BHIMRAO RAMCHANDRA KHALATE (DECEASED) THROUGH LRS. versus NANA DINKAR YADAV (TANPURA) & ANR.

Citation: [2021] 8 S.C.R. 151 · Decided: 13-08-2021 · Supreme Court of India · Bench: HEMANT GUPTA · Disposal: Appeal(s) allowed

Cited by 1 judgment(s) · cites 8 · see the full citation network in Lexace

Judgment (excerpt)

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BHIMRAO RAMCHANDRA KHALATE (DECEASED)
THROUGH LRS.
v.
NANA DINKAR YADAV (TANPURA) & ANR.
(Civil Appeal No. 10197 of 2010)
AUGUST 13, 2021
[HEMANT GUPTA AND A. S. BOPANNA, JJ.]
Transfer of Property Act, 1882: ss. 58(c) proviso and 63 –
Redemption of mortgaged property – Plaintiff, owner of agricultural
land borrowed Rs.3,000/- from defendant No. 1 by executing a
document titled “conditional sale deed” as a security for the loan
amount, which was to be returned and the defendant was bound to
re-transfer the land – Plaintiff requested defendant No. 1 to
reconvey the suit land by accepting the loan amount of Rs.3,000/-
but defendant No. 1 refused to do so – Subsequently, defendant
No. 1 transferred the suit land in favour of his brother-defendant
No. 2 – Suit for redemption of mortgaged property and possession
by plaintiff, claiming that the transaction was in the nature of
mortgage even though it was titled as the conditional sale – Dismissal
of suit by trial court and High Court – Sustainability of – Held: Not
sustainable – Condition of re-transfer is a part of the same
document, as expressed by the proviso of s. 58(c) – Transaction
which  takes  the  outward  form of  a sale but in essence the
documents  are of  a  mortgage,  though  it  is couched in the form of
a sale – Document has to read as a whole and if any word is
ambiguous, then the intention of the parties has to be seen when
such document was executed – Thus, reading of the document would
show that the document was executed for the reason that the plaintiff
has  borrowed a sum of Rs.3,000/- and the defendant is bound to
re-transfer the land if the amount is  paid within one year – Advance
of loan and return thereof are part of the same document which
creates a relationship of debtor and creditor – Thus, it would be
covered by proviso in s . 58(c) – Thus, the judgment  and decree
passed  by the First Appellate Court and that of the High Court are
set aside and the suit is decreed.
[2021] 8 S.C.R. 151
151
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SUPREME COURT REPORTS
[2021] 8 S.C.R.
Allowing the appeal, the Court
HELD: 1.1 The intention of the parties has to be seen when
the document is executed. It is not in dispute that the condition
of re-transfer is a part of the same document. Such condition is
in terms of an amendment inserted by the proviso of Section
58(c) of the Transfer of Property Act, 1882 in the year 1929. A
transaction which takes the outward form of a sale can still be
considered in essence a mortgage. It is impossible to compare
one case with another. Each case must be decided on its own
facts and circumstances. The document has to read as a whole
and if any word is ambiguous, then to find out the intention of the
parties when such document was executed. Therefore, a reading
of the document would show that the document was executed for
the reason that the plaintiff has borrowed a sum of Rs. 3,000/- for
his household expenses and the defendant is bound to re-transfer
the land if the amount is paid within one year. The advance of
loan and return thereof are part of the same document which
creates a relationship of debtor and creditor. Thus, it would be
covered by proviso in Section 58(c) of the Act. [Paras 11, 12][160-
D-H]
1.2 Section 63 of the Act contemplates that any accession
by the mortgagee, during the continuance of the mortgage, the
mortgagor shall on redemption be entitled to such accession in
the absence of a contract to the contrary. Under Section 63(a) of
the Act, the liability of mortgagor to pay for improvement will
arise if the mortgagee had to incur the costs to preserve the
property from destruction or deterioration or was necessary to
prevent the security from becoming insufficient or being made in
compliance with the lawful order of any public servant or public
authority. None of the eventualities arose in the instant case
compelling the mortgagor to pay for the improvements if any
carried out by the mortgagee. A mortgagee spends such money
as is necessary for the preservation of the mortgaged property
for destruction, forfeiture or sale; for supporting the mortgagor’s
title to the property; for making his own title thereto good against
the mortgagor; and when the mortgaged property is a renewable
lease-hold, for the renewal of the lease, such expenditure incurred
by the mortgagee can be added to the cost of improvements in
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the principal amount due. However, in  the  absence  of any positive
evidence of any

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