Transfer of Property Act, 1882 – s.58(c) – Mortgage by conditional sale – Respondent-plaintiff received a sum of Rs.5000/- from appellant-defendant, however, same was construed as the consideration for the suit property and a registered sale deed dated 10.12.1968 (Exh.23) was executed in favour of the defendant – A separate agreement dated 10.12.1968 (Exh.24) was also entered into between the parties where the plaintiff agreed to repay the said amount and secure reconveyance of the property – Another agreement was entered into on 29.08.1969 (Exh.14/1) under which plaintiff agreed that he had received additional amount of Rs.2,224/-, hence total amount of Rs.7,224/- – Suit was filed seeking redemption of mortgage and recovery of the possession of the suit property – Plaintiff claimed that he was prepared to repay the amount so as to secure back the property and, in that regard, construing the transaction as a mortgage – Trial court decreed the suit – Lower appellate court on reappreciation of the evidence set aside the judgment and decree of the trial court – However, High Court decreed the suit in favour of plaintiff – On appeal, held: On perusal of three documents namely, sale deed dated 10.12.1968 (Exh.23) agreements dated 10.12.1968 (Exh.24) and 29.08.1969 (Exh.14/1), it is clear that sale deed dated 10.12.1968 did not disclose that the transaction is one of mortgage or that of a conditional sale – Agreement dated 10.12.1968 (Exh.24) can only be treated an agreement where the defendant had agreed to reconvey the property subject to the repayment being made as provided thereunder – Further, agreement dated 29.08.1969 (Exh.14/1) disclose that plaintiff did not repay Rs.5000/-and instead received a further sum of Rs.2,224/-, thus in all taking the financial assistance treated as sale consideration to Rs.7,224/- – If the reconveyance as agreed under agreement dated 10.12.1968 (Exh.24) was to be effected the said amount was to be repaid, failing which the right of reconveyance would be forfeited and sale deed would become absolute after which even the right of reconveyance would not be available – Admittedly the said amount was not repaid by plaintiff – In that background the document cannot be considered as a mortgage by conditional sale – Since the amount was not repaid the defendant had acquired absolute right to the property – In the circumstance, the suit seeking redemption was not sustainable.
Allowing the appeal, the Court
HELD: 1. In so far as the legal position relating to the manner in which the document is to be construed, this Court in the case of Dharmaji Shankar Shinde & Ors. vs. Rajaram Sripad Joshi (D) Lrs. and Ors. had considered the entire conspectus of the provision contained in Section 58(c) of the Transfer of Property Act, 1882 with reference even to the decisions relied upon by the counsel for the plaintiff and had arrived at the conclusion that a sale with a mere condition of retransfer is not a mortgage. It is further held therein that keeping in view the proviso to Section 58(c) if the sale and agreement to repurchase are embodied in separate documents then the transactions cannot be a mortgage by conditional sale irrespective of whether the documents are the contemporaneously executed. It is further held therein that even in the case of a single document the real character of the transaction is to be ascertained from the provisions of the deed viewed in the light of the surrounding circumstances and intention of the parties. [Para 7] [976-D-E]
2. Keeping in view the enunciation of the legal position, in the instant case admittedly the claim of the plaintiff is based on the reliance placed on a contemporaneous document at Exh.24 (agreement dated 10.12.1968). Hence at the outset, it is evident that the case of the plaintiff cannot overcome the rigour of law to term it as a mortgage by conditional sale. That apart even if the nature of the transaction is taken note of and in that context if the sale dated 10th December, 1968 (Exh.23) is carefully perused, it not only does not indicate any clause to demonstrate it as a mortgage but, on the other hand, refers to the sale consideration, the manner in which it was received and the plaintiff as the vendor by executing the document has assured the defendant that he should enjoy possession of the said land ancestrally which, in other words, is an absolute conveyance. In that background, even if the agreement dated 10th December, 1968 (Exh.24) is taken note, the same cannot alter recitals in the sale deed to treat the same as a mortgage by conditional sale. At best the said agreement (Exh.24) can only be treated as an agreement whereby the defendant had agreed to reconvey the property subject to the repayment being made as provided thereunder. It is in that circumstance, the document dated 29th August, 1969 (Exh.14/1) is to be viewed. From a combined reading of Exhibits
24 and 14/1 it would disclose that not only the plaintiff has not repaid the sum of Rs.5,000/- with interest but had received a further sum of Rs.2,224/-, thus in all taking the financial assistance treated as sale consideration to Rs.7,224/-. Hence, if the reconveyance as agreed under Exh.24 was to be effected the said amount was to be repaid on “Velamavasya” failing which the right of reconveyance would be forfeited and the sale deed would become absolute after which even the right of reconveyance will not be available. Admittedly amount of Rs.2,224/- was not repaid by the plaintiff. In that background, in any event, the document cannot be considered as a mortgage by conditional sale. [Para 8] [976-F-H; 979-A-D]
3. In the above background, if the entire transaction is taken note, since the amount was not repaid the defendant had acquired absolute right to the property. Hence, he had also initiated mutation proceedings to secure the revenue entries relating to the land in his favour. Though the plaintiff had opposed the proceedings the very contention urged herein had been taken note therein and the Tehsildar by the order dated 23rd July, 1974 (Exh.21) has ordered the revenue entries to be changed to the name of the defendant. Change of mutation in the name of the defendant is a formidable circumstance to show that the Exh.23 is a sale deed conveying absolute right and title to the defendant. [Para 9] [977-D-F]
4. In the above circumstance the suit seeking redemption of mortgage was not sustainable. If at all the agreement of reconveyance (Exh.24) was to be pressed into service, the appropriate course ought to have been for the plaintiff to institute a suit seeking for the relief of specific performance. In such suit the consideration would be on the touchstone of the principles required to be satisfied as governed under the provisions of the Specific Relief Act. To that effect there should be appropriate pleading and evidence in support of the contentions which is not presently satisfied as the suit is instituted on a misconception. [Para 11] [978-C-D]
Dharmaji Shankar Shinde & Ors. v. Rajaram Sripad Joshi (D) LRs.and Ors. (2019) 6 SCALE 682
– relied on.
Bhimabai Mahadeo Kambekar v. Arthur Import and Export Co. (2019) 3 SCC 191 : [2019] 1 SCR 812 – inapplicable.
P.L. Bapuswami v. N. Pattay Gounder [1966] 2 SCR
918 ; Pandit Chunchun Jha v. Sheikh Ebadat Ali [1955] 1 SCR 174 – 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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