IMPORTANT POINT
Deed of mortgage by conditional sale and an outright sale are two distinct recitals.

S.C. Gupte, J.—Heard learned Counsel for the parties.

2. This Second Appeal challenges a judgment and order passed by the District Court at Nashik. By the impugned judgment and order, the learned District Judge dismissed the appeal filed by the Appellant herein from the judgment and decree passed by the Trial Court in a suit for possession and reconveyance filed by the Respondent.

3. The case of the Respondent (Original Plaintiff) before the Trial Court was that the suit property, being an agricultural land bearing Survey No.275 and admeasuring 22 Ars, was mortgaged by the Respondent to the Appellant by way of a conditional sale. The mortgage money was Rs.1500/, whereas the repayment period was of 10 years. Since the possession of the mortgaged property was handed over to the Appellant for his use, there was no provision for payment of interest. It was submitted by the Respondent that, in the year 1973, the Respondent had repaid the sum of Rs.1500/to the Appellant but that the Appellant retained the possession of the suit property. The Appellant, in the premises, filed this suit claiming redemption of mortgage and recovery of possession of the suit property from the Appellant. In his written statement, the Appellant claimed the suit transaction as an outright sale and not a mortgage. It was submitted that this suit property was sold by the Respondent to the Appellant, according to the then market price of Rs.1500/, but that since the parties had friendly relations between them, merely by way of a concession, the deed was termed as a conditional sale and a provision was made for reconveyance of the suit property in favour of the Respondent on payment of Rs.1500/. Alternatively, it was claimed that since, on 29 March 1973, the Appellant had acknowledged receipt of the sum of Rs.1500/from the Respondent, and, at the same time, refused to handover possession of the suit property, the Appellant was actually in adverse possession with effect from 29 March 1973 and, having continued for over 12 years in such possession, has become an owner of the suit property by adverse possession. It was argued that the Respondent’s suit for recovery of possession was bared by the law of limitation.

4. The Trial Court decreed the Respondent’s suit and ordered the Appellant to redeem the mortgage by reconveyance as per the terms and conditions of the agreement of 5 October 1970. The Trial Court also directed the Appellant to handover the possession of the suit property to the Respondent and reserved liberty unto the Respondent to file a separate suit for mesne profits.

5. The order of the Trial Court was carried in appeal by the Appellant herein before the District Court at Nashik. The learned District Judge came to the conclusion that since the mortgage money was duly repaid by the Respondent to the Appellant, the relationship of mortgagor and mortgagee between the parties had ceased and that, accordingly, the Respondent (mortgagor) was entitled to file a suit not for redemption of mortgage but for recovery of the suit property from the Appellant. The learned District Judge, accordingly, dismissed the appeal and confirmed the judgment and decree of the Trial Court, save and except the decree of redemption. The learned District Judge modified this part of the decree by directing the Appellant to execute a reconveyance in terms of the agreement dated 5 October 1970 and also to handover possession of the suit land to the Respondent.

6. The Second Appeal involves substantial questions of law concerning (i) the equity of redemption of a mortgagor, (ii) the plea of adverse possession, and (iii) the bar of limitation for a suit for recovery of possession of immovable property based on title in the face of a plea of adverse possession set up by the Defendant.

7. Both the Courts below have come to a unanimous finding that the document in question, namely, the deed of 5 October 1970, was a deed of mortgage by conditional sale and not an outrig