P L D 2006 Karachi 404 (PLP)

SARMAD JALAL OSMANY, J.

This Civil Revision Application impugns the judgment dated 28-I-1996 passed by the learned Additional District Judge, Kandiaro whereby Civil Appeal No.70 of 1994 filed by respondents against the applicant was allowed and the judgment and decree passed by the learned Senior Civil Judge, Kandiaro dated 20-11-1994 and 27-11-1994 in F.C. Suit No.141 of 1993 in favour of the applicant was set aside.

2. Briefly stated the facts of the matter are that the applicant Abdul Latif had tiled Civil Suit No.141 of 1993 (old No.73 of 1983) against respondents Ashiq Ali and Rahmat Ali wherein it has been averred that respondent Ashiq Ali had obtained a loan from Applicant Abdul Latif in a sum of Rs.25,000 and as security for repayment of the same he had mortgaged the shop in question on 11-3-1982 in favour of the former with a stipulation that if the said amount was not repaid by 5-4-1983, the mortgage deed would be treated as one for absolute sale and thereafter the respondent Ashiq Ali would execute such sale-deed in favour of the applicant. The possession of the shop was also delivered to the applicant on 11-3-1982 and so also a power of attorney was executed by the respondent No.1 in favour of the applicant's son namely Abdul Razzaq on the said date whereby the Attorney was authorized to execute the sale deed in favour of the applicant. Per the applicant, respondent Ashiq All failed to repay the amount of Rs.25,000 by 5-4-1983 and instead fraudulently executed a sale-deed for the said shop in favour of respondent No.2 Rahmat All. Hence the suit for specific performance of the agreement between the parties and for cancellation of the subsequent sale-deed in favour of respondent No.2. In the written statement filed by the. respondents it is denied that the shop was ever mortgaged to the applicant by respondent No. 1 as it was rented out to him and the amount of Rs.25,000 was in fact the security deposit given by the applicant. In the alternative it has also been pleaded that the said mortgage deed is not a binding and legal document and hence does not create any right, title or interest in favour of the applicant. It is further averred that the said amount has been returned to the applicant by respondent No.1 on 3-4-1983 and, the possession of the shop was delivered to the respondent on the same day in presence of the witnesses. The execution of the power of attorney by the respondent No. l in favour of' Abdul Razzaq is also denied whereas the sale-deed in favour of respondent No.2 has been admitted. Hence it is prayed that the suit be dismissed. As observed B above, the said Suit was decreed by the learned Senior Civil Judge but under appeal the decree was set aside and hence this Revision Application.

3. In support of the revision application, Mr. -Abdul Naeem has submitted that in order to prove his case, the applicant has examined himself and has fully supported the plaint and also produced a copy of the mortgage deed along with Power of Attorney as well as utility bills etc. in his own name for the shop in question. Under cross-examination he has denied that the amount of Rs.25,000 was 'returned to him by the respondent No.1 and also that it was a security deposit. Similarly, P.W.2 Muhammad Akram who is a witness to the mortgage deed has supported the case of the plaintiff but he did not know whether the amount of Rs.25,000 was returned to the applicant by respondent No.1. So also, P.W.3 Muhammad Hashim, who was sitting at the shop of P.W. Muhammad Salik when the mortgage deed was being written, has also supported the case of applicant. Finally, per learned Counsel P.W.4 Abdul Razzaq, the applicant's son has again fully supported the case vis-a-vis the execution of the mortgage deed in favour of the applicant' and the power of attorney in his favour. On the other hand per learned Counsel the respondent No.1 has denied the execution of both these documents and stated that he had returned the advance deposit of Rs.25,000 to the applicant in presence of' Master Amin Salik and Nazeer. Under cross-examination, he stated that the rent agreement for the shop in question was written at the shop of Master Amin Salik on 5-4-1982 but he has not retained any copy of the same. Similarly, D.W.2 Muhammad Amin Salik has deposed that he never wrote the mortgage deed and neither the power of attorney in favour of the applicant or his son respectively. He has also stated that the amount of Rs.25,000 was received by the respondent No.1 as security deposit and was returned by him to the applicant in his presence on 4th or 5th March, 1983. He had counted the money and had given it to the applicant at which time Nazeer was also present. Under cross-examination, he has stated that he had written the rent agreement between the parties and was also a witness to the same. Finally, learned Counsel has referred to the deposition of D. W.3 Babu Abdul Majeed, the respondent's son, who has again supported the respondent's case to the extent that he had purchased the shop in question from the respondent for a sum of Rs.50,000 and as Rs.25,000 was to be returned to the applicant such amount was given to him while the balance was given to the respondent No.1 in the presence of Master Amin Salik upon which the latter registered the sale-deed in his favour.

4. On the basis of foregoing evidence on record, learned counsel for the applicant has submitted that the case has been fully established and hence the learned Civil Court had correctly passed the decree in favour of the applicant. However, per learned counsel the learned appellate Court fell into error by allowing the Appeal on a legal ground viz. no Suit for specific performance could be filed on the basis of' a mortgage by conditional sale as this was a clog on the equity of redemption as held by the Honourable Supreme Court of Pakistan in Abdul Sattar v. Sardar Begum 1992 SCMR

417. However, per learned counsel the mortgage deed does not satisfy the requirements of mortgage by conditional sale per section 58(c) of the Transfer of Property Act. In this regard learned counsel has referred to Ganu Mia v. Abdul Jabbar PLD 1959 Dhaka 293 which lays down the essential tests to be fulfilled before a mortgage can be construed as one by way of conditional sale. He has also cited Allahanda v. Sardarangmal PLD 1967 Kar. 859 and Aziz Ullah Khan v. S.H.O. 2001 YLR

263. Consequently per learned counsel the document in question can only be construed as an agreement to sell and hence enforceable under section 12 of the Specific Relief Act. Learned Counsel's next contention was that even a mortgage by conditional sale was enforceable per settled law. In this regard he has cited Muhammad Ramzan v. Yaqoot Begum 1991 SCMR 819, Muhammad Iqbal Nasim v. Seema Shamim 1991 CLC 2056 and Aman Enterprise v. Rahim Inds. Pak. Ltd. PLD 1993 SC

292. Learned counsel has therefore prayed that this Revision Application be allowed and the Judgment and decree of the learned Civil Court reinstated.

5. On the other hand Mr. Abdul. Qadir Shaikh, learned counsel for the respondents has fully supported the impugned Judgment on the legal plain as the document in question is a mortgage by way of conditional sale and hence no suit can be filed for specific performance of the same, it being a clog on the equity of redemption as held by the Honourable Supreme Court in Abdul Sattar v. Mst. Sardar Begum (supra) and Abdus Saboor v. Saeed Mir PLD 1982 AJK

79. Consequently, the only remedy which was available to the applicants, was to have filed a suit for foreclose or sale of the property or recovery of the mortgage money under sections 67 and 68 respectively of the Transfer of Property Act. Learned Counsel has further submitted that even otherwise the applicant has failed to prove the mortgage deed and power of attorney since only copies have been produced and no reasons have been given for doing so. In support of his submission learned counsel has relied upon Allah Rakha v. Muhammad Yousaf 1990 MLD 1592, Wazirdullah v. Land Acquisition Collector PLD 2003 Pesh. 235 and Sher Baz. Khan v. Adam Khan PLD 2002 Pesh. I. In this regard per learned counsel P.W. Abdul Razzaq has stated in his examination-in-chief that the originals of the aforementioned document were returned by the applicant to the respondents on the ground that the amount in question would be given to the applicant but this was not done and thereafter the respondent No.l had burnt the same. However, as this stand was never taken in the plaint of the suit hence no evidence could be led on the same. For this submission learned counsel relied upon Binyameen v. Hakim 1996 SCMR

336. Learned counsel's next submission is that the burden of proving both the mortgage deed and power of attorney was upon the applicant since he relied upon the same and execution thereof was denied by Respondent No.l. As both these documents created financial obligations between the parties they were to he compulsory attested by at least two male witnesses or two female and one male witness in accordance with Article 19 of the Qanun-e-Shahadat Order and the only method to do so was by examining such attesting witnesses as per Article 79 of the Order, which has not been done. Hence per learned counsel these documents have not been proved in accordance with law since only P.W. Muhammad Akram a marginal witness to the mortgage deed has been examined and neither the scribe nor the person who attested the same has been examined. Learned counsel has therefore prayed that this Revision Application be dismissed.

6. I have heard both the learned counsel and have examined the record very carefully with their assistance. My conclusions are as follows.

7. Considering the legal aspect of the case as to whether the document in question is a mortgage by way of conditional sale and hence the suit based upon the same is barred under the equity of redemption, it would be seen that the following tests have been evolved in order to establish the true identity of such document per Ganu Mia v. Abdul Jabbar (supra), by Khan, J. (as he then was):-- (a) the existence of a debt; (b) the period of' repayment, a short period being indicative of' a sale and along period of a mortgage: (c) the continuance of the grantor in possession indicates a mortgage; (d) a stipulation for interest on repayment indicates a mortgage; (e) a price below the true value indicates a mortgage: (f) a contemporaneous deed stipulated for re-conveyance indicates a mortgage, but one executed after a lapse of time points to a sale.

8. The aforementioned tests were cited with approval in the case of Allahanda v. Sardarangmal (supra) by Noorul Arfin, J. (as he then was). Applying such tests to the document in question, it would be seen that under the same (which is titled as a mortgage deed) the respondent No.l Ashiq Ali has stated that he owns, the shop in question and that in order to meet his household expenses, he has borrowed an amount to Rs.25,000 from the applicant and as security for repayment has mortgaged the shop in his favour. It has been further stipulated that the amount of Rs.25,000 would be returned to the applicant by 5-4-1983 failing which the transaction would be converted to an agreement to sell between the parties and the applicant would be considered as the sole owner of the shop. Furthermore, he has given a special power of attorney to Abdul Razzaq the son of the applicant authorizing him to register the sale agreement on this behalf regarding the shop with the applicant. So also it has been stipulated by the respondent No.l that during the period up to 5-4-1983 to interest shall be payable by him to the applicant on the borrowed amount. In view of the foregoing stipulations and conditions contained in the mortgage deed in question I have no hesitation in coming to the conclusion that in fact it is a mortgage by conditional sale within the meaning of section 58(c) 'of the Transfer of Property Act and hence any suit based upon the same for specific performance would be barred being a clog on the equity of redemption which has been accorded to the mortgagee under section 60 of the Act. In this respect it would also be seen that all along it has been C the case of' the applicant that the property in question was mortgaged to him by the respondent No.l as security for the loan of Rs.25,000 advanced to said respondent with a stipulation that in case the money was not returned to the applicant by the due dates a sale-deed would be executed by the respondent No.l in his favour. Consequently, it cannot be argued at this stage that in fact the document in question was not a mortgage by a conditional sale but an agreement to sell. Hence, in my opinion the suit filed by the applicant upon the document in question would be barred by law and hence no exception can be taken to the impugned order passed by the learned appellate Court. Insofar as the cases cited by learned counsel in support of his submission that even a mortgage by conditional sale could be specifically enforceable as an agreement to convey property, in my opinion the same are distinguishable. In this regard in the case of Muhammad Ramzan v. Yaqoob 13egum (supra), the Honourable Supreme Court did not consider section 58(c) of the Transfer of Property Act at all since the case only turned on the performance of an agreement to sell although it has been observed by the Honourable Supreme Court that the seller had executed a mortgage as well in favour of the buyer earlier in time. The facts of Muhammad Iqbal Nasim v. Seeing Shamim (supra) cited by learned counsel are also identical to the foregoing case as those of Aman Enterprises v. Rahim Industries Limited (supra).

9. As I have reached the conclusion that the suit filed by the applicant based upon a mortgage by conditional sale would not be maintainable being barred by law, there is no further need to discuss the merits of the case. Revision application accordingly stands dismissed along with the listed application. H.B.T./A-55/K Revision dismissed.