496 DR. BABASAHEB AMBEDKAR : WRITINGS AND SPEECHES
(3) It is the jural relation constituted by it, that will determine whether the transaction is a mortgage or not.
2 Bom. 462.
- How to find what the intention of the parties was ?
By finding out how they have treated the money advanced ? If they have treated it as a debt, then it is mortgage. The criteria adopted by the Courts are—
(i) The existence of a debt
(ii) The period of repayment, a short period being indicative of a sale and a long period of a mortgage.
(iii) The continuance of the mortgagor in possession indicates a mortgage.
(iv) The price below a true value indicates a mortgage.
In applying these tests, the Courts put the onus on the party alleging that an ostensible sale-deed was a mortgage, and in a case of ambiguity, lean to the construction of a mortgage.
Is oral evidence of intention admissible ?
Before the Indian Evidence Act was passed, oral evidence and other instruments were freely admitted to prove this intention. But this practice was condemned by the Privy Council.
After the passing of the Indian Evidence Act, the question was governed by Section 92.
Section 92 excludes oral evidence to contradict a written document. The Indian Courts, never the less, on the authority of Lincoln vs. Wright (1859) 4 DeG.& J. 16 admitted evidence of acts and conduct of parties to show, that a deed which purported to be an absolute conveyance was intended to operate as a mortgage.
In 1899, the Privy Council definitely ruled in Balkishen v/s. Legge= 22 All. 149 =27 I. A. 58. that the rule in Lincoln vs. Wright had no application in India.
The result is that, the Courts are definitely limited to the document itself in order to ascertain the intention of the parties.