Civil Appeal No 691 of 1970
Appeal by Special Leave from the Judgment and Order dated 12 8 1969 of the Mysore High Court in Civil Revision Petition No 1322 of 1967
section section Javali M Veerappa and J R Das for the Appellant
section C Javali P G Gokhale and B R Agarwala for the Respondents
The Judgment of the Court was delivered by GUPTA J
The only question that arises for decision in this appeal by special leave is whether the respondents before us are entitled to relief under section 25ii of the Bombay Agricultural Debtors Relief Act 1947
The question arises on the following facts
On June 1 1927 the predecessors in interest of the appellants transferred to one Krishnaji two plots of land bearing survey numbers 1251 and 136 measuring respectively 145 and 2131 acres in village Murnal Bagalkot Taluk in Bijapur District
The document by which the transfer was effected described as a sale deed shows that the two items of property were sold absolutely for a total sum of Rs 2000 
In 1932 Krishnaji sold the plot bearing survey No 136 to one Ramanna predecessor in interest of respondent Nos 2a to 2e
for Rs 400 
In 1935 Krishnaji sold the other plot survey No 1251 for Rs 1000 to Utalsab Dogrisab
Walikar predecessor in interest of respondents 1a to 1c
After the Bombay Agricultural Debtors Relief Act 1947 came into force the appellants applied under section 4 of the Act for adjustment of debts claiming that the transaction in 1927 was really not a sale but a mortgage
The trial court held that the transaction was a mortgage and not a sale but dismissed the application on the view that the respondents were entitled to protection under section 25ii of the Act
The District Judge reversed the decision and allowed the application under section 4
The matter was taken to the High Court in revision and the High Court recorded a consent order that the tran 125 saction was not a sale but a mortgage and remitted the case to the trial court for a decision on the question whether the purchasers Ramanna and Walikar were transferees for value without notice of the real nature of the transaction between the appellants  predecessors and Krishnaji and as such entitled to the protection of section 25ii
This order of the High Court was made on January 25 1963
At this stage we may mention that our attention was drawn to an order made in the same matter by the High Court on January 31 1962 which is reported in  that shows that the same learned Judge had set aside the order of the appellate court and restored that of the trial court
Counsel for both sides appeared to think that the order made by the High Court in 1962 must have been set aside later on review though neither of them was able to produce the order by which the 1962 order had been set aside
However both learned counsel agreed that for the purpose of this appeal it is the order of the High Court made on January 25 1963 that need be considered
That the 1963 order held the field would be apparent from the fact that the case was reconsidered by the trial court as directed by the aforesaid order
The trial court on hearing the matter after remand dismissed the application under section 4 on the finding that the purchasers were bona fide transferees for value without notice of the real nature of the original transaction
The lower appellate court reversed this decision
The purchasers then moved the High Court in revision from the order passed by the appellate court
The High Court by the impugned order set aside the order of the appellate court and restored that of the trial court agreeing with the trial court that the purchasers had no notice of the real nature of the transaction of 1927
Section 24 of the Bombay Agricultural Debtors Relief Act 1947 empowers the court to declare any transfer of land by a person whose debts are being adjusted under this Act purporting to be a sale to be a mortgage if the court was satisfied that the circumstances connected with the transfer showed it to be in the nature of a mortgage
Section 25ii provides that nothing in section 24 shall apply to any bona fide transferee for value without notice of the real nature of such transfer or his representative where such transferee or representative holds under a registered deed executed on or before the 15th day of February 1939
The document evidencing the transfer of the plots to Krishnaji in 1927 is discribed as a sale deed and contains a statement that the vendors have absolutely sold both the said lands to Krishnaji and that the entire ownership was Krishnaji s alone
It is also said that possession of the lands has also been given to Krishnaji
The High Court found that the purchasers from Krishnaji had no actual knowledge or notice of the real nature of the transaction in 1927
But the High Court also held that the notice contemplated in section 126 25ii was actual notice and that constructive notice was clearly beyond the contemplation of section 25ii
It seems to us that construing the notice referred to in section 25ii as actual notice only is likely to defeat the purpose of the statute which was enacted to provide for the relief of agricultural debtors in the province of Bombay
We are of the view that section 25ii does not exclude constructive notice
However on the facts of the case it appears that the transferees had no notice actual or constructive of the real nature of the transaction of 1927
It has been found that they had no actual notice the High Court appears to have also found that they had no constructive notice
Referring to the provision of section 25ii requiring that the transferee must hold under a registered deed executed on or before February 15 1939 the High Court says It will be seen that the reference is to a period anterior to the coming into force of the Act a period therefore during which the special provisions of the Act could not have been within the contemplation of anybody
If those provisions were not in contemplation it is impossible to postulate a situation where any given circumstance could be regarded as sufficient to excite suspicion that the transaction might be hit by the statute and therefore persuade people to start and pursue further enquiries Mr section section Javali appearing for the appellants contends that the fact that the lands in question were transferred for a smaller amount in 1932 and 1935 than the price Krishnaji had paid for them in 1927 was a circumstance that should have put the transferees on enquiry and that if reasonable enquiries had been made they would have had knowledge of the real nature of the transaction of 1927
The fact that the lands were sold to the respondents for a price lower than what they fetched in 1927 might have been due to various reasons and it cannot be said that this ground alone was sufficient to raise a suspicion that the transaction of 1927 was really a mortgage
As pointed out by the High Court the Act of 1947 could not have been within the contemplation of anyone in 1932 or 1935
Ramappa in his deposition said that he paid Rs400 for the land as it was fallow and that if there were no weeds the price would have been Rs 600 
As for the land sold to Utalsab he was dead when the matter came up for hearing before the trial court
The record of rights also does not contain 127 any indication that the transaction of 1927 was in the nature of a mortgage
The evidence discloses that Krishnappa put the transferees in possession of the lands in question
There was therefore no such occasion or circumstance to impel the transferees to start an enquiry as to the real nature of the transaction between Krishnaji and the predecessors in interest of the appellants in 1927
The appeal is dismissed but in the circumstances of the case without any order as to costs
NKA Appeal dismissed


Summary:
Section 25ii of the Bombay Agricultural Debtors  Relief Act 1947 provides that nothing in section 24 shall apply to any bona fide transferee for value without notice of the real nature of such transfer or his representative where such transferee or representative holds under a registered deed executed on or before 15th February 1939
The predecessors in interest of the appellants transferred two plots of land in 1927 to one Krishnaji
The document evidencing the transfer of the plots was described as a sale deed and contained a statement that the vendors had absolutely sold both the said lands to him that the entire ownership was his alone and that possession had been given to him
In 1932 and 1935 Krishnaji sold the two plots to the predecessors in interest of the respondents at a price lower than that paid by him when he purchased the plots
After the coming into force of the 1947 Act the appellants applied under section 4 of the Act for adjustment of debts claiming that the transaction of 1927 was really not a sale but a mortgage
Although the trial court came to the conclusion that the transaction was mortgage and not a sale it dismissed the application on the ground that the respondents were entitled to protection under section 25ii of the Act
On appeal the District Judge allowed the application under section 4
In revision the High Court recorded a consent order that the transaction was not a sale but a mortgage and remitted the case to the trial court for a decision whether the purchasers were transferees for value without notice of the real nature of the transaction and were entitled to protection of section 25ii
On remand the trial court dismissed the application under section 4 holding that the purchasers were bona fide transferees for value without notice of the real nature of the original transaction
The lower appellate court reversed this decision
The High Court set aside the order of the appellate court and restored that of the trial court on the view that the purchasers had no actual knowledge or notice of the real nature of the transaction of 1927
It also held that the notice contemplated by section 25ii was actual notice and that constructive notice was clearly beyond the contemplation of section 25ii
Dismissing the appeal  HELD Construing the notice referred to in section 25ii as actual notice only is likely to defeat the purpose of the statute which was enacted to provide for the relief of agricultural debtors in the province of Bombay
Section 25ii does not exclude constructive notice
126A B 124 In the instant case however the transferees had no notice actual or constructive of the real nature of the transaction of 1927
126B The fact that the lands were sold to the respondents for a price lower than what they fetched in 1927 might have been due to various reasons and it cannot be said that this ground alone was sufficient to raise a suspicion that the transaction was really a mortgage
The Act of 1947 could not have been within the contemplation of any one in 1932 or 1935 when the lands were sold
The lands were fallow and barren
The record of rights does not contain any indication that the transaction was a mortgage
The transferees were put in possession of the lands
Therefore there was no occasion or circumstance to impel the transferees to start an enquiry as to the real nature of the transaction between the seller and the predecessors in interest of the appellants in 1927
126F H 127A B