Patel Ravjibhai Bhulabhai (D) Thr. Lrs. Vs Rahemanbhai M.Shaikh (D) Thr. Lr. & Ors, on 2nd May 2016, Supreme Court of India: Case Brief – Read Judgment

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When property is handed over for money taken, with the condition to take it back on repayment of said money, otherwise not: Court held transactions is one of ‘Mortgage by way of Conditional Sale’

Civil Appeal No. 4683 of 2016
Bench: Justice Ranjan Gogoi; Justice Prafulla C. Pant

Case Brief: Here, in the present matter, a challenge by way of appeal is preferred against the judgement and decree passed by the High Court, by which that Court had decided the Second Appeal and reversed the decision of the First Appellate Court. In other words, the suit filed by the Plaintiffs/ respondents herein for redemption of suit property was decreed by the High Court. In the facts of the case, the Original Plaintiffs executed a deed in favour of Defendant no. 1 and 2 under which there was a conditional sale for the sum of Rs. 10,000, with the condition that if the repayment of the said amount is made within five years period, the defendants shall given back the property to the Plaintiffs. Later, Plaintiffs filed a suit for redemption of property on repayment of mortgage money. However, the claim of plaintiff is denied by the Trial Court and held that plaintiffs have failed to prove that the transaction was a mortgage and that suit is barred by time. First appellate Court also affirmed the decree of dismissal of suit passed by Trial Court. Thus, before High Court, a second appeal is preferred, and that Court reversed the findings of that said two courts below. As such, now the defendants are in appeal before Apex Court.

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 The bench, at the outset found that the issue of limitation was not pressed before this Bench as Article 60 (a) of the Limitation Act, 1963 provides for the 30 years period for the filing of suit for redemption. The major question found by this bench is that whether the said document in its true interpretation is a mortgage deed by conditional sale, or sale with option to repurchase. The bench observed that the Section 58(c) of the Transfer of Property Act, 1882 is defining the Mortgage by Conditional Sale and section 60 thereof provides for the redemption of property mortgage. Bench also observed the important differences between two terms. Here, the bench analysed the disputed documents and in its contained important condition, which make it clear that if the plaintiffs make repayment of said amount within a given period, the defendants shall handover the possession of the property in suit back to the plaintiffs, and this is considered by the bench as an actual transaction between the parties was of Loan, and the relationship was of debtor and creditor existed. As such, this bench concluded that the High Court’s view was right in holding that the deed in question is a mortgage by way of conditional sale. And as the possession over the property is handed over to the mortgagee, no interest was charged. As such, the Bench found no force in this appeal and as such appeal is dismissed.

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Read the Judgement: Patel Ravjibhai Bhulabhai (D) Thr. Lrs. Vs Rahemanbhai M.Shaikh (D) Thr. Lr. & Ors

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