Back
2000 Supreme(Kar) 3
Karnataka High Court
B.Jayashankarappa - Appellant
Versus
D.S.Gulwadi - Respondent
Decided On : 01-04-00
R.S.A. : 756 of 1984
B.S.RAVINDRA, BASAVA PRABHU S.PATIL, G.S.VISHVESHVARA
The main legal point established in the judgment is the distinction between a mortgage by conditional sale and an out and out sale, and the application of statutory tests and case law to determine the nature of the transaction.
Headnote:
Mortgage by Conditional Sale - Redemption Suit - Section 58, Transfer of Property Act - Section 55, Transfer of Property Act - Section 54, Transfer of Property Act - Art. 61(a), Limitation Act
Fact of the Case:
The plaintiff filed a suit for redemption of a mortgage by conditional sale. The defendant contended that the transaction was an out and out sale and the suit was barred by limitation. The trial Court decreed the suit, but the lower Appellate Court reversed the decision, holding the transaction to be an out and out sale and dismissing the suit as time-barred. The plaintiff appealed to the High Court.
Finding of the Court:
The High Court analyzed the deed and relevant legal provisions to determine the nature of the transaction. It concluded that the deed was a mortgage by conditional sale, not an out and out sale. Therefore, the suit for redemption was not time-barred.
Issues: The main issue was whether the transaction was a mortgage by conditional sale or an out and out sale, and whether the suit for redemption was time-barred.
Ratio Decidendi: The Court applied Section 58, Transfer of Property Act, which defines mortgage by conditional sale, and Section 54 and 55, Transfer of Property Act, which define sale and the rights of the seller and buyer. The Court also considered the proviso to Section 58(c) and relevant case law to determine the intention of the parties and the nature of the transaction.
Final Decision: The High Court allowed the appeal, set aside the lower Appellate Court's decision, and maintained the trial Court's decree, decreeing the plaintiff's suit for redemption with costs throughout.
( 1 ) THIS Second Appeal arises from the judgment and decree dt. 13-7-1984 passed by the Additional Civil Judge, Shimoga, in Regular Appeal No. 43/1979 whereby the first Appellate Court allowed the defendants' 1st appeal and set aside the judgment and decree dt. 31-1-1979 passed by Prncipal Munsif in regular suit No. 55/74 and dismissed the plaintiff's suit for redemption.
( 2 ) ). The facts of the case in the nut-shell are that, the abovementioned plaintiff-appellants filed the suit for redemption of mortgage with allegations to the effect that suit scheduled property which was described in the plaint schedule originally belongs to the plaintiffs' father Siddappa who had executed a deed of mortgage on 25-7-1951 Ex. P-3 in favour of the defendant-respondent for a sum of Rs. 2,000-00 only with a condition that Siddappa, father of the plaintiffs since deceased, was to make payment of the amount of Rs. 2,000-00 borrowed from the defendant respondent, within six months from the date of deed and the defendant-respondent would be bound to reconvey suit property in favour of Siddappa, the execution of the deed. According to the plaintiffs' case, after Siddappa had sold the southern portion of the site measuring 90' x 30' in favour of the defendants vide sale deed dt. 6-11-1950 for a sum of Rs. 3,400-00 and retained the northern portion of the said land measuring 90' x 30'. It was alleged that Siddappa was in need of money, so he borrowed a sum of Rs. 1,000-00 from the defendant by mortgaging the above northern portion of land measuring 90' x 30' vide registered mortgage-deed dt. 25-6-1951. Later on being in need of more money, Siddappa borrowed a sum of Rs. 2,000-00 on the security of the property in order to discharge the anticedent mortgage deed as well as for processing the necessities, under a mortgage deed dt. 25-6-1951. It was further alleged that the defendant was willing to lend the money of Rs. 2,000-00 provided the suit property was put in possession of the defendant as a security and an ostensible sale deed by way of mortgage by conditional sale deed was executed by Siddappa in favour of the defendant and that said amount be repaid within six months from the date of document and the plaintiff pays interest at the rate of 9% p. a. as well as mortgage deed was also paid off within six months and property that was mortgaged was taken back. The plaintiffs further alleged that out a sum of Rs. 2,000-00 advanced, a sum of Rs. 1,000-00 was adjusted towards the previous mortgage deed under deed dt. 25-6-1951 by way of discharge. The plaintiffs' case was that transaction dt. 25-7-1951 executed by Ex. P-3 was the mortgage by conditional sale and was not an out and out sale and as the defendant insisted on the possession, and possession of the land was handed over to the defendant-respondent. The certified copy of the deed dt. 25-7-1951 was produced with the plaint. It was alleged that the defendant refused to redeem the mortgage and to deliver the possession of property. So the suit for redemption was filed and it was alleged that it was within time.
( 3 ) THE defendant contested the suit, filed written statement and asserted that the transaction dt. 25-7-1951 was really an out and out sale and it was not a mortgage by conditional sale and deed dt. 25-7-1951 was of sale, but with a condition to reconvey the property within six months from the date of execution of the sale deed. The defendant further alleged that Siddappa did not exercise this option to purchase and failed to pay the amount within the period stipulated. So the defendant became full owner of the property and the plaintiffs and any other person on their behalf have no right and suit for redemption was misconceived. The defendant has also taken other pleas of having spent enormous amounts in putting up construction etc. , but had denied that value of the site was more than Rs. 5,000-00. The defendant claimed to be in possession and asserted that suit fo
