Case Note & Summary
The respondent (original plaintiff) filed a suit for recovery of possession of suit land Survey No. 331/4, alleging that he had mortgaged the land to the appellant (original defendant) for Rs.2500/- by a registered deed dated 08.04.1981, which was a mortgage by conditional sale. He claimed that the appellant executed a contemporaneous bond agreeing to reconvey the land on repayment. The appellant contended that the deed was an outright sale. The trial court dismissed the suit, but the first appellate court reversed and decreed the suit. The High Court, in second appeal, upheld the appellate court's decision, holding that the deed was a mortgage by conditional sale under Section 58(c) of the Transfer of Property Act, 1882. The court found that the contemporaneous bond and the circumstances indicated the transaction was a loan with a security. The court allowed the appeal, confirming the decree for redemption and possession, and directed the appellant to deliver possession upon payment of Rs.2500/-.
Headnote
A) Transfer of Property Act - Mortgage by Conditional Sale - Section 58(c) - Construction of Deed - The court considered whether a registered deed styled as a sale deed with a condition of re-purchase was in fact a mortgage by conditional sale. Held that the deed, read with a contemporaneous bond executed by the appellant, clearly indicated a mortgage transaction. The condition for re-purchase was part of the same transaction, and the relationship was that of mortgagor and mortgagee. The court relied on the principle that the form of the deed is not conclusive; the intention of the parties and the surrounding circumstances must be examined. (Paras 8-12) B) Transfer of Property Act - Redemption - Mortgage by Conditional Sale - Section 60 - The plaintiff, as mortgagor, is entitled to redeem the mortgage on payment of the mortgage money. Held that the trial court erred in dismissing the suit; the appellate court correctly decreed redemption. The defendant must accept the mortgage amount and deliver possession. (Paras 13-15) C) Evidence Act - Burden of Proof - Mortgage vs. Sale - The burden lies on the party asserting that a deed is a mortgage to prove that the transaction was intended as a security. In this case, the plaintiff successfully discharged the burden by showing the contemporaneous bond and the circumstances. (Para 10)
Issue of Consideration
Whether the deed dated 08.04.1981 is a mortgage by conditional sale or an outright sale with a condition of re-purchase, and whether the plaintiff is entitled to redemption and possession.
Final Decision
The High Court dismissed the second appeal, confirming the judgment and decree of the first appellate court. The appellant is directed to deliver possession of the suit land to the respondent upon payment of Rs.2500/-.
Law Points
- Mortgage by conditional sale
- Section 58(c) Transfer of Property Act
- 1882
- Redemption
- Burden of proof
- Construction of deed
- Intention of parties
