IMPORTANT POINTS
A Mortgage by conditional sale should embody the condition of repurchase effecting or purporting to effect the sale in the document itself.
Where there is no relationship of debtor and creditor and no security is created the instrument would be a deed of sale with condition of repurchase.

JUDGMENT

S.B. Sinha, J. —

1.Leave granted.

2.Interpretation of a deed dated 27.10.1969 as to whether the same is one of absolute conveyance with a condition of repurchase or a mortgage with conditional sale, is the question involved in this appeal which arises out of a judgment and order dated 1.11.2006 passed by the High Court of Kerala in Second Appeal No.290 of 2003 setting aside a judgment and decree dated 28.11.1988 passed by the Munsif’s Court, Manjeri in Original Suit No.458 of 1984.

3.Respondent herein was owner of the land in question. He took the said land on lease with one Cheriathan jointly from one Gopalan Nair by reason of a deed of conveyance dated 21.12.1967. They made improvements. They constructed buildings thereupon. Half of the said leasehold rights was sought to be conveyed in favour of the appellant by reason of the said deed. Indisputably, the first respondent executed a deed of assignment in favour of the V. Devaki Amma in respect of his half share for a consideration to repurchase the same by a document dated 27.10.1969. She, by a deed of assignment dated 2.3.1976, transferred her right, title and interest being half of the property to the appellant and, thus, according to him, he became the full owner thereof.

Indisputably again, the appellant was granted a purchase certificate under the Kerala Land Reforms Act in respect of the entire property in the year 1978. First Respondent did not take any step to set aside the said certificate for a long time. Only in the year 1984, he filed a suit for redemption of mortgage and partition in respect of his half share in the property alleging that the said deed dated 27.10.1969 represented only a loan transaction. Appellant herein, however, took the usual stand that the said deed is in effect and substance a deed of sale with a condition to repurchase.

In view of the pleadings of the parties, several issues were framed; issue No.4 being:

“4.Whether the transaction involved in document No.276/1970 is a mortgage?”

3.On construction of the document in question, the learned Trial Judge opined that the transaction represented a sale. On an appeal having been preferred thereagainst by the respondent, the First Appellate Court held that the transaction was a mortgage by conditional sale and as the respondent did not exercise his option to repurchase the property within a period of three years, the said sale has become absolute.

Respondent filed a second appeal before the High Court which by reason of the impugned judgment has been allowed interpreting the said document to be a deed of mortgage and consequently holding that the suit for partition and redemption was maintainable.

4.Mr. Krishnamoorthy, learned senior counsel appearing on behalf of the appellant, would submit that the High Court committed a serious error in passing the impugned judgment in so far as it failed to construe the provisions of Section 58 of the Transfer of Property Act in its proper perspective. It was urged that apart from the fact that the value of the property could not have been assessed at Rs.6,800/-, the High Court ignored that only half share thereof was transferred. It furthermore failed to take into consideration that no evidence had been brought on record to establish the relationship of creditor and borrower between the parties. Possession having been delivered, permission to attorn having been given and no interest having been stipulated, it was submitted, the High Court should have construed the document to be one of absolute sale with a condition of repurchase.

5.Learned counsel appearing on behalf of the respondent No.1, on the other hand, would contend that as appellant did not prefer any appeal against the judgment and order passed by the First Appellate Court, the contentions raised before us should not be permitted to be raised. For the said purpose, it was contended, even the provisions of Order 41 Rule 33 of the Code of Civil Procedure would not be applicable.

6.Before embarking upon