HIGH COURT OF MADRAS
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(1.) The District Judge dismissed the appeal on the ground that the document executed by the appellants "must be taken to be what it purports to be--an outright deed of sale," and that they "cannot be permitted to plead a contemporaneous oral agreement or arrangement under which it was to be treated as a mortgage."
(2.) The question of the admissibility of oral evidence to prove that an apparent sale is, in fact, a mortgage has been considered very fully in Baksu Lakshman v. Govinda Kanji, I.L.R. 4 Bom. 594, and the rule "most consonant both to the statute law and to equity and justice" found to be that though a party, whether plaintiff or defendant, who sets up a contemporaneous oral agreement, as showing that an apparent sale was really a mortgage, shall not be permitted to start his case by offering direct parol evidence of such oral agreement, yet "if it appears clearly and unmiatakeably from the conduct of the parties that the transaction has been treated by them as a mortgage, the Court will give effect to it as a mortgage and not as a sale; and thereupon, if it be necessary to ascertain what were the terms of the mortgage, the Court will, for that purpose, allow parol evidence to be given of the original oral agreement."
(3.) The courts will not allow a rule, or even a statute, which was introduced with a view to suppressing fraud, to be used as a weapon or means of effecting a fraud [Lincoln v. Wright, 4 De G. & J. 16].;
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