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Judgment
Bijayesh Mukherji, J.—The judgment I render now governs two cases. One is a Revisional petition u/s 25 of the Provincial Small Cause Courts Act, IX of 1887, challenging the dismissal, by a learned Subordinate Judge, Howrah, qua Small Cause Court Judge, of a suit for recovery of arrears of rent for two rooms (Civil Revision No. 2252 of 1961). The other is an Appeal from an Appellate Order of a learned Additional District Judge, Howrah, reversing the order of the same learned Subordinate Judge who allowed an application u/s 38 of the Bengal Money Lenders Act, 10 of 1940 (Second Miscellaneous Appeal No. 118 of 1962).
To the facts first One Buddhu Sau held as a thika tenant, 72/6, Banbihari Basu Lane (shortened hereafter into ''72/6''). Admeasuring some six cottahs and containing so many as twentyone rooms, albeit of split-bamboo walling and of tiled roofs, a pucca privy, a pucca drain, a well etc., ''72/6'' is within the municipality and the police-station of Howrah. Quite an important property in 1958 and still more so in the context of to-day, it became the subject-matter of three documents, each of which was executed on March 14, 1958 and put to registration eleven days later : March 25, 1958. To assist one''s convenience, here is a table recording some detail of these documents:
Serial No. Nature of the documents Executed by whom and in whose favour Date of execution Date of registration Exhibit number and remarks
(1) (2) (3) (4) (5) (6)
Sale-deed By Buddhu Sau in favour of Mangal Sau 14.3.58 25.3.58 Ext. A: Consideration--Rs. 4,000
Agreement to reconvey By Mangal Sau in favour of Buddhu Sau 14.3.58 25.3.58 Ext. 7: On payment of Rs. 4,000 by Buddhu Sau within 14.3.61, Mangal Sau would reconvey ''72/6'' to him
Lease By Mangal Sau in favour of Buddhu Sau 14.3.58 25.3.58 Ext. B: Demise of ''72/6''s 2 rooms only out of; 21, on a rent of Rs. 16 a month
On May 22, 1959, a little more than a year after the execution of the three documents tabulated above, Buddhu Sau applied before a learned Subordinate Judge, Howrah, u/s 38, Sub-section 1, of the Money Lenders Act, for accounting. Mangal Sau was not to lag behind. Only twelve days later, that is to say, on June 3, 1959, he instituted a suit in the Small Cause Court, Howrah, against Buddhu Sau, for recovery of Rs. 232 as arrears of rent for 14� months from March 14, 1958 to May 1959, at the rate of Rs. 16 a month: just the amount and just the tenancy stipulated in the lease, Ex. B.
The same learned Judge had had an analogous hearing of both these litigations. Buddhu Sau''s application u/s 38, Sub-section (1), registered as a Miscellaneous Judicial Case under Rule 776(48) of this Court''s Civil Rules and Orders, vol. 1, he tried as a Subordinate Judge. And Mangal Sau''s suit he tried as a Judge, Small Cause Court. So he did upon evidence which was treated as evidence in both and used as well for the purposes of both, save that documentary evidence was separately marked as exhibits in each. In the end, by a consolidated judgment governing both, he found the transaction, evidenced by the three documents together, to be in substance a loan within the meaning of Section 2, Clause 12, of the Money Lenders Act, which bears, in so fat as it is material here:
''loan'' means an advance...of money...made on condition of repayment with interest and includes any transaction which is in substance a loan.
Necessarily, therefore, he allowed Buddhu Sau''s application u/s 38, Sub-section (1) and dismissed Mangal Sau''s suit. Against the dismissal of his suit, Mangal Sau moved this Court u/s 25 of the Provincial Small Cause Courts Act and obtained a Rule. This is Civil Revisional Case No. 2252 of 1961. From the order of the learned Subordinate Judge, allowing Buddhu Sau''s application u/s 38, Sub-section (1), Mangal Sau preferred an appeal which was allowed by a learned Additional District Judge oh the finding that the transaction in question was a sale, not a loan in substance. And from that Appellate order of reversal, Buddhu Sau has appealed to this Court. That is Second Miscellaneous Appeal No. 118 of 1962.
The only question on which I have been addressed by Mr. Banerjee and Mr. Das Gupta, the learned Advocates for Buddhu Sau and Mangal Sau respectively, is what the true nature of the transaction is like, an absolute conveyance or a loan in substance.
I confess, it is not at all an easy matter to determine; the more so, as the litigations I am seized of are such--one is a Second Appeal and the other a Civil Revision u/s 25 of the Provincial Small Cause Courts Act--that the realm of facts is a prohibited area for me, even though it may bristle with errors, perversities and the like in relation to facts. Errors of law constitute the only portal through which I can enter here. I, therefore, proceed with the utmost caution and step by step.
To begin from the very begining, Buddhu Sau got ''72/6'' from his father, Mathura Sau, by a registered deed of gift dated May 5, 1950 : Ex. D. A little more than four years later, to be exact, on December 29, 1954, exactly three types of documents, which now bulk large before me, were gone into by and between Buddhu Sau, on one hand and one Panchanan Das, on the other. The first was an absolute sale-deed by which Buddhu Sau sold ''72/6'' for Rs. 1,000 to Panchanan Das : Ex. A/2. The second was an agreement to reconvey ''72/6'' : executed by Panchanan Das in favour of Buddhu Sau, Ex. A/1 wrongly recorded in the list of documents admitted in evidence as "Regd. Kobala dt. 29.12.54." The term stipulated thereby was that should Buddhu Sau pay Panchanan Das by Agrahayan 1363 B.S. (corresponding to, say, mid-December 1956), that is to say, inside of a little less than two years from the date of execution of the sale-deed dated December 29, 1954, Ex. A/2, Rs. 1,000, the consideration money of the aforesaid sale-deed, plus Rs. 720 on account of damages, in all, Rs. 1,720, Panchanan Das would remain bound to reconvey ''72/6'' to his vendor, Buddhu Sau. The third was a lease, a kabuliyat, executed by Buddhu Sau in favour of Panchanan Das for one room only in ''72/6'' on a rent of Rs. 6 a month upto Agrahayan 1363 B.S. (mid-December 1956), just when the agreement to reconvey ''72/6'' (Ex. A/1) would spend itself. A lease as this, referred to in the body of the document as Bharatia Kabulati, is Ex. C.
What do these documents by and between Buddhu Sau and Panchanan Das indicate--a debt, as found by the first Judge, or an out-and out sale with a contract of repurchase, as found by the appellate Judge? Surely, this is a question of fact. And the finding of fact comes to by the last Court of facts must prevail over that come to by the primary Court of facts, unless the finding of the appellate Judge is vitiated by errors of law. I do see such errors--errors of law. I proceed to state what they are.
Buddhu Sau, it is apparent, could not buy back ''72/6'' by mid-December 1956--the maximum time limit inside of which he was to redeem it in terms of the contract of repurchase dated December 29, 1954, Ex. A/1. So, had it been an out-and-out sale, ''72/6'' would have continued to be Panchanan Das''s and no further question of reconveyance by him to Buddhu Sau could have arisen. Panchanan Das, however, did reconvey it to Buddhu Sau, not on any date earlier than mid-December 1956, but on March 25, 1958, when the three documents of supreme importance by and between Buddhu Sau and Mangal Sau tabulated in para. 2 ante were put to registration. This deed of reconveyance by Panchanan Das in favour of Buddhu Sau is Ex. 1 in the Small Cause Court suit : a certified copy the formal proof of which has been dispensed with. The original sale-deed, the certified copy of which is Ex. 1 in the Small Cause, forms part of the record to this day, being stored in a tin-box. Buddhu Sau filed it in the Miscellaneous Judicial Case on or about December 8, 1959, as the firhisti (the list of documents filed) goes to show. The certified copy having gone into evidence on admission, none bothered to put the original too in evidence. Be that as it may, non-consideration by the appellate Judge of this material evidence : that Panchanan Das did reconvey ''72/6'' a little more than fifteen months after he was freed from his obligation to reconvey evidence which suggests more of a loan than of an absolute sale, does make an error of law.
Again, the contract of repurchase, Ex. A/1, stipulates for repayment, within a little less than two years, by Buddhu Sau not only of Rs. 1,000, the consideration of the conveyance, Ex. A/2, but also of Rs. 720 as damages which is but another name for interest. Rs. 720 in two years for Rs. 1,000 works out at the rate of 36% a year. Another indicium of a loan, which the appellate Judge overlooks and by overlooking which, falls into one more error of law.
An error of law may be spelt out in another way too. I do not question the facts found and existing, such as (i) apparently an absolute conveyance by Buddhu Sau in favour of Panchanan Das for a consideration of Rs. 1,000 on December 29, 1954, (ii) an agreement by Panchanan Das to reconvey, bearing the same date, provided that Buddhu Sau would pay by mid-December 1956 Rs. 1,000 plus Rs. 720 as damages, (iii) failure of Buddhu Sau to pay so, (iv) reconveyance yet by Panchanan Das on March 25, 1958 etc. etc. I question instead the soundness of the conclusion drawn from such facts. I question instead the legal inference drawn therefrom. And this is a matter of law. See Ramgopal v. Shams Khatun ILR 20 Cal. 93 and 3 CWN 502 (Privy Council) . Having questioned the conclusion drawn, the legal inference I draw on my own, from the facts so clear, is that Buddhu Sau''s was a debt to Panchanan Das on December 29, 1954, in a sum of Rs. 1,000, a debt which Buddhu Sau repaid on March, 25, 1958. This I am entitled to do, a matter of law as it is.
What sum was repaid and how? Buddhu Sau and Mangal Sau agree that a certain payment was made to Panchanan Das out of the consideration money received by Buddhu Sau from Mangal Sau on March 25, 1958, for the sale of ''72/6'' again by the former to the latter : vide the sale-deed, Ex. A, serial No. 1 of the table in para. 2 ante. But the area of their agreement is that and no more. What Buddhu says comes to this:
Got Rs. 2,500 only from Mangal. Out of that, paid Rs. 1,000 to Panchanan.
What then about the residue of Rs. 1500, the total consideration for the sale-deed having been Rs. 4,000? Going by Buddhu''s original, petition u/s 38, Sub-section 1, the residue is explained as under: Mangal retained Rs. 1,350 as interest for the three-year term inside of which he was to reconvey ''72/6'' on being paid Rs. 4,000. Rs. 140 was expended for the requisite stamp for the sale-deed, Ex. A which does bear that much of stamp and Rs. 10 for search. In his substantive evidence, however, all he says is that he had received Rs. 2,500 in all from Mangal Sau on March 25, 1958. Even if that little is true, a loan is indicated instead of a sale.
Mangal Sau will not admit that he had paid Buddhu Sau only Rs. 2,500 on March 25, 1958. He says instead:
I had paid Rs. 4,000 cash down to Buddhu who in turn paid Rs. 1,930, out of that, to Panchanan. And Panchanan executed the reconveyance in favour of Buddhu : Ex. 1 in the Small Gause (para. 8 ante).
The jai (memorandum of the detail of the money) at the foot of the sale-deed of March 25, 1958, by Buddhu in favour of Mangal (Ex. A) records as much:
(1) Total sum paid on account of repayment of Panchanan Das''s debt and damages therefore... Rs. 1,930
(2) Given today (to Buddhu Sau)... Rs. 2,070
Total: Rs. 4,000
If this is true, a sale is indicated instead of a loan; the more so, because by the contract of reconveyance of the same date, Ex. 7, Buddhu was to pay Mangal just that sum (Rs. 4,000) within three years in order to get back ''72/6''.
The first Judge accepts Buddhu''s version:
I cannot but hold that Buddhu spoke the truth when he said that he received only Rs. 2,500 and again quite a large portion of the balance was retained by Mangal on account of future interest.
The appellate Judge rejects Buddhu''s version:
there is nothing in proof of this(receipt by Buddhu of Rs. 2,500 only on March 25, 1958) except the oral uncorroborated testimony of Buddhu Sau himself, which cannot certainly outweigh the evidence afforded by the recitals in the document itself coupled with the positive evidence given by a witness to that document, namely, Sakhicharan who has said that Rs. 4,000 was paid to Buddhu Sau.
If no error of law lurks here, the appellate Judge''s finding of fact must prevail over the first Judge''s. But errors of law do lurk here, because of the failure on the part of the appellate Judge to consider the very material evidence set out below:
(1) The recitals in the sale-deed by Panchanan in favour of Buddhu (Ex. 1 in the Small Cause) proclaim receipt by Panchanan from Buddhu of Rs. 1,000 in all, thereby falsifying Mangal''s evidence and the jai in Ex. A that Buddhu had paid Rs. 1,930 to Panchanan on March 25, 1958 and thereby demonstrating too the truth of Buddhu''s evidence that he had paid Rs. 1,000 only to Panchanan on March 25, 1958.
(2) What is far more important, the particulars endorsed by the Registrar, on Panchanan''s reconveyance of March 25, 1958, to Buddhu, when admitting it to registration, bear inter alia:
Rs. 1000/- (one thousand only) as consideration is paid in my presence by Mangal Show (Sau) for the purchaser (Buddhu Sau) to the executant.
The Registrar did make such endorsement, as indeed he was bound to make, u/s 58, Sub-section (1), Clause (e), of the Registration Act of 1908. In compliance with Section 60, Sub-section (1), a certificate by the Registrar with the particulars set out therein is there too. Section 59 has received effect as well the dated endorsements over the Registrar''s signatures are all there. In the circumstances, the Registrar''s certificate becomes admissible, u/s 60, Sub-section (2), for the purpose of proving that the facts mentioned in the endorsements have occurred. So, here is very strong evidence that Mangal did pay Rs. 1,000 to Panchanan for Buddhu on March 25, 1958, demonstrating once more the falsity of Mangal''s evidence that Panchanan was paid Rs. 1,930 and the truth of Buddhu''s evidence that Panchanan was paid Rs. 1,000 only. Mangal himself made the payment, as is so natural, because by such payment ''72/6'' would be freed from Panchanan only to be tied to Mangal. In Buddhu''s sale-deed to Mangal, Ex. A, there is no endorsement by the Registrar of Rs. 4,000 having been paid in his presence.
(3) Sakhicharan in whose evidence the appellate Judge finds corroboration of payment of Rs. 4,000 by Mangal to Buddhu is really Sakhi Chand Sau, the second witness for Mangal. About him, Mangal himself says this in his cross-examination:
Sakhi Chand was not present at the time of execution and registration of the documents.
Therefore, the finding of fact comes to by the last Court of facts that Mangal had paid Rs. 4,000 to Buddhu or that Buddhu''s evidence of having received Rs. 2,500 only is not acceptable, is vitiated by the errors of law just noticed : failure on the part of the last Court of facts to consider evidence on the materiality of which there can be no two words.
It can, therefore, be found in safety, as indeed is found, that Buddhu had received from Mangal on March 25, 1958, no more than Rs. 2,500, no matter that the recital in the sale-deed, Ex. A, speaks of a consideration of Rs. 4,000 (such payment not endorsed by the Registrar as the payment in the other sale-deed by Panchanan to Buddhu, Ex. 1 in the Small Cause, is) and that out of the sum so received he liquidated the debt of Panchanan by paying him Rs. 1,000, a fact which receives striking corroboration from the recital in Panchanan''s reconveyance, Ex. 1 ibid. and from the Registrar''s endorsement to that end therein.
Does the finding just come to that Buddhu Sau received Rs. 2,500 only from Mangal Sau and not Rs. 4,000 as recited in the sale-deed, Ex. A, contravene Section 92 of the Evidence Act, 1 of 1872? This is another question debated before me. On a topic as this, Sub-section (6), as added to Section 40 of the parent Act, by Section 10 of the Bengal Money Lenders (Amendment) Act, of 1965, is apt to come to one''s mind. It nullifies Section 92 of the Evidence Act in so far as a document creates or witnesses a loan. When such is the document, the borrower''s evidence contradicting, varying, adding to, or subtracting from, its terms is admissible. But this new provision is not for one like Buddhu Sau who instituted his legal proceedings on May 22, 1959. The "Amendment Act" of 1965, came into force on October 15, 1965. More, by Section 14 thereof, the legal proceedings now before me have been saved. They are to continue "as if this Act (Act of 1965) had not been passed". Thus, this new provision--Sub-section (6) of Section 40--does no duty here Section 92 of the Evidence Act does, remaining in its original strength. It must, therefore, receive effect.
But what is Section 92 in so far as it is material here? By its main provision, oral evidence contradicting, varying, adding to, or subtracting from, the terms of a written instrument solemnly entered into by the parties is inadmissible. The principle of this rule appears to be: "You have put into writing all you had wanted to say. So, there you must stop. You are not allowed to go back upon it." Were this not so, where and when will the bandying of words by one party with the other end, though both have made a complete memorial of what they were agreed about and of what they intended to do? If Section 92 had been this and this only, the finding I have come to in para. 15 ante: that Buddhu Sau had received Rs. 2,500 instead of Rs. 4,000 as stated in the sale-deed, would have surely contravened it (Section 92). But this section contains much more: so many as six provisos, of which proviso (6), playing a leading part in litigations of this type; bears:
Any (act may be proved which shows in what manner the language of a document is related to existing facts.
In Ganpatrao Appaji Jhgtap v. Bapu Tukaram AIR 1920 Bom. 143 Macleod C.J. and Crump J. spoke of this proviso in the following terms:
That is one of the provisos which is the despair of the Judge and the joy of the lawyers.
Is it really? Let a clean look be taken of the plain language of the proviso, unbiased by authorities. And there are so many. On one side, is to be weighed the document''s language, from which there can be no running away. On the other side, are to be weighed the existing facts, that is to say, facts which exist at or about the time of the document having come into being. Weighing over, find out in what manner the document''s language is related to such existing facts. You may prove any fact which will bring out this relationship. That, then, is the clear mandate of the sixth proviso, to understand which completely it has got to be known what is the meaning of fact. To the Evidence Act again which contains its own dictionary. Here is Section 3 laying down what the meaning of fact is:
''Fact'' means and includes--
(1) any thing, state of things, or relation of things capable of being perceived by the senses;
(2) any mental condition of which any person is conscious.
The two broad divisions this definition makes are on the basis of facts--(i) physical or external and (ii) psychological or internal. Not content with a bald definition, it gives five illustrations : (a) to (e) : to demonstrate what a fact is. Illustrations (a) to (c) illustrate Clause 1 : physical or external facts which are capable of being perceived by the senses. Illustrations (d) and (e) similarly illustrate psychological or internal facts which can exist only in the mind of the individual and are, therefore, spoken of as "any mental condition of which any person is conscious". Take illustration (e) : "That a man has a certain reputation is a fact". Surely it is not capable of being perceived by the senses. It is only a mental condition of which persons knowing about such reputation are conscious. Or take the following from illustration (d) : "That a man has a certain intention is "a fact". So, whether or not a person has a certain intention is a fact. Let the full meaning of the sixth proviso to Section 92 be now grasped, in the context of facts I am seized of. The language of Buddhu Sau''s sale-deed in favour of Mangal Sau is clear: Rs. 4,000 was paid by the one to the other. Say, the existing fact--a physical or external fact--in truth is: Rs. 2,500 was in fact paid, not Rs. 4,000. Ergo, provable is any fact which shows in what manner the document''s language, bespeaking of a consideration of Rs. 4,000, is related to the existing external fact which, in truth, is that Rs. 2,500 was paid instead of Rs. 4,000. The principle behind the rule, which the sixth proviso embodies, appears to be that in suitable cases, such as where the ''haves'' prey upon the want and misery of the ''have-nots'', it is the duty of the Court to get at the truth by entering into evidence with the subject of finding out in what manner the document''s language is related to the existing facts. Terms of the sale-deed? Say, this consideration of Rs. 4,000 is a term of the contract as entered in the sale-deed, though it may well be said that it is no more than an admission by Buddhu Sau as having received Rs. 4,000, coupling with a recital (as distinguished from a term) to that end by him, the payee; in which case this can surely be disputed like any other admission, because, by virtue of Section 31, admissions are not conclusive ever. Even on the assumption that this consideration of Rs. 4,000 is a term, Buddhu Sau by his oral evidence that he had received Rs. 2,500 is only reiterating what he had in fact received. He is not saying that the term was so. He is, therefore, not contradicting, varying, adding to, or sub-tracking from, this term of the consideration having been Rs. 4,000. Hence, the finding comes to that Buddhu Sau received Rs. 2,500 on March 25, 1958, when his conveyance in favour of Mangal Sau was registered (para, 15 ante) appears to be well within even the main part of Section 92 denuded of the sixth proviso. And such finding is much more within the sixth proviso, showing in what manner the sale-deed''s language (consideration of Rs. 4,000) is related to the existing fact (receipt of Rs. 2,500 in fact).
Two conclusions I have then come to so far. One, Buddhu Sau had an old debt of December 29, 1954, to Panchanan Das in a sum of Rs. 1,000 which was repaid on March 25, 1958 : para. 10 ante. Two, it was repaid so, out of a sum of Rs. 2,500 he had received on March 25, 1958, from Mangal Sau in whose favour he had executed a sale-deed for 72/6'' on March 14, 1958--a sale-deed which was put to registration on March 25, 1958, along with two other documents --an agreement by Mangal Sau to reconvey ''72/6'' to Buddhu Sau and a lease as respects two rooms therein by Mangal Sau again in favour of Buddhu Sau (See para. 2 ante, for the tabular chart of the three documents and para. 15 ante for the conclusion reached on receipt of Rs. 2,500 by Buddhu Sau and payment of Rs. 1,000 out of that to Panchanan Das.) The blessings of the salutary provision, which the sixth proviso to Section 92 is, are not exhausted yet. Two more existing facts need looking into. One is who continued to be in possession of ''72/6'', in spite of the sale-deed of March 14/25, 1958, Ex. A, where Buddhu Sau, the vendor, proclaimed:
I have relinquished this day possession of the property sold (72/6) in your (Mangal Sau''s) favour. I have made over khas possession to you of the rooms which were in my khas possession. I have made the tenants of my tenanted rooms attorn to you. From this day, I, down to my heirs, become destitute for ever of any right, title and interest in the property sold.
The other existing fact, which does need looking into, is : what is the fair and reasonable value of ''72/6'' at the relevant time and how does it stand in relation to Rs. 4,000 stated in the sale-deed to be its price? I proceed to deal with these two facts in the light of findings come to by the learned Judges below and also of the materals they had had put before them.
First to the question of valuation on which the two learned Judges are said to have differed. The first Judge finds it to be "extremely doubtful" if ''72/6'', a property the value of Which is about Rs. 12,000, would be sold at one-third-thereof, when the loan to Panchanan was Rs. 1,000 only. The appellate Judge takes into his reckoning "the nature of the property" : (i) the thika tenancy of Buddhu for the land proper, as well as (ii) the kuchha structures at ''72/6'' and finds that
the manner in which the surveyor made the valuation, to my mind, does not give the true market value thereof.
Finding so, he hastens to say in the next sentence:
However, when the provisions of the two deeds, namely, Exs. A and 7 (the sale-deed by Buddhu in favour of Mangal and the agreement to reconvey ''72/6'' by Mangal), considered together, do not contain any condition indicating the transaction to be a mortgage or anything else other than a transfer outright and when there is no ambiguity in the language of the deed in this matter, I do not think that only the inadequacy of the consideration of the transfer of the property is a sufficient circumstance indicating the intention of the parties that the transaction in question was not an outright transfer but was a mortgage by conditional sale.
Then he goes on to add that
a person under certain circumstances may be compelled to sell his property at a value much lower than the property is worth.
Thereafter, he concludes that, at all events, to Buddhu the offer of Rs. 4,000 with a contract, for repurchase was a better bargain than the sale to Panchanan Das at Rs. 1,000 with a similar contract.
A finding of fact by the appellate Judge, the last Court of facts, is no doubt to be treated as final in Second Appeal, as Mr. Das Gupta rightly emphasises. The appeal I am seized of is just that : a Second Appeal. But can what the appellate Judge says, taken as a whole, be regarded as a clear and specific finding on the question of valuation? First, he says that because of the tenancy being a thika one with kuchha structures and because of the manner of the valuation, the true market value of ''72/6'' has not been brought out. If he had said no more, it might have amounted to some sort of a negative finding that what the two valuers value does not establish the true market value, even though he does not take the trouble of examining the contents of the two valuation reports--one set by Buddhu''s witness No. 1, Balai Chandra Seth, a licensed surveyor and valuer (Exs. 1 and 1-a) and another by his witness No. 3, B. K. Banerjee, an engineer and valuer of 27 years'' standing, as he says in his evidence and a "B.E., C.E., A.M.I.E., Chartered Engineer. Architect, Valuer and Surveyor", as he describes himself in his report, Ex. 3, with a letter-head in print recording his so many qualifications. Even this little of some sort of a negative finding by the appellate Judge : that the true market value of ''72/6'' does not emerge upon evidence, is completely washed out by his observations that immediately follow : (i) the provisions of the two deeds, the sale-deed and the ikrarnamah, Exs. A and 7, however, proclaim the transaction to be an absolute sale (mark the word ''However'' in the extract quoted from the appellate judgment in the preceding paragraph, indicating that even he does not attach any finality to his casual finding about the absence of the true market value emerging upon evidence), (ii) the possibility of one in a certain predicament selling his property at a value much lower than it is worth and (iii) Buddhu making a better bargain with an offer of Rs, 4,000 than the earlier one with a completed sale at Rs. 1,000. What then remains of his negative finding on valuation come to earlier?
Such contradictory and necessarily ambiguous findings on the part of the appellate Judge cannot but bring to one''s mind the Privy Council decision in Ram Lal Dutt v. Dhirendra Nath Roy (1942) 47 C.W.N. 489 . In an "able judgment", the trial Judge found as a fact, upon the whole of the evidence--oral and documentary, that Srinath Sarkar, the original tenant, had been given possession, inter alia, of 822 bighas Perhaps inadvertently stated as 822 acres at p. 492 of the report, of land demised and then ousted from part thereof (37 acres). On appeal, the Judge there gave "a general approval" "to the views taken by trial Court"--an approach which did "not necessarily incorporate" all his findings in detail. Worse, he (the appellate Judge) did not deal with the question of dispossession specifically, examining the contents of the kabulyats examined by the trial Judge and expressed himself as under:
...the Plaintiffs dispossessed the Defendants and their predecessors of those lands.
a language which
is a singularly unconvincing way of stating a finding that Srinath was put in possession and was dispossessed but a phrase natural enough if all that he meant is that the Defendants and their predecessors were kept out of possession.
In the background of all this, their Lordships laid down two propositions:
A. Since findings of fact by the lower Appellate Court are to be treated as final, they should at least be clear and specific--not ambiguous or inferential.
B. If it is in law of importance to the rights of the parties to decide whether the Defendants have proved that Srinath was ever in possession of the 37 acres, their Lordships think that the High Court was entitled to decide the question upon the evidence before it.
Just so here, going by the principle of Ram Lal Dutt''s case (1942) 47 C.W.N. 489 . Not that the findings of the appellate Judge there and the appellate Judge here are just the same. As what I have recorded in paras. 19 and 20 reveals, the first observation the appellate Judge here makes is that having regard to nature of the property (72/6) and the manner of valuation, the true market value thereof does not come to light. Then he says, one in straitened circumstances does sell his property at a price much lower than the market value. If that be so, the two findings cancel one another. Buddhu then sold ''72/6'' to Mangal at Rs. 4,000, much lower than its market value. Again, he says, Buddhu made a bargain in March 1958 at Rs. 4,000 compared to the sale to Panchanan Das at Rs. 1,000 on December 29, 1954. But that was no sale. That was only a debt to Panchanan Das in a sum of Rs. 1,000. (See paras. 6-10 ante.) Such observations on valuation I hesitate to call findings even. Even if I treat them as findings, as I do, they are neither clear nor specific. They are ambiguous and inferential : just the type, the Privy Council warns, the lower appellate Court must not resort to, if it wants its findings to be treated as final : Proposition A in the preceding paragraph.
Again, it is in law of utmost importance to the rights of Buddhu Sau and Mangal Sau to decide what was the proper valuation of ''72/6'' in and about March 1958, an existing fact within the sixth proviso to Section 92 of the Evidence Act. I am, therefore, entitled to decide this question upon the evidence before me, though seized of a Second Appeal: Proposition B in para. 21 ante. And that is just what I proceed to do.
Buddhu Sau values his property (72/6) at Rs. 12,000. That may be ignored, if his is the lone evidence on the point. What may not be ignored, however, is his further evidence that ''72/6'' fetches a rent of Rs. 170 a month and that there are twenty-One rooms in all, facts which are not in the realm of controversy.
The licensed surveyor and values, Balai Chandra Seth, values the structures only at Rs. 10,070.55 P. The written estimate he submits is Ex. 1 and the detail he records is Ex. 1/a. He holds no degree nor a certificate. But he did pass the examination after a 3-year course of the Howrah Municipality. To value a bustee, which ''72/6'' is, the Court does not need an expert with a doctorate in engineering. Such a one is too good for so modest a work. The only criticism that is made against him is that he visited ''72/6'' only once to stay there for half an hour or a little more with a view to taking the necessary notes. But for this paltry work, done in a rough-and-ready manner, that little appears to be enough. One need not be there from sunrise to sundown. With all the infirmities in his evidence, such as non-examination of the length and depth of the concrete portion below the surface, failure to give up the ''break up'' value of the measurements, no deduction for depreciation, presumably because he found ''72/6'' in a good condition etc, etc., the valuation he gives of the struotures only (a little more than Rs. 10,000) appears to be acceptable, on the whole.
That, in spite of so many infirmities, the rule of thumb he had employed gave him a correct conclusion is borne out by the evidence of that qualified engineer and valuer, B.K. Banerjee, whose report along with the plan he had made is Ex. 3. Allowing 20% for depreciation, he values the structures only at Rs. 11,822. He did not bring along with him his field-book. Certainly it would have been better if he had brought it. But that does not destroy the value of the whole of his evidence. Valuation or no valuation by a valuer, it needs no imagination to see that the structures comprising so many as twentyone rooms, (on which there is no controversy) would be valued at that much in or about 1958. Reduce it. Say, it is in the neighbourhood of Rs. 10,000.
But the structures are not the only things to be reckoned in calculating the value of ''72/6'' What about the land which admeasures six cottahs? The learned appellate Judge in his none too firm a finding (on the contrary, in the course of a most casual, provisional and ambiguous finding) dwells on Buddhu''s being a thika tenancy : para. 19 ante. So what? A thika tenancy these days is not the precarious affair it was before. Nor was it anything like precarious in March, 1958. Thanks to the legislation on thika tenancies, leaving aside the period when the Calcutta Thika Tenancy Act, II of 1949, remained a dead-letter because of the impossibility of proving the system of thika under the then definition of a thika tenant and counting from the period when the Calcutta Thika Tenancy (Amendment) Ordinance, XV of 1952, followed by the Amendment Act VI of 1953, rid the parent Act of that clog, a thika tenant includes his successors in interest Section 2, Sub-section (5) and has several manners of statutory protection thrown around him. So, why belittle ''76/2'' only because Buddhu''s is the interest of a thika tenant? Surely, a six-cottah plot of land within the municipality and police-station of Howrah, even though the vendor holds it as a thika tenant, is not valueless. In safety, at least Rs. 2,000 may be put as its valuation. Therefore, Rs. 10,000 for the structures plus Rs. 2,000 for the land, Rs. 12,000 in all, will be the value of ''76/2'' at its lowest.
The rental basis, the rent being Rs. 170 a month, lends much more than an assurance to such valuation, even if due allowance be made, for the rent of Rs. 13 a month payable to the landlords, the Seal Babus, as stated in the sale-deed, Ex. A, depreciation at 20% and other sundry expenses. It is significant that Chartered Engineer B.K. Banerjee speaks also of the rental basis of Rs. 170 a month--a recognized method of valuation.
Again, look to the annual value of ''72/6'' as assessed by the Municipality of Howrah : vide the rate bills, Exs. 6 series. It is Rs. 583. Multiply it by 20 and you get the market value which becomes Rs. 11,660. It is well-known that the annual value assessed by a municipality invariably errs on a low side. The finding must therefore be that the valuation of ''72/6''--land, structures and all cannot be less than Rs. 12,000 by any computation. Appearances are in favour of its being much more.
Now, apply the sixth proviso to Section 92. In what manner is the 1958 sale-deed''s language (price of ''72/6'' at Rs. 4,000) related to the existing fact (the market value of ''72/6'' in 1958 being Rs. 12,000)? The consideration set out in the 1958 sale-deed, Ex. A, (Rs. 4,000) is one-third, of the market value which is in the least Rs. 12,000 (an existing fact), though the debt repaid to Panchanan comes to Rs. 1,000 (still another existing fact). One more indicium of the transaction being a loan and not an absolute sale.
The learned appellate Judge has failed to consider any one of these material facts I have culled from the evidence and has thereby fallen into an error of law again, giving me jurisdiction to interfere.
Now to the question of possession. What the recital in the relevant sale-deed is like has been noticed : para. 18 ante. Here also the two Judges differ. To the trial Judge, "the evidence is overwhelming that Buddhu continued to possess the property in the same manner throughout as he has done during the period the loan with Panchanan Das had remained subsisting." To the appellate Judge, Buddhu Sau''s possession of the two rooms in ''72/6'' is attributable to the lease (Ex. B : see para. 2 ante) by Mangal Sau in his favour for a three-year term : and possession of the remaining nineteen rooms in ''72/6'', tenanted all, is the possession also of Mangal Sau through the tenants who had attorned to him (Mangal Sau), as is the definite statement in the sale-deed, Ex. A.
Here also no finality can attach to the learned appellate Judge''s finding, vitiated as it is by errors of law on account of his failure to consider material facts listed below:
A. Mangal Sau resting on his oars from March 25, 1958, (when Buddhu Sau''s sale-deed, Ex. A, in his favour for ''72/6'' was registered) to June 3, 1959, (when he instituted his small cause for recovery of arrears of rent of Rs. 16 a month from March 14, 1958 to May 1959 in terms of the lease, Ex. B : see para. 2 ante).
Had Mangal Sau been a genuine purchaser of ''72/6'' and had the lease granted by him to Buddhu Sau as respects two rooms of ''72/6'' been a genuine one too, it would have been difficult even for credulity to swallow that he would allow rent for fourteen months and a half to accumulate. It is said : what also could he have done when Buddhu Sau proved himself to be a refractory tenant. The obvious answer is that even the most unruly tenant (assuming Buddhu Sau to have been so) could not have prevented him (Mangal Sau) from filing a suit earlier. And how his small cause was'' timed appears to be deserving of a special notice. It was filed on June 3, 1959; some 12 days after Buddhu Sau had initiated proceedings u/s 38 of the Money Lenders Act, 10 of 1940, the date of such initiation being May 22, 1959. Only a sham purchaser would behave in the manner in which one of Mangal Sau''s stamp was behaving. A true purchaser of the type, Mangal Sau belongs to, (not of a type a millionaire is, caring little for such a small amount) would not and could not, have rested on his oars so long. But a lender would and could.
B. What about the remaining 19 rooms?
The learned appellate Judge sees in Buddhu Sau''s possession his possession as a lessee. The very lease having been there to keep up the appearance of a sale by Buddhu Sau, such scienter is not attributable to him. Furthermore, of the remaning nineteen rooms, as respects which Buddhu Sau''s possession cannot be explained on the basis of his alleged possession as a so-called lessee, the best Mangal Sau could do at the trial was to examine the worst type of a witness, Ram Birij (Mangal''s witness No. 4), who, on his own evidence given on February 24, 1961, had been a tenant at ''72/6'' "for the last 2 years", that is to say, from February 1959 or thereabouts, nearly a year after the transaction of March 14/25, 1958, evidence by the three deeds--the conveyance, Ex. A, the agreement to reconvey ''72/6'', Ex. 7 and the lease, Ex. B. (See para. 2 ante.) Where go the tenants and they are so many, who, as the sale-deed, Ex. A, recites, had attorned to Mangal Sau, at the time the so-called sale was gone into? A glance over a counter-foil book, Ex. F/1, of Mangal Sau will suffice. Only seven such counterfoils are there, the foils having presumably been pressed into service and the remaining pages, with foils and counterfoils, having not been used at all. Leaving aside the seventh one which is blank save the signature of Mangal Sau at the bottom, the first six counterfoils record payments of rent for January, 1960. The first one is not dated. The second one is dated February 9, 1960. And the remaining four are dated February 13, 1960. The recorded tenants are Parasan, Gouri Shankar Prasad, Bonowari Chowdhuri, Binda Sau, Ram Birinch (Ram Birij, the witness No. 4?) and Daya Chowdhuri : one name in each counterfoil. To ask the Court to believe Mangal Sau''s possession of ''72/6'' from March 14/25, 1958, to May 22, 1959, or June 3, 1959, on the basis of counterfoils of February 1960, is to ask for the impossible. On the other hand, the counterfoils of Buddhu Sau : Ex. E/1 from August 7, 1957 to November 1958 and Ex. E from November 1958 to July 1959, are apt to carry conviction, with all their infirmities. The two other counterfoil books of Buddhu Sau, Exs. 9 and 9(a), I do not take into account, as they '' relate to the post-litigation period : August 1959 to January 1961. No wonder, the trial Judge, who had had the benefit of hearing and seeing Buddhu Sau, Mangal Sau and other witnesses, finds:
Mangal has failed to prove beyond any reasonable doubt that he had been peacefully collecting rents from different tenants in the property.... On the other hand, Buddhu had adduced satisfactory evidence from the counterfoils filed that he has been realising rents from the tenants in the house....
The appellate Judge, who was only dealing with the "dead body" of the evidence, explains away the possession of nineteen rooms in favour of Mangal Sau, relying only on the recital in the sale-deed, Ex. A, that the tenants of these rooms "were made to attorn to the vendee Mangal Sau". What the possession was like immediately after the recital on March 14/25, 1958 and in spite of such recital, in the light of the counterfoils and the oral evidence, he does not consider.
On these broad considerations, the finding of the trial Judge : that possession of ''72/6'' remained with Buddhu Sau in spite of the sale-deed, Ex. A, can well be sustained. It is hardly necessary therefore to dear with, in detail, other features relied on by Mr. Banerjee, such as:
(i) Erection by Buddhu Sau of a room in ''72/6'' after March 14/25, 1958, which cannot be called an existing fact within the sixth proviso to Section 92 of the Evidence Act and the admissibility of which, a subsequent conduct, has been rightly questioned by Mr. Das Gupta;
(ii) Buddhu Sau''s Small Cause Court Suit No. 87 of 1958, the cause of action of which against the tenant sued is October 1, 1957, as stated in the relative decree, Ex. 10, is, to say the least, irrelevant in the context of possession by one party or the other on and from March 14/25, 1958; the more so, when arrears of rent were not assigned by the vendor Buddhu Sau to the vendee Mangal Sau by virtue of the sale-deed, Ex. A;
(iii) Khasra Khatians, Exs. 5 and 5/a, not finally published, recording Buddhu Sau, have some evidentiary value, no doubt; but it is so small;
(iv) of so many rate bills of the Howrah Municipality filed in both the litigations Miscellaneous Case u/s 38 of the Money Lenders Act and Small Cause Court Suit--those which are relevant, coming in date after March 14/25, 1958 and recording the name of Buddhu Sau are Ex. A/4, A/6 to A/8 and A/10 in the Small Cause Court Suit; but what they indicate is offset to a great extent by Mangal Sau having applied for mutation of his name in the books of the Municipality on May 3, 1958 and the Municipality having granted it on May 11, 1959 : Vide Exs. E/2 and E/1 in the Miscellaneous Case.
To sum up, the four existing facts, that is to say, facts which exist at the time of the controversial transaction, are (i) existence of a debt of Buddhu Sau to Panchanan Das in a sum of Rs. 1,000, (ii) payment of that debt that day by Buddhu Sau out of Rs. 2,500 (not Rs. 4,000) he had received from Mangal Sau also that very day, (iii) Rs. 4,000, the consideration money for ''72/6'', having no relation to its market price then, as high as Rs. 12,000, if not more and (iv) possession of the vendor Buddhu Sau remaining undisturbed and continuing in defiance of he sale-deed extinguishing his possession. Such existing facts point to one and only one thing : that the transaction is not an absolute sale it purports to be; it is in substance a loan. The sixth proviso to Section 92 of the Evidence Act doing such an excellent duty and enabling the judge to do his duty too, why should it earn the stigma, if I may say so, with all respect, of being "the despair of the Judge and the joy of the lawyers"? (See para. 17 ante.) May it not be said instead, in the light of facts emerging here, that it is the despair of the greedy and the joy of the needy?
With all the findings that go before, the controversial transaction will not be a mortgage by conditional sale. It will not be, because the condition of repurchase is not embodied in Ex. A which purports to effect the sale. Such condition is embodied instead in the separate ikrarnamah which is Ex. 7. The proviso to Section 58(c) of the Transfer of Property Act, IV of 1882, is, therefore, in breach. And the transaction in controversy cannot be deemed a mortgage by conditional sale. No Court can regard as a mortgage by conditional sale that which a competent enactment has declared shall not be a mortgage by conditional sale.
But that is of the least materiality here. What is of the utmost materiality is that the transaction is in substance a loan u/s 2(12) of the Money Lenders Act, 10 of 1940, which reigns here and governs the two litigations I am seized of. And that is enough to tilt the scales in favour of Buddhu Sau. See Manindra Nath Bose v. Narendra Krishna Mitra I.L.R.(1956) Cal. 59, reiterated recently in Banku Behari Chandra v. Sm. Kalyani Debi (1965) 70 C.W.N. 138, for the principle to go by in such cases.
Section 37A of the Money Lenders Act, 10 of 1940, inserted by Section 9 of the Money Lenders (Amendment) Act, XXI of 1965, to which Mr. Das Gupta is good enough to draw my attention, does nullify the proviso to Section 58(c) of the Transfer of Property Act, IV of 1882. But, precisely for the reason set out in para. 16 and this new section does not reach the litigations before me. So, I leave it at that.
It will be noticed that, in the discussions contained in the foregoing lines, I have eschewed oral evidence of the intention that animated Buddhu Sau and Mangal Sau on March 14/25, 1958. I have, because of a long line of cases, say, from 4 CWN 153 (Privy Council) , down to Pandit Chunchun Jha and Sheikh Ebadat Ali (1954) S.C.A. 611 and even beyond, such as Bhaskar Waman Joshi (deceased) and Others Vs. Shrinarayan Rambilas Agarwal (deceased) and Others, and some of these cases have been referred to at the Bar holding that oral evidence of intention is not admissible, or that, in the words of Bose J. in Chunchun Jha''s case (1954) S.C.A. 611, "any extraneous enquiry into what was thought or intended is ruled out". In the circumstances, it will be futile to investigate whether or not a man having a certain intention which is undoubtedly a fact within the meaning of Section 3 of the Evidence Act defining ''fact'' and illustrating by illustration (d) such intention to be a fact, (see para. 17 ante), can also be regarded as an existing fact within Section 92''s proviso 6, which is, in reality, more in the nature of an independent provision than a mere proviso. In all humility, I just stir this point which perhaps "wiser heads in time may settle".
But the case in hand is such and the surrounding circumstances I have gleaned from evidence and gone by are such, that the true meaning and effect of the impugned transaction appears to be, in substance, a loan and nothing but a loan. Take, for example, the Privy Council decision in Baijnath Singh v. Hajee Vally Mahomed Hajee Abba AIR 1925 P.C. 75, where Sir Lawrence Jenkins delivered the judgment of the Board on December 5, 1924, some 24 years after Lord Davey had delivered the Board''s judgment in 4 CWN 153 (Privy Council) . There, too, what, to all outward appearance, was an absolute sale of certain shares was found, on scrutiny, to be a mortgage, the shares only serving as security, because of the extrinsic evidence furnished by the surrounding circumstances, such as the amount paid by the transferee having had no relation to the market price of the shares, recognition of the transferor''s claim to dividends etc. Section 92 of the Evidence Act, making inadmissible, as between the parties to an instrument, oral, evidence of intention for the purpose, either of construing deeds or of proving the intention of the parties, just the rule laid down in 4 CWN 153 (Privy Council) was referred to. And it was said:
...Section 92 merely prescribes a rule of evidence it does not better the Court''s power to arrive at the true meaning and effect of a transaction in the light of all the surrounding circumstances.
I have done no more. Or, better still, I have tried to do no more. And the finding I have come to is that the controversial transaction of March 14/25 is, in substance, a loan, not an absolute sale.
In the result, the Rule obtained by Mangal Sau in Civil Revision Case No. 2252 of 1961 must be and is hereby, discharged; and Second Miscellaneous Appeal No. 118 of 1962 preferred by Buddhu Sau must be and is hereby, allowed : the judgment of the Additional District Judge in Miscellaneous Appeal No. 65 of 1961 be set aside and that of the Subordinate Judge in Miscellaneous Case No. 20 of 1960 be restored. In all circumstances here, each party will pay and bear its costs throughout.
Leave to appeal under Clause 15 of the Letters Patent is asked for. It is refused.