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2009 Supreme(Mad) 4659
High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE M. JEYAPAUL
Natarajan(died) & Others
Versus
A. Mahalinga Padayachi & Another
S.A.Nos.608 of 1995 to 611 of 1995
Decided on : 05-11-2009
For the Appellants:M/s. J. Antony Jesus for K.Srinivasan, Advocate.
For the Respondent:Srinath Sridevan, Advocate.
The central legal point established in the judgment is the interpretation of a Deed of conditional sale under Section 58(c) of The Transfer of Property Act, 1882, and its classification as either a mortgage by conditional sale or an outright sale with a condition for re-conveyance.
Headnote:
Deed of conditional sale - Property Dispute - The Transfer of Property Act, 1882, Section 58(c)
Fact of the Case:
The appellants sought reconveyance of the suit properties after executing a Deed of conditional sale. The respondents claimed an outright sale with a condition for re-conveyance. The trial court found the Deed to be a mortgage by conditional sale, while the First Appellate Court held it to be an outright sale. The appellants appealed to the High Court.
Finding of the Court:
The High Court found that the Deed of conditional sale was an outright sale with a condition for re-conveyance, based on the absence of debtor-creditor relationship, the absolute right and title conferred on the first respondent, and the unrestricted enjoyment of the property by the first respondent.
Issues: The main issues were whether the Deed was a mortgage by conditional sale or an outright sale, and whether the suit was barred by limitation.
Ratio Decidendi: The court considered the absence of debtor-creditor relationship, the absolute right and title conferred on the first respondent, and the unrestricted enjoyment of the property by the first respondent to conclude that the Deed was an outright sale with a condition for re-conveyance. The court also held that the suit was hopelessly barred by limitation due to the expiry of the stipulated time for reconveyance.
Final Decision: The High Court dismissed the appeals, confirming the judgments of the First Appellate Court.
The respondents in second appeal nos.608 and 609 of 1995 filed the suits in O.S.Nos.29 and 30 of 1989 praying for permanent injunction as against the appellants therein. The appellants in second appeal no.610 of 1995 filed the suit in O.S.No.11 of 1989 and the appellant in S.A.No.611 of 1995 filed O.S.No.12 of 1989 seeking for a direction to the respondents therein either to receive the sum of Rs.5,000/- deposited by the appellants into court and deliver possession of the suit properties to the appellants or in the alternative to receive the sum of Rs.5,000/-in discharge of the mortgage and execute sale deed in favour of the appellants and deliver vacant possession of the suit property.
2. Theplaintiffs in O.S.No.29 and 30 of 1989 were non-suited by the trial court. The defendants in O.S.No.11 and 12 of 1989 suffered a decree. The first appeals preferred by the plaintiffs in A.S.Nos.23 and 24 of 1994 preferred by the plaintiffs in O.S.Nos.29 and 30 of 1989 respectively were allowed. The appeals in A.S.Nos.21 and 22 of 1994 preferred by the defendants as against the judgment in O.S.Nos.11 and 12 of 1989 were also allowed. The present second appeal nos.608 and 609 of 1995 have been preferred by the defendants in O.S.Nos.29 and 30 of 1989 and the S.A.Nos.610 and 611 of 1995 were preferred by the plaintiffs in O.S.Nos.11 and 12 of 1989.
3. It is the case of the appellants that they having received a sum of Rs.5,000/- as loan instead of executing a mortgage deed as the Debt Relief Act was in force, as demanded by the respondents, executed a Deed of conditional sale. The suit properties are valued at Rs.11,000/-. But the sale deed was executed with the condition that the respondents would reconvey the property to the appellants after four to five years. Inspite of the demand made by the appellants right from the month of August 1985 to reconvey the suit properties, the first respondent refused to do it. The second respondent who claims to be in possession of the suit property was never in possession of the same. With the aforesaid pleadings, the appellants seek for the prayers as stated supra.
4. The respondents resisted the claim of the appellant. They would submit that on payment of sale consideration of Rs.5,000/- by the first respondent to the appellants, the latter executed the sale deed. They dispute, the claim of the appellants that the market value of the suit property was Rs.11,000/- on the date of the sale. It is contented that only after negotiations, the price was fixed at Rs.5,000/- which was the prevailing market value. The first respondent having become the absolute owner of the suit properties got possession of the same and has been in possession and enjoyment through the second respondent who is a cultivating tenant of the suit properties. The appellants fail to exercise their right of reconveyance reserved in the sale deed within the stipulated period. There was no demand made by the appellants for reconveyance. The first respondent had made improvements in the lands by spending more than Rs.2,000/-. The suit is hopelessly barred by limitation. With the aforesaid pleadings, the respondents seek to dismiss the suit.
5. The trial court having adverted to the evidence on record has returned a finding that Exhibit A1 is a Deed of Mortgage by conditional sale and the second respondent has not established that he has been in possession and enjoyment of the suit property.
6. In the appeal preferred by the respondents herein, the First Appellate Court having adverted to the evidence on record arrived at a conclusion that the value of the suit property was only Rs.5,000/-at the time of execution of sale deed Exhibit A1. The attending circumstances also were referred to by the first Appellate Court to fortify its finding that Exhibit A1 is only a sale deed executed with the condition to reconvey the suit property within the time frame fixed therein. The First Appellate Court also found that the suits filed by
