The document was determined to be a sale with a condition to repurchase rather than a mortgage, emphasizing the necessity of a debtor-creditor relationship for a true mortgage.

JUDGMENT :

GAURI GODSE, J.

1. This second appeal is filed by the original defendants to challenge the judgment and decree passed by the first appellate court. By the impugned decree, the suit for redemption of the mortgage is decreed, and the plaintiff is directed to deposit an amount of Rs. 300/- towards redemption of the mortgage. The second appeal is admitted vide order dated 1^st July 2004 on the following substantial question of law:

“Whether the Appellate Court committed error by misreading and misinterpreting the document dated 2^nd July, 1962 and came to the conclusion that the document is mortgage by a condition of sale?”

FACTS IN BRIEF:

2. The appellants are the original defendants nos. 1 to 8. Respondent No. 1 is the original plaintiff. Respondents Nos. 2 to 6 are the original defendants nos. 9 to 13. It was the plaintiff’s case that the father of the plaintiff and defendants nos. 9 to 13 needed money and therefore approached the father of defendants nos. 1 to 8, who advanced Rs. 300/- and a document dated 2^nd July 1962 was executed, mortgaging the suit property belonging to the plaintiff’s father. Since the father of defendant nos. 1 to 8 did not possess a money-lending licence, the suit property was mortgaged by executing a mortgage by conditional sale. The plaintiff therefore offered to pay the redemption amount, in accordance with the terms and conditions, and prayed for redemption of the mortgage.

3. The suit proceeded ex-parte against defendant nos. 9 to 13. Defendant nos. 1 to 8 (‘defendants’) filed a written statement and denied that the amount was paid as a loan. According to the defendants, the plaintiff’s father executed a registered sale deed subject to the condition that, if he repaid Rs. 300/- within five years, the defendants’ father would execute the sale deed in his favour. Hence, according to the defendants, the transaction was not a mortgage transaction by conditional sale, but it was a document of sale with a condition to repurchase. Since the plaintiff’s father made no payment within the five-year repurchase period, his right was extinguished on expiry of the five-year period from the date of the document, i.e., on 2^nd July 1967. Accordingly, the defendants contend that the suit property continued to be held by their father as the absolute owner.

4. The trial court held that the plaintiff failed to prove that the transaction was a mortgage by conditional sale and that he was entitled to redeem the mortgage. The trial court accepted the defendants' contention that the document was a registered sale deed subject to a condition of repurchase. Hence, the trial court dismissed the suit. In an appeal preferred by the original plaintiff, the trial court's findings were reversed, holding that the transaction was a mortgage by conditional sale and that the plaintiff was entitled to redeem the mortgage. The first appellate court, therefore, decreed the suit for redemption of the mortgage and directed the execution of a reconveyance and the delivery of possession.

SUBMISSIONS ON BEHALF OF APPELLANTS:

5. Learned counsel for the appellants submitted that from the plain reading of the terms and conditions of the document, it is clear that the document was a title document of a sale deed with a condition to repurchase if the amount was paid within five years. Hence, the suit property was sold to the defendants’ father, and the absolute title was transferred to him. As per the condition in the document, the ownership was transferred to the defendants’ father with a clarification that he would be entitled to dispose of the property as per his own