Govinda Krishna Gupta & Others vs Siba Pada Das & Others on 25 April, 2025

Calcutta High Court (Appellete Side)

Govinda Krishna Gupta & Others vs Siba Pada Das & Others on 25 April, 2025

Author: Debangsu Basak

Bench: Debangsu Basak

               IN THE HIGH COURT AT CALCUTTA
                CIVIL APPELLATE JURISDICTION
                       APPELLATE SIDE

Present:
The Hon'ble Justice Debangsu Basak
               And
The Hon'ble Justice Md. Shabbar Rashidi

                               F.A. 225 of 2000

                               With
               CAN 1 of 1997 (Old CAN 2525 of 1997)
               CAN 2 of 1998 (Old CAN 4967 of 1998)
               CAN 3 of 2000 (Old CAN 6409 of 2000)
               CAN 4 of 2005 (Old CAN 1738 of 2005)
               CAN 5 of 2005 (Old CAN 1739 of 2005)
               CAN 6 of 2011 (Old CAN 1665 of 2011)
               CAN 8 of 2014 (Old CAN 11983 of 2014)

                                    With

                           F.M.A. 68 of 2001
                               With
               CAN 1 of 1997 (Old CAN 2011 of 1997)
               CAN 2 of 2013 (Old CAN 6752 of 2013)
               CAN 3 of 2014 (Old CAN 11984 of 2014)

                     Govinda Krishna Gupta & Others
                                     Vs.
                         Siba Pada Das & Others


For the Appellants         :        Mr. Haradhan Banerjee, Adv.
                                    Ms. Somali Mukhopadhyay, Adv.
                                    Ms. S. Das, Adv.
                                           2




     For the Respondents         :       Mr. Saptansu Basu, Adv.
                                         Mr. Gopal Pahari, Adv.
                                         Ms. Piyali Kulari, Adv.
                                         Ms. Mandeep Kaur, Adv.

     Heard on                    :       18.02.2025

     Judgment on                 :       25.04.2025


     Md. Shabbar Rashidi, J.

1. The appeals at the behest of the plaintiffs/defendants is directed

against a common Judgment and Decree dated December 13, 1996

passed by learned Judge, VIIth Bench, City Civil Court, Calcutta in

Title Suit No. 1691 of 1975 and Misc. Judicial Case No. 370 of 1980.

2. By the impugned Judgment and Decree, learned trial Court

dismissed the Title Suit No. 1691 of 1975 as well as Misc. Judicial

Case No. 370 of 1980.

3. The facts giving rise to the present lis are, in a nutshell, that the suit

premises being 11A and 11B, Bow Street, Calcutta, consisting of a

partly three storied partly four storied building containing big gates,

yard, boundary wall and 30 numbers of big and small rooms

situated over an area admeasuring 6 Cottas of land, were owned by

the plaintiff. The building contained two distinct wings, the western
3

bloc and eastern bloc connected by a common stair case. The

western portion of the suit building at 11A and 11B, Bow Street,

Calcutta, comprising of 20 big and small rooms is the subject matter

of the present proceeding.

4. It was the case of the plaintiffs that the western portion of the suit

premises was the subject matter of a mortgage in the form of a

registered sale deed dated September 20, 1972 together with

separate agreement for reconveyance of the suit premises upon

payment of the entire consideration money along with interest at the

rate of 10 % per annum thereon, to be paid within 3 years from the

date of the sale deed. The plaintiffs had come up with a case that the

aforesaid transaction of sale was effected without any consideration

actually paid taking advantage of the physical condition of the

plaintiff and upon practice of fraud upon such plaintiffs. Therefore,

according to the plaintiff, the transaction of sale effected by the sale

deed dated September 20, 1972 was null and void and also vitiated

by fraud as no consideration money was passed.

5. The plaintiff also pleaded that defendant no. 1 was newly recruited

advocate and used to reside in tenanted premises at Hidaram

Banerjee Lane with his wife i.e. defendant no. 2. The said

accommodation was not at all sufficient for the couple.
4

6. It is further case of the plaintiff that defendant no. 3 had a small

ancestral building at the crossing of Vivekananda Road and Central

Avenue. In 1962, he was introduced with the defendant no. 3 since

the plaintiff was searching for suitable house to purchase. Since

thereafter, the defendant no. 3 used to visit the chamber of the

plaintiff often. In early 1970 the plaintiff fell ill and developed a

mental debility resulting in loss of his general ability. Taking

advantage of the physical inability of the plaintiff, the defendants

conspired together to play fraud upon the plaintiff.

7. It is further case of the plaintiff that the defendants in a conspiracy,

brought a fake Income Tax officer to his chamber and on the pretext

of hosing of a proposed income tax proceeding allegedly proposed

against the plaintiff, extracted ₹3,500/- from the plaintiff. According

to the plaintiff, defendant no. 1 asked for a further loan of ₹5,000/-

from the plaintiff in first week of November 1970 in order to contest

proceeding filed by his wife. However, the plaintiff could not advance

such loan of ₹5,000/- as he himself was in need of money for the

purpose of the marriage of his daughter. The defendants then

proposed that if the plaintiff executes a promissory note of

₹12,500/- in the name of defendant no. 2, the defendants would

arrange a loan for the plaintiff as well as the defendant from a
5

moneylender. In order to obtain a loan for the marriage of his

daughter as well as for saving the plaintiff from the demand of

₹4,500/- made by the income tax officers, the plaintiff executed a

note of ₹13,500/- in favour of defendant No. 2. The plaintiff also

submitted that he was made to handover the title deed in respect of

suit premises for procuring a loan from the moneylender. However,

the plaintiff received the loan of ₹4,000/- whereas rest of the money

was reported by Defendant nos. 1 and 2 to have been taken by

defendant no. 3 in order to manage the Income Tax Officer.

8. The plaintiff also submits that in April 1971, a flat in the first floor

of the western portion of the premises was vacated by the tenant

and came to be possessed by the plaintiff. Defendant no. 3

persuaded the plaintiff to let the said premises out to him for the

purpose of setting up of a radiological clinic. The defendants tried

several times to extract money from the plaintiff on the pretext of

hosing up of criminal cases where the plaintiff was a suspect. It is

also the case of the plaintiff that in May 1972, the plaintiff was

taken to the registration office and made to execute a mortgaged

document in favour of defendant no. 2. It was the specific case of the

plaintiff that the said document was kept prepared and ready before

hand, the plaintiff was not allowed to go through such document nor
6

he was paid anything towards the consideration involved in the said

deed.

9. It was further case of the plaintiff that in January 1972 the

defendant no. 1 further demanded a sum of ₹40,000/- for making

arrangement for the destruction of an alleged dying declaration

where the plaintiff was named in a case of murder. The plaintiff

accordingly, at the dictates and advice of the defendant, executed a

sale deed in respect of the entire eastern portion of the premises

belonging to him in favour of the son of defendant no. 3. Coupled

with such deed, a two pages unregistered document was executed in

favour of the plaintiff stipulating for the resale of the transferred

property within 3 years on payment of the consideration money at

which the sale was executed. Besides that, the plaintiff also

executed two promissory notes of ₹15,000/- and ₹10,000/-

respectively, on January 7, 1972 in favour of defendant no. 3.

Defendant no. 3 is also alleged to have taken over the agreement for

resale for obtaining signature of the wife of defendant no. 3 as a

witness. No such document or the promissory notes executed by the

plaintiff were ever returned by defendant no. 3 to him. The

defendants also extracted money in the denomination of ₹5,000/-
7

and other denominations on several pretext from the plaintiff on

false pleas of rinsing the alleged prosecution of the plaintiff.

10. All on a sudden service of notice from the Municipal Corporation,

the plaintiff came to know that defendant No. 2 was the owner of the

demised property belonging to the plaintiff. On enquiry, the

defendants misbehaved with the plaintiff and threatened to oust him

from the property. According to the plaintiff’s case, the alleged deed

of sale executed by the plaintiff on September 20, 1972 was vitiated

by fraud and was of no consequence at all. It was a null and void

document. The plaintiff/appellant did not receive any consideration

whatsoever for the transaction.

11. The plaintiff/appellant then served a notice upon defendant No. 2,

through his advocate on July 24, 1975 asking her to reconvey the

suit premises in favor of the plaintiff in terms of the agreement

between the parties. The notice was duly received on August 9, 1975

but the same was never responded to. On the contrary, the

defendants engaged local goons and musclemen to intimidate the

appellant.

12. The plaintiff/appellant then filed the Title Suit seeking a declaration

that the deed of sale dated September 20, 1972 was null and void

being without any valid consideration and was vitiated by fraud and
8

conspiracy with ancillary reliefs. The plaintiff also sought for a

declaration that such document had no effect on the rights and title

of the appellant over the suit premises and that the defendants were

under obligation to execute necessary document for release and/or

reconveyance of the suit premises in favour of the plaintiff.

13. Pleading the similar facts, later on, the plaintiff/appellant

approached the court with an application under Section 38 read

with Section 37A of the Bengal Money-Lenders Act, 1940 seeking a

declaration that the deed of sale dated September 20, 1972 together

with the agreement executed by the defendant No. 2 was a loan

transaction contemplated under the provisions of the Act of 1940.

The appellant also sought for taking accounts towards the loan

transaction. Such application was registered as Misc. Judicial Case

No. 370 of 1980. Both the proceedings were disposed of by the

impugned common judgment.

14. The proceedings so initiated by the appellant were contested by the

defendants by filing written statement and written objection. The

case made out by the appellant with regard to conspiracy and fraud

was categorically denied by the defendants in the pleading filed on

their behalf. On the contrary, the defendants came up with a case
9

that the appellant with an intention to obtain illegal gains implicated

the defendants in false and frivolous cases.

15. It is the positive case of the defendants/respondents that the

plaintiff got himself introduced to defendant No.1 at his residence at

Hidaram Banerjee Lane sometimes in 1970. He also requested

defendant No.1 to arrange for a loan of ₹15,000/- to meet the

expenses of his daughter’s marriage. Defendant No. 1 had no such

money. At the request of defendant No. 1, his wife i.e. defendant No.

2 advanced a sum of ₹13,500/- as a loan to the plaintiff. As an

acknowledgement, the appellant executed a promissory note for a

sum of ₹13,500/- in favour of defendant No. 2 and created the

mortgage by deposit of title deeds of his house property being

premises No. 11 A and 11 B, Bow Street, Calcutta 12. It was further

contended that the plaintiff/appellant again secured a loan of

₹20,000/- from defendant No. 2 and executed registered did of

mortgage dated May 3, 1972 for a sum of ₹33,500/- inclusive of the

previous loan amount of ₹13,500/-.

16. It was further case of the defendants that in the month of January

1972, one of the flats on the ground floor in the western portion of

the premises Nos. 11 A and 11 B, Bow Street, Calcutta 12 fell

vacant. At that time, at the request of the plaintiff, defendant No. 2
10

was inducted as a tenant in the said flat at a monthly rental of

₹200/-, the tenancy commencing from the month of January 1972.

It was further contended that in September 1972, the

plaintiff/appellant asked for a further loan to meet up the expenses

towards debts. Defendant No. 2 showed her inability to advance

further loan. Thereafter, the plaintiff proposed to sell and transfer

the western portion of the premises No. 11 A and 11 B, Bow Street,

Calcutta 12 in favour of defendant No. 2 at a consideration of

₹44,355/-. The flat tenanted in favour of defendant No. 2, fell within

the portion proposed to be transferred in her favour.

17. Such proposal of the plaintiff regarding sale and transfer of the suit

premises was accepted by Defendant No. 2. The entire consideration

money, less the amounts already advanced to the plaintiff on earlier

two occasions amounting to ₹33,500/- together with interest thereon

was paid to the plaintiff by Defendant No. 2. Upon payment of

agreed consideration money, the plaintiff/appellant executed a deed

of sale in respect of the suit property being premises No. 11 A and

11 B, Bow Street, Calcutta 12, favour of Defendant No. 2 which was

duly registered at Calcuta Registry Office. Defendant No. 2 had been

in occupation of the suit premises initially as a monthly tenant and

after aforementioned purchase, as an absolute owner thereof. By
11

such sale, the plaintiff divested himself of his right and title in

respect of the suit premises.

18. It was further contended by the defendants that the

plaintiff/appellant filed a case against the defendant Nos. 1 & 2 on

the allegations of robbing money and illegally compelling the plaintiff

to execute a sale deed in favour of Defendant No. 2 being C Case No.

650 of 1976. The said case was, however, dismissed on contest by

the Court of learned 8th Metropolitan Magistrate. Thereafter, the

plaintiff also filed a complaint against the defendants seeking their

prosecution for the offences punishable under Sections

420/465/467/468/471/120B of the Indian Penal Code. Such

application was rejected by the court of learned 3rd Metropolitan

Magistrate. The plaintiff carried a revision against such rejection but

the same was also dismissed by this High Court.

19. It was further submitted by the defendants that after purchase of

the suit premises from the plaintiff, Defendant No. 2 got the

tenancies in the premises attorned in her favour and she also filed

eviction suits against some of the tenants including the plaintiff

which are pending. The defendants also contended that the plaintiff

with ominous motives filed false eviction suit against a fictitious

tenant namely Gurmukh Singh in respect of the premises under
12

occupation of Defendant No. 2 and obtained an Ex-parte decree.

Following the ex-parte decree, the plaintiff also filed an execution

case against the said Gurmukh Singh. However, the defendant

resisted the bailiff from taking possession in execution of ex-parte

decree. Not only that, the plaintiff also filed another Ejectment Suit

being Ej. Suit No. 1191 of 1977 against Defendant No. 2 and

obtained an ex-parte decree suppressing the service of summons.

After knowing of the suit, the defendant sought for setting aside ex-

parte decree which was allowed.

20. The appellant submitted, at the time of hearing that the alleged sale

deed dated September 20, 1972 does not contain a statement with

regard to delivery of possession of the suit property. As such, the

possession was not ever delivered rendering the sale deed without

any effect. Such position of non-delivery of possession of the suit

property after the alleged sale was emboldened in the deposition of

Tejpal Saran Gupta who was adequately cross-examined. Moreover,

a collateral agreement stipulated for reconveyance of the suit

property within a specified period.

21. It was also contended by the appellant that defense witness No. 1

admitted in the deposition that the plaintiff has been in possession

of the suit property till June 1991 when he left the property.
13

According to the appellant, the condition pertaining to reconveyance

was admitted in the written statement.

22. The appellant also submitted that the alleged letters of attornment

were issued after the filing of the suit and therefore are not reliable.

In the deposition, it was admitted that the appellant did not issue

letters of attornment despite repeated requests. Later on, it was

issued by an advocate on behalf of the appellant party who was

never examined at the trial. It was also submitted that the contents

of the letters of attornment were not proved. Signature of the

appellant was not admitted on such letters. In support of such

proposition, learned advocate for the appellant cited a decision

reported in (1981) 1 Supreme Court Cases 80 (Ramji Dayawala

& Sons Privated Limited vs. Invest Import). Besides, the

respondents failed to prove that they received blank papers in the

name of notice regarding reconveyance of the suit property.

23. It was also contended that DW2 in her cross examination admitted

that had Tejpal Saran Singh paid the money in time, she would have

created a deed of reconveyance. Inspite of such admission on the

part of DW2, the learned trial court came to a finding with regard to

letters of attornment which was ostensibly perverse.
14

24. The appellant also submitted that the appellant vehemently

questioned the veracity of alleged rent receipts Ext. K and K1 as

manufactured documents. The respondent chose not to cross

examine on such pretext which amounts to an admission. In

support of such contention, learned advocate for the appellant relied

upon (2008) 11 Supreme Court Cases 505. We failed to find any

such case reported as referred. We however found a case reported as

(2008) 11 Supreme Court Cases 504 (Vishwanath Dadoba

Karale v. Parisa Shantappa Upadhye). Learned advocate for the

appellant also placed reliance upon 2019 SCC OnLine SC 468

(Atul Chandra Das vs. Rabindra Nath Bhattacharya).

25. The appellant also submitted that the title suit was filed within the

stipulated three years fixed for reconveyance of the suit property and

that an application under Section 37A of the Act of 1940 was made

within 30 years as provided under the Article 61 of the Limitation

Act, 1963.

26. It is also contended by learned advocate for the appellant that the

judgment relied upon by the respondents reported in (2006) 4

Supreme Court Cases 432 (Biswanath Prasad Singh vs.

Rajendra Prasad & Others) and 2023 INSC 743 (Prakash vs. G.

Aradhya) are distinguishable as the same were rendered in the
15

context of Section 58 of the Transfer of Property Act, 1882 and not

in terms of Section 37A of the Bengal Money Lenders Act, 1940. The

learned advocate for the appellant submitted that the transaction

involved in the instant proceeding was a mortgage by conditional

sale. The appellant has every right to redeem the mortgage in terms

of Section 37A of the Bengal Money Lenders Act, 1940.

27. Per contra, learned advocate for the respondents submit that the

appellant approached the respondents for a loan which was

advanced by Defendant No. 2. Initially, a loan of ₹13,500/- was

advanced. Thereafter, another loan of ₹20,000/- was advanced by

her. When the appellant again came up for further loan, the

respondent/defendant showed her inability to advance such loan.

Whereupon, the appellant proposed to sell out the suit premises at a

consideration of over ₹44,000/- which the defendant agreed.

Accordingly, a sale of the suit property was effected by executing a

registered sale deed on September 20, 1972. Such deed did not

contain any stipulation for resale of the suit property. Defendant

No.1 executed a separate agreement to that effect. Relying upon

(2006) 4 Supreme Court Cases 432 (Biswanath Prasad Singh vs.

Rajendra Prasad & Others) and 2023 INSC 743 (Prakash vs. G.

Aradhya), learned advocate for the respondent submitted that the
16

transaction involved in the registered deed dated September 20,

1972 was an out and out sale. It was never intended to create a

mortgage by conditional sale.

28. Learned advocate for the respondent further submitted that since

the appellant proposed and agreed to sell out the suit property for

consideration, letters of attornment were duly issued by the

appellant upon the tenants informing them of the sale. The

appellant and the respondent have been residing in the suit

premises since prior to the sale. Not only that, the appellant/plaintiff

went on to pay rent as tenant to respondent No. 2 after such sale.

Such action on the part of the appellant, according to the

respondents, was sufficient evidence to establish that the appellant

had the sole intention of selling out the suit premises. The

circumstances do not support the case that the transaction was a

mortgage by conditional sale. It is at some ill advice; the appellant

changed his course to contend that the transaction was not an out

and out sale. For such reason, the appellant filed an application

under Section 37A of the Act of 1940 after many years of filing the

Title Suit.

29. It is not in dispute that the appellant secured a loan being advanced

by defendant No. 2 on two occasions. The appellant, on first
17

occasion executed a promissory note thereafter at the time of taking

second loan, a registered mortgage deed was executed. In the

meantime, defendant No. 2 was inducted in a portion of the suit

premises as tenant. When the appellant approached the defendant

for the third time seeking further loan, the defendant showed her

inability to advance such loan. The appellant party proposed to sell

out the suit premises. Defendant No. 2 agreed to purchase the same

at a consideration of ₹44,355/-. A sale deed was executed by the

appellant in favor of defendant No. 2, upon receipt of the

consideration money less the amount involved in the two earlier

loans with interest thereof. According to the respondents, the

aforesaid transaction was an out and out sale and this is how

defendant No.2 acquired right and title in the suit premises.

30. On the other hand, the appellant alleged that he executed the sale

deed in favour of defendant No. 2 on September 20, 1972. On the

same day, defendant No. 1 executed an agreement in favour of

appellant with a stipulation that if the appellant returns the entire

consideration money paid for the sale with interest at the rate of

10% on the advanced loan, within three years from date, defendant

No. 2 would be obliged to reconvey the suit premises in favour of the

appellant. According to the appellant, the transaction was a
18

mortgage by deposit of title deeds as defined under Section 58 (c) of

the Transfer of Property Act and not an out and out sale. No title in

the suit premises, therefore, passed on to defendant No. 2 by dint of

registered deed of ostensible sale dated September 20, 1972. The

appellant retained his right to redeem the mortgaged property within

the stipulated time period. The defendant actually exercised such

right by serving a notice upon the defendant No.2 through his

advocate on July 24, 1975 which was allegedly never responded by

the defendant.

31. Section 58 of the Transfer of Property Act, 1882 defines a mortgage

by conditional sale in following terms, that’s to say:

“58. “Mortgage”, “mortgagor”, “mortgagee”, “mortgage-
money” and “mortgagedeed” defined

(a)…………………………………………

(b)…………………………………………

(c) Mortgage by conditional sale
Where the mortgagor ostensibly sells the mortgaged property

–

on condition that on default of payment of the mortgage-
money on a certain date the sale shall become absolute, or
on condition that on such payment being made the sale shall
become void, or
on condition that on such payment being made the buyer
shall transfer the property to the seller,
19

the transaction is called a mortgage by conditional sale and
the mortgagee a mortgagee by conditional sale:

1[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.]

(d)………………………………….

(e)……………………………………

(f)……………………………………..

(g)…………………………………….”

32. Admittedly, the registered sale deed involved in the case did not

contain any condition to bring the transaction into one under the

purview of mortgage by conditional sale as specified in the proviso

appended to Section 58 (c) of the Act of 1882.

33. In Bishwanath Prasad Singh (supra), the Hon’ble Supreme Court

observed that,

“27. A bare perusal of the said provision clearly shows that a
mortgage by conditional sale must be evidenced by one
document whereas a sale with a condition of retransfer may
be evidenced by more than one document. A sale with a
condition of retransfer, is not mortgage. It is not a partial
transfer. By reason of such a transfer all rights have been
transferred reserving only a personal right to the purchaser
(sic seller), and such a personal right would be lost, unless
the same is exercised within the stipulated time.”
20

37. The Hon’ble Supreme Court also laid down that,

“46. Going by Section 58(c) of the Transfer of Property Act, it
is clear that for an ostensible sale deed to be construed as a
mortgage by conditional sale, the condition that on
repayment of the consideration by the seller the buyer shall
transfer the property to the seller is embodied in the
document which effects or purports to effect the same. It has
so been clarified by this Court also in Pandit Chunchun Jha
v. Sk. Ebadat Ali [(1955) 1 SCR 174 : AIR 1954 SC 345] by
stating: (SCR p. 178)
“If the sale and agreement to repurchase are embodied in
separate documents, then the transaction cannot be a
mortgage whether the documents are contemporaneously
executed or not.”

Therefore, it is clear that what was involved in this case was
the sale followed by a contemporaneous agreement for
reconveyance of the property. Such an agreement to reconvey
is an option contract and the right has to be exercised within
the period of limitation provided therefor. It has also been
held that in such an agreement for reconveyance, time is of
the essence of the contract. The plaintiffs not having sued
within time for reconveyance, it would not be open to them to
seek a declaration that the transaction of sale entered into by
them construed in the light of the separate agreement for
reconveyance executed by the purchaser, should be declared
to be a mortgage. Such a suit would also be hit by Section 91
of the Evidence Act, subject to the exceptions contained in
Section 92 of that Act.”

21

38. Similarly, in the case of Prakash (supra), the Hon’ble Supreme

Court laid down a distinction between a mortgage by conditional

sale vis-vis a sale with a condition to repurchase envisaged in a

separate document. Supreme Court held that,

“31. In terms of the Sale Deed and the Reconveyance Deed,
reconsidered in the light of the enunciation of law, as referred
to above, in our opinion, the same cannot be held to be a
transaction of mortgage of property. Sale of property initially,
was absolute. By way of execution of Reconveyance Deed,
namely, on the same day, the only right given to the
appellants was to repurchase the property.”

39. The Hon’ble Supreme Court in the case of Vishwanath Dadoba

Karale (supra) laid down that,

“13. However, in Tulsi v. Chandrika Prasad [(2006) 8 SCC
322] distinguishing Bishwanath Prasad Singh [(2006) 4 SCC
432] , it was held : (SCC pp. 327-28, paras 14-17)

“14. Before we consider the stipulations contained in the
deed dated 30-12-1968, it may be noticed that in terms
of Section 58(c) of the Transfer of Property Act, a
transaction may be held to be a mortgage with
conditional sale if it is evidenced by one document. The
condition precedent for arriving at a finding that the
transaction involves mortgage by way of conditional
sale is that there must be an ostensible sale. It must
22

contain a condition that on default of payment of
mortgage money on a certain date, the sale shall
become absolute or on condition that on such payment
being made the sale shall become void, or on condition
that on such payment being made the buyer shall
transfer the property to the seller.

15. A distinction exists between a mortgage by way of
conditional sale and a sale with condition of repurchase.
In the former the debt subsists and a right to redeem
remains with the debtor but in case of the latter the
transaction does not evidence an arrangement of
lending and borrowing and, thus, right to redeem is not
reserved thereby.

16. The proviso appended to Section 58(c) of the
Transfer of Property Act was added by Act 20 of 1929
for resolution of the conflict in decisions on the question
whether the condition relating to reconveyance
contained in a separate document could be taken into
consideration in finding out whether a mortgage was
intended to be created by the principal deed.

17. The transaction in this case has been evidenced by
one document. Section 58(c) of the Transfer of Property
Act will, therefore, apply.”

“14. Recently in Manjabai Krishna Patil v. Raghunath Revaji
Patil [(2007) 12 SCC 427 : (2007) 3 Scale 331] it was held :

(SCC p. 431, para 12)
23

“12. Proviso appended to Section 58(c) is clear and
unambiguous. A legal fiction is created thereby that the
transaction shall not be held to be a mortgage by
conditional sale, unless a condition is embodied in the
document which effects or purports to effect the sale.

Where two documents are executed, the transaction in
question would not amount to a mortgage by way of
conditional sale. In a case of this nature, ordinarily the
same would be considered to be a deed of sale coupled
with an agreement of reconveyance.”

In the facts of that case, however, it was held that no
relationship of debtor and creditor came in existence
and no security was created and in fact conveyance of
the title of the property by the respondent to the
appellant was final and absolute.”

34. The averments made in the deed of sale executed by the appellant

party neither brings the transaction into the definition either of

mortgage by conditional sale or even within the meaning of sale with

condition of repurchase. The document does not contain any such

condition. On the contrary, a separate document appears to have

been executed by defendant No.1 for and on behalf of defendant

No.2, specifying a condition to reconvey the suit premises, if the

appellant pays off the loan amount together with interest thereon

within a period of 3 years. So far as the impugned deed is
24

concerned, it is plain and simple deed of sale with no condition of

repurchase. There is no explanation on the part of the appellant as

to what prevented him from incorporating a condition to that effect

in the deed itself as required in accordance with the provisio to

Section 58 (c) of Transfer of Property Act. There is absolutely no

explanation as to why a separate document was prepared on the

date of registration of sale deed itself incorporating a condition of

repurchase.

35. In Atul Chandra Das (supra) the Hon’ble Supreme Court held that,

“23. In this case proceeding on the basis that there is an
inconsistency between Section 58(c) of the Transfer of
Property Act and Section 37-A of the State Act, in view of the
assent given by the President, the matter falls under Article
254(2). Therefore, despite the inconsistency, Section 37-A of
the State Act will prevail in the State.”

36. In the said case, the Supreme Court also observed that,

14. Keeping Section 58(c) side by side with Section 37-A of
the State Act, the conclusion is inevitable that the State
Legislature has intended to override the effect of proviso to
Section 58(c) of the Transfer of Property Act by enacting
Section 37-A in the State Act. Section 37-A was incorporated
by way of an amendment in the State Act. Reading of Section
37-A brings out the legislative intent with unambiguous
clarity and therefore the High Court was right in relying upon
25

Section 37-A of the State Act to find that though it was by
agreement dated 7-12-1959 which is a separate document
that condition to make it a mortgage was incorporated it
would not make any difference. We may also notice that
despite the sale deed dated 27-11-1959, the Bhattacharyas
continued to be in possession of the plaint scheduled
property and it has been found that they paid the taxes. It is
further found that the market value of the property would not
have been less than Rs 30 thousand as on the date of the
alleged sale, namely, 27-11-1959.

37. However, in the case at hand, it is admitted position that the

respondent/defendant No. 2 was inducted in the suit premises as

tenant and was in occupation of the premises since prior to the

execution and registration of the ostensible sale deed. Not only that,

she got her name mutated in the revenue records of the municipality

in respect of the suit premises after such purchase. Over and above,

letters of attornment were issued by the appellant upon the tenants

in the premises informing them of the sale of the suit premises.

Although, such appellant has denied having issued such letters but

at the time of cross examination, the appellant admitted his

signature on such letters. No explanation is offered on the part of

the appellant as to how his signature on the letters of attornment

was obtained. The ratio laid down in Ramji Dayawal & Sons
26

(supra) cannot render any to help the appellant at any stretch. The

appellant i.e. the propounder of the document himself admitted his

signature on the document nevertheless, no steps were taken by the

appellant to refute such document. The Hon’ble Supreme Court laid

down in the said case to the following effect:

“16. Incidentally it was urged by Mr Majumdar that even if
the court proceeds on the assumption that the letter and the
cable were received, it is not open to this Court to look into
the contents of the letter and the cable because the contents
are not proved as the Managing Director of the appellant
Company who is supposed to have signed the letter and the
cable has neither entered the witness-box nor filed his
affidavit proving the contents thereof. Reliance was placed on
Judah v. Isolyne Shrojibasini Bose [AIR 1945 PC 174: 1945
MWN 634: 26 PLT 279]. In that case a letter and two
telegrams were tendered in evidence and it was observed
that the contents of the letter and the telegram were not the
evidence of the facts stated therein. The question in that case
was whether the testatrix was so seriously ill as would
result in impairment of her testamentary capacity. To
substantiate the degree of illness, a letter and two telegrams
written by a nurse were tendered in evidence. The question
was whether in the absence of any independent evidence
about the testamentary capacity of the testatrix the contents
of the letter could be utilised to prove want of testamentary
capacity. Obviously, in these circumstances the Privy Council
observed that the fact that a letter and two telegrams were
27

sent by itself would not prove the truth of the contents of the
letter and, therefore, the contents of the letter bearing on the
question of lack of testamentary capacity would not be
substantive evidence. Undoubtedly, mere proof of the
handwriting of a document would not tantamount to proof of
all the contents or the facts stated in the document. If the
truth of the facts stated in a document is in issue mere proof
of the handwriting and execution of the document would not
furnish evidence of the truth of the facts or contents of the
document. The truth or otherwise of the facts or contents so
stated would have to be proved by admissible evidence i.e.
by the evidence of those persons who can vouchsafe for the
truth of the facts in issue. But in this case Bhikhubhai
Gourishankar Joshi who filed an affidavit on behalf of the
appellant has referred to the averments in the letter and the
cable. He is a principal officer and constituted attorney of the
appellant Company. Once the receipt of the letter and the
cable are admitted or proved coupled with the fact that even
after the dispute arose and before the suit was filed, in the
correspondence that ensued between the parties, the
respondent did not make any overt or covert reference to the
arbitration agreement and utter failure of the respondent to
reply to the letter and the cable controverting the averments
made therein would unmistakably establish the truth of the
averments made in the letter. What is the effect of averments
is a different question altogether but the averments contained
in the letter and the cable are satisfactorily proved.”

38. In both the decisions relied upon by the appellant, the Hon’ble

Supreme Court considered and laid down significance of the market
28

valuation of the property involved in the transaction as an attending

circumstance for determination of the nature of transaction as an

absolute sale or a mortgage by conditional sale. In both the

decisions, the Supreme Court found the valuation shown in the

document of transaction to be abysmally lower than the current

market rate of the properties involved in such transaction and on

such pretext, the Supreme Court held the transaction to be a

mortgage and not a sale. However, in the present case, the valuation

of the suit property described in the sale deed dated September 20,

1972 is more or less in consonance with the contemporary market

price of the demised property. Regard being had to the fact that the

suit premises was under the occupation of several tenants including

defendant No. 2, a condition which would surely tell upon the

valuation of a property.

39. The evidence led at the trial also shows that the appellant himself

was occupying a portion of the suit premises at the time of effecting

the alleged ostensible sale and he continued to be in such

occupation thereafter. After purchase and upon service of letters of

attornment, the purchaser i.e. defendant No. 2 started realizing

rents for the tenanted premises. Rent receipts were accordingly

issued by defendant No. 2. The appellant himself paid rent to
29

defendant No. 2. Ext. K and K1 are such rent receipts issued on

receipt of rent from the appellant. In his cross examination at the

trial, the appellant, in an answer to a question if he was paying

taxes for the suit property replied that the property was tax free. He

however, denied his knowledge that the suit premises stood mutated

in the name of defendant No. 2. He also admitted that the tenants in

the suit premises were depositing rent in the joint name of appellant

and defendant No. 2, with the rent controller and defendant No. 2

applied for withdrawal of such rent. No steps, in this regard appear

to have been taken on behalf of the appellant.

40. Besides that, the appellant initially came up with a case that the

defendants jointly cheated upon him by extracting money on the

ploy of hosing legal proceedings in the nature of criminal and tax

proceeding. He altogether denied having secured any loan from the

respondents. He lost all criminal proceedings in this regard, initiated

against the respondents, right up to this High Court. However later

on, the appellant admitted securing loan from the respondent,

firstly, on the strength of promissory note and thereafter by a

registered mortgage deed. At the trial, the appellant gave up his case

taken out in his pleadings with regard to cheating and fraud. Such
30

circumstances also cast a reasonable doubt on the veracity of the

case made out by the pleading.

41. Therefore, in the light of discussions made hereinabove, we are of

the opinion that the transaction involved in the ostensible sale deed

dated September 20, 1972 was an out and out sale. The

circumstances and the action subsequent to such deed do not

suggest that the deed was in the nature of a mortgage by conditional

sale. In such view of the facts, we find no reason to interfere with the

impugned judgment and decree and the same is affirmed.

42. Consequently, the appeals being F.M.A. 68 of 2001 and F.A. 225 of

2000 are disposed of, however, without any order as to costs.

43. Since the main matter is disposed of, nothing survives. Therefore,

connected application(s), if any, shall stand disposed of.

44. Urgent photostat certified copy of this judgment, if applied for, be

supplied to the parties on priority basis upon compliance of all

formalities.

[MD. SHABBAR RASHIDI, J.]

45. I agree.

[DEBANGSU BASAK, J.]