Supreme Court ruling on mortgage by conditional sale, sale deed validity, and transferee rights

The Supreme Court upheld the lower courts' findings that the document in question was a mortgage by conditional sale, not an absolute sale. It confirmed the validity of the sale deed, noting that full consideration was paid or promised as allowed under the law. The Court also restored the plaintiff's right to redeem the mortgage, emphasizing the transferee's entitlement to do so based on the fulfillment of redemption conditions. The judgment clarified legal principles on mortgages, sale deed validity, and transferee rights.

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Issues Involved:
1. Nature of the Document (Mortgage by Conditional Sale vs. Out and Out Sale)
2. Validity and Payment of Consideration for the Sale Deed
3. Right to Redeem the Mortgage

Summary:

Issue 1: Nature of the Document (Mortgage by Conditional Sale vs. Out and Out Sale)
The primary issue was whether the document executed on 24th March 1971 was a mortgage by conditional sale or an out and out sale. The Trial Court and Lower Appellate Court found it to be a mortgage by conditional sale. The Supreme Court upheld this finding, noting that the document explicitly stated it was a "mortgage by conditional sale" and included a stipulation for reconveyance upon repayment of Rs. 1500 by a specified date. The Court emphasized that the intention of the parties, as reflected in the document, was to create a mortgage by conditional sale, not an absolute sale.

Issue 2: Validity and Payment of Consideration for the Sale Deed
The High Court had set aside the sale deed executed by defendant No. 2 in favor of the plaintiff, claiming the full consideration was not paid. The Supreme Court reversed this, noting that defendant No. 2 admitted in his written statement and testimony that he received the full sale consideration of Rs. 5000. The Court held that even if the entire amount was not paid at the time of execution, the sale would still be valid u/s 54 of the Transfer of Property Act, which allows for part-payment or a promise to pay. The Supreme Court also highlighted that defendant No. 1, who contested the sale, did not provide evidence or enter the witness box, leading to an adverse inference against him.

Issue 3: Right to Redeem the Mortgage
The Trial Court had decreed the plaintiff's right to redeem the mortgage, which was upheld by the Lower Appellate Court but reversed by the High Court. The Supreme Court restored the Trial Court's decree, stating that the plaintiff, as the transferee of defendant No. 2, was entitled to redeem the mortgage. The Court found that defendant No. 2 had offered the mortgage amount to defendant No. 1, who refused it, thus fulfilling the condition for redemption.

Conclusion:
The Supreme Court allowed the appeal, set aside the High Court's judgment, and restored the Trial Court's decree, affirming the plaintiff's right to redeem the mortgage and validating the sale deed executed by defendant No. 2. The judgment emphasized the legal principles regarding the nature of mortgages by conditional sale, the validity of sale deeds with part-payment, and the rights of transferees to redeem mortgages.

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