TMI Blog1999 (3) TMI 655X X X X Extracts X X X X X X X X Extracts X X X X ..... land in dispute, namely, an area of 4.04 acres, the entire land is in possession of the plaintiff. Defendant No. 2 was the owner of the whole Plot No. 15. On 24th of March, 1971, he executed a document styled as Kararkharedi in favour of defendant No. 1 for a sum of ₹ 1500 and delivered possession thereof to the latter. There was a stipulation in the document that if the entire amount of ₹ 1500 was returned to defendant No. 1 before 15th of March, 1973, the property would be given back to defendant No. 2. 4. This land was subsequently transferred by defendant No. 2 in favour of the plaintiff for a sum of ₹ 5,000 by a registered sale deed dated 19.6.1973. After having obtained the sale deed, the plaintiff filed the aforesaid suit in which it was given out that defendant No. 2 had offered the entire amount to defendant No. 1 but the latter did not accept the amount and, therefore, defendant No. 2 had to send it by money order on 7.6.1973 which was refused by defendant No. 1. A notice, dated 5.6.1973, had also been sent by defendant No. 2 to defendant No. 1. It was pleaded that since the document, executed by defendant No. 2 in favour of defendant No. 1, was a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... endant-1 on the mortgage mentioned in the plaint dated 24-3-71 is ₹ 1500/-. It is further ordered and decreed that the plaintiff to pay into court on or before 29-10-75 or any later date into which time for payment may be extended by the Court the said sum of ₹ 1500. That on such payment and on payment thereafter before such date as the Court may fix of such amount as the Court may adjudge due interest as may be payable under Rule 10, together with such subsequent interest as may be payable under Rule 11 of the Order 34 of the first schedule to the CPC 1908, the defendant-1 shall bring into Court all documents in his possession or power relating to the mortgage property in the plaint mentioned and all such documents shall be delivered over to the plaintiff or to such person as he appoints, and the defendant-1 shall, if so required, reconvey or retransfer the said property from the said mortgage and clear of and from all encumbrances created by the defendant-1 or any person claiming under him or any person under who he claims, and free from all liability whatsoever arising from the mortgage or this suit and shall, deliver up the plaintiff quiet and peaceful possession ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re perverse which could be set aside under Section 100 C.P.C. He also contended that the document of title in favour of defendant No. 1 was misread as a mortgage deed although it constituted an out and out sale. Moreover, on the commission of default, as contemplated by the document in question, the whole transaction, even if it was a mortgage, converted itself into an absolute sale as agreed upon between the parties. The sale having thus become absolute in favour of defendant No. 1, no title was left in defendant No. 2 to convey it to the plaintiff through the sale deed in question. 11. Let us examine the respective contentions. Beginning with the pleadings, defendant No. 2 in his written statement filed before the Trial Court, admitted the claim of the plaintiff. 12. Annexure P-III to the Special Leave Petition is the true translation of the copy of written statement filed by defendant No. 2 in the suit. It reads as under: IN THE COURT OF HON'BLE CIVIL JUDGE SENIOR DIVISION BULDANA: R.C. S.No. 195/73 F.F Plaintiff : Vidhyadhar Vishnupant Ratnaparkhi - v. - Defendant: (1) Manikrao Babarao Deshmukh (2) Pandu Ganu Bhalerao WRITTEN STATEMENT OF DEFENDANT NO. 2 P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aragjit Carpenter v. Narsingh Nandkishore Rawat also followed the Privy Council decision in Sardar Gurbakhsh Singh's case (supra). The Allahabad High Court in Arjun Singh v. Virender Nath and Anr. held that if a party abstains from entering the witness box, it would give rise to an inference adverse against him. Similarly, a Division Bench of the Punjab Haryana High Court in Bhagwan Dass v. Bhishan Chand and Ors. , drew a presumption under Section 114 of the Evidence Act against a party who did not enter into the witness box. 17. Defendant No. 1 himself was not a party to the transaction of sale between defendant No. 2 and the plaintiff. He himself had no personal knowledge of the terms settled between defendant No. 2 and the plaintiff. The transaction was not settled in his presence nor was any payment made in his presence. Nor, for that matter, was he a scribe or marginal witness of that sale deed. Could, in this situation, defendant No. 1 have raised a plea as to the validity of the sale deed on the ground of inadequacy of consideration or part-payment thereof? Defendant No. 2 alone, who was the executant of the sale deed, could have raised an objection as to the validi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tious or, for that matter, collusive and not intended to be acted upon. Thus, the whole question would depend upon the pleadings of the parties, the nature of the suit, the nature of the deed, the evidence led by the parties in the suit and other attending circumstances. For example, in a landlord-tenant matter where the landlord is possessed of many properties and cannot possibly seek eviction of his tenant for bona fide need from one of the properties, the landlord may ostensibly transfer that property to a person who is not possessed of any other property so that that person, namely, the transferee, may institute eviction proceedings on the ground of his genuine need and thus evict the tenant who could not have been otherwise evicted. In this situation, the deed by which the property was intended to be transferred, would be a collusive deed representing a sham transaction which was never intended to be acted upon. It would be open to the tenant in his capacity as defendant to assert, plead and prove that the deed was fictitious and collusive in nature. We, therefore, cannot subscribe to the view expressed by the Privy Council in the case of Lal Achal Ram (supra) in the broad ter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll be returned by defendant No. 2 and the property would revert back to him. 22. The findings of fact concurrently recorded by the Trial Court as also by the Lower Appellate Court could not have been legally upset by the High Court in a second appeal under Section 100 C.P.C. unless it was shown that the findings were perverse, being based on no evidence or that on the evidence on record, no reasonable person could have come to that conclusion. 23. The findings of fact concurrently recorded by the lower Courts on the question of title of the plaintiff on the basis of sale deed, executed in his favour by defendant No. 2, have been upset by the High Court on the ground that full amount of consideration does not appear to have been paid by plaintiff to defendant No. 2. It will be worthwhile to reproduce the findings recorded by the High Court on this question. The High Court observed: 14. As already stated above, the plaintiff had paid a nominal amount of ₹ 500 before the Sub-Registrar and got the document executed considering the plight of the defendant No. 2 that his seven acres of land was already mortgaged with the plaintiff and, in fact, no further consideration of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant No. 2 from defendant No. 1. It is clear that except ₹ 500 nothing has been paid by the plaintiff to defendant No. 2 as the amount of ₹ 4,500 alleged to have been paid at home to the defendant No. 2 has not been established. Therefore, the view taken by both the Courts below under no circumstances, can be sustained. 24. The circumstances relied upon by the High Court had already been considered by the Courts below and ultimately the Lower Appellate Court proceeded to say as under: But it would appear as though that all this discussion is worthless in view of the fact that deft. No. 2 himself admitted in his deposition that he executed the sale deed in favour of the plaintiff and accepted the price. His written statement and deposition is quite eloquent on that point. On the fact of these admission, there cannot be any other circumstance which would assist the Court to hold that the document executed in favour of the plaintiff by defendant No. 2 as bogus, sham and without consideration, notwithstanding the fact that the circumstances and the facts of the case infallibly point that the document of sale does not convey the real transaction that had taken place bet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court or otherwise, any witness, other than those whose names appear in the list referred to in Sub-rule (1), if such party shows sufficient cause for the omission to mention the name of such witness in the said list. (4) Subject to the provisions of Sub-rule (2), summons referred to in this rule may be obtained by parties on an application to the Court or to such officer as may be appointed by the Court in this behalf. 30. Rule 1A which allows production of witnesses without summons provides as under: Rule 1A. Production of witnesses without summons. Subject to the provisions of Sub-rule (3) of Rule 1, any party to the suit may, without applying for summons under Rule (1), bring any witness to give evidence or to produce documents. 31. These two Rules read together clearly indicate that it is open to a party to summon the witnesses to the Court or may, without applying for summons, bring the witnesses to give evidence or to produce documents. Sub-rule (3) of Rule 1 provides that although the name of a witness may not find place in the list of witnesses filed by a party in the Court, it may allow the party to produce a witness though he may not have been summoned th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch it was set out that the sale deed was a sham transaction for which the consideration was not paid. In relying upon this circumstance, the High Court overlooked the fact that defendant No. 2, in his capacity as a witness for the plaintiff, had stated in clear terms that this notice was issued to the plaintiff at the instance of defendant No. 1. Defendant No. 2 also stated that the complaint made by him to the police in that regard was withdrawn by him. This circumstance, therefore, also could not have been legally relied upon by the High Court in holding that full amount of consideration was not paid. 34. It could not be ignored that the plaintiffs case had been admitted in unequivocal terms by defendant No. 2 in his written statement. It could also not be ignored that when plaintiff examined himself as a witness in the suit, defendant No. 2 refused to cross-examine him. The circumstance, which, however, clinches the matter is the statement of defendant No. 2 on oath in which he admitted that he had executed a sale deed in favour of the plaintiff and had obtained full amount of consideration. The sale deed is a registered document which recites that out of the amount of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... part-promised indicate that actual payment of whole of the price at the time of the execution of sale deed is not sine qua non to the completion of the sale. Even if the whole of the price is not paid but the document is executed and thereafter registered, if the property is of the value of more than ₹ 100/-, the sale would be complete. 37. There is a catena of decisions of various High Courts in which it has been held that even if the whole of the price is not paid, the transaction of sale will take effect and the title would pass under that transaction. To cite only a few, in Gyatri Prasad v. Board of Revenue and Ors. (1973) Allahabad Law Journal 412, it was held that non-payment of a portion of the sale price would not effect validity of sale. It was observed that part payment of consideration by vendee itself proved the intention to pay the remaining amount of sale price. To the same effect is the decision of the Madhya Pradesh High Court in Sukaloo and Anr. v. Punau . 38. The real test is the intention of the parties. In order to constitute a sale , the parties must intend to transfer the ownership of the property and they must also intend that the price would b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r interest thereon from the date of delivery of possession. Originally, there was no provision with regard to the date from which interest would be payable on the amount of unpaid purchase money. The Special Committee which suggested an amendment in this Section gave the following reason: This clause is also silent as to the date from which the interest on the unpaid purchase money should run. It seems fair that it should run from the date when the buyer is put in possession. 42. It was on the recommendation of the Special Committee that the words from the date on which possession has been delivered were inserted into this clause by Section 17 of the Transfer of Property (Amendment) Act, 1929 (XX of 1929). 43. This clause obviously applies to a situation where the ownership in the property has passed to the buyer before the whole of the purchase money was paid to the seller or the vendor. What is contained in this clause is based on the English Doctrine of Equitable Lien as propounded by Baron Rolfe in Goode and Anr. v. Burton (1847) 74 RR 633 : 1 Ex. 189. This clause confers statutory recognition on the English Doctrine of Equitable Lien. As pointed out by the Privy Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e buyer shall transfer the property to the seller, the transaction is called a mortgage by conditional sale and the mortgage a mortgagee by conditional sale: 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) ... 48. The Proviso to this clause was added by Section 19 of the Transfer of Property (Amendment) Act, 1929 (XX of 1929). The Proviso was introduced in this clause only to set at rest the controversy about the nature of the document; whether the transaction would be a sale or a mortgage. It has been specifically provided by the Amendment that the document would not be treated as a mortgage unless the condition of repurchase was contained in the same document. 49. The basic principle is that the form of transaction is not the final test and the true test is the intention of the parties in entering into the transaction. If the intention of the parties was that the transfer was by way of security, it would be a mortgage. The Privy Council as early as in Balkishen Das and Ors. v. Legge, 27 Indian Appeals 58, had laid down ..... X X X X Extracts X X X X X X X X Extracts X X X X
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