Honble DR. AR. LAKSHMANAN, J.–This appeal is directed against the final judgment and order dated 06.03.1998 passed by the High Court of Madras in Second Appeal No. 1966 of 1984 allowing the same and reversing the judgment and order dated 15.11.1983 passed in A.S. No. 51 and 1982 by the Additional Subordinate Judge, Dharmapuri at Krishnagiri and restoring the order and judgment dated 20.11.1981 passed by the District Munsiff, Hosur in O.S. No. 542 of 1978.

(2). The short facts of the case are as follows:-

The defendant is the appellant in this civil appeal. One Munimalaiyan (plaintiff) executed a simple mortgage in favour of the appellant for a sum of Rs.3,000/-. For securing the due repayment, 3 items of properties belonging to Munimalaiyan was given as security. Munimalaiyan was unable to discharge the simple mortgage and on the intervention of Panchayatdars, a deed was executed by Munimalaiyan in favour of the appellant herein (Chennammal). In and by the said deed, one of the properties which was given as security for the simple mortgage was sold to the appellant herein with a right reserved to the said Munimalaiyan to repurchase the same within a period of 3 years on payment of Rs.3,000/-. A legal notice was issued by the said Munimalaiyan to the appellant herein seeking redemption of the property which was the subject-matter of the deed dated 22.10.1970. The appellant issued a reply notice contending that the deed dated 20.10.1970 was a deed of sale and not a mortgage by conditional sale as sought to be contended by the said Munimalaiyan.

(3). The said Munimalaiyan instituted a suit in O.S. No. 542 of 1978 on the file of the District Munsiff, Hosur against the appellant herein praying for a decree for redemption. It was contended that the deed dated 20.10.1970 was a mortgage by conditional sale and that pursuant to the sale, the appellant was put in possession of the suit property and that the deed is not a sale deed and that a right to redeem the property within a period of 3 years was reserved and failing which the appellant herein was entitled to have the patta transferred in her own name. As on 20.10.1970, the property was valued at Rs.12,500/-. It was further contended that Munimalaiyan was paying the kist for the suit properties and that the appellant had raised various crops and derived sufficient income every year and that the mortgaged debt has to be scaled down as per Section 8 of Act 5 of 1978 and that since the appellant has been in possession for 8 years Rs.2,400/- ought to be deducted and that the appellant herein is entitled only to Rs.600/- as per law and that the said sum of Rs. 600/- has been deposited into Court and that, therefore, the property has to be re-transferred and possession handed over. On these allegations the said Munimalaiyan prayed for the aforesaid relief.

(4). Pending the suit, the said Munimalaiyan died and his LRs were brought on record as his legal representatives and they continued to prosecute the suit.

(5). The appellant herein resisted the suit contending that the deed dated 20.10.1970 was on outright sale and that since Munimalaiyan was unable to discharge the simple mortgage the deed in question came to be executed and that the sale consideration under the document was adjusted towards the amounts due under the simple mortgage deed of the year 1961 and that the said document was executed on the advise the Panchayatdars and that half the property is rocky and unfit for cultivation and that the income therefrom was very meagre and that a right to repurchase had been reserved under the document within a period of three years failing which the document stipulated that the appellant would have absolute rights and that the option to repurchase was not exercised within the stipulated period of three years and that from the date of the document the appellant has been in possession as absolute owner and has been paying kist and that patta has also been transferred in her name and that the app

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