Judgment:
Shantanu Kemkar, J.
1. Appellant/defendant No. 1 has filed this Second Appeal against the judgment and decree dated 28-1-2006 passed by II Additional District Judge, Mandsaur in Civil Regular Appeal No. 42-A/05, reversing the judgment and decree dated 4-4-2005 passed by Civil Judge, Class II, Mandsaur in Civil Suit No. 277-A/02.
2. This second appeal was admitted on 15-2-2008 on following substantial questions of law:
(a) Whether in the facts and circumstances of the case the learned Lower Appellate Court was right in holding that the transaction in question was mortgage and not a sale outright sale?
(b) Whether the impugned judgment and decree as passed by the learned Lower Appellate Court suffer from perversity ?
3. Briefly stated, the plaintiff-respondent No. 1 Khalil filed a suit against the appellant No. 1 for redemption of land bearing Survey No. old 82, new No. 350, 0.4 hectare situated at Village Bajkhedi, Tehsil Mandsaur. It was averred by the plaintiff that his father Mohinuddin had mortgaged the said land by an agreement dated 10-12-1980 for Rs. 1300/- with the appellant/defendant No. 1. As per the terms of the said agreement dated 10-12-1980 the plaintiffs father Mohinuddin was to return the said amount to the defendant No. 1 within four years and the defendant No. 1 was not required to act upon the sale deed dated 10-7-1980 executed in respect of the said land by Mohinuddin in his favour. According to the plaintiff prior to the death of his father, his father Mohinuddin had filed a suit against the defendant No. 1 but the same was dismissed for non-appearance of the plaintiff. He stated that on 3-10-2002 he offered Rs. 1300/- to the defendant No. 1 appellant and requested to the appellant defendant No. 1 for release of the mortgaged land but the appellant defendant No. 1 refused to release the said land and deliver its possession. In the circumstances he had to file the suit claiming redemption of the mortgage and possession of the suit land.
4. The defendant No. 1 filed written statement and denied the claim of the plaintiff. The Trial Court framed issues and after recording evidence dismissed the plaintiff's suit vide judgment dated 4-4-2005 holding the sale deed dated 10-7-1980 to be an outright sale of the suit land and not a mortgage by conditional sale. It held that the burden to prove that the sale deed is not an outright sale but a conditional sale was on the plaintiff which he failed to discharge. It also held that the agreement dated 10-12-1980 on the basis of which the plaintiff is claiming redemption being an unregistered document the same is inadmissible in evidence in view of Section 59 of the Transfer of Property Act. It also held that the properly sold by a registered sale deed 10-7-1980 cannot be redeemed on the basis of an unregistered agreement dated 10-12-1980 entered into after more than five months of the execution of the registered sale deed.
5. In the appeal, the First Appellate Court without adverting to the registered sale deed dated 10-7-1980 (Exh. D-1) allowed the plaintiff's appeal and decreed the suit placing reliance on the agreement dated 10-12-1980 (Exh. P-1).
6. Shri Shailendra Mukati, learned Counsel for the appellant defendant No. 1 has argued that vide registered sale deed dated 10-7-1980 (Exh. D-1) the suit property was out rightly sold by the plaintiff's father to the defendant No. 1 appellant. In the circumstances the unregistered agreement dated 10-12-1980 (Exh. P-1) was rightly discarded by the Trial Court holding it to be inadmissible in evidence. He argued that the sale deed dated 10-7-1980 (Exh. D-1) docs not contain condition of mortgage or reconveyance, on the other hand on its plain reading it is very clear that it is an out and out sale. He submits that from the testimony of Jama (D.W. 1) corroborated by the sale deed (Exh. D-1) it has been proved that the possession of the land was also handed over by the plaintiff's father to Jama defendant No. 1. He argued that the agreement dated 10-12-1980 (Exh. P-1) being an unregistered document it has rightly been held to be inadmissible in evidence by the Trial Court. He further argued that for a transaction to be a mortgage by conditional sale the condition is required to be embodied in the document which effects or purports to effect the same in view of the provision contained in Section 58(c) of the Transfer of Property Act. In support he placed reliance on various judgments including Kasturi Venkata Subbarao v. Bikkina Veeraswami AIR 1946 Mad 456, Pt. Soshil Kumar v. Madan Gopal : AIR 1953 Punjab 292, Pt. Krishna Chandra Sharma and Ors. v. Pt. Ramgulam and Anr. : AIR 1958 MP 295 (DB), Chunchun Jha v. Ebadat Ali and Anr. : AIR 1954 SC 345, MA. Bashir and Anr. v. Mrs. Ethel and Ors. : AIR 1957 MP 207, Bhaskar Waman Joshi and Ors. v. Shrinarayan Rambilas Agarwal and Ors. : AIR 1960 SC 301.
7. Shri R.L. Patidar, learned Counsel appearing for the plaintiff respondent No. 1 supported the impugned judgment of the First Appellate Court and has argued that in view of the agreement dated 10-12-1980 (Exh. P-1) in which the entire circumstances for entering into the agreement after execution of the sale deed (Exh. D-1) has been clearly spelled out, the finding recorded by the First Appellate Court need not to be interfered into.
8. In the case of Kasturi Venkata Subbarao v. Bikkina Veeraswami (supra), it has been held by the Madras High Court that an ostensible sale with a stipulation for repurchase shall not be regarded as a mortgage unless the stipulation is contained in the same document which effects the sale. It is held that the effect and object of proviso to Section 58(c) of the Transfer of Property Act is to shut out an enquiry whether a sale with a stipulation for retransfer is a mortgage where the stipulation is not embodied in the same document. In Soshil Kumar v. Madan Gopal (supra), a Division Bench of Punjab High Court has observed that a sale deed which undoubtedly require registration under Section 17 of the Registration Act, and if it was sought to be modified in respect of terms of the sale deed by later agreement the document embodying those terms would also require registration. In Pt. Krishna Chandra Sharma and Ors. v. Pt. Ramgulam and Anr. (supra), a Division Bench of Madhya Pradesh High Court while considering proviso to Section 58(c) has held that the sale and agreement to reconvey if not embodied in same document the transaction cannot be recorded as mortgage by conditional sale and the seller is precluded from showing that transaction was not an out and out sale but was something between mortgage and sale. In Chunchun Jha v. Ebadat Ali and Anr. (supra), the Supreme Court has held:
Under the Proviso to Section 58(c), T.P. Act, 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 document does not necessarily mean that it must be a mortgage and cannot be a sale. If the condition of repurchase is embodied in the document the effects or purports to effect the sale, then it is matter for construction which was meant. The Legislature has made a clear cut classification and excluded transactions embodied in more than one document from the category of mortgages, therefore, it is reasonable to suppose that persons who, after the amendment choose not to use two documents, do not intent the transaction to be a sale, unless they displace the presumption by clear and express words; and if the conditions of Section 58(c) are fulfilled, then the deed should be construed as a mortgage.
In MA. Bashir and Anr. v. Mrs. Ethel and Ors. (supra), this Court laid down the tests which have been to be applied for determining whether the transaction between the parties is mortgage by conditional sale or an absolute sale coupled with a condition of repurchase and has observed thus:
If the purchasers do not desire that their transaction should be interpreted as a mortgage by conditional sale, they must insist on two separate documents which can never be construed as a mortgage under law. If, however, they choose to incorporate the condition of repurchase in the same document, they must insist that clear and express words excluding the mortgage are incorporated in the same document. If they do not insist on these two things, and the condition of repurchase is in the same document, then, however ostensible the first part conveying absolute title to the purchase may be, Courts will hold that a mortgage was intended and they will got to the surrounding circumstances only if there be ambiguity, but not otherwise: : AIR 1954 SC 345 explained; AIR 1955 Nag 272 held currently decided and relied on. Case Law Ref. to and discussed.
In Bhaskar Waman Joshi and Ors. v. Shrinarayan Rambilas Agrawal and Ors. (supra), it has been held that:
If the words are plain and unambiguous they must in the light of the evidence of surrounding circumstances be given their true legal effect. If there is ambiguity in the language employed, the intention may be ascertained from the contents of the deed with such extrinsic evidence as may be law be permitted to be adduced to show in what manner the language of the deed was related to existing facts. Oral evidence of intention is not admissible in interpreting the covenants of the deed but evidence to explain or even to contradict the recitals as distinguished from the terms of the documents may of course be given. Evidence of contemporaneous conduct is always admissible as a surrounding circumstance; but evidence as to subsequent conduct of the parties is inadmissible.
9. Applying the ratio of the judgments cited by the learned Counsel for the appellant I have examined the sale deed dated 10-7-1980 (Exh. D-1) and the agreement dated 10-12-1980 (Exh. P-1). Having gone through the sale deed (Exh. D-1) I find that no condition has been embodied in the registered sale deed to hold that the transaction is mortgage by conditional sale. Section 58(c) clearly provides that where the mortgagor ostensibly sells the mortgage property on a condition that on default of payment of the mortgage-money on a 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, the transaction is called a mortgage by conditional sale and the mortgagee a mortgagee by conditional sale:
Provided that no such transaction shall be deemed to be a mortgage, unless the condition is embodied in the document which effects or purports to effect the sale. The registered sale deed (Exh. D-1) is not containing any such condition. In the light of the various judgments referred to above the sale deed (Exh. D-1) cannot be held to be a mortgage by conditional sale. The agreement (Exh. P-1) which has been executed after more than five months cannot be treated to be an agreement of incorporating such condition in the registered sale deed (Exh. D-1). It has been held in the case of Kasturi Venkata Subbarao v. Bikkina Veeraswami AIR (33) 1946 Mad. 456 stipulation for repurchase requires to be contained in the same document which effects the sale and an enquiry as to whether a sale with a stipulation for retransfer is a mortgage has been shut when the stipulation is not embodied in the same document. As mentioned, herein before, no such condition finds place in sale deed (Exh. D-1). The agreement (Exh. P-1) is not a registered document. The conditions of the registered sale deed (Exh. D-1) cannot be modified by an unregistered document agreement (Exh. P-1).
(Emphasis supplied)
10. The Trial Court has rightly dealt with the issue and has rightly held the agreement (Exh. P-1) to be inadmissible in evidence being not registered. The Appellate Court has wrongly relied the agreement and committed error in treating the same to be admissible in evidence. The agreement of mortgage to change the conditions of registered sale deed was required to be registered but the same was not registered and in the circumstances it could not have been treated by the Appellate Court to be a document admissible in evidence. It is also pertinent to mention the Trial Court disbelieved the plaintiff's version that the amount of Rs. 1300/- was error tendered by the father of the plaintiff or by plaintiff within four years time as stipulated in the agreement dated 10-12-1980 (Exh. P-1).
11. Having regard to the aforesaid discussion, I am of the view that the judgment and decree passed by the First Appellate Court is liable to be set aside as it has totally ignored the sale deed (Exh. D-1) and has misinterpreted and has wrongly placed reliance on the agreement (Exh. P-1) which was inadmissible in the evidence. The First Appellate Court on the basis of evidence could not have held that the transaction in question was mortgage and not outright sale. The impugned judgment passed by the First Appellate Court suffers from perversity and as such the same is set aside.
12. Accordingly the appeal is allowed. The judgment and the decree of the First Appellate Court is set aside and the judgment and decree passed by the Trial Court is restored. The plaintiff's suit is dismissed. Parties to bear their own costs.