Case Note & Summary
The case involves a second appeal arising from a suit for redemption of mortgaged land. The plaintiffs (respondents) claimed that their late father, Tukaram Bala Kadam, executed a deed of mortgage by conditional sale on 21-4-1953 in favor of Madhavrao Savlaram Bhosale for Rs.700, with an agreement that upon repayment within ten years, the purchaser would reconvey the land. The defendants (appellants) contended that the deed was an outright sale with a condition of repurchase. The trial court dismissed the suit, holding the deed to be a sale. The first appellate court reversed this decision, decreeing the suit for redemption. The High Court framed a substantial question of law regarding the nature of the deed. The High Court analyzed the deed and the separate agreement dated 2-5-1953, noting that the condition for reconveyance was not in the deed itself but in a separate document. The court applied the principle that if the condition for repurchase is in a separate deed, the transaction is a mortgage by conditional sale. The court also considered the conduct of the parties, including the fact that the defendants had not taken any steps to assert absolute ownership. The High Court upheld the first appellate court's decision, holding that the deed was a mortgage by conditional sale and that the plaintiffs were entitled to redemption. The appeal was dismissed with costs.
Headnote
A) Transfer of Property Act - Mortgage by Conditional Sale vs. Sale with Condition of Repurchase - Interpretation of Deed - The court considered whether a deed dated 21-4-1953, along with a separate agreement dated 2-5-1953, constituted a mortgage by conditional sale under Section 58(c) of the Transfer of Property Act, 1882, or a sale with a condition of repurchase. The court held that the deed was a mortgage by conditional sale, as the condition for reconveyance was embedded in a separate agreement, and the transaction was intended as a security for debt. The court allowed the appeal and decreed the suit for redemption. (Paras 1-10)
Issue of Consideration
Whether the Deed dated 21-4-1953 (Exhibit 62) is a Deed of Mortgage by way of conditional sale or a sale with condition of re-purchase?
Final Decision
The High Court dismissed the second appeal with costs, upholding the first appellate court's decree that the deed dated 21-4-1953 is a mortgage by conditional sale and the plaintiffs are entitled to redemption.
Law Points
- Interpretation of deeds
- mortgage by conditional sale
- sale with condition of repurchase
- redemption of mortgage
- Section 58(c) Transfer of Property Act
- 1882
Case Details
2005 LawText (BOM) (11) 7
Second Appeal No.552 of 1996
Mr. G.N. Salunkhe i/b. Mr. P.A. Pol for appellants, Mr. Machindra Patil for respondents
Vamanrao Sawalaram Bhosale, Yadavrao Mahdavrao Bhosale, Krishnarao Madhavrao Bhosale, Shevantabai Madhavrao Bhosale, Gajarabai Dinkar Pawar, Savitrabai Anandrao Jagtap
Vithal Tukaram Kadam, Chandrabhaga Bajirao Jagtap
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Nature of Litigation
Second appeal against decree for redemption of mortgaged land.
Remedy Sought
Appellants (original defendants) sought to set aside the decree for redemption passed by the first appellate court.
Filing Reason
Appellants challenged the first appellate court's decision that the deed dated 21-4-1953 was a mortgage by conditional sale and not a sale with condition of repurchase.
Previous Decisions
Trial court dismissed the suit holding the deed to be a sale; first appellate court reversed and decreed the suit for redemption.
Issues
Whether the Deed dated 21-4-1953 (Exhibit 62) is a Deed of Mortgage by way of conditional sale or a sale with condition of re-purchase?
Submissions/Arguments
Appellants argued that the deed was a sale with condition of repurchase, and the condition was in a separate agreement, so it was not a mortgage.
Respondents argued that the deed was a mortgage by conditional sale, as the condition for reconveyance was in a separate agreement, and the transaction was intended as security for debt.
Ratio Decidendi
When the condition for repurchase is contained in a separate deed, the transaction is a mortgage by conditional sale under Section 58(c) of the Transfer of Property Act, 1882, and not a sale with a condition of repurchase. The intention of the parties, as gathered from the documents and conduct, determines the nature of the transaction.
Judgment Excerpts
Whether the Deed dated 21-4-1953 (Exhibit 62) is a Deed of Mortgage by way of conditional sale or a sale with condition of re-purchase?
It was claimed that Tukaram Bala Kadam, the late father of the plaintiffs had executed the deed of mortgage by conditional sale on 21-4-1953 in favour of Shri Madhavrao Savlaram Bhosale for consideration of Rs.700/- and it was agreed between the parties that on repayment of the said amount within ten years from the date of the deed, the purchaser would reconvey the suit land to the seller and such condition was embedded in another agreement signed on 2-5-1953.
Procedural History
Regular Civil Suit No.26 of 1986 was filed by the respondents for redemption of mortgaged land. The trial court dismissed the suit. The first appellate court reversed the trial court's decision and decreed the suit for redemption. The appellants filed Second Appeal No.552 of 1996, which was admitted on 3-2-1997, framing the substantial question of law. The High Court heard the appeal and dismissed it on 17-11-2004.
Acts & Sections
- Transfer of Property Act, 1882: Section 58(c)
