- (1.) THE plaintiff Smt. Beni Bai is a widow. Ram Charan Lal her husband was the owner of two houses numbered 135 and 136 in Mohalla Nai Basti, Jhansi. House No. 135 was purchased by her husband in the year 1953 in a court auction for a sum of Rs. 1150 and house No. 136 was purchased by him in the year 1958 for a sum of Rs. 250/-. Defendant no.4 Sri Ram Rastogi is a moneylender. Ram Charan Lal borrowed some money from Sri Ram Rastogi, which he could not repay. In the year 1966, Ram Charan Lal executed a sale deed of the two houses in favour of Sri Ram Rastogi for a consideration of Rs. 500/-. Ram Charan Lal died in 1980. After his death both the houses were sold by Sri Ram Rastogi to defendant no.1 Smt. Bhagwan Devi for a sum of Rs.8,000/-. The defendant no.2 Narain Das Verma, husband of Bhagwan Devi, was a tenant of house no.135 and defendant no.3 Bhaiya Lal was a tenant of house no.136. Their tenancy was continuing since the days of Ram Charan Lal. After the sale deed in favour of Smt. Bhagwan Devi. The plaintiff Smt. Beni Bai, widow of Ram Charan Lal filed a suit for declaration that Ram Charan Lal was the owner of the two houses and that the sale deed executed in the year 1966 by him in favour of defendant no.4 Sri Ram Rastogi and the subsequent sale deed executed by Sri Ram Rastogi in favour of defendant no.1 Smt. Bhagwan Devi in the year 1980 were void documents.
(2.) THE plaintiff's case is that Ram Charan Lal was an illiterate person and could only write his name and that defendant no.4 who was a moneylender had advanced him a sum of Rs.500/-, to secure which, a mortgage deed was intended to be executed by Ram Charan Lal but defendant no.4 played fraud and obtained a sale deed from him. The case of the defendant-appellants Bhgwan Devi and Narain Das is that the transaction in question was a sale out right and not a mortgage and that no fraud was practiced upon Ram Charan Lal. It was also alleged that an agreement was executed by defendant no.4 Sri Ram Rastogi to reconvey the property in favour of Ram Charan at his option to be exercised within a period of three years but Ram Charan failed to get it reconveyed. Similar stand was taken in the written statement filed by defendant no.4 Sri Ram Rastogi. The trial court dismissed the suit holding that fraud was not established and that the nature of the transaction was not of mortgage but that of a sale out right. The trial court relied upon an admission made by the plaintiff Smt. Beni Bai that she had knowledge of the sale deed for the past 20-25 years and held that the suit was barred by limitation. The plaintiff preferred an appeal, which was allowed. The lower appellate court has held that the sale deed was executed as a security for the loan and that the transaction was not a sale but a mortgage. In recording this finding, the lower appellate court has considered the oral evidence of the parties and also the material facts and circumstances. It has also been found by the lower appellate court that the defendant Bahgwan Devi is not a bonafide purchaser
(3.) I have heard Shri B.N. Agarwal counsel for the defendant-appellants and Shri A.N. Bhargava, counsel for the plaintiff-respondent no.1. The appeal was admitted on two substantial questions of law. They are:- i) Whether the lower appellate court was legally correct in reversing the judgement of the trial court and holding that the transaction entered into between the deceased husband of the plaintiff and the vendor of the appellant was a mortgage? ii) Whether in absence of any document on record to show that there was any agreement between the parties to the said sale that there was an agreement for resale of the property, the court could correctly assume that the transaction amounted to mortgage by conditional sale? Subsequently a third question was framed at the time of hearing. This question is:- iii) Whether on the facts and circumstances mentioned in the plaint, the relief claimed in the plaint for declaration of the sale deed as null and void could be granted, inasmuch as from the pleadings it is clear that the foundation of the suit is that the registered sale deed dated 30.3.1966, was in fact a mortgage executed to secure the amount borrowed by the plaintiff predecessor? ;