A deed titled as a mortgage by conditional sale establishes a lender-borrower relationship, and any clause restricting the right of redemption is void under Section 60 of the Transfer of Property Act.

JUDGMENT :

ROHIT W. JOSHI, J.

1. The present second appeal was admitted vide order dated25.01.2007 on the following substantial question of law :-

“(i) Whether the deed Exhibit – 45 dated 23.11.1978 is mortgage by conditional sale or sale with condition of reconveyance ?

2. The present appeal is preferred by original defendant no.1, who has suffered two concurrent decrees in a suit filed against him by respondent no.1 herein. The other respondents are family members of respondent no.1. Respondent no.1 is hereinafter referred to as “plaintiff” and appellant is referred to as “defendant no.1”.

3. The plaintiff had filed a suit for redemption of mortgage with respect to the suit property, which is an agricultural land bearing Gut No.36/1 admeasuring 1.01 HR situated at village Hasanapur, Tq.Shrirampur, Dist.Ahmednagar. It is the case of the plaintiff that he had mortgaged the suit property with defendant no.1 in consideration of loan amount of Rs.7,000/- vide document, being mortgage by conditional sale dated 23.11.1978. The said document is at Exhibit-45 in the record of the learned trial court. The plaintiff contends that in terms of the said document dated 23.11.1978, defendant no.1 was placed in possession of the suit property. He contends that in terms of the said document, the plaintiff was entitled to redeem the mortgage by making repayment of the loan amount of Rs.7,000/- to defendant no.1 after a period of 8 years and before a period of 10 years from the date of execution of the document and upon such payment, defendant no.1 was bound to execute the deed of reconveyance with respect to the suit property in his favour and to deliver back possession of the suit property to him. The plaintiff contends that despite repeated requests, defendant no.1 avoided to reconvey the suit property, and therefore, the plaintiff had issued legal notice dated 30.11.1988. He further states that since the legal notice also did not yield the desired result, he was constrained to file the suit. The suit came to be registered as Regular Civil Suit No.335/1989.

4. On being served with the suit summons, defendant no.1 entered appearance in the matter and filed written statement contending that the document dated 23.11.1978 was not a document of mortgage by conditional sale but, a document of out and out sale coupled with a condition for repurchase. He contended that the right to repurchase was to be exercised between a period of 8 to 10 years from the date of execution of the document i.e. between 23.11.1986 to 22.11.1988 and after completion of a period of 10 years on 22.11.1988, the right to seek reconveyance was not available to the plaintiff. Defendant No.1 contended that the plaintiff did not exercise the right to obtain reconveyance within stipulated period of 10 years, and therefore, the suit was liable to be dismissed.

5. Learned Trial Court framed issues in the matter, on which the plaintiff and defendant no.1 led evidence. The plaintiff examined himself at Exhibit-43 and the two attesting witnesses to the document dated 23.11.1978 as witnesses nos.2 and 3 and closed his evidence. As against this, defendant no.1 examined himself at Exhibit-57. It will be pertinent to note that the plaintiff had deposited amount of Rs.7,000/-before the learned Trial Court on 04.03.1991.

6. After recording the evidence, learned Trial Court heard arguments of rival parties and was pleased to pass a decree in favour of the plaintiff, thereby directing defendant no.1 to tender all documents in his custody with respect to the suit property in the court for delivering the same to the plaintiff, direction to reconvey the suit property free from all encumbrances to the plaintiff and also to deliver peaceful vacant possession of the suit property to the plaintiff. The learned Trial Court has held that the document in question was not a out and out sale but a document of mortgage by conditional sale. The learned Trial Court has also rejected the argument that if reconveyan