VITHAL TUKARAM KADAM AND ANOTHER versus VAMANRAO SAWALARAM BHOSALE AND OTHERS

Citation: [2017] 8 S.C.R. 379 · Decided: 09-08-2017 · Supreme Court of India · Bench: L. NAGESWARA RAO · Disposal: Appeal(s) allowed

Cited by 2 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

[2017] 8 S.C.R. 379 
VITHAL TUKARAM KADAM AND ANOTHER 
v. 
VAMANRAO SAWALARAM BHOSALE AND OTHERS 
(Civil Appeal Nos. 7245-7246of2011) 
AUGUST09,2017 
(L. NAGESWARA RAO AND NAVIN SINHA, JJ.) 
Transfer of Property Act, 1882 - s.58(c) - Mortgage by 
conditional sale -
When - Appellant-plaintiff's suit for redemption 
A 
B 
of mortgage, decreed by two courts - Decree reversed in second C 
appeal by High Court holding that the agreement in question was a 
sale with an option to repurchase and not a mortgage by conditional 
sale - On appeal, held: Whether a document is a mortgage by 
conditional sale, or a sale with an option to repurchase, has to be 
determined in the facts of each case, depending on the recitals in 
the document, intention of the parties, coupled with attendant D 
surrounding circumstances - In the instant case, the language used 
in the agreement conveys that the plaintiff did not intend to relinquish 
all rights, title and claims in his lands - Parties were admittedly well 
known to each other - Thus, there was a relationship of debtor and 
creditor - Further, the clause for reconveyance was in requirement 
E 
with s.58(c) - Agreement in question, though styled as a sale deed, 
is a mortgage by conditional sale and not a sale with an option to 
repurchase - Mortgage. 
Allowing the appeals, the Court 
HELD: 1.1 The question whether a document is a mortgage 
F 
by conditional sale, or a sale with an option to repurchase, has to 
be determined in the facts of each case, dependent on the recitals 
in the document, intention of the parties, coupled with attendant 
surrounding circumstances. There can be no hard and fast rule 
for determining the nature of the document devoid of these 
circumstances. (Para 7)(383-D-EJ 
G 
1.2 An ostensible sale with transfer of possession and 
ownership, but containing a clause for reconveyance in accordance 
with Section 58 (c) of the Transfer of Property Act, 1882 will clothe · 
the agreement as a mortgage by conditional sale. The execution 
379 
H , 
380 
SUPREME COURT REPORTS 
[2017] 8 S.C.R. 
A of a 
separate agreement for 
reconveyance, either 
contemporaneously or subsequently, shall militate against the 
agreement being mortgage by conditional sale. There must exist 
a debtor and creditor relationship. The valuation of the property, 
and the transaction value, along with the duration of time for 
B 
reconveyance, are important considerations to decide the nature 
of the agreement. There will have to be a cumulative consideration 
of these factors, along with the recitals in the agreement, intention 
of the parties, coupled with other attendant circumstances, 
considered in a holistic manner. [Para 141(386-B-DI 
1.3 In the instant case, the agreement, Exhibit 62, though 
C styled as a sale deed, for a consideration of Rs.700/- is but an 
ostensible sale, containing a clause for reconveyance. The 
significance of the words "repay", "return" and "subject to this 
condition" cannot be overlooked. They are not commensurate 
with a deed of absolute sale. The language used, conveys the 
D distinct impression that the plaintiff did not intend to relinquish 
all rights, title and claims to his lands. The defendant was aware 
of the limited nature of right conveyed and had agreed to a 
conditional sale along with an obligation to return the lands if the 
amount was repaid. (Para 151(386-E-Gl 
E 
F 
1.4 The parties were admittedly well known to each other 
since before. The plaintiff had been borrowing money from the 
defendant even earlier from time to time according to need, and 
even at the time of execution of the agreement he was in need of 
money. The value of the land was Rs. 3500/- far in excess of the 
amount of Rs.700/- mentioned in the agreement. The defendant 
in cross-examination did not deny that he had demanded the sum 
of Rs.3500/-with interest for reconveyance. The relationship of 
debtor and creditor cannot be faulted with. The respondent did 
not take any steps for mutation for three long years after the 
execution of the deed. The plaintiff had specifically objected to 
G mutation in the name of the defendant. The period for 
reconveyance provided in the agreement itself was inordinately 
long for ten years. The clause for reconveyance was in 
requirement with Section 58 (c) of the Act. The High Court failed 
to consider the aforesaid factors in totality and in a holistic manner, 
while arriving at the finding that there was no debtor and creditor 
H 
VITHAL

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