CHENNAMMAL versus MUNLMALALYAN AND ORS.

Citation: [2005] SUPP. 4 S.C.R. 341 · Decided: 19-10-2005 · Supreme Court of India · Bench: ARIJIT PASAYAT · Disposal: Dismissed

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Judgment (excerpt)

CHENNAMMAL 
A 
v. 
MUNlMALAlYAN AND ORS. 
OCTOBER 19, 2005 
[ARIJIT PASAYAT AND DR. AR. LAKSHMANAN, JJ.] 
B 
Transfer of Property Act, 1882-Section 58(c)-Mortgage by conditional 
sale-Sale of one of the mortgaged properties to mortgagee-Reserving a 
right to repurchase-Right to redeem property within three years reserved 
specifically-Sale value much less than existing value-Held, the recitals would C 
clearly show that the deed is n1Jt a sale but a mortgage by conditional sale. 
Respondent executed a simple mortgage in favour of the appellant 
for a sum of Rs. 3,000. For securing the due repayment, 3 items of 
properties were given as security. Since he was unable to discharge the D 
simple mortgage, on the intervention of Panchayatdars, a deed was 
executed by Respondent in favour of the appellant whereby one of the 
properties which was given as security for the simple mortgage was sold 
to the appellant with a right reserved to the Respondent to repurchase 
the same within a period of 3 years on payment of Rs. 3,000. Respondent 
filed a suit against the appellant praying for a decree for redemption. E 
Respondent contended that the deed was a mortgage by conditional sale 
and that pursuant to the sale, I.he appellant was put in possession of the 
suit property and that the deed is not a sale deed and that a right to redeem 
the property within a period of 3 years was reserved and failing which 
·the appellant herein was entitled to have the patta transferred in her own F 
name, that he was paying the kist for the suit properties and that the 
appellant had raised various crops and derived sufficient income every 
year and that the mortgage debt has to be scaled down as per Section 8 
of Act S of 1978, that since the appellant has been in possession for 8 years 
Rs. 2,400 ought to be deducted and that the appellant is entitled only to 
Rs. 600 as per law and that the said sum of Rs. 600 has been deposited G 
into Court and that, therefore, the property has to be re-transferred and 
possession handed over. 
Appellant resisted the suit contending that the deed was an outright 
sale, that since Respondent was unable to discharge the simple mortgage 
341 
H 
342 
SUPREME COURT REPORTS [2005] SUPP. 4 S.C.R. 
A the deed in question came to be executed, that the sale consideration under 
the document was adjusted towards the amounts due under the simple 
mortgage deed of the year 1961, that the said document was executed on 
the advise of the Panchayatdars, that half the property is rocky and unfit 
for cultivation, that the income therefrom was very meagre, that a right 
to repurchase had been reserved under the document within a period of 
B three years failing which the document stipulated that the appellant would 
have absolute rights, that the option to repurchase was not exercised within 
the stipulated period of three years, that from the date of the document 
the appellant has been in possession as absolute owner and has been paying 
kist, that patta has also been transferred in her name and that the 
C appellant had made certain portions of the property cultivable and the 
value thereof has increased and in order to get the benefit of the increase 
in value the present suit has been laid wrongly alleging that the document 
is a mortgage by conditional sale and that the suit is barred by time and 
that the provisions of Act 40of1978 are not applicable to the facts of the 
case and that the question of scaling down of the debt does not arise and 
D that court fee paid is incorrect. 
The District Munsiff, decreed that suit and held that the document 
in question was only a mortgage by conditional sale and that it is not a 
sale deed as contended by the appellant and that from the intentfon of 
E the parties and the document in question, it was clear that only a mortgage 
by conditional sale had been executed and that the respondent was entitled 
to the benefits under Act 40 of 1978 and that, therefore, only Rs. 600 was 
due and that the question of rnesne profits was to be relegated to the final 
decree proceedings. 
p 
On an interpretation of the document in question the appellate court 
allowed the appeal and held that the document was only an outright sale 
and not a mortgage by conditional sale. The second appeal filed by 
Respondent was allowed and the judgment and decree of the trial Court 
was restored. The High Court held that the document in question is only 
a mortgage by conditional sale since vesting ab

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