Case Note & Summary
The plaintiffs (respondents) filed a suit for redemption and possession of agricultural lands, claiming that the transaction dated 03.11.1973 was a mortgage by conditional sale. They alleged that they took a loan of Rs.1200/- from the defendants (appellants) and executed a sale deed with a contemporaneous agreement to reconvey the lands upon repayment within ten years. When they tendered the loan amount, the defendants refused to reconvey. The defendants contended that it was an absolute sale and that they had paid Rs.1130/- earlier, but had no written evidence. The trial court and first appellate court decreed the suit in favor of the plaintiffs, holding it to be a mortgage by conditional sale. The defendants appealed in second appeal. The High Court framed a substantial question of law regarding the nature of the transaction. Analyzing the documents and evidence, the court noted that the sale deed and agreement to reconvey were executed on the same day, the consideration was exactly the loan amount, and the agreement provided for reconveyance on repayment. The court held that the transaction fell within the definition of mortgage by conditional sale under Section 58(c) of the Transfer of Property Act, 1882. The defendants failed to prove that the transaction was an absolute sale. The court also held that the suit for redemption was within limitation. Accordingly, the second appeal was dismissed, confirming the decrees of the lower courts.
Headnote
A) Transfer of Property Act - Mortgage by Conditional Sale - Section 58(c) - The transaction was held to be a mortgage by conditional sale where the sale deed and contemporaneous agreement to reconvey were executed on the same day, and the loan amount was Rs.1200/- repayable within ten years. The court held that the intention of the parties was to create a mortgage, not an absolute sale, and the plaintiffs were entitled to redemption. (Paras 1-15) B) Evidence Act - Burden of Proof - Sections 101, 102 - The defendants failed to prove that the transaction was an absolute sale. The contemporaneous agreement to reconvey and the circumstances indicated a mortgage. The court held that the burden was on the defendants to show that the transaction was not a mortgage, which they did not discharge. (Paras 10-15) C) Limitation Act - Suit for Redemption - Article 61(a) - The suit for redemption filed within 30 years from the date of mortgage was within limitation. The court held that the mortgage was created in 1973 and the suit filed in 1983 was within time. (Paras 1-15)
Issue of Consideration
Whether the transaction dated 03.11.1973 was a mortgage by conditional sale or an outright sale with an agreement to reconvey.
Final Decision
The second appeal is dismissed. The judgments and decrees of the trial court and first appellate court are confirmed. The transaction is held to be a mortgage by conditional sale, and the plaintiffs are entitled to redemption and possession upon payment of the mortgage amount.
Law Points
- Mortgage by conditional sale
- Section 58(c) Transfer of Property Act
- 1882
- Redemption
- Reconveyance
- Burden of proof
- Documentary evidence
- Oral evidence
- Adverse possession
