Back
1897 Supreme(Mad) 115
IN THE HIGH COURT OF MARAS
Venkata Krishna Rao
Versus
Venkatachalam And Ors.
Decided On : 10 September, 1897
The mention of interest in a sale document does not automatically indicate the intention to create a mortgage, and the parties' intention and arrangement of terms are crucial in determining the nature of the transaction.
Headnote:
The mention of interest in a sale document does not necessarily indicate an intention to create a mortgage. The intention of the parties to arrange the terms of re-conveyances and set off profits and interest against each other is important in determining the nature of the transaction. The finding as to the value of the property is relevant in understanding the parties' intention. The appeal is dismissed with costs.
1. The mere circumstance that interest is stipulated for by the parties does not by itself indicate that a document which apparently is a sale was intended to be a mortgage. It might be important as indicating that there was a subsisting debt secured by the instrument. But the mention of interest is accounted for by the intention of the parties to arrange before-hand the terms on which the re-conveyances were to take place. The profits and the interest were to be set off against each other. Except the mention of interest, there is no indication of an intention to create a mortgage security. The finding as to the value of the property as throwing light on the intention of the parties cannot be questioned here.
2. We must dismiss the appeal with costs.
