SOPAN (DEAD) THROUGH HIS L.R.versusSYED NABI

                        [2019] 9 S.C.R. 969                             969


              SOPAN (DEAD) THROUGH HIS L.R.                             A
                                 v.
                           SYED NABI
                   (Civil Appeal No.3506 of 2010)
                           JULY 16, 2019                                B
         [R. BANUMATHI AND A.S. BOPANNA, JJ.]
       Transfer of Property Act, 1882 – s.58(c) – Mortgage by
conditional sale – Respondent-plaintiff received a sum of
Rs.5000/- from appellant-defendant, however, same was construed
                                                                        C
as the consideration for the suit property and a registered sale deed
dated 10.12.1968 (Exh.23) was executed in favour of the
defendant – A separate agreement dated 10.12.1968 (Exh.24) was
also entered into between the parties where the plaintiff agreed to
repay the said amount and secure reconveyance of the property –
Another agreement was entered into on 29.08.1969 (Exh.14/1)             D
under which plaintiff agreed that he had received additional amount
of Rs.2,224/-, hence total amount of Rs.7,224/- – Suit was filed
seeking redemption of mortgage and recovery of the possession of
the suit property – Plaintiff claimed that he was prepared to repay
the amount so as to secure back the property and, in that regard,
                                                                        E
construing the transaction as a mortgage – Trial court decreed the
suit – Lower appellate court on reappreciation of the evidence set
aside the judgment and decree of the trial court – However, High
Court decreed the suit in favour of plaintiff – On appeal, held: On
perusal of three documents namely, sale deed dated 10.12.1968
(Exh.23) agreements dated 10.12.1968 (Exh.24) and 29.08.1969            F
(Exh.14/1), it is clear that sale deed dated 10.12.1968 did not
disclose that the transaction is one of mortgage or that of a
conditional sale – Agreement dated 10.12.1968 (Exh.24) can only
be treated an agreement where the defendant had agreed to
reconvey the property subject to the repayment being made as
                                                                        G
provided thereunder – Further, agreement dated 29.08.1969
(Exh.14/1) disclose that plaintiff did not repay Rs.5000/-and
instead received a further sum of Rs.2,224/-, thus in all taking the
financial assistance treated as sale consideration to Rs.7,224/- – If
the reconveyance as agreed under agreement dated 10.12.1968
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                                 969
970           SUPREME COURT REPORTS                      [2019] 9 S.C.R.


A     (Exh.24) was to be effected the said amount was to be repaid,
      failing which the right of reconveyance would be forfeited and sale
      deed would become absolute after which even the right of
      reconveyance would not be available – Admittedly the said amount
      was not repaid by plaintiff – In that background the document
      cannot be considered as a mortgage by conditional sale – Since the
B
      amount was not repaid the defendant had acquired absolute right
      to the property – In the circumstance, the suit seeking redemption
      was not sustainable.
            Allowing the appeal, the Court
C           HELD: 1. In so far as the legal position relating to the
      manner in which the document is to be construed, this Court in
      the case of Dharmaji Shankar Shinde & Ors. vs. Rajaram Sripad
      Joshi (D) Lrs. and Ors. had considered the entire conspectus of
      the provision contained in Section 58(c) of the Transfer of
      Property Act, 1882 with reference even to the decisions relied
D     upon by the 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
E     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
      provisions of the deed viewed in the light of the surrounding
      circumstances and intention of the parties. [Para 7] [976-D-E]
F
            2. Keeping in view the enunciation of the legal position, in
      the instant case admittedly the claim of the plaintiff is based on
      the reliance placed on a contemporaneous document at Exh.24
      (agreement dated 10.12.1968). Hence at the outset, it is evident
      that the case of the plaintiff cannot overcome the rigour of law to
G     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

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      SOPAN (DEAD) THROUGH HIS L.R. v. SYED NABI                       971


mortgage but, on the other hand, refers to the sale consideration,     A
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
                                                                       B
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          C
(Exh.14/1) is 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
                                                                       D
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       E
cannot be considered as a mortgage by conditional sale.
[Para 8] [976-F-H; 979-A-D]
       3. 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            F
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           G
defendant is a formidable circumstance to show that the Exh.23
is a sale deed conveying absolute right and title to the defendant.
[Para 9] [977-D-F]

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972            SUPREME COURT REPORTS                      [2019] 9 S.C.R.


A            4. 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
B
      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.
      [Para 11] [978-C-D]
C           Dharmaji Shankar Shinde & Ors. v. Rajaram Sripad
            Joshi (D) LRs.and Ors. (2019) 6 SCALE 682
            – relied on.
            Bhimabai Mahadeo Kambekar v. Arthur Import and
            Export Co. (2019) 3 SCC 191 : [2019] 1 SCR 812 –
D           inapplicable.
            P.L. Bapuswami v. N. Pattay Gounder [1966] 2 SCR
            918 ; Pandit Chunchun Jha v. Sheikh Ebadat Ali
            [1955] 1 SCR 174 – referred to.

E                            Case Law Reference
            [1966] 2 SCR 918            referred to          Para 7
            [1955] 1 SCR 174            referred to          Para 7
            (2019) 6 SCALE 682         relied on             Para 7
F           [2019] 1 SCR 812           inapplicable          Para 10
            CIVIL APPELLATE JURISDICTION: Civil Appeal No. 3506
      of 2010
            From the Judgment and Order dated 26.09.2007 of the High Court
      of Judicature at Bombay, Bench at Aurangabad in Second Appeal
G     No. 479 of 1991
            Subodh S. Patil, Ms. Sujata Kurdukar, Advs. for the Appellant.
           Parameshwar, M.V. Mukunda, Shivaji M. Jadhav, Advs. for the
      Respondent.
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      SOPAN (DEAD) THROUGH HIS L.R. v. SYED NABI                               973


      The Judgment of the Court was delivered by                               A
      A.S. BOPANNA, J.
       1. The appellant herein was the defendant 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              B
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 herein, namely the             C
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.           D
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          E
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 willbe
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          F
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
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/-       G
, 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
                                                                               H
974             SUPREME COURT REPORTS                            [2019] 9 S.C.R.


A     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
B
      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
C     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 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
D
      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 isa 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
E     will have to be taken note from the three documents, namely, Exhibits23,
      24and 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:
F            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

G            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,
             the transaction is called a mortgage by conditional sale and the
             mortgagee a mortgagee by conditional sale:
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      SOPAN (DEAD) THROUGH HIS L.R. v. SYED NABI                               975
                  [A.S. BOPANNA, J.]

        [Provided that no such transaction shall be deemed to be a             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       B
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          C
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         D
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 29th August, 1969. It is 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               E
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         F
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          G
(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.
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976            SUPREME COURT REPORTS                           [2019] 9 S.C.R.


A            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 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
B
      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
C     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
D
      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
E     case of a single document the real character of the transaction is to be
      ascertained from the 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
F     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
G     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
H
      SOPAN (DEAD) THROUGH HIS L.R. v. SYED NABI                              977
                  [A.S. BOPANNA, J.]

(Exh.24) is taken note, the same cannot alter recitals in the sale deed to    A
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 to be viewed. From a
                                                                              B
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                  C
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.
                                                                              D
       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         E
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
conveying absolute right and title to the defendant.
       10. Though the learned counsel for the plaintiff has relied upon       F
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              G
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,
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978                SUPREME COURT REPORTS                         [2019] 9 S.C.R.


A     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 23rdJuly, 1974 in a
      proceeding in the presence of the plaintiff the said order was not assailed
B
      before an appropriate forum and it is only in the year 1980 the suit in
      question came to be filed.
             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
C     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
D     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
E     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.
F
            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.


G     Ankit Gyan                                                     Appeal allowed.




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