Dharmaji Shankar Shinde and Others vs Rajaram Shripad Joshi (Dead) Through Lrs and Others

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

JUDGMENT

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 Signature Not Verified Digitally signed by MAHABIR SINGH Date: 2019.04.23 suit property upon payment of the balance amount. 17:19:06 IST Reason: 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.

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