TULSI AND ORS. versus CHANDRIKA PRASAD AND ORS.

Citation: [2006] SUPP. 5 S.C.R. 255 · Decided: 24-08-2006 · Supreme Court of India · Bench: S.B. SINHA · Disposal: Dismissed

Judgment (excerpt)

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TULSI AND ORS. 
A 
v. 
CHANDRIKA PRASAD AND ORS. 
AUGUST 24, 2006. 
[SB. SINHA AND DAL VEER BHANDARI, JJ.] 
B 
Transfer of Property Act, 1882-Sections 58(c) and 83-Evidence Act, 
I 872-Section 9 I-Mortgage of Part of suit property-Sale of the whole suit 
property thereafter to another by a document with a right to redeem the C 
mortgage-Suit for decree of redemption of mortgage or in the alternative 
for a decree for specific performance to execute a sale deed was filed before 
trial court-Trial Court decreed the suit holding that the doucment is a deed 
of mortgage with conditional sale and not a sale with a condition to 
repurcahse -First Appellate Court affirmed the decree-High Court dismissed 
the Second Appeal----Correctness of-Held, on facts, transaction is held to be D 
a mortgage with conditional sale since it is evidenced by. one document-
Hence allowed the suit. 
Appellant-defendant transferred by a deed of mortgage the northern part 
of suit property in favour of one B. Appellant, thereafter, sold the entire suit 
property to respondent~laintiffs for a valuable consideration by a document E 
which included a right to redeem the mortgage. Respondents issued several 
notices to the appellants expressing intention to redeem the mortgage. When 
personal tender of the mortgage money was refused by the appellants, the 
respondent filed an application under section 83 of the Transfer of Property 
Act, 1882 and deposited the mortgage money in Civil Court. Thereafter, the F 
respondents filed a suit for redemption of mortgage and for mesne profits 
before trial court. In the alternative, the respondents prayed for a decree for 
specific performance of contract directing the appellants to execute a deed of 
sale in their favour. The appellants contended before the trial court that the 
document in question was a deed of sale with a condition to repurchase. The 
trial court, after construing the doucments, came to a finding that t.he G 
document was a deed of mortgage with condition of sale and not a sale with a 
condition to repurchase and consequently decreed the suit The first appellate 
court affirmed the decree of the trial court. The Second Appeal filed by the 
appellants was dismissed by the High Court. Hence the appeal before this 
255 
H 
256 
SUPREME COURT REPORTS (2006] SUPP. 5 S.C.R. 
A Court. 
Dismissing the appeals, the Court 
HELD: I.I. Under section 58(c) of the Transfer of Property Act, 1882, a 
transaction may be held to be a mortgage with conditional sale if it is 
B evidenced by one document. The condition precedent for arrriving at a finding 
that the transaction involves mortgage by way of conditional sale is that there 
must be an ostensible sale. The transaction has been evidenced by one 
document. Section 58(c) of the Act will therefore apply. (261-8, F) 
1.2. The categorical statement of the scribe of the document was that 
C he had been asked by the parties to scribe a document of mortgage and not a 
deed of sale. Respondent no.I, in the document itself categorically stated that 
he was executing a deed of mortgage. The amount of stamp duty was paid by 
him. In case of deed of sale ordinarly the transferee pays the stamp duty. The 
deviation from the normal practice has not been explained by the appellant. 
D 
[261-GJ 
1.3. The transaction categorically states that appellant no. I was to 
maintain the property in its present condition. If the contention of the parties 
was to transfer the property absolutely, no such stipulation was required to 
be made at all. In a case of absolute transfer, the vendee has an absolute right 
E to deal with his property in any manner he likes. It was clearly stipulated in 
the deed that in the event, the executant repaid the entire consideration, the 
purchaser would reconcey the property and furthermore deliver possession 
thereof. The sale was to become absolute only when the transferee failed to 
pay the amount within the stipulated period. The contemporaneous conduct of 
the parties was taken into considrration in treating the transaction to be one 
F of mortgage and not of sale. Hence the parties entered into a transaction of 
mortgage and not a sale. [262-A, B, CJ 
1.4. Section 91 of the Evidence Act, 1872 mainly forbids proving of the 
contents of a writing otherwise than by writing itself and merely lays down 
the 'best evidence rule'. It, however, does not prohibit the parties to adduce 
G evidence, in a case, the deed is capable of being constru

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