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2024 Supreme(All) 2484

IN THE HIGH COURT OF ALLAHABAD
JASPREET SINGH, J.
Ram Shanker And Others – Appellant 
Versus
Mohd. Ibrahim And Others – Respondent
SECOND APPEAL No. - 587 of 1983
Decided on : 09-07-2024

Advocates Appeared:
For the Appellant : V.R.Singh,Mohammad Saeed,Mohd. Naeem, Puttu Lal Mishra, Puttu Lal Misra, Vinay Misra
For the Respondent: R.C. Gupta,Brijesh Kumar, S.H. Ibrahim, Utkarsh Srivastava

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.

Headnote:(A) Transfer of Property Act, 1882 - Section 58(c) - Dispute regarding the nature of document dated 17.02.1937 as either a sale deed or mortgage by conditional sale - Courts concluded it was not a mortgage due to lack of creditor-debtor relationship - Suit filed within limitation affirmed - No merit found in appeal. (Paras 2, 11, 46, 47)

(B) Jurisdiction of Appellate Court - Appellate courts should not disturb findings of fact unless they are perverse or illegal - The nature of the document must be assessed based on its actual terms and the intentions of the parties, not merely the labels attached to it. (Paras 18, 30)

Facts of the case:
The plaintiffs sought ownership of property initially sold by Bhagwandeen in 1937, with a clause for repurchase, arguing defendants had no title after expiration of the contractual period for repurchase. (Paras 5-13)

Findings of Court:
The original deed was deemed a sale with a right of repurchase, not a mortgage due to lack of evidence for a creditor-debtor relationship, affirming the suit’s legitimacy and dismissing the appeal. (Paras 46, 47)

Issues: Whether the 1937 document constituted a sale deed with a right to repurchase or a mortgage by conditional sale, and if the suit was filed within the limitation period. (Paras 2, 11)

Ratio Decidendi: A mortgage by conditional sale requires the existence of a debtor-creditor relationship, which was not established; the document must be interpreted based on its terms and surrounding circumstances. (Paras 29, 44, 46)

Result: Appeal dismissed, judgment and decree of lower courts affirmed.

Table of Content
1. parties appeal against previous judgments. (Para 1 , 2 , 3)
2. facts related to property transfer and litigation. (Para 4 , 5 , 6 , 7 , 8 , 9 , 10)
3. appellant's argument on document classification. (Para 16 , 17 , 18)
4. respondent's counterarguments on sale nature. (Para 20 , 21 , 22)
5. plaintiff's right and limitations regarding property. (Para 23 , 24 , 25)
6. court's assessment of document validity. (Para 26 , 27)
7. clarification on debtor-creditor relationship. (Para 30 , 31 , 32 , 33 , 34)
8. errors in claims of redemption invalidated. (Para 35 , 36 , 37 , 38 , 39 , 40 , 41 , 42)
9. mortgage definitions contrasted. (Para 43 , 44 , 45 , 46)
10. final decision on the appeal. (Para 47)
11. dismissal of the appeal and affirmation of prior judgments. (Para 48)

JUDGMENT :

Jaspreet Singh, J.

1. The defendants of Regular Suit No. 115 of 1974 have approached this Court assailing the judgment of the Trial Court dated 05.12.1980 whereby the suit of the plaintiffs-respondents was decreed and the Regular Civil Appeal preferred by the defendants before the First Appellate Court bearing No. 22 of 1981 was also dismissed by means of judgment and decree dated 03.05.1983.

2. The instant second appeal was admitted by means of order dated 27.04.1984, however, substantial questions of law were not framed and later this Court by means of order dated 14.05.2024 framed the following two substantial questions of law, which reads as under:-

"A. Whether the instrument dated 17.02.1937 executed by Late Bhagwan Deen the predecessor in title of the appellants in favour of Late Mohammad Azim-the father of the respondents was a deed of mortgage by conditional sale as defined in Section 58 (c) of Transfer of Property Act 1882 and the learned courts below were right by interpreting and holding the instrument as not a deed of mortgage by conditional sale. If so, its effect ?

B. Whether, the learned trial court was right in holding the suit as filed by the respondents to be within the time of limitation. If so, its effect ?"

3. During pendency of the proceedings, certain parties have expired and their legal heirs have been brought on record, however, for the sake of convenience this Court shall refer to the parties as they were originally impleaded in the suit.

4. Certain brief facts relevant for the adjudication of the controversy involved in the instant second appeal are being noticed first:-

5. Sri Mohd. Azeem, the original plaintiff filed a suit bearing No. 115 of 1974 before Munsif, Raebareli seeking a decree of declaration and possession against Smt. Indrani Devi, Ram Nath, Ram Dulare, Ram Shanker and Mohd. Saleem in respect of the premises bearing Municipal No. 762 in Ward 885 No. 3 in District Raebareli.

6. It was pleaded that the property in question initially belonged to Sri Bhagwandeen who sold the same to the plaintiff Mohd. Azeem by means of a registered sale deed dated 17.02.1937 for a total sale consideration of Rs. 150 which included the consideration for the house as well as one Tamarind tree.

7. It was further stated that the said deed of 1937 contained a re- purchase clause to the effect that in case if the vendor namely Bhagwandeen within ten years from the date of execution of the sale deed dated 17.02.1937 repays the amount to the plaintiff, he would have a right to re-purchase the property in question.

8. It was pleaded that Bhagwandeen during his lifetime did not repay nor exercised his option of repurchasing the property within a period of ten years. Sri Bhagwandeen died in November, 1962 and thereafter his wife Smt. Indrani sold the property in favour of the defendant no. 4 namely Ram Shanker and it is in this context that the plaintiff had sought the relief of declaration and possession.

9. The suit bearing No. 115 of 1974 was contested by Smt. Indrani and Ram Shanker who filed their separate written statements.

10. Primarily, their defence was that the document dated 17.02.1937 was not simplicitor a sale deed but was a mortgage

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