Case Note & Summary
The respondent/plaintiff filed a suit for declaration that a document dated 05.06.1953, styled as an agreement of sale (Isar Pawati), was actually a mortgage deed, and for possession of the suit land. The plaintiff's father, Narayan, was in dire need of money and approached the defendant, Bhivsen, who was a money lender without a license. The defendant lent Rs. 875/- but took the document as security. The plaintiff contended that the transaction was a loan and the document was a mortgage by conditional sale. The defendant claimed it was an outright sale. The trial court decreed the suit, holding the document to be a mortgage, and the lower appellate court confirmed the decree. In second appeal, the High Court examined the document, the conduct of the parties, and the surrounding circumstances. The court noted that the defendant was a money lender, the consideration was inadequate, and the plaintiff's father remained in possession of the land. The court held that the concurrent findings of the lower courts were based on proper appreciation of evidence and did not warrant interference. The appeal was dismissed with costs.
Headnote
A) Transfer of Property Act - Mortgage vs. Sale - Construction of Document - The court considered whether a document styled as 'Isar Pawati' (agreement of sale) was in fact a mortgage by conditional sale. The court examined the intention of the parties, the conduct of the parties, and the surrounding circumstances to determine the true nature of the transaction. Held that the document was a mortgage and not an agreement of sale, as the plaintiff's father was in dire need of money, the defendant was a money lender, and the possession was delivered as security for the loan. (Paras 2-10)
B) Evidence Act - Burden of Proof - Onus on Party Asserting Mortgage - The court held that the burden of proving that a document is a mortgage lies on the party asserting it. However, in this case, the plaintiff successfully discharged the burden by showing that the defendant was a money lender, the consideration was inadequate, and the possession was delivered. The concurrent findings of the lower courts were based on proper appreciation of evidence. (Paras 5-8)
Issue of Consideration
Whether the document dated 05.06.1953 is an agreement of sale or a mortgage deed.
Final Decision
The second appeal is dismissed with costs. The judgment and decree of the lower appellate court confirming the trial court's decree are upheld.
Law Points
- Construction of document
- mortgage vs. agreement of sale
- intention of parties
- conduct of parties
- burden of proof
- Section 58 of Transfer of Property Act
- 1882
Case Details
2013 LawText (BOM) (08) 20
Second Appeal No. 317 of 1990
Shri M. D. Joshi for Appellants, Shri Anand Bhandari for Respondent
Sakharam Bhivsan Dhale (died through L.Rs.) and others
Parasram Narayan Shahagadkar
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Nature of Litigation
Civil suit for declaration that a document is a mortgage and for possession of land.
Remedy Sought
Plaintiff sought declaration that document dated 05.06.1953 is a mortgage deed and not an agreement of sale, and for possession of suit land.
Filing Reason
Plaintiff's father Narayan borrowed Rs. 875/- from defendant Bhivsen, a money lender, and executed a document styled as agreement of sale. Plaintiff claimed it was actually a mortgage.
Previous Decisions
Trial court decreed the suit on 29.01.1985, holding document as mortgage. Lower appellate court confirmed the decree on 31.07.1990.
Issues
Whether the document dated 05.06.1953 is an agreement of sale or a mortgage deed.
Submissions/Arguments
Appellants argued that the document was an agreement of sale and the transaction was a sale, not a mortgage.
Respondent argued that the document was a mortgage by conditional sale, as the father was in need of money and the defendant was a money lender.
Ratio Decidendi
The court held that the document dated 05.06.1953, though styled as an agreement of sale, was in fact a mortgage by conditional sale. The intention of the parties, the conduct of the parties, and the surrounding circumstances, including the fact that the defendant was a money lender and the plaintiff's father was in need of money, indicated that the transaction was a loan with possession of land as security. The concurrent findings of the lower courts were based on proper appreciation of evidence and did not warrant interference in second appeal.
Judgment Excerpts
This is defendants' second appeal against the judgment and decree dated 29.01.1985 passed by the 02nd Joint Civil Judge Junior Division, Jalna in R.C.S. No. 38/1977, whereby the suit filed by the respondent/plaintiff was decreed with a declaration that the document dated 05.06.1953 was not an agreement of sale, but a mortgage document and consequently for possession which was confirmed by the lower Appellate Court by its judgment and decree dated 31.07.1990 passed by the IInd Additional District Judge, Jalna in R.C.A. No. 74/1985.
The respondent/plaintiff brought a suit R.C.S. No. 38/1977 against Bhivsen, the original defendant whose legal representatives are the appellants herein for declaration that the document dated 05.06.1953 is not an agreement of sale, but a mortgage deed and for possession of land Sy. No. 43 area 4 A 20G of village Ghankheda, Tq. Jafrabad, Dist. Jalna.
Procedural History
The plaintiff filed R.C.S. No. 38/1977 in the court of 02nd Joint Civil Judge Junior Division, Jalna, which was decreed on 29.01.1985. The defendants appealed to the IInd Additional District Judge, Jalna in R.C.A. No. 74/1985, which was dismissed on 31.07.1990. The defendants then filed the present second appeal in the High Court.
Acts & Sections
- Transfer of Property Act, 1882: Section 58
