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REPORTABLE                 

   IN THE SUPREME COURT OF INDIA

  CIVIL APPELLATE JURISDICTION

 CIVIL APPEAL NO.3506 OF 2010

Sopan (dead) through His L.R.         .…Appellant(s)

               Versus

Syed Nabi         ….Respondent(s)

J U D G M E N T

A.S. Bopanna,J.

1. The appellant  herein was the  plaintiff  in  Regular  Civil  Suit

No.237  of  1980  filed  before  the  Civil  Judge,  Junior  Division  at

Ahmedpur.  The suit in question was filed seeking a judgment and

decree for redemption of mortgage and recovery of the possession of

the suit scheduled land.  The land in question is situated in Survey

No.2/A measuring 6 acres 2 guntas. The Civil Court by its judgment

dated 20th September, 1984 accepted the contention of the plaintiff

and decreed the suit whereby the redemption of the suit land was

ordered treating the transaction to be a mortgage.  The appellant

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herein,  namely  the  defendant  in  the  said  suit  claiming  to  be

aggrieved by the said judgment was before the lower appellate court

i.e.  the Additional District Judge at Latur in Regular Civil  Appeal

No.233 of 1984.  The Lower Appellate Court on reappreciation of the

evidence  on  record  and  consideration  of  the  legal  position  has

through its judgment dated 29th June, 1990 allowed the appeal and

set aside the judgment and decree of the Civil Court.  Accordingly,

the  suit  filed  by  the  respondent  herein  was  dismissed.  The

plaintiff/respondent herein therefore filed the Second Appeal before

the  High  Court  of  Judicature  at  Bombay,  bearing  S.A.No.479  of

1991.  The High Court on answering the substantial question of law

in  favour  of  the  respondent  herein  had  allowed  the  appeal  and

consequently decreed the suit.  The appellant herein who was the

defendant in the suit is, therefore, before this Court in the present

appeal.

2. For the purpose of convenience and clarity the parties will   be

referred to in the same rank as assigned to them in the Civil Suit

namely, the appellant herein would be referred to as the defendant,

while the respondent herein would be referred to as the plaintiff.

3. The brief facts are that the plaintiff and the defendant were

known to each other and due to such acquaintance, the plaintiff had

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taken  money  from  the  defendant  as  and  when  such  financial

assistance was required.  At a stage when the plaintiff  received a

sum of Rs.5,000/-, the same was construed as the consideration for

the land owned by the plaintiff bearing Survey No.2/A measuring 6

acres 2 guntas and the defendant already being put in possession of

the said property, a registered sale deed dated 10th December, 1968

was executed  in favour of  the defendant.   A separate agreement

dated 10th December, 1968 was also entered into between the parties

whereby  the  plaintiff  had  agreed  to  repay  the  said  amount  and

secure  reconveyance  of  the  property.   Another  agreement  was

entered into on 29th August, 1969 between the parties under which

the respondent-plaintiff agreed that he has taken Rs.5,000/- from

the appellant-defendant and the possession of the land was given.

In addition, respondent-plaintiff has received a sum of Rs.2,224/-

without  any  interest,  in  all  Rs.7,224/-.   The  respondent-plaintiff

agreed if the amount is not repaid on “Velamavasya”  the deed will

be considered as sale deed.   It is in that background the plaintiff

claiming that he is prepared to repay the amount so as to secure

back the property and, in that regard, construing the transaction as

a mortgage, got issued a demand notice dated 10th September, 1980

through his Advocate.  The defendant got replied the said notice on

23rd September,  1980  and  disputed  the  claim  put  forth  by  the

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plaintiff.  The plaintiff, therefore, filed the suit as stated above.  The

defendant  entered  appearance  and  filed  the  written  statement

disputing  the  claim.   The  trial  court  though  had  framed  several

issues,  the  entire  consideration rested on the  construction of  the

sale  deed  dated  10th December,  1968  and  the  contemporaneous

documents,  so  as  to  consider  whether  the  same  amounts  to  a

mortgage by conditional sale in the nature of contention put forth, or

as to whether it is a sale transaction.

4. In the  present  appeal,  it  would  not  be  necessary  for  us  to

reappreciate  the  evidence  inasmuch  as,  only  the  nature  of  the

transaction will  have to be taken note from the three documents,

namely,  Exhibits  23,  24  and   14/1  around  which  the  entire

controversy  revolves.   Before  adverting  to  the  said  documents,  it

would be also necessary to take note of the provision as contained in

Section  58  (c)  of  the  Transfer  of  Property  Act  which  reads  as

hereunder:

58(c) Mortgage by conditional sale. Where the mortgagor ostensibly sells the mortgaged property:

on condition that on default of payment of the mortgage money on a certain date the sale shall become absolute

on condition not on such payment being made the sale shall become void, or on condition that on such payment being made the buyer shall transfer the property to the seller,  

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  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 supplied)

5. From a perusal of the proviso to Section 58(c) as emphasised,

it indicates that no transaction shall be deemed to be a mortgage

unless the condition is embodied in the document which effects or

purports  to  effect  the  sale.   Therefore,  any  recital  relating  to

mortgage or the transaction being in the nature of a conditional sale

should be an intrinsic part of the very sale deed which will be the

subject matter.  In that background, a perusal of the document at

Exhibit 23, namely, the sale deed dated 10th December, 1968 would

make  it  clear  that  the  document  does  not  disclose  that  the

transaction  is  one  of  mortgage  or  that  of  a  conditional  sale.

However, the issue as to whether it should be construed as mortgage

has presently arisen since the agreement dated 10th December, 1968

at Exhibit 24 being a contemporaneous document is relied upon by

the plaintiff to claim that the same indicates that the transaction is

a  mortgage  and  the  relationship  of  debtor  and  the  creditor  is

established by the said document.  In addition, the document which

is also to be noticed is at Exhibit 14/1 dated 29 th August, 1969.  It is

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no doubt true that in the document at Exhibit 24 it depicts that the

sale deed is reconveyable when the plaintiff would repay Rs.5,000/-

to  the  defendant  and  the  land  would  be   retransferred.   It  also

indicates that the interest of Rs.720/- is agreed to be paid every year

on the day of “Gudi Padwa”.

6. The contention on behalf of the defendant is that in addition

to the sum of Rs.5,000/- which was taken by the plaintiff earlier and

was treated as the sale consideration, a further sum of Rs.2,224/-

was  taken  by  the  plaintiff  and  accordingly  a  total  amount  of

Rs.7,224/-  was  agreed  to  be   repaid  without  interest  on  the

“Velamavasya”  and  the  said  understanding  was  reached  on  29th

August, 1969.  The case, therefore, set up by the defendant was that

notwithstanding the agreement dated 10th December, 1968 (Exh.24)

and the document dated 29th August, 1969 (Exh.14/1) whereunder

reconveyance was agreed, since the amount was not repaid within

one year, though the defendant had agreed to reconvey the property,

the sale deed had become absolute since the plaintiff had failed to

repay the amount and secure the reconveyance.

7. However, the learned counsel for the plaintiff has contended

that when the documents at Exhibits 24 and 14/1 is admitted   by

the defendant and since it refers to the relationship of debtor and

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creditor the sale deed dated 10th December, 1968 (Exh.23) is to be

construed as a mortgage by conditional sale.  The learned counsel

has  referred  to  the  decision  of  this  Court  in  the  case  of  P.L.

Bapuswami vs. N. Pattay Gounder (1966) 2 SCR 918 to contend

that it should be construed as mortgage and in that context would

also refer to the decision in the case of Pandit Chunchun Jha vs.

Sheikh  Ebadat  Ali  (1955)  1  SCR  174  to  contend  that  the

subsequent document would rebut the presumption.  In so far as

the legal position relating to the manner in which the document is to

be construed, we notice that this Court in the case of  Dharmaji

Shankar Shinde & Ors. vs.  Rajaram Sripad Joshi (D) Lrs. and

Ors.  (2019) 6 SCALE 682 had considered the entire conspectus of

the  provision contained in Section 58(c) with reference even to the

decisions relied upon by the learned counsel for the plaintiff and had

arrived  at  the  conclusion  that  a  sale  with  a  mere  condition  of

retransfer is not a mortgage.  It is further held therein that keeping

in view the proviso to Section 58(c)  if  the sale  and agreement to

repurchase  are  embodied  in  separate  documents  then  the

transactions cannot be a mortgage by conditional sale irrespective of

whether the documents are the contemporaneously executed.  It is

further held therein that even in the case of a single document the

real  character  of  the  transaction  is  to  be  ascertained  from  the

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provisions  of  the  deed  viewed  in  the  light  of  the  surrounding

circumstances and intention of the parties.

8. Keeping in view the enunciation of the legal position, we notice

that in the instant case admittedly the claim of the plaintiff is based

on the reliance placed on a contemporaneous document at Exh.24.

Hence at the outset, it is evident that the case of the plaintiff cannot

overcome the rigour of law to term it as a mortgage by conditional

sale.  That apart even if the nature of the transaction is taken note

of and in that context if the sale dated 10th December, 1968 (Exh.23)

is  carefully  perused,  it  not  only  does  not  indicate  any  clause  to

demonstrate it as a mortgage but, on the other hand, refers to the

sale  consideration,  the  manner in  which it  was received and the

plaintiff as the vendor by executing the document has assured the

defendant  that  he  should  enjoy  possession  of  the  said  land

ancestrally  which, in other words, is an absolute conveyance.  In

that background, even if the agreement dated 10th December, 1968

(Exh.24) is  taken note,  the same cannot alter  recitals in the sale

deed to treat the same as a mortgage by conditional sale.  At best

the said agreement (Exh.24) can only be treated as an agreement

whereby the defendant had agreed to reconvey the property subject

to the repayment being made as provided thereunder.  It is in that

circumstance, the document dated 29th August, 1969 (Exh.14/1) is

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to be viewed. From a combined reading of Exhibits 24 and 14/1  it

would disclose that not only the plaintiff has not repaid the sum of

Rs.5,000/-  with  interest  but  had  received  a  further  sum  of

Rs.2,224/-,  thus in all taking the financial assistance treated as

sale  consideration  to  Rs.7,224/-.   Hence,  if  the  reconveyance  as

agreed under Exh.24 was to be effected the said amount was to be

repaid  on  “Velamavasya”  failing  which  the  right  of  reconveyance

would be forfeited and the sale deed would become absolute after

which  even  the  right  of  reconveyance  will  not  be  available.

Admittedly amount of Rs.2,224/- was not repaid by the plaintiff. In

that background, in any event, the document cannot be considered

as a mortgage by conditional sale.

9. In the above  background,  if  the  entire  transaction is  taken

note, since the amount was not repaid the defendant had acquired

absolute  right  to  the  property.   Hence,  he  had  also  initiated

mutation proceedings to secure the revenue entries relating to the

land  in  his  favour.   Though  the  plaintiff  had  opposed  the

proceedings the very contention urged herein had been taken note

therein  and  the  Tehsildar  by  the  order  dated  23rd July,  1974

(Exh.21) has ordered the revenue entries to be changed to the name

of the defendant. Change of mutation in the name of the defendant

is a formidable circumstance to show that the Exh.23 is a sale deed

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conveying absolute right and title to the defendant.

10.  Though the learned counsel for the plaintiff has relied upon

the  decision  in  the  case  of  Bhimabai  Mahadeo  Kambekar  vs.

Arthur Import and Export Co., (2019) 3 SCC 191 to contend that

the  mutation  of  land  in  the  revenue  records  does  not  create  or

extinguish the title for such land, nor has it any presumptive value

on  the  title,  the  said  decision  would  not  be  of  relevance  in  the

present context as the mutation proceeding becomes relevant in the

instant proceedings though not for the purpose of title.  We say so

only  to  indicate  that  in  the  present  facts,  while  construing  the

nature of the transaction and while considering as to whether the

plaintiff had a right of redemption as a mortgagor, the fact that the

defendant had acted upon the sale deed dated 10th December, 1968

on the  same becoming  absolute  in  view of  the  reconveyance  not

being affected pursuant to the agreement dated 10th December, 1968

and  in  that  circumstance,  the  right  was  exercised  to  secure  the

mutation order pertaining to the land is to be treated as a relevant

circumstance. Further, though such mutation order was passed on

23rd July, 1974 in a proceeding in the presence of the plaintiff the

said order was not assailed before an appropriate forum and it is

only in the year 1980 the suit in question came to be filed.

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11. In  the  above  circumstance  the  suit  seeking  redemption  of

mortgage  was  not  sustainable.   If  at  all  the  agreement  of

reconveyance  (Exh.24)  was  to  be  pressed  into  service,  the

appropriate course ought to have been for the plaintiff to institute a

suit seeking for the relief of specific performance.  In such suit the

consideration would be on the touchstone of the principles required

to be satisfied as governed under the provisions of the Specific Relief

Act.   To  that  effect  there  should  be  appropriate  pleading  and

evidence  in  support  of  the  contentions  which  is  not  presently

satisfied as the suit is instituted on a misconception.

12. In that background, if the consideration as made by the courts

below is taken note, we are of the opinion that the Civil Court and

the High Court were not justified in their conclusion.  On the other

hand, the lower appellate court in Regular Civil  Appeal No.233 of

1984 has taken into consideration the factual aspects in its correct

perspective and keeping in view the legal position had allowed the

appeal  and  dismissed  the  suit.   Hence,  we  hereby  set  aside  the

judgment dated 26th September, 2007 passed by the High Court in

S.A.No.479 of 1991 and restore the judgment dated 29th June, 1990

passed  by  the  Additional  District  Judge  in  Regular  Civil  Appeal

No.233 of 1984.

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13. Accordingly, the above appeal is allowed.  Consequently, the

Regular  Civil  Suit  No.237  of  1980  filed  by  the  plaintiff  i.e.  the

respondent  herein  shall  stand  dismissed.   However,  we  pass  no

order as to costs.

    ……………………….J.                                                            (R. BANUMATHI)

……………………….J.                                                                (A.S. BOPANNA)

New Delhi, July 16, 2019