Full Judgment Text
NONREPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO(s). 3960 OF 2011
| GANPATI BABJI ALAMWAR (D) | ||||
|---|---|---|---|---|
| BY LRs. RAMLU AND OTHERS |
VERSUS
| DIGAMBARRAO VENKATRAO BHADKE | |||||||||
| AND OTHERS |
JUDGMENT
NAVIN SINHA, J.
The appellants, who were the original defendants are
aggrieved by the dismissal of their second appeal, affirming the
judgment of the First Appellate Court, which reversed the
dismissal of the suit for redemption of mortgage filed by the
plaintiffs.
2. The parties shall be referred to by their original position in
the suit for convenience. The plaintiffs purchased daily
necessities from the shop of defendant no.1 on credit. A sum of
Rs.10,500/ became outstanding after verification of accounts.
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On 26.04.1970, the plaintiffs executed an instalment bond,
Exhibit 53, to pay the dues in three yearly instalments on the
occasion of Gudi Padwa in 1971, 1972 and 1973. The plaintiffs
defaulted in payment of the first instalment itself. On
29.04.1971, Exhibit 52, the plaintiffs executed a conditional sale
deed for sale of their agricultural lands measuring 2½ acres in
favour of defendant no.1 for a sum of Rs.11,000/. The earlier
dues of Rs.10,500/ formed part of the consideration. The
plaintiffs admitted having received a sum of Rs.500/ earlier. The
agreement provided that the plaintiffs upon repayment of the
dues by Gudi Padwa of 1973 shall be entitled to reconveyance of
the lands. In the event of their failure to do so, the sale would
become absolute. The plaintiffs having failed to repay the dues,
defendant no.1 obtained mutation of the lands in his name on
13.05.1976 and sold the lands to defendant no.2 by a registered
sale deed dated 13.02.1978. The plaintiffs thereafter filed the suit
for redemption in the year 1980.
3. The Civil Judge held that the nature of the document
coupled with the recitals therein and conduct of the plaintiff, left
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him in no doubt that the document was a sale deed. The First
Appellate Court and the High Court on an interpretation of the
document held it to be a mortgage by conditional sale, opining
that their existed the relationship of a debtor and a creditor, and
not that of a transferor or transferee. Thus, the present appeal.
4. Learned counsel for the appellants submitted that even if
Exhibit 52 is interpreted as a mortgage by conditional sale,
nonetheless the intention of the parties, the attendant
circumstances, including the conduct of the plaintiffs in failing to
repay and redeem the property in accordance with the instalment
bond within the stipulated time, the failure to object to the
mutation proceedings despite notice or to challenge the final
order of mutation dated 13.05.1976 in favour of defendant no.1,
are all relevant factors to be considered for denial of relief to the
plaintiffs. The execution of the instalment bond had been
concealed in the suit. The institution of the suit for redemption
seven years later after expiry of time for repayment under the
agreement, coupled with possession already having been
delivered to defendant no.1 on the date of the agreement,
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redemption of the mortgage ought not to have been allowed in the
facts and circumstances of the case. The plaintiffs did not have a
case for an undervalued sale also. Defendant no.2 was a bonafide
purchaser. Considering the nature of the contractual agreement,
the intention of the parties has to be deciphered from their
conduct, including after the agreement. Reliance in support of
the submissions was placed on The Godhra Electricity Co. Ltd.
, (1975) 1
and another vs. The State of Gujarat and another
SCC 199, Vanchalabai Raghunath Ithape (Dead) by Lr. vs.
,
Shankarrao Baburao Bhilare (Dead) by Lrs. and others
(2013) 7 SCC 173, Bibi Fatima and others vs. M. Ahmad
Hussain and others , (2017) 11 SCC 832 and Vithal Tukaram
Kadam and another vs. Vamanrao Sawalaram Bhosale and
others , (2018) 11 SCC 172.
5. Learned counsel for the respondents submitted that Exhibit
52 was not a sale deed, but a conditional sale deed. The
existence of a debtor and creditor relationship is clearly
established from the recitals in the agreement itself. The right of
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reconveyance was incorporated in the same agreement in
accordance with Section 58(c) of the Transfer of Property Act,
1882 (hereinafter called as “the Act”). The fact that the dues may
not have been paid within the period stipulated in the instalment
bond or under the agreement cannot deprive the right of the
respondents to bring a suit for redemption within a period of 30
years from the date of agreement in accordance with Article 61(a)
of the Limitation Act, 1963. The appellants were conscious of the
fact, and therefore did not move for mutation for three long years
after expiry of the period for repayment. The appellants did not
file any suit under Section 67 of the Act for foreclosure.
6. We have considered the respective submissions on behalf of
the parties. The appeal raises a singular question of law as to
whether the agreement dated 29.04.1971, Exhibit 52, was a
mortgage by conditional sale or it was a sale with an option to
repurchase.
7. The plaintiffs owed Rs.10,500/ to defendant no.1 for credit
purchases of daily necessities from the shop of the latter. The
instalment bond was executed by the plaintiffs on 26.04.1970, to
repay the amount in three instalments falling due on the Gudi
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Padwa day in 1971, 1972 and 1973. On failure to pay the first
instalment in 1971, the agreement in question, Exhibit 52, came
to be executed on 29.04.1971. Defendant no.1 got the mutation
done in his name after notice to the plaintiffs on 13.05.1976, i.e.
three years after the last date for payment of instalments on Gudi
Padwa in 1973. Defendant no.1 then resold the land to
defendant no.2 on 13.02.1978. The suit for redemption of
mortgage was filed in 1980.
8. We deem it necessary to incorporate the agreement dated
29.04.1971 for better appreciation of the controversy falling for
adjudication by us.
“Exh.52
Stamp
Sub Registrar, Degloor.
Conditional Sale Deed
The Conditional Sale deed of land out of Taulka Degloor, Dist;
Nanded, Muncipal Council, Degloor, agricultural land bearing
Survey No. 156/A) Admeasuring 99 Arrs, assessment Rs. 514
paise. Consideration Rs. 11.000/.
date: 29.04.1971
Purchasers: Dukan “Sadasaukh Jankidash” Degloor
owners:
1 Gangadas s/o Satnarayanlal Daga
2 Haridas s/o Satnarayanlal Daga
3 Sridas s/o Satnarayanlal Daga
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4 Jagmohandas s/o Satnarayanlal Daga
Age: 17 years Minor through Guardian
Mother Chanddevi w/o Satnarayanlal Daga
5 Shelabai w/o Ajay Kumar
6 Sundrabai d/o Satnarayanlal
7 Chanddevi w/o Satnarayanlal
8 Laxmibai w/o Kedarnath
All R/o Hyderabad Andhra Pradesh (A.P.)
Through General Power of Attorney
Ramnivas s/o Bankatlal Jhawar
Age: 55 Years,
Occ. Agriculture & Private Service,
R/o Degloor, Tq: Degloor.
Transferors: 1) Venkat Nagorao Bhadke
2) Keshavrao
3) Digamberrao
4) Dattatryarao
5) Suryakant Father of all Venkatrao Bhadke
Age: 71, 36, 33, 31, 29 respectively.
Occupation of all: Agri.
Residents of Degloor.
For the reasons the conditional sale deed is executed, that
in District Nanded, Taluka Degloor, at Degloor proper we
own & possess agricultural land survey no. 156/1
admeasuring 99 Arrs, assessment Rs. 5.14 paise, having
four boundaries towards East: Agri Land of Nagnath Devji
Motewar, West: Road, North: Agri Land of Tukaram
Nagorao, South : Agri. Land of Ramrao Nagorao, this
agricultural land today on 29.04.1971 is given to you till the
Gudi Padwa of the year 1973 by this deed for consideration
of Rs. 11,000/ (In words Eleven Thousand Only) by this
conditional sale and the possession of said agricultural land
is handed over to you.
That we will pay the above consideration on expiry of the
above term and then will seek the possession of our
agricultural land. If we fail to make the payment after the
expiry of said period then you can consider this as
permanent sale deed and can cultivate the property for
perpetuity. If anyone objects your cultivation then we will
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make redressal of the same. If any private or government
encumbrance is found on the land then we will be solely
responsible for the same. That in all there are total dues of
Rs. 10,500/ (Ten thousand five hundred only) to be paid by
us to you. That we have examined & confirmed the
accounts & have executed instalment bond on 26.04.1970.
That amount & Rs.500/ which we have received earlier in
cash from you. Accordingly there is no objection or
grievance for receiving Rs.11,000/ (in words Rs. Eleven
thousand only) & giving possession. The purchasers are
agriculturists. Even after purchase of this land their land
holding will not be excess than the ceiling limits as per the
provisions of Maharashtra Agricultural Lands (Ceiling &
Holdings) Act, 1961 & not more than 2/3 of minimum
holding prescribed under the Act. Therefore for this
transaction there is no need to seek permission of Deputy
Collector as required under Hyderabad Tenancy &
Agricultural Lands (Amendment) Act, 1965. The executants
of this deed are not from Scheduled Caste and Scheduled
Tribes. Hence this Conditional Sale deed is executed by us
with free will & satisfaction & signed on 29 April 1971.”
9. Section 58, clause (c) of the Transfer of Property Act defines
mortgage by conditional sale as follows:
“Where the mortgagor ostensibly sells the mortgaged
property—
on condition that on default of payment of the
mortgagemoney 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 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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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.”
10. Whether an agreement is a mortgage by conditional sale or
sale with an option for repurchase is a vexed question to be
considered in the facts of each case. The essentials of an
agreement, to qualify as a mortgage by conditional sale, can
succinctly be 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
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circumstances, considered in a holistic manner. The language
used in the agreement may not always be conclusive.
11. In
Bhaskar Waman Joshi (deceased) and Ors. vs.
Shrinarayan Rambilas Agarwal (deceased) and Ors., AIR
1960 SC 301, the principles for determination of the nature of
the document were explained as follows:
“7…The question in each case is one of
determination of the real character of the
transaction to be ascertained from the provisions
of the deed viewed in the light of surrounding
circumstances. If the words are plain and
unambiguous they must in the light of the
evidence of surrounding circumstances be given
their true legal effect. If there is ambiguity in the
language employed, the intention may be
ascertained from the contents of the deed with
such extrinsic evidence as may by law be
permitted to be adduced to show in what manner
the language of the deed was related to existing
facts.”
12. In the light of the aforesaid discussion and the facts of the
present case, an examination of the recitals in the agreement
dated 29.04.1971 holistically, including the heading of the
document, we are left with no doubt that it was not a sale deed
with an option for repurchase but a document of mortgage by
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conditional sale. An agriculturist will normally not so easily
dispose his agricultural land, the source of his survival and
livelihood merely for purchases made by him on credit. The dire
financial straits of the plaintiffs is evident from the fact that they
were left with no option but to mortgage 2½ acres of their
agricultural lands for credit purchase of daily necessities. The
financial stringency of the plaintiffs is apparent from their failure
to repay anything even after execution of the instalment bond.
Given the limitations of the plaintiffs because of their poor
financial status, the fact that they may not have objected to the
mutation so done three years later cannot be considered as
sufficient for a contrary interpretation of the agreement dated
29.04.1971, especially when the Appellate Court held that the
plaintiffs were in possession of the lands. In the facts of the
case, a debtor and creditor relationship stands clearly
established and hardly needs further elucidation. The limitation
for the right to redeem, under Article 61(a) of the Limitation Act
1963, is 30 years. The suit for redemption was therefore within
limitation. In the facts of the present case, we do not consider
the delay of seven years in filing the suit so fatal, as to disinherit
the plaintiff from his agricultural lands.
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13. In Vanchala Bhai (supra), there was a finding that their
existed no relationship of debtor and creditor. In that
background, the delay of 11 years in institution of the suit for
redemption was considered as a relevant factor.
14. In Bibi Fatima (supra), the agreement was held to be a
mortgage by conditional sale as the respondent had continued to
be in possession of the lands and the loan was raised to
discharge debts.
15. The observations in (supra) that
Vithal Tukaram Kadam
attendant surrounding circumstances should be considered, and
upon which learned counsel for the appellant laid much
emphasis, in our opinion is of no avail to him in the facts and
circumstances of the present case. The question whether the
appellant was a bonafide purchaser or not cannot be considered
relevant in the facts of the present case and may require further
evidence. It is therefore left open for consideration visàvis
defendant no.1 in an appropriate proceeding if instituted by the
appellant.
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16. We find no merit in the appeal. The appeal is dismissed.
…………...................J.
[NAVIN SINHA]
…………...................J.
[INDIRA BANERJEE]
NEW DELHI
SEPTEMBER 12, 2019
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