Skip to main content

Sale With A Mere Condition Of Retransfer Is Not A Mortgage

IN CIVIL APPEAL NO.3506 OF 2010, Sopan vs Syed Nabi, the plaintiff had borrowed money from the defendant against which 3 documents were signed. One was an outright sale deed, another whereby the plaintiff had agreed to repay the said amount and secure reconveyance of the property and the third which declared that possession of land had been given against the loan. The plaintiff agreed if the amount is not repaid on “Velamavasya” the deed will be considered as sale deed. It is in that background the plaintiff claiming that he is prepared to repay the amount so as to secure back the property and, in that regard, construing the transaction as a mortgage, got issued a demand notice dated 10th September, 1980 through his Advocate which was disputed by the defendant. The plaintiff claimed the transaction as mortgage by conditional sale while the defendants claimed it to be outright sale.

On appeal, the Supreme Court held that Section 58 (c) of the Transfer of Property Act which defines mortgage by conditional sale clearly states that no such transaction shall be deemed to be a mortgage, unless the condition is embodied in the document which effects or purports to effect the sale. This means that the sale deed should have some reference to mortgage or some such condition which according to the Supreme Court the sale deed here did not, rather the language implied an an absolute conveyance. The other documents relied upon by the plaintiff cannot alter recitals in the sale deed to treat the same as a mortgage by conditional sale. At best the said agreement can only be treated as an agreement whereby the defendant had agreed to reconvey the property subject to the repayment being made as provided thereunder. In the above background, if the entire transaction is taken note, since the amount was not repaid the defendant had acquired absolute right to the property.

Comments

Post a Comment

Most viewed this month

Valuation Report of Jewellery once made is effective for Four Assessment Years

The division Bench of the Delhi High Court in Pr.Commissioner of Wealth Tax vs. Raghu Hari Dalmia held that a valuation report made by a registered valuer once adopted shall be in effect for four assessment years unless an event has occurred whereby the value is increased or decreased. The High Court made it clear that the event of “search” under Section 132 of the Income Tax Act, 1961 cannot compel the assessee to undertake a fresh valuation.
2 comments
Read more

The recovery of vehicles by the financier not an offence - SC

Special Leave Petition (Crl.) No. 8907  of 2009 Anup Sarmah (Petitioner) Vs Bhola Nath Sharma & Ors.(Respondents) The petitioner submitted that  respondents-financer had forcibly taken away the vehicle financed by them and  illegally deprived the petitioner from its lawful possession  and  thus,  committed  a crime. The complaint filed by the petitioner had been  entertained  by  the Judicial Magistrate (Ist Class), Gauhati (Assam) in Complaint Case  No.  608 of 2009, even directing the interim custody of the vehicle (Maruti  Zen)  be given to the petitioner vide order dated  17.3.2009.  The respondent on approaching the Guwahati High  Court against this order, the hon'ble court squashed the criminal  proceedings  pending   before  the  learned Magistrate. After hearing both sides, the Hon'ble Supreme Court decided on 30th...
7 comments
Read more

Mere Agreement To Sell The Leased Property To Tenant Would Not Terminate Landlord-Tenant Relationship

In CIVIL APPEAL Nos. 1237­1238 OF 2019, Dr. H.K. Sharma vs Shri Ram Lal, the tenant had objected against the eviction suit filed by the landlord, claiming that the landlord-tenant relationship between them had ceased to exist by virtue of an agreement for sale entered between them and that he has already paid some money in advance based on the agreement. The tenant contented as the landlord-tenant relationship did not exist, the landlord cannot evict him. The matter went through various forums and finally landed before the Supreme Court in appeal. The Supreme Court referring to the judgment in Shah Mathuradas Maganlal & Co. vs. Nagappa Shankarappa Malage & Ors., held that in the instant case the lease agreement included no clauses on the fate of the tenancy. A fortiori, the parties did not intend to surrender the tenancy rights despite entering into an agreement of sale of the tenanted property. In other words, if the parties really intended to surrender their tenancy ...
2 comments
Read more