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2015 Supreme(Kar) 1339

KARNATAKA HIGH COURT
S. ABDULNAZEER, J.
Smt. Rajamma and others - Appellant
Versus
B. Renuka Murthy – Respondent
RSA No. 929 of 2011 and Misc. Cvl. No. 8928 of 2011 (Dec/inj)
Decided on : 21-09-2015.

Advocates:
Advocate Appeared:
For the Appellant :Sri T. Seshagiri Rao, Advocate.
For the Respondent:Sri M. Shivappa, Sr. Advocate, G. Chandrashekaraiah, Advocate.

Headnote:TRANSFER OF PROPERTY ACT, 1882 - Sections 58(c), 54: [S. Abdul Nazeer, J] Mortgage by conditional sale or sale with condition to repurchase - There is a distinction between the two concepts, mortgage by a conditional sale and a sale with a condition to repurchase. The former is a mortgage, the relationship of debtor and creditor subsists and the right to redeem remains with the debtor. The latter is an out and out sale whereby the owner transfers all his rights in the property to the purchaser reserving a personal right to purchase. The question to which category a document belongs presents real difficulty which can only be solved by ascertaining the intention of the parties on a consideration of the contents of a document and other relevant circumstances.

        In the instant case, the property is agreed to be sold absolutely for family necessity and to pay the family debts. The property was sold for a consideration of Rs. 2,000/-. Under the document, the vendors have also delivered possession of the property. The purchaser was asked to pay the taxes. There is a further clause that after execution of the documents, the defendant and his successors may enjoy the property peacefully by remitting the tax payable to the Government. It is further stated that the purchaser is entitled to enter into all four types of transactions including sale and that the vendors or their legal representatives have no manner of right whatsoever. The last important clause is an undertaking that the vendors will repay the amount within five years and get the sale deed executed. As its recitals, possession was delivered to the defendant on the same day of the execution of the document. As such, the title of the property was transferred to the defendant. The purchaser was given the right of ownership and possession of the property with a stipulation that he has to pay the tax in future. Thus a careful perusal of all the clauses contained in the document are clearly consistent with the express intention of making the transaction a conditional sale with an option to repurchase.

JUDGMENT :

S. Abdulnazeer, J.

This is a plaintiffs appeal challenging the judgment and decree in R.A.No.27/2009 dated 1.2.2011 passed by the Senior Civil Judge & JMFC, Nelamangala, where by the judgment and decree in O.S.No.358/1995 dated 22.11.2006 on the file of the Civil Judge (Jr.Dn.) and JMFC, Nelamangala has been confirmed.

2. The appellants are the wife and children of B.P. Siddalingappa. B.P. Siddalingappa, the first plaintiff (since deceased by his L.Rs.) and B.P. Siddanna, father of the second plaintiff are brothers. Smt. Ammayamma is the younger sister of B.P. Siddanna and B.P. Siddalingappa. She was married to Rajashekharappa. The defendant is the son of Smt. Ammayamma and Rajashekharappa.

3. It is the case of the plaintiffs that during the year 1975, they borrowed a sum of Rs.2,000/- from the defendant to meet their family necessity. Since the plaintiffs could not repay the said amount, the defendant insisted for security for his debt. The defendant made the plaintiffs to execute a document staling that it is a deed of mortgage for securing loan of Rs.2,000/-. The contents of the document was not read over to them. At no point of time, the defendant was in possession of the suit schedule property. The plaintiffs are in possession and enjoyment of the suit schedule property as absolute owners thereof. Plaintiffs received a notice from the Tahsildar, Nelamangala, informing them that the defendant has filed an application for change of RTC on the basis of the registered document dated 1.7.1976. They have never intended to sell the property in favour of the defendant. The amount of Rs.2,000/- borrowed by them was refunded to the defendant with interest. The defendant began asserting title over the suit property as the plaintiffs relationship with the defendant strained and the market value of the property increased enormously. Therefore, they have filed the suit for declaration of their title to the suit schedule property and for injunction restraining the defendant from interfering with their peaceful possession and enjoyment of the said property. In the alternative, the plaintiffs have also sought for a declaration that the transaction dated 1.7.1976 is only a mortgage transaction and if the Court comes to a conclusion that the amount has not been paid, for redemption of the mortgage on payment of Rs.2,000/- to the defendant.

4. The defendant has filed his written statement by contending that the plaintiffs have executed a registered sale deed in his favour knowing fully well that the same is an absolute sale deed and that they have received full sale consideration. Plaintiff Nos. 1 and 2 have divided their properties under a palu patti dated 15.3.1982 wherein the suit schedule property has been excluded from partition since the property has already been sold in his favour. The defendant is the absolute owner of the property and that the suit is barred by time.

5. On the basis of the pleadings of the parties, the trial Court has framed the following issues:

"(1) Whether the plaintiff proves that they are the absolute owners of plaint schedule property?

2. Does the plaintiffs prove their lawful possession and enjoyment of the suit schedule property?

3. Whether the plaintiffs prove the lawful obstruction or interference by the defendant?

4. Whether the plaintiffs are entitled for the relief of declaration and permanent injunction as prayed?

5. Alternatively, whether the plaintiffs are entitled to the relief of declaration that the transaction dated 1.7.1976 is only a mortgage transaction?

6. Whether the defendant proves that the plaintiff had executed an absolute registered sale deed in favour of the defendant?

7. Whether the defendant proves that the suit is barred by law of limitation?

8. To what order or decree?"

6. On behalf of the plaintiffs, plaintiff No. 2 was examined as P.W1 and two witnesses were examined as P.W2 and P.W3. The defendant was examined as D.W1.

7. On appreciation of the evidence on record, the trial Court has
































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