1968 SCMR 302 (PLP)

FAZLE-AKBAR, J.-This is an appeal by special leave from a jud ment and decree of a learned Single Judge of the High Court of East Pakistan passed in a second appeal. The plaintiffs filed a suit to redeem the suit land, upon the allegation that they borrowed a sum of Rs. 600 from Sreejukta Muhammad Ismail Miaji, predecessor of the present defendants, by mortgaging 1.60 acres of land and the deed which was executed by the mortgagor contained a condition that the mortgagee would re-convey the land on repayment of the loan within three years. The plaintiffs' case was that the said transac tion constituted a mortgage by conditional sale and that since execution of the mortgage the mortgagees were in possession of the mortgaged land and enjoyed the usufructs thereof they had realized more than what was due to them. The defendants contested the suit. Their contention was that the said deed was an out-and-out sale with a condition of re-purchase within three years and that as the said right was not exercised within the stipulated period, the plaintiffs were not entitled to get any relief in the suit. The Munsif found that the deed in question was a mortgage by conditional sale and accordingly decreed the suit. The said judgment and decree were also upheld on appeal by the Sub ordinate Judge. In the second appeal, a learned Single Judge of the High Court, however, held that the document in question was out-and-out a sale with a condition of re-purchase and not a mortgage by conditional sale. He, accordingly, set aside the judgment and decree of the Courts below and dismissed the suit. The only point for determination in, this appeal is whether the document in question is a mortgage by conditional sale, or a deed of out-and-out sale with a condition of re-purchase. The question, therefore, is what, on a fair construction, is the meaning of this document? The said document which was executed on 17-7-38 begins thus:- "It is an out-and-out sale deed of land of a transferable rlayati right within the district Tippera, P. S. and Sub-Registry Chandina, Ph. Kadba, Mouza Kashedda, Khatian No. 52 of which we the vendors along with other co-sharers are owners and possessors." Then, after giving reasons for the sale it says:- "So we have offered to sell the schedule land to you and you have accepted the said offer on a consideration of Rs.

600. We, having received the aforesaid consideration money in cash, are executing this sale deed and declaring that you the vendee acquire the right to the schedule land in our place and mutate your name in the landlord's Sherista in place of our names and en joy the property with heritable right to your son's son and other heirs with full right to transfer, gift and all other sorts of legal transfer. We, the vendors, have no subsisting right or title to the said property and that neither we nor any of our heir or heirs will have any claim or possession over the said property. If any such claim is made the same shall be rejected." The last paragraph gives the right of re-purchase in these terms:

"And it is further expressed that on our refund to you of Rs. 600 the aforesaid consideration money and the landlord's fee that you paid within 3 years from today, you shall be bound to return the schedule land to us on execution of kabala in our favour." This document, on the face of it, is an absolute conveyance. There is no indication in the document that the property was given merely as a security for a loan. Now, the question is what was there to show that it was intended to be a mortgage. In such a case the Court would require cogent evidence to induce it to hold that the document is not what it purports to be. The learned counsel for the appellants has relied on the covenant of re-purchase in the document. He has also urged that the consideration mentioned in the kabala was inadequate; that all along rent for the suit lands had been paid by the appellants and that the defendants did not pay the landlord's fee and/or got the land mutated in their names. It is true that the Court may look into such extrinsic evidence of surrounding circumstances as may be required to show in what manner the language of the document is related to existing facts. See Balkishen Das v. W. P. Legge (27 I A 58), Maung Kyin v. Ma Shwe La (I L R 45 Cal. 320). Now, the High Court of East Pakistan has laid down certain tests, though not exhaustive for determining the nature of such a transaction. See Abdul I-Iafiz Chowdhury and another v. Somar Ali and Samir Ali (4DLR126 ) Ganu Mia v. Abdul Jabbar and others (10 D L R 636). They are as follows: (1) The existence of a debt; (2) The period of repayment, a short period being indicative of a sale and a long period of mortgage; (3) Continuance of the grantor in possession indicates a mortgage; (4) A stipulation for payment of interest indicates a mortgage; (5) A price below the true value is indicative of mortgage; (6) A contemporaneous deed stipulating for re-conveyance in the case of a mortgage, but one executed after a lapse of time points to a sale; (7) Purchase of stamps and payment of registration costs if done by the transferor, is indicative of a sale. We think they may be considered as good criteria for ascertaining whether the parties intended the transaction to be a mortgage or a sale. The learned Single Judge has d (a) that there was no- debt, (b) that the period within which the vendor was to exercise his option of repurchase was a short one, (c) that since the execution of the document the vendees were in possession of the case land and (d) that there was no stipulation for payment of interest. From these facts he came to the conclusion that the transaction was an out-and-out sale. There are, in addition, the following factors to support the decision of the learned Judge. The transfer having been effected in 1938, the suit was not brought until 1957, nineteen years later. The transferee Ismail is a cousin of the transferor Ansar Ali, and the expectation would be that if there had been any difference of E opinion regarding the true nature of the transfer, the dispute would have been raised much earlier. The long delay is in itself an indication of acquiescence in the quiet possession of the land, in proprietary right by the transferee, after the period of three Years stipulated for repayment of the purchase price had elapsed years in 1941. The parties were at issue over the value of the land in 1938. Ansar Ali placed it at Rs. 2,000--2,500, but his witness Sudhir Chandra P. W. 4, brought it down to Rs. 1,500-2,

000. A strong indication that the value was much below this figure is furnished by the statement of Man Mohan Dev, P. W. 2, that he had agreed to take the land for Rs. 450, but refused to take it when he was told that Rs. 600 were wanted to save the land from the threatened certificate sale. If the value had been even Rs. 1,500, the land would have been a bargain at Rs.

600. It was at this stage that Ismail, a cousin, came forward to save Ansar Ali's land and paid Rs. 600 for the transfer. Two witnesses for Ismail and Ismail him-self fixed the sale value of the land close to Rs.

600. In 1938, when the world economic depression which started the in 1929 was at its worst, land prices were at their lowest following the very low prices of grain then prevalent. It is therefo not possible to hold that the transfer money of Rs. 600 was significantly below the market value of the land. The stipulation for reconveyance was included in the deed itself, and not in a subsequent document, but it was admitted by Man Mohan Dev, P. W. 2, that the stamp paper for the conveyance was brought by Ansar Ali with his own money. Six out of the seven indators enumerated above are there- fore found to support the conclusion of a sale rather than a mortgage. The seventh, namely, that the stipulation for re- conveyance was not made in su bsequent deed, is insufficient to outweigh the others. In our opinion, the decision of the High Court is correct and we, therefore, see no reasons to interfere. The appeal is dismissed with costs. Appeal dismissed.