IMPORTANT POINT
For determining whether a document is mortgage by conditional sale or a sale with a condition of re-purchase intention of parties is the determinative factor.

JUDGMENT :

L. Nageswara Rao, J.

The first Respondent-Plaintiff filed a suit for redemption of a mortgage and for re-conveyance of the suit schedule property which was decreed. The Appeal filed by the Appellant-first Defendant in the suit was allowed and the judgment and decree of the Trial Court were set aside. The High Court reversed the judgment of the first Appellate Court and restored the judgment of the Trial Court in favour of the first Respondent-Plaintiff. Hence, this appeal.

2. For the sake of convenience, the parties will be referred to as they were arrayed before the Trial Court. The father of the Plaintiff, Mavada Mokthesar Ummar Saheb (hereinafter referred to as Ummar Saheb), obtained a loan from Vijaya Bank and defaulted in repayment of the loan. The suit filed by Vijaya Bank was decreed. In the execution petition filed by the Bank, the land and building belonging to Ummar Saheb were brought to sale. He approached his son-in-law, the first Defendant and took Rs.5,900/-for which he executed a document on 02.07.1964, which was exhibited as P-1 in the suit. It was stated therein that he needed the money for repayment of his debts which were to the tune of Rs.5,900/-. The breakup of Rs.5,900/-was also given in the document as Rs.4,577/-for payment to the Bank and Rs.1,323/-for clearing other debts. The suit schedule property was sold to the first Defendant who was given an absolute right to enjoy the property and the income realised therefrom. It was mentioned in the deed that if the amount of Rs.5,900/-was repaid after two years and within five years, the first Defendant would have to re-transfer the property to Ummar Saheb and in case the re-transfer is not made on payment of Rs.5,900/-, damages not exceeding Rs.5,900/-would have to be paid.

3. Ummer Saheb died on 17.07.1978. Thereafter, the Plaintiff requested for re-conveyance of the property which was the subject matter of the document dated 02.07.1964. The first Defendant refused the request of the Plaintiff which led to the filing of a suit for redemption and re-conveyance of the property in dispute. Plaintiff asserted that the document was a mortgage by conditional sale governed by Section 58 (c) of the Transfer of Property Act, 1882 (hereinafter referred to as ‘the Act’). He averred that his father took a loan of Rs.5,900/-from the first Defendant to clear his debts. He further urged that the property was worth more than Rs.10,000/-. Reliance was placed on the condition pertaining to re-conveyance of the property on payment of Rs.5,900/-which according to the Plaintiff would show that the document was a mortgage by conditional sale. It was also pleaded by the Plaintiff that his father continued to be in possession of the property till the date of his death i.e. 14.07.1978.

4. The first Defendant through a general power of attorney filed a written statement in which he contended that the document is a sale deed with a condition of re-purchase. The first Defendant stated in the written statement that Ummar Saheb requested him to purchase the property as he had to clear his debts. He further submitted that the condition of re-purchase by itself does not make the document a mortgage deed. Though Ummar Saheb offered to give possession of the house, the first Defendant permitted him to continue in possession. According to the first Defendant, a Badige Karar (rental agreement) was executed by the first Defendant in 1969 pursuant to which Ummar Saheb resided in the house as a tenant.

5. Amongst others, the Trial Court framed an issue as to whether the transaction covered by the document dated 02.07.1964 is a mortgage by conditional sale or an outright sale. After appreciating the evidence on record, the Trial Court accepted the case of the Plaintiff and held that the condition of re-conveyance of the property on payment of Rs.5,900/-by Ummar Saheb created a relation