolute sale under a right of ownership. The
transferee also had a right to get his name mutated in the municipal record and
pay taxes. The transferee therein had an absolute right to mortgage, sell, or
gift the suit property. The executant could not dispute the title of the
transferee. Such is not the position here.
the courts below, the Appellant No. 1 did not examine herself. The Respondents
categorically averred in the plaint that the mortgage amount was tendered to
her as also to her husband. Having regard to the peculiar facts and
circumstances of this case, we are of the opinion that she should have examined
herself to deny such tender.
Gurbakhsh Singh v. Gurdial Singh and Another [AIR 1927 PC 230], the Privy
Council emphasized the need of examination of the parties as witnesses. [See
also Martand Pandharinath v. Radhabai, AIR 1931 Bom 97 and Sri Sudhir Ranjan
Paul v. Sri Chhatter Singh Baid & Anr., Cal LT 1999(3) HC 261] For the
aforementioned reasons, we are of the opinion that there is no infirmity in the
judgment of the courts below. The appeal is, therefore, dismissed. In the facts
and circumstances of this case, there shall be no order as to costs.