(Guest)

What is distinction between mortgage by conditional sale or

What is distinction between mortgage by conditional sale or sale with condition of repurchase?

Bare reading of the

registered Sale Deed dated 21.02.1980 shows that the plaintiff and his
father sold the suit land to the defendants for an amount of Rs.6000/
without any condition for repurchase. Though the plaintiffs relied on
the agreement dated 29.06.1986 by which the defendants agreed to
reconvey the suit land in their favour, that agreement was not admitted
by the defendants. Even the plaintiffs failed to prove the same by
cogent evidence to show that the said agreement was duly signed by
the defendants.

In order to consider as to whether the document is a document of
mortgage by conditional sale, or is a sale with condition of repurchase,
the distinction between two transactions must be borne in mind. In the
former case, there is a relationship of debtors and creditors and the
transfer is by way of security for repayment of debt, whereas in the
later case, there is condition of reconveyance in the event the amount
equivalent to the consideration is paid by the vendor to the purchaser.
If the condition of repurchase is contained in a separate deed, the
original sale deed can never be regarded as mortgage in view of the
provisions of Section 58(c) of the Transfer of Property Act, 1882.
It is true that the condition of the repurchase is not contained in
the document of transfer itself, but it is contained in a separate
document. The document of transfer cannot be regarded as a mortgage
by a conditional sale, in view of provisions of Section 58(c) of the
Transfer of Property Act, where a condition is contained in a separate
document. The deed of transfer would be regarded as an outandout
sale and the condition contained in a separate document would only be
regarded as separate agreement for reconveyance. In that event, the
conditions for reconveyance including condition of time would be
required to be strictly complied. In case of Agreement for Sale of
immovable property, time is generally not an essence of Contract.
However, the Agreement to reconvey is essentially entered by the
purchaser with the vendor in the nature of concession, wherein timewould ordinarily be regarded as an essence of contract. In that event,
the original vendor would be required to strictly comply with the
conditions including the condition of time, contained in the agreement
of reconveyance.
Admittedly, in the case in hand, there was no provision in the
Sale deed dated 21.02.1980 to reconvey the property to the plaintiffs.
There was an alleged separate agreement dated 29.06.1986.
Therefore, in view of Section 58(c) of the Transfer of Property Act, in
view of the Judgment of the Apex Court in the matter of Vanchalabai
(supra) and in the matter of C. Cheriathan (Supra), it is crystal clear
that on the basis of sale deed dated 21.02.1980 and the subsequent
agreement dated 29.06.1986, the plaintiffs are not entitled for decree
to direct the defendants to execute the reconveyance in respect of the
suit land in their favour. These facts are properly considered by the
Appellate Court, hence, I do not find any reason to interfere in the well

reasoned order on this point.

IN THE HIGH COURT OF JUDICATURE AT BOMBAY.
CIVIL APPELLATE JURISDICTION.
SECOND APPEAL NO. 161 OF 2013
WITH
CIVIL APPLICATION NO. 502 OF 2013
Shri. Nanda @ Sadanand Dattu Barmukh
Vs
Shri. Chhotubhai Kasambhai Inamdar
CORAM : K. K. TATED, J.
DATED : 04/09/2015.
Citation; 2016(2) ALLMR162

https://www.lawweb.in/2016/05/what-is-distinction-between-mortgage-by.html