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“Whether the transaction entered into between the parties, Ex.P-1 is a mortgage or a sale outright ?”= Consequently, substantial question of law formulated for the decision of this appeal is decided that it was a mortgage and not a sale outright.

HIGH COURT OF CHATTISGARH AT BILASPUR

NIT Raipur

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Second Appeal No 6 of 1994

1 Mangtin

2 Bhagwati

3 Shyamwati

4 Rambai

5 Mantora

6 Makhan

7 Ishwari

8 Rajni Bai

9 Munni Bai
…Petitioners
Versus
1 Rahibai

2 Ajit Died and deleted

3 Sigga Bai

4 Gopal

5 Mangali Bai

6 Budhwantin Bai

7 Pancho Bai

8 Netram
…Respondents
! Mr Ravish Chandra Agrawal Senior Advocate with Mr Sumesh Bajaj counsel for the appellants

^ Mr H B Agrawal Senior Advocate with Mrs Meera Jaiswal counsel for the respondents

CORAM: Honble Mr T P Sharma J

Dated: 24/01/2012

: Judgement

JUDGMENT
(Delivered on 24th January, 2012)

(SECOND APPEAL UNDER SECTION 100 OF THE CPC)

1. By this second appeal under Section 100 of the Code of
Civil Procedure, 1908 (for short `CPC’), the appellants have
challenged legality and propriety of the judgment & decree dated
5.11.93 passed by the First Additional District Judge to the
Court of the District Judge, Raipur, in Civil Appeal No.76-A/91,
reversing the judgment & decree of dismissal of the civil suit
dated 5.12.84 passed by the Third Civil Judge Class-II, Raipur,
in Civil Suit No.468A/84.

2. Present second appeal was admitted for consideration on
1.7.94 on the following substantial question of law:-
“Whether the transaction entered into between the
parties, Ex.P-1 is a mortgage or a sale outright
?”

3. As per claim of respondent No.1 Rahi Bai, Rahi Bai has
purchased the suit property bearing khasra No.720 area 1.38
hectare situated at village Tulsi P.H.No.111, district Raipur
vide registered sale deed dated 15.4.1976 on payment of
consideration of Rs.3000/- and obtained possession, name of
respondent No.1 has been mutated vide order dated 16.3.79. The
appellants have committed theft of the crop shown by respondent
No.1, then respondent No.1 has lodged the F.I.R., she was
dispossessed by the appellants in the year 1979. Then suit for
possession has been filed on behalf of respondent No.1 on
12.8.80. By filing written statement the present appellants had
denied the adverse allegation and have specifically pleaded that
appellant No.1 has taken loan for her family on 15.4.76 and has
executed one document in the shape of sale deed for security of
loan. Respondent No.1 was in possession with the connivance of
revenue officer, she was succeeded in mutation of her name and
she has also lodged report against the appellants. Appellant
No.1 was not competent to alienate the property of minors
without permission of the District Judge. During pendency of the
suit, respondent No.1 has executed sale deed in favour of Ajit,
predecessor-in-title of respondents No.2(i) to 2(vi), therefore,
he was impleaded as a party. After providing opportunity of
hearing to the parties, the Third Civil Judge Class-II, Raipur
has dismissed the suit for possession and held that transaction
between the parties was loan transaction. Same was challenged
before the lower appellate Court and vide judgment & decree
impugned the lower appellate Court has reversed the judgment &
decree passed by the Third Civil Judge Class-II and decreed the
suit for possession in favour of the respondents.

4. I have heard learned counsel for the parties, perused the
impugned judgment & decree, judgment & decree of the trial Court
and records of the Courts below.

5. Learned counsel for the appellants vehemently argued that
present appellant No.1 Mangtin Bai, mother of other appellants,
has taken loan from respondent No.1 Rahi Bai and has executed
the document in the shape of sale deed, but same was only for
security of loan, it was never intended to act upon the document
was sham and nominal. Appellant No.1 was not competent to
alienate the property of minor appellants No.2 to 9 without
valid permission from the District Judge. By adducing evidence
the present appellants have proved the fact and discharged their
burden that it was not outright sale but was mortgage.
Respondent No.1 has examined herself and as per finding of the
trial Court same is unreliable witness. Respondent No.1 has
failed to prove the fact that transaction is sale, but by
adducing documentary and oral evidence the present appellants
have discharged their burden. The appellants have succeeded in
proving the fact that transaction was not sale, but for security
of loan. Learned counsel further argued that respondent No.1 has
specifically admitted in previous proceeding that she has given
loan to appellant No.1 which she has returned and she had not
seen the field, was admission of respondent No.1 and was
sufficient to discharge the factum of execution of sale deed.

6. Learned counsel placed reliance in the matter of Sara
Veeraswami alias Sara Veerraju v. Talluri Narayya (deceased) and
others1 in which the Privy Counsel has held that finding of a
Judge who was having opportunity to see and hear the witness
that witness speaks lie is entitled to great weight. Privy
Counsel further held that in terms of Sections 91 and 92 of the
Evidence Act the parties are entitled to give oral evidence in
proof of validation of any document relating to fraud,
intimidation, illegality, want of due execution, want of
capacity in any contracting party of consideration, or mistake
in fact or law, existence of any separate oral agreement as to
any matter on which a document is silent, and which is not
inconsistent with its terms, existence of any separate oral
agreement, constituting a condition precedent to the attaching
of any obligation under any such contract, grant or disposition
of property. Learned counsel further placed reliance in the
matter of Mandas v. Manabai2 in which the High Court of Madhya
Pradesh has held that parties are entitled to give evidence to
show that the sale deed was never agreed to be acted upon. If
there was a stipulation between the parties that the contract
would not be enforced or that it would not be acted upon ab
initio, oral evidence in support of such a plea may be given.
Leaned counsel also placed reliance in the mater of Smt.Koze and
another v. Makhan Singh3 in which the High Court of Madhya
Pradesh has held that alleged sale deed executed on behalf of
Gond, an illiterate woman having no male member in her family
and amount has also not been paid before the Sub-Registrar shows
that alleged sale deed has been obtained by playing fraud and
undue influence. The High Court of Madhya Pradesh has further
held that in case of execution of document by poor and
illiterate person, burden to prove conscious and genuine
execution lies upon the person in whose favour it has been
executed. Learned counsel relied upon the matter of Narayan
Bhagwantrao Gosavi Balajiwale v. Gopal Vinayak Gosavi and others4
in which the Supreme Court has held that the burden of proof is
of importance only where by reason of not discharging the burden
which was put upon it, a party must eventually fail. Where,
however, parties have joined issue and have led evidence and the
conflicting evidence can be weighed to determine which way the
issue can be decided, the abstract question of burden of proof
becomes academic. Learned counsel placed reliance in the matter
of Panni Lal v. Rajinder Singh and another5 in which the Supreme
Court has held that sale of property of minor by mother during
lifetime of father after attestation of sale deed by father is
not voidable under Section 8 of the Hindu Minority and
Guardianship Act, 1956, but void. In this case, during lifetime
of father and taking interest in the affairs of the minor mother
has executed sale deed who was not natural guardian, therefore,
instead of declaring sale deed voidable in accordance with
Section 8 of the Act, 1956, the Supreme Court has held that sale
deed was void on the ground that it has not been executed by the
natural guardian. Learned counsel further placed reliance in the
matter of R.Janakiraman v. State represented by Inspector of
Police, CBI, SPE, Madras6 in which the Supreme Court has held
that bar under Section 92 of the Evidence Act is to oral
evidence to disprove the terms of a contract, and not to
disprove the contract itself. Learned counsel also placed
reliance in the mater of Santosh Hazari v. Purushottam Tiwari
(deceased) by LRS.7 in which the Supreme Court has held that
first appeal is a valuable right of the parties and unless
restricted by law, the whole case is therein open for rehearing
both on questions of fact and law. The judgment of the appellate
court must, therefore, reflect its conscious application of mind
and record findings supported by reasons, on all the issues
arising along with the contentions put forth, and pressed by the
parties for decision of the appellate court. The appellate Court
is required to consider the reasoning of the trial Court.
Learned counsel relied upon the matter of Karam Kapahi & Ors. V.
M/s. Lal Chand Public Charitable Trust & Anr.8 in which the
Supreme Court has held that admission means admission of facts
either in pleading or otherwise whether orally or in writing.
Learned counsel further relied upon the matter of Bharat Singh
and others v. Mst.Bhagirathi9 in which the Supreme Court has
held that admission is substantive evidence even though the
party is not confronted with the statement. Learned counsel
placed reliance in the matter of Avadh Kishore Dass v. Ram Gopal
and others10 in which the Supreme Court has held that it is true
that evidentiary admissions are not conclusive proof of the
facts admitted and may be explained or shown to be wrong, but
they do raise an estopel and shift the burden of proof on to the
person making them or his representative-in-interest. Unless
shown or explained to be wrong, they are an efficacious proof of
the facts admitted. Learned counsel further placed reliance in
the matter of Kallathil Sreedharan and another v. Komath
Pandyala Prasanna and another11 in which the Supreme Court has
held that contract for alienation of minor’s share in immovable
property by mother without obtaining previous permission of
court, is not executable.

7. On the other hand, learned counsel for the respondents
opposed the appeal and argued that the plaintiff/respondent No.1
has not filed suit for declaration of title and possession but
has simply filed suit for possession after dispossession by the
present appellants, therefore, there was no issue for decision
that whether sale deed was genuine or not. The present
appellants have not filed any suit for declaration that such
deed was not sale deed and was mortgage deed. As per pleading
and claim of the appellants, alleged sale deed was not outright
sale but was mortgage, in which the appellants were party to the
deed, therefore, it was necessary for them to file civil suit or
counter-claim to declare the document not as a sale deed but as
a mortgage. Document was not void but was voidable as prayed by
the appellants and unless it is declared at the option of the
appellants, void document is enforceable under the law. No
separate agreement has been executed to show that deed was a
mortgage or for security for loan or was not to be acted upon.
Learned counsel further argued that mother has executed deed for
the benefits of minors which has been pleaded and admitted by
the appellants in their pleading that on account of famine
appellant No.1 has executed sale deed for their children which
was permissible under Section 8 of the Act, 1956. Even otherwise
document executed by the natural guardian without permission of
the Court is voidable at the instance of minors. Minors have not
filed any suit challenging the sale deed against their mother.
Learned counsel further argued that voidable transactions are
required to be avoided.

8. Learned counsel placed reliance in the matter of
Ranganayakamma and another vs. K.S. Prakash (dead) by LRs. And
others12 in which the Supreme Court has held that voidable
transactions are required to be avoided.
9. Respondent No.1 has filed suit for possession after
dispossession. As per para 9 of the plaint, she has been
dispossessed on 17.11.79 and has filed civil suit on 12.8.80
after lapse of six months, therefore, it was not the suit under
Section 6 of the Specific Relief Act. Even as per plaint
allegation she has purchased the suit property from the present
appellants. Virtually suit for possession was based on title.
The appellants have specifically denied the title of respondent
No.1 and have specifically pleaded that appellant No.1 has not
sold the land to respondent No.1, she has taken loan on account
of famine for her family, but respondent No.1 has succeeded in
getting the document in the shape of sale deed which was only
for security of loan. The trial Court has also framed Issue No.1
that whether the present appellants/defendants have sold the
land to respondent No.1 on 15.4.76.

10. Both the parties have led evidence to prove and disprove
the aforesaid Issue No.1. As per Ex.P/2, respondent No.1 had
filed application for mutation before the revenue court where
the appellants have objected that it was not outright sale but
was loan transaction. After order of mutation name of respondent
No.1 has been corrected in revenue record vide Exs.P/3 and P/4.
The appellants have taken defence before the revenue Court that
it was not sale but was mortgage. Ex.P/6 further reveals that in
the year 1982-83 the respondents were in possession. Initial
burden to prove the fact that sale deed Ex.P/1 was outright sale
was on respondent No.1. The appellants have specifically pleaded
and claimed that it was not outright sale but was mortgage. In
order to disprove her burden, respondent No.1 has examined
herself and has deposed that she has purchased the property
vide Ex.P/1 and has paid consideration of Rs.3000/-. She has
further admitted in para 3 of her evidence that she has
cultivated the land for 2-3 years, thereafter the appellants
quarrelled and objected. As per para 6 of her evidence, for the
aforesaid two years she has cultivated the land through co-
plaintiff/original respondent No.2 Ajit whom she has sold the
land subsequently. She has denied in para 8 of her cross-
examination that she was never in possession of the suit
property. As per her evidence she is resident of Tikrapara,
Raipur and not village Tulsi. As per para 9 of her evidence, she
was not having barn and house at village Tulsi. She has denied
the suggestion in para 10 that she used to give loan after
getting document in her favour in the shape of sale deed. She
has also denied the suggestion in para 11 that she has given
loan to Adhari who has executed sale deed in her favour, but
thereafter she has returned the land after receiving loan
amount. She has also denied the suggestion that earlier she has
given loan to appellant No.1 which she had returned, thereafter
she has executed sale deed Ex.D/2. She has denied her previous
statement as Ex.D/3. Co-plaintiff Ajit (PW-2) has deposed that
he has purchased the land from respondent No.1 after payment of
consideration of Rs.4000/-. As per his evidence he was not
present at the time of transaction. The appellants have examined
Dhelu (DW-1) and Sakharam (DW-2) (attesting witnesses of alleged
sale deed Ex.P/1), who have deposed that it was not sale but was
loan transaction. In para 5 Dhelu (DW-1) has deposed that
respondent No.1 has informed him that it was loan transaction.

11. Appellant No.1 Mangtin has examined herself and has deposed
that it was loan transaction. She has further deposed that
earlier she has taken loan from respondent No.1 and has executed
sale deed, same was retuned vide Ex.D/2 after payment of loan.
Adhari (DW-4) has deposed that he has taken loan from Rahi Bai
and has executed sale deed and after returning the loan she has
again executed sale deed in his devour. These witnesses have not
filed previous sale deeds executed by them in favour of Rahi
Bai. Respondent No.1 has not disputed the execution of sale deed
Ex.D/2 by her in favour of appellant No.1 Mangtin. As per
Ex.D/2, in order to pay loan, respondent No.1 has executed sale
deed of some land in favour of appellant Mangtin on 11.2.75, but
as per Ex.P/1 deed in question appellant No.1 Mangtin Bai has
executed sale deed in favour of respondent No.1 Rahi Bai on
15.4.76, within one year and three months and sold her land for
payment of loan. When respondent No.1 has sold the land on
11.2.75 for payment of loan, then it does not appear to be
natural that within one year and three months she would be in a
position to purchase the land and alleged seller Mangtin would
be indebted to the extent that she would be compelled to sale
the land for payment of loan.

12. As admitted by respondent No.1 that she is not resident of
village Tulsi, she was not having barn and house at village
Tulsi, although she has denied her previous statement in
criminal proceeding Ex.D/3. But it reveals in Ex.D/3 that she
has admitted that there was loan transaction of Rs.3000/- which
Mangtin had paid.
13. As per pleading and claim of the appellants, transaction
was not sale but was loan, as held by the Supreme Court in the
matter of Ranganayakamma (supra), document was voidable and not
void and is required to be avoided at the instance of the
parties, but the present appellants have not filed any suit for
declaration of such deed Ex.P/1 not as a sale but as a mortgage.

14. As held by the Supreme Court in the matter of Bharat Singh
(supra), previous statement without confronted can be
considered, although same is not conclusive in nature. In the
present case, Ex.D/3 previous statement of respondent No.1
reveals that previously she has given loan to appellant No.1,
but in her present evidence she has denied Ex.D/2 and Ex.P/1
further supports the claim of the appellants that respondent
No.1 used to give loan on the basis of document in the shape of
sale deed.

15. As per Exs.P/2 and P/6, the present appellants have
objected the transactions since its inception. In these
circumstances, heavy burden was upon respondent No.1 to prove
that transaction was outright sale, but in order to prove the
aforesaid fact, virtually respondent No.1 has not examined any
witness except herself. Her evidence is full of contradictions,
even she has denied her previous statement Ex.D/3, inter alia,
the appellants have examined attesting witnesses of document
Ex.P/1. Dhelu (DW-1) (attesting witness) has specifically
deposed that he was informed by respondent No.1 that it was loan
transaction.

16. Appellant No.1 has put her thumb impression over Ex.P/1. As
held by the Supreme Court in the matters of Narayan Bhagwantrao
Gosavi Balajiwale (supra), in case of document executed by an
illiterate person, conscious execution of the document by such
person is upon the person who asserted. The Supreme Court has
further held that after leading the evidence by both the parties
question of burden of proof becomes academic.

17. In the present case, both the parties have led evidence.
Appellant No.1 is illiterate woman; therefore, burden to prove
conscious execution by her was upon respondent No.1. Respondent
No.1 has admitted in Ex.D/3 that she has given loan to appellant
No.1, which is sufficient admission on behalf of respondent No.1
and as held by the Supreme Court in the matters of Avadh Kishore
Dass, Karam Kapahi, Bharat Singh (supra), onus shifted upon
respondent No.1 to prove the fact that it was not loan
transaction.

18. While dealing with the question of exclusion of oral
evidence to disprove the terms of contract the Supreme Court in
the matter of R.Janakiraman (supra) has held that Section 92 of
the Evidence Act creates bar to adduce oral evidence to disprove
the terms of the contract but not to disprove the contract
itself. Para 24 of the said judgment reads as under:-
“24. We may cull out the principles relating to
section 92 of the Evidence Act, thus :-
(i) Section 92 is supplementary to Section 91
and corollary to the rule contained in Section
91.

ii) The rule contained in Section 92 will
apply only to the parties to the instrument or
their successors-in-interest. Strangers to the
contract (which would include the prosecution
in a criminal proceeding) are not barred from
establishing a contemporaneous oral agreement
contradicting or varying the terms of the
instrument. On the other hand, Section 91 may
apply to strangers also.

iii) The bar under Section 92 would apply when
a party to the instrument, relying on the
instrument, seeks to prove that the terms of
the transaction covered by the instrument are
different from what is contained in the
instrument. It will not apply where anyone,
including a party to the instrument, seeks to
establish that the transaction itself is
different from what it purports to be. To put
it differently, the bar is to oral evidence to
disprove the terms of a contract, and not to
disprove the contract itself, or to prove that
the document was not intended to be acted upon
and that intention was totally different.

Applying the aforesaid principles, it is clear that
the bar with Section 92 will apply to a proceeding
inter partes to a document and not to a criminal
proceeding, where the prosecution is trying to
prove that a particular document or set of
documents are fictitious documents created to offer
an explanation for disproportionate wealth. Oral
evidence can always be led to show that a
transaction under a particular document or set of
documents is sham or fictitious or nominal, not
intended to be acted upon.

19. As held by the Privy Counsel in the matter of Sara
Veeraswami alias Sara Veerraju (supra), the oral agreement as to
reconveyance deed not contradict, vary or subtract from the
terms of the sale-deed within the meaning of Section 92 of the
Evidence Act , therefore, oral evidence is not excluded. In the
present case, the appellants have not adduced oral evidence to
prove the terms of Ex.P/1, but have adduced oral evidence to
disprove the contract itself which is permissible under the law.

20. As held by the High Court of Madhya Pradesh in the matter
of Mandas (supra), the present appellants were also entitled to
adduce evidence to show that sale deed was nominal and not to be
acted upon and as held by the High Court of Madhya Pradesh in
the mater of Smt.Koze (supra), the present appellants are
entitled to adduced evidence to disprove the contract itself.

21. As further submitted by learned counsel for the appellants
that sale deed has been executed by appellant No.1 without
obtaining permission from the District Judge under Section 8 of
the Hindu Minority and Guardianship Act, 1956, therefore, as
held by the Supreme Court in the matter of Panni Lal (supra),
alleged contract/sale deed without obtaining permission from the
District Judge by mother was not only voidable but void. In this
case, at the time of contract mother was not natural guardian,
therefore, the Supreme Court has held that sale deed executed by
the person who was not natural guardian of the minor was void
and not voidable, but in the present case, mother was natural
guardian after death of father of the minors. As per written
statement, appellant No.1 has executed deed when her family was
suffering from famine which shows that it was for the benefit
and welfare of the minors, therefore, alleged contract was not
void but was voidable and minors have not filed any suit for
declaration of such deed as void. Therefore, facts of the case
of Panni Lal (supra) are distinguishable to that of the present
case.

22. In the matter of Kallathil Sreedharan (supra), the Supreme
Court has denied the claim of specific performance on the ground
that specific performance is discretionary relief and can be
denied in appropriate cases. Therefore, facts of the case of
Kallathil Sreedharan (supra) are distinguishable to that of the
present case.

23. As held by the Supreme Court in the matter of Santosh
Hazari (supra), first appellate Court was under obligation to
consider all disputes claiming submission of the parties because
first appellate Court is final Court and second appeal may be
admitted only on substantial question of law. First appellate
Court is required to consider the issue and evidence and decide
the case. There must be independent judgment of first appellate
Court.
24. In the present case, while decreeing the suit the lower
appellate Court has committed illegality by shifting the burden
to prove the fact that contract was mortgage and not a sale upon
the appellants. In order to obtain decree of possession on the
basis of title, burden to prove title and that too she has
acquired the title by sale deed Ex.P/1 and Ex.P/1 was outright
sale was upon respondent No.1, not upon the appellants. The
lower appellate Court was under obligation to consider the
submissions and evidence and decide the case, but it has failed
to discharge its duty. Burden to prove the fact that Ex.P/1 was
outright sale and not mortgage was upon respondent No.1.
Respondent No.1 was not resident of village Tulsi, she is not
having any barn and house at village Tulsi. The appellants have
objected the genuineness of sale deed since its inception. In
the year 1975 appellant No.1 was competent to purchase the land
and respondent No.1 was indebted as Ex.D/2, but within one year
as Ex.P/1 respondent No.1 became competent to purchase the land
and appellant No.1 became indebted. The appellants have
explained that Ex.D/2 was reconveyance deed after payment of
loan and Ex.P/1 is loan transaction, not outright sale. These
circumstances and facts are sufficient to discharge the fact
that it was outright sale and are sufficient to prove the fact
that it was mortgage.

25. Consequently, substantial question of law formulated for
the decision of this appeal is decided that it was a mortgage
and not a sale outright. On the basis of finding on substantial
question of law, the appeal deserves to be allowed and is hereby
allowed. Judgment & decree of the First Additional District
Judge, Raipur in Civil Appeal No.76-A/91 dated 5.11.93 are
hereby set aside and judgment & decree of the trial Court are
hereby restored.

26. Parties shall bear their own cost.

27. Advocate fees as per schedule.

28. Decree be drawn accordingly.
JUDGE

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