PROVINCIAL COOPERATIVE BANK, GILGIT through General Manager Versus MUHAMMAD SHARIF through L.Rs.
SYED TAHIR ALI SHAH, J .--- Through this petition for leave to appeal the petitioners have impugned the vires of judgments/decrees returned by a Division Bench of Chief Court, Northern Areas dated 8-6-2006 in C.P.L.As. Nos.21 and 22 of 2000 whereby the First Appellate Court upheld findings of trial Court dated 25-9-2000.
2. At the very outset, we are constrained to express our dissatisfaction over the long and unexplained pendency of appeals before the Chief Court extending over a period of more than five and half years to its disposal.
3. Facts relating to the case in hand arc that one Muhammad Sharif son of Faqir Muhammad resident of City Gilgit filed a suit for redemption of the suit-land upon the allegation that he is the owner of the property in the suit which was mortgaged by way of conditional sale with defendant No.1, the Provincial Cooperative Bank Gilgit (hereinafter called the Bank) through a deed registered against No.182, dated 10-6-1981. The plaintiff, further averred that he is liable to pay a sum of Rs.3,00,000 which he had borrowed from the bank. The plaintiff through the deed marked as Exh.P.1, mortgaged two sets of residential houses, stood constructed on land bearing Khasra No.1010 measuring 3 Kanals excluding the three shops constructed on the said land and a patch of land reserved for construction of other three shops. The possession of mortgaged property was followed by execution of the mortgaged deed. The plaintiff, has further contended that on 4-9-1986 the Bank fraudulently, without any notice to the plaintiff, posing himself the owner of mortgaged property sold the same to defendant No.2 for a consideration of Rs,3,00,000 along with delivery of possession through Mutation No.8661 attested on 4-9-1986. He claimed, the transaction as void. Before such transaction came into existence the Bank got attested Mutation No.8582 in his name as owner of the mortgaged property. As relief, he claimed the possession of the mortgaged property through redemption.
4. Defendant No.1, the Bank tiled its written statement and contested the suit. Besides a chain of legal objections raised in the written statement, the only concrete point towards defence was that the transaction alleged in the plaint is in fact not a mortgage but was an out acid out sale. The possession of the property was also delivered to the Bank on the very date of execution of the deed in question. He further contended that the property rests with defendant No.2 as the Bank has sold out the same to defendant No.2 for a consideration of Rs.3,00,000.
5. Defendant No.2 through his separate written statements almost repeated the stances taken by defendant No. l with the addition that he has spent a sum of Rs.1,57,000 on the property in the shape of improvements. Defendant No.3, as order-sheet reveals, did not put his appearance in the Court after he was impleaded as defendant and was proceeded ex pane.
6. After-going through the proceedings of the case and extending full opportunity of proof and rebuttal to the parties the learned Civil Judge at the completion of proceedings arrived at the conclusion that alleged transaction made through Exh.P.1 is a mortgage and not sale. He accordingly decreed the suit as prayed for.
7. Felt aggrieved with the judgment/decree of the trial Court the Bank and defendant No.2 assailed the findings returned by the trial Court by filing appeals before the Chief Court in the year 2000. The First Appellate Court decided the appeal on 25-5-2005 after a period of five and half years. The judgment/decree of the trial Count was upheld and appeals were dismissed. The present petition is the outcome of the order passed by the First Appellate Court on 25-5-2005.
8. The learned counsel appearing for the petitioner very honestly confined his arguments on the sole point that the transaction made by the parties through deed Exh.P.1 is an out and out sale and not a mortgage. Therefore, we are left to concentrate on the solitary point, the radical issue, whether the impugned document is a sale or otherwise. The document which was executed on 2-6-1981 begins thus, "the property described as two sets of residential houses built on a plot measuring 3 Kanals excluding of the area of three shops constructed thereon and provision of land for another three shops is sold to the Provincial Cooperative Bank for a consideration of a sum of Rs.3,00,000 along with delivery of possession. The consideration amount has also been received". Thereafter its recites again "that within five years of time the consideration money so received will be paid back to the Bank, and the latter will be bound to redeem the property". Thereafter the recital goes on saying that "I, have no concern with the property so alienated and vendee will have the right to receive the rent amount from the department with which the building rests on a monthly rent of Rs.1,080". Thereafter, it followed saying "that the vendee will carry out the repair work as and when the building demands". It further recites, that "vendee will not carry out improvements over the property described in the deed".
9. The document, seemingly is an absolute conveyance. There is no clear mention that the property was given merely as a security for a loan. Here the question arises what is there to indicate that it is a mortgage or a sale. In such-like situation the Court requires cogent evidence to induce it to hold that the document does not seem to as it purports to be. The Court therefore, to look into such intrinsic evidence of surrounding circumstances as may be required to show in what manner the language of document is related to existing facts which otherwise is not apparent in the deed.
10. The highest judicial hierarchy from the time of united Pakistan has repeatedly formulated and followed certain tests set out for answer to the queries arising from the situation like above explained. The repeated recognition of the formula laid down has made the tests an integral part of section 58 of the Transfer of Property Act, 1882 rather a mere explanation and interpretation of the law.
11. The tests formulated and repeatedly applied as guideline in the matter of mortgaged transaction, where similar situation arise as in the instant case given as under:--
"(i) The existence of debt;
(ii) The period of payment, short period being indicative of a sale and a long of a mortgage.
(iii) Possession of property, the continuance of the grantor in possession indicating a mortgage.
(iv) Existence or otherwise of a stipulation of payment of interest or re-conveyance, a stipulation of interest of re-payment indicating a mortgage.
(v) Adequacy or inadequacy of the consideration inadequate price indicating a mortgaged.
(vi) Presence or otherwise of the stipulation of re-conveyance in the document itself, the stipulation of re-conveyance embodied in the deed being prima facie an indication that the transaction is a mortgage.
(vii) Purchase of stamps and payment of registration costs, the same if done by the transferee is indicative of a sale."
12. In respect of test No.1, we have come across with a document lying on page 29 of the file. This is a kind of certificate issued by the Bank through its Manager, Momin Shah on the official pad of the Bank issued on 15-3-1993 the certificate expresses and owes in clear and unequivocal terms that the property in dispute was left with the Bank as mortgage against a sum of Rs.5,94,000. It further recites that the mortgaged property can be released to the plaintiff on payment of original debt. The contents of the certificate is reproduced:--
"Certified that Messrs Muhammad Sharif and sons residents of Hospital area Gilgit owed a sum of Rs.5,94,000 (Rupees five lacs ninety-five thousand) only to this Bank for which we have already taken over the .possession of their landed property measuring 3-1/2 Kanals including shops and two sets of quarters etc. (The property can be released to them only -when the amount of original debt is cleared). "
13. The contents of the documents referred hereinabove provide sufficient material for decision of the entire case. However, we would like to discuss the other test towards the solution of a perplexed situation coming across in future in matters like in hand. It also appears that such types of evidence, had not experienced with delivering judgments in the lower Courts.
14. As far the second test is concerned it has clearly been worded in the deed that the Bank shall be bound to redeem the property if the loan is repaid within a period of five years. From the contents regarding re-payment within a stipulated period of five years followed by redemption of the property, clearly indicates that the plaintiff' had in his mind to take back the property transacted subject to re-payment of the loan. The period indicated for re-payment within five years can rightly be termed as a long period towards the characteristic of a mortgage rather than a sale.
15. Coming to the 3rd point of test it goes without saying on the basis of contents of the deed, and the averments made in the plaint that possession of the property was delivered during the transaction.
16. In respect of test No.4 in the instant case, there is no clear indication for payment of interest. However, it transpires that during a period of five years the Bank was allowed to receive the monthly rent of the building included in the transactions. Hence, it can safely be presumed that the rent as well as other benefits from the property described in the deed amount to interest for the loan.
17. As far the 5th test is concerned through the parties have not brought any solid evidence regarding the market value of the alienated property. However, it can conveniently be presumed that the value of property, as per its location, certainly carries five times market value than stipulated in the deed. Otherwise also no one would be willing to sell out the alleged property on a throw out price of Rs.300,000, The value assessed in the deed for the property seems rather quite inadequate towards mortgage property.
18. In respect of test No.6 the words following in the deed as are clearly indicative that the stipulation of re-conveyance is very much present in the instant case. Moreover, the certificate issued by the Bank on 15-3-1993 further confirms that the stipulation of re-conveyance has made on in the document.
19. As far the last test concerning stamps expenses and registration cost, the same has been purchased and -cost paid by the plaintiff without any shadow of doubt.
20. Out of seven tests indicated above, all the test except test No.3 are in favour of the plaintiff. However, .the importance of a test is to be considered and not the number of tests got through by any particular party. Besides, there can be other factors in any case which can be decisive ones to form an opinion about a transaction. The quality and not the quantity should be considered as a test. However, in the instant case, the inadequacy of the price is to be regarded as a very decisive and paramount factor. Another astonishing point appearing on the record is that the disputed property was transferred to the bank for a price of Rs.3,00,000 in the year 1981 and it was resoled to defendant No.2 after a period of 5 years at the same cost. It also gives the impression that the bank was interested in the clearance of the debt which was made to plaintiff by reselling it at the same cost after a lapse of five long years. Even a single prudent person will hardly imagine such consistency in price covering a period of five years, keeping in view the location of property which is located in the heart of City.
21. We have given our careful consideration to the document in question and also the accumulating circumstances mentioned above. It appeared to us that the true intention of the parties towards the execution of the document in question was nothing but a mortgage against the property described in the deed.
22. Resultantly we did not notice any misinterpretation of facts in judgments of two lower Courts regarding the deed in question executed by the parties or any infirmity in the impugned judgments. Petition for leave to appeal having no force, is declined.
F.B./25/Glt. Leave refused.