C. CHERIATHAN v. P. NARAYANAN EMBRANTHIRI

Citation: [2008] 17 S.C.R. 1239

Court: Supreme Court of India

Bench: S.B. SINHA, CYRIAC JOSEPH

Case summary

C. CHERIATHAN v. P. NARAYANAN EMBRANTHIRI.pdf

Judgment text

[2008) 17 S. C. R. 1239 C. CHERIATHAN II. ~ P. NARAYANAN EMBRANTHIRI (Civil Appeal No. 7400 of 2008) DECEMBER 18, 2008 [S. B. SINHA AND CYRIAC JOSEPH, JJ. ] Deeds and Documents - Conveyance deed - Interpretation of - Held: Intention of the parties must be gathered from the document itself but therefor circumstances attending thereto would also be relevant; particularly when relationship between the parties is in question - For said purpose, all parts of the deed should be read in their entirety - On facts, the deed in question was an absolute conveyance with condition of repurchase and not a mortgage with conditional sale - Transfer of Property Act, 1882 - s. 58(c). The question which arose for consideration in the present appeal was as to whether the deed in question ? entered into between respondent vendor and appellant vendee was an absolute conveyance with a condition of repurchase or a mortgage with conditional sale. _ .... Allowing the appeal, the Court HELD:1.

A document must be read in its entirety. When character of a document is in question, although the heading thereof would not be conclusive, it plays . , significant role. Intention of the parties must be gathered -l from the document itself but therefor circumstances attending thereto would also be relevant; particularly when the relationship between the parties is in question. For the said purpose, it is essential that all parts of the deed should be read in their entirety. [Para 9) (1245-D] P. S. Ramakrishna Reddy v. M. K. Bhagyalakshmi & Anr. (2007) 10 SCC 231 and State Bank of India & Anr. v. Mula . f Sahakari Sakhar Karkhana Ltd. (2006) 6 SCC 293, relied on. 2. 1. The deed in question is said to be a deed of sale. The source of title has been disclosed. What was sought to be· conveyed thereby was the leasehold interest. -~ Assignment was in respect of the vendor's one half share in the property. Possession of the properties had t>,een handed over.

A stipulation was made in the deed that the vendor shall repurchase the same at his expenses within a period of three years from the date of execution thereof. He acknowledg. ed receipt of sale consideration of Rs. 2,000/- in cash. The vendor relinquished all his right J.. over the scheduled property. However, the 'nature of assignment was sought to be clarified as the words "till the period is over" and "efflux of time and thereafter as an absolute sale" are used. It is significant that thereby the vendee in terms of the said instrument became entitled to attorn to the landlord by paying stipulated rent evidently as a tenant and not as a mortgagee. The vendor , accepted that he would have no right to deal with the I-" l j property in any manner. The reason why the' original deed T of sale had not been handed over was also explained. j Declaration has been made that no encumbrances had """' t been created in respect of the vendor's share in the property.

[Para 11] [1245-G-H; 1246-A-C] )'; \ 2. 2. By reason of the said deed only half of the right of the vendor was sought to be assigned. Appellant had already acquired the right, title and interest in respect of the other half of the property. As the word ·•repurchase' ... has been used, the respondent was aware that he has to repurchase the transferred property. What would be ,. +the consideration for repurchase has not been stated. ,-' The time for repurchase, however, has been specified, namely, three years. No evidence has been brought on record to show that any relationship of creditor and borrower had come into being. As the parties were [ related to each other, it is difficult to conceive that the other half of the property would be subject to mortgage + \ and not a sale. Also, appellant had been permitted to ~ ' attorn to the landlord. The intention of appellant that by reason of the deed in question, he would become the •..... J owner of the entire property was thus obvious.

[Paras 12, 17] [1246-D-E; 1250-A, B] Seth Gangadhar v. Shankar Lal & Ors. (1959) SCR 509; Poma/ Kanji Govindji & Ors. v. Vrajlal Karsandas Purohit & Ors. (1989) 1 SCC 458 and Shivdev Singh &Anr. v. Sucha Singh & Anr. (2000) 4 SCC 326, distinguished. Bishwanath Prasad Singh v. Rajendra Prasad & Anr. · -. A (2006) 4 SCC 432 and Manjabai Krishna Patil (DJ by LRs. v. Raghunath Revaji Patil & Anr. (2007) 3 SCALE 331 relied on. Tutsi & Ors. v. Chandrika Prasad & Ors. (2006) 8 SCC 322, referred to. Case Law Reference: (2001) 10 sec 231 relied on Para 9 (2006) 6 sec 293 relied on Para 10 (1959) SCR 509 distinguished Para 13 r: (1989) 1 sec 458 distinguished Para 13 (2000) 4 sec 326 distinguished Para 13 (2006) 4 sec 432 relied on Para 14 (2006) a sec 322 referred to Para 15 (2007) 3 SCALE 331 relied on Para 16 CIVIL APPELLATE JURISDICTION : Civil Appeal No. 7400 of 2008. ~ From the final Judgment and Order dated 1. 11. 2006 of the High Court of Kerala at Erankulam in S. A. No. 290 of 1993. P.

Krishnamoorthy, C. S. Rajani and M. T. George for the Appellant. S. Udaya Kumar Sagar and Bina Madhavan (for M/s Lawyer's Knit & Co. ) for the Respondents. . J The Judgment of the Court was delivered by S. B. SINHA, J. 1. Leave granted. , 2. Interpretation of a deed dated 27. 10. 1969 as to whether >-- ,. _ the same is one of absolute conveyance with a condition of repurchase or a mortgage with conditional sale, is the qu-estion involved in this appeal which arises out of a judgment and order \--~ dated 1. 11. 2006 passed by the High Court of Kerala in Second Appeal No. 290 of 2003 setting aside a judgment and decree dated 28. 11. 1988 passed by the Munsifs Court, Manjeri in Original Suit No. 458 of 1984. 3. Respondent herein was owner of the land in question. He took the said land on lease with one Cheriathan jointly from one Gopalan Nair by reason of a deed of conveyance dated ,l- ' ~' 21. 12. 1967. They made improvements. They constructed buildings thereupon.

Half of the said leasehold rights was sought to be conveyed in favour of the appellant by reason of the said deed. Indisputably, the first respondent executed a deed of assignment in favour of the V. Devaki Amma in respect of his half share for a consideration to repurchase the same by a document dated 27. 10. 1969. She, by a deed of assignment dated 2. 3. 1976, transferred her right, title and interest being half of the property to the appellant and, thus, according to him, he ~ became the full owner thereof. Indisputably again, the appellant was granted a purchase ,__ certificate under the Kerala Land Reforms Act in respect of the entire property in the year 1978. First Respondent did not take any step to set aside the said certificate for a long time. Only in the year 1984, he filed a suit for redemption of mortgage and -partition in respect of his half share in the property alleging that the said deed dated 27. 10. 1969 represented only a loan transaction.

Appellant herein, however, took _the usual stand that +the said deed is in effect and substance a deed of sale with a ',___ condition to repurchase. ' ~ In view of the pleadings of the parties, several issues were framed; issue No. 4 being : "4. Whether the transaction involved in document No. 276/1970 is a mortgage? " \. 3. On construction of the document in question, the learned Trial Judge opined that the transaction represented a sale. On [S. B. SINHA, J. ] an appeal having been preferred thereagainst by the respondent, the First Appellat~ Court held that the transaction was a mortgage by conditional sale and as the respondent did - "---f not exercise his option to repurchase the property within a period of three years, the said sale has become absolute.

Respondent filed a second appeal before the High Court which by reason of the impugned judgment has been allowed interpreting the said document to be a deed of mortgage and consequently holding tbat the suit for partition and redemption J was maintainable. 4. Mr. Krishnamoorthy, learned senior counsel appearing on behalf of the appellant, would submit that the High Court committed a serious error in passing the impugned judgment in so far as it failed to construe the provisions of Section 58 of the Transfer of Property Act in its proper perspective. It was urged that apart from the fact that the value of the property could not have been assessed at Rs. 6,800/-, the High Court ignored that only half share thereof was transferred. It furthermore failed to take into consideration that no evidence had been brought f'""' . judgment cannot be sustained. It is set aside accordingly. The appeal is allowed. In the facts and circumstances of the case, \.

however, there shall be no order as to costs. B. B. B. · Appeal allowed.