Case Number: Civil Appeal No.10197 OF 2010

Judges Name: Hon’ble Judges Hemant Gupta J, A.S. Bopanna J.

Order dated:  13.08.2021

    “When the dispute revolves around the classification of a document, it is necessary to consider the attendant circumstances the imponderable variables which that brings in its train make it impossible to compare one case with another”

Facts of the case:

• The plaintiff was the owner of 20 gunthas of agricultural land. The plaintiff borrowed Rs.3,000/- from defendant No. 1 on 22.2.1969 by executing a document named as “conditional sale deed” as a security for the loan amount. Thereafter, the plaintiff requested defendant No. 1 to reconvey the suit land by accepting the loan amount of Rs.3,000/- but defendant No. 1 did not agree to do so and transferred the suit land in favour of his brother (defendant No. 2). 
• The plaintiff filed a suit against the defendants on 5.4.1989 under the Transfer of Property Act, 1882 for redemption of mortgaged property and possession. The claim of the plaintiff is that the transaction dated 22.2.1969 was in nature of mortgage although it was titled as the conditional sale. The suit for redemption of the mortgaged property was dismissed. The appeal of the plaintiff also failed. The plaintiff filed an appeal before the Hon’ble Supreme Court aggrieved against the judgment passed by the High Court on 11.8.2006. The dispute revolves around whether the document dated 22.2.1969 is a document of conditional sale or a mortgage?

Supreme Court held/ observed:

• The intention of the parties has to be seen when the document is executed. It is not in dispute that the condition of retransfer is a part of the same document Such is the condition inserted by an amendment in the year 1929 expressed by the proviso of Section 58(c) of the Act. A transaction which takes the form of a sale but in essence the documents are of a mortgage, though it is couched in the form of a sale. 
• Each case must be decided on its own facts and circumstances. The document must read as a whole and if any word is ambiguous, then to find out the intention of the parties when such document was executed. The document was executed for reason that the plaintiff has borrowed a sum of Rs.3,000/- for his household expenses and the defendant is bound to retransfer the land if the amount is paid within one year. The advance of loan and return thereof are part of the same document which creates a relationship of debtor and creditor. Thus, it would be covered by proviso in Section 58(c) of the Act. 
• The Hon’ble Supreme Court observed that the order of the First Appellate Court dismissing the suit for redemption is not sustainable in law, so as the order passed by the High Court. Consequently, the judgment and decree passed by the First Appellate Court and that of the High Court are set aside and the suit is decreed. The Hon’ble Supreme Court held that plaintiff may pay or deposit the mortgage amount within three months of the receipt of copy of the order. The appeal is allowed with no order as to costs.