184 PLP 185 (MLD)

(2) Whether the suit is time-barred? (3) Whether the suit in present form is not maintainable and is barred under section 42 of the Specific Relief Act? (4) Whether the court-fee stamp paid is insufficient? (5) Whether the plaintiffs are agriculturists? (6) Whether the transaction in favour of Haji Din Muhammad is a mortgage or a conditional sale? (7) What should the decree be?"

6. After recording evidence of the parties the learned Civil Judge came to the conclusion that the respondents were agriculturists, that the two deeds executed between Din Muhammad of the one part and Allah Nawaz and Gagan of the other part in favour of each other constituted mortgage by conditional sale and that the respondents were entitled under section 10(A) read with section 15(A) of the Sind Agri culturists' Relief Act of 1879 (hereinafter referred to as the said Act) to a decree of redemption of the Survey No. in question. In view of this finding the suit of the respondents was decreed and it was directed that on deposit being made by the respondents of Rs.240 as mortgage money, the land in dispute shall be reconveyed to them by the appellants. Against this judgment appeal was filed before the District Judge, Nawabshah who transferred it to Additional District Judge. The learned Additional District Judge concurred with the findings of the trial Judge and dismissed the appeal.

7. The only point stressed before this Court by the learned counsel for the appellants is that the two documents which have been produced by the respondents as Exhs. 34 and 35, dated 28-8-1918 constituted conditional sale and that by virtue of the stipulation in the second deed regarding payment of Rs.240 by the vendors (Allah Nawazo and Gagan), having not been complied with, the sale had become absolute and that the respondents were not entitled to claim reconveyance of the land.

8. It is not disputed that the respondents as well as the Gagan deceased, the father of respondents Nos.2 and 3 were and are agriculturists. It is, therefore, clear that the provisions of sections 10(A) and 15(A) of the said Act shall be applicable to this case and the nature of the transaction shall have to be determined with reference to the principles laid down by higher Courts from time to time in this behalf. The most important case which has been relied upon by both the parties in this connection is of Haji Allahanda and another v, Sadarangmal and another P L D 1967 Kar. 859 in which it has been held that to determine whether a transaction is a sale with the condition of repurchase or a mortgage, the following circumstances may be considered:

(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 some time thereafter; (the former evidencing the intention to create mortgage and the latter the intention of repurchase only); It has further been held in the above case that the rule prescribed by the proviso to section 58(c) of the Transfer of Property Act, as to restriction of the inference to be drawn in favour of a mortgagee only to cases where a condition of repurchase is embodied in the document of ostensible sale, will not apply to transactions covered by section 10(A) of the said Act.

9. In view of the tests laid down above it is to be seen as to how far the parties have succeeded in proving the actual nature of the transaction. Now the two transactions i.e. the sale-deed Exh.34 and the second-deed Exh.35 for reconveyance of the property on payment of Rs.240 by the vendors to deceased Din Muhammad for reconveyance of the land within two years were executed on the same date. It shall, therefore, be presumed that both the documents constituted one transaction and not two. Reference in this connection may be made to the case of Raja Bahadur Narasingerji Gyanagerji v. Raja Panuganti Parthasaradhi Rayanim Garu A I R 1924 Pr.C. 226 in which two documents executed by two parties in favour of each other regarding sale and repurchase were held to constitute one transaction. It was further held that a transaction ostensibly a sale with right of repurchase in the vendor shall be mortgage by conditional sale where time fixed for repurchase was not of the essence of the contract, the price was extremely inadequate and other circumstances indicated a mortgage. It will be shown that in the present case there are other circumstances which indicate that the transaction was a mortgage by conditional sale and not a sale with condition to repurchase. In the case of Nathu Lal and others v. Mat. Gomti Kuar and others A I R 1940 Pr.C. 160 it was held that where a vendor ostensibly sells a property by executing a sale-deed and a vendee by another document agrees to re-convey the property on payment of the price thereof after the expiry of the fixed period, the transaction amounts to a mortgage by a conditional sale.

10. The most important circumstance which establishes the nature of the transaction as mortgage is the mutation in the record of rights in respect of survey number in dispute in favour of Din Muhammad, copy of which has been produced by the respondents as Exh.36. This is certified copy of the record of rights in which Survey No. 352 was mutated in favour of Din Muhammad on 21st October, 1918. In column No.12 of this record the nature of title of Din Muhammad is described as under. It is in Sindi, translation of which will be as follows:

"Mortgage with possession in favour of Din Muhammad son of Jamal by Gagan son of Saleh and Allah Nawazo son of Deboro vide documents dated 18-8-1918 for Rs.240, with the condition that on payment of this amount within two years, the land shall be returned to the mortgagors."

11. It is thus clear that Din Muhammad himself regarded this transaction as a mortgage and not a conditional sale. This entry in the record of rights has not been disputed by any of the appellants. The mutation must have been effected in the record of rights at the instance of Din Muhammad himself because he was the purchaser or the mortgagee. He himself accepted his status as mortgagee before the Revenue authorities by describing himself as such in the relevant Revenue record.

12. Another important circumstance to be considered in this connection is whether there was relationship of debtor and creditor between the parties to the transaction. D.W. Abdul Hameed has admitted in his cross-examination that his father Din Muhammad used to lend money to Allah Nawazo and Gagan. He also admits that Allah Nawazo has sold his other land also in order to pay up his debts to Hindus. This is thus another circumstances in favour of the presumption that the transaction in question was mortgage and not a conditional sale. ''

13. Another important circumstance to be considered in this connection is adequacy of the sale consideration. The parties have produced several documents pertaining to sale of neighbouring land from which it transpires that the rates of land were different. The disputed land the area of which was seven acres and 25 ghuntas, was valued at Rs.240 by the parties. This means that the rate per acre would approximately be Rs.35. The respondents have produced certified copies of two sale deeds as Exhs. 71 and 72 in respect of certain lands which were sold during the same period when the transaction in dispute had taken place. Exh. 72 relates to sale of 3 acres of land for Rs.458. It is dated 7th May 1923. The land is situated in Taluka Kandiyaro. From this sale-deed it would appear that the value of land in those days was more than Rs.100 per acre. This deed clearly shows that the value of the land in dispute as Rs.35 per acre was grossly inadequate. The other sale-deed Exh.71 is dated 27th January, 1944, which shows that one acre and 39 ghuntas of land was sold for Rs.100 in the same District. These two documents which have been produced by the appellants themselves do not prove that the amount which was paid by Din Muhammad to the respondent No.1 father of respondents Nos.2 and 3 for the disputed land was adequate. These documents establish that the disputed land which was sold for Rs.35 per acre was much more valuable than the amount which was paid by deceased Din Muhammad.

14. It may be stated that all the conditions mentioned in para. 5 above for testing the nature of a transaction must not necessarily be proved by an agriculturist to claim benefit of section 10(A) of the said Act. If such an agriculturist is successful in establishing by surrounding circumstances, by conduct of the parties, by inadequacy of a sale consideration that the nature of the transaction was mortgage, it would riot be necessary for him to prove other tests which have been mentioned in the above para. The respondents have also produced several sale-deeds pertaining to the surrounding lands which prove that the land in dispute was much more valuable than the price paid by deceased Din Muhammad for it. They have produced a sale-deed Exh.40 whereby four acres and 31 ghuntas were sold for Rs.700, which means that the rate of land per acre would approximately be Rs.150. Other sale-deed is Exh.39, whereby 2 acres and 17 ghuntas of land were sold for RS-400 i.e. approximately at the rate of Rs.200 per acre. Then Exh. 37 is another sale-deed, whereby the land was sold at the rate of Rs.85 per acre. The last sale-deed is Exh. 38, whereby irrigated land was sold for Rs.200 per acre. All these sale-deeds relate approximately to the same period when the disputed transaction had taken place and are situated in the vicinity of the disputed land. It is, therefore, proved that the amount paid by deceased Din Muhammad for this land at the rate of Rs.35 per acre was grossly inadequate which is one of the most important circumstance to establish that the transaction was al mortgage by conditional sale.

15. Mr.Abdul Majeed learned counsel for the appellants has argued that according to section 58(c) of the Transfer of Property Act, no transaction of conditional sale shall be deemed to be a mortgage unless the condition of mortgage is specifically embodied in the document which effects or purports to effect the sale. In this connection reference may again be made to the case of Haji Allahanda in which it has beers clearly held by Noorul Arfin, J. as under:- "The rule prescribed by the proviso to section 58(c) of the Transfer of Property Act, as to restriction of the inference to be drawn in favour of a mortgagee only to cases where the condition of repurchase is embodied in the document of ostensible sale will not apply to transactions covered by section 10(A) of the Sind Agriculturists' Relief Act. The second proviso to section 10(A) specifically states that the section will not apply to a bona fide transferee only if such transferee held land under a registered deed executed more than 12 years before the institution of the suit. Section 10(A) of the Sind Agriculturists' Relief Act confers wide powers on the Court to determine the real nature of the transaction and to admit evidence outside the written documents, notwith standing the provisions of any other law. The effect of section 10(A) of the Sind Agriculturists' Relief Act is not, however that the inference of mortgage should necessarily be drawn in all cases where the condition of repurchase is embodied in a document executed with or after the sale-deed." I am in respectful agreement with the above rule. In view of the overriding nature of section 10(A) of the said Act, the proviso to section 58(c) of the Transfer of Property Act shall not be applicable to a claim set up by an agriculturist under the said Act. In view of the above discussion I am satisfied that the finding of the two Courts below regarding the nature of the transaction, is based on cogent reasons and supported by irrefutable evidence. It has not been shown that the findings are perverse or are based on misreading of evidence or that these findings could not have been based on the evidence on record. The appeal is, therefore, dismissed with costs. M. Y. Y Appeal dismissed.