REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.7448 OF 2008

DHARMAJI SHANKAR SHINDE  AND OTHERS          …Appellants

VERSUS

RAJARAM SHRIPAD JOSHI (DEAD) THROUGH LRs. AND OTHERS                  …Respondents

WITH

CIVIL APPEAL NO.7449 OF 2008

J U D G M E N T  

R. BANUMATHI, J.

These appeals arise out of the judgment dated 15.11.2006

passed  by  the  High  Court  of  Bombay  dismissing  the  Second

Appeal No.887 of 2003 thereby upholding the decision of the first

Appellate Court holding that Ex.P-73 is a “mortgage by conditional

sale” and that the respondents-plaintiffs are entitled to redeem the

suit property upon payment of the balance amount.  

1

2. Facts giving rise to these appeals are that the respondents-

plaintiffs  filed  a  suit  for  redemption  of  the  suit  property  bearing

S.No.147  present  G.No.750  admeasuring  2  Hectares  18  Are

situated in village Kudal, Jawli taluka and district Satara.  Case of

the respondents-plaintiffs is that the suit property was mortgaged

by their father Shripad Joshi on 28.07.1967 in favour of Shankar

Shinde  who  is  the  predecessor-in-interest  of  the  appellants-

defendants for Rs.2500/-.  The said deed (Ex.P-73) is a deed of

“mortgage by conditional sale” with a condition that if the amount is

not repaid within a period of five years from the date of execution

of the deed, then the same would be treated and construed as an

absolute  sale  between  the  parties  conferring  absolute  right  of

ownership on Shankar Shinde and his legal representatives.  As

per the recitals in the document, the possession of the suit property

was also handed over to Shankar Shinde on the date of execution

of  the  deed.   The  respondents-plaintiffs  further  averred  that  on

26.07.1972, their father had paid an amount of Rs.800/- to Shankar

Shinde and to that effect Ex.P-69-receipt was executed.  Shripad

Joshi  died  in  the  year  1973  and  the  respondents-plaintiffs

succeeded to his estate. Further case of the respondents-plaintiffs

is that in spite of repeated request to the appellants-defendants for

2

redemption of the suit property and delivery of possession of the

property, they failed to receive the money and had not handed over

the possession of the property.  After issuance of legal notice dated

19.02.1980,  the  plaintiffs  filed  the  suit  for  redemption  of  the

mortgage.

3. The appellants-defendants resisted the suit contending that

the transaction between their father-Shankar Shinde and the father

of  the  respondents-plaintiffs-Shripad  Joshi  was  a  sale  with

condition  to  repurchase within  a  stipulated  period  of  five  years.

Case  of  defendants  is  that  since  Shripad  Joshi,  father  of  the

respondents-plaintiffs  failed  to  repay  the  money  within  the

stipulated period of five years and failed to take any step to get the

property reconveyed to them, after the period of five years as per

the  terms  and  conditions  of  Ex.P-73,  father  of  the  appellants-

defendants Shankar Shinde has become the absolute owner of the

suit property and the plaintiffs have no right, title or interest in the

suit property.

4. The  trial  court  dismissed  the  respondents-plaintiffs  suit  by

holding  that  the  relationship  of  debtor  and  creditor  is  not

established  and  the  respondents  have  failed  to  prove  that  the

transaction    (Ex.P-73) was a mortgage and therefore, they are not

3

entitled to redemption and possession of the suit property.  After

referring  to  the  recitals  in  Ex.P-73,  the  trial  court  held  that  the

respondents-plaintiffs have agreed that if Shripad Joshi does not

pay  the  amount  within  stipulated  period  of  five  years,  the  said

document  was  to  be  treated  as  sale  deed  and  in  his  life  time

executant Shripad Joshi did not take any action to get the property

reconveyed.  The trial court also held that Ex.P-69-receipt has not

been proved  by  the  respondents-plaintiffs  and the  respondents-

plaintiffs are not entitled to the decree prayed for by them.   

5. In appeal, the first Appellate Court set aside the judgment of

the trial court by holding that Ex.P-73 is a “mortgage by conditional

sale” and not an absolute sale deed or a sale with a condition to

repurchase.   The  first  Appellate  Court  held  that  payment  of

Rs.800/-  by  Shripad  Joshi  has  been  proved  and  that  the

respondents  have  proved  the  execution  of  Ex.P-69-receipt  by

examining Prabhakar (PW-2) who is the son of the scribe of Ex.P-

69-receipt.   The  first  Appellate  Court  held  that  Ex.P-73  was  a

“mortgage with  conditional  sale”  as  per  proviso to  clause (c)  of

Section 58 of the Transfer of Property Act and that the respondents

are  entitled  to  redeem the  mortgage subject  to  the  payment  of

balance amount of Rs.1700/-.  Being aggrieved by the judgment of

4

the first  Appellate Court,  the appellants preferred second appeal

before  the  High  Court  which  came  to  be  dismissed  by  the

impugned judgment.

6. Taking us through the evidence and materials on record, the

learned counsel  for  the appellants submitted that  the amount of

Rs.2500/-  was paid by Shankar Shinde as consideration for  the

sale and the recitals  in  Ex.P-73-document clearly  show that  the

transaction was a sale  with  condition for  reconveyance.  It  was

submitted that during the five years, original owner Shripad Joshi

did not repay the amount within the stipulated period of five years

and take steps to get reconveyance of the property and therefore,

the document dated 28.07.1967 has become an absolute sale. It

was submitted that merely because the clause regarding sale and

agreement  to  repurchase are  embodied in  the same document,

proviso to clause (c) of Section 58 of the Transfer of Property Act is

not  attracted  and  it  cannot  be  said  that  the  transaction  is  a

mortgage. It was urged that the first Appellate Court and the High

Court  failed  to  consider  the  intention  of  the  parties  and  the

surrounding  circumstances  which  clearly  show  that  the  parties

intended  Ex.P-73  to  be  a  transaction  of  sale  with  condition  to

repurchase and not mortgage by conditional sale.  It was further

5

submitted  that  the  execution  of  Ex.P-69-receipt  has  not  been

proved by the plaintiffs and the first Appellate Court and the High

Court erred in reversing the well-considered judgment of the trial

court.

7. Per contra, the learned counsel for the respondents-plaintiffs

submitted that  since the sale  and agreement  to  repurchase are

embodied  in  the  same  document,  in  view  of  the  mandatory

provision of the proviso to clause (c) of Section 58 of the Transfer

of Property Act, the transaction is to be treated as a “mortgage by

conditional  sale”  which  the  respondents-plaintiffs  are  entitled  to

redeem.  According to the respondents-plaintiffs, though the words

“….conditional  sale….”  have  been  used  in  the  Ex.P-73,  parties

intended it to be only a mortgage and not a conditional sale with

condition to repurchase.  The learned counsel for the respondents-

plaintiffs contended that the first Appellate Court rightly accepted

Ex.P-69-receipt under which the plaintiffs paid a sum of Rs.800/-

and the first Appellate Court rightly held that the document dated

28.07.1967 is a “mortgage by conditional sale” and not a sale with

condition for reconveyance.

8. We  have  heard  Ms.  Qurratulain,  learned  counsel  for  the

appellants  and  Mr.  Arvind  S.  Avhad,  learned  counsel  for  the

6

respondents-plaintiffs and perused the impugned judgment and the

judgment of the trial court and materials placed on record.   

9. In these appeals, the question falling for consideration is the

interpretation  of  Ex.P-73-document  dated  28.07.1967.   Upon

consideration of the submissions, the following questions arise for

determination in these appeals:-

(i) Whether  the  respondents-plaintiffs  are  right  in

contending that in view of the statutory provision viz.

proviso to clause (c) of Section 58 of the Transfer of

Property Act, Ex.P-73-document dated 28.07.1967 is

to be held as a mortgage by conditional sale?

(ii) Whether the clause in Ex.P-73-document that in case

of  non-payment  of  the amount  within  the stipulated

period of five years, the sale will become permanent

and the transferee will have an absolute right are not

consistent with the intention of the parties of making

the transaction  a  conditional  sale  with  an option  to

repurchase?

10. Section 58(c) of the Transfer of Property Act contains the

definition of “mortgage by conditional sale”.  In a “mortgage by

conditional  sale”,  the  transfer  is  made as a  security  to  a  loan

taken by the mortgagor-owner; whereas in a “sale with a condition

to repurchase”, the sale is made by the vendor-owner reserving

with himself a right to repurchase it within a stipulated time.  A

7

sale with a condition of  retransfer is  not a mortgage since the

relationship of debtor and creditor does not exist and there is no

debt for which the transfer is made as a security.  Whether the

document  is  a  “mortgage  by  conditional  sale”  or  “sale  with  a

condition to repurchase” is to be ascertained from the intention of

the parties. It is trite law that the intention of the parties should be

gathered from the recitals of the document itself.

11. Section  58(c)  of  the  Transfer  of  Property  Act  deals  with

“mortgage by conditional sale” which reads as under:-

“58. …….

(c) Mortgage by conditional sale.—Where the mortgagor ostensibly

sells the mortgaged property—

on a condition  that  on  default  of  payment  of  the  mortgage-

money on a certain date the sale shall become absolute, or

on condition that on such payment being made the sale shall

become void, or

on a condition that  on such payment being made the buyer

shall transfer the property to the seller,

the transaction is called a mortgage by conditional sale and the

mortgagee, a mortgagee by conditional sale:

Provided  that  no  such  transaction  shall  be  deemed  to  be  a

mortgage,  unless  the  condition  is  embodied  in  the  document

which effects or purports to effect the sale.”  

(emphasis added)

12. Proviso to Section 58(c) was added by Act 20 of 1929.  Prior

to  the  amendment,  there  was  a  conflict  of  decisions  on  the

8

question  whether  the  condition  contained  in  a  separate  deed

could be taken into account in ascertaining whether a mortgage

was intended by the principal deed.  The conflict was resolved by

adding  proviso  to  Section  58(c).   Considering  the  scope  of

proviso to Section 58(c) which was added by Act 20 of 1929 and

elaborating upon the distinction between “mortgage by conditional

sale”  and  “sale  with  agreement  to  repurchase”,  in  Bhaskar

Waman Joshi (deceased) v. Shri Narayan Rambilas Agarwal

(deceased) (1960) 2         SCR 117 :  AIR 1960 SC 301, it was

held as under:-

“6. The proviso to this clause was added by Act 20 of 1929. Prior to

the  amendment  there  was  a  conflict  of  decisions  on  the  question

whether the condition contained in a separate deed could be taken

into account in ascertaining whether a mortgage was intended by the

principal deed. The Legislature resolved this conflict by enacting that a

transaction shall not be deemed to be a mortgage unless the condition

referred to in the clause is embodied in the document which effects or

purports to effect the sale. But it does not follow that if the condition is

incorporated  in  the  deed  effecting  or  purporting  to  effect  a  sale  a

mortgage  transaction  must  of  necessity  have  been  intended.  The

question whether by the incorporation of such a condition a transaction

ostensibly of sale may be regarded as a mortgage is one of intention

of the parties to be gathered from the language of the deed interpreted

in the light of the surrounding circumstances. The circumstance that

the condition is incorporated in the sale deed must undoubtedly be

taken into account, but the value to be attached thereto must vary with

the degree of formality attending upon the transaction. The definition

of  a  mortgage  by  conditional  sale  postulates  the  creation  by  the

9

transfer  of  a  relation of  mortgagor  and mortgagee,  the  price  being

charged  on  the  property  conveyed.  In  a  sale  coupled  with  an

agreement to reconvey there is no relation of debtor and creditor nor is

the price charged upon the property conveyed, but the sale is subject

to an obligation to retransfer the property within the period specified.

What distinguishes the two transactions is the relationship of debtor

and creditor and the transfer being a security for the debt. The form in

which the deed is clothed is not decisive. The definition of a mortgage

by  conditional  sale  itself  contemplates  an  ostensible  sale  of  the

property. ……”  

13. As per proviso to Section 58(c), if the sale and agreement to

repurchase are embodied in  the separate documents  then the

transaction  cannot  be  a  “mortgage  by  conditional  sale”

irrespective  of  whether  the  documents  are  contemporaneously

executed; but the converse does not hold good.  Observing that

the  mere  fact  that  there  is  only  one  document,  it  does  not

necessarily mean that it  must be a mortgage and cannot be a

sale, in Chunchun Jha v. Ebadat Ali and another AIR 1954 SC

345, it was held as under:-  

“6. The first is that the intention of the parties is the determining factor:

see  Balkishen Das v.  Legge  27 IA 58. But there is nothing special

about  that  in this  class of  cases and here,  as in every  other case

where  a  document  has  to  be  construed,  the  intention  must  be

gathered, in the first place, from the document itself. If the words are

express and clear, effect must be given to them and any extraneous

enquiry  into  what  was  thought  or  intended  is  ruled  out.  The  real

question in such a case is not what the parties intended or meant but

what is the legal effect of the words which they used. If, however, there

is ambiguity in the language employed, then it is permissible to look to

10

the surrounding circumstances to determine what  was intended.  As

Lord Cranworth said in Alderson v. White 44 ER 294 at 928:

“The  rule  of  law  on  this  subject  is  one  dictated  by

commonsense;  that  prima  facie  an  absolute  conveyance,

containing  nothing  to  show  that  the  relation  of  debtor  and

creditor is to exist between the parties, does not cease to be an

absolute conveyance and become a mortgage merely because

the vendor stipulates that he shall have a right to repurchase….

In  every  such  case  the  question  is,  what,  upon  a  fair

construction, is the meaning of the instruments?”

7. Their  Lordships of  the Privy Council  applied this  rule to India in

Bhagwan Sahai v. Bhagwan Din 17 IA 98 at 102 and in Jhanda Singh

v. Wahid-ud-din 43 IA 284 at 293.

8. The converse also holds good and if, on the face of it, an instrument

clearly purports to be a mortgage it cannot be turned into a sale by

reference  to  a  host  of  extraneous  and  irrelevant  considerations.

Difficulty only arises in the border line cases where there is ambiguity.

Unfortunately, they form the bulk of this kind of transaction.

9. Because  of  the  welter  of  confusion  caused  by  a  multitude  of

conflicting decisions the legislature stepped in and amended Section

58(c) of the Transfer of Property Act. Unfortunately that brought in its

train a further conflict of authority. But this much is now clear.  If the

sale  and  agreement  to  repurchase  are  embodied  in  separate

documents, then the transaction cannot be a mortgage whether the

documents are contemporaneously executed or not. But the converse

does not hold good, that is to say, the mere fact that there is only one

document does not necessarily mean that it must be a mortgage and

cannot be a sale.  If  the condition of repurchase is embodied in the

document that effects or purports to effect the sale, then it is a matter

for construction which was meant. The legislature has made a clear

cut classification and excluded transactions embodied in more than

one  document  from  the  category  of  mortgages,  therefore  it  is

reasonable  to  suppose  that  persons  who,  after  the  amendment,

choose not to use two documents, do not intend the transaction to be

a sale, unless they displace that presumption by clear and express

11

words; and if the conditions of Section 58(c) are fulfilled, then we are

of  opinion  that  the  deed  should  be  construed  as  a  mortgage.

(emphasis added)

In Chunchun Jha, after considering the recitals in the document

thereon and the surrounding circumstances thereon, the Supreme

Court  held that  there was a relationship of  debtor and creditor

between the parties existing at the time of the suit transaction.

14. The question in each case is the determination of the real

character of the transaction to be ascertained from the provisions

of the deed viewed in the light of the surrounding circumstances.

If the words are plain and unambiguous then in the light of the

evidence of the surrounding circumstances, it must be given their

true  legal  effect.   If  there  is  any  ambiguity  in  the  language

employed, the intention is to be ascertained from the contents of

the  deed  and  the  language  of  the  deed  is  to  be  taken  into

consideration to ascertain the intention of the parties. Evidence of

contemporaneous  conduct  of  the  parties  is  to  be  taken  into

consideration as the surrounding circumstances.   

15. After referring to number of judgments and the essentials of

agreement  to  qualify  as  a  “mortgage  by  conditional  sale”,  in

12

Vithal Tukaram Kadam and another v. Vamanrao Sawalaram

Bhosale and others (2018) 11 SCC 172, it was held as under:-

“14. The  essentials  of  an  agreement  to  qualify  as  a  mortgage  by

conditional sale can succinctly be broadly summarised. An ostensible

sale  with  transfer  of  possession  and  ownership,  but  containing  a

clause for reconveyance in accordance with Section 58(c) of the Act,

will  clothe  the  agreement  as  a  mortgage  by  conditional  sale.  The

execution  of  a  separate  agreement  for  reconveyance,  either

contemporaneously  or  subsequently,  shall  militate  against  the

agreement  being mortgage by  conditional  sale.  There must  exist  a

debtor and creditor relationship. The valuation of the property and the

transaction value along with the duration of time for reconveyance are

important considerations to decide the nature of the agreement. There

will have to be a cumulative consideration of these factors along with

the recitals  in the agreement,  intention of  the parties,  coupled with

other attendant circumstances, considered in a holistic manner.”

In the light of the consistent view taken in various decisions, let us

consider whether Ex.P-73 is a “mortgage by conditional sale”  or

a “sale with condition for reconveyance” and whether there exists

any debtor and creditor relationship.  

16. Intention  of  the  parties  as  seen  from the recitals  of

Ex.P-73:-  By perusal of Ex.P-73, it is clear that eight days prior to

Ex.P-73, Shripad Joshi has borrowed orally a sum of Rs.700/- for

the purpose of marriage of his daughter.  At the time of execution

of Ex.P-73 (28.07.1967), Shirpad Joshi required more money for

the same reason and he executed Ex.P-73-document  titled as

13

“mortgage by conditional sale” for a consideration of Rs.2500/-

and on the date of execution of the said document, Shripad Joshi

received only a sum of Rs.1800/-.  The earlier borrowed amount

of  Rs.700/-  was  thus  adjusted  from  the  sale  consideration  of

Rs.2500/-.  The intention of the parties in putting an end to the

debtor-creditor relationship with respect to the sum of Rs.700/- is

clear from the recitals of the document i.e. adjustment of Rs.700/-

from the total consideration of Rs.2500/- and parties intending to

create a relationship of vendor and vendee by transfer of the suit

property for a consideration of Rs.2500/-.   Period of five years

was  fixed  in  Ex.P-73  within  which  Shirpad  Joshi-father  of  the

respondents-plaintiffs was to repay the said amount.  On the date

of execution of  the document (Ex.P-73),  the possession of  the

property  was  handed  over  to  the  appellants-defendants  for

cultivation.   Further,  recitals  are  to  the  effect  that  if  the

consideration  amount  is  paid  within  five  years,  Shripad  Joshi-

executant will get the mortgage redeemed.  In case, the amount

is not paid within the stipulated period of five years, the mortgage

shall  be  treated  as  an  absolute  sale  and  thereafter  Shankar

Shinde to pay the land revenue to the government and all other

charges for which executant will have no complaint.  The recitals

14

of the document make clear the intention of the parties that if the

amount is not repaid within the stipulated period of five years, the

transferee  will  have  absolute  right  and  the  mortgage  will  be

treated as an absolute sale and the transferee to pay the land

revenue and the other charges.  These clauses in Ex.P-73, in our

view, are consistent with the intention of the parties making the

transaction a conditional sale with an option to repurchase.

17. Admittedly, executant of Ex.P-73, Shripad Joshi expired in

the year 1973 and till  his life time, he never took any action or

step to get the property reconveyed.  After death of Shripad Joshi

in  the  year  1973,  no  immediate  action  was  taken  by  his

successor.  Obviously, all the legal action were started in the year

1980 by the present plaintiffs based upon a receipt-Ex.P-69 dated

26.07.1972 under which an amount of Rs.800/- is said to have

been paid to Shankar Shinde.  Much emphasis has been placed

by the respondents-plaintiffs on Ex.P-69-receipt which we would

refer  a  little  later.   When being  confronted  with  the  recitals  in

Ex.P-73, in his cross-examination, PW-1-Rajaram Joshi admitted

that  “the  transaction  was  that  of  sale  with  the  condition  of

repurchase”  and  “neither  parties  are  described  therein  as

mortgagor  or  mortgagee”.  Admission  of  PW-1  is  a  formidable

15

evidence indicating the intention of the parties.  Having not paid

the amount within the stipulated period of five years, the plaintiffs

have lost their right to repurchase.

18. Mention of “borrowed a sum of Rs.700/-“ in the document is

incidental.  Mere  incorporation  of  the  word  “borrowed”  and

“mortgage by conditional sale” cannot by itself establish that there

is a debtor-creditor relationship.  In fact, as pointed out earlier, the

recitals of the document make it clear that the parties expressed

their intention to put an end to the debtor-creditor relationship with

respect to the sum of Rs.700/- that existed prior to the execution

of Ex.P-73 and creating a relationship of vendor and vendee by

transfer of the suit  property for consideration of Rs.2500/-.   As

rightly observed by the trial court, in Ex.P-73, there is no mention

of the rate of interest, right of foreclosure that are essential in a

deed of mortgage.

19. The  contention  of  the  respondents  is  that  in  view of  the

mandatory provisions of the proviso to clause (c) of Section 58 of

the  Act,  since  the  sale  and  the  agreement  to  repurchase  are

embodied in the same document (Ex.P-73), the transaction is to

be taken as a mortgage and the conditions enumerated in proviso

to  Section  58(c)  of  the  Transfer  of  Property  Act  have  been

16

satisfied in the present case.  On behalf of the respondents, it

was submitted that the existence of creditor-debtor relationship

can  be  derived  from  the  recital  in  the  document  “I  have

borrowed”.   As pointed out  earlier,  there are no recitals  in  the

document  to  establish  creditor-debtor  relationship;  nor  does  it

contain the right of foreclosure, payment of interest etc. which are

essential requirements in a deed of mortgage.

20. As per Section 58(a) of  the Transfer of  Property  Act,  the

mortgage  is  the  transfer  of  an  interest  in  specific  immovable

property  as  security  for  the  repayment  of  the  debt;  but  such

interest itself is immovable property.  In the case in hand, non-

mention  of  the  mortgage  amount  for  which  the  interest  in  the

immovable  property  was  created  as  security,  indicate  that  the

parties have never intended to create a mortgage deed.  If really

the parties have intended the transaction to be a mortgage, while

handing over possession of the property to Shankar Shinde for

cultivation, the parties would have stated that the cultivation and

enjoyment  of  usufructs  are  in  lieu  of  the  interest  payable  by

Shripad Joshi on the amount.  But that was not to be so.  The

transfer of possession and right to cultivate the suit land could be

conceived as the intention of the executant to transfer the right,

17

title  and  interest  in  the  property  which  are  essentials  in  any

transaction of a sale.

21. Moreover,  as  per  the  clauses  in  Ex.P-73-document,  the

possession of the suit property was also handed over to Shankar

Shinde-father  of  the  appellants.   Though,  it  is  stated  that  the

transferee-Shankar  Shinde  was  to  pay  the  revenue  to  the

government  after  five  years,  according  to  the  appellants,  ever

since 1967, land revenue was paid by the father of the appellants.

In  his  evidence,  PW-1  admitted  that  revenue  cess  of  the  suit

property has been paid by Shankar Shinde from 1967 and after

his  demise,  by his  legal  heirs.   Likewise,  a mutation was also

effected in the name of Shankar Shinde even in the year 1967.

During his life time, father of the respondents-Shripad Joshi has

not raised any objection to the mutation nor for the payment of the

revenue  cess  by  Shankar  Shinde.   Considering  the

contemporaneous conduct of the parties, it is clear that Shankar

Shinde and thereafter the appellants were dealing with the suit

property as if they were the owners of the land.  The clause in

Ex.P-73 that if the amount is not paid within a period of five years,

the  transaction  will  become  a  permanent  sale  deed  and

thereafter,  the  transferee  will  have  the  absolute  right  over  the

18

property  are  consistent  with  the  express  intention  of  parties

making  the  transaction  a  conditional  sale  with  option  to

repurchase.

22. The respondents-plaintiffs contended that the market value

of the suit  property  was higher than the transaction value and

therefore, Ex.P-73 is to be construed as a mortgage.  In support

of  their  contention,  reliance  was  placed  upon  the  judgment  in

Vithal  Tukaram.   The  facts  in  Vithal  Tukaram  are  clearly

distinguishable  with  the  facts  and  evidence  on  record  in  the

present case.  In that case, the value of the land was Rs.3500/-

far  in  excess  of  the  amount  of  Rs.700/-  mentioned  in  the

document.   Considering  the  evidence  of  the  respondent-

defendant thereon and the facts of the said case, the Supreme

Court held that the value of the land was far in excess of Rs.700/-

mentioned  in  the  agreement.   Further,  in  the  said  case,  the

defendant thereon did not take any step for mutation of the land

for three long years and the plaintiff thereon specifically objected

to mutation in the name of  respondent-defendant.  The case in

hand is clearly distinguishable on facts.

23. In the present case, there are no averments in the plaint as

to the market value of the property and as to the inadequacy of

19

the  consideration.  In  his  evidence,  PW-1  has  stated  that  the

transaction of absolute sale could have been worth Rs.60,000-

70,000/- in the year 1967; but the respondents-plaintiffs have not

produced the certificate of valuation of the land or the circle rate

of  the property  at  the time when Ex.P-73 was executed.   The

appellants contended that the suit property was sold for a proper

consideration and relied upon the transaction that took place in

the  village  in  the  year  1957  to  establish  that  the  sale

consideration is appropriate.  The trial court while deciding issue

No.4  has  held  that  the  respondents-plaintiffs  have  failed  to

adduce any evidence to show that the market value of the suit

property in the year 1967 was much more than what was paid by

the appellants-defendants.

24. The respondents-plaintiffs have placed much reliance upon

Ex.P-69-receipt  to  show that  Shripad Joshi  paid  an amount  of

Rs.800/-  to  Shankar  Shinde  who  in  turn  executed  the  receipt

dated 26.07.1972 in favour of his father and at that time, PW-1

was also present.   The appellants-defendants contend that Ex.P-

69-receipt is forged.  Admittedly, neither parties to Ex.P-69-receipt

nor the scribe who wrote the receipt  are alive.  In  the light  of

defence plea questioning the correctness of Ex.P-69, the burden

20

of  proof  is  on  the  respondents-plaintiffs  to  adduce  the  best

possible evidence to prove Ex.P-69-receipt.   The respondents-

plaintiffs examined      PW-2-Prabhakar, son of the scribe-Gopal

Tukaram Shivade to identify the handwriting and signature of the

scribe  of  Ex.P-69.   In  his  evidence,  PW-2  stated  that  he  is

acquainted with the handwriting and signature of his father and

that Ex.P-69-receipt was written by his father.  

25. Gopal  Tukaram  Shivade-scribe,  father  of  PW-2,  was  a

Police Patil  of  Kudal  for  ten years  and he expired in  the year

1990.      Ex.P-69-receipt was of the year 1972 and PW-2 was

examined in the year 1994.  After perusal of Ex.P-69-receipt, the

trial court held that there are glaring defects in the said receipt i.e.

faded and incomplete thumb impression of Shankar Shinde on

the revenue stamp.  The trial court has observed that except the

evidence of PW-2, no other evidence has been adduced by the

respondents-plaintiffs to prove Ex.P-69-receipt.  Since the scribe

was a Police Patil  of  Kudal,  it  was very much possible for the

respondents-plaintiffs to prove the execution of the document by

producing  the  admitted  handwriting  of  the  scribe  so  as  to

compare them with the questioned writing in the receipt.  The trial

court  also pointed out  that  though PW-1-Rajaram Joshi  claims

21

that he was present at the time of execution of Ex.P-69, PW-1

had not signed in it nor attested it,  so PW-1’s evidence is of no

help to prove the execution of the receipt.  Be it noted that though

Ex.P-69-receipt was of the year 1972, during his life time, based

on  Ex.P-69-receipt,  Shripad  Joshi  had  not  taken  any  step  to

redeem the property.  Even after death of Shripad Joshi in 1973,

Ex.P-69-receipt did not see the light of the day till 1980 when the

notice was said to have been issued by the respondents-plaintiffs.

In these factual circumstances, it cannot be said that the plaintiffs

have  discharged  the  burden  in  proving  Ex.P-69-receipt  as

genuine  to  hold  that  the  parties  had  intended  that  Ex.P-73-

document is only a “mortgage by conditional sale” and not a sale

with  condition  to  repurchase.   The  receipt  Ex.P-69  cannot  be

relied upon as corroborative piece of evidence to hold that part

payment was made by Shripad Joshi and that the parties treated

Ex.P-73 as a “mortgage by conditional sale”.

26. When Ex.P-73 is clear and unambiguous, the first Appellate

Court erred in relying upon Ex.P-69-receipt to draw inference as

to the intention of the parties.  The first Appellate Court did not

keep in view that the appellants-defendants have denied Ex.P-69-

receipt,  hence,  burden  lies  upon  the  plaintiffs  to  prove  the

22

contents of Ex.P-69 to bring in the intention of the parties that the

transaction  between  the  parties  was  only  a  “mortgage  by

conditional  sale”.   When  the  recitals  in  Ex.P-73-document  is

sufficient to gather the intention of the parties, the first Appellate

Court erred in placing reliance on Ex.P-69-receipt to ascertain the

intention of the parties to upset the findings of fact recorded by

the trial court.  The findings of the first Appellate Court and the

High Court in placing reliance upon Ex.P-69-receipt to conclude

that the transaction was a mortgage and not a sale are erroneous

and the same cannot be sustained.   

27. Though  the  transaction  and  condition  to  repurchase  are

embodied in one document, having regard to the intention of the

parties  and  the  surrounding  circumstances,  in  our  considered

view, Ex.P-73 does not fall within the proviso to Section 58(c) of

the Transfer of Property Act.  Ex.P-73 a registered document, in

our considered view, is not a mortgage but a transaction of sale

with  condition  to  repurchase.   The  High  Court  and  the  first

Appellate Court did not properly appreciate the recitals in Ex.P-73

and  that  it  does  not  create  expressly  or  by  implication  the

relationship of debtor and creditor. The High Court failed to note

that  since  Shripad  Joshi  failed  to  pay  the  amount  within  the

23

stipulated period of five years, the respondents-plaintiffs have lost

their right to repurchase the property.  When the findings of the

first Appellate Court and the High Court though concurrent, whey

they are shown to be perverse, this Court would certainly interfere

with the findings of fact recorded by the courts below.  The High

Court has not properly appreciated the evidence and Ex.P-73 in

the  light  of  the  surrounding  circumstances  and  the  impugned

judgment is liable to be set aside.

28. In the result, the impugned judgment of the High Court in

Second Appeal No.887 of 2003 dated 15.11.2006 is set aside and

these  appeals  are  allowed.   The  Suit  No.100/89  filed  by  the

respondents-plaintiffs is dismissed and the judgment of the trial

court shall stand restored.  No order as to cost.

..………………………….J.                                                     [R. BANUMATHI]

…………………………….J.                                                               [R. SUBHASH REDDY] New Delhi; April 23, 2019.

24