1989 PLP 4763 (MLD)

7. From the perusal of the contents of the deed, Exh. D1, he noticed that the period of four years for reconveyance on the payment of disputed amount was a short one, there was no relationship between the parties, the consideration was adequate, the possession of the property' had been handed over to the appellant and there was no stipulation for payment of interest. Therefore, applying the tests which have been judicially recognized to determine the nature of a transaction whether it is a mortgage by conditional sale or a sale with a condition of repurchase he concluded that the alienation could not be termed a mortgage and it was in reality a sale with the condition to repurchase within the stipulated time. In view of his finding that the transfer of property amounted to sale he held the suit to have been brought after six years (the period prescribed by Article 120 of the first schedule of the Limitation Act, 1908) of the registration of the sale to be barred by time.

8. In appeal preferred by the respondent against the decision of the learned trial Court the learned Additional District Judge took the contrary view. He used the contents of the deed of agreement, Exh. D.2, to spell out the intention of the respondent. According to him the said document, Exh. D.2, if perused carefully did not portray the execution of the sale except that a reference was made in the end. From the language of this document he drew inference that after getting the house redeemed from Ghulam Mustafa, the house was to be given to the petitioner and that the respondent would be able to get the same redeemed within four years if the amount of debt was paid to the appellant. He observed that the words used for redemption of the house indicated in clear terms that the respondent had the dominant intention of executing the deed of mortgage with condition for sale.

9. Arguing that the respondent had taken upon herself the responsibility of payment of taxes assessed upon the property or to be assessed in the future and had agreed that if the petitioner was obliged to pay the taxes the amount paid by her in respect thereof would be a charge on the property and finding no particular period for continuance of this liability, the learned Judge formulated the view that the respondent had primarily retained the title of ownership of the property in dispute to herself. In this connection he observed that if the respondent had intended transferring the house finally to the appellant she was not required to accept the liability of payment of taxes. From all this he proceeded to draw inference that the intention of the respondent appeared to be to create mortgage by conditional sale and that the sale‑deed with condition for repurchase was ostensible only. Therefore, he held that the document, Exh. D.1, would be deemed at the most to be a deed of mortgage with condition for sale and declared it to be illegal and void to the extent of being a sale‑deed with condition for repurchase.

10. Considering the suit to be one for redemption of mortgage he took it to be within time and passed preliminary decree for redemption of mortgage in favour of the respondent and against the appellant. He remanded the suit to the learned trial Court to determine the terms and conditions under which the redemption was to take place.

11. For ascertaining the intention of the parties touching the nature of the transaction primarily the contents of the document, Exh. D1, will have to be interpreted in the light of the following principles, which, though not exhaustive in themselves, have emerged through process of judicial pronouncements and which have been oft quoted, among others, in Mst. Janat v. Pir Bux (P L D 1972 Karachi 336) and Muhammad Hussain v. Haji Hassan Muhammad (P L D 1979 Lahore 41) and to which both the learned counsel for the parties made reference:‑‑ (i) Whether the relationship of debtor and creditor existed between the parties before or at the time of the alleged sale? (ii) Did the intention to create a mortgage precede the alleged sales? (iii) Was the price paid by the purchaser fair market price? (iv) Was the possession of the property transferred to the purchaser? (v) Is there a covenant for the payment of interest by the purchaser? (vi) Is the purchaser accountable to the seller for the income of the property? (vii) Whether agreement of repurchase was made at the time of sale or sometime thereafter; the former evidencing the intention to create mortgage and the latter the intention of repurchase only? (viii) Whether a short or long period of repayment is stipulated; a short period evidencing the intention to sell and a long period indicating a mortgage?

12. The arguments of the learned counsel for the petitioner rested on the reasoning given by the learned Civil Judge to hold the transaction in dispute to be a sale. The learned counsel for the respondent canvassed for taking into consideration all the contents of sale‑deed, Exh. D2, earlier executed by the respondent and the oral evidence produced by her to find out the real intention of the parties. The deed of agreement Exh. D 2, was executed by the respondent two days before she executed the deed, Exh Dl. They. had not been contemporaneously executed. As ruled by the Privy Council in Balkishen Das v. Legge (27 Indian Appeal 58), oral evidence of intention for the purpose of construing the deed for ascertaining the intention of parties is not admissible. Only extrinsic evidence of surrounding circumstances as may be required to show in what manner the language of the document is related to existing facts may be admissible. Exh. D1 refers to the deed of agreement, Exh. D2, executed on the 4th May, 1963, according to which Rs. 300 as earnest money had been received by the respondent. This fact indicates that the deed, Exh. Dl, was executed on the basis of the deed of agreement Exh. D

2. A perusal of the contents of the document, Exh. D2. read as a whole, gives the impression that the parties at the time of its execution intended concluding a bargain of mortgage with conditional sale rather than sale with condition to repurchase. The following sentences occurring in the document speaking of the way the house was to be given to the petitioner, without making any specific mention of sale, of redemption of mortgage on payment of the amount within four years and of undertaking to shoulder the liability of payment of all kinds of taxes and repair charges by the respondent are significant to induce one to consider the agreement to be one for the mortgage with conditional sale in place of sale with condition to repurchase:‑‑

13. In Exh. DI, the liability to pay taxes, which had already been levied upon the house or which would be levied in future, was, like the document, Exh. D2, upon the respondent. It was specifically stipulated if any tax was recovered from the petitioner its charge would be placed upon the property in dispute. The respondent was also bound to pay for the repairs of the house for four years and if she failed to discharge her liability in this behalf and the petitioner was to incur any expenditure on repairs the amount spent by her was to be a charge upon the property. The document, Exh. D1, quoted the respondent having effected sale of the house with condition that if she were to pay the sale consideration within four years to the petitioner she would get back the house otherwise the sale would become absolute and the respondent would not be eligible to get the house. At the tail end of Exh. D1, the following sentence appears. The word yeh rakam refers to the repair charges mentioned in the preceding sentence.

14. Another pertinent fact, namely, retention by the respondent of the liability to pay existing and future taxes levied on the property, which has been noticed by the learned Additional District Judge, detracts from the parties intention to treat the alienation as sale because normally after transfer by sale the petitioner would have taken upon herself the responsibility to pay the taxes. The view formed by the learned Additional District Judge was permissible in the circumstances to be adopted. Therefore, it does not demand interference in revision by this Court. It needs hardly be mentioned that mortgage can be redeemed m no fewer than sixty years and consequently the respondent's suit was not out of time. The petition loses force and is dismissed leaving the parties to bear their own costs. H.B.T./B‑157/L Revision dismissed.