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TMI Blog1954 (4) TMI 57X X X X Extracts X X X X X X X X Extracts X X X X ..... for ₹ 250. This was also a simple mortgage. After this came the transaction in suit dated 15th April, 1930. The same three persons executed the disputed deed. This was in favour of the first defendant. The consideration mentioned in the deed is ₹ 634-10-0 due on the second mortgage and ₹ 65-6-0 taken in cash to enable the executants to meet the expenses of certain commutation proceedings under section 40 of the Bihar Tenancy Act in respect of this very land. The second defendant sued on his mortgage of 1922 but did: not join the subsequent mortgagee, the first defendant. He obtained a decree against the mortgagors alone and executed it in 1940. He himself purchased the property in dispute and took possession on 20th March, 1943. Shortly-after, on 19th August, 1943, he sold this land to the plaintiff for ₹ 400. The plaintiff's title is derived from the second defendant who stepped into the shoes of the mortgagors because of his suit against the mortgagors in 1940. The plaintiff's case is that the transaction of 15th April, 1930, is a mortgage and, as the subsequent mortgagee was not joined as a party to the earlier suit, the plaintiff is entitled to redee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve a right to repurchase............... In every such case the question is, what, upon a fair construction, is the meaning of the instruments? Their Lord-ships of the Privy Council applied this rule to India in Bhagwan Sahai v. Bhagwan Din (17 I.A. 98 at 102) and in Jhanda Singh v. Wahid-ud-din (43 I.A. 284 at 293). The converse also holds good and if, on the face of it, an instrument clearly purports to be a mortgage it cannot be turned into a sale by reference to a host of extraneous and irrelevant considerations. Difficulty only arises in the border line cases where there is ambiguity. Unfortunately, they form the bulk of this kind of transaction. Because of the welter of confusion caused by a multitude of conflicting decisions the Legislature stepped in and amended section 58(c) of the Transfer of Property Act. Unfortunately that brought in its train a further conflict of authority. But this much is now clear. If the sale and agreement to repurchase are embodied in separate documents, then the transaction cannot be a mortgage whether the documents are, contemporaneously executed or not. But the converse does not hold good, that is to say, the mere fact that there is only one ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and occupation of us the executants." (7) " If we do not pay the same, the said vendee shall remain in possession and occupation thereof, generation after generation, and he shall appropriate the produce thereof." (8) " We, the executants, neither have nor shall have any objection whatsoever in respect of the vended property and the consideration money. Perchance if we do so it shall be deemed null and void in Court." "and we declare also that the vended property is flawless in every way and that if in future any kind of defect whatsoever be found on account of which the said vendee be dispossessed of a portion or the entire property vended under this deed of conditional sale and will have to pay the loss or damage, in that event we, the executants, (a) shall be liable to be prosecuted under the criminal procedure, and (b) we shall pay the entire consideration money together with loss and damage and interest at the rate of ₹ 2 per mensem per hundred rupees from the date of the execution of this deed till the date of realisation from our person and other properties (c)and we shall not claim the produce of the vended property for the period o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t though in substance it is a mortgage it is couched in the form of a sale with certain conditions attached. The executable clearly purported to sell the property in clause (5) because they say so, therefore, if the transaction is not in substance a mortgage, it is unquestionably a sale: an actual sale and not merely an ostensible one. But if it is a mortgage, then the condition about an " ostensible sale " is fulfilled. We next turn to the conditions. The ones relevant to the present purpose are contained in clauses (6) and (7). Both are ambiguous, but we have already said that on a fair construction clause (6) means that if the money is paid within the two years then the possession will revert to the executants with the result that the title which is already in them will continue to reside there. The necessary consequence of that is that the ostensible sale becomes void. Similarly, clause- (7), though clumsily worded, can only mean that if the money is not paid, then the sale shall become absolute. Those are not the actual words used but, in our opinion, that is a fair construction of their meaning when the document is read as a whole. If that is what they mean, as we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... act that clause (3) says that the price paid was a "fair and just?' one and that the Courts below have found that the consideration was not inadequate. , He also relies on the fact that no interest was charged, that the transferee was placed in possession of the property and was Dot to accountfor the usufruct also on the fact that a short term, namely two years, was fixed for repayment. But on the other side, there is the very significant fact that ₹ 65-6-0 was borrowed to enable the executants to carry on commutation proceedings under section 40 of the Bihar Tenancy Act (that is, for substitution of a cash rent instead of one in kind) in respect of this very property: (clause 1). It was admitted before us, and the lower Courts so find, that the commutation proceedings related to this very land. The learned High Court Judges discount this by saying that there is no evidence to show that the proceedings, which were started in 1929, continued after the deed. But that is a mistake apparently due to the fact that the copy of the entry in the Rent Schedule, produced before the learned Judges, inadvertently omitted the date. Mr. N. C. Chatterjee produced a certified copy of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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