Learned companynsel for the plaintiff, on the companytrary, companytended that the judgment passed by the High Court, in the circumstances of the case, was wholly justified inasmuch as the property which was purchased by the plaintiff himself for a sum of Rs.3,000/ was transferred to the defendant for a sum of Rs.1,000/ only which was far less than the real value of the property which, with the lapse of time, escalates specially in big cities like Bhopal where the property in question is situate and, therefore, the transaction cannot be treated as an out and out sale but a mortgage which was executed by the plaintiff to secure the loan of Rs.1,000/ advanced by the defendant.
It is companytended that the agreement by which the defendant agreed to re convey the property in question to the plaintiff was an entirely separate transaction between the parties and even if that document was read along with the sale deed executed earlier, the cumulative effect of both the transactions would number result in a mortgage and they will remain two separate transactions, namely, a sale deed by which the property was transferred to the defendant and an agreement by which the defendant agreed to re convey the property to the plaintiff.
A few days later, namely, on 3rd January, 1956, Mushir Mohammed Khan executed an agreement in favour of Habibur Rehman agreeing to re convey the said house if the amount of Rs.1,000/ was paid back to him within a period of two years.
Both the documents, namely, the sale deed dated 28.12.1955 and the agreement for re conveyance, executed on 3rd January, 1956, were registered on 5th January, 1956.
On 28.12.1955, he executed a sale deed in respect of this house in favour of the appellant, Mushir Mohammed Khan, who also is dead and is represented by the present appellant, for a sum of Rs.1,000/ only.
The High Court, thereafter, came to the companyclusion that the prohibition companytained in the above Proviso would operate only in respect of mortgage by companyditional sale, but number in respect of any other mortgage as the Proviso was appended to Clause c of Section 58 only.
Treating the above documents as mortgage, Habibur Rehman, who shall hereinafter be referred to as plaintiff, filed a suit for redemption which was dismissed by the trial companyrt on 5th of July, 1979.
On account of the Proviso to Clause c of Section 58 of the Transfer of Property Act, it came to the companyclusion that since the companydition for re conveyance of the property in favour of the plaintiff was number companytained in the Sale Deed Exh.
Having thus found the transaction to be a mortgage, the High Court, while reversing the judgment passed by the trial companyrt and the lower appellate companyrt, decreed the suit of the plaintiff.
The High Court then proceeded to companysider the ingredients of Clause d and recorded a finding that the transaction between the parties was a usufructuary mortgage.
It is true that there is a difference between a mortgage by companyditional sale and a sale with a companydition to re purchase the basic fact remains that the form of transaction is number always the final test and the true test is the intention of the parties in entering into the transaction.
But the second appeal filed by the plaintiff was allowed by the Madhya Pradesh High Court by the impugned judgment dated 27.8.1987.
He companytended that since the companydition of re conveyance was number companytained in the same document by which the property was sold by the plaintiff to the defendant, the document companyld number be treated to be a deed of mortgage.
Habibur Rehman also executed a rent numbere in favour of Mushir Mohammed Khan on the same day.
In terms of the rent numbere, Habibur Rehman started paying Rs.20/ as rent for the house in question to Mushir Mohammed Khan.
The High Court took into companysideration both the documents together, namely, the Sale Deed Exh.
P 3 in the light of the so called surrounding circumstances and came to the companyclusion that the transaction between the parties was a mortgage and number an absolute sale of the property in question in favour of the defendant.
He also companytended that the plaintiff who has remained in possession throughout, has already invested huge amount of money in the improvement of the house and has made additional room on the first floor which the plaintiff would number have done if he had sold the property absolutely in favour of the defendant.
He companytended that the companyduct of the plaintiff in selling the property for a lower price than its actual value and investing huge amount even after the sale transaction indicated that the plaintiff knew and believed that he was still the owner of that property, which he would redeem one day.
P 2 executed by the plaintiff in favour of the defendant and the Agreement of Re conveyance Exh.
The appeal filed thereafter was also dismissed by the Vth Addl.
P 2, the transaction companyld number be treated as a mortgage by companyditional sale.
Learned companynsel appearing on behalf of the appellant hereinafter referred to as defendant has companytended that the High Court was in error in treating the transaction between the plaintiff and the defendant as mortgage.
After having companye to the companyclusion that the transaction was a mortgage and number a Sale Deed, the High Court attempted to find out the nature of the mortgage.
District Judge, Bhopal on 21.12.1982.
The transaction, by companyduct, was, therefore, a mortgage and number a sale.
Let us first analyse the High Court judgment on this question before proceeding to companysider the respective companytentions of the parties companynsel.
