IN THE HIGH COURT OF JUDICATURE AT MADRAS
G. CHANDRASEKHARAN, J.
Balasubramaniyam – Appellant
Versus
Paneer Selvam – Respondent
S.A. No. 571 of 2019
Decided On : 07-02-2022
Transfer of Property Act - Section 58(c) - Sale agreement - Mortgage by conditional sale - Whether it is correct to state that sale deed is a mortgage by conditional sale - Appellant/plaintiff filed suit to declare his right and title to suit property with consequential relief of permanent injunction restraining defendants their men servants agents police in interfering with peaceful possession and enjoyment of suit property - Case of appellant/plaintiff is that suit property originally belongs to deceased first defendant through a partition held in his family on - Appellant/plaintiff purchased suit property from him on behalf of his son-second defendant on a conditional sale with condition to repurchase for a good and valuable consideration of amount by a sale deed - Second defendant was a minor at time of sale - Appellant/plaintiff is in possession and enjoyment of suit property - Condition of repurchase is that defendants within years should get repurchase of suit property otherwise defendants loose their right of repurchase. Para 23, 24.
Finding of the Court:
Submission of counsel for appellant/plaintiff that respondents have not shown any material to show the payment of interest and they have not filed suit for redemption of mortgage cannot be entertained for reason that appellant/plaintiff is in possession of the suit property and therefore there is no question of payment of interest - Suit for redemption can be instituted within years when right to redeem or recover possession accrues - Still respondents have time to file suit for redemption - For reasons aforesaid this Court answers substantial questions of law No. 1 that courts below are right in construing Ex.A1 is a mortgage by conditional sale - Courts below have not misplaced the burden of proof wrongly and took a decision that Ex.A1 is a mortgage by conditional sale on basis of evidence available.
Result: Second Appeal is dismissed.
JUDGMENT :
G. CHANDRASEKHARAN, J.
1. This Second Appeal is filed challenging the judgment and decree of learned Additional District and Sessions Judge, Ariyalur, in A.S. No. 76 of 2016 dated 07.12.2018 confirming the judgment and decree of the learned Principal District Munsif, Ariyalur in O.S. No. 225 of 2008 dated 27.09.2012.
2. Appellant/plaintiff filed the suit to declare his right and title to the suit property with the consequential relief of permanent injunction restraining the defendants, their men, servants, agents, police in interfering with the peaceful possession and enjoyment of the suit property. The case of the appellant/plaintiff is that the suit property originally belongs to deceased first defendant Panneer Selvam, through a partition held in his family on 23.12.1998. Appellant/plaintiff purchased the suit property from him on behalf of his son-second defendant on a conditional sale with the condition to repurchase for a good and valuable consideration of Rs. 3,200/- on 18.06.1999 by a sale deed. Second defendant was a minor at the time of the sale. Appellant/plaintiff is in possession and enjoyment of the suit property. Condition of repurchase is that defendants, within 1½ years, should get repurchase of the suit property, otherwise defendants loose their right of repurchase. Since the repurchase clause was embodied in the same document, the document would not come under the category of mortgage by conditional sale, but an outright sale with a condition to repurchase. Since the defendants had not exercised their right of repurchase option within the time stipulated under the document, the claim is barred by limitation. Without any legal right, they gave complaint to the police. Patta and Chitta are in the name of appellant/plaintiff. Suit property is a vacant site and appellant/plaintiff is intended to construct a building in the suit property. In the said circumstances, the suit is filed for the aforesaid reliefs.
3. Case of the defendants/respondents, in brief is as follows:
The court reaffirmed that redemption rights hinge on compliance with mortgage conditions; failure to meet obligations nullifies claims to recover property.
The document was determined to be a sale with a condition to repurchase rather than a mortgage, emphasizing the necessity of a debtor-creditor relationship for a true mortgage.
The court clarified that a mortgage by conditional sale requires a debtor-creditor relationship, which was not found; thus, the document was held as a sale deed with a right of repurchase.
The central legal point established in the judgment is the interpretation of the document as a mortgage by conditional sale, relying on the Transfer of Property Act and the intention of the parties.
The main legal point established is that the nature of a sale deed, the right to repurchase, and the applicable limitation for the suit are crucial factors in determining the outcome of property disp....
A sale deed must explicitly state conditions for re-transfer to qualify as a mortgage by conditional sale under Section 58(c) of the Transfer of Property Act.
Mortgage rights cannot be extinguished by an unregistered document; valid legal processes are required to affect mortgage rights.
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