Case Note & Summary
The appellant, Pandurang Maruti Dombale, filed a suit for recovery of possession and profits based on a registered conditional sale deed dated 22 November 1972 executed by Piraji Krishna Owal, predecessor-in-interest of the respondents. The deed recited that possession was given, but it was admitted that possession was not delivered. The appellant claimed that the amount of Rs. 2,500 was not repaid within five years, making the conditional sale absolute. The plaint described the amount as mortgage money and sought foreclosure. The respondents filed a counterclaim for redemption and deposited the mortgage money in court. The Trial Court held that the document was a conditional sale and decreed possession in favor of the appellant. The First Appellate Court reversed the decree, holding that the transaction was a mortgage by conditional sale and that the respondents were entitled to redeem. In the second appeal, the High Court upheld the First Appellate Court's decision. The court noted that the plaint itself treated the transaction as a mortgage, seeking foreclosure. Since no preliminary decree for foreclosure was passed, the suit for possession was not maintainable. The court held that the proper remedy was a preliminary decree for sale under Order 34 Rule 4 CPC. The respondents' right to redeem subsisted as no final decree had been passed, and their counterclaim was within time. The High Court dismissed the second appeal, confirming the respondents' right to redeem the mortgage.
Headnote
A) Transfer of Property Act - Mortgage by Conditional Sale - Section 58(c) - The court examined whether a document styled as a conditional sale was in fact a mortgage by conditional sale. The plaint itself described the amount as mortgage money and sought foreclosure, indicating the transaction was a mortgage. Held that the document was a mortgage by conditional sale and not an absolute sale (Paras 2-4). B) Civil Procedure Code - Foreclosure Decree - Order 34 Rule 2 - The appellant sought foreclosure, but the court held that a preliminary decree for foreclosure must be passed before a final decree. Since no such preliminary decree was passed, the suit for possession based on foreclosure was not maintainable. Held that the proper remedy was to pass a preliminary decree for sale under Order 34 Rule 4 CPC (Paras 5-6). C) Limitation - Redemption of Mortgage - Article 61(a) of Limitation Act, 1963 - The respondents deposited the mortgage money in court and sought redemption. The court held that the right to redeem subsists until a final decree for foreclosure or sale is passed. Since no such decree was passed, the respondents' counterclaim for redemption was within time. Held that the respondents were entitled to redeem the mortgage (Paras 7-8).
Issue of Consideration
Whether the transaction dated 22 November 1972 was a sale or a mortgage by conditional sale, and whether the appellant was entitled to a decree for possession and foreclosure or the respondents were entitled to redeem the mortgage.
Final Decision
The High Court dismissed the second appeal, confirming the judgment of the First Appellate Court. The respondents were held entitled to redeem the mortgage upon payment of the mortgage money.
Law Points
- Mortgage by conditional sale
- foreclosure
- redemption
- Section 58(c) Transfer of Property Act
- 1882
- Order 34 Rule 2 CPC
- limitation for redemption
