Sadanandan s/o Erakkal Govindan v. Mukundan and Prasanna Rajan

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR. JUSTICE P.B.SURESH KUMAR** **TUESDAY ,THE 04TH DAY OF SEPTEMBER 2018 / 13TH BHADRA, 1940** **RSA.No. 60 of 2012** **AGAINST THE DECREE AND JUDGMENT DATED 27-08-2011 IN AS 411/2004 of ADDITIONAL SESSIONS COURT, IRINJALAKUDA AGAINST THE DECREE AND JUDGMENT DATED 26-06-2004 IN OS 440/2001 of ADDL.SUB COURT, IRINJALAKUDA** ## **APPELLANT/APPELLANT/PLAINTIFF:** **SADANANDAN S/O.ERAKKAL GOVINDAN, CHENDRAPPINNI VILLAGE,PERUMBADAPPU DESOM, KODUNGALLUR TALUK,THRISSUR DISTRICT.** **BY ADV. SRI. P.R. SHAJI** ## **RESPONDENTS/RESPONDENTS/DEFENDANTS:** |**1**|**MUKUNDAN**| |---|---| ||**S/O.PUNATHUPARAMBIL VELAYUDHAN,CHENDRAPPINNI**| ||**VILLAGE,CHENDRAPPINNI DESOM,KODUNGALLUR**| ||**TALUK,THRISSUR DISTRICT, CHENDRAPPINNI P.O., 680687**| |**2**|**PRASANNA RAJAN**| ||**S/O.KOTTEKKATT RAMAN NAIR,CHENDRAPPINNI**| ||**VILLAGE,CHENDRAPPINNI DESOM,KODUNGALLUR**| ||**TALUK,THRISSUR DISTRICT, CHENDRAPPINNI P.O., 680687**| ||**BY ADV. SRI. D. ANIL KUMAR**| **THIS REGULAR SECOND APPEAL HAVING BEEN FINALLY HEARD ON 04.09.2018, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** RSA.No. 60 of 2012 2 ## **JUDGMENT** **The plaintiff in a suit for declaration of title and recovery of possession, is the appellant.** **2. The case set out by the plaintiff in the plaint is that the plaint schedule property measuring 10 cents belonged to the first defendant; that the defendants sought a loan of `1.25 lakhs from the plaintiff; that the plaintiff agreed to give the loan sought by the defendants on condition that the same shall be repaid within four months and that the first defendant shall execute a sale deed in respect of the plaint schedule property in his favour by way of security for the loan; that the first defendant executed Ext.A1 sale deed in respect of the plaint schedule property in favour of the plaintiff on the basis of the said arrangement and the plaintiff gave the loan as agreed to the defendants; that the arrangement was that the property will be re-conveyed as and when the loan is repaid; that the defendants have not repaid the loan as agreed and that, therefore, the plaintiff is entitled to get his title over the plaint schedule property declared and recover** RSA.No. 60 of 2012 3 **possession of the plaint schedule property from the defendants. The defendants filed a joint written statement. The stand taken by the defendants in the written statement delivered by them is that they have borrowed only a sum of `70,000/- from the plaintiff; that Ext.A1 sale deed was executed only as a security document for the loan availed from the plaintiff; that the plaintiff has executed Ext.A2 agreement on the date of registration of Ext.A1 sale deed itself agreeing to reconvey the property to the first defendant once the loan is repaid and that though the defendants have tendered the amount borrowed to the plaintiff, he refused to reconvey the property. According to the defendants, as there was no intention to convey the property to the plaintiff, he is not entitled to the decree sought for in the suit. The trial court found that the transaction between the parties would amount only to a mortgage and dismissed the suit. The decision of the trial court has been confirmed in appeal. As noted, the plaintiff is aggrieved by the decisions of the courts below. 3. Heard the learned counsel for the plaintiff as also the learned counsel for the defendants.** RSA.No. 60 of 2012 4 **4. The learned counsel for the plaintiff contended that the courts below went wrong in construing the transactions evidenced by Ext.A1 and Ext.A2 documents as a single transaction. It was pointed out by the learned counsel that Ext.A1, going by its recitals, is a sale deed conforming to the requirements of Section 54 of the Transfer of Property Act and Ext.A2, going by its recitals, is an agreement for re-conveyance of the property. It was argued by the learned counsel that in so far as Ext.A1 is a valid sale deed in respect of the plaint schedule property and since the defendants have admittedly not obtained re-conveyance of the property in terms of Ext.A2 agreement, the courts below ought to have declared the title of the plaintiff over the plaint schedule property and permitted the plaintiff to recover possession of the plaint schedule property from the defendants.** **5.** _**Per contra**_ **, the learned counsel for the defendants pointed out that Ext.A2 being a document executed on the same day on which Ext.A1 sale deed was registered, the contents of both documents have to be construed for the purpose of arriving at the conclusion** RSA.No. 60 of 2012 5 **as to the intention of the parties and the nature of the transaction. According to the learned counsel, if the contents of both the said documents are construed, it can be safely concluded that the first defendant never intended to convey the plaint schedule property to the plaintiff and the intention was only to execute a document to secure the repayment of the loan availed from the plaintiff. According to the learned counsel, in the circumstances, the courts below cannot be found fault with for having held that the transaction is a mortgage. It was also pointed out by the learned counsel that though the defendants have approached the plaintiff on various occasions and offered substantial amounts, the plaintiff was not willing to accept the offers made by the defendants. It was further pointed out by the learned counsel that in a case of this nature, even though a money decree was not sought in the suit, with a view to avoid further litigations between the parties, the courts below could have passed a money decree in** **favour of the plaintiff.** **6. Having heard the learned counsel on either side, the substantial questions of law arising for** RSA.No. 60 of 2012 6 ## **consideration in the second appeal have been re-framed** ## **thus:** _**(1) Were the courts below justified in construing the recitals of Ext.A1 sale deed and Ext.A2 agreement for sale in the matter of arriving at the conclusion that there was no intention at all for the first defendant to convey the plaint schedule property to the plaintiff and that, therefore, the plaintiff is not entitled to the decree sought for?**_ _**(2) Having found that the transaction between the plaintiff and the defendants was one in terms of which the plaintiff had lent money to the defendants on the security of the plaint schedule property and that the debt thereby created has not been discharged by the defendants, should the courts below have passed a decree in favour of the plaintiff for recovery of the amounts admittedly due to the plaintiff from the defendants?**_ **7. It is seen that though Ext.A1 sale deed was executed on 18.11.1998, the same was registered only on 19.11.1998. Ext.A2 is a document executed between the parties on 19.11.1998. Though Ext.A1 is styled as a sale deed in respect of the plaint schedule property, Ext.A2** RSA.No. 60 of 2012 7 **agreement categorically recites that Ext.A1 has been executed only to secure the repayment of the loan of `1.25 lakhs availed by the second defendant from the plaintiff. Ext.A2 also recites that the plaintiff shall re-convey the property to the first defendant when the loan is repaid. Though the plaintiff has set up a case that the arrangement between the parties was that the loan shall be repaid by the defendants within four months, Ext.A2 agreement does not contain such a stipulation. It is conceded by the plaintiff in the plaint itself that Ext.A1 was executed by the first defendant on condition that the property shall be reconveyed once the loan is repaid. In other words, even according to the plaintiff, when Ext.A1 sale deed was executed by the first defendant in favour of the plaintiff, the first defendant had no intention to convey the property to the plaintiff. Situation would have been different, had this been a case where the first defendant had transferred the property absolutely to the plaintiff. As there was no intention at all to transfer the property, the plaintiff cannot claim title over the suit property on the strength of the said document, especially** RSA.No. 60 of 2012 8 **when there is no time limit prescribed for re-conveyance of the property and when the first defendant continued to hold possession of the property contrary to the recital contained in Ext.A1 sale deed. True, had the transaction been a mortgage by conditional sale contemplated under Section 58(c) of the Transfer of Property Act, 1882, the plaintiff could have certainly claimed title over the property when the condition is not fulfilled. Ext.A1 transaction cannot be construed as a mortgage by conditional sale, for, a transaction to constitute a mortgage by conditional sale, it is necessary that the condition shall be embodied in the document that purports to effect the sale. That requirement is stipulated in the proviso to Section 58(c) of the Transfer of Property Act, 1882, which admits no exceptions. [** _**See Raj Kishore v. Prem Singh and others (2011 (1) SCC 657)]**_ **. In the light of the said decision of the Apex Court, Ext.A1 cannot be construed as a mortgage by conditional sale. If Ext.A1 sale deed cannot be construed as a mortgage by conditional sale, no doubt, what is to be seen is the intention of the parties at the time of execution of the said document and as it is found** RSA.No. 60 of 2012 9 **that the intention of the parties at the time of execution of Ext.A1 agreement was not to convey the property to the plaintiff, the courts below cannot be found fault with for having held that the plaintiff is not entitled to the decree sought for. Question No.1 is thus answered in favour of the respondents.** **8. As noted above, Ext.A2 agreement entered into between the plaintiff and the first defendant, to which the second defendant is a witness, recites that a sum of `1.25 lakhs has been borrowed by the second defendant from the plaintiff on 19.11.1998 and Ext.A1 document is executed as a security document for the said transaction. It also recites that the property covered by Ext.A1 shall be re-conveyed by the plaintiff to the first defendant when the said loan is repaid. Ext.A2 agreement** **does not prescribe any time frame for the second defendant to repay the loan and for re-conveyance of the property. Though the defendants have contended that a portion of the liability has been discharged by the defendants, the same has not been established in the suit. In other wards, the debt remains undischarged even now. In a case of this nature, according to me, as** RSA.No. 60 of 2012 10 **pointed out by the learned counsel for the defendants, instead of non-suiting the plaintiff, the courts below could have passed a decree for recovery of the amounts due to the plaintiff from the defendants in the interest of justice, for, otherwise there will not be a quietus to the dispute between the parties and the culmination of this litigation would only be the beginning of another. True, the plaintiff has not sought such a relief in the suit. As held by the Apex Court in** _**Pasupuleti Venkateswaru v. The Motor and General Traders**_ **[** _**(1975) 1 SCC 770**_ **], equity justifies bending the rules of procedure, where a specific provision of law or a principle of fairplay is not violated, with a view to promote substantial justice. Further, the courts have a duty to bring litigations to an end or at least to ensure that if possible, no further litigations arise from the cases pending before it. This principle was applied by the Apex Court in** _**Special Land Acquisition Officer v. Karigowda and Others [(2010) 5 SCC 708].**_ **The relevant passage of the judgment in the said case reads thus;** _**“An established maxim “boni judicis est lites dirimere, ne lis ex lite oritur, et interest reipublicae ut sint fines litium”,**_ RSA.No. 60 of 2012 11 _**casts a duty upon the court to bring litigation to an end or at least ensure that if possible, no further litigation arises from the cases pending before the court in accordance with law.”**_ **9. Coming to the quantum, the amount lent by the plaintiff to the second defendant on 19.11.1998 is `1.25 lakhs. Had the suit been one for recovery of money, the plaintiff could have claimed interest also for the said amount. If interest is worked out at a reasonable rate of 12% for `1.25 lakhs from 19.11.1998, the interest itself would come to `3,00,000/- and the interest along with the principal would come to `4.25 lakhs. In the light of the submission made on behalf of the defendants in the course of proceedings, I have suggested the learned counsel for the defendants to offer an amount to settle the liability and the learned counsel, after instructions from his parties, submitted that the defendants are prepared to pay `5 lakhs to the plaintiff towards settlement of the disputes, provided the plaintiff re-conveys the property to the first defendant. The offer was not acceptable to the plaintiff and the matter was, therefore, not settled. In the peculiar facts and circumstances of this case, I am of** RSA.No. 60 of 2012 12 **the view that a decree for recovery of `5 lakhs along with interest at the rate of 12% from the date of this judgment charged on the plaint schedule property should redress the grievances of both sides and render justice to both parties. Issue No.2 is thus answered accordingly.** **In the result, the Second Appeal is allowed, the impugned judgments are set aside and a decree for recovery of `5 lakhs with interest at the rate of 12% from the date of this judgment charged on the plaint schedule property is granted in favour of the plaintiff. It is clarified that notwithstanding the execution of Ext.A1 sale deed, the first defendant continued to be the owner and the title holder of the plaint schedule property subject, of course, to the charge created in terms of this judgment. There will be no order as to costs.** **Sd/-** **P.B.SURESH KUMAR** **JUDGE** **SKS**