JUDGMENT
D.C. Srivastava, J.
1. This is plaintiffs’ Second Appeal arising out of following facts:
2. Brief facts are that the plaintiffs are the owners of plot No. 31 measuring 6 Acres and 32 Gunthas. It was mortgaged by them with the defendants-respondents on 14-6-1963 for Rs. 6,000/-. According to the plaintiffs it was mortgage by conditional sale and the transaction was for the safety of amount of Rs. 6,000/- advanced by the defendants to the plaintiffs. Market value of the land on the date of mortgage was Rs. 20,000/-. The plaintiffs were in hard financial conditions, hence they mortgaged property for a sum of Rs. 6,000/- only. The plaintiffs wanted to redeem the mortgage after payment of Rs. 6,000/- but the defendants refused to accept the same. Accordingly, notice was served by the plaintiffs. The defendants in reply to the notice stated that it was outright sale and not mortgage by conditional sale. Accordingly, the suit for redemption was filed.
3. The defendants contested the suit on the ground that it was time-barred and that the transaction was outright sale and not mortgage by conditional sale. Notice of the plaintiffs was properly replied by the defendants. The plaintiffs did not file the suit till 15-1-1969, hence, it was time-barred. It was denied that the market value of the land was Rs. 20,000/- and not Rs. 6,000/-.
4. The trial Court found that the document in question was sale deed and not mortgage by conditional sale. Accordingly, the suit of the appellants for redemption of mortgage was dismissed.
5. Appeal was filed which too was dismissed with the observation that the document was sale deed and the transaction was outright sale and not mortgage by the conditional sale. It is, therefore, this Second Appeal.
6. In this appeal following substantial question of law was formulated:
Whether the deed in question is mortgage by conditional sale or sale with condition to repurchase?
7. The original deed is in Gujarati and its translation was filed. The deed was executed on 14-6-1963. It is to be seen whether this deed is sale outright or sale with condition of repurchase or mortgage by conditional sale.
8. The fate of this appeal hinges around the interpretation of this deed. The settled rule of interpretation is that the document is to be interpreted as it is to find out the real intention of the parties. If the document is clear and unambiguous pointing out to a particular type of transaction between the parties it hardly requires any interpretation. However, if there is some ambiguity in the document it requires interpretation and for that the real intention of the parties is to be gathered firstly from the document itself and the recitals contained therein and also from the attending circumstance emerging from the evidence adduced by the parties.
9. In order to interpret such document nice distinction between mortgage by conditional sale and sale with condition of repurchase has to be kept in mind. Of course aid can be taken from various decisions to come to the conclusion whether a particular circumstance gives indication of real intention of the parties. Each case has to be decided on its own facts. Consequently particular decision, unless applicable on all force to the facts of the present case, cannot be applied or pressed in service for holding that the document is sale deed or mortgage by conditional sale.
10. Certain tests had been laid down in various cases for interpreting such document. In short those tests, which are illustrative and not exhaustive, are enumerated below:
(1) Nomenclature of document is hardly conclusive and much importance cannot be attached to the nomenclature alone. However, if the nomenclature in the document is consistent with the intention of the party it has to be taken into account.
(2) In view of Section 58 of the Transfer of Property Act, mortgage by conditional sale is a transaction which presupposes existence of a debt and relationship of debtor and creditor between the parties. Such debt may be pre-existing or it may be created at the time of execution of the deed. Relationship of debtor and creditor is a sine qua non of mortgage by conditional sale.
(3) Stipulation for payment of interest though not conclusive yet it indicates that the transaction was mortgage. Sometimes in lieu of interest possession is handed over to the mortgagee who is permitted to use usufruct of the mortgaged property.
(4) In view of Section 58(c) of the Transfer of Property Act if two transactions are incorporated in one and the same document an inference can be drawn that it is mortgage by conditional sale but this is a presumption which is rebuttable. If there are two documents executed simultaneously transaction may be said to be sale with condition to repurchase but even a single document can give rise to such transaction, namely, sale with a condition to repurchase.
(5) In case of mortgage by conditional sale vesting of title is postponed whereas in case of sale with condition to repurchase there is immediate vesting of title followed by possession. Rights of ownership are transferred in transaction in the nature of sale with condition to repurchase whereas in mortgage mere possession is transferred and not ownership rights.
(6) Inadequacy of consideration may indicate that under pressing circumstances mortgage was created because the amount received was not corresponding to the market value of the property but this is not universally applicable in all cases.
(7) Reconveyance of the property on the same price on which it was conveyed to the mortgagee is not clinching circumstance for holding that the transaction is mortgage by conditional sale. It is possible that because the possession was transferred, so also, the ownership rights it might have been agreed for reconveyance of the property on the original consideration.
(8) If there is transfer of title and ownership rights simultaneously and the transferee is authorised to deal with the property in any manner he likes such clause in the agreement will indicate that the transfer was a sale with condition to repurchase.
(9) Intention of the parties is to be gathered from the evidence, from attending circumstances and also from the document. The conduct of the parties is also relevant though subsequent conduct is not very much material.
Keeping in view the aforesaid tests and going through the deed itself and the evidence on record I have no hesitation in holding that the document is sale with condition to repurchase and not a mortgage by conditional sale. Short reasons are that from the documents the relationship of debtor and creditor is found missing. There is no recital in the document that any loan was taken nor is there any mention of rate of interest at which the amount was to be repaid. Learned Counsel for the appellants contended that there was pre-existing loan. Principal amount was Rs. 5,100/- and the interest was Rs. 900/- and in this way subsequent mortgage for Rs. 6,000/- was created. However, this was rightly held by the lower Appellate Court to be an afterthought. No doubt the evidence was adduced on this point but no evidence could be admitted on a fact which is not pleaded in the plaint. There is no pleading or the averment in the plaint that there was such previous loan. Notice was given by the plaintiffs to the defendants and in that notice also it was not mentioned that there was any previous outstanding loan. Defendants gave reply to the plaintiffs’ notice in which they came out with the case of sale with condition to repurchase and denying the averment in the plaintiffs’ notice that the transaction was mortgage by conditional sale. No reply to the defendants’ reply notice was given by the plaintiffs. This shows that at the earliest opportunity the plaintiffs did not come out with the case that there was any subsisting debt and the second mortgage was executed because the defendants though doing money-lending business had not obtained licence for the business and to oblige them such recital was made in the deed on account of which relationship of debtor and creditor was omitted. Such an afterthought case was rightly refused to be accepted by the lower Appellate Court.
11. As pointed out above simply because two transactions are included in one document it need not necessarily be held to be mortgage by conditional sale.
12. It is not the case where there was mere transfer of possession. Vesting of title was not postponed neither for long period nor for short period. On the other hand, there was immediate vesting of title. On the point of inadequacy of consideration or price of the property, the lower Appellate Court after considering the evidence categorically held that the price at Rs. 6,000/- was adequate market price. The condition in the document that recoveyance was to be made on Rs. 6,000/ -, in such circumstance, does not indicate that parties intended to create mortgage by conditional sale.
13. Coming to the document itself in the body of it, at one place it is mentioned to be a document of sale along with all the rights therein having been sold to the purchaser for Rs. 6,000/-. These recitals clearly indicate that the parties intended to create transaction of sale with condition to repurchase which is also contained in the subsequent portion of the agreement.
14. There is yet material recital in the deed “that the possession of which is handed over to you and/or you are entitled to make use of the land freely”. This recital shows that not only the possession was transferred but transferee was authoritsed to make use of the land freely. There is yet another recital that “the land which is sold to you is of exclusive occupation and possession and the same is sold to you and in case there is any dispute regarding the same or any right or objection is raised and if any liability arises the same and the expenses will be borne by the transferee”. This further shows that it was a case of sale with condition to repurchase. In Para 4 of the agreement it is further mentioned that “you can make use of the said land sold to you in the manner that you like”. This recital also clearly indicates that the land was sold and the purchasers were authorised to use the land in the manner they liked. It, therefore, follows that title was transferred and not mere possession.
15. Learned Counsel for the appellants placing reliance on Clause 3 of the agreement urged that it indicates that it was mortgage by conditional sale. This clause recites that since right of reconveyance was to be exercised on or before 31-12-1964 and on payment of the same price land was to be resold by the transferee to the transferor which shows that title was not transferred and there was no vesting of ownership in the transferee. This contention cannot be accepted. Because such recital or clause is always there in such agreement. In this very Clause (3), it is again mentioned that sale made in favour is to be treated as complete and the purchase price of Rs. 6,000/- are received in cash. This recital negatives the contention that Rs. 6,000/- represented the loan amount. Moreover, since there is no evidence as to what was the rate of interest for the earlier loan it is difficult to believe that Rs. 900/- could be calculated as interest on Rs. 5,100/-. The time for reconveyance in this case was very short and it was not a case where long period was given. Deed was executed on 14-6-1963 whereas the right of reconveyance was to be re-exercised on or before 31-12-1964. For such short period it cannot be said that parties intended to create transaction in the nature of mortgage by conditional sale.
16. Applying the above tests and the tests laid down by the Supreme Court in Tamboli Ramanlal Motilal v. Ghanchi Chimanlal Keshavlal , it can be safely held that the interpretation given to the deed by two Courts below does not suffer from any infirmity or illegality. Cases cited by learned Counsel for the appellants in support of his contention are distinguishable on facts.
17. In the case of Patel Atmaram Nathudas v. Patel Babubhai Keshavlal reported in (1975) XVI GLR 509 since the vesting of property was postponed for 20 years, it was held that such statement is indicative of the relationship of mortgagor and mortgagee. In the case before me no such long period was given during which vesting postponed. Rather vesting followed immediately after execution of the document and simultaneously possession was also given.
18. Case of Asmal Bagas Abharam v. Raj Mahijibhai Prabhatsing and Anr. reported in (1973) XIV GLR 600, is also distinguishable on facts. In the case before me neither it is a case where document was executed without consideration nor that there is omission to mention the date of payment. Date of repayment is specifically mentioned in the deed.
19. Last case of Chodhari Madhaji Ganeshji v. Patel Magandas Bechardas , in the first place laid down general rule of construction of such document and it says that the question whether a given transaction is mortgage by conditional sale or an outright sale with a condition of repurchase must be decided on its own facts. In every such case the question is what upon a fair construction is the meaning of the document. If the words of the document are express and clear, effect must be given to them and any extraneous inquiry into what the parties to it thought or intended is ruled out. There can be no dispute with the above proposition of law. However, the facts in that case were that there was a particular manner in which the receipt of money by the executant was expressed in the deed and the defendant himself admitted in examination-in-chief that the plaintiff had come to place the field with him. It is on this recital that the transaction was held to be mortgage with conditional sale. In the case before me there is clear recital that the money was received in cash and not as loan. There is no recital that the land was placed with the defendants. As such this case is also distinguishable.
20. In view of the foregoing discussions, I am of the view that the document in question is not mortgage by conditional sale but sale with condition to repurchase and the interpretation given by two Courts below is correct and in accordance with law.
21. There is no merit in this appeal which is hereby dismissed with costs.