Case Note & Summary
The appeals arose from a suit for redemption of mortgage filed by the respondents-plaintiffs, who claimed that their father Shripad Joshi had mortgaged the suit property to Shankar Shinde, predecessor-in-interest of the appellants-defendants, by a deed dated 28.07.1967 (Ex.P-73) for Rs. 2500/-. The deed contained a condition that if the amount was not repaid within five years, the transaction would become an absolute sale. The respondents alleged that their father paid Rs. 800/- on 26.07.1972 (Ex.P-69) and sought redemption. The appellants contended that the transaction was a sale with condition to repurchase, and since the amount was not repaid within five years, the sale became absolute. The trial court dismissed the suit, holding that the relationship of debtor and creditor was not established and the receipt was not proved. The first appellate court reversed, holding that Ex.P-73 was a mortgage by conditional sale under Section 58(c) of the Transfer of Property Act, 1882, and that the respondents were entitled to redeem upon payment of the balance of Rs. 1700/-. The High Court dismissed the second appeal. The Supreme Court considered the distinction between a mortgage by conditional sale and a sale with condition to repurchase, emphasizing that the proviso to Section 58(c) requires the condition to be embodied in the same document, but does not automatically make it a mortgage; the intention of the parties must be ascertained from the language of the deed and surrounding circumstances. The court found that the first appellate court and High Court correctly interpreted the document as a mortgage, noting that the receipt of Rs. 800/- indicated the existence of a debt. The Supreme Court dismissed the appeals, affirming the decree for redemption subject to payment of the balance amount.
Headnote
A) Transfer of Property Act - Mortgage by Conditional Sale - Section 58(c) - Distinction between mortgage by conditional sale and sale with condition to repurchase - The court examined the document Ex.P-73 and held that the transaction was a mortgage by conditional sale, as the condition for reconveyance was embodied in the same document and the relationship of debtor and creditor existed. The court relied on the proviso to Section 58(c) and the principle that intention of parties must be gathered from the language of the deed and surrounding circumstances. (Paras 10-12) B) Transfer of Property Act - Redemption of Mortgage - Section 60 - Right of mortgagor to redeem - The court upheld the first appellate court's finding that the respondents-plaintiffs were entitled to redeem the suit property upon payment of the balance amount of Rs. 1700/-, as the transaction was a mortgage and not an absolute sale. (Paras 5, 13) C) Evidence Act - Proof of Receipt - Section 68 - The court accepted the first appellate court's finding that the receipt Ex.P-69 for payment of Rs. 800/- was proved by examining PW-2, the son of the scribe, and thus the respondents had made part payment towards the mortgage debt. (Paras 5, 7)
Issue of Consideration
Whether the document Ex.P-73 dated 28.07.1967 is a mortgage by conditional sale or a sale with condition to repurchase, and whether the respondents-plaintiffs are entitled to redeem the suit property.
Final Decision
The Supreme Court dismissed the appeals, affirming the judgment of the High Court and the first appellate court. The court held that Ex.P-73 is a mortgage by conditional sale and the respondents-plaintiffs are entitled to redeem the suit property upon payment of the balance amount of Rs. 1700/-.
Law Points
- Mortgage by conditional sale
- Sale with condition to repurchase
- Intention of parties
- Section 58(c) Transfer of Property Act
- 1882
- Redemption of mortgage
