Transfer of Property Act, 1882: ss. 58(c) proviso and 63 – Redemption of mortgaged property – Plaintiff, owner of agricultural land borrowed Rs.3,000/- from defendant No. 1 by executing a document titled “conditional sale deed” as a security for the loan amount, which was to be returned and the defendant was bound to re-transfer the land – Plaintiff requested defendant No. 1 to reconvey the suit land by accepting the loan amount of Rs.3,000/but defendant No. 1 refused to do so – Subsequently, defendant No. 1 transferred the suit land in favour of his brother-defendant No. 2 – Suit for redemption of mortgaged property and possession by plaintiff, claiming that the transaction was in the nature of mortgage even though it was titled as the conditional sale – Dismissal of suit by trial court and High Court – Sustainability of – Held: Not sustainable – Condition of re-transfer is a part of the same document, as expressed by the proviso of s. 58(c) – Transaction which takes the outward form of a sale but in essence the documents are of a mortgage, though it is couched in the form of a sale – Document has to read as a whole and if any word is ambiguous, then the intention of the parties has to be seen when such document was executed – Thus, reading of the document would show that the document was executed for the reason that the plaintiff has borrowed a sum of Rs.3,000/- and the defendant is bound to re-transfer the land if the amount is paid within one year – Advance of loan and return thereof are part of the same document which creates a relationship of debtor and creditor – Thus, it would be covered by proviso in s . 58(c) – Thus, the judgment and decree passed by the First Appellate Court and that of the High Court are set aside and the suit is decreed.
Allowing the appeal, the Court
HELD: 1.1 The intention of the parties has to be seen when the document is executed. It is not in dispute that the condition of re-transfer is a part of the same document. Such condition is in terms of an amendment inserted by the proviso of Section 58(c) of the Transfer of Property Act, 1882 in the year 1929. A transaction which takes the outward form of a sale can still be considered in essence a mortgage. It is impossible to compare one case with another. Each case must be decided on its own facts and circumstances. The document has to read as a whole and if any word is ambiguous, then to find out the intention of the parties when such document was executed. Therefore, a reading of the document would show that the document was executed for the reason that the plaintiff has borrowed a sum of Rs. 3,000/- for his household expenses and the defendant is bound to re-transfer the land if the amount is paid within one year. The advance of loan and return thereof are part of the same document which creates a relationship of debtor and creditor. Thus, it would be covered by proviso in Section 58(c) of the Act. [Paras 11, 12][160D-H]
1.2 Section 63 of the Act contemplates that any accession by the mortgagee, during the continuance of the mortgage, the mortgagor shall on redemption be entitled to such accession in the absence of a contract to the contrary. Under Section 63(a) of the Act, the liability of mortgagor to pay for improvement will arise if the mortgagee had to incur the costs to preserve the property from destruction or deterioration or was necessary to prevent the security from becoming insufficient or being made in compliance with the lawful order of any public servant or public authority. None of the eventualities arose in the instant case compelling the mortgagor to pay for the improvements if any carried out by the mortgagee. A mortgagee spends such money as is necessary for the preservation of the mortgaged property for destruction, forfeiture or sale; for supporting the mortgagor’s title to the property; for making his own title thereto good against the mortgagor; and when the mortgaged property is a renewable lease-hold, for the renewal of the lease, such expenditure incurred by the mortgagee can be added to the cost of improvements in the principal amount due. However, in the absence of any positive evidence of any improvement and the cost incurred, the defendants are not entitled to recover anything more than the mortgage amount. Since the possession was given to the mortgagee, he has enjoyed usufruct from the mortgage property which compensates not only of the user of the land but also improvements made by him. The improvements were to enjoy the usufruct of the property mortgaged. [Para 22][165-D-H; 166A]
1.3 The submission that plaintiff has filed suit for redemption after 20 years of execution of the document is not tenable as the suit for redemption can be filed within 30 years from the date fixed for redemption. The period of 30 years would commence on 22.2.1969 and the suit was filed in the year 1989, which is within the period of limitation. [Para 23][166-A-B]
1.4 The order of the First Appellate Court accepting the appeal of the defendants and dismissing the suit for redemption is not sustainable in law, so as the order passed by the High Court. Consequently, the judgment and decree passed by the First Appellate Court and that of the High Court are set aside and the suit is decreed. [Para 24][166-B-C]
Pandit Chunchun Jha v. Sheikh Ebadat Ali & Anr. AIR 1954 SC 345 : [1955] 1 SCR 174; Shri Bhaskar Waman Joshi v. Shri Narayan Rambilas Agarwal AIR 1960 SC
301 : [1960] 2 SCR 117; P. L. Bapuswami v. N. Pattay Gounder AIR 1966 SC 902 : [1966] 2 SCR 918 – relied on.
Vanchalabai Raghunath Ithape (Dead) by LR v. Shankarrao Baburao Bhilare (Dead) by LRs & Ors. (2013) 7 SCC 173 : [2013] 8 SCR 1028 – per incuriam. Umabai & Anr. v. Nilkanth Dhondiba Chavan (Dead) by LRs & Anr. (2005) 6 SCC 243 : [2005] 3 SCR 521; Tulsi & Ors. v. Chandrika Prasad & Ors. (2006) 8 SCC
322 : [2006] 5 Suppl. SCR 255; Vithal Tukaram Kadam & Anr. v. Vamanrao Sawalaram Bhosale & Ors. (2018)
11 SCC 172 : [2017] 8 SCR 379; Ganpati Babji Alamwar (Dead) by LRs Ramlu & Ors. v. Digambarrao Venkatrao Bhadke & Ors. (2019) 8 SCC 651; Dharmaji Shankar Shinde & Ors. v. Rajaram Shripad Joshi (Dead) through LRs & Ors. (2019) 8 SCC 401 : [2019]
6 SCR 257; Sopan (Dead) through his LR v. Syed Nabi (2019) 7 SCC 635 : [2019] 9 SCR 969 – referred to.
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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