Gurdial Kaur and Others Vs Preminder Lal Dhingra and Another

V. Ratnam, C.J.@mdashThis appeal has been preferred by the legal representatives of deceased Defendants 1, 2 and 4 and by Defendant Nos. 3 and 5 against the judgment and decree in case No. 109/1 of 72 before the Sub-Judge (II), Shimla That suit was instituted by Sh. Malvinder Dhingra, praying for redemption of a mortgage deed dated 15-1-1953 and for recovery of possession of the mortgaged property and for an account of rents and Ors. sums received by the mortgagee from 7-1-1953 till delivery of possession is effected and also for payment of the surplus amounts that may be found due, after deduction of such amounts as might have been spent lawfully under the terms of the mortgage deed together with-interest. Mulvinder Dhingra, who instituted the suit, died during the pendency of the appeal and his legal representatives Preminder Lal Dhingra and Mrs. Indra Dhingra have been brought on record and they are the main contesting Respondents in this appeal. Briefly stated, the case of Shri Malvinder Dhingra, as set out in the plaint, is as under:

2. On 15-1-1953, the property known as Villa Nova main house, with furniture and fittings, pavilion rooms, rickshaw sheds, tennis courts and land measuring about 6624 sq. yards and 3 sq. feet was mortgaged by Shri Malvinder Dhingra to Shri S. Prem Singh, the predecessor-in-interest of the Appellants, for a sum of Rs. 26,000 and as the mortgage was with possession, no interest was stipulated. The further case of Malvinder Lal Dhingra, the mortgagor was that the mortgagee had realised by way of rents and income from the property, an amount far an in excess of what was advanced, together with interest at 7-1/2% and on the taking of the accounts, large amounts will be due to the mortgagor and no amount would be due on the mortgage. Referring to the conditions of redemption Shri Malvinder Dhingra stated that the period of mortgage was three years from 15-1-1953, i.e. 15-1-1956 and the mortgagor could pay the amount and redeem the property within a further period of two years i.e. by 15-1-1958 on payment of the full amount of the mortgage money. The further amount of Rs. 10,000 agreed to be paid by the mortgagee was not so paid and that rendered the condition of sale incorporated in the mortgage inoperative, besides being a clog on the equity of redemption, according to Shri Malvinder Dhingra. Stating that possession of the mortgaged property was delivered to S. Prem Singh on 7-1-1953 and that after his death, the Appellants remained in possession of the mortgaged property and realised rents, the mortgagor put forward the plea that the annual income by way of rents from the mortgaged property was over Rs. 6,000 and the taxes payable per annum amounted to Rs. 445.75 and interest at 7-1/2% per annum on Rs. 26,000 worked out to Rs. 1,950, and thus the mortgagor claimed that the mortgagee had received more than twice the amount originally advanced and a surplus of several thousands of rupees would be payable to the mortgagor, Malvinder Dhingra. In addition, the mortgagor also stated that he is ready and willing to pay any amount that the Court may find due and payable to the mortgagee. Referring to the induction of a tenant by the mortgagee, the mortgagor stated that the tenant had materially altered the structure and had also unauthorisedly and illegally put up some Ors. constructions on the tennis court and-had also closed the main passage to Villa Nova and the cottage and that had impaired the value and utility of the mortgaged property and that the mortgagor, Malvinder Dhingra is entitled to recover the possession not only from the mortgagee, but also from the tenant. Referring to the issue of notices dated 30-12-1957 and 11-7-1971, seeking redemption and the inaction of the mortgagee in that regard, the mortgagor prayed for the reliefs referred to earlier.

3. In the written statement filed on behalf of the successors-in-interest of the mortgagee, S. Prem Singh, they put forward the plea that the property stood sold to S. Prem Singh for a consideration of Rs. 36,000 since 15-1-1956, as the mortgagor Sh. Malvinder Dhingra failed to redeem the same within three years from the date of the mortgage. They also stated that the transaction was a sale for a consideration of Rs. 36,000, out of which Rs. 26,000 was paid to the mortgagor, Sh. Malvinder Dhingra, and the balance of Rs. 10,000 was agreed to be paid after the production of a duly registered partition deed with the brOrs. of the mortgagor, Sh. Baldoom Dhingra, with an option to the mortgagor that he could take back the property from the mortgagee within three years of the execution of the document. The mortgagor, Sh. Malvinder Dhingra, according to the Appellants, failed to do so and at best, he could recover the balance of Rs. 10,000, after complying with the condition, namely, production of a duly registered partition deed with the brOrs. of the mortgagor. The Appellants also stated that on and from 16-1-1956, they had become the owners of the property, exercising rights over it, in accordance with the terms of the deed dated 15-1-1953. Claiming that they had effected repairs and improvements to the mortgaged property at their expanse, the Appellants also pleaded that it was agreed that during the subsistence of the mortgage, the income and rents of the property, would be equal to the interest which was payable by the mortgagor, Sh. Malvinder Dhingra. Admitting that a portion of the premises had been let out to a tenant, the Appellants stated that it was so done by them, in their capacity as owners of the property. In the alternative, it was also contended that the act of letting the premises to the tenant was within the competence of the mortgagee and binding on the mortgagor. It was also stated that the tenant had expended considerable amounts in improving the property and the construction was put up by the tenant in the presence of the mortgagor Sh. Malvinder Dhingra and no objection was raised, as the mortgagor had treated the property as having been sold to the Appellants. Reiterating that the property stood sold to the Appellants, it was contended that the value of and income from the property was not more than that for which it was agreed to be sold and the mortgagor had treated it as having been sold, but that owing to a raise in the prices, the mortgagor Shri Malvinder Lal Dhingra had come forward with the suit for squeezing money out of the Appellants. The income from the mortgaged property as claimed by the mortgagor was also denied by them. The cause of action for the suit was also disputed. Even if the mortgage is held to be subsisting, according to the Appellants, the property was not liable to be redeemed till payment of Rs. 26,000. The Appellants also claimed that they cannot be prevented from realising the rents and profits of the property, as even according to the mortgagor, Sh. Malvinder Dhingra, the transaction was a mortgage with possession. Ultimately, the Appellants prayed for the dismissal of the suit. In the written statement filed by the tenant, it was stated that the Himachal Pradesh Motors took on lease the ground including the pavilion from Sh. Harcharan Singh, one of the sons of the mortgagee, for carrying on business and had invested large amounts for putting up-constructions and that had been done in the bona fide belief that the possession will not in any manner be disturbed. Stating that the improvements, alterations, etc. were carried out to the knowledge of the mortgagor, Sh. Malvinder Dhingra, and that he did not object to the same, the tenant also put forward a plea of waiver and estoppel A further plea was also put forward that the property stood sold to the mortgagee and the mortgagor did not have any locus standi to file the suit. Claiming that the additions, expansions etc. had improved the leraed premises, the tenant disputed the claim of the mortgagor that the value and utility of the property had been impaired. The tenant also prayed for the dismissal of the suit.

4. In the replication filed by the mortgagor, he reiterated the particulars of the mortgage as given in the plaint and denied that the transaction was a sale and that the Appellants had been exercising rights of ownership over the property. The mortgagor, Sh. Malvinder Dhingra, also stated that the Appellants are bound to deliver the possession of the property and that the tenancy created by the mortgagee would not be binding upon the mortgagor. The mortgagor also stated that he is entitled to redeem the property without payment of any amount. In the replication to the written statement filed by the tenant, the mortgagor stated that the tenancy created by the mortgagee is not binding on the mortgagor, on the redemption of the mortgage and as such, the tenant was bound to deliver possession of the property on redemption. The alleged consent of the mortgagor for effecting improvements or alterations in the mortgaged property, was disputed The utility and value of the property had been impaired by the acts of the tenant, according to the mortgagor. The mortgagor also stated that his right to redeem the property cannot be defeated on the ground of improvements, as such improvements were not carried out to preserve the property from destruction or keeping the mortgage amount secured. Reiterating the stand taken in the plaint, the mortgagor prayed for a decree in the suit, with reference to the reliefs prayed for therein.

5. On the basis of the aforesaid pleadings, the following issues were framed from trial:

1. Whether the property in dispute stood sold in favour of the pre-decessors-in-interest of the Defendant Nos. 1 to 6.

2. If issue No. 1 is found in the negative, then, whether the property in dispute, is redeemable without any payment.

3. Whether the Plaintiff is entitled to any account from the Defendants as alleged. If so, its effect.

4. Whether the suit is bad for the non-joinder of necessary parties and for impleading unnecessary party as alleged. If so, its effect.

5. Whether any improvements have been effected in the property in dispute, if so, by whom and its effect.

6. Relief.

6. The court below, on a consideration of the deed dated 15-1-1953, found that under the terms thereof, the mortgaged property was not sold in favour of the mortgagee or the Appellants herein and that having regard to the issue of notice by the mortgagor on 30-12-1957, claiming redemption, the mortgagor was entitled to redeem the property, as provided for in the deed itself. Adverting to the income from the property, the Court below found that the mortgagee had been in possession of the property for nearly 14 years and had also realised a sum of Rs. 56,000 and that was sufficient to recover the interest as well as the Ors. expenses incurred by tire mortgagee. It was also further held by the Court below that the mortgagor and the mortgagee should put in their claims regarding the expenditure and income before a Commissioner to be appointed for going into the accounts of the income from the property to ascertain how much of money has been received and how much had been spent Dealing with the tenancy created by the mortgagee and the improvements stated to have been effected by the tenant, the Court found that such improvements, as were claimed to have been made, were not essential for keeping the property in good condition and that no compensation can be claimed for the same. The mortgagees were held duty bound to return the property to the mortgagor in the same condition in which it had been mortgaged and that neither the Appellants nor the tenants, were entitled to any amount with reference to improvements effected by them. In accordance with the findings so given on the issues in the suit, the Court below passed a preliminary decree for redemption it is the correctness of this that is questioned in this appeal.

7. Learned Counsel for the Appellants, drawing attention to the terms of the deed dated 15-1-1953, contended that the cumulative effect of the several provisions the rein would unmistakably point out to the conclusion that the transaction was an out and out sale, with a condition for repurchase and not a mortgage by conditional of sale. To support this, counsel relied upon the several circumstances, like possession with the mortgagee, absence of any stipulation for payment of interest, the fixation of a short period for repurchase, payment of municipal taxes by the transferee, absence of a right in the transferee to claim refund of the consideration paid, the inability of the transferor to manage the property, which was depreciating in value and the retention of which was also a burden, desire to dispose of the property as such and the payment of Rs. 36,000 by way of consideration. Reference was also made by the counsel in this connection to the decisions reported in Hans Raj Vs. Mat Ram and Others, ; Puzhakkal Kuttappu Vs. C. Bhargavi and Others, Kameshwar Singh and Ors. v. Khaichow Singh and Ors. AIR 1973 Gau 43 and Nana Tukaram Jaikar Vs. Sonabai and Others, . It was also contended that there was nothing to show that the mortgagor had exercised his right to redeem the property in terms of the provisions under the deed dated 15-1-1953 and that there was no proof that the notice under Ex. P-6 had been issued by the mortgagor claiming redemption, as per the provision of deed dated 15-1-1953. Counsel also pointed out that no reliance could be placed upon the postcard Ex. P-7 to establish the service of notice under Ex. P-6 upon the mortgagee. Yet anOrs. contention put forward by the counsel was that the Court below fell into an error in fixing the interest payable at 7-1/2%, while it should have been atleast 2% above the bank rate. Refuting the contentions thus advanced, learned Counsel for the successors-in-interest of the mortgagor submitted that the nature of the transaction under the deed dated 15-1-1953, has to be determined on its terms and that the several provisions in the deed clearly indicated the subsistence of the relationship of mortgagor and mortgagee between the parties thereto and also the intention to charge or secure the property for the repayment of the amount advanced and the transaction would only be a mortgage by conditional sale at best and not an out and sale with a condition for repurchase. Adverting to the value of the property at the time when the deed dated 15-1-1953 was executed, counsel pointed out that even according to the evidence of the mortgagor, in the course of his cross-examination at the instance of the mortgagee, the value of the property in 1952 was two lacs of rupees and this clearly established that the intention of the parties was not to enter into a sale transaction, but only a mortgage, having regard to the amount advanced with reference to the property, the market value of which was over rupees two lacs, even then. In addition, attention was also drawn to the list of furniture and fittings mortgaged alongwith the house and counsel stated that value of all this was far in excess of Rs. 26,000 and the transaction was, on the terms of the dead, only a mortgage by conditional sale and not an out and out sale with a condition for repurchase. The absence of a stipulation with reference to payment of interest was explained by the counsel as due to possession having been admittedly handed over to the mortgagee even on 7-1-1953 and the right of the mortgagee to enjoy the rents and income in lieu of interest, and therefore, the absence of a provision, would not militate against the transaction being a mortgage by conditional sale. The payment of taxes by the mortgagor and the absence of a transfer of the property in the name of the mortgagee, in the municipal records were also relied upon to show that the transaction was only in the nature of mortgage by conditional sale. The minimum period of three years, during which under the terms of the deed dated 15-1-1953, the transaction should subsist as a mortgage, was also pressed into service to contend that the intention of the parties was to treat the transaction as a mortgage, providing for redemption within two years thereafter and this clearly indicated that the transaction was not a sale with a condition for repurchase, but only a mortgage by conditional sale. Referring to the terms of deed dated 15-1-1953 and the decisions report in Pandit Chunchun Jha Vs. Sheikh Ebadat Ali and Another, ; Bhaskar Waman Joshi (deceased) and Others Vs. Shrinarayan Rambilas Agarwal (deceased) and Others, ; P.L. Bapuswami Vs. N. Pattay Gounder, , learned Counsel submitted that when the language of the document is clear and there is no ambiguity, the nature of the document has got to be ascertained on its own terms and not on a consideration of any Ors. extraneous matters and viewed thus, the transaction under the deed dated 15-1-1953, would only be a mortgage by conditional sale and not a sale with a condition for repurchase. Learned Counsel also referred to the evidence of Sh. Malvinder Dhingra examined as PW 1 to contend that with reference to the service of the notice under Exs. P-6 to P-9, there was no cross-examination whatever thereon and that even according to DW 4, Ex. P-8 had been received, though no reply was given. Learned Counsel further submitted that the circumstances relied upon by the learned Counsel for the Appellants were not inconsistent with the transaction under the deed dated 15-1-1953, being a mortgage by conditional sale. The clause in the mortgage deed, prohibiting redemption beyond two years from 16-1-1956, was characterised by counsel as a clog on the equity of redemption, which should be relieved against. Attention in this connection was drawn to the decision reported in Om Parkash v. Jagat Ram 1971 HLR 361, R.F.A. No. 1 of 70; Smt. Ajudhia Devi v. Sh. Sohanu Ram and Ors., decided on 23-11-1974 and Pomal Kanji Govindji and Ors. v. Vrajlal Karsandas Purohit and Ors. 1989 SCC 458. Referring to the interest fixed at 7-1/2%, counsel contended that rate of interest as determined was in order under the provisions of Usurious Loans Act, as applicable to Punjab and that in the absence of any material to show what the bank rate was at the relevant time, there was no justification for fixing the interest at the rate higher than 7-1/2%.

8. Thus the main question that arises for determination is whether the deed dated 15-1-1953 is a mortgage by conditional sale or a sale with a condition for repurchase. In the context of considering this question, it is necessary to bear in mind certain well settled principles-laid down by Supreme Court in Chunchun Jha v. Ebadat Ali and Anr. (supra). The Court pointed out that where a document has to be construed, the intention must be gathered, in the first place, from the document itself and where the words are express and clear, effect must be given to them, avoiding any extraneous enquiry into what was thought or intended and the real question is what is the legal effect of the words used. In addition, the Court also pointed out that prima facie, an absolute conveyance, containing nothing to show that the relation of debtor and creditor existed between the parties, does not cease to be an absolute conveyance and become a mortgage, merely because a vendor stipulated that he shall have a right to repurchase and that the endeavour should be to ascertain, upon a fair construction, the meaning of the instrument. Referring to Section 58(c) of the Transfer of Property Act, the Court observed that 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, but-the fact that there is only one document, -does not necessarily mean that it must be a mortgage and cannot be a sale. It was also laid down that if the condition for repurchase is embodied in the document that effects or purports to effect the sale, then, it is a matter for construction as to what was meant and that as a clear cut classification had been made by the legislature, excluding the transactions embodied in more than one document-from the category of mortgages, it is reasonable to suppose that persons, who, after the amendment, choose not to use two documents, do not intend the transaction to be a sale, unless they displace that presumption by clear and express words and if the conditions of Section 58(c) of T.P. Act, are fulfilled, then, the deed should be construed as a mortgage. The distinction between a mortgage by a contional-sale and a sale with a condition for repurchase, has been very clearly brought out in the decision of the Supreme Court in Bhaskar Waman Joshi and Ors. (supra) in the following terms:

The question whether by the incorporation of a condition a transaction ostensibly of sale may be regarded as a mortgage is one of intention of the parties, to be gathered from the language of the deed interpreted in the light of the surrounding circumstances. The circumstance that the condition is incorporated in the sale deed must undoubtedly be taken into account, but the value to be attached thereto must vary with the degree of formality attending upon the transaction. The definition of a mortgage by conditional sale postulate the creation by the transfer of a relation of mortgagor and the mortgagee, the price being charged on the property conveyed. In a sale coupled with an agreement to reconvey, there is no relation of debtor and creditor nor is the price charged upon the property conveyed, but the sale is subject to an obligation to re-transfer the property within the period specified. What distinguishes the two transactions is the relationship of debtor and creditor and the transfer being a security for the debt. The form in which the deed is clothed is not decisive.

9. In P.L. Bapuswami Vs. N. Pattay Gounder, after making a reference to the passage extracted above, the Court stated that the question in each case is one of determination of the real character of the transaction to be ascertained from the provisions of the document, viewed in the light of the surrounding circumstances and if the language is plain and unambiguous, true legal effect must be given to it, in the light of the evidence of surrounding circumstances, but if there is an ambiguity in the language employed, the intention may be gathered from the contents of the deed with such extrinsic evidence permitted by law to be adduced to show in what manner the language of the deed related to existing facts. From the principles laid down in the decisions referred to, it follows that the approach, in deciding the nature of the transaction, should be to ascertain the intention of the parties from the terms of the deed itself, if the language is clear and unambiguous. In the background of the aforesaid principles, it now becomes necessary to refer to the terms of document in this case. The document runs as follows:

THIS DEED OF MORTGAGE made this 15th day of January, 1953 between Shri Malvinder Lal Dhingra son of Sh. Bihari Lal Dhingra presently of Shimla (and hereinafter called the Mortgagor which expression shall also include his heirs. Successors, administrators, executors and assigns) of the one Part and Sardar Prem Singh son of Sher Singh of Gobindgarh, Tehsil Fazilka, District Ferozepur (and hereinafter called the mortgagee, which expression shall also include his heirs, successors, representatives and assigns) of the Second part.

WHEREAS by an agreement dated 3rd December, 1952 between the parties abovenamed it was agreed that the Mortgagor after getting the estate known as Villa Nova situated in Boileauganj alias Tilak Nagar, Shimla, partitioned with his brOrs. who was part owner thereof and get the partition deed duly registered and completed and had also assured the Mortgagees that in a private partition one main house known as Villa Nova together with furniture and fittings as per list attached thereto together with Tennis Court, Pavilion Room, Rickshaw sheds etc. and land appurtenant had fallen into the share of the mortgagor of which the mortgagor would give possession to the mortgage on the mortgagee paying Rs. 3,000 as advance out of the total consideration of Rs. 36,000 on the security of the mortgaged premises on terms and conditions set therein and get the mortgage deed with a condition for sale embodied therein duly executed and registered by the 10th January, 1953.

WHEREAS the mortgagor has already delivered possession of the said premises to the Mortgagee on receipt of Rs. 3,000 but as he was not able to get partition deed with his brOrs. Mr. Baldoon Dhingra who i-5 residing in Paris executed, completed and registered before the said date.

WHEREAS by a supplementary agreement dated the 10th January, 1953, the period was extended to the 15th January, 1953.

WHEREAS the mortgagor has not yet been able to receive from his brOrs. the said Mr. Baldoon Dhingra a duly executed power of attorney for registration of the partition deed but has assured the mortgagee that under letter dated March 12, 1948 the mortgagor has full authority to deal with the property in such manner as he considers fit and after full consideration and mature thought the Mortgagor is satisfied that it is in the best interest of his family and his children to dispose of the Shimla property at a very early date and the mortgagee has agreed to advance a further sum of Rs. 26,000 (rupees twenty six thousand only) on the security of the said estate or of any Ors. property of the mortgagor and his brOrs. which falls into the share of the mortgagor shall remain charged with reduce mortgage money above stated on the terms and conditions herein set forth. If the mortgagee fails to pay the balance of Rs. 10,000 (rupees ten thousand only) on the mortgagor getting the partition effected the mortgagor shall have the right to redeem the property at any time and the condition of sale shall not operate.

NOW THEREFORE the parties above named agreed and covenant with each Ors. as under:

I. The mortgagor has received Rs. 3.000 (rupees three thousand only) by draft No. CK 22553 on the Imperial Bank of India, Shimla, out of the consideration of this deed which he hereby acknowledges and has delivered possession of Villa Nova main house with tennis court, pavilion room, rickshaw sheeds etc. furniture and fittings etc. as per list attached together with land measuring about 6624 sq. yds. and 3 sq ft. to the mortgagee as from the 7th January, 1953, and the mortgagee hereby admits he has taken possession of the said property.

The sum of Rs. 3,000 has been advanced for purchase of stamp expenses, registration and the expenses necessary for execution, registration and completion of the partition deed and for the formal finalisation of the partition, mutation etc.

II. The total consideration of this transfer shall be Rs. 36,000 (rupees thirty six thousand only) payable as follows:

(a) Rs. 3,000 already paid as above.

(b) Rs. 23,000 (rupees twenty three thousand only) to be paid at the time of registration of this deed before the Sub-Registrar for the purpose of the share in the company started as Dhupia and Co. in which the Mortgagor will be a Director and partner.

(c) Rs. 10,000 (rupees ten thousand only) payable within three months from the date of registration of the deed, on the Mortgagor getting the partition deed with his brOrs. executed, registered and completed so as to secure exclusive property hereby mortgaged. In case this is not done within the said period of three months by the mortgagor this sum of Rs. 10,000 will not be payable and the transfer shall be deemed to be a transfer of the share of the mortgagor in the entire-estate known as Villa Nova Estate for a total sum of Rs. 26,000 (Rupees twenty thousand only) all Ors. terms remaining the same.

The amount is required by the mortgagor for the higher education of his son Prem Inder Dhingra. The said Prem Inder Dhingra has signed in token of his consent.

III. The property mortgaged consists of Villa Nova main house, with furniture and fittings etc. pavilion room, rickshaw sheds, tennis court and land measuring about 6624 sq. yards and 3 sq. ft. shown and marked in red in the plan attached hereto together with furniture and fittings listed in the schedule attached herewith.

The Khasra Nos. of the entire estate are:

Khasra No. 8/10 Khatauni No. 37 Khasra Nos. 55, 55/1, 55/2, 55/3. 55/4, 55h, 55/6, 55/7, 55/8, 55/9, 55/10, 55/11, 55/12, 55/13, 55/14 in the jamabandi 1950-51.

The estate known as Villa Nova was gifted to Sir B.L. Dhingra by His Highness the late Maharaja of Jind State and half share therein was given to the Mortgagor and half to his brOrs. by the will of late Sir B.L. Dhingra, the father of the mortgagor duly acted upon and as such is the self- acquired property of the Mortgagor. Mortgagor''s brOrs. is in service in UNESCO France can neither manage nor look after this property which is fast depreciating in value. He as well as the Mortgagor find that the retaining of this estate is a burden rather than assest to the family. Mortgagor''s Ors. valuable property is in Jind and his business is in Delhi. It is in the best interest of the mortgagor''s family to dispose of the Shimla property and invest money received thereby in promising business enterprise and education of the children.

The mortgagor''s brOrs. has in a family arrangement and private partition agreed to divide the estate in such manner as to allocate the mortgaged property to the mortgagor''s share as Ors. wise purchasers are not prepared to advance such amount on the security of the undivided share or divided share as does not include the main house with all its appurtenances as one component property This property has, wherefore, been with the consent and on the representation of Shri Baldoon Dhingra entered in the Municipal Records as the exclusive property of the Mortgagor.

IV. That the period of the mortgage shall be at least three years commencing from the date of these presents and the mortgagor shall have right to have the property redeemed and reconveyed to him during his period.

On the termination of three years, the mortgagor may pay the amount of the mortgage within a further period of two years, that is before the 10th January, 1958, and on repayment of full amount of the mortgage money and all costs and Ors. charges that he due hereunder, he shall be entitled to have the mortgaged property and every part thereof redeemed and reconveyed to him by the mortgagee but at his own costs and expenses.

The mortgagee shall not have the right to demand repayment of the mortgage money or any part thereof before the 10th January, 1958 and if the said mortgage money or any amount thereof remains unpaid on or after the 10th January, 1958 whether repayment of the same had been demanded or not, then in that event the whole of the mortgaged property shall be deemed to have been sold and conveyed by the mortgagor to the mortgagee for the amounts of the mortgage money or any part thereof that may then be remaining unpaid and the mortgagor shall be deemed to have lost and forfeited all right to repay the mortgage or to claim redemption or reconveyance of the mortgaged property and the mortgagee shall become the absolute owner of the mortgaged property and the mortgagee shall have the right to have the mortgaged property declared sold to him by appropriate proceeding in a Court of Law.

This clause shall not operate it the mortgagee fails to pay the balance of Rs. 10,000 on the mortgagor getting the partition deed execute and registered by his brOrs. .

V. That the property hereby mortgaged has come to the share of the mortgagor by a private and informal partition with his brOrs. Sh. Baldoon Dhingra and partition has to be finalised by means of a formal document to be executed between the mortgagor and his brOrs. Sh Baldoon Dhingra. The mortgagor will take early steps to have the partition finalised either privately or through a Court of law and will have as his share by partition the portion of the property that has been mortgaged hereunder to the mortgagee and any amount payable therefore for equalisation of the two divided share shall be paid by the mortgagee. If the mortgaged property or any part thereof falls to the share of Mortgagor''s brOrs. the abovenamed Baldoon Dhingra then in that event the property or portion thereof that falls to the share of the mortgagor on partition shall be deemed to have been mortgaged to the mortgagee in place of the mortgaged property abovementioned in place of the mortgaged property abovementioned and all terms and conditions of this deed shall apply to the said divided property or portion that may have fallen to the share of the mortgagor to same extent and degree as if the said divided share had been originally mortgaged hereunder as security for the mortgage amount and the mortgagee shall be entitled to possession of the said divided share.

VI. That the mortgagor shall pay and clear all taxes or arrears of taxes and Ors. charges in respect of the mortgaged property that may be due up to the end of 1952 and the mortgagee shall have no liability or responsibility to pay the same.

In future and during the term of the mortgage hereby created, the mortgagee shall pay the Municipal Taxes and any Ors. taxes that may be levied hereafter except property tax which shall be paid by the mortgagor.

If the mortgagor fails to pay any taxes that may have been due up to end of 1952 or the property tax as heretofore provided and the mortgagee is obliged to pay any such taxes or arrears in order to save the mortgaged property or any part thereof, from sale for recovery of such unpaid taxes or arrears, in such event the amount so paid by the mortgagee shall be further charge on the mortgaged property and shall be recoverable separately also by the mortgagee from the mortgagor personally and the property hereby mortgaged shall not be liable to redemption until such amount has also been paid by the mortgagor to the mortgagee.

VII. That the mortgagor shall be responsible to carry out any repairs and make any replacements that may be needed to or in the mortgaged property to its outside, but it shall be the responsibility of the mortgagee to keep the inside of the property and all furniture and fittings therein in proper condition and repair. The garden attached to the house will also be maintained by the mortgagee. The mortgagor shall carry out all reasonable outside repairs required to the Estate to put them in fit and proper condition within one month of this deed. Thereafter reasonable repairs to the outside will be carried out by the mortgagor and if he fails to carry out the same in spite of the notice of the mortgagee, he the mortgagee shall have them executed at his own costs and add the same to the mortgage value or recover them separately. The mortgagee will not be liable for ordinary wear and tear of the furniture and fittings which shall be maintained at his own costs.

VIII. That on repayment of the mortgage money and Ors. amounts and charges payable by the mortgagor hereunder within two years after the first three years of mortgage, all the rights and interest created hereby in favour of the mortgagee shall have automatically become fully satisfied and extinct and the mortgagor shall have the right to have the mortgaged property and every part thereof recovered to him at his own cost ; Ors. wise he shall have no right or interest in the said property.

IX. That the mortgagor hereby assures the mortgagee that the property mortgaged is his exclusive property which he has a right to mortgage and there is no charge or encumbrance thereon. The mortgagor has shown the title deeds to the mortgagee and the son of the mortgagor has signed this deed in token of their consent and will hand over the title deeds to the mortgagee alongwith the partition deed duly executed and registered:

(i) Gift Deed.

(ii) Will copy.

(iii) Municipal Record.

(iv) Certificate copy of birth entry.

(v) Copy of letter dated 12-3-1948.

The last three documents will be delivered at the time of registration.

10. The deed at the out-set mentions that it is a deed of mortgage and that Shri Malvinder Dhingra is the mortgagor and S Prem Singh is the mortgagee. The description adopted in the document as a mortgage or the reference to the parties as mortgagor and mortgagee, is not decisive or conclusive. In the second paragraph of the document, it is clearly stated that S. Prem Singh would pay Rs. 3,000 as advance out of the total consideration of Rs. 36,000 on the security of the mortgaged premises. The bargain between the parties is thus expressed to be one of advance of a total amount of Rs. 36,000, as part of which Rs. 3,000 was advanced, but whole of it on the security of the mortgaged premises. This, in oar view, brings about between Malvinder Dhingra and S. Prem Singh, the relationship of debtor and creditor and the amount being charged or secured over the property. It is also significant that the parties intended to get the mortgage deed executed with a condition for sale embodied therein duly executed and registered on 10-1-1953. The circumstance that both the transactions are included in the same document and not in two, would also raise a presumption that the parties had not intended the transaction to be a sale. It may also be pointed out that the terms of the document do not by clear and express words displace the presumption.

11. The deed also recites that possession had been delivered to the mortgagee on receipt of Rs. 3,000. Though this may indicate that there was transfer of possession and that may also support a sale, that cannot be so construed, in view of the admitted case of the parties to the effect that possession of the property was given on 7-1-1953 and that the receipt of rents and profits by the transferee should be towards interest. From paragraph 2-h of the plaint, it is seen from the possession of the property and the realisation of the rents therefrom, by the Appellants, is accepted. DW 4 Shri Ujjagar Singh accepted that for a period of five years, the income of the property and the interest was to be equally balanced. This would indicate that in respect of the interest on the amount advanced, possession was given to the transferee to enable him to collect the rents and profits in lieu of interest. The absence, therefore, of any stipulation for payment of interest in the deed dated 15-1-1953, cannot be taken advantage of to contend that the transaction was a sale and not a mortgage Thus neither the handing over of the possession to the transferee nor the absence of any stipulation for the payment of-interest, would support the transaction as one of-sale. In addition, though it has been stated in the deed dated 15-1-1953 that it is in the best interest of the family of Sh. Malvinder Lal Dhingra and his children to dispose of the Shimla property, that at best would establish that such disposal was contemplated in the interest of the family, though not given effect to. Likewise, the term that Sh. Malvinder Lal Dhingra and his brOrs. had found the retention of the property to be a burden lather than an asset to the family, is again only an indication of their disposition-to this property and cannot be construed as manifestation of an intention to sell the property under the terms of the deed. Similarly, the recital that it would be in the best interest of the family of the mortgagor to dispose of the Shimla property and invest the money received thereby in promising business enterprise and education of the children is again reflective of what was conceived to be in the interests of the family and not for the disposal of the property by a sale. That the intention was to secure the amount advanced, is also clearly established by the provision relating to substituted security, in that any Ors. property, falling to the share of Malvinder Lal Dhingra, was agreed to remain charged with reduced mortgage money. From this provision, it is manifest that the predominent intention of the parties was only to enter into a relationship of debtor and creditor, with creation of a charge and security over the property of the debtor, for the repayment of the amount advanced. With reference to the value of the property also, it is seen from the evidence of PW 1 in cross-examination that even in 1952, this property could have been sold for rupees two lacs, as one S. Bahadur Sohan Lal wanted to purchase this property for that amount. He had also denied the suggestion that the redemption suit had been filed on account of the increase in the property value. That the relationship of debtor and creditor was brought into being is also clear from the recital in the document regarding consideration. A sum of Rs. 3,000 had been paid already and anOrs. sum of Rs. 23,000 was to be paid at the time of the registration for the purpose of securing shares in a Dupia and Co., in which Malvinder Dhingra was to be a Director and a partner. Though this is so stated, there is also the Ors. recital that the amount is required by Sh. Malvinder Lal Dhingra to meet the expenses of the higher education of his son Prem Indar Dhingra, who had also signed the documents. Yet anOrs. recital in document is to the effect that the money is to be invested in business enterprise and the education of the children. PW 1 stated that the property was mortgaged, as he was in need of money and that was why he took the loan. This would also establish that though the property alongwith furniture and fittings was worth much more even in 1953, Shri Malvinder Lal Dhingra was obliged to borrow loans and to secure the repayment, the property had been charged, under the deed. It is also significant that the property was an extensive and valuable one, worth atleast rupees two lacs and something more, along with fittings and the loan advanced was only Rs. 26,000 indicating that the transaction could not have been intended as a sale, particularly in the absence of any evidence on the side of the Appellants to show the market value of the property on 15-1-1953. That the parties intended the security and the income there from should be available to S. Prem Singh, atleast for three years, without any impediment, is established by the provision to the effect that Sh. Malvinder Lal Dhingra shall not have right to have the property redeemed and reconveyed during the three years period. The provision to the effect that within two years, after the expiry of three years, on repayment of full amount of mortgaged money, the mortgaged property could be got back by Malvinder Lal Dhingra or Ors. wise it is lost to him, in our view, is not determinative of the transaction being a sale, particularly in view of that provision being in the nature of a clog on the equity of redemption, which will be referred to a little later also. Under the terms of the deed, provision has been made for payment of all taxes and arrears of taxes and Ors. charges by Sh. Malvinder Lal Dhingra upto end of 1952 and that S. Prem Singh will not in any manner be liable or responsible for such payment. However, it is seen that this again is not conclusive, as under the terms of the document, possession had been delivered on 7-1-1953 to S. Prem Singh and he was at liberty to collect rents and profits and from out of that, in the ordinary course, the taxes should be paid by him. That explains the reason for the provision that Shri Malvinder Lal Dhingra was responsible for the payment of taxes upto the end of 1952. Even thereafter, under the terms of the deed, during the terms of the transaction, S. Prem Singh should pay the municipal taxes and Ors. taxes, except the property tax, which shall be paid by Sh. Malvinder Lal Dhingra. This is hardly consistent with the transaction being a sale, as in that event, the registry should have been transferred in the name of S. Prem Singh and he should have paid the property tax, as well. Yet anOrs. provision in the deed is to the effect that in the event of Sh. Malvinder Lal Dhingra not paying the taxes due upto 1952 and S. Prem Singh, is obliged to pay such taxes, then, the amounts so paid, would be a further charge on the mortgaged property and the property shall not be liable to be redeemed, until that amount was also paid by Sh. Malvinder Lal Dhingra. Obviously, this provision was intended to preserve the security for the benefit of S. Prem Singh, as in the event of non-payment of taxes, the security was likely to be lost and this situation had also been contemplated by the provision to the effect that any payment made by S. Prem Singh, to save the property, would be a charge on that property. This again shows that S. Prem Singh was enabled to have the benefit of the security, by payment of the taxes upto 1952, even in the event of non-payment of this by Sh. Malvinder Lal Dhingra. Even as regards the carrying out of the repairs, if the transaction was one of sale, as claimed by the Appellants, it is difficult to appreciate how Shri Malvinder. Lal Dhingra was responsible for repairs and replacement with reference to the outside of the property. The provision with reference to the carrying out of the repairs in the inside of the property by S. Prem Singh and the furniture and fittings therein would also show that being in possession of the property and having a security thereon, he was obliged to keep that property in good condition and repairs, so as to enable the realisation of rents and profits therefrom. Thus the stipulation regarding the payment of taxes also does not establish the transaction to be a sale. Though under the document, no right has been conferred on S. Prem Singh to claim a refund of the amount advanced by him, that does not make out the transaction to be one of sale, as under the document, it had been provided clearly that Sh. Malvinder Lal Dhingra will pay the amounts secured as well as the Ors. charges payable, within two years, after the first years, in which event, the right of S. Prem Singh will become extinguished and Sh. Malvinder Lal Dhingra will be entitled to the property secured. In the event of the failure of Sh. Malvinder Lal Dhingra to do so, it bad been provided that he shall lose his right or interest in the property. The absence therefore of a provision regarding the right of S. Prem Singh to claim a refund of amounts is immaterial. Thus, on a consideration of the different terms of the deed, it is at once clear that the relationship of debtor and creditor has been brought into being between Sh. Malvinder Lal Dhingra and S. Prem Singh and the latter was to retain the property and possession thereof as security for the repayment of the amount advanced to Shri Malvinder Lal Dhingra. The several circumstances relied on by the learned Counsel for the Appellants, considered in the light of the terms in the deed, would not establish that the parties intended a sale and not a mortgage by a conditional sale. As pointed out by the Supreme Court in Pandit Chunchun Jha Vs. Sheikh Ebadat Ali and Another, it is a fruitless task to consider numerous decisions on the question whether a transaction is a mortgage by conditional sale or a sale out right with a condition for repurchase because two documents are seldom expressed in identical terms and each case must be decided on its facts, though certain broad principles may remain. In view of this, we are relieved of the necessity of referring to the several decisions relied upon by the learned Counsel for the Appellant, as, the decision in this case is rested on the terms of the deed dated 15-1-1953 and the decisions referred to were rendered on the basis of the terms and conditions contained in the document in each of those cases.

12. The argument that Ex. P-6 and Ex. P-7 have not been established to have sent by Sh. Malvinder Lal Dhingra seeking redemption, has no force. Ex. P-6 is the first notice dated 30-12-1957 issued on behalf of Sh. Malvinder Lal Dhingra seeking redemption and it is not in dispute that this demand for redemption had been made within two years after the expiry of three years period. Ex. P-7 is a post-card by the counsel, who issued notice on behalf of Shri Malvinder Lal Dhingra and the issue of that notice as well as the receipt of the letter, had been referred to in the evidence of PW 1. That however, has not been, in any manner questioned by the Appellants in the course of the cross-examination of PW 1. It has, therefore, to be taken that under Ex. P-6 served on S. Prem Singh as shown by Ex P-7, the claim for redemption had been made before the rights of Shri Malvinder Lal Dhingra became extinguished under the terms of the deed dated 15-1-1953. Even Ors. wise, the provision to the effect that if Sh. Malvinder Lal Dhingra did not redeem the property, within two years, after the expiry of the first three years, he shall lose his right or interest in the property, would be in the nature of a clog in the equity of redemption. In Murarilal since deceased and after his death his newly substituted legal representatives Umedi Lal and Ors. v. Devkaran since deceased and after his death his legal representatives, Murarilal Vs. Dev Karan, a provision to the effect that failure to redeem the property, within a period of 15 years, would amount to a clog on the equity of redemption. In this case also, if Sh. Malvinder Lal Dhingra was unable to pay the amount within two years, after the expiry of three years period, and the mortgage amount had thus remained unpaid, his title would be extinguished and S. Prem Singh would become absolute owner of the property. In the light of the decision of the Supreme Court, referred to earlier, such a provision would clearly be a clog on the equity of redemption. It would also be relevant at this stage to refer to 1971 HLR 361 (supra) where it was held that a condition in a mortgage deed that mortgagor would be entitled to redemption within ten years and not thereafter, was held to amount o a clog on the equity of redemption. In so holding, the court had applied the decision reported in Murarilal Vs. Dev Karan, We are of the view that the same considerations would apply even in respect of Clause VIII in the dleed dated 15-1-1953. We may also maka a reference to decision in R.F.A. No. I of 70, Smt. Ajudia Devi v. Sh. Sohnu Ram and Ors., decided on 23-11-1974, where a condition in a mortgage deed that the mortgagor shall redeem the property within the stipulated period of three years, failing which the mortgagee would become the owner of the property, was held to be in the nature of a clog on the equity of redemption and the court has power to relieve the party from a bargain, which has the effect of forfeiting the mortgagor''s right to redeem We may also in this connection refer to 1989 SCC 458 (supra) where it was pointed out that the statutory right of redemption conferred u/s 60 of the Transfer of Property Act, is an incident of a subsisting mortgage and it is the right of the mortgagor, on redemption, to get back the subject of the mortgage and if he is prevented from doing so, the equity of redemption is affected and such a clog is inequitable, bad in law and void and the Court will ignore any contract, the effect of which is to deprive the mortgagor of his right to redeem the mortgage. In the light of the decisions referred to above, the provision in the deed dated 15-1-1953, totally debarring Sh. Malvinder Lal Dhingra from redeeming the property beyond two years after the expiry of first three years, thus depriving him of his interest and title in the property, would be in the nature of a clog on the equity of redemption and has to be ignored. Even as regards the tenancy created by the Appellants in favour of second Respondent, the Supreme Court in the decision referred to above has pointed out that unless the lease specifically makes an exception in favour of the tenant that he or she can continue in possession even after the expiry of the termination of the lease and those leases were acts of prudent management, the tenant inducted by the mortgagee, would not be entitled to protection under the Rent Act after redemption, merely because the mortgage deed authorises the mortgagee with possession to induct a tenant. The court also further observed that any authorisation of the mortgagee, would not enable the creation of a tenancy binding on the mortgagor, after redemption of the mortgage and a tenant inducted by a mortgagee with possession, when the tenancy of that tenant is not binding on the mortgagor, after the redemption of the mortgage is not protected under the provisions of the Rent Control Act.

13. The argument that the interest had been reckoned at 7-1/2%, while in fact it should have been higher, cannot be accepted. Indeed in R.F.A. No. 1 of 70 (supra) this identical question had been considered and decided and the court had upheld the fixation of the interest at 7-1/2% as permissible rate of interest. Though it was stated that the rate of interest should be 2% more than the bank interest, no material was placed before us to show what the bank interest was at the relevant time and we are also not satisfied that the Appellants are entitled to a rate of interest higher than 7-1/2%.

14. That leaves for consideration the application in C.M.P. No. 82/ 94 filed by the Appellants under Order 41, Rule 27, CPC for reception of additional evidence The additional evidence now sought to be let in comprises of documents to establish the prevailing market value of similar properties in or around the area, where the mortgaged property is situate, at the time of entering into the deed dated 15-1-1953 The only reason put forward is that the documents could not be produced during the course of the trial of the suit on account of the fact that no proper guidance was given to them and the Petitioners were not aware of the intricacies of law. This application has been opposed on the ground that the requirements of Order 41, Rule 27, CPC have not been satisfied and that these documents should have been produced even at the earlier stage of the suit, as it is not in dispute that they were available even then. The reasons put forward for the earlier non-production were also seriously disputed. Counsel also referred to the decision reported in S. Rajagopal Vs. C.M. Armugam and Others, to contend that in order to properly prove the documents, oral evidence has to be recorded and an opportunity has also be given to the Ors. side and that cannot be done after lapse of seventeen years after the institution of the suit. We have carefully considered the contents of the petition and we are unable to hold that the Petitioner had made out a case for reception of additional evidence under Order 41, Rule 27, CPC As rightly pointed out by the learned Counsel for the Respondents, the matter had been pending before this Court for almost of 16 years and only on 5 4-1994 an application had been filed and the documents, if admitted, would require to be formally proved and an opportunity has to be given to the opposite party to contradict the same and at this belated stage, we are not inclined to permit the reception of additional evidence, especially when the requirements of Order 41, Rule 27, CPC have not been satisfied. That application is, therefore, dismissed.

15. Thus on a due consideration of the terms of Ex. P-2 dated 15-1-1953, and the Ors. evidence available on record, we hold that Ex. P-2 is only a mortgage by a conditional sale u/s 58(c) of the Transfer of Property Act and not a sale with a condition for re-purchase and a preliminary decree for redemption was rightly granted in the suit filed by late Sh. Malvinder Lal Dhingra. Consequently, the appeal fails and is dismissed with costs of Prem Indar Dhingra and Mrs. Indra Dhingra, Respondents (1-a) and (1-b) in the appeal. Counsel''s fee Rs. 2,500.

29th July, 1994 (A)

This judgment is being signed and pronounced by one of us (A.L. Vaidya, J.) because the Ors. member of the Bench Hon''ble V. Ratnam, C.J., is not available on his appointment as Governor, Himachal Pradesh, on 10th July, 1994, and demitting his office of C.J. on 31st July, 1994. However, in his capacity as C.J. his lordship has agreed to the judgment and consented to its pronouncement.