Mortgage by conditional sale requires reconveyance in the same deed; separate agreement and Section 83 deposit did not create mortgage or res judicata.

A sale deed coupled with a separate contemporaneous agreement for reconveyance was held not to constitute a mortgage by conditional sale because Section 58(c) of the Transfer of Property Act requires the condition of reconveyance to be embedded in the same instrument that effects the sale. The absolute sale deed transferred title outright, and the separate agreement could not alter its legal character. Permission to deposit money under Section 83 of the Transfer of Property Act was procedural only and did not finally determine the existence of a mortgage, so it did not operate as res judicata. The High Court was also held not justified in disturbing concurrent findings in second appeal under Section 100 of the Code of Civil Procedure.

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Issues: (i) Whether the transaction evidenced by the sale deed and contemporaneous agreement for reconveyance amounted to a mortgage by conditional sale or only a sale with a condition of repurchase; (ii) Whether the order permitting deposit under Section 83 of the Transfer of Property Act operated as res judicata; (iii) Whether the High Court was justified in disturbing the concurrent findings in second appeal.

Issue (i): Whether the transaction evidenced by the sale deed and contemporaneous agreement for reconveyance amounted to a mortgage by conditional sale or only a sale with a condition of repurchase.

Analysis: The governing test was Section 58(c) of the Transfer of Property Act, 1882, which requires the condition of reconveyance to be embodied in the same document if the transaction is to be treated as a mortgage by conditional sale. The sale deed here was absolute in form, transferred title completely, and described the parties as vendor and vendee. The separate agreement for reconveyance did not convert the transaction into a mortgage. The document had to be read as a whole, and the terminology used in the agreement was insufficient to override the legal effect of the sale deed.

Conclusion: The transaction was not a mortgage by conditional sale; it was a sale with a separate agreement to reconvey, against the respondents.

Issue (ii): Whether the order permitting deposit under Section 83 of the Transfer of Property Act operated as res judicata.

Analysis: Section 83 of the Transfer of Property Act, 1882 is procedural and only enables a mortgagor to deposit money due on a mortgage. Permission to deposit does not finally decide the existence of a mortgage or alter the legal status of the parties. A matter can operate as res judicata only if it has been directly and substantially in issue and heard and finally decided. The deposit proceedings did not satisfy that requirement.

Conclusion: The order under Section 83 did not operate as res judicata, against the respondents.

Issue (iii): Whether the High Court was justified in disturbing the concurrent findings in second appeal.

Analysis: The trial court and first appellate court had concurrently found that the transaction was a sale with reconveyance and not a mortgage. The High Court interfered on a question that turned largely on the interpretation of documents and on a pure question of law arising from settled principles. On the facts and law, the High Court ought not to have upset the concurrent findings in the manner it did.

Conclusion: The High Court was not justified in interfering under Section 100 of the Code of Civil Procedure, 1908, in favour of the appellant.

Final Conclusion: The impugned judgment was unsustainable, and the appellant succeeded in restoring the dismissal of the respondents' claim.

Ratio Decidendi: Where a sale deed and a separate contemporaneous agreement for reconveyance are contained in distinct documents, the transaction is not a mortgage by conditional sale unless the condition is embodied in the document effecting the sale; a deposit proceeding under Section 83 does not by itself create res judicata.

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