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.

JUDGMENT :

Prayer: Second Appeal filed under Section 100 of C.P.C., against the judgment and decree dated 29.11.2007 and made in A.S.No.231 of 2006 on the file of the Principal District Judge at Puducherry reversing the judgment and decree dated 30.04.2001 made in O.S.No.81 of 1994 on the file of the Principal Sub-ordinate Court at Puducherry.

This is an appeal, which raises the vexed question yet again, whether the document under which, the parties are litigating before the Court, is a mortgage by conditional sale or a sale with a condition to repurchase.

2. The relationship between the parties seem to have been cordial enough for the respondent to receive amounts from the appellant to repay his loans. The respondent was an employee of Anglo French Textiles, which had to be locked down some time in 1984. The respondent was living in the said house with his wife and two daughters and was mired in debt. At that time, he entered into an agreement of sale dated 03.12.1984, agreeing to alienate the property, in which he was residing for a sum of Rs.20,750/-. Even under the said document, the word that was used was “

It was agreed that the property will be sold in the form of () Subsequently, the parties had executed a document on 31.01.1985. The said document reads as () with certain conditions which are as follows :

3. The Trial Court interpreted the document as a sale with a condition of re-purchase. The lower Appellate Court had taken opposite view. Against this reversing findings, the defendant in the suit has presented this appeal. At the time of admission, the following substantial questions of law were framed:-

“a. Whether the Lower Appellate Court has not committed error or law by reversing the well considered judgment of the trial court by holding that the appellant was only a mortgagee and not a purchaser of the suit property as per Ex.A1 (Ex.B2), dated 31.01.1985?

b. Whether the Lower Appellate Court has not erred in law by misconstruing the contents of the sale deed, i.e.Ex.A1 (Ex.B2) by holding that it was only a mortgage as against the borrowal of loan?”

4. In this appeal, I am called upon to answer whether Ex.A1, which corresponds to Ex.B2, is a sale with condition of re-purchase or a mortgage by conditional sale.

5. Mr.S.Mahimai Raj, learned counsel appearing for the appellant would submit that reading of Ex.A1/Ex.B2 would show that though it was titled as (), it is a document of sale with a condition of re-purchase. He would state that the intention of the parties is clear from the evidence of D.W.2 and D.W.3, who were scribe in the attesting witness. They have stated that it was the intention of the parties to enter into a sale deed and not into a mortgage deed. He would very forcibly draw my attention to the pre-suit notice where under, it was stated that it was only a sale with a condition of re-purchase and not a mortgage. He would further submit that his clients have made an improvement of nearly Rs.1,00,000/- over the property, which no prudent person would have made, had it been only a mortgage with conditional sale. On this basis, Mr.S.Mahimai Raj would forcibly contend that the appeal has to be allowed and the judgment of the Trial Court has to be restored.

6. Mr.R.Gowthama Narayanan, learned counsel appearing for the respondent/plaintiffs would contend that the document should be read only as a mortgage because the title to the property did not get transferred to the appellants, which would have been the case, had it been a sale. He would further contend that Section 58(c) of the Transfer of Property Act applies in full force to Ex.A1 and would invite the attention of this Court to forms of pleadings LIFCO's Documents-Drafting & Registration (in Tamil), in particular, at Page 157 to contend that the document is only a mortgage by conditional sale and not a sale with condition of re-purchase.

7. The learned counsel appearing for the respondent would rely upon the judgments of several Courts, which are as follows:-