P L D 1959 (W (PLP)

Date of hearing : 22nd June 1959. In a piece of land which had an area of 91 kanals 15 marlas, Shaukat Khan had 14/72 share which measured about 13 kanals 16 marlas and some sarsais, and over this he created a mortgage by means of a registered deed, dated 20‑3‑1952 for a sum of Rs. 3,500 in favour of one Khalil. The mortgage was to subsist for a period of three years. The land was already under lease with Mohsin Khan son of Khalil Khan mortgagee which was to expire in Rabi 1954. Mention of this fact was mace in the mortgage deed and the period of the mortgage was to run from the termination of the lease in Rabi 1954.

2. Naming this mortgage a sale, Khawaja Muhammad Khan and Sher Muhammad Khan pre‑empted it on the ground that they were co‑sharers in the Khata of the land sold and possessed other pre‑emptive qualifications as well, and had a right to acquire it in preference to Khalil vendee. This suit was instituted on 18‑8‑1953. Khalil, under a mutation ,transferred by way of sale his mortgagee rights in favour of his grandson Nisar Muhammad son of Mohsin. Nisar Muhammad was also impleaded as defendant in the case.

3. The judge who tried the case dismissed the suit on 4‑4‑1955 on the ground that the transaction was a mortgage and was not pre emptible. That judgment was reversed by the Additional District Judge on appeal, holding the transaction to be a sale. He passed a decree in pre‑emptors' favour on 19‑9‑57 on payment of Rs. 3,

500. A revision petition has now been presented by Khalil Khan, Mohsin and Nisar and also by Shaukat, the alleged mortgagor, against the order of the District Judge and the point on which the revision has been argued in this Court was whether the transaction in dispute was a sale or a mortgage.

4. A certified copy of the deed of 20‑8‑1952 is on the record and on the face of it, it satisfies all the requirements of a mortgage deed. A mortgage has been created over the property in suit for a sum of Rs. 3,500 and for a period of three years commencing, from the expiry of the period of lease. Besides the property under the mortgage the mortgagor has bound himself and his other property for the realization of the mortgage debt

5. It is no doubt open to a person intending to enforce his right of pre‑emption to have it declared that a transaction is a sale, although in appearance it is not a sale. He has this right under the language of section 4 of the North‑West Frontier Province Pre‑emption Act, 1950, and the Court will have to declare it a sale if on the evidence adduced it is satisfied that the material brought on the record indicates most unequivocally that the intention of the parties to the transaction was to make a permanent transfer by way of sale. The material on the record will include the deed evidencing the transaction.

6. But it is obvious that it requires very strong and cogent evidence to assail a registered deed which purports to be deed of mortgage and have it declared as a sale, and unless he succeed in establishing beyond doubt that the intention of the parties was to make a permanent transfer by way of sale he will not be entitled to that declaration. If the a evidence adduced leaves room; for doubt he will no doubt fail.

7. The tests to which a mortgage will be submitted for this purpose are many. If those tests point to the conclusion that the conditions of the mortgage are such that they exclude the possibility of redemption, or render redemption profitless for the mortgagor, the Court will pronounce it to be mortgage (sic). Those conditions are :‑ (a) the amount of the mortgage money, if the debt for which the mortgage is most certainly in excess of the actual price of the land then that is an indication that a sale was intended iii the guise of a mortgage. (b) the period for which the mortgage is created. If the period is so long that there is no chance for the mortgagor or his immediate descendants to recover the land during their life time, then the mortgage is presumed to be a sale. If the parties intend to disguise a sale into a mortgage a long period of fifty or sixty years or more, is fixed for redemption. (c) the burdens which the mortgagee is permitted to impose upon the mortgaged property and which the mortgagor has to discharge at the time of redemption. Such burdens are imposed where the mortgagee is permitted to effect improvements of unlimited amount in the property without the consent of rile mortgagor, and is allowed to add interest to the costs of the improvement, and authorised to recover the costs and the' interest from the mortgagor at the time of redemption. (d) mortgagee's dealings with the mortgaged property, i.e., when the mortgagee is permitted to deal with the property as if it has fallen into his hand as his absolute property, i.e. when he is allowed to cut trees, demolish buildings, and set up new ones in their place, or to make other expensive alterations in the mortgaged property. The co‑existence of two or more of these conditions will no doubt render redemption impossible or at least profitless for the mortgagor.

8. In this case the lower Appellate Court has held the mortgage to be a sale only on the ground that the sum secured by this transaction is equal to the price of the land. A Commis sioner was appointed to ascertain the price of the property in dispute who reported that according to his estimate the property secured was worth Rs. 3,

300. According to the abstract of sales prepared by the patwari the price of the property is Rs. 3,500.

9. Shaukat Khan mortgagor and Khalil Khan mortgagee appeared as witnesses and deposed to the transaction as being a mortgage. The market price was found to be in close proximity of the mortgage money only by artificial means by appointing a Commissioner and by inviting an abstract of five years sales from the patwari. There is no other evidence to show that the price of the land is equal to the mortgage money. Even if the price of the land is equal to the mortgage money, that fact alone cannot be made the basis for declaring a mortgage to be a sale. Along with that condition some of other onerous conditions must also be in existence. It is the co‑existence of two or more of the aforesaid, conditions which will exclude the possibility of redemption. On the document as it stands, there is nothing to prevent Shaukat Khan from redeeming this land on the expiry of the period of mortgage. If he is able to do that it should not be open to the Courts to deprive him of this right by declaring his mortgage to be a sale. The Courts of law should refrain from doing anything which should throw perfectly plain transactions into uncertainties. If they are permitted to do so on small pretexts, nobody will have any faith in the transaction into which he enters. Courts of law are to hold assurances that the dealings of the people will be honoured in accordance with their intentions. It should only be when fraud or collusion is clearly established that transactions should be pronounced as fraudulent. No authority has been cited to show that a mortgage should be declared to be a sale on the sole ground that the mortgagee debt is in close proximity of the market price.

10. Two other grounds were urged in support of the contention that the mortgage is a sale. It was said that the mortgagor is at enmity with the pre‑emptor and in order to deprive them of their right of pre‑emptions colour of mortgage has been given to a transaction of sale. It was also alleged that Khalil Khan mortgagee is the father of Mohsin lessee and after acquiring mortgage he transferred his., mortgagee rights to Nisar Muhammad, his grandson. This transfer could not have taken‑place if the mortgage had not been a sale.

11. It may be true that the mortgagor is hostile to the pre‑emptors, but that is not one of the considerations on which a mortgage should be treated as a sale. As regards the transfer of mortgagee rights by Khalil in favour of Nisar, it is not under stood how that transfer can be relied upon for converting an apparent mortgage into a sale.

12. The learned counsel for the petitioner relies on 100 Punjab Record 1895 and A I R 1928 Lah. 706 and contends that in spite of the fact mortgages in those cases were for long terms and carried other unconscionable burdens, they were treated as mortgages. In those cases the mortgagees were allowed to effect improvements without the mortgagors' consent and were allowed to recover interest thereon as well. Permission was also given to cut trees.

13. It was also contended on behalf of the pre‑emptors that Khalil sold his mortgagee rights to Nisar by a mutation and that sale is pre‑emptable under section 4 of the North‑West Frontier Province Pre‑emption Act, 1950, because the sale of the mortgagee rights is the sale of immovable property. Reliance for this view was placed on A I R 1924 Lah.

143. That contention is no doubt true. The pre‑emptors could pre‑empt the sale of mortgagee rights by Khalil in favour of Nisar. But the pre‑emptors did not pre‑empt that transaction. They raised this plea for the first time at the stage of arguments before the trial Court. If they had applied for the amendment of the plaint and by amendment had pre‑empted this transfer as well, they would no doubt, have been entitled to a decree and would have been heard on this point here as well. But no such plea was raised in the plaint and no opportunity was given to the defendants to answer it, and it is now too late in the day for the pre‑emptors to raise this contention in revision.

14. It has also been contended that no revision is competent because no point of law is involved. Revisions in this Court arc governed by the provisions of section 34 of the North‑West Frontier Province Courts Regulation, 1931. If a revision is admitted to full hearing it can be heard as an appeal under proviso (IV) to section

34. Apart from this the question that the transaction is a mortgage or a sale appears to be a mixed question of law and fact, and is not a question of fact only.

15. In my view the transaction which has been impugned is one of mortgage and as such it was not pre‑emptable and the suit was correctly dismissed by the trial Court. This Application for revision is accepted, the order of the lower appellate Court is set aside and that of the trial Judge is restored. The respondents will bear the petitioner's costs. K. B. A./A. H. Petition accepted.