2008 (12) TMI 817 - SC - Indian Laws

Supreme Court: Deed is Absolute Sale, Not Mortgage

The Supreme Court held that the deed dated 27.10.1969 was an absolute sale with a condition of repurchase, not a mortgage by conditional sale. The appeal ... - Issues Involved:1. Interpretation of the deed dated 27.10.1969.2. Applicability of Section 58(c) of the Transfer of Property Act, 1882.3. Relationship of creditor and borrower between the parties.4. Applicability of Order 41 Rule 33 of the Code of Civil Procedure.Summary:1. Interpretation of the Deed Dated 27.10.1969:The primary issue in this appeal was whether the deed dated 27.10.1969 constituted an absolute conveyance with a condition of repurchase or a mortgage with conditional sale. The High Court of Kerala, in its judgment dated 1.11.2006, interpreted the deed as a mortgage with conditional sale, thereby allowing the suit for redemption and partition filed by the respondent. The Supreme Court, however, found that the deed should be construed as an absolute sale with a condition of repurchase, considering the possession was delivered, no interest was stipulated, and the appellant was permitted to attorn to the landlord.2. Applicability of Section 58(c) of the Transfer of Property Act, 1882:Section 58(c) defines a mortgage by conditional sale. The Supreme Court noted that one of the ingredients for determining the true nature of the transaction is that the condition of repurchase should be embodied in the document. The Court found that this condition was satisfied in the present case. However, the Court emphasized that a document must be read in its entirety, and the intention of the parties must be gathered from the document itself and the attending circumstances.3. Relationship of Creditor and Borrower Between the Parties:The Supreme Court observed that no evidence was brought on record to establish a relationship of creditor and borrower between the parties. The appellant had been permitted to attorn to the landlord, which indicated that the transaction was not intended to create a mortgage but an absolute sale with a condition of repurchase.4. Applicability of Order 41 Rule 33 of the Code of Civil Procedure:The respondent contended that the appellant should not be permitted to raise certain contentions as no appeal was preferred against the judgment of the First Appellate Court. The Supreme Court clarified that Order 41 Rule 33 allows the appellate court to pass any decree that ought to have been passed by the trial court or grant any further decree as required. The Court held that it was legally permissible for the appellant to support the decree passed in his favor by attacking the findings of the First Appellate Court.Conclusion:The Supreme Court set aside the judgment of the High Court, concluding that the deed dated 27.10.1969 was an absolute sale with a condition of repurchase, not a mortgage by conditional sale. The appeal was allowed, and the impugned judgment was not sustained. No order as to costs was made.