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2013 Supreme(Raj) 473
RAJASTHAN HIGH COURT AT JAIPUR BENCH
Bela M. Trivedi, J.
Nath Rai and others - Appellants
Versus
Kalyan Sahai Dangachayach - Respondent
Civil First Appeal No. 7 of 1993
Decided On : 07-03-2013
For the Appellants :S.K. Tiwari Senior Counsel with G.P. Gupta, Advocate.
For the Respondent:S. Kasliwal Senior Counsel with R.N. Vijay, Advocate.
A document purporting to be a sale with an option to repurchase will be construed as a mortgage by conditional sale only if there is a relationship of debtor and creditor between the parties and the document provides for the payment of interest.
Headnote:
MORTGAGE BY CONDITIONAL SALE - SALE WITH OPTION TO REPURCHASE - DISTINCTION - DOCUMENT INTERPRETATION - RES JUDICATA - APPLICATION.
Fact of the Case:
Plaintiffs, claiming to be the grandsons of Smt. Chandra Kunwar Devi, filed a suit for redemption of mortgage in respect of a property, alleging that the document executed by Smt. Chandra Kunwar Devi in favor of the defendant was a mortgage by conditional sale and not an absolute sale. The defendant resisted the suit, contending that the document was an absolute sale with an option to repurchase and that the suit was barred by res judicata.
Finding of the Court:
The court held that the document in question was an absolute sale with an option to repurchase and not a mortgage by conditional sale. The court considered the language and contents of the document, as well as the surrounding circumstances, and found that there was no intention on the part of the parties to create a mortgage. The court also held that the suit was barred by res judicata, as the issue of the nature of the document had been decided in an earlier suit between the defendant and Smt. Chandra Kunwar Devi.
Issues: 1. Whether the document in question was a mortgage by conditional sale or an absolute sale with an option to repurchase? 2. Whether the suit was barred by res judicata?
Ratio Decidendi: 1. The court held that the document in question was an absolute sale with an option to repurchase and not a mortgage by conditional sale, based on the following factors: - The document was titled as a "sale deed" and contained language indicating an absolute transfer of ownership. - The consideration for the sale was paid in full at the time of execution of the document. - The possession of the property was handed over to the defendant. - There was no relationship of debtor and creditor between the parties, and the document did not provide for the payment of interest. - The plaintiff's predecessor in title, Smt. Chandra Kunwar Devi, did not exercise her right to repurchase the property within the stipulated period of two and a half years or during her lifetime. 2. The court held that the suit was barred by res judicata, as the issue of the nature of the document had been decided in an earlier suit between the defendant and Smt. Chandra Kunwar Devi. The court noted that Smt. Chandra Kunwar Devi had not challenged the decree in the earlier suit, and that the issue had attained finality.
Final Decision: The court dismissed the appeal and confirmed the judgment and decree of the trial court, which had dismissed the plaintiffs' suit for redemption of mortgage.
Bela M. Trivedi, J.
The present appeal has been filed by the appellants-plaintiffs under Section 96 of CPC challenging the judgment & decree dated 19.08.1992 passed by the Additional District & Sessions Judge, Court No. 3, Jaipur City, Jaipur (hereinafter referred to as "the trial court") in Civil Suit No. 17/81, whereby the trial court has dismissed the suit of the appellants-plaintiffs seeking redemption of the mortgage in respect of the suit property.
2. The case of the appellants-plaintiffs in nutshell before the trial court was that the plaintiffs were the grandsons of Smt. Chandra Kunwar Devi who had expired on 13.11.1971, after executing the will on 06.10.1971. By virtue of the said will, the plaintiffs had become the owners of the properties belonging to the said Smt. Chandra Kunwar Devi, including the plot bearing No. D/54 Madhosingh Road, Bani Park, Jaipur. It was further case of the plaintiffs that the said Smt. Chandra Kunwar Devi was in need of money, and therefore had executed a document on 09.12.1966 in favour of the respondent-defendant, creating a mortgage by conditional sale in respect of half of the plot (southern portion) comprising 1250 square yards with construction, of the plot D/54, for Rs. 36,000/-. The said deed of conveyance dated 09.12.1966 contained the conditions of re-conveyance and duration to the effect that said Smt. Chandra Kunwar Devi could repurchase the said property if she desired to do so, within a period of two and a half years for Rs. 36,000/-. According to the plaintiffs, the value of disputed property at the relevant time was Rs. 75,000/-, however the said sale was effected with the consideration of Rs. 36,000/- only, and the title deeds of the said property were also not handed over to the defendant. The name of the defendant was also not recorded as the owner in the House Tax Department and other Departments of Government. The appellants-plaintiffs had further alleged that they had served legal notice dated 21.10.1980 on the respondent-defendant calling upon him to redeem the mortgage, however the defendant having failed to give any reply to the same, the suit was filed.
3. The respondent-defendant had resisted the suit by filing the written statement denying the allegations made by the appellants in the plaint and further contending inter alia that the will dated 06.10.1971 allegedly executed by late Smt. Chandra Kunwar Devi in favour of the plaintiffs was a forged will, and therefore the plaintiffs did not have any right to file the suit. It was further contended that the document dated 09.12.1966 was the deed of sale and not the deed of mortgage by conditional sale as alleged by the plaintiffs. It was also contended that the defendant had got actual possession of one hall situated in the plot in question from Smt. Chandra Kunwar Devi on the date of execution of the said sale deed, however the defendant had got symbolic possession of the rest of the property, as the same was in occupation of three tenants and one another portion was in possession of the mortgagee Shugan Kanwar, with whom Smt. Chandra Kunwar Devi had mortgaged the said portion. According to the defendant the possession of the rented premises from the respective tenants was already recovered from them by filing suits against them and the possession of the mortgaged portion was also recovered from Smt. Shugan Kanwar by the defendant, by filing a suit for possession against the said Shugan Kanwar and Chandra Kunwar Devi. According to the defendant, the said suit was filed by the defendant in the capacity of the owner of the suit property and the same was also decreed against the said two defendants, however Smt. Chandra Kunwar Devi had not chosen to challenge the same, and therefore the present suit being barred by principles of res judicata was also not maintainable.
4. The appellants-plaintiffs had examined as many as five witnesses and the respondent-defendant had examined two witnesses before the trial cour
