JUDGMENT <NAME>

[1] This civil application raises a very interesting question of the law of limitation. An order fixing the compensation was passed by a special officer under Section 8 (1), Bombay Land Requisition Act, 1948. This was done on 28-12-1950. Sub-section (3) of Section 8 provides that an appeal shall lie against the decision of that officer, and in this ease the appeal lay to this Court. The appeal in fact was preferred on 28-2-1951. Section 8 (3) provides that such appeal shall be made within a period of 60 days from the date of the decision. The appeal was out of time by two days. The petitioners applied that delay should be condoned under Section 5, Limitation Act , as they had sufficient cause for the delay, and the question that arises for our determination is whether Section 5 applies to an appeal provided under the Land Requisition Act.

[2] What calls for our interpretation in the first instance is Section 29 (2), Limitation Act . The section assumed its present form in 1922. Before that amendment there was considerable conflict between the different <ORG> as to the true interpretation of this sub-section, and in order to resolve the conflict the <ORG> amended the sub-section in 1922. As it stands now it provides :

"(2) Where any special or local law prescribes for any suit, appeal or application, a period of limitation difierent from the period prescribed therefor by Schedule I, the provisions of Section 3 shall apply, as if such period were prescribed therefor in that schedule, and for the purpose of determining any period of limitation prescribed for any suit, appeal or application by any special or local law-

(a) the provisions contained in Sections 4 , 9 to 18 and 22 shall apply only in so far as, and to the extent to which, they are not expressly excluded by such special or local law. ..."

[3] The first question is whether the special law as embodied in the Land Requisition Act contains a period of limitation for the appeal provided therein which is different from the period prescribed therefor by the first schedule of the Limitation Act . The contention of Mr. <NAME> is that Sub-section (2) only applies when you find a period of limitation laid down in the first schedule and a special law alters, or modifies that period, and inasmuch as the Limitation Act does not provide for a period of limitation in respect of an appeal from a special officer to <ORG>, Section 29 (2) has no application to this particular special law. In our opinion, that is not the correct interpretation to put upon the language used by the <ORG>, viz. "a period of limitation different from the period prescribed therefor by the first schedule." The period of limitation may be different under two different circumstances. It may be different if it modifies or alters a period of limitation fixed by the first schedule to the Limitation Act . It may also be different in the sense that it departs from the period of limitation fixed for various appeals under the Limitation Act . If the first schedule to the Limitation Act omits laying down any period of limitation for a particular appeal and the special law provides a period of limitation, then to that extent the special law is different from the Limitation Act . We are conscious of the fact that the language used by the <ORG> is perhaps not very happy, but we must put upon it a construction which will reconcile the various difficulties caused by the other sections of the Limitation Act and which will give effect to the object which obviously the <ORG> had in mind, because if we were to give to Section 29 (2) the meaning which. Mr. <NAME> contends for, then the result would be that even Section 3 of the Limitation Act would not apply to this special law. The result would be that although an appeal may be barred by limitation, it would not be liable to be dismissed under a. 3. If possible we must try and avoid such a startling result and we are sure that the <ORG> did not intend that such a result should come about by the language used by it. Therefore, in our opinion, it is clear that we have before us a special law which does prescribe a period of limitation different from the period prescribed therefor by the first schedule to the Limitation Act .

[4] The other contention of Mr. <NAME> is that 8. 29 (2) only applies to that limited class of sections in the Limitation Act which deal with the computation of the period of limitation, and inasmuch as Section 5 does not deal with computation of the period of limitation, Section 29 (2) has no application. In our opinion, the expression "for the purpose of determining any period of limitation" does not mean "computing the period of limitation." In our opinion, every provision in the Limitation Act is intended for the purpose of determining the period of limitation. The Limitation Act by its operative Section 3 provides that every suit, appeal or application presented to the <ORG> shall he dismissed unless it is filed within the period of limitation, and, therefore, the main thing that the <ORG> has to consider is whether a suit or an application or an appeal is maintainable looking to the provisions of the Limitation Act , and in order to decide that not only has the <ORG> to consider various sections like Section 4 and Sections 9 to 18 but also Section 5 , because if a suit, appeal or application is out of time as provided by the first schedule, the <ORG> has still to consider whether such suit, appeal or application should be allowed to be preferred by reason of Section 5 . Therefore, in our opinion, there is no justification for giving to the expression "for the purpose of determining any period of limitation" the restricted meaning suggested by Mr. <NAME>.

[5] It is then contended that inasmuch as Section 3 imports the application of Sections 4 to 25 , by reason of the fact that Section 3 is made applicable by Section 29 (2), B. 6 should also be deemed to apply to an appeal preferred under the special law. In our opinion that contention is obviously untenable for two reasons. If that were the true position, then it was unnecessary to refer specifically to Section 4 , Sections 9 to IS and Section 22 in Section 29 (2) (a). If these sections became applicable by reference to Section 3 , then it was sufficient for the <ORG> to have provided that Section 3 shall apply and excluded such of the sections from Sections 4 to 25 as the <ORG> thought should not apply in the case of a special law. But far from doing that, the <ORG> was at pains to point out which of those sections from Sections 4 to 25 should apply in the case of special laws. The second reason why this contention is untenable is that Section 29 (2) (b) expressly provides that the remaining provisions of this Act shall not apply, the remaining provisions being other than Sections 3 , 4 , 9 to 18 and 22 to which reference is made in the earlier part of the section. Therefore, the scheme of Section 29 (2) seems to be this. Section 3 is made applicable to all special or local laws which prescribed a period of limitation for any suit, appeal or application. Sections 4 , 9 to 18 and 22 also apply unless the special or local law expressly excludes their application. Sections other than those just mentioned would not apply unless the special or local law expressly provided for their application. It is difficult to accept the contention that although Section 29 (2) (b) expressly precluded the application of Section 5 , we must hold that Section 6 is applicable by reference to Section 3 .

[8] The final argument advanced by Mr. <NAME> is that Section 5 applies to all appeals proprio vigore, and this argument is based upon the different language used by the <ORG> in Section 3 and Section 5 . Section 3 refers to "period of limitation prescribed therefor by Schedule 1"; Section 5 merely refers to "the period of limitation prescribed therefor"; and the argument advanced before us is that whereas 8. 3 refers to the period of limitation which is to be found in Schedule 1, Section 5 applies to all laws which prescribe any period of limitation, and therefore according to Mr. <NAME> without any reference being made in any special or local law Section 5 must pf its own strength apply because the <ORG> has made Section 5 applicable to all cases where periods of limitation are prescribed. In the first place, this argument runs counter to the ordinary canon of construction which one must apply in construing a statute. When a statute speaks of a period of limitation prescribed, it can only mean prescribed by that statute itself. If the intention of the <ORG> was to refer to the period of limitation prescribed by other laws, the <ORG> would have expressly so mentioned. It is true that in Section 3 there is an express mention of Schedule 1 to the Limitation Act . But the mere fact that there is no such express mention in Section 5 does not and cannot lead to the conclusion that the <ORG> intended the limitation prescribed to be prescribed by any law other than the Limitation Act itself. The other reason why this argument cannot be accepted is that when we turn to Section 4 , it also speaks of "limitation prescribed" and not "limitation prescribed by Schedule 1," and yet under Section 29 the <ORG> had expressly to make Section 4 applicable when the period of limitation was prescribed by a special or local law. If Mr. <NAME>'s contention were right, then Section 4 as much as Section 5 would apply proprio vigore and it was not necessary for the <ORG> in 8. 29 to state that Section 4 would apply under certain circumstances. Therefore, in our opinion, unless the <ORG> expressly makes Section 5 applicable, Section 5 does not apply when no period of limitation for that appeal is prescribed in the Limitation Act and a special period is prescribed by a special law. The intention of the <ORG> obviously was that an appellant must prefer the appeal within the period defined in the statute, and if he fails to do so, the <ORG> should have no power to condone the delay and admit the appeal under Section 5 . We are conscious of the fact that this construction may lead in some cases to considerable hardship, but that is more a matter for the <ORG> than for us. There are various statutes to which our attention is drawn where the <ORG> has applied Section 5 . On the other hand, there are statutes where Section 5 has not been applied, and this difference in different statutes clearly bear out what we have been suggesting, viz., that in some cases the <ORG> wanted to bring about a strict adherence to the period of limitation prescribed by a particular statute and not to give discretion to the <ORG> to enlarge that period under Section 5 .

[7] No more startling result could have been brought about than what was in fact brought about in the case reported in <CITATION> , 60 cal. 571. In that case under the Emergency Powers Ordinance No. 2 of 1932 the period of limitation was prescribed as seven days and it was contended before Rankin C. J. and <NAME>, that Section 5 should be applied in favour of the appellant who had preferred the appeal after the expiry of seven days, and with consider-able hesitation that bench rejected that contention and held that Section 5 had no application, and the learned Chief Justice observed (p. 577) :

"...... It is certainly somewhat alarming that limitation for so short a period as seven days should not be one over which <ORG> in a proper case should have any power of control or dispensation but it is necessary to base our construction of the Ordinance and of the Limitation Act upon principle and it is not possible for us on the ground of hardship to give another meaning to the Ordinance."

The same view of the law has been taken by the other <ORG>. <CITATION> .l.r. (1941) ALL. 356 ; Mittoor -Moideen Hajee, In re, A. I. R. 1923 Mad. 95 and <NAME> v. <NAME>, 9 pat. 747. Therefore, in giving the construction to Section 29 which we are giving we find that we are taking the same view which the other <ORG> in India have taken.

[8] The result, therefore, is that we must hold that the appeal is out of time, that Section 5 does not apply, and, therefore, we have no power to condone the delay on the part of the petitioners. Rule discharged. No order as to costs.

[9] Rule discharged.


PETITIONER: <NAME> Vs. RESPONDENT: <NAME> AND ANOTHER. DATE OF JUDGMENT: 14/04/1954 BENCH: <NAME>, VIVIAN BENCH: <NAME>, VIVIAN MUKHERJEA, B.K. HASAN, <NAME>, T.L. VENKATARAMA CITATION: 1954 AIR 345 1955 SCR 174 CITATOR INFO : D 1963 SC1906 (7) D 1992 SC1236 (11,15,18,21) ACT: Transfer of Property Act (Act IV of 1882)- Section 58(c) as amended by Act XX of 1929-Document-Wether a mortgage or sale outright -Principles for determining whether the document is one or the other. HEADNOTE: There is no hard and fast rule for determining whether a given transaction is a mortgage by conditional sale or sale outright with a condition for repurchase. Each case must be decided on its own facts. The numerous decisions of <ORG> on the point are of no help because two documents are seldom expressed in identical terms. The intention of the parties is the determining factor but the intention must be gathered from the document itself which has to be construed to find out the legal effect of the words used by the parties. If the words are express and clear, effect must 'be given to them and any extraneous enquiry into what was thought or in. tended is ruled out. If however there is ambiguity in the language employed then it is permissible to look to the surrounding circumstances to determine what was intended. 175 In view of the provisions of the amended section 58(c) of the Transfer of Property Act, 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 mere fact that there is only one document does not necessarily mean that it must be a mortgage and, cannot be a sale. If the condition of repurchase is embodied in the document that effects or purports to affect the sale, then it is a matter for construction which was meant. <NAME> v. <NAME> (27 I.A. 58), <NAME> v. <NAME> (44 E.R. 924 at 928), <NAME> v. <NAME> (17 I.A. 98 at 102), and <NAME> v. <NAME> (43 I.A. 284 at 293) referred to. JUDGMENT:

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 98 of 1953.

Appeal by Special Leave from the Judgment and Decree dated the 27th day of January, 1949, of <ORG> at Patna in Appeal from Appellate Decree No. 690 of 1947 against the Decree dated the 13th January, 1947, of <ORG>, Bbagalpur, in Title Appeal No. 161 of 1946 arising out of the Judgment and Decree dated the 25th July, 1946, of <ORG> Additional Subordinate Judge, Bhagalpur, in Title Suit No. 80 of 1945. <NAME>, (<NAME> and <NAME>, ,with him) for the appellant.

<NAME> and <NAME>, for respondent No. I. 1954. April 14. The Judgment of the <ORG> was delivered by <NAME> is a plaintiff's appeal in a suit for re- demption of what the plaintiff calls a mortgage dated 15th April, 1930. The only question for determination is whether this is a mortgage by conditional sale or a sale out and out with a condition of repurchase. If the former the plaintiff succeeds. If the latter he is out of <ORG>.

The property covered by the disputed deed belonged to one <NAME> who died leaving a widow <NAME> <NAME> and two sons <NAME> and <NAME>. On 25th May, 1922, <NAME> alone executed a simple mortgage in favour of the second defendant for Rs.

25. Then on 6th May, 1927, <NAME>, <NAME> and Mst. <NAME> mortgaged the same property to the first defendant for Rs. 250. This was also a simple mortgage. After this came the transaction in suit dated 15th April, 1930. The same three persons executed the disputed deed. This was in favour of the first defendant. The consideration mentioned in the deed is Rs. 634-10-0 due on the second mortgage and Rs. 65-6-0 taken in cash to enable the executants to meet the expenses of certain commutation proceedings under section 40 of the Bihar Tenancy Act in respect of this very land.

The second defendant sued on his mortgage of 1922 but did: not join the subsequent mortgagee, the first defendant. He obtained a decree against the mortgagors alone and executed it in 1940. He himself purchased the property in dispute and took possession on 20th March, 1943. Shortly-after, on 19th August, 1943, he sold this land to the plaintiff for Rs. 400.

The plaintiff's title is derived from the second defendant who stepped into the shoes of the mortgagors because of his suit against the mortgagors in 1940. The plaintiff's case is that the transaction of 15th April, 1930, is a mortgage and, as the subsequent mortgagee was not joined as a party to the earlier suit, the plaintiff is entitled to redeem. The first defendant's case is that the transaction of 15th April, 1930, was not a mortgage but an out and out sale with a covenant for repurchase which became infructuous because no attempt was made to act on the covenant within the time specified. The learned trial Judge and the lower appellate <ORG> both held that the document was a mortgage and so decreed the plaintiff's claim. The High <ORG> on second appeal reversed these findings and held it was a sale. Consequently the learned Judges dismissed the plaintiff's suit. The plaintiff appeals here.

The question whether a given transaction is a mortgage by conditional sale or a sale outright with a condition of repurchase is a vexed one which invariably gives rise to trouble and litigation. There are numerous decisions on the point and much industry has been expended in some of <ORG> in collating and analysing them. We think that is a fruitless task because two documents are seldom expressed in identical terms and when it is necessary to consider the attendant circumstances the imponderable variables which that brings in its train make it impossible to compare one case with another. Each must be decided on its own facts. But certain broad principles remain. The first is that the intention of the parties is the determining factor: see <NAME> (1). But there is nothing special about that in this class of cases and here, as in every other case where a document has to be construed the intention must be gathered, in the first place, from the document itself. If the words are express and clear., effect must be given to them and any extraneous enquiry into what was thought or intended is ruled out. the real question in such a case is not what the parties intended or meant but what is the legal effect of the words which they used. If, however, there is ambiguity in the language employed, then it is permissible to look to the surrounding circumstances to determine what was intended. As Lord <NAME> said in A Aderson v. White (2) : "The rule of law on this subject is one dictated by commonsense; that prima facie an absolute conveyance, containing nothing to show that the relation of debtor and creditor is to exist between the parties, does not cease to be an absolute conveyance and become a mortgage merely because the vendor stipulates that he shall have a right to repurchase............... In every such case the question is, what, upon a fair construction, is the meaning of the instruments?

Their Lord-ships of the Privy Council applied this rule to India in <NAME> v. <NAME> (3) and in <CITATION> (4).

The converse also holds good and if, on the face of it, an instrument clearly purports to be a mortgage it cannot be turned into a sale by reference to a host of (1) 27 I.A. 58. (3) 17 I.A. 98 at 102.

(2) 44 E.R. 924 at 928. (4) 43 I.A. 284 at 293.

extraneous and irrelevant considerations. Difficulty only arises in the border line cases where there is ambiguity. Unfortunately, they form the bulk of this kind of transaction.

Because of the welter of confusion caused by a multitude of conflicting decisions the <ORG> stepped in and amended section 58(c) of the Transfer of Property Act. Unfortunately that brought in its train a further conflict of authority. But this much is now clear. 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 converse does not hold good, that is to say, the mere fact that there is only one document does not necessarily mean that it must be a mortgage and cannot be a sale. If the condition of repurchase is embodied in the document that effects or purports to effect the -sale, then it is a matter for construction which was meant. The <ORG> has made a clear cut classification and excluded transactions embodied in more than one document from the category of mortgages, therefore 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) are fulfilled, then we are of opinion that the deed should be construed as a mortgage.

The document with which we are concerned, Exhibit A, is in the following terms and our first duty is to construe the language used and see whether it is ambiguous. (We have paragraphed the document for convenience of construction and have omitted unnecessary words).

(1)" Rs. 634 principal with interest under a registered rehan bond " (simple mortgage) " dated the 6th May, 1927, is justly due............ by us the executants. Now we further require Rs. 65-6-0 more to meet costs of the suit under section 40 ." (Bihar Tenancy Act).

(2)(I; and at present there is no other way in view rather it seems impossible and difficult to arrange for the money without selling the property let out in rehan " (simple mortgage) " under the above mentioned bond." (3) " Therefore, we the executants declare.... that we sold -and vended the properties,detailed below on condition (given below) for a fair and just price of Rs. 700 " (4) "That we set off Rs. 634- 10-0 against the consideration money " (torn) " payable under the aforesaid bond in favour of the said vendee and received Rs. 65-6-0 in cash from the said vendee. In this way the entire consideration money was realised from the said vendee." (5) " and we put the said vendee in possession and occupation of the vended property detailed below and made him an absolute proprietor in our places." (6) " If we, the executants, shall repay the consideration money to the said vendee within two years............ the property vended under this deed of conditional sale attached shall come in exclusive possession and occupation of us the executants."

(7) " If we do not pay the same, the said vendee shall remain in possession and occupation thereof, generation after generation, and he shall appropriate the produce thereof."

(8) " We, the executants, neither have nor shall have any objection whatsoever in respect of the vended property and the consideration money. Perchance if we do so it shall be deemed null and void in Court."

"and we declare also that the vended property is flawless in every way and that if in future any kind of defect whatsoever be found on account of which the said vendee be dispossessed of a portion or the entire property vended under this deed of conditional sale and will have to pay the loss or damage, in that event we, the executants,

(a) shall be liable to be prosecuted under the criminal procedure, and

(b) we shall pay the entire consideration money together with loss and damage and interest at the rate of Rs. 2 per mensem per hundred rupees from the date of the execution of this deed till the date of realisation from our person and other properties

(c)and we shall not claim the produce of the vended property for the period of vendee's possession against the said vendee or his heirs and representatives." (10) " Therefore we, the executants......... have executed this deed of conditional sale so that it may be of use in future."

In our opinion, this language is not free from difficulty and is ambiguous. The deed purports to be a sale and has the outward form of one but at the same time it calls itself a"conditional sale." It has,however, no clause for retransfer and instead says (clause 6) that if the executants pay the money within two yeas, the property " shall come in exclusive possession and occupation of us, the executants." That is clear about the possession but is silent about the title. In the context we can only take these words to mean that if there is payment within the specified time, then the title will continue to reside in the executants; for what else can a right of exclusive possession import in these circumstances ? It is relevant to note in passing that this silence about title would be proper in a mortgage for there the owner's title remains in him all the while and so a reconveyance is unnecessary. But if there is an out and out sale the title could not revert to the original owner without a proper reconveyance. Clause (7) appears to underline this because it couples the transferee's; right to remain in possession and occupation and to appropriate the produce " generation after generation " with the non-payment of the money within the time set out. It is true the words of conveyance in the earlier part Of the deed (clause 5) would pass an absolute title if they stood alone but the document must be read as a whole and it must also be remembered that it was executed by ignorant justice and scribed by a man whose knowledge of conveyancing was, on the face of it, rudimentary and defective. The deed lacks the precision of a practised hand and that probably accounts. for its ambiguities: that there is ambiguity is patent from what we have said.

The next step is to see whether the document is covered by section 58(c) of the Transfer of Property Act, for- if it is not, then it cannot be a mortgage by conditional sale. The first point there is to see whether there is an " ostensible sale." That means a transaction which takes the outward form of a sale, for the essence of a mortgage by conditional sale is that though in substance it is a mortgage it is couched in the form of a sale with certain conditions attached. The executable clearly purported to sell the property in clause (5) because they say so, therefore, if the transaction is not in substance a mortgage, it is unquestionably a sale: an actual sale and not merely an ostensible one. But if it is a mortgage, then the condition about an " ostensible sale " is fulfilled.

We next turn to the conditions. The ones relevant to the present purpose are contained in clauses (6) and (7). Both are ambiguous, but we have already said that on a fair construction clause (6) means that if the money is paid within the two years then the possession will revert to the executants with the result that the title which is already in them will continue to reside there. The necessary consequence of that is that the ostensible sale becomes void. Similarly, clause- (7), though clumsily worded, can only mean that if the money is not paid, then the sale shall become absolute. Those are not the actual words used but, in our opinion, that is a fair construction of their meaning when the document is read as a whole. If that is what they mean, as we hold they do, then the matter falls squarely within the ambit of section 58(c) .

Now, as we have already said, once a transaction is embodied in One document and not two and once its terms are covered by section 58(c) then it must be taken to be a mortgage by conditional sale unless there are express words to indicate the contrary, or, in a case of ambiguity, the attendant circumstances necessarily lead to the opposite conclusion. There are no express words here which say that this is not a mortgage but there is ambiguity, so we must probe further. The respondents, who claim that this is a sale and not a mortgage, rely on the following circumstances. They are all culled from the deed itself First, they point to clause (5) which says that the transferee has been made the absolute proprietor in place of the executants. Those, they say, are the operative words and point to an out and out transfer of title. Next, they point to clause (2) where the executants say that they have no other Means of raising the money they want except by selling the property. The respondents argue that the word " sale " could not have been used inadvertently because it is contrasted with a mortgage in the very same sentence. The word " mortgage "is also used in clause (1), therefore it is clear that when a mortgage is intended the word " mortgage is used. It must follow that when the word " sale is used, a sale must have been meant. The only weakness in this argument is that when a mortgage is by conditional sale this is the form it has to take, because section 58(c) postulates that there must be an " ostensible sale " and if a sale is ostensible it must necessarily contain all the outward indicate of a real sale. The question we are considering can only arise when the word " sale " is used and, of course, a sale imports a transfer of title. The use of the words It absolute proprietor in our places " carries the matter no further because the essence of every sale is to make the vendee the absolute proprietor of what is sold. The question here is not whether the words purport to make the transferee, an absolute proprietor, for of course they must under section 58(c) , but whether that is done " ostensibly " and whether conditions of a certain kind are attached.

The learned counsel for the respondents next relied on the fact that clause (3) says that the price paid was a "fair and just?' one and that the Courts below have found that the consideration was not inadequate. , He also relies on the fact that no interest was charged, that the transferee was placed in possession of the property and was Dot to account- for the usufruct also on the fact that a short term, namely two years, was fixed for repayment.

But on the other side, there is the very significant fact that Rs. 65-6-0 was borrowed to enable the executants to carry on commutation proceedings under section 40 of the Bihar Tenancy Act (that is, for substitution of a cash rent instead of one in kind) in respect of this very property: (clause 1). It was admitted before us, and the lower <ORG> so find, that the commutation proceedings related to this very land. The learned <ORG> Judges discount this by saying that there is no evidence to show that the proceedings, which were started in 1929, continued after the deed. But that is a mistake apparently due to the fact that the copy of the entry in the Rent Schedule, produced before the learned Judges, inadvertently omitted the date. Mr. <NAME> produced a certified copy of the revenue record here and that gives the missing date. From that it is clear that the proceedings continued till 18th February,- 1931, that is to say, for some ten months after the deed. This, we think, is crucial. Persons who are selling their property would hardly take the trouble to borrow money in order to continue revenue proceedings which could no longer benefit them and could only enure for the good of their transferees.

There is another point in favour of the appellant, and that is that the surrounding circumstances show that there was a relationship of debtor and creditor between the. parties existing at the date of the suit transaction. The bulk of the consideration went in satisfaction of the mortgage of 6th May, 1927. In those circumstances, seeing that the deed takes the form of a mortgage by conditional sale under section 58(c) of the Transfer of Property Act, it is legitimate to infer, in the absence of clear indications to the contrary, that the relationship of debtor and creditor was intended to continue.

The point made on behalf of the respondents about the adequacy of the consideration and the absence of interest can be explained. The transferee was to take possession of the property and would thus get the produce and it is evident to us from the tenor of the document that he was not to be accountable for it.

We say this because the indemnity clause (clause 9) says in sub-clause (b) that in the event of the transferee's possession being disturbed the executants would among other things, pay him, in addition to damages, the entire consideration together with interest at 2 per cent. per month from the date of the deed and would not require the transferee to account for the usufruct. It is true this can also be read the other way but considering these very drastic provisions as also the threat of a criminal prosecution in sub-clause (a), we think the transferee was out to exact more than his pound of flesh from the unfortunate rustics with whom he was dealing and that he would not have agreed to account for the profits: indeed that is his own case, for he says that this was a sale out and out. In these circumstances, there would be no need to keep a reasonable margin between the debt and the value of the property as is ordinarily done in the case of a mortgage. Taking everything into consideration, we are of opinion that the deed is a mortgage by conditional sale under section 58(c) of the Transfer of Property Act. The appeal is allowed. The decree of <ORG> is set aside and that of the lower appellate <ORG> is restored except as to costs.

The original owners of the property have lost it. The value of the property was put at over Rs. 10,000 in the special leave petition. The second defendant oust,.,, the original owners by getting a mortgage decree for Rs. 130 in his favour on a mortgage of only Rs. 25 and purchasing it at the auction himself. He is no longer in the picture as he sold it to the plaintiff for Rs. 400. The plaintiff has accordingly obtained property which on his own showing is worth more than Rs. 10,000 for only Rs. 400. The first defendant spent only Rs. 250 plus Rs. 65-6-0 on it: Rs. 315- 6-0 and the consideration of the disputed deed is only Rs.

700. it is evident that both sides are speculators. In the circumstances we direct that each party bear its own costs.

Appeal allowed,


JUDGMENT

1. The District Judge does not seem to have appreciated the real questions arising or decision in the case. The lands in question were admittedly; granted to certain Vritikars for reciting the Vedasin a temple. The Inam title deed, Exhibit A, was granted to the Vritikars, It does not appear that the temple had any right of property in the lands-The inam being a conditional one granted by a Zamindar and confirmed by the British Government the right of resumption would be in Government. The trustees did not state how they had any right to take possession of the lands. Again, the Judge seems to have assumed that the trustees had the right to dismiss the Vritikars. We express no opinion on the question whether in the case of such a grant the trustees would have such a right. But the matter was one which should have been tried and could not be decided on any assumption, Again, the District Judge has assumed that a minor, a female and a person unlearned in the Vedas would lose the right to the service in the temple; there is no basis for the assumption; the onus would be on the Dharmakartas to prove any such disqualification; services in temples are often performed by proxies.

2. Again, the Judge did not try the question whether the plain-tiffs neglected or refused to have the services properly performed Further, unless the <NAME> could prove their right to take possession of the lands, the plaintiff's suit must succeed, even if they failed to perform the services or forfeited their right to the services, the right of resumption of; the inam' being prima facie in Government alone. As the case has not been properly tried, we set aside the decree of <ORG> and remand the suit for fresh disposal according to law after recording all the evidence that either party may adduce, The costs of this appeal will abide the result.