In a significant legal case concerning a land dispute, the Supreme Court Of India made a crucial judgment regarding the nature of a sale deed. The dispute, involving the parties in the case of Dharmaji Shankar Shinde & Ors. vs Rajaram Sripad Joshi, revolved around the interpretation of key documents like Exhibits 23, 24, and 14/1. The court’s decision emphasized the importance of actions and consequences in determining the true nature of the transaction, ultimately leading to the dismissal of the suit by the lower appellate court.
Facts
- An agreement dated 10 December, 1968 was entered into between the parties for repayment.
- A demand notice was issued by the plaintiff on 10 September, 1980, followed by a reply from the defendant on 23 September, 1980 disputing the claim.
- The plaintiff filed a suit seeking redemption of mortgage and recovery of possession of the land.
- The High Court allowed the appeal filed by the defendant, thus dismissing the suit of the plaintiff.
- Another agreement dated 29 August, 1969 was entered into between the parties regarding a sum of Rs.5,000 and possession of the land.
- The Civil Court decreed the suit treating the transaction as a mortgage.
- The plaintiff appealed to the High Court of Judicature at Bombay, bearing S.A.No.479 of 1991.
- The Lower Appellate Court reversed the judgment and decree of the Civil Court.
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Issue
- The trial court focused on the construction of the sale deed dated 10 December, 1968, and related documents to determine if it was a mortgage by conditional sale or a straightforward sale transaction.
- The key documents under consideration are Exhibits 23, 24, and 14/1, which are central to resolving the dispute.
- Section 58(c) of the Transfer of Property Act, which deals with mortgage by conditional sale, is also relevant to the case.
- The appeal does not require reevaluation of evidence, but rather a determination of the nature of the transaction based on the specified documents and legal provisions.
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Arguments
- The learned counsel for the plaintiff argued that the mutation of land in the revenue records does not impact the title of the land.
- The defendant claimed that despite agreements for reconveyance, the sale deed became absolute due to non-repayment.
- Plaintiff’s counsel contended that the sale deed should be seen as a mortgage by conditional sale based on documents at Exhibits 24 and 14/1.
- Reference was made to the case of P.L. Bapuswami vs N. Pattay Gounder (1966) 2 SCR 918 to support the argument for construing the sale deed as a mortgage.
- Additionally, the case of Pandit Chunchun Jha vs. Sheikh Ebadat Ali (1955) 1 SCR 174 was cited to emphasize that the subsequent document could rebut the presumption.
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Analysis
- Section 58(c) of the Transfer of Property Act defines a mortgage by conditional sale and the mortgagee by conditional sale.
- For a transaction to be considered a mortgage, the condition must be clearly mentioned in the document that effects or purports to effect the sale.
- The proviso emphasizes the importance of the condition being embodied in the sale document to qualify as a mortgage.
- The plaintiff’s claim is based on a contemporaneous document at Exh.24 but cannot be termed as a mortgage by conditional sale.
- The sale deed dated 10 December, 1968 (Exh.23) does not indicate any clause to demonstrate it as a mortgage, rather it shows an absolute conveyance.
- Exhibit 24 agreement indicates a potential reconveyance subject to repayment, amounting to Rs.7,224/- based on combined reading with Exhibit 14/1.
- The defendant was granted absolute rights to the property due to non-repayment by the plaintiff.
- Change of mutation in defendant’s name is a strong indicator that Exh.23 is a sale deed conveying absolute rights.
- The suit seeking redemption of mortgage was not sustainable due to aforementioned circumstances.
- Despite the agreement for reconveyance in Exh.24, as amount was not repaid, the defendant’s right to the property became absolute.
- In case of reconveyance disagreement, the appropriate action for the plaintiff would have been to seek specific performance rather than redemption.
- The defendant acting upon the sale deed and securing mutation order further solidifies the absolute rights granted.
- The interest payment agreement and non-repayment of Rs.2,224/- by the plaintiff were key factors in establishing absolute rights of the defendant.
- The judgment emphasizes the need to consider actions and consequences in determining the true nature of the transaction.
- The defendant’s proactive steps to secure revenue entries in his favor strengthen the argument against the document being a mortgage by conditional sale.
- In the case of Dharmaji Shankar Shinde & Ors. vs Rajaram Sripad Joshi (D) Lrs. and Ors. (2019) 6 SCALE 682, the Court considered Section 58(c) in detail.
- It was determined that a sale with a condition of retransfer is not a mortgage.
- The proviso to Section 58(c) was mentioned, stating that if the sale and agreement to repurchase are in separate documents, it cannot be considered a mortgage by conditional sale.
- The conclusion was that even if the documents are executed separately, the transactions cannot be seen as a mortgage.
- The Civil Court and High Court were not justified in their conclusion regarding the suit.
- The lower appellate court considered factual aspects correctly and in line with legal position.
- Regular Civil Appeal No. 233 of 1984 was allowed and the suit was dismissed based on the correct perspective.
Decision
- The judgment dated 26 September, 2007 passed by the High Court in S.A.No.479 of 1991 is set aside.
- The judgment dated 29 June, 1990 passed by the Additional District Judge in Regular Civil Appeal No.233 of 1984 is restored.
- The appeal is allowed.
- Regular Civil Suit No.237 of 1980 filed by the plaintiff is dismissed.
- No order is passed as to costs.
Case Title: SOPAN(DEAD) THROUGH HIS L.R. Vs. SYED NABI
Case Number: C.A. No.-003506-003506 / 2010
