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Hem Chunder Soor v. Kally Churn Das
Factual and Procedural Background
The plaintiff (appellant) filed suit seeking possession of 2 1/4 bigas of land, claiming to have purchased it absolutely from the respondent under a kobala dated 3rd December 1878. The respondent admitted the kobala but contended that the transaction was a mortgage rather than an absolute sale. The respondent supported this position with oral evidence and conduct of the parties, including the plaintiff's failure to take possession for a significant period and the consideration paid being substantially less than the property's value. The plaintiff objected to this evidence, relying on Section 92 of the Evidence Act to exclude evidence that varied or contradicted the written kobala. The lower courts admitted the evidence and ruled in favor of the respondent, holding that surrounding circumstances and conduct could be examined to determine the true nature of the transaction. The present appeal challenges this ruling.
Legal Issues Presented
- Whether parol evidence is admissible to contradict or vary the terms of a written agreement under Section 92 of the Evidence Act.
- Whether the transaction evidenced by the kobala was an absolute sale or a mortgage, considering the conduct of the parties and surrounding circumstances.
- Whether the Full Bench decision in Kashi Nath Chatterjee v. Chandi Charan Bannerjee remains good law after the enactment of Section 92 of the Evidence Act.
Arguments of the Parties
Appellant's Arguments
- The appellant asserted that Section 92 of the Evidence Act precluded the respondent from introducing evidence to vary or contradict the terms of the kobala, which purported to be an absolute sale.
Respondent's Arguments
- The respondent contended that the transaction was a mortgage, not an absolute sale.
- Supported this by oral evidence and the conduct of the parties, particularly the failure of the plaintiff to take possession for a long time and the nominal consideration paid relative to the value of the property.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Kashi Nath Chatterjee v. Chandi Charan Bannerjee B.L.R. Sup. Vol. 383; S.C. 5 W.R. 68 | Admissibility of parol evidence to show that a deed appearing to be an absolute sale was intended as a conditional sale (mortgage) based on surrounding circumstances and conduct. | The court followed this Full Bench decision to hold that surrounding circumstances and conduct could be examined to ascertain the true nature of the transaction despite the written deed. |
| Ram Doyal Bajpie v. Hera Lal Paray C.L.R. 386 | Application of Section 92 of the Evidence Act regarding the inadmissibility of evidence varying a written contract. | Referenced by the appellant to argue that Section 92 overruled the Full Bench decision, but the court rejected this view. |
| Daimoddee Paik v. Kaim Taridar I.L.R. 5 Cal. 300; s.c. 4 C.L.R. 419 | Interpretation of Section 92 of the Evidence Act on exclusion of evidence contradicting a written instrument. | Also cited to support the contention that Section 92 controls the admissibility of parol evidence, but the court found this consistent with the Full Bench ruling. |
| Hasha Khand v. Jesha Premaje (unreported) and Baksu Lakshman v. Govinda Kanji I.L.R. 4 Bom. 594 | Equitable jurisdiction to look beyond written deeds where fraud or mistake is alleged. | The court cited these cases as examples of the principle that equity permits examination of circumstances to prevent fraud despite written instruments. |
| Lincoln v. Wright 4 De G. and Jones 16 | Equity principle that the Statute of Frauds does not protect against fraud; parol evidence is admissible to prove fraud. | Used to illustrate that equity allows parol evidence to show that an apparently absolute conveyance was in fact a mortgage, preventing fraud. |
Court's Reasoning and Analysis
The court examined whether Section 92 of the Evidence Act, enacted after the Full Bench decision in Kashi Nath Chatterjee v. Chandi Charan Bannerjee, altered the rule of evidence concerning parol evidence to contradict or vary written agreements. The court found that Section 92 codified the same rule as stated by Sir Barnes Peacock in the Full Bench case, and therefore did not overrule it. The principle that equity courts may look beyond the written deed to the surrounding circumstances and conduct of the parties to prevent fraud was affirmed. The court relied on established equity principles, including judgments from English and Bombay High Courts, which permit parol evidence to demonstrate that a deed, though absolute on its face, was intended as a mortgage. The facts of the present case mirrored those in the Full Bench case, particularly the lack of possession by the purchaser and the inadequacy of consideration, reinforcing the mortgage characterization. Consequently, the court confirmed the lower courts' judgments admitting evidence beyond the written kobala.
Holding and Implications
The appeal is dismissed with costs.
The court upheld the lower courts' rulings that parol evidence is admissible to show that a written deed of sale was in fact a mortgage, consistent with established equity principles and prior Full Bench authority. This decision directly affects the parties by confirming the respondent's mortgage claim and denying the plaintiff's claim for possession under an absolute sale. No new precedent was established; rather, the court reaffirmed existing law.
1. In this case the plaintiff (appellant) sued for possession of 2 1/4 bigas of land, which he claimed to have purchased absolutely from the respondent under a kobala, dated the 18th Aughran 1285 (3rd December 1878).
2. The respondent admitted the kobala, but contended that the transaction between the plaintiff and himself was a mortgage only.
3. In support of this view, the defendant relied partly upon oral evidence of the transaction, and partly upon the conduct of the parties, more especially the fact that the plaintiff had never taken possession, although the kobala was dated the 3rd December 1878, and this suit was not brought until the year 1880.
4. He also relied upon the further fact, that the sum of Rs. 18, which was admitted to be the consideration for the kobala, was scarcely one-fourth the value of the property.
5. The plaintiff all along objected to the reception of these facts in evidence upon the ground that the defendant was precluded by Section 92 of the Evidence Act from bringing forward any evidence to vary or contradict the terms of the kobala.
6. The lower Courts, however, have admitted the evidence, and have gone into all the circumstances of the case; both holding that, although parol evidence, as a rule is not admissible to contradict or vary the terms of a written agreement, yet that, in a case of this kind, the Court is bound to look to the surrounding circumstances, and to the acts and conduct of the parties, for the purpose of ascertaining whether that which appears upon the face of the deed to be an absolute sale, had been treated by the parties and intended by them as a conditional sale only. In support of this position, both Courts relied upon the Full Bench case of Kashi Nath Chatterjee v. Chandi Charan Bannerjee B.L.R. Sup. Vol. 383; S.C. 5 W.R. 68.
7. The learned Judge in this Court, although putting the case upon a somewhat different ground, has confirmed the judgment of the lower Courts.
8. It has now been argued before us that, although the Pull Bench case above referred to established the law in the year 1866, Section 92 of the Evidence Act, which was passed in 1872, must be considered as having over ruled the Full Bench decision; and that the cases of Ram Doyal Bajpie v. Hera Lal Paray C.L.R., 386 and Daimoddee Paik v. Kaim Taridar I.L.R. 5 Cal. 300: s.c. 4 C.L.R. 419 have decided that Section 92 of the Evidence Act has (sic) the law.
9. If I could see any ground for supposing that the Full Bench case is not law at the present day, or that Section 92 of the Evidence Act either made, or intended to make, any alteration in the rule of evidence which prevailed here before the Act was passed, and which was recognized as law in the Full Bench case, I should consider that our proper course was to refer the question to another Full Bench; but when I look to the language used by Sir Barnes Peacock in that case, it seems to me that Section 92 of the Evidence Act lays down in terms the same rule as Sir Barnes Peacock then stated to be the law.
10. And the principle upon which the judgment in the Full Bench case proceeded is one which, in my opinion, is perfectly consistent with that rule.
11. It is a principle which has constantly been acted upon by Courts of Equity in England, as well as by the Courts of this country; and notably by the Bombay High Court in the cases of Hasha Khand v. Jesha Premaje (unreported) and of Baksu Lakshman v. Govinda Kanji I.L.R. 4 Bom. 594.
12. In the latter case there will be found an excellent judgment of Mr. Justice Melvill, in which he very clearly explains this principle of equity, and the mode and the circumstances under which it may be applied.
13. I quite agree with that learned Judge, that the true ground upon which the equitable jurisdiction of the Court proceeds generally in cases of this kind, is that of fraud, and this (as Mr. Justice Melvill observes) is very clearly stated by L.J. Turner in Lincoln v. Wright 4 De G. and Jones 16.
14. That was a case in its circumstances very similar to the present. "Wright had brought an action of ejectment against Lincoln to recover certain land, which the latter had conveyed to him by a deed, which appeared on the face of it to be an absolute conveyance. Lincoln then brought a suit in equity to restrain the ejectment, on the ground that the transaction was in reality a mortgage; and he relied in support of that contention, partly upon a parol agreement, and partly upon the acts and conduct of the parties. L.J. Turner says: "The principle of the Court is, that the Statute of Frauds was not made to cover fraud. If the real agreement in this case was that, as between the plaintiff and Wright, the transaction should be a mortgage transaction, it is in the eyes of this Court a fraud to insist on the conveyance as being absolute; and parol evidence must be admissible to prove the fraud."
15. The main difference between that case and the present is, that there the question arose upon a bill filed in equity to restrain the ejectment, whereas here it arises in the form of an equitable defence to the ejectment suit.
16. Another very ordinary form in which the same principle is recognized and acted upon, is in suits to alter or reform deeds of conveyance, upon the ground that they were not drawn up in accordance with the true intention of the parties. Suppose, for example, that the present defendant on hearing that the plaintiff was about to treat the kobala as an absolute sale, had brought a suit to have the deed reformed in accordance with what he contends to have been the true arrangement between the parties, the only way in which he could establish his claim in such a suit would be by showing what the real transaction was, and how the circumstances of the case and the conduct of the parties were in accordance with his view of the matter. The ground of such a suit would be fraud or mistake; and that fraud or mistake might be set up as well by way of defence to a suit like the present, as in a substant(sic) suit to alter or reform the conveyance.
17. It is remarkable that in the Full Bench case of Kashi Nath Chatterjee Chandi Charan Banerjee B.L.R., Sup. Vol., 383; S.C. 5 W.R., 68, already referred to, the two facts which were mainly relied upon as showing that the transaction was a mortgage instead of a sale, are the same which are relied upon in this case, namely: (1st) that possession was not given to the purchaser at the time of sale, and that he never sought to obtain possession until long afterwards; and (2nd) that the consideration mentioned in the deed was a very small sum, as compared with the selling value of the property.
18. I think, therefore, that we are bound by the authority of the Full Bench case to confirm the judgment of the Court below; and it seems to me that we are not constrained, by any of the authorities to which our attention has been called, to refer the question to a Full Bench.
19. As my learned brother agrees with me in this view, the Appeal will be dismissed with costs.
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