IMPORTANT POINT
Decisive factors for determination whether a document is a mortgage by conditional sale and not a sale with an option to repurchase are: ostensible sale with transfer of possession and ownership, but containing a clause for reconveyance in one document; debtor and creditor relationship; valuation of property and transaction value; and duration of time for re-conveyance.

JUDGMENT

Navin Sinha, J.

The appellants' suit for redemption of mortgage, decreed by two courts, has been reversed in second appeal by the High Court. The parties shall be referred to by their respective positions in the suit, for convenience and better appreciation.

2. The only question of law for consideration is, whether the deed dated 21.04.1953, Exhibit 62, was a mortgage by conditional sale, or a sale with an option to repurchase.

3. The Civil Judge and the Additional District Judge in appeal, after consideration of the recitals in the deed, intention of the parties, and the attendant circumstances, held that it was a mortgage by conditional sale.

4. The High Court in second appeal, opined that there did not exist a debtor and creditor relationship between the parties. The deed contained no recital that the suit lands were being transferred for securing payment of money. The agreement was a sale deed, transferring title and possession. The option for reconveyance, was not exercised within the stipulated period of ten years. The suit itself was thus not maintainable. The plaintiff, while objecting to mutation in the name of the defendant, did not make any offer to repay the amount of Rs. 700/- mentioned in the deed, seeking consequent return of the lands. The agreement was held to be a sale, with an option to repurchase.

5. Learned counsel for the plaintiff submits that the clause for reconveyance being contained in the agreement itself, it was a mortgage by conditional sale under Section 58(c) of the Transfer of Property Act, 1882 (hereinafter referred to as `the Act'). It was redeemable at any time during ten years under the agreement. The plaintiff had objected to mutation in the name of the defendant. The defendant in his evidence, had admitted that the plaintiff had taken money from him from time to time. The land was valued at Rs. 3500/- and the defendant was demanding that amount for reconveyance. The plaintiff could not have sold his lands for a paltry sum of Rs. 700/-. The High Court erred in not appreciating the distinction between a mortgage by conditional sale and a sale with an option to repurchase. Reliance was placed on Vishwanath Dadoba Karale v. Parisa Shantappa Upadhye (D) thr. Lrs., (2008) 11 SCC 504, and Patel Ravjibhai Bhulabhai (D) thr. Lrs. v. Rahemanbhai M. Shaikh (D) thr. Lrs and Ors., (2016) 12 SCC 216.

6. Learned counsel for the respondent submitted that mere incorporation in the agreement of a provision for reconveyance, cannot be singularly determinative of the deed being a mortgage by conditional sale. The agreement was styled as a sale deed, conveying an absolute title, free of encumbrances. The failure to redeem within ten years, coupled with the absence of a debtor and creditor relationship, were sufficient evidence of the agreement being a sale with option to repurchase. Reliance was placed on Tamboli Ramanlal Motilal (dead) by Lrs. v. Ghanchi Chimanlal Keshavlal (dead) by Lrs., 1993 Supplement (1) SCC 295.

7. The question whether a document is a mortgage by conditional sale, or a sale with an option to repurchase, has to be determined in the facts of each case, dependent on the recitals in the document, intention of the parties, coupled with attendant surrounding circumstances. There can be no hard and fast rule for determining the nature of the document devoid of these circumstances. Precedents, in abundance, will not suffice alone, as observed in Pandit Chunchun Jha v. Sheikh Ebadat Ali and Another, 1955 SCR 174, as follows:-

"There are numerous decisions on the point and much industry has been expended in some of the High Courts in collating and analyzing them. We think that it is a fruitless task because two documents are seldom expressed in identical terms and when it is necessary to consider the attendant circumstances the imponderable variables which that brings in its train make it impossible to compare one case with another. Each case must be decided on its own facts."

8. Section 58, clau