' This is an appeal against the order, dated 30-9-1970 passed by the Additional Commissioner, Khairpur, whereby he rejected the petitioner's appeal regarding redemption of mortgage in respect of Survey No, 848 (2.24) Acres of Deh Arbani, Taluka Kotdiji District Khairpur.
2. The facts of the case are that the disputed land was owned by the petitioner. He executed registered document in favour of the respondent whereby he is stated to have sold the land for a consideration of Rs, 2,000 to the respondent with the condition that the consideration will be returned b> the Vendor in between 11-1-1963 to 10-1-1966 to the Vendee and if the Vendor failed to return the whole amount then the deed of sale would be deemed to be the deed for absolute sale and the Vendee will get the record of rights mutated in his favour on the basis of the sale-deed.
The petitioner failed to pay the money within the stipulated period and the Khata of the land was mutated in favour of respondent on 18-9-1968 on the basis of original document. The petitioner approached the Settlement Officer/Collector, Khairpur for redemption of the mortgage but his request was rejected by him vide his order, dated 11-6-1970 and he was directed to seek his remedy in civil Court. The petitioner preferred an appeal, which was rejected by the Additional Commissioner, Khairpur vide impugned order.
3. I heard the counsel for the parties on 16-11-1970. They have also filed written arguments. The main points urged by them are as follows:- A. Counsel for the petitioner.-
(1) The transaction is ab initio void as it is in contravention of the provisions of the M. L. R.
64.
(ii) The transaction was a usufructuary mortgage and the sum of Rs, 2,000 was the loan. The petitioner was entitled to prove this orally as against the written document vide the special protection conferred upon him by section 10 (a) of Deccan Agriculturist Relief Act. According to section 15 of the Deccan Agriculturist Relief Act, the Agriculturists have not to pay the mortgage money when he goes for redemption of the mortgage and the Collector can redeem the mortgage without payment of such money or on payment of the mortgage money in easy instalments. If the possession had not been delivered by the petitioner to the respondent then it would have been a conditional sale with simple mortgage as defined by section 58 of Transfer of Property Act. The Revenue Authorities had to adjudicate upon the question vide section 3 of the West Pakistan Redemption and Restitution of Mortgaged Lands Act, 1964 and the jurisdiction of civil Court was barred vide section 17 of the Act.
(iii) The mutation in the record-of-rights in favour of respondent was made without any notice to the petitioner and it was, therefore, bad in law, B. Counsel for the respondent.- (i)Section 58(c) of the Transfer of Property Act, speaks about conditional sale but there is proviso which reads that no such transaction shall be deemed to be a mortgage unless the condition is embodied in the document which effects or forms part to effect the sale. There is mention of word mortgage throughout the sale-deed and on the contrary there is express contract between the parties whereby the petitioner had agreed to obtain Rs, 2,000 from the respondent and had executed sale-deed on 11-11-1963 on condition that if loan obtained is not returned upto 10-1-1966, the conditional sale will be absolute sale and the Khata in favour of the respondent will be changed on the basis of the document. The transaction is, therefore, sale and not mortgage.
(ii) There is a penal clause in the document itself that the sale would become absolute in case vendee failed to repay the loan, and as such section 67 of Transfer of Property Act is not applicable to the case.
(iii) As defined in Explanation No, H below section 3 of the Redemption and Restitution of Mortgage Lands Act 1964 the section relates to simple mortgages between the parties without delivery of the possession and section 3 of the Act is not, therefore, applicable to this case. Section 6 of the Act also does not apply as the amount due was not deposited by the petitioner with the Collector on the date of submitting the application for redemption as required by section 4 of the Act and Rule 10 of the West Pakistan Redemption and Restitution of Mortgaged Lands Rules, 1969. Proper application in Form "A" prescribed by the rules was also not submitted by the petitioner. The petitioner is not entitled to any relief under the Act as he has failed to deposit the amount with the Collector. Section 17 of the Act has no application at all as in this case the rights are still subsisting and the section applies to those mortgages which have already been extinguished. Section 7 of the Act is in favour of the respondent, which gives powers to the civil Court for establishing the claim of the aggrieved party in such cases.
(iv) As held in A. H. R. 1938 Lahore p. 512 it is not proper to order redemption in summary proceedings as the dispute between the parties is of complicated nature.
4. I have considered the arguments of the parties. The petitioner executed the registered deed, dated 11-1-1963. The material points mentioned therein are as follows :-
(a) Survey No, 848 measuring 2-24 Acres with boundaries all rights in and out with sanctioned drains with usual other rights is being sold conditionally for a consideration of Rs, 2,000 which have been received by the petitioner from Chuttal Khan and the possession delivered to him. The petitioner extinguished himself of his rights.
(b) The consideration shall be returned in between 11-1-1963 to 10-1-1966 to the Vendee. If the Vendor fails to return the whole amount then the deed of sale shall be deemed to be the deed for absolute sale. The Vendor on the basis of this sale-deed will get the record-of-rights mutated and the Vendor will raise no objection.
5. According to section 58(c) of the Transfer of Property Act where the mortgagor ostensibly sells the mortgaged property on condition that on default of payment of the mortgaged money on a certain date, the sale becomes absolute and the transaction is called a mortgage by conditional sale. Reading of the sale-deed in the instant case makes it quite clear that the land was mortgaged by way of conditional sale for a limited period. Condition embodied in the deed is that the mortgagor would return the loan amount by 10th January, 1966 and in case of default the sale would be absolute. The petitioner is stated to have defaulted in payment of the amount. The next question would, therefore, be whether default on the part of mortgagor would ipso facto make the sale absolute. The lower authorities have acted in this case in the assumption that the sale had become ipso facto absolute after 10th January, 1966 on account of default in payment of the money by the petitioner mortgagor and have changed the record of rights accordingly. I am afraid I cannot agree with this assumption. This is the case of a mortgage by conditional sale and in the circumstances the provisions of section 67 of the Transfer of Property Act would come into play and the default on the part of the mortgagor, would not make the conditional sale as absolute unless right of redemption is fore-closed by decree of a civil Court. In the present the respondent mortgagee after the petitioner/mortgagor's failure to return the amount on the due date should have filed suit for foreclosure of the mortgage or for sale of the property to him. The sale could have become absolute after getting decree in his favour which is not there and the respondent/mortgagee has, therefore, not become absolute owner of the property, which will be deemed to be mortgaged with him till this date.
6. In view of the above, I hold that the property under dispute is mortgaged with the respondent and ownership rights do not stand transferred to him and that the mutation of sale in respect of the land made in the record-of-rights in favour of the respondent is not proper and is set aside.
The lower Authorities have not examined the case in the perspective of the provisions of the West Pakistan Redemption and Restitution of Mortgaged Land Act, 1964 on the assumption that the sale had become absolute. This assumption was not justified. The case is, therefore, remanded to the Collector concerned for passing fresh orders in the case in accordance with the provisions of the West Pakistan Redemption and Restitution of Mortgaged Lands Act, 1964 and rules/instruction therein. The orders should be passed after giving proper opportunity to the parties concerned of being heard.
7. The revision petition is accepted to the above extent.
8. Parties may be informed.