LexMUSHIR MOHAMMED KHAN (DEAD) BY LRS. versus SMT. SAJEDA BANO AND ORS.
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) --- ....,,.. MUSHIR MOHAMMED KHAN (DEAD) BY LRS. v. SMT. SAJEDA BANO AND ORS. MARCH 2, 2000 [S. SAGHIR AHMAD AND Y.K. SABHARWAL, JJ.] Transfer of Property Act, 1882-Section 58(c) proviso and (d)-Mort- gage by conditional sale and usufructuary mortgage-Parties executed three documents-Sale deed, agreement of re-conveyance and a rent note-By sale deed property sold by plaintiff in favour of defendant-By agreement of. re conveyance of property by defendant in favour of plaintiff property reconveyed on payment of sale price within stipulated time-In tenns of rent note plaintiff paying rent of the property to defendant-True nature of transaction to be ascertained having regard to all documents-Held, the transaction is not a m011gage by conditional sale as the condition of reconveyance is not con- tained in the documents by which the property was sold-Further; an agree- ment of reconveyance does not constitute part of the transaction by which usufructuary mortgage is created. Plaintiff-respondents sold the property for a price less than its origi- nal price to the defendant-appellants by executing a sale deed. Property was further reconveyed on payment of sale price within stipulated time by executing agreement of reconveyance by the defendant in favour of the plaintiff. In terms of the rent note, plaintiff had to pay rent to the defend- ant. Plaintiff filed suit for redemption treating the transaction as mort- gage. Both the trial court and the lower appellate court dismissed the suit. High Court held the transaction between the parties as mortgage and not sale of the property. Hence this appeal. Disposing of the appeal, the Court A B c D E F HELD : 1.1. Where the parties executed three documents-the sale deed, agreement of reconveyance and rent note almost contemporane- G ously, all the three documents have to be taken into consideration to find out the true nature of the transaction. [74-C] 1.2. The three documents being sale deed, agreement of reconveyance and rent note read together would not constitute a mortgage by operation of proviso to section 58(c) of the Transfer of Property Act, as the condition H 65 66 SUPREME COURT REPORTS [2000] 2 S.C.R. A of re-purchase is not contained in the documents by which the property was sold and the transaction between the parties cannot be held to' be a ''mortgage by conditional sale." [73-C-D] Chunchun Iha v. Ebadat Ali & Am:, [1955) 1 SCR 174; Bhaskar Waman Joshi (D) & Ors. v. Shrinarayan Rambilas Agarwal (D) & Ors., [1960) 2 SCR B 117; P.L Bapuswami v. N. Pattay Gounder, Am (1966) SC 902 and Vidhyadh~r v. Mankikrao & Am:, [1999) 3 SCC 573, relied on. c D E F G H Narasingerji Gyanagerji v. P. Parthasaradhi, Am (1924) PC 226; and Balkishan Das v. Legge, (1899) 27 Ind. Appl. 58, cited. 1.3. If the ~ocuments cannot be treated as creating a mortgage on account of the prohibition contained in proviso to section 58(c) these documents would not create a mortgage of another kind. Though in a usufructuary mortgage, the possession has necessarily to be delivered to the mortgagee, an agreement for reconveyance is 'not obtained from him. An agreement of reconveyance does not normally constitute part of the transaction by which unufructuary mortgage is created. [73-G; 74-A.C] Smt. Indira Kaur & Ors. v. Shri Sheo Lal Kapoor, Am (1988) SC 1074, distinguished. Govind Prasad Chaturvedi v. Hari Dutt Shastri,[1977] 2 SCR 877, cited. 2.1. The property was ostensibly transferred to the defendant for a price less than the market value which must have considerably appreci- ated when the property was purchased by the plaintiff when it was sold by him to the defendant. Even though the defendant knew that within two years the value of the property would further escalate, he agreed on a reconveyance on the original price for which it was sold to him. [76-B-D] Smt. Indira Kaur & Ors. v. Shri Sheo Lal Kapoor, AIR (1988) SC 1074, relied on. 2.2. Having regard to the circumstances of the case, parties were allowed time to negotiate a settlement, but they have failed to arrive at a compromise. Therefore, defendants are directed to pay a sum of Rs. Two lakhs forgoing the arrears of rent up-to-date within three months from the date of the judgment failing which the appeal shall stand dismissed with costs. [77-C; EJ M.M. KHAN v. SMT. SAJEDA BANO (S. SAGHIR AHMAD, J.] 67 U. Nilan v. Kannayyan (Dead) through Lrs., JT (1999) 7 SC
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