Sunil kr. Sarkar and Ors. vs. Aghor Kr. Basu & Ors.

Sunil kr. Sarkar and Ors. vs. Aghor Kr. Basu & Ors.

 

Before the Gauhati High Court
AIR 1989 Gau 39
Petitioner
Sunil kr. Sarkar and Ors.
Respondent
Aghor Kr. Basu and Ors.
Date of Judgement
09 May 1987
Bench
Hon’ble Justice R.K. Manisana Singh

Background:

The present case revolves around the Transfer of Property Act, 1882 to determine whether the transactions made between the plaintiff and the defendant were mortgage by conditional sale or not. Section 58(c) of the Transfer of Property talks about mortgage by a conditional sale. It envisages a condition purporting a condition that to effect the sale, a mortgage transaction must be incorporated in one and the same deed. The present case incorporates in total three separate deeds performed on the same day as parts of the same transaction and hence, the defendant was debarred from saying that the transactions were in the nature of mortgage by conditional sale. Further, it was observed by the court that the defendant was not even protected under Section 53A of the Transfer of Property Act which talks about the part performance and was the tenant of the plaintiff.

Facts:

The plaintiff in the present matter brought a suit against the defendant alleging that the defendant took the lease of the suit premises at a monthly rent of Rs.200 on 8-12-1964 and defaulted in payments of rent from February 1967. The defendant on continuous demand of the plaintiff failed to pay the rent and vacate the suit premises, he also sublet a portion of the suit premises. The defendant decided to contest the suit and presented that he took a loan of Rs. 4100 from plaintiff mortgaging suit premises, a deed of sale, dated 5-12-64 was registered on 8-12-64 and was obtained by the plaintiff for Rs. 8,200, deed of re-conveyance dated 7-12-64 was registered on 8-12-64 and was executed by the plaintiff for the re-sale of the premises at Rs. 8,200 averring that if the defendant pays the sum of Rs. 8,200 on or before 7-12-75, the suit premises would be re-conveyed. There was an agreement for re-payment of loan dated 7-12-65 at Rs. 4,100 at a monthly installment of Rs. 200. The defendant stated that the sale deed was fraudulent and collusive and the plaintiff has no right, title in the premises and he has already paid the money therefore he cannot be evicted.

Statute and Provisions Discussed:

  • Section 58 (c) of the Transfer of Property Act, 1882.
  • Section 53A of the Transfer of Property Act, 1882.
  • Section 116, Indian Evidence Act, 1872.

Issues:

  • Whether the transaction between the plaintiff and the defendant was a mortgage by conditional sale?
  • Whether the defendant (tenant) continues in possession in part-performance of the contract?

Arguments Advanced:

Arguments on the behalf of Petitioner:

The Counsel on behalf of the appellant submitted three documents namely the sale deed, the re-conveyance deed and the lease deed and if the deeds read together presented that the transaction between the parties was the transaction of mortgage and not a sale by referring to the decision of the Supreme Court in Bhaskar v. Srinarayan,[1] and P. L. Bapuswami v. N. Pattay[2]. It was further submitted that the defendant is liable under Section 53A of the Transfer of Property Act.

Arguments on behalf of Respondent:

It was submitted on behalf of the respondent that the defendant has been prohibited from taking the plea that the transaction was a mortgage under Section 58 of T.P. Act.

Judgment:

It was held that since the condition purporting to effect the sale, a mortgage transaction must be incorporated in one and the same deed as in the present case there were three separate deeds, therefore, it was held that the transaction was not in the nature of mortgage by conditional sale. The learned court further observed that the defendant possessed the suit premises in the capacity of a tenant under the lease deed and not in part-performance of the contract.

Ratio Decidendi:

It was stated by the Court that the defendant was not protected by Section 58 (c) of the T.P. Act as there were three deeds executed on the same day which were part of the same transaction. The Court relied on the decision of K. Simrathmull v. Nanjalingiah,[3] which has similar facts in which the plaintiff failed to prove that the transaction between the parties to contract was in the nature of a mortgage. The reading of 58(c) makes it very clear that to effect a sale, mortgage transactions must be incorporated in the same deed.

To invoke Section 53A[4] there are several pre-requisites which include that, there must be a contract to transfer for consideration immovable property in writing signed by the person sought to be bound by it and from which the terms necessary to constitute the transfer can be ascertained with reasonable certainty;  that it must be shown that the transferee has, in part-performance of the contract, either taken possession of the property or any part thereof, or the transferee being, already in possession, continues in the possession and has done some act in furtherance of the contract; and that the transferee has performed or is willing to perform his part of the contract. By the above reading, it was concluded that mere continuance in possession does not satisfy the requirements of 53A. When the tenant essentially possessed the property and continues to possess it after the contract does not necessarily mean that he continues dispossession in part-performance of the contract. As the defendant was the tenant here, he was estopped from questioning the title from the appellant (landlord), which held its position in Section 116 of The Evidence Act. Therefore, the tenant has to show by some evidence that he continued to possess the property independently and not in the capacity of a tenant. In addition to this, the tenant has to show that his possession was no longer as of a tenant by showing the payment of necessary taxes. Although, in the present case there was a registered contract, but no material to show that the defendant (tenant) possessed the suit premises in part-performance, it was held that the defendant can claim no protection under 53A.

Conclusion:

To conclude, a tenant cannot claim protection under 53A if he has been in possession in his capacity as a tenant and not in part-performance of the contract. In the present matter there were three separate deeds and to gain protection under 58(c) mortgage transactions must be incorporated in the same deed.

Edited by Parul Soni

Approved & Published – Sakshi Raje

Reference

[1] Bhaskar v Srinarayan, (AIR 1960 SC 301)

[2] P. L. Bapuswami v. N. Pattay, (AIR 1966 SC 902)

[3] K. Simrathmull v. Nanjalingiah, (AIR 1963 SC 1182)

[4]Section 53A, Transfer of Property Act, 1882.

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I am Aditi Mishra, a first year student pursuing B.A.LLB (Hons.) from Hidayatullah National Law University, Raipur. I am capable of working in fast-paced environment and of meeting strict deadlines, being a Law student my interest lies in Constitutional Law , Penal Laws and Public International Law. In my free times I indulge myself in cooking and baking, apart from this my interest also lies in debating and reading fictions. At last, I am able to work independently and as part of a team and can make valuable contributions to any legal team.