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2026 CLC 1041
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2026 CLC 1041
[Lahore (Multan Bench)]
Before Ch. Sultan Mahmood, J
Syed SAJID RAZA through Special Attorney ... Petitioner
versus
MUHAMMAD ALI DIN ---Respondent
C.R. No. 1147-D of 2021, heard on 30th June, 2025.
(a) Transfer of Property Act (IV of 1882)---
Ss. 58 & 60---Specific Relief Act (1 of 1877), S.42---Punjab Alienation of Land Act (XIII of 1900), S.10---Civil Procedure Code (V of 1908), S.115 & O.XXXIV, R.11---Mortgage by conditional sale---Plaintiff contending that the transaction was an absolute sale under 'bai-bil-wafa' and not a mortgage---Courts below finding the transaction to be a mortgage---Determination---Assessment and true characterization of such a transaction---Butler's test---Scope and applicability---Distinguishing sale from mortgage, criteria for---Interesting facts of the matter were that the petitioner filed a suit for declaration of ownership of the suit property on the basis of a bai-bil-wafa (conditional sale/mortgage by conditional sale) mutation, or in the alternative, specific performance of an agreement, after the respondent failed to return two cheques of Rs. 15,00,000/- each issued toward repayment of a debt---Trial Court decreed recovery of Rs.30,00,000/- with profit, and the Appellate Court modified the decree by removing interest but maintaining return of money and cancellation of mortgage upon payment---In present civil revision petition before the High Court, the core issue requiring determination was "whether the transaction constituted a mortgage by conditional sale rather than an absolute sale, and consequently, whether the petitioner was entitled to a declaration of
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ownership or any relief beyond redemption/return of mortgoas money?" Held: Section 58 of the Transfer of Property Act, 1882
recognized sale by conditional mortgage The petitioner/plaintify was claiming that instrument in question was a sale document after the cutoff date, whereas the Courts below had read the same mortgage document-To prove a case of sale by mortgage, it wa imperative that plaintiff proved his case on the test popularly knows as Butler's test---Petitioner/plaintiff had mentioned existence of debt; the period of sale was about 14 months which was short however the possession was not with the guarantor but with the mortgagee; there was a stipulation of repayment with interest; there was no pleading or evidence led by the plaintiff that he bought the property on the market price and he was not merchant of venice: there was no contemporaneous deed for reconveyance; pleadings were silent with respect to the purchase of stamp papers---Thus, transaction had not been proved to the test approved by the Supreme Court (Butler's test) and plaintiff fulfilled only two requirements... Thus, considering the remaining prongs of the test other than the two-favouring plaintiff, the balance tilted in favour of the defendant/respondent---Both the evidence and pleadings of the petitioner were deficient in this regard---He could not prove his case to the test laid down on the subject---Merely holding the mutation and an agreement did not entitle him for sale---It was S.60 of the Transfer of Property Act which embodied right of redemption of mortgager and no clog could be placed on such a statutory right--Even otherwise, suit for declaration was not maintainable---Through such suit the petitioner had sought declaration to vest right standing out of contract but such right ran contrary to S.60 of the Transfer of Property Act, 1882 and even otherwise, the petitioner had failed to fulfill all the requirements---Relief sought by the petitioner was rightly refused by the courts below---Present, civil revision petition was meritless and the same was dismissed, in circumstances. [pp. 1045, 1046, 1047, 1048, 1049] A, C, E, F & G
Mating Kyin Ma Shwe La ILR 45 Cal. 320; Abdul Hafiz Choudhnry and another v. Somar Ali and Samir Ali 4 DLR 126; Ganu Mia v. Abdul Jabbar and others 10 DLP 636; Muhammad Akhtar v. Mst. Siani 2011 CLC 1218; Moula Buksh v. Afzal Hussain and others 2006 YLR 965; Chhaju Ram v. Muzaffar Ahmad AIR 1936 Lah. 845 and Tariq Hussain Shah v. The State 1993 MLD 1025 ref.
(b) Transfer of Property Act (IV of 1882)---
-S.58-Sale or 'mortgage by conditional sale'---Distinction Whether the apparent sale was in fact a mortgage---Determination Assessment and characterization of transaction-Real nature and
essen appli diffe addi coup of a of t the vene con or t to t que the in cir the COM pe de ad ex ten Co cia in W de SC p in in 3
2026]
Sajid Raza v. Muhammad Ali Din (Ch. Sultan Mahmood, J)
1043
essence of such a transaction highlighted-Butler's test-Scope and applicability-The sale and mortgage by conditional sale are two different types of transactions; however, the requirement to prove the additional limbs in the case of later needs to be proved by pleading coupled with evidence by the party asserting such right---The definition of a mortgage by conditional sale itself contemplates an ostensible sale of the property-The circumstance that the transaction as phrased in the document is ostensibly a sale with a right of repurchase in the vendor, the appearance being laboriously maintained by the words of conveyance needlessly iterating the description of an absolute interest or the right of repurchase bearing the appearance of a right in relation to the exercise of which time was of the essence is not decisive-The question in each case is one of determination of the real character of the transaction to be ascertained from the provisions of the deed viewed in the light of surrounding circumstances---If the words are plain and unambiguous they must in the light of the evidence of surrounding circumstances be given their true legal effect---If there is ambiguity in the language employed, the intention may be ascertained from the contents of the deed with such extrinsic evidence as may by law be permitted to be adduced to show in what manner the language of the deed was related to existing facts---Oral evidence of intention is not admissible in interpreting the covenants of the deed but evidence to explain or even to contradict the recitals as distinguished from the terms of the documents may of course be given---Evidence of contemporaneous conduct is always admissible as a surrounding circumstance, but evidence as to subsequent conduct of the parties is inadmissible---The test has been approved by the Supreme Court, whereby, the Supreme Court has laid out factors to be considered to evaluate the document under question such as: (i) the existence of a debt; (ii) the period of repayment, a short period being indicative of a sale and a long period of mortgage; (iii) continuance of the grantor in possession indicates a mortgage; (iv) a stipulation for payment of interest indicates a mortgage; (v) a price below the true value is indicative of mortgage. [pp. 1045, 1047] B & D
302 rel. Ansar Ali and others v. Muhammad Ismail MiaJi 1968 SCMR
51 Ind. App. 305 [AIR 1924 PC 226] ref.
(c) Civil Procedure Code (V of 1908)---
at case of variance---Preference---In S.115-Judgments inconsistency between the findings of Trial Court and the Appellate Court, the findings of the latter must be given preference in the absence of any cogent reason to the contrary. [p. 1049] G
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Amjad Ikram v. Mst. Asiya Kausar and 2 offers 2015 SCMR 1; Madan Gopal and 4 others v. Maran Bepari and 3 others PLD 1969 SC 617 and Muhammad Nawaz through L.Rs. v. Haji Muhammad Baran Khan through L.Rs and others 2013 SCMR 1300 rel.
P
Sheikh Muhammad Usman for Petitioner.
Ch. Pervaiz Akhtar Gujjar for Respondent.
Date of hearing: 30th June, 2025.