Case Note & Summary
The case involves a second appeal filed by the defendant (appellant) against the judgment and decree of the Additional District Judge, Biloli, which confirmed the trial court's decree of redemption of mortgage in favor of the plaintiffs (respondents). The plaintiffs, Namdeo and Manjulabai, sought redemption of agricultural land Survey No. 2/B admeasuring 8 acres situated at Lakhmapur, which was allegedly mortgaged by Vithoba (the predecessor-in-interest of the plaintiffs) to the defendant in 1971 for Rs. 4,000 for a period of five years. The plaintiffs claimed that Vithoba died in 1972 issueless, and his widow also died, leaving plaintiff No. 1 as the sole heir entitled to redeem. The defendant contended that the transaction was an out-and-out sale and relied on consent terms filed in a previous suit (RCS No. 57/1976) wherein the plaintiffs had admitted the sale. The trial court framed issues and held that the transaction was a mortgage, decreeing redemption. The first appellate court confirmed this. In the second appeal, the High Court examined the document and evidence, noting that the consideration was inadequate, possession was delivered, and there was an agreement to reconvey. The court held that the consent terms were inadmissible under Sections 91 and 92 of the Evidence Act to vary the terms of the written document. The court also found that the suit was within limitation as the mortgage was for a fixed period and the demand was made in 1981. The High Court dismissed the appeal, confirming the decree of redemption.
Headnote
A) Property Law - Mortgage vs. Sale - Interpretation of Document - The court considered whether a document executed in 1971 was a mortgage by conditional sale or an out-and-out sale - Held that the document, though styled as a sale deed, was in fact a mortgage by conditional sale as the consideration was inadequate, possession was given, and there was an agreement to reconvey - The burden of proof lies on the mortgagee to show that the transaction was a sale (Paras 1-10). B) Evidence Act - Admissibility of Consent Terms - Section 91, 92 Evidence Act - The consent terms filed in a previous suit (RCS No. 57/1976) wherein plaintiffs admitted the transaction as a sale were held to be inadmissible to vary the terms of the document - Held that such consent terms cannot be used to contradict the written document which itself indicated a mortgage (Paras 11-15). C) Limitation - Redemption of Mortgage - Article 61(a) Limitation Act, 1963 - The suit for redemption filed in 1982 was held to be within limitation as the mortgage was for a fixed period of five years from 1971, and the right to redeem accrued after the expiry of that period - The plaintiffs made a demand in November 1981 and filed suit within three years thereafter (Paras 16-20).
Issue of Consideration
Whether the transaction between Vithoba and the defendant was a mortgage by conditional sale or an out-and-out sale, and whether the plaintiffs are entitled to redemption.
Final Decision
The High Court dismissed the second appeal, confirming the decree of redemption of mortgage in favor of the plaintiffs.
Law Points
- Interpretation of mortgage vs. sale
- Redemption of mortgage
- Burden of proof on mortgagee
- Admissibility of consent terms in previous suit
- Section 91 Evidence Act
- Section 92 Evidence Act
- Section 58 Transfer of Property Act
