' The suit giving rise to this Regular Second Appeal was filed by Muhammad Kazim appellant now represented by his legal representatives for declaration, that having paid the mortgage money, he was the owner in possession of the house in dispute, alternately he prayed for a decree for redemption of the mortgage on payment of Rs, 2,000 or any other amount determined by the Court. The learned trial Court on 26-6-1974 passed a preliminary decree for redemption of the suit property, subject to payment of Rs, 2,000 by the appellant. The respondent's first appeal against the preliminary decree, was, however; accepted by the learned District Judge, Sheikhupura, by his judgment and decree dated 9-9-1975. He declared the respondent as absolute owner of the property and dismissed the suit wita no order as to costs throughout. Hence this second appeal by the plaintiff.
' The appellant's case, is, that he borrowed a sum of Rs, 2,000 from the respondent's husband namely Muhammad Iqbal who died before commencement of this litigation. According to him the deceased was of the view that mortgage would give rise to usury and, therefore, asked for scribing a sale-deed, with the condition to execute an agreement to re-transfer the property to the appellant against the same amount The plaint proceeds, that the two documents were completed; the deceased got the mortgage deed executed in favour of his wife and a period of five years was fixed for redemption thereof; the appellant remained in possession of the house, as a tenant, paid the rent to the respondent, and also the sum of Rs, 2,000. The appellant claimed that after having liquidated his liability he was in possession of the property as its owner. In the plaint, an offer was made to re-pay the mortgage money, in case its payment was not proved.
3. The respondent contested the suit, denied the mortgage and contended that there was an absolute sale in her favour, for a consideration of Rs, 2,000 evidenced by a registered sale-deed; followed by an agreement for re-transfer of the property to the appellant within a period of five years and as he did not exercise this right within the stipulated period, it was lost.
4. Apart from his oral evidence, comprising the depositions of six witnesses including the appellant, he tendered in evidence copies of the sale-deed, the rent deed and the agreement for re-transfer as Exhs. P. 1, P. 2 and P. 3 respzetively. The document Exh. R. 1 is the original of Exh. P.
3. Amongst the witnesses examined by the appellant, lshfaq Hussain is a Clerk of an Advocate who is said to have advised him and the deceased to execute the sale-deed and the agreement for sale, to avoid element of usury, in the transaction. His next two witnesses are Abdul Hamid and Abdur Rehman who deposed regarding the value of the property. According to the former at the time of the transaction it was worth Rs, 7,000 or Rs, 8,000 and in the estimation of the latter, the appellant spent about Rs, 8,000 or Rs, 9,000 on its construction. The fourth witness Muhammad Arshad Tariq is a petition-writer who proved the document Exh. P.
2. Then there is the statement of Muhammad Ismail. His signatures appear on the three documents, as a marginal witness. , Lastly, toe appellant himself entered the witness-box and corroborated ' the contents of the plaint.
5. In rebuttal, the respondent's attorney produced the documents Exh. D. 1, D. 2 and D. 3 showing that the initiated ejectment proceedings against the appellant; the Rent Controller passed an ejectment order against him, and this order was not interfered with by the appellate Court.
6. Since the judgments of the Courts below are at variance, I have closely examined toe reasons on which their respective decisions are set up. On the question as to whether or not there was an out and out sale or merely an ostensible sale and the documents in question were executed to secure the repayment of the amount advanced to the appellant by Muhammad Iqbal deceased, the learned Civil Judge maintained that relationship of debtor and creditor existed between the parties. This led him to hold that the transaction covered by the sale-deed Exh. P. 1 was in fact a mortgage by conditional sale. This finding was founded on the formulations that three documents were executed on the same date; the appellant did not part with the possession and the consideration for the ostensible sale and the re-sale was the same.
7. It is discernible from the record that the opinion formulated by the learned Civil Judge, was, sought to be controverted, by the respondent on two points. Firstly, the sale-deed and the agreement for re-sale were not executed on the same date; the former was scribed and signed on 15-3-1952 and the-latter on 16-3-1952. It was, thus, argued before him,. That the two documents could not be considered as contemporaneous. Secondly, reference was made to the proviso to clause (c) of section 58 of the Transfer of Property Act, to urge that a transaction does not qualify to be a mortgage by conditional sale unless the condition for re-transfer is embodied in the document which affects the sale. The characterization of the transaction by the appellant, as a mortgage by conditional sale, on the basis of a separate document, contemplating re-transfer of the property, was, thus, also seriously assailed.
8. The learned trial Court overruled both the contentions. It maintained that the agreement was executed on 15th March, 1952 and there was an attempt to alter the date from 15th to 16th. As regards the second argument, it held that the Transfer of Property Act does not apply to the Punjab Province, the proviso lays down a rigid rule and such a technical provision of the Act, the Court is not bound to enforce.
9. The learned District Judge deprecated the trial Court's reliance on the appellant's oral evidence and maintained that the intention of the parties, reflected by the language of the instruments Exh.
P. 1 and R. 1, clearly 4emonstrated an outright sale to the respondent. He specifically referred to R. 1 to point out that this agreement was executed on 16th March, but a crude attempt was made to alter this date as 15th March. He was of the view, that the agreement stipulated a duration of five years for re-purchase of the property by the appellant which expired on 16-3-1957 and after that time limit, the instrument stood cancelled. The fact that the sale-deed did not make mention of any re-sale, also influenced the decision of the learned District Judge in treating the sale as an absolute one. He further declined to subscribe to the view that at the relevant time the property was worth much more than Rs, 2,000 and recorded a finding that when the transaction was made, the price of the house could not be more than Rs, 2,000. In arriving at this finding he was mindful of the rise, registered in the value of the immovable properties during the interregnum between 1951 and the year 1972 when the appellant led his evidence.
10. The main question for determination, in this appeal is as to what is the real nature of the transaction between the parties; whether the two documents Exhs. P. 1 and R. 1 constitute an absolute sale of the house to the respondent with the condition to re-convey it to the appellant at the same price or establish a mortgage with conditional sale. There is an obvious distinction between the two types of transactions. In the first case there does not exit any relationship of borrower and creditor, between the parties and by virtue of the sale-deed, the title in the property is absolutely passed on to the vendee and the agreement to re-transfer it to the vendor does not cast any limitation on his ownership rights. The second instance represents an arrangement for borrowing money, much below the value of the property which is tendered as security for re- payment of the loan. If it is not paid the creditor can fall back on the security. When the relationship of mortgagor and the mortgagee is created the ostensible owner of the property retains an interest in it, inasmuch as the sale-deed and the agreement for repurchase, make out interdependent constituents of the same transaction. It may be observed, that where the two documents, one contemplating transfer and the other an agreement for re-transfer of the property, purport to be contemporaneous, the determination of the real character of the transaction is not without difficulty. It was with a view to narrow down the wide field of controversy regarding the nature of the transaction qua mortgage by conditional sale, embodied in two or more than two documents, that section 58 of the Transfer of Property Act was amended by Act XIX of 1929 and a proviso added to clause (c) which expressly lays down that no transaction shall be deemed to be a mortgage unless the condition for re-purchase is incorporated in the document which affects or purports to affect the sale. Thus, after this amendment a mortgage by conditional sale cannot be proved if the transaction is hit by the proviso. But the _proviso is not binding on the Courts in the Punjab Province, where the Transfer of Property Act is not in force and section 58 has also not been extended. It is not disputed that in the territories to which the Act has not been applied, its general principles B in accord with the rules of justice, equity and good conscience are followed. However, the technical provisions of the Act are not obligatory. It is evident, that the proviso deals with the proof of the mortgage. Such a provision cannot be considered as a rule of justice, equity and good conscience. Reference in this respect may be made to Raghubar Dial v.
Zahuor Ahmad and another (1). Thus, the proviso by itself cannot stand in the. Way of the appellant, if he otherwise succeeds in establishing the transfer in question as a mortgage by conditional sale.
11. The intention of the parties to the document, furnishes a positive test, for finding out the real character of the transaction. Such intention, however, must essentially be gathered from the language adopted in the document, vie wed in the light of the surrounding circus stances. It is to be remembered that the surrounding circumstances cannot be used to portray the instrument as different in nature from the one what is conveyed by its language, but for the purposes of throwing light on the meanings thereof. If the words of the document are clear and unambiguous, speculative opinion must be avoided. Tb oral evidence, is admissible only to the extent that in what manner the language of the document is related to the existing facts.
12. For the application of this test, it is necessary to examine, the language of the documents. Exh. P.
1 bears the title "sale-deed of the house" and its language reveals that the appellant transferred the house to the respondent by way of absolute sale for a consideration of Rs, 2,000 out of which he received Rs, 500 in advance and the remaining sum of Rs, 1,500 was to be paid to him before the Sub-Registrar. Then there is the averment that the appellant had removed his occupation from the house and surrendered the possession to the vendee. This is followed by the usual recitals peculiar to the sale-deed, to the effect that the appellant and his successors-in-interest would have no concern with the house, the property was free from encumbrances and if it was found under charge; the appellant would be liable to be prosecuted. It further reads that in case the whole or part of the property went out of the vendee's possession, the appellant would be liable to refund the sale price. The respondent has been shown therein, clothed with sole and complete ownership of the house. The second document Exh. R. 1 has been executed and signed by the respondent alone. It is recorded in it that the house had been purchased by her and she agreed to sell the same to Muhammad Kazam appellant for a consideration of Rs, 2,000. Its main covenant, is, that the respondent would execute the sale-deed, get it registered within a period of five years and receive the entice sale price before the Joint Registrar; on her failure to complete the sale it would be open to the vendee to seek the completion of the bargain through the civil Court. The instrument expressly ordains that if the vendee defaulted, in proceeding with the sale, within the stipulated time, the bargain would be
(1) 1946 P R 517 deemed to have been rescinded. The third document is a rent deed, executed by the appellant, to get the house in dispute, on rent from the respondent at the rate of Rs, 20 per month. The duration of the tenancy is 11 months commencing from the 1st April 1952.
13. The two Courts below have recorded conflicting -findings on the question of date of execution of Exh. R.
1. The date of the execution of the sale-deed and the agreement for re-sale, may have some bearing on the contemporaneous nature of the two documents. The issue, therefore, needs to be attended to. From the perusal of the three documents, I, however, find that the stamp papers on which these are scribed, were purchased on 15-3-1952. There are clear indications that these were written on 16-3-1952. But the figure 16 has been interpolated and an attempt made to convert it into 15, to ante-date the, documents. This tampering is analogous in character and is clearly visible in the three documents. No reason for such tampering is ascertainable from; the record. There is another important factor relevant to the. Date of execution of the documents, which escaped the notice of the. Courts below. The three documents have been scribed by the same petition-writer namely Muhammad Arshad Tariq and the two marginal witnesses thereof are also the same. The combination of all these factors does not leave me in any manner of doubt that the three documents were executed contemporaneously.
14. But the contemporaneous execution, is not the real test of the sameness of the transaction. It must yield to the intention of the parties, discoverable from the words of the instruments. The language of Exh. P. 1 D unequivocally demonstrates that the sale in favour of the respondent, was, not subject to any covenant but an absolute one. It also does not make mention of any borrowing nor of any stipulation enjoining upon the respondent to execute some other instrument, warranting re-conveyance of the property to the appellant. The respondent throughout, in this document has been described as "vendee". Significantly, it was registered on 7-4-1952 and according to the Sub- Registrar's endorsement made thereon, the appellant admitted the contents of the document and received from Muhammad Iqbal balance of the sale price amounting to Rs, 1,500. The contents of Exh. P. 1 are a clear manifestation of the fact that by virtue of the sale-deed, the title to the property was intended to be passed on to the vendee absolutely. The second document Exh. R. 1 is in fact a unilateral writing by the respondent agreeing to re-transfer the house to the appellant. Though it is in his favour but he is not a signatory thereto and thus not party to the same. It does not disclose any nexus with the sale-deed. As a matter of fact the contents of the two documents which evidently do not suffer from any ambiguity, amply signify that the two independent transactions have been affected thereby.
15. Mere execution of Exh. P. 1 and R. 1, on the same date, is no' ground for holding teat a mortgage by conditional sale has been created. There is authority for the proposition that such contemporaneous execution does not necessarily establish the interdependent of twp documents.
In this connection, I may refer to Bhagwan Sahai v. Bhagwan Din (1). This was a case in which the plaintiffs predecessor-in-interest sold away some immovable property to one Ganga Din and on the sang (1) 12 All, 387 day the latter executed a deed containing a covenant to re-convey the property to the vendors within a period of 10 years from the date of the deed on payment of the same sale price, with interest. The two documents were executed in the year 1835 and about 50 years afterward the plaintiffs brought a suit for redemption of the property. The Privy Council relying upon the following passage from the judgment of Lord Cram worth in Alderson v. While (1) : "The rule of law on this subject is one dictated by common sense, that prima facie an absolute conveyance containing nothing to show that the relation of debtor and creditor is to exist between the parties does not cease to be an absolute conveyance and become a mortgage merely because the vendor stipulates that he shall have a right to re-purchase." ' held the transaction to be an absolute sale with a right to repurchase within 10 years. This case as well as the observations of Lord Cranworth were again quoted with approval by the Privy Council in Jhanda Singh v. Wahiduddin (2). In that case there were two instruments the first document purported to be a deed of absolute sale of certain property and the second conferred a right on the vendors to repurchase the same on re-payment of the original purchase money within 9 or 10 years. This time limit lapsed and the vendors did not avail themselves of the condition of re- purchase but sued for redemption. On the basis of the language of the documents, considered in the light of the surronding circumstances, the judicial committee declared that the transaction was out and out sale and not a mortgage by conditional sale. The case-law on the subject completely seals the fate of the appellant.
16. The five years time limit envisaged by Exh. R. 1 expired in the year 1957. The appellant did not enforce against the respondent the covenant as to the re-transfer of the property and choose to sue her on 5-6-1971, for declaration and redemption of the mortgage. He failed to prove the payment of the amount in question to the respondent and thus, had to bank on the alternate prayer for redemption. It is, noteworthy, that he did not think of instituting the suit until the Rent Controller ordered his eviction and vide Exh. D. 3 his appeal was also dismissed by the District Judge. After the lapse of 14 years, in the circumstances of the case, much is needed to be persuaded, to permit the appellant to redeem the property on the footing of the documents in question. This is a case of an absolute sale and by efflux of time the appellant lost his right of re- purchase.
17. The question of possession can shed some light on the nature of the transaction, for, if it proved that the possession was never delivered to the respondent, that can lend some support to the version that the house was held out merely as a security for re-payment of loan. Be the respondent's assertion, in this behalf, is fairly negatived by the material on the record. I have already made reference to the contents of Exh. P. 1 incorporating the appellant's admission that he abandoned his occupation over the house and handed over its possession to the vendee. As stated earlier, under the rent deed Exh. P. 2 the tenancy commenced with effect from 1-4-1952. The combined reading of the two documents, is demonstrative of the inference that after the delivery of
(1) (1858) 2 De G & J 97 (2) AIR 1916 P C 49 ' possession, the appellant was inducted into the house as a tenant w. e. f. 1-4-1952.
18. There is another legal hurdle to travel beyond the contents of sale-deed Exh. P.
1. The transfer of the property to the respondent is exhibited by a registered document which upon its terms is an absolute sale. The appellant seeks to utilize the unregistered document Exh. R. 1 to show that the transaction covered by Exh. P.
1., though ostensibly a sale, is, in reality a mortgage by conditional sale. In other words the object of Exh. R. 1 is to modify and limit the terms of Exh. P.
1. An] unregistered document cannot be allowed to affect the terms of a registered document which creates rights in a property of the value! Of more than Rs, 100.
19. On behalf of the appellant it has also been emphasized that the value of the house was much in excess of Rs, 2,000 and an aid is sought from the rule that transfer of the property for an unduly low price, is, an attribute of the mortgage by conditional sale. But this test needs to be applied very cautiously because mere inadequacy of consideration by itself is not a safe guide for adjudicating the nature of the transaction. No doubt the learned Civil Judge has maintained that there is a marked disparity between the market value and the sale price but this finding is rested on the sole ground that the appellant's evidence remained unrequited. It is to be seen that the burden to prove the actual 'value of the property at the time of execution of Exh. P. 1, lay on the appellant. I do not think that the depositions of the two witnesses examined by him, in this respect, inspire confidence.
Further, the reasoning which prevailed with the learned District Judge cannot be brushed aside easily. Anyhow, the case has primarily to he decided on the basis of the contents of the documents, which as already held falsify the appellant.
20. Looking from various angles, I see no merit in this appeal. It is dismissed with costs and the judgment and decree of the learned first Appellate Court are upheld but somewhat for different reason.