GANGABAI Vs. CHHABUBAI

JUDGEMENT

(1.) This appeal by special leave arises out of a declaratory suit in respect of title to a house property.

(2.) The respondent filed a suit in the Court of the Second Joint Civil Judge, Amravati alleging that the house situated near Sarafa Bazar in Amravati had been purchased by her in 1950 for Rupees 4,000 and thereafter improvements had been effected by her to the property. Being, in need of money, she entered into an agreement with the appellant for a loan of Rs. 2,000 and it was decided that simultaneously she should execute a nominal document of sale and a rent note. These documents were executed on January 7, 1953. She alleged that the documents were never intended to be acted upon, and that the rent paid by her represented in fact interest at 18% on the loan. She continued in possession of the house property throughout and, it is said, carried on repairs from time to time. It was stated that the appellant was attempting to enforce the document as a sale deed by filing suits in the Court of Small Causes for recovery of rent. As two suits had resulted in decrees, she considered it necessary to file the present suit for a declaration that she was, and continued to be, owner of the house property. In defence, the appellant maintained that the sale deed represented a genuine transaction, and ownership of the house property had passed to the appellant. It was pleaded that the decrees passed by the Court of Small Causes operated as res judicata barring the respondent from pleading that the sale deed was merely a nominal transaction. Reliance was also placed on S. 92 of the Indian Evidence Act.

(3.) The trial Court held that the sale deed was never intended to be acted upon and decreed the suit. The appellant appealed to the District Court, Amravati, but the learned District Judge did not accept the case that a sale had taken place. He held, however, that the transaction between the parties constituted a mortgage. He modified the trial Court decree to conform to that finding. The High Court of Bombay, in second appeal, did not agree with the finding of the lower appellate Court that the transaction was a mortgage and affirmed the findings of the trial Court that the sale deed and rent note were sham documents, that the decrees of the Court of Small Causes did not operate as res judicata and that S. 92 of the Indian Evidence Act did not prevent the respondent from establishing the true nature of the transaction. Accordingly, the High Court set aside the decree of the lower appellate Court and restored that of the trial Court.