GOVIND RAM Vs. SUNDER BAI
LAWS(RAJ)-1966-9-4
HIGH COURT OF RAJASTHAN
Decided on September 30,1966

GOVIND RAM Appellant
VERSUS
SUNDER BAI Respondents

JUDGEMENT

TYAGI, J. - (1.) THIS is defendant's second appeal against the judgment and decree dated 15th February, 1961 passed by the District Judge, Ajmer, in his appellate jurisdiction dismissing the appeal filed against the judgment and decree dated 30th November, 1959 of the Civil Judge, Ajmer, in Civil suit No. 408 of 1958.
(2.) SMT. Sunder Bai and others filed a suit against defendant Govindram for the specific performance of a contract for sale of an immovable property which originally belonged to the plaintiffs and which was sold by them to defendant Govind ram for Rs. 4,000/- on 31st October, 1956, by means of a sale deed registered on that day. By a separate deed of the same date, the parties agreed that the same property shall be resold to the plaintiffs after the lapse of five years and for that it was alleged that the plaintiffs paid Rs. 100/- as earnest money to defendant Govindram. It was further alleged that the defendant-appellant did not stick to his part of the obligation under the agreement and therefore the plaintiffs were compelled to file the suit against him for specific performance for the resale of the disputed property. The defendant traversed the claim of the plaintiffs and denied to have received Rs. 100/- as an earnest money under the agreement for re-sale executed and registered by him on the same day when the house was purchased by him from the plaintiffs. He also raised a plea that the agreement which confers a right on the plaintiffs to re-purchase the disputed property was illegal and void. The trial court came to the conclusion that the amount of Rs. 100/- was not paid by the plaintiffs to the defendant when the deed Ex. 1 was executed by the defendant in favour of the plaintiffs but it held that the plaintiffs were entitled to get a decree for specific performance for the sale of the property in dispute on payment of Rs. 4,100/ -. On appeal, the learned Judge modified the finding of the trial court and held that it has been established by the plaintiffs that the amount of Rs. 100/- was paid by them to the defendant on the very day when the deed Ex. 1 was executed and therefore he held that the plaintiffs were entitled to a decree for specific performance on payment of Rs. 4,000/- only. It may be mentioned that this finding was recorded by the lower appellate court while disposing of the cross-objections filed by the plaintiffs in respect of the payment of Rs. 100/- to the defendant. It is against this judgment of the learned District Judge that the present appeal has been filed by the defendant. Learned counsel for the appellant urged that the suit was not maintainable as the transaction in question was actually a mortgage by conditional sale and the defendant could not advance a loan of Rs. 4. 000/- to the plaintiffs in violation of the Bombay Money Lenders Act, 1946, as was applicable in Ajmer, without obtaining a license to carry on the money lending business. An endeavour was also made by Mr. Panwar, appearing for the appellant, that the finding given by the lower appellate court that a payment of Rs 100/- was made by the plaintiffs to the defendant at the time when Ex. 1 was executed as an earnest money is erroneous and it should, therefore, be set aside, and if the court comes to the conclusion that no earnest money was paid by the prospective purchasers of the property to defendant Govind Ram, then the agreement Ex. 1 was without consideration. The argument advanced by learned counsel about the finding of fact in respect of the payment of Rs. 100/- cannot be entertained in second appeal as it relates to the question of fact which has been finally determined by a court of fact in first appeal. I am inclined to hold that the finding recorded by the learned Judge that Smt. Sunder Bai had paid Rs. 100/- to Govindram as an earnest money when Ex. 1 was executed by him is supported by evidence on the record which the learned appellate Judge preferred to rely. This Court has no jurisdiction under sec. 1c0 of the Civil Procedure Code to reverse this finding unless it was shown to be perverse. The principal question that now remains to be decided by me is whether the transaction entered into between the parties by executing the agreement Ex. 1, and the sale deed in favour of Govindram which is Ex. A-1 on the record is actually a mortgage by conditional sale or it was really a sale with a covenant to re-purchase the same property for consideration of Rs. 4,100/- In this connection, my attention has been drawn to the proviso to sec. 58 (c) of the Transfer of Property Act which resolves the controversy that has been raised by learned counsel for the appellant. Sec. 58 (c) describes the mortgage by conditional sale and it lays down that where the mortgagor ostensibly sells the mortgaged property on condition that on such payment being made the buyer shall transfer the property to the seller, then the transaction is called a mortgage by conditional sale and the mortgagee a mortgagee by conditional sale, but a rider has been put by the Legislature by introducing a proviso to this sub-section which reads as follows : "provided that no such transaction shall be deemed to be a mortgage, unless the condition is embodied in the document which effects or purports to effect the sale. " This proviso introduces a very important prohibition for creating a mortgage by conditional sale and it is that the covenant for effecting a sale with a con-dition that the buyer shall retransfer the property to the seller on the payment to be made by him must be contained in the same document which effects the sale or purports to effect the sale. It clearly means that if the covenant for re-sale is not embodied in the document by which the sale is effected or purported to be effected and is contained in a separate document then in that event, even if the intention of the parties as gathered from the circumstances may go to establish that they wanted to create a mortgage by conditional sale, that transaction shall not be taken or deemed to be a mortgage as the mandate of the proviso to sec. 58 (c) clearly lays down that it will not be deemed to be a mortgage unless the covenant for re-sale was a part of the same document which effects the sale in favour of the ostensible purchaser. From this it is obvious that if the condition of re-sale is not found in the sale deed by which ownership has been transferred or purported to be transferred to the ostensible purchaser, the law would not recognise that transaction as a mortgage by conditional sale even though the intention of the parties was clearly to create such a mortgage. Learned counsel cited two authorities in Ramchandra Ayyar vs. Rama-lingam Chettiar (l) and L. Manmohandass vs. Shaikh Bahabuddin (2) in support of his contention that this transaction was a mortgage by conditional sale and not an absolute sale in favour of the defendant and therefore this Court should hold that the defendant had advanced Rs. 4000/- to the plaintiffs as loan in contravention of the provisions of the Bombay Money Lenders Act, 1946. These two decisions, in my opinion, have no bearing on the controversy raised before this Court in the present appeal and they are of no avail to the appellant. On the basis of these decisions it is difficult for me to hold that the transaction entered into between the parties by means of Ex. 1 and Ex. A-l was a mortgage by conditional sale. The proviso to clause (c) of sec. 58 of the Transfer of Property Act comes in the way of the appel-lant. As long as the condition of re-sale was not the part of the sale-deed itself by which the sale of the property in dispute was effected, the transaction cannot be declared as a mortgage by conditional sale. In this view of the matter, it is difficult for me to accept: the contention of learned counsel for the appellant that the suit was not maintainable as the transaction of sale of the disputed property violated the provisions of the Bombay Money Lenders Act, 1946. For the reasons given above, the appeal of the appellant is dismissed. The decree passed by the trial court as confirmed by the appellate court is, however, modified to this extent that the defendant-appellant shall on payment of Rs. 5,000/-by the plaintiffs respondents execute the sale deed in favour of the plaintiffs-respondents and shall get it registered within six months from today, failing which the plaintiffs shall be entitled to get the sale-deed executed and registered through Court within a period of two months after the expiry of the period of six months. The parties shall bear their own costs in this appeal. . ;


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