RAMLAL AND ANR. versus PHAGUA AND ORS.

Citation: [2005] SUPP. 4 S.C.R. 331 · Decided: 19-10-2005 · Supreme Court of India · Bench: ARIJIT PASAYAT · Disposal: Dismissed

Judgment (excerpt)

RAMLAL AND ANR. 
A 
v. 
PHAGUA AND ORS. 
OCTOBER 19, 2005 
[ARIJIT PASAYAT AND DR. AR. LAKSHMANAN, JJ.] 
B 
Constitution of India-Article 136-Civil Procedure Code, l 908-Section 
100-Plaintiff executing a sale deed of suit property in favour of vendee for 
obtaining a loan-Simultaneously a reconveyance deed was executed by vendee C 
if the loan is repaid by respondent within stipulated period-On failure to 
repay loan within the stipulated period, the vendee got her name mutated in 
revenue records and sold the suit property to purchasers-Plaintiffs filing a 
suit for declaration that the sale deed executed was only a nominal sale-
Trial Court dismissing the suit and First appellate court dismissing the appeal-
High Court allowed the Second Appeal of the respondents-Correctness of- D 
Held, the sale deed was a nominal sale and it was executed by plaintiffs by 
wiry1 of security which did not confer any right, title or interest in the suit 
property to the vendee-Hence the purchasers form the vendee do not get a 
better title than the vendee had 
Respondents-plaintiffs executed a sale deed of suit land in favour of 
vendee on obtaining a loan. Simultaneously an agreement of reconveyance 
of the suit property was executed by the vendee in favour of the respondent 
if the loan is repaid 'within a stipulated period. On failure to repay the 
loan in revenue records and sold the property to the appellants-defendants 
E 
by a registered sale deed. The respondent filed a suit ·ror declaration that F 
the sale deed executed by her in favour of the vendee was only a nominal 
sale and she continues to be the owner of the suit land. The trial court 
dismissed the suit. The first appeal preferred by the respondent was also 
dismissed. The High Court allowed the second appeal of the respondents 
holding that the respondent has title over the suit land and on paying the G 
loan amount to the vendee, he sha"ll have the right to get back the 
possession of the suit land. 
In appeal to this court, the appellants contended that the High Court 
was not right in interfering with the concurrent findings of facts by the 
331 
H 
332 
SUPREME COURT REPORTS [2005] SUPP. 4 S.C.R. 
A lower courts under section I 00 CPC; that the respondents failed to institute 
a suit for specific performance of the deed of reconveyance against the 
vendee; that the sale consideration is not a sole criteria for holding that 
the object of the sale deed was not to convey the title in the suit land; that 
the High Court has not framed any other substantial question of law at 
B the time of hearing except framed at the stage of admission; 
The respondents contended that the sale deed executed was by way 
of surety which did not pass any right, title or interest in favour of the 
vendee; and that by mere mutation of the name of the vendee in the 
revenue records, it does not confer any right, title or interest in favour of 
C the vendee in the absence of the real transaction of sale. 
Dismissing the appeal, the Court 
HELD:LI. The sale deed is not a real sale deed but was by way of 
surety. It did not pass any right, title or interest in favour of the vendee 
D which is clear from the admission of the vendee. In addition to the sale 
deed executed, an agreement was also entered into between the parties 
simultaneously for execution of the re-conveyance deed in favour of the. 
respondents. Therefore, by the said sale deed, no right, title or interest 
ever pass in favour of the vendee and that mer,e mutation of the name of 
E the vendee in the revenue records does not confer any right, title or interest 
in her favour in the absence of the real transaction of the property. Since 
. the vendee had no right, title or interest over the suit property she was 
not competent to execute the sale deed in favour of the appellants for any 
consideration and if the vendee executed the sale deed in favour of the 
appellants it never conferred any right, title or interest in favour of the 
F subsequent purchasers i.e. the appellants. 1336-E; 337-A, B, CJ 
1.2. The trial Court dismissed the suit on the wrong premises holding 
that the respondents have failed to prove that the loan amount was taken 
from the husband ofvendee by way of loan. The first Appellate Court has 
G not given any finding in respect of the issues framed by the trial court. 
The Appellate Court also did not give any finding whether the vendee was 
competent to transfer the property to the appellants or not. 

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