GAUHATI HIGH COURT
MANISANA, J.
Sunil Kr.Sarkar (deceased by L.Rs.) and others -Appellant
Versus
Aghor Kr.Basu (deceased by L.Rs.) and others -Respondent
Second Appeal No. 99 of 1979
Decided On : 09-05-1987
TRANSFER OF PROPERTY ACT, 1882 - SECTION 58(C) - MORTGAGE BY CONDITIONAL SALE - REQUISITES - SALE DEED, DEED OF RE-CONVEYANCE AND LEASE DEED EXECUTED SEPARATELY - TRANSACTION NOT A MORTGAGE.
Fact of the Case:
The plaintiff filed a suit for ejectment of the defendant from the suit premises, alleging that the defendant had defaulted in payment of rent and had sublet a portion of the premises. The defendant contested the suit, claiming that he had taken a loan from the plaintiff and mortgaged the suit premises, and that the sale deed and lease deed were fraudulent and collusive.
Finding of the Court:
The court held that the transaction was not a mortgage by conditional sale, as the condition effecting or purporting to effect the sale as a mortgage was not embodied in the sale deed. The court also held that the defendant was not protected by Section 53A of the Transfer of Property Act, as he had not shown that he was possessing the suit premises in part performance of the contract.
Issues: Whether the transaction was a mortgage by conditional sale.
Ratio Decidendi: Under Section 58(c) of the Transfer of Property Act, a mortgage by conditional sale is defined as a transaction where the mortgagor ostensibly sells the mortgaged property on condition that on default of payment of the mortgage-money on a certain date the sale shall become absolute, or on condition that on such payment being made the buyer shall transfer the property to the seller. The proviso to Section 58(c) envisages that the condition effecting or purporting to effect the sale as a mortgage transaction must be incorporated in one and the same deed. In the present case, there were three separate deeds, namely, the sale deed, the deed of re-conveyance, and the lease deed. The condition effecting or purporting to effect the sale as a mortgage was not embodied in the sale deed. Therefore, under Section 58(c), the defendant was debarred from saying that the transaction was in the nature of a mortgage or a mortgage by conditional sale.
Final Decision: The appeal was dismissed.
JUDGMENT: - This appeal arises from the judgment and decree passed by the learned Assistant District Judge Goalpara in Title Appeal No. 99 of 1978 affirming the judgment and decree passed by the learned Munsiff (I), Dhubri in Title Suit No. 120 of 1975 decreeing the suit for ejectment or eviction of the defendant from the suit premises.
2. The plaintiff brought the suit stating that the defendant, on 8-12-1964, took lease of the suit premises at a monthly rent of Rs. 200/-. But the defendant defaulted in payment of rents for the suit premises from the month of February 1967. The defendant has also sublet a portion of the suit premises.The plaintiff demanded rents and possession of the suit premises, but the defendant failed to pay rent and to vacate the suit premises. The defendant contested the suit. The case of the defendant was that he took a loan of Rs. 4,100/- from the plaintiff by mortgaging the suit premises. The defendant was allowed to possess the suit premises as before on his own right. But a deed of sale, dated 5-12-64, registered on 8-12-64 was obtained by the plaintiff from the defendant for Rs. 8,200/-. A deed of re-conveyance dated 7-12-64 (Ext.4) registered on 8-12-64 was executed by the plaintiff for the re-sale of the suit premises at Rs. 8,200/- stating that if the defendant pays the sum of Rs. 8,200/- on or before 7-12-75, the suit premises would be re-conveyed. There was also another agreement dated 7-12-65 (64) (Ext.-5) for re-payment of loan of Rs. 4,100/at a monthly instalment of Rs. 200/-. The further case of the defendant was that the sale deed (Ext.-3) was fraudulent and collusive; and the plaintiff had acquired no right, title and interest in the suit premises. The defendant has already paid the money and therefore is not entitled to be evicted.
3. The Courts below have held that the sale deed (Ext.-3) was out and out sale; and that the defendant was the tenant of the plaintiff on the basis of the lease deed (Ext.5); and that the defendant did not pay the sum mentioned in the deed of re-conveyance (Ext.-4).
4. Mr. B.K. Goswami, the learned Counsel for the appellant, has submitted that the three documents, namely, the sale deed (Ext.-3), the re-conveyance deed (Ext.-4) and the lease deed (Ext.-5) if read together, the transaction was a mortgage and not a sale. Mr. Goswami has referred me to the decisions of the Supreme Court as reported in Bhaskar v. Srinarayan, AIR 1960 SC 301 and P.L. Bapuswami v. N. Pattay, AIR 1966 SC 902 to support his contention.
5. Mr. Banerjee, the learned counsel for the respondents, has submitted that under S.58 (c) of the T.P. Act, the defendant is debarred from taking the plea that the transaction was a mortgage.
6. The question which arises for consideration is whether the transaction was a mortgage by conditional sale. Sale deed, Ext. 3, was executed on 5-12-64. But it was registered on 8-12-64. On 7-12-64 a deed of re-conveyance (Ext.-4) was executed by the plaintiff in favour of the defendant. The deed of re-conveyance was also registered on 8-1264. Under the deed of re-conveyance, the right of re-purchase was to be exercised within one year from the date of the agreement. On 7-12-64 another lease deed was also executed by the defendant in favour of the plaintiff agreeing to pay rent @ Rs. 200/- p.m. for occupation of the suit premises.
7. By S.58 (c) of the T.P. Act, a mortgage by a conditional sale is defined as follows :
"Mortgage by conditional sale : Where the mortgagor ostensibly sells the mortgaged property-
On condition that on default of payment of the mortgage-money on a certain date the sale shall become absolute, or
On condition that on such payment being made the buyer shall transfer the property to the seller.
the transaction is called a mortgage by conditional sale ;
Provided that no such transaction shall be deemed to be a mortgage, unless the condition is embodied in the document which effects or purports to effect the sale."
(Emphasis added)
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