Case: P.L. Bapuswami Vs. N. Pattay Gounder

2. The disputed property consisted of 16 acres and 27 cents of land in Sokkanur village of Coimbatore district of which half share belonged to Palani Moopan and the other half to his daughter Palani Mooppachi. Palani Moopan executed the document. Ex,. B-1 with regard to his share of the property in favour of the 1st defendant for a consideration of Rs. 4,000 on May 28, 1946. Out of the consideration, a sum of Rs. 2,000 was reserved with the vendee to pay off an earlier mortgage and the balance of Rs. 2,000 was paid to the vendor in cash. The first defendant discharged the earlier mortgage in accordance with the directions in Ex. B-1. The document, B-1 was in the form of a sale deed but it contained a stipulation that the 1st defendant should reconvey the property to Palani Moopan on his repaying the amount of Rs. 4,000 after 5 years and before the end of the 7th year. After the death of Palani Moopan his sons executed an assignment deed in favour of the plaintiff, Ex. A-1 dated August 10, 1950 for a sum of Rs. 1,600. On the basis of Ex. A-1 the plaintiff has brought the present suit for redemption of the disputed property. The case of the plaintiff was that Ex. B-1 must be deemed in law to be a mortgage by conditional sale and that he was entitled to redeem as the assignee of the equity of redemption. The plaintiff further claimed that being an agriculturist, he was entitled to the benefits of Madras Act IV of 1938 as amended. The plaintiff pleaded alternatively that if Ex. B-1 was held to be an outright sale with a condition to repurchase, the first defendant was bound to reconvey the property to him on payment of the amount of Rs. 4,000. The plaintiff alleged that he tendered the amount to the first defendant several times but the latter refused to accept the same, The suit was contested by the 1st defendant who denied that Ex. B-1 was a mortgage by conditional sale, it was alleged that Ex. B-1 was an outright sale with a conenant to repurchase and as no tender was made by the plaintiff within the time stipulated in the document, the suit was barred by time.      3. Upon these rival contentions the trial Court held that Ex. B-1 was a mortgage by conditional sale and accordingly granted a preliminary decree to the plaintiff for redemption under O. 34 R . 7 of the Civil Procedure Code. The first defendant took the matter in appeal to the Subordinate Judge of Coimbatore but the appeal was dismissed. The 1st defendant preferred second appeal in the Madras High Court which set aside the decrees of the lower Courts and ordered that the suit should be dismissed, holding that the transaction was an outright sale and not a mortgage by conditional sale. As regards the alternative plea based on the covenant for reconveyance, the High Court considered that there was no proof that the plaintiff had tendered the amount within the period stipulated in the document.

Court's reasoning:
6. We consider that in the present case there are several circumstances to indicate that Ex. B-1 was a transaction to indicate that Ex. B-1 was a transaction of mortgage by conditional sale and not a sale with a condition for retransfer. In the first place there is the important circumstance that the condition for repurchase is embodied in the same document. In the second place, there is the significant fact that the consideration for Ex B-1 was Rs. 4,000 while the real value of the property was, according to the Munsif and the Subordinate Judge, Rs. 8,000.The High Court has dealt with this question and reached the finding that the value of the property was Rs. 5,500 but it is submitted by Mr. Ganapathi Iyer on behalf of the appellant that the question of valuation was one of fact and the High Court was not entitled to go into the question in the second appeal. The criticism of learned Counsel for the appellant is justified and we must proceed on the basis that the valuation of the property was Rs. 8000 and since the consideration for Ex.B-1 was only Rs. 4,000 it was a string circumstance suggesting that the transaction was mortgage and not an outright sale. In the third place, there is the circumstance that the patta was not transferred to the 1st defendant after the execution of Ex. B-1 by Palani Moopan.It appears that defendant No. 1 did not apply for the transfer to patta and the patta admittedly continued in the name of Palani Mooopan even after the execution of Ex. B-1 Exhibits A-6 and A-7 are certified copies of thandal extract of patta for the years 1945-54 and they prove this fact. These exhibits also show that the plaintiff had obtained patta for the and on the basis of Ex. A-2 The registered deed of transfer of patta was executed by the sons of Palani Moopan in favour of the Plaintiff. There is also the circumstance that the Kist for the land was continued to be paid by Palani Moopan and after his death, by the sons of Palani Moopan Lastly, there is the important circumstance that the consideration for reconveyance was Rs. 4,000 the same amount as the consideration for Ex. B-1. Having regard to the language of the document Ex. B-1 and examining it in the light of these circumstances we are of the opinion that the transaction under Ex. B-1 was mortgage by conditional sale and the view taken by the High Court with regard to the legal effect of the transaction must be reversed. It follows, therefore that the plaintiff is entitled to a preliminary decree for redemption under O. 34 R. 7, Civil Procedure Code for taking accounts and for declaration of the amounts due to the 1st defendant under Ex. B-1.