LEELA AGRAWAL versus SARKAR & ANR.

Citation: [2024] 11 S.C.R. 1130 · Decided: 19-11-2024 · Supreme Court of India · Bench: VIKRAM NATH · Disposal: Appeal(s) allowed

Judgment (excerpt)

[2024] 11 S.C.R. 1130 : 2024 INSC 946
Leela Agrawal 
v. 
Sarkar & Anr.
(Civil Appeal No(s).12538-12539 of 2024)
19 November 2024
[Vikram Nath* and Prasanna B. Varale, JJ.]
Issue for Consideration
Whether the mortgage deed dated 17.10.1990 constitutes a 
mortgage by conditional sale under Section 58(c) of the Transfer 
of Property Act, 1882 and whether the plaintiff is entitled to redeem 
the mortgage.
Headnotes†
Transfer of Property Act, 1882 – s.58(c) – Mortgage by 
conditional sale – The dispute centers around a piece of land 
and the plaintiff-respondent is the undisputed owner of this 
land – In 1990, the plaintiff in need of funds approached the 
defendant-appellant and mortgaged the suit land – In pursuant 
thereto, a mortgage deed dated 17.10.1990 was executed and 
registered – It was orally agreed that plaintiff could redeem the 
mortgage within three years – Thereafter, in 1993, the plaintiff 
attempted to redeem the mortgage – However, the defendant 
refused to accept the payment, asserting that, according to the 
terms of the mortgage deed, the mortgage had transformed 
into an absolute sale due to the plaintiff's failure to repay the 
amount within the stipulated time – Correctness:
Held: The ingredients of a mortgage by conditional sale u/s.58(c) 
of the Act are as follows: (i) The mortgagor ostensibly sells the 
mortgaged property to the mortgagee – (ii) Such ostensible sale 
is subject to any one of the following conditions: On default of 
payment of the mortgage money on a certain date, the sale shall 
become absolute; or on payment of the mortgage-money on a 
certain date, the sale shall become void; or on payment of the 
mortgage-money on a certain date, the buyer shall re-transfer 
the property to the seller – (iii) The condition should be embodied 
*Author
[2024] 11 S.C.R. 
1131
Leela Agrawal v. Sarkar & Anr.
in the same document which effects or purports to effect the 
sale – In the instant case, the mortgage deed indicates that the 
mortgagor agreed to mortgage her land to the mortgagee for 
a sum of ₹75,000 due to personal financial needs, so the first 
condition i.e. Ostensible Sale of the Property is satisfied – The 
mortgage deed contains explicit condition that upon default in 
payment within the stipulated period, the sale would become 
absolute, satisfying the second ingredient under the first condition 
specified in s.58(c) of the Act that on default of payment on a 
certain date, the sale shall become absolute – As far as the 
last ingredient is concerned, as required under the proviso of 
s.58(c), the condition regarding the conversion of the mortgage 
into an absolute sale upon default is embodied within the same 
document i.e., the mortgage deed dated 17.10.1990 – This is 
evident from the clauses of the mortgage deed – Therefore, it 
can be concluded that all the essential ingredients of a mortgage 
by conditional sale u/s.58(c) of the Act are satisfied in the 
present case as there was an ostensible sale of the property by 
the mortgagor to the mortgagee and the sale was conditional, 
stipulating that upon default of payment within three years, the 
sale would become absolute as well as that the condition was 
embodied in the same document, i.e. the mortgage deed, that 
effected the transaction – Also, the permissive possession by the 
plaintiff in the present case does not alter the character of the 
transaction – The mortgage deed dated 17.10.1990 constitutes a 
mortgage by conditional sale u/s.58(c) of the Act – The condition 
converting the mortgage into an absolute sale upon default is 
valid and enforceable. [Paras 14, 15, 16, 17, 18, 21, 26]
List of Acts
Chhattisgarh Land Revenue Code, 1959; Transfer of Property Act, 
1882; Specific Relief Act, 1963.
List of Keywords
Mortgage Deed; Mortgage by Conditional Sale; Ostensible Sale; 
Redemption; Clog on Equity of Redemption; Mortgagor; Mortgagee; 
Permissive Possession; Intention of Parties; Default of Payment; 
Absolute Sale; Re-transfer; Mortgage-Money; Nature of Possession; 
Terms of the Mortgage Deed.
1132
[2024] 11 S.C.R.
Digital Supreme Court Reports
Case Arising From
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 12538-12539 
of 2024
From the Judgment and Order dated 06.09.2018 and 30.01.2019 
of the High Court of Chhattisgarh at Bilaspur in FA No. 28 of 2004 
and REVP No. 222 of 2018 respectively
Appearances for Parties
V. Chitambaresh, Sr. Adv., Kaustubh Shukla, Advs. for the Appellant.
C.B. Gururaj, Prakash Ranjan Na

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