Bombay High Court
Laxman Krishana Sangade And Othrs vs Hari Bhima Pokharkar Deceased L.R.1A ... on 29 November, 2023
Author: S. G. Mehare
Bench: S. G. Mehare
2023:BHC-AUG:25003
1 SA.292-93.odt
IN THE HIGH COURT OF JUDICATURE AT BOMBAY BENCH
AT AURANGABAD
SECOND APPEAL NO. 292 OF 1993
1. Laxman Krushna Sangade,
Age : 50 years.
2. Krushna S/o Bhiva Sangade,
Age : 55 years.
Both Agriculturist,
Resident of Kurkundi,
Tq. Sangamner, Dist. Ahmednagar. ... Appellants
Versus
Hari s/o Bhima Pokharkar,
Since deceased, through his heirs
1-A. Kamalabai w/o Hari Pokharkar,
Age : 48 years.
1-B. Sindhubai D/o Hari Pokharkar,
Age : 14 years.
1-C. Ramdas s/o Hari Pokharkar,
Age : 12 years.
Respondent Nos.1-B and 1-C
being minors, through their legal guardian,
respondent No.1-A mother.
2. Narayan s/o Bhima Pokharkar,
Age : 62 years,
All Agriculturist,
Resident of Kurkundi,
Tq. Sangamner, Dist. Ahmednagar. ... Respondents.
...
Advocate for Appellants : Mr. S. V. Dixit h/f Mr. V. J. Dixit.
Advocate for Respondent Nos.1A, 1B, 1C & 2 : Mr. S.T. Shelke.
...
::: Uploaded on - 30/11/2023 ::: Downloaded on - 01/12/2023 07:29:35 :::
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CORAM : S. G. MEHARE, J.
RESERVED ON : 11.09.2023
PRONOUNCED ON : 29.11.2023.
JUDGMENT :
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1. The defeated defendants have impugned the Judgments
and decrees of the Court of the first instance and the first
appellate Court.
2. The appellants will be referred to as the "defendants"
and the respondents as the "plaintiffs" for convenience.
3. The plaintiffs have claimed that they had filed a suit for
redemption and possession. The agricultural fields were the
suit lands. The plaintiffs had a case that they were in dire need
of money. They contacted the defendants for financial
assistance. The defendants agreed to pay a loan subject to the
condition of executing the sale deed in their favour. They also
agreed to reconvey the suit lands to them upon returning their
amount. A contract was concluded that the plaintiffs would
refund Rs.1200/- to them within ten years, and they would
reconvey the suit fields to them. Accordingly, on 03.11.1973,
the sale deed was executed. On the same day, a contemporary
document titled an agreement of resale of the suit lands on
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refunding the loan amount was also created. It was purely a
mortgage by conditional sale. The plaintiffs went to the
defendants with the loan amount and requested them to
reconvey the suit lands. However, they denied it. Hence, the
suit was filed.
4. The defendants had a case that the plaintiffs agreed to
sell the suit lands to them. Hence, from time to time, the
plaintiffs took Rs.1130/- from them. They requested the
plaintiffs to execute the sale deed, but they avoided it. They
had no written evidence of the money they had paid the
plaintiffs. Taking advantage of the said situation, the plaintiffs
forcibly got an agreement of resell of the suit lands from them.
They were afraid of losing the money paid to them. Hence,
they executed the said agreement. They never intended to
resell the suit lands, as they had their other lands adjoining to
the suit lands. It was purely a sale transaction. It was not a
mortgage by a conditional sale.
5. Both Courts held that it was a mortgage by a conditional
sale. The defence of the defendants was discarded.
6. Heard the respective counsels at length.
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7. The appeal was admitted on 23.09.1993. On that day,
leave to amend and add ground Nos.2, 3 and 7A was granted.
The learned counsel for the appellants amended the grounds
accordingly. However, no substantial questions of law were
framed. Therefore, this Court had formulated the substantial
questions of law on 11.09.2023, which reads thus;
(A) Whether the terms of re-conveyance shall only
be embodied in the document that affects the sale ?
(B) Whether the transaction was a mortgage by
conditional sale ?
(C) Whether Section 36-A of the Maharashtra Land
Revenue Code protect the defendants ?
8. The learned counsel for the defendants has vehemently
argued that unless the condition for resell is embodied in the
document of sale, it cannot be said to be a mortgage by
conditional sale. The contemporary document of resell of the
land does not prove that it was a mortgage by conditional sale.
To bolster his argument, he relied on the case of Ashokkumar
Nandalal @ Girdharilal Maliwal and others Vs. Jaswantsing
Pyarasing Sikh and others, First Appeal No.129 of 2007 ,
decided by this Court on 27.02.2019. He also argued that the
5 SA.292-93.odt
defendants belong to the Scheduled Tribes. Hence, they are
protected under section 36-A of the Maharashtra Land Revenue
Code. ("M.L.R. Code" for short). It was a question of law, and
oral evidence on such an issue is not essential. Such a legal
issue may be raised at any stage of the suit. He prayed to
allow the appeal.
9. Per Contra, the learned counsel for the plaintiffs would
submit that there are two fact findings against the defendants.
Therefore, there is a little scope to interfere with the impugned
judgments and decrees. He relied on the case of C.
Doddanarayana Reddy (Dead) By Legal Representative and
Others Vs. C. Jayarama Reddy (Dead) By Legal Representatives
and Others ; (2020) 4 SCC 659 and argued that when the view
taken by the trial court and the First Appellate Court is
possible, and findings of fact are not perverse, then the Court
should not exercise the powers under section 100 of the Civil
Procedure Code. He also relied on the case of Santakumari
And Others Vs. Lakshmi Amma Janaki Amma (D) by L.Rs. and
Others ; AIR 2000 SC 3009. The facts of the said case were that
the sale deed and agreement to sell the same property after ten
years were executed simultaneously. On these facts, it was held
that the construction of the document raises a substantial
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question of law, and this proposition of law is well settled.
Further, it was held that both documents should be read
together to understand the intention of the parties. Reading
these two documents together, the intention of parties to the
contract was nothing, but a mortgage by a conditional sale.
The Hon'ble Supreme Court specifically observed that it is to be
remembered that at that time, the Transfer of Property Act did
not operate in the State of Travancore, and only the general
principles of that Act based upon justice, equity and good
conscience were applicable. These observations indicate that
the ratio was laid down in the particular facts of the case. In
this case, the suit land was situated in the Maharashtra State,
where the Transfer of Property Act was applicable. Hence, the
said case is distinguishable on facts.
10. He also argued that the plaintiffs did not enter the
witness box. However, before the suit, they had issued a notice
to the defendants. The defendants did not reply to it. They did
not prove the undue influence and coercion. Their defence was
false. At the time of the transaction, the plaintiffs were in dire
need of money for the family expenses; hence, they had no
option except to execute a nominal sale deed in favour of the
defendants. They had a clear agreement to reconvey the suit
7 SA.292-93.odt
lands to them on refunding the amount of the loan within ten
years. Since the terms of the agreements were clear, a
contemporary document was created. Silence for such a long
period speaks volumes about the intention of the parties. On
reading the agreement to resell as a whole, the sole conclusion
could be drawn that it was a mortgage by a conditional sale.
Both courts have correctly appreciated the evidence, and there
is no perversity in the impugned judgments and decrees. No
substantial questions of law have been involved in the appeal.
The ground of protection under Section 36-A of the
Maharashtra Land Revenue Code has been raised for the first
time in the second appeal. There was absolutely no pleading
that they belonged to Scheduled Tribes and as such protected
under the said provision. No substantial questions of law have
been involved in this appeal. He prayed to dismiss the appeal.
11. The entire case revolves around the intention of the
parties. It is evident that a separate agreement to resell the
same land was also executed on the same day. The Plaintiffs
had a case of mortgage by conditional sale. Hence, Section
58(C ) of the Transfer of Property Act would apply. It has been
provided in the said section that where the mortgagor
ostensibly sells the mortgaged property, on the condition that
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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, this is a mortgage by
conditional sale. The proviso to this clause is significant to
determine whether it was a mortgage by conditional sale or the
transition of a pure sale. The said proviso reads thus ;
'No such transactions shall be deemed to be the mortgage
unless the condition is embodied in the document which
affects or purports to affect the sale'.
12. It is very specific that to determine whether the
document is a mortgage by conditional sale, the condition of
resell shall be embodied in the document of sale itself.
13. In the present case, a separate agreement to sell was
executed on the same day. Both courts admitted the plaintiffs
case, read the sale deed and agreement to resell together, and
held that the intention of the parties was not to sell the suit
lands, but that it was a mortgage by conditional sale.
14. The question that emerged for consideration is whether
such a contemporary document complies with the proviso to
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clause (C) of Section 58 of the Transfer Property Act. A similar
question had cropped up before this Court in the case of
Ashokkumar (cited supra). This Court considered the ratio laid
down in the case of Pandit Chunchun Jha Vs. Ebadat Ali and
Another ; AIR 1954 Supreme Court 345 , in which it was held
that under the proviso to section 58 (C) of the Transfer
Property 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 the repurchase is embodied in the
document that effects or purports to effect the sale, then it is a
matter of construction which was meant. The Legislature has
made a clear cut classification and excluded transactions
embodied in more than one document from that category of
mortgages''.
15. The Hon'ble Supreme Court recently, in the case of
Prakash (Dead) By L.Rs. Vs. G. Aradhya and others, Civil
Appeal No.706 of 2015, Decided on August 18, 2023 , has in
paragraph No.24 held thus;
10 SA.292-93.odt
"24. A perusal of the aforesaid proviso to sub-section ( c )
of Section 58 of the Act 1882 Act provides that no
transaction shall be deemed to be a mortgage unless the
condition is embodied in the document which effects or
purports to effect the sale. It is the undisputed case in
hand that it was not a single document, the condition
contained in Civil Appeal No. 706 of 2015 have to be
considered by this Court to opine that the transaction was
not a sale, but a mortgage. Admittedly, there are two
documents".
16. The ratio decidendi in the above case was that if the
condition for re-transfer is not embodied in the same document
that effects or purports to effect a sale, the transaction would
not be regarded as a mortgage by conditional sale. The facts of
this case are similar. The plaintiff did not comply strictly with
clause (C) of Section 58 of the Transfer of Property Act. Hence,
the plaintiffs' case that by two separate documents, the sale
deed in question was a mortgage by a conditional sale could
not be accepted.
17. As far as another document of repurchases executed on
the same day, the Hon'ble Supreme Court in Prakash's case has
referred to the observations in the case of Umabai Vs. Nilkanth
Dhondiba Chavan ; (2005) 6 SCC 243 in which it was observed
in paragraph No.21 that "There exists a distinction between
11 SA.292-93.odt
mortgage by conditional sale and a sale with a condition of
repurchase. In a mortgage, the debt subsists, and a right to
redeem remains with the debtor, but a sale with a condition of
repurchase is not a lending and borrowing arrangement. There
does not exist any debt and no right to redeem is reserved
thereby. An agreement to sell confers merely a personal right
which can be enforced strictly according to the terms of the
deed and at the time agreed upon. Proviso appended to
Section 58 (C), however, states that if the condition for
retransfer is not embodied in the document which effects the
sale, the transaction will not be regarded as a mortgage".
18. The law is well settled that to appreciate the document,
its contents are to be read in their entirety, and the intention of
the parties is to be gathered from the language used therein.
19. Bearing in mind the above proposition of law, the Court
read the contents of the sale deed (Exh.44), which does not
recite any other transaction of advance of any sum by the
vendee to the vendor, which was entered into by and between
the parties. The recitals therein are clear that before the date of
sale the vendor had received substantial consideration from the
vendees for repaying the hand loans they had taken from
12 SA.292-93.odt
others, and the remaining balance consideration was also paid.
They had executed the sale deed voluntarily. On the same day,
the possession was also delivered to the vendee. Nothing is
recited in the sale document that it was a mortgage by
conditional sale. It was also not recited that it was a sale on the
condition of repurchase.
20. In the case of Santakumari, the Supreme Court held that
the execution of a separate document on the same day of the
sale deed, along with the indebtedness of the vendor, shows
that the intention was to re-convey the property to the vendor.
However, in paragraph No.12 it has been observed that it is to
be remembered that at the time, The Transfer Property Act did
not operate in the state of Travancore, and only the general
principles of that Act based on justice, equity, and conscience
were applicable. Hence, the said case is distinguishable on facts
and does not assist the plaintiffs in believing that the separate
agreement could be read with the sale deed to prove that it
was a mortgage by conditional sale.
21. The agreement to sell (Exh.40) executed on the same
day recites that they have sold the suit field for a consideration
of Rs.1200/-. If the said amount is paid to the vendee within
13 SA.292-93.odt
ten years, he would sell the suit land to the vendees. The
document does not recite that the sale deed was executed as
security towards the loan received from the vendee and that a
nominal sale deed was executed. However, the recitals were
clear that the vendee, the defendant, had to execute the sale
deed within or after ten years on consideration of Rs.1200/-.
The recitals of the agreement to sell were clearly an agreement
to sell, the consideration was agreed upon, and the date was
also fixed for the specific performance. It was a document
dated 03.11.1973. So, construing the terms of purchase from
the agreement, the plaintiffs/Vendors had to execute their
personal right to seek specific performance of the contract
within three years from 03.11.1983, i.e. on or before
03.11.1986. The plaintiffs/vendors had served notice through
a lawyer on 15.10.1982 calling upon the defendants to inform
the date of execution of the sale deed as per the agreement.
The defendant/vendee replied to his notice through a lawyer
on 21.10.1982. They had a defence that the plaintiffs had
agreed to sell the suit land to them orally. The plaintiffs had
received Rs.1130/- from time to time. However, the plaintiffs
were avoiding to execute the sale deed. The plaintiffs obtained
the agreement to sell under pressure. They were apprehensive
about losing their amount of Rs.1130/-. In these
14 SA.292-93.odt
circumstances, the agreement to sell was executed. Indirectly,
they had a case that it was not an agreement to sell but a
document created under pressure.
22. The plaint reveals that the plaintiffs in the first part
brought a story of the execution of sale for the term of ten
years and the defendant No.1 had executed an agreement to
return the suit field before ten years. It was further agreed that
when the plaintiffs would pay the money as per the agreement,
he would execute the sale deed. On getting the money, the
plaintiffs went to the defendants and asked to execute the sale
deed, but they denied. A notice was served upon the
defendants on 15.10.1982. The suit was based on the
agreement to sell. He avoided to execute the sale deed. Hence,
the suit was filed. However, the prayers were otherwise. Order
XXXIV of C.P.C. deals with the suit for foreclosure sale and
redemption. The relevant rules would be discussed in the later
part of the judgment. What should be the nature of the
redemption suit should be examined first.
23. The mortgager is the owner who parted with some rights
of ownership, and the right of redemption is a right which he
exercises by virtue of his residuary ownership to resume what
15 SA.292-93.odt
he had parted with. Section 60 of the Transfer of Property Act
provides that after the money becomes due, the mortgagor has
a right, on payment or tender at a proper time and place, of
the mortgage-money to require the mortgagee to deliver the
mortgage deed and all documents relating to the mortgaged
property, to deliver possession thereof to the mortgagor. The
section is clear that where the mortgagor wishes to redeem the
mortgage, he may, on the failure of the mortgagee to redeem,
file a suit for redemption, as provided under Order XXXIV of
the Civil Procedure Code. On reading Rule 7 of the said Order,
it is specific that in a suit for redemption, the plaintiffs have to
plead the case of mortgage, the type of mortgage, whether the
direction is required to the mortgagee for an account of the
principal money and interest due, costs of the suit if any or
pray for declaring the amount due at that date or directions to
the mortgagee to deliver the documents and possession if
parted and retransfer the mortgaged property on payment of
the money in the Court. It seems from the prayer that those are
like a suit for the specific performance of the contract. There
were no specific prayers for redemption, possession and re-
conveyance.
16 SA.292-93.odt
24. If it is assumed that the plaintiffs wanted to execute the
rights acquired through the said agreement in the form of
specific performance of the contract, then, they were required
to plead and prove that they were ready and willing to perform
their part of the contract. That is the requirement under
Section 16 (C) of the Specific Relief Act. The plaintiff did not
enter the witness box. The defendants had no opportunity to
bring the material on the facts from his mouth. Hence, it is
presumed that their evidence was not favourable to the
plaintiffs. In other words, an adverse inference is to be drawn
against them that they had no case of redemption for the
mortgaged property, and their case was not true.
25. The written statement is silent about the protection
under Section 36-A of the M.L.R. Code. There should be a
specific claim disclosing the caste or tribe for seeking
protection under the said section. That issue is a question of
fact. Hence, without specific pleadings and evidence, such
ground could not be raised for the first time in the second
appeal.
17 SA.292-93.odt
26. The above discussion leads this Court to answer the
substantial questions of law formulated by this Court as
follows;
Question (a) :- The terms of sale by conditional sale
should be embodied in the document itself and not in a
separate document.
Question (b) :- The sale deed in question was not a
mortgage by conditional sale.
Question (c) :- The protection under Section 36-A of the
M.L.R. Code is redundant for want of specific pleadings and
evidence.
27. The facts discussed with the law further leads this Court
to hold that the impugned judgments and decrees of the Court
of first instance and first appellate Courts are illegal and
perverse. Hence, the following order;
ORDER
(i) The appeal is allowed.
(ii) The judgments and decrees passed by the learned
Joint Civil Judge, Junior Division, Sangamner in
R.C.S. No. 123 of 1983 dated 31.3.1987 and
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confirmed by the learned Additional District
Judge, Ahmednagar, in R.C.A. No. 221 of 1987
27.01.1993 stand set aside.
(iii) The plaintiffs' suit stands dismissed, and the
decree be drawn up accordingly.
(iv) No order as to costs.
(v) Record and proceedings be returned to the Trial
Court.
(S. G. MEHARE, J.)
28. After pronouncement of the judgment, learned counsel
for the respondents requested to stay the judgment and order
of this Court, as he wish to impugned before the Hon'ble
Supreme Court.
29. The respondents is in possession of the suit land. Hence,
to protect the interest, the effect and operation of this order is
stayed for six (6) weeks from today.
(S. G. MEHARE, J.)
...
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