DHARMAJI SHANKAR SHINDE AND OTHERS versus RAJARAM SHRIPAD JOSHI (DEAD) THROUGH LRS. AND OTHERS on 23 April 2019

[2019] 6 S.C.R. 257

DHARMAJI SHANKAR SHINDE AND OTHERS

v.

RAJARAM SHRIPAD JOSHI (DEAD) THROUGH LRs. ANDOTHERS

(Civil Appeal No. 7448 of 2008)

APRIL 23, 2019

[R. BANUMATHI AND R. SUBHASH REDDY, JJ.]

Deeds and Documents – ‘Mortgage by conditional sale’ or‘Sale with a condition to repurchase’ – Respondents-plaintiffs casewas that the suit property was mortgaged by their father in favourof the predecessor-in-interest of the appellants-defendants forRs.2500/- – Pursuant thereto, a Deed (Ex.P-73) was executed bythe parties – According to the respondents the said deed was adeed of ‘mortgage by conditional sale’ with a condition that if theamount is not repaid within a period of five years from the date ofexecution of the deed, then the same would be treated as an absolutesale between the parties conferring absolute right of ownership onpredecessor-in-interest of the appellants-defendants and his legalrepresentatives – It was alleged that father of respondents failed torepay the money within the stipulated period – After death of theirfather, respondents-plaintiffs filed a suit for redemption of themortgage and contended that their father had paid Rs.800 (Ex. P-69) – Appellant-defendant defended the suit on the basis thattransaction was a sale with condition to repurchase – Trial courtdismissed the suit holding that the relationship of debtor and creditorwas not established – First Appellate Court set aside the judgmentof the trial court and held that (Ex. P-73) was a ‘mortgage byconditional sale’ – Aggrieved, appellants preferred second appealbefore the High Court which was dismissed – On appeal, held:Whether the document is a ‘mortgage by conditional sale’ or ‘salewith a condition to repurchase’ is to be ascertained from the intentionof the parties – It is trite law that the intention of the parties shouldbe gathered from the recitals of the document itself – In the instantcase, by perusal of Ex.P-73 it was clear that eight days prior toEx.P-73, father of respondents had borrowed orally a sum ofRs.700/- – Later, when Ex.P-73 was executed, the earlier borrowed

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Aamount of Rs.700 was adjusted from the sale consideration ofRs.2500/- – The intention of the parties in putting an end to thedebtor-creditor relationship with respect to the sum of Rs.700/- wasclear from the recitals of the document i.e. adjustment of Rs.700/-from the total consideration of Rs.2500/- and parties intended tocreate a relationship of vendor and vendee by transfer of the suitBproperty for a consideration of Rs.2500/- – Further, period of fiveyears was fixed in Ex.P-73 within which father of respondents wasto repay the said amount – Thus, clauses in Ex.P-73 were consistentwith the intention of the parties that they made the transaction aconditional sale with an option to repurchase – Having not paidCthe amount within the stipulated period of five years, the plaintiffslost their right to repurchase – Insofar as Ex. P-69 is concerned, itcannot be relied upon as corroborative piece of evidence to holdthat part payment was made by father of respondents and that partiestreated Ex.P-73 as ‘mortgage by conditional sale’ – Therefore, the Judgment of the High Court is set aside – Judgment of the trialDcourt restored – Transfer of Property Act, 1882 – s.58(c).

Allowing the appeals, the Court

Conclusion

HELD: 1. By perusal of Ex.P-73, it is clear that eight daysprior to Ex.P-73, father of respondents-plaintiffs has borrowedEorally a sum of Rs.700/- for the purpose of marriage of hisdaughter. At the time of execution of Ex.P-73 (28.07.1967), fatherof respondents-plaintiffs required more money for the samereason and he executed Ex.P-73-document titled as “mortgageby conditional sale” for a consideration of Rs.2500/- and on thedate of execution of the said document, father of respondents-Fplaintiffs received only a sum of Rs.1800/-. The earlier borrowedamount of Rs.700/- was thus adjusted from the sale considerationof Rs.2500/-. The intention of the parties in putting an end to thedebtor-creditor relationship with respect to the sum ofRs.700/- is clear from the recitals of the document i.e. adjustmentGof Rs.700/- from the total consideration of Rs.2500/- and partiesintending to create a relationship of vendor and vendee by transferof the suit property for a consideration of Rs.2500/-. Period offive years was fixed in Ex.P-73 within which father of therespondents-plaintiffs was to repay the said amount. On the dateof execution of the document (Ex.P-73), the possession of theH

property was handed over to the appellants-defendants forcultivation. Further, recitals are to the effect that if theconsideration amount is paid within five years, father ofrespondents-executant will get the mortgage redeemed. In case,the amount is not paid within the stipulated period of five years,the mortgage shall be treated as an absolute sale and thereafterpredecessor-in-interest of the appellants-defendants to pay theland revenue to the government and all other charges for whichexecutant will have no complaint. The recitals of the documentmake clear the intention of the parties that if the amount is notrepaid within the stipulated period of five years, the transfereewill have absolute right and the mortgage will be treated as anabsolute sale and the transferee to pay the land revenue and theother charges. These clauses in Ex.P-73 are consistent with theintention of the parties making the transaction a conditional salewith an option to repurchase. [Para 16][269-B-G]

2. Mention of “borrowed a sum of Rs.700/-” in the documentis incidental. Mere incorporation of the word “borrowed” and“mortgage by conditional sale” cannot by itself establish that thereis a debtor-creditor relationship. In fact, as pointed out earlier,the recitals of the document make it clear that the partiesexpressed their intention to put an end to the debtor-creditorrelationship with respect to the sum of Rs.700/- that existed priorto the execution of Ex.P-73 and creating a relationship of vendorand vendee by transfer of the suit property for consideration ofRs.2500/-. As rightly observed by the trial court, in Ex.P-73,there is no mention of the rate of interest, right of foreclosurethat are essential in a deed of mortgage. [Para 18][270-D-E]

3. Insofar as Ex.P-69-receipt is concerned, the trial courtpointed out that though PW-1 claims that he was present at thetime of execution of Ex.P-69, PW-1 had not signed in it norattested it, so PW-1’s evidence is of no help to prove the executionof the receipt. Be it noted that though Ex.P-69-receipt was ofthe year 1972, during his life time, based on Ex.P-69-receipt,father of respondents-plaintiffs had not taken any step to redeemthe property. Even after the death of father of respondents-plaintiffs in 1973, Ex.P-69-receipt did not see the light of the daytill 1980 when the notice was said to have been issued by the AB

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Arespondents-plaintiffs. In these factual circumstances, it cannotbe said that the plaintiffs have discharged the burden in provingEx.P-69-receipt as genuine to hold that the parties had intendedthat Ex.P-73-document is only a “mortgage by conditional sale”and not a sale with condition to repurchase. The receipt Ex.P-69cannot be relied upon as corroborative piece of evidence to holdBthat part payment was made by father of respondents-plaintiffsand that the parties treated Ex.P-73 as a “mortgage by conditionalsale”. [Para 25][273-C-E]

4. Though the transaction and condition to repurchase areembodied in one document, having regard to the intention of theCparties and the surrounding circumstances, Ex.P-73 does not fallwithin the proviso to Section 58(c) of the Transfer of PropertyAct. Ex.P-73 a registered document, is not a mortgage but atransaction of sale with condition to repurchase. The High Courtand the first Appellate Court did not properly appreciate the Drecitals in Ex.P-73 and that it does not create expressly or byimplication the relationship of debtor and creditor. The High Courtfailed to note that since father of respondents-plaintiffs failed topay the amount within the stipulated period of five years, therespondents-plaintiffs have lost their right to repurchase theproperty. When the findings of the first Appellate Court and theEHigh Court though concurrent, where they are shown to beperverse, this Court would certainly interfere with the findingsof fact recorded by the courts below. The High Court has notproperly appreciated the evidence and Ex.P-73 in the light of thesurrounding circumstances and the impugned judgment is liableFto be set aside. [Para 27][274-A-D]

Bhaskar Waman Joshi (deceased) v. Shri NarayanRambilas Agarwal (deceased) [1960] 2 SCR 117 –referred to.

Chunchun Jha v. Ebadat Ali and another AIR 1954 SCG345 : [1955] SCR 174 – relied on.

Vithal Tukaram Kadam and another v. VamanraoSawalaram Bhosale and others (2018) 11 SCC 172 :[2017] 8 SCR 379 – distinguished.

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DHARMAJI SHANKAR SHINDE v. RAJARAM SHRIPADJOSHI (D) THR. LRs.

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CIVIL APPELLATE JURISDICTION : Civil Appeal No. 7448of 2008.

From the Judgment and Order dated 15.11.2006 of the HighCourt of Bombay in Second Appeal No. 887 of 2003.

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Civil Appeal No. 7449 of 2008.

Ms. Qurratullain, Brij Kishor Sah, Shivaji M. Jadhav (for M/S.S.M. Jadhav And Company), Advs. for the Appellants.

Arvind S. Avhad, Rajat Kapoor, Ms. Abha R. Sharma, Ms. SujataKurdukar, Advs. for the Respondents.

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The Judgment of the Court was delivered by

R. BANUMATHI, J.

1. These appeals arise out of the judgment dated 15.11.2006 passedby the High Court of Bombay dismissing the Second Appeal No.887 of2003 thereby upholding the decision of the first Appellate Court holdingthat Ex.P-73 is a “mortgage by conditional sale” and that the respondents-plaintiffs are entitled to redeem the suit property upon payment of thebalance amount.

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2. Facts giving rise to these appeals are that the respondents-plaintiffs filed a suit for redemption of the suit property bearing S.No.147present G.No.750 admeasuring 2 Hectares 18 Are situated in villageKudal, Jawli taluka and district Satara. Case of the respondents-plaintiffsis that the suit property was mortgaged by their father Shripad Joshi on28.07.1967 in favour of Shankar Shinde who is the predecessor-in-interestof the appellants-defendants for Rs.2500/-. The said deed (Ex.P-73) isa deed of “mortgage by conditional sale” with a condition that if theamount is not repaid within a period of five years from the date ofexecution of the deed, then the same would be treated and construed asan absolute sale between the parties conferring absolute right of G

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Aownership on Shankar Shinde and his legal representatives. As per therecitals in the document, the possession of the suit property was alsohanded over to Shankar Shinde on the date of execution of the deed.The respondents-plaintiffs further averred that on 26.07.1972, their fatherhad paid an amount of Rs.800/- to Shankar Shinde and to that effectEx.P-69-receipt was executed. Shripad Joshi died in the year 1973 andBthe respondents-plaintiffs succeeded to his estate. Further case of therespondents-plaintiffs is that in spite of repeated request to the appellants-defendants for redemption of the suit property and delivery of possessionof the property, they failed to receive the money and had not handedover the possession of the property. After issuance of legal notice datedC19.02.1980, the plaintiffs filed the suit for redemption of the mortgage.

3. The appellants-defendants resisted the suit contending that thetransaction between their father-Shankar Shinde and the father of therespondents-plaintiffs-Shripad Joshi was a sale with condition torepurchase within a stipulated period of five years. Case of defendantsDis that since Shripad Joshi, father of the respondents-plaintiffs failed torepay the money within the stipulated period of five years and failed totake any step to get the property reconveyed to them, after the period offive years as per the terms and conditions of Ex.P-73, father of theappellants-defendants Shankar Shinde has become the absolute ownerof the suit property and the plaintiffs have no right, title or interest in theEsuit property.

4. The trial court dismissed the respondents-plaintiffs suit by holdingthat the relationship of debtor and creditor is not established and therespondents have failed to prove that the transaction (Ex.P-73) was amortgage and therefore, they are not entitled to redemption and possessionFof the suit property. After referring to the recitals in Ex.P-73, the trialcourt held that the respondents-plaintiffs have agreed that if ShripadJoshi does not pay the amount within stipulated period of five years, thesaid document was to be treated as sale deed and in his life time executantShripad Joshi did not take any action to get the property reconveyed.GThe trial court also held that Ex.P-69-receipt has not been proved by therespondents-plaintiffs and the respondents-plaintiffs are not entitled tothe decree prayed for by them.

5. In appeal, the first Appellate Court set aside the judgment ofthe trial court by holding that Ex.P-73 is a “mortgage by conditionalsale” and not an absolute sale deed or a sale with a condition toH

repurchase. The first Appellate Court held that payment of Rs.800/- byShripad Joshi has been proved and that the respondents have proved theexecution of Ex.P-69-receipt by examining Prabhakar (PW-2) who isthe son of the scribe of Ex.P-69-receipt. The first Appellate Court heldthat Ex.P-73 was a “mortgage with conditional sale” as per proviso toclause (c) of Section 58 of the Transfer of Property Act and that therespondents are entitled to redeem the mortgage subject to the paymentof balance amount of Rs.1700/-. Being aggrieved by the judgment ofthe first Appellate Court, the appellants preferred second appeal beforethe High Court which came to be dismissed by the impugned judgment.

6. Taking us through the evidence and materials on record, thelearned counsel for the appellants submitted that the amount ofRs.2500/- was paid by Shankar Shinde as consideration for the sale andthe recitals in Ex.P-73-document clearly show that the transaction wasa sale with condition for reconveyance. It was submitted that during thefive years, original owner Shripad Joshi did not repay the amount withinthe stipulated period of five years and take steps to get reconveyance ofthe property and therefore, the document dated 28.07.1967 has becomean absolute sale. It was submitted that merely because the clauseregarding sale and agreement to repurchase are embodied in the samedocument, proviso to clause (c) of Section 58 of the Transfer of PropertyAct is not attracted and it cannot be said that the transaction is a mortgage.It was urged that the first Appellate Court and the High Court failed toconsider the intention of the parties and the surrounding circumstanceswhich clearly show that the parties intended Ex.P-73 to be a transactionof sale with condition to repurchase and not mortgage by conditionalsale. It was further submitted that the execution of Ex.P-69-receipt hasnot been proved by the plaintiffs and the first Appellate Court and theHigh Court erred in reversing the well-considered judgment of the trialcourt.

7. Per contra, the learned counsel for the respondents-plaintiffssubmitted that since the sale and agreement to repurchase are embodiedin the same document, in view of the mandatory provision of the provisoto clause (c) of Section 58 of the Transfer of Property Act, the transactionis to be treated as a “mortgage by conditional sale” which the respondents-plaintiffs are entitled to redeem. According to the respondents-plaintiffs,though the words “….conditional sale….” have been used in the Ex.P-73, parties intended it to be only a mortgage and not a conditional sale AB

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Awith condition to repurchase. The learned counsel for the respondents-plaintiffs contended that the first Appellate Court rightly accepted Ex.P-69-receipt under which the plaintiffs paid a sum of Rs.800/- and the firstAppellate Court rightly held that the document dated 28.07.1967 is a“mortgage by conditional sale” and not a sale with condition forreconveyance.B

8. We have heard Ms. Qurratulain, learned counsel for theappellants and Mr. Arvind S. Avhad, learned counsel for the respondents-plaintiffs and perused the impugned judgment and the judgment of thetrial court and materials placed on record.

C9. In these appeals, the question falling for consideration is theinterpretation of Ex.P-73-document dated 28.07.1967. Uponconsideration of the submissions, the following questions arise fordetermination in these appeals:-

(i) Whether the respondents-plaintiffs are right in contendingDthat in view of the statutory provision viz. proviso toclause (c) of Section 58 of the Transfer of Property Act,Ex.P-73-document dated 28.07.1967 is to be held as amortgage by conditional sale?

(ii) Whether the clause in Ex.P-73-document that in case of nonEpayment of the amount within the stipulated period of fiveyears, the sale will become permanent and the transfereewill have an absolute right are not consistent with the intentionof the parties of making the transaction a conditional salewith an option to repurchase?

10. Section 58(c) of the Transfer of Property Act contains theFdefinition of “mortgage by conditional sale”. In a “mortgage by conditionalsale”, the transfer is made as a security to a loan taken by the mortgagor-owner; whereas in a “sale with a condition to repurchase”, the sale ismade by the vendor-owner reserving with himself a right to repurchaseit within a stipulated time. A sale with a condition of retransfer is not aGmortgage since the relationship of debtor and creditor does not exist andthere is no debt for which the transfer is made as a security. Whetherthe document is a “mortgage by conditional sale” or “sale with a conditionto repurchase” is to be ascertained from the intention of the parties. It istrite law that the intention of the parties should be gathered from therecitals of the document itself.H

11. Section 58(c) of the Transfer of Property Act deals with“mortgage by conditional sale” which reads as under:- “58. …….

(c) Mortgage by conditional sale.—Where the mortgagorostensibly sells the mortgaged property—

on a condition that on default of payment of the mortgage-money on a certain date the sale shall become absolute, or on condition that on such payment being made the sale shallbecome void, or on a condition that on such payment being made the buyershall transfer the property to the seller, the transaction is called a mortgage by conditional sale and themortgagee, a mortgagee by conditional sale:

Provided that no such transaction shall be deemed to be amortgage, unless the condition is embodied in the documentwhich effects or purports to effect the sale.”

(emphasis added)

12. Proviso to Section 58(c) was added by Act 20 of 1929. Priorto the amendment, there was a conflict of decisions on the questionwhether the condition contained in a separate deed could be taken intoaccount in ascertaining whether a mortgage was intended by the principaldeed. The conflict was resolved by adding proviso to Section 58(c).Considering the scope of proviso to Section 58(c) which was added byAct 20 of 1929 and elaborating upon the distinction between “mortgageby conditional sale” and “sale with agreement to repurchase”, in BhaskarWaman Joshi (deceased) v. Shri Narayan Rambilas Agarwal(deceased) (1960) 2 SCR 117 : AIR 1960 SC 301, it was held as under:- “6. The proviso to this clause was added by Act 20 of 1929. Priorto the amendment there was a conflict of decisions on the questionwhether the condition contained in a separate deed could be takeninto account in ascertaining whether a mortgage was intended bythe principal deed. The Legislature resolved this conflict by enactingthat a transaction shall not be deemed to be a mortgage unless thecondition referred to in the clause is embodied in the document A

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which effects or purports to effect the sale. But it does not followthat if the condition is incorporated in the deed effecting orpurporting to effect a sale a mortgage transaction must of necessityhave been intended. The question whether by the incorporationof such a condition a transaction ostensibly of sale may be regardedas a mortgage is one of intention of the parties to be gatheredfrom the language of the deed interpreted in the light of thesurrounding circumstances. The circumstance that the conditionis incorporated in the sale deed must undoubtedly be taken intoaccount, but the value to be attached thereto must vary with thedegree of formality attending upon the transaction. The definitionof a mortgage by conditional sale postulates the creation by thetransfer of a relation of mortgagor and mortgagee, the price beingcharged on the property conveyed. In a sale coupled with anagreement to reconvey there is no relation of debtor and creditornor is the price charged upon the property conveyed, but the saleis subject to an obligation to retransfer the property within theperiod specified. What distinguishes the two transactions is therelationship of debtor and creditor and the transfer being a securityfor the debt. The form in which the deed is clothed is not decisive.The definition of a mortgage by conditional sale itself contemplatesan ostensible sale of the property. ……”

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13. As per proviso to Section 58(c), if the sale and agreement torepurchase are embodied in the separate documents then the transactioncannot be a “mortgage by conditional sale” irrespective of whether thedocuments are contemporaneously executed; but the converse does nothold good. Observing that the mere fact that there is only one document,Fit does not necessarily mean that it must be a mortgage and cannot be asale, in Chunchun Jha v. Ebadat Ali and another AIR 1954 SC 345, itwas held as under:- “6. The first is that the intention of the parties is the determiningfactor:see Balkishen Das v. Legge 27 IA 58. But there is nothingspecial about that in this class of cases and here, as in every othercase where a document has to be construed, the intention mustbe gathered, in the first place, from the document itself. If thewords are express and clear, effect must be given to them andany extraneous enquiry into what was thought or intended is ruledout. The real question in such a case is not what the parties intended G

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or meant but what is the legal effect of the words which theyused. If, however, there is ambiguity in the language employed,then it is permissible to look to the surrounding circumstances todetermine what was intended. As Lord Cranworth said in Aldersonv. White 44 ER 294 at 928:

“The rule of law on this subject is one dictated bycommonsense; that prima facie an absolute conveyance,containing nothing to show that the relation of debtor andcreditor is to exist between the parties, does not cease to be anabsolute conveyance and become a mortgage merely becausethe vendor stipulates that he shall have a right to repurchase….In every such case the question is, what, upon a fair construction,is the meaning of the instruments?”

7. Their Lordships of the Privy Council applied this rule to India inBhagwan Sahai v. Bhagwan Din 17 IA 98 at 102 and in JhandaSingh v. Wahid-ud-din 43 IA 284 at 293.

8. The converse also holds good and if, on the face of it, aninstrument clearly purports to be a mortgage it cannot be turnedinto a sale by reference to a host of extraneous and irrelevantconsiderations. Difficulty only arises in the border line cases wherethere is ambiguity. Unfortunately, they form the bulk of this kindof transaction.

9. Because of the welter of confusion caused by a multitude ofconflicting decisions the legislature stepped in and amended Section58(c) of the Transfer of Property Act. Unfortunately that broughtin its train a further conflict of authority. But this much is nowclear. If the sale and agreement to repurchase are embodied inseparate documents, then the transaction cannot be a mortgagewhether the documents are contemporaneously executed or not.But the converse does not hold good, that is to say, the mere factthat there is only one document does not necessarily mean that itmust be a mortgage and cannot be a sale. If the condition ofrepurchase is embodied in the document that effects or purportsto effect the sale, then it is a matter for construction which wasmeant. The legislature has made a clear cut classification andexcluded transactions embodied in more than one document fromthe category of mortgages, therefore it is reasonable to suppose A

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Athat persons who, after the amendment, choose not to use twodocuments, do not intend the transaction to be a sale, unless theydisplace that presumption by clear and express words; and if theconditions of Section 58(c) are fulfilled, then we are of opinionthat the deed should be construed as a mortgage. (emphasis added)

BIn Chunchun Jha, after considering the recitals in the documentthereon and the surrounding circumstances thereon, the Supreme Courtheld that there was a relationship of debtor and creditor between theparties existing at the time of the suit transaction.

14. The question in each case is the determination of the realCcharacter of the transaction to be ascertained from the provisions of thedeed viewed in the light of the surrounding circumstances. If the wordsare plain and unambiguous then in the light of the evidence of thesurrounding circumstances, it must be given their true legal effect. Ifthere is any ambiguity in the language employed, the intention is to beascertained from the contents of the deed and the language of the deedDis to be taken into consideration to ascertain the intention of the parties.Evidence of contemporaneous conduct of the parties is to be taken intoconsideration as the surrounding circumstances.

15. After referring to number of judgments and the essentials ofagreement to qualify as a “mortgage by conditional sale”, in VithalETukaram Kadam and another v. Vamanrao Sawalaram Bhosaleand others (2018) 11 SCC 172, it was held as under:- “14. The essentials of an agreement to qualify as a mortgage byconditional sale can succinctly be broadly summarised. Anostensible sale with transfer of possession and ownership, butFcontaining a clause for reconveyance in accordance with Section58(c) of the Act, will clothe the agreement as a mortgage byconditional sale. The execution of a separate agreement forreconveyance, either contemporaneously or subsequently, shallmilitate against the agreement being mortgage by conditional sale.GThere must exist a debtor and creditor relationship. The valuationof the property and the transaction value along with the durationof time for reconveyance are important considerations to decidethe nature of the agreement. There will have to be a cumulativeconsideration of these factors along with the recitals in theagreement, intention of the parties, coupled with other attendantHcircumstances, considered in a holistic manner.”

In the light of the consistent view taken in various decisions, let usconsider whether Ex.P-73 is a “mortgage by conditional sale” or a “salewith condition for reconveyance” and whether there exists any debtorand creditor relationship.

16. Intention of the parties as seen from the recitals ofEx.P-73:- By perusal of Ex.P-73, it is clear that eight days prior toEx.P-73, Shripad Joshi has borrowed orally a sum of Rs.700/- for thepurpose of marriage of his daughter. At the time of execution of Ex.P-73 (28.07.1967), Shirpad Joshi required more money for the same reasonand he executed Ex.P-73-document titled as “mortgage by conditionalsale” for a consideration of Rs.2500/- and on the date of execution ofthe said document, Shripad Joshi received only a sum of Rs.1800/-. Theearlier borrowed amount of Rs.700/- was thus adjusted from the saleconsideration of Rs.2500/-. The intention of the parties in putting an endto the debtor-creditor relationship with respect to the sum of Rs.700/- isclear from the recitals of the document i.e. adjustment of Rs.700/- fromthe total consideration of Rs.2500/- and parties intending to create arelationship of vendor and vendee by transfer of the suit property for aconsideration of Rs.2500/-. Period of five years was fixed in Ex.P-73within which Shirpad Joshi-father of the respondents-plaintiffs was torepay the said amount. On the date of execution of the document (Ex.P-73), the possession of the property was handed over to the appellants-defendants for cultivation. Further, recitals are to the effect that if theconsideration amount is paid within five years, Shripad Joshi-executantwill get the mortgage redeemed. In case, the amount is not paid withinthe stipulated period of five years, the mortgage shall be treated as anabsolute sale and thereafter Shankar Shinde to pay the land revenue tothe government and all other charges for which executant will have nocomplaint. The recitals of the document make clear the intention of theparties that if the amount is not repaid within the stipulated period of fiveyears, the transferee will have absolute right and the mortgage will betreated as an absolute sale and the transferee to pay the land revenueand the other charges. These clauses in Ex.P-73, in our view, areconsistent with the intention of the parties making the transaction aconditional sale with an option to repurchase.

17. Admittedly, executant of Ex.P-73, Shripad Joshi expired in theyear 1973 and till his life time, he never took any action or step to get theproperty reconveyed. After death of Shripad Joshi in the year 1973, no A

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Aimmediate action was taken by his successor. Obviously, all thelegal action were started in the year 1980 by the present plaintiffs basedupon a receipt-Ex.P-69 dated 26.07.1972 under which an amount ofRs.800/- is said to have been paid to Shankar Shinde. Much emphasishas been placed by the respondents-plaintiffs on Ex.P-69-receipt whichwe would refer a little later. When being confronted with the recitals inBEx.P-73, in his cross-examination, PW-1-Rajaram Joshi admitted that“the transaction was that of sale with the condition of repurchase”and “neither parties are described therein as mortgagor ormortgagee”. Admission of PW-1 is a formidable evidence indicatingthe intention of the parties. Having not paid the amount within theCstipulated period of five years, the plaintiffs have lost their right torepurchase.

18. Mention of “borrowed a sum of Rs.700/-” in the documentis incidental. Mere incorporation of the word “borrowed” and “mortgageby conditional sale” cannot by itself establish that there is a debtor-Dcreditor relationship. In fact, as pointed out earlier, the recitals of thedocument make it clear that the parties expressed their intention to putan end to the debtor-creditor relationship with respect to the sum ofRs.700/- that existed prior to the execution of Ex.P-73 and creating arelationship of vendor and vendee by transfer of the suit property forconsideration of Rs.2500/-. As rightly observed by the trial court, inEEx.P-73, there is no mention of the rate of interest, right of foreclosurethat are essential in a deed of mortgage.

19. The contention of the respondents is that in view of themandatory provisions of the proviso to clause (c) of Section 58 of theAct, since the sale and the agreement to repurchase are embodied in theFsame document (Ex.P-73), the transaction is to be taken as a mortgageand the conditions enumerated in proviso to Section 58(c) of the Transferof Property Act have been satisfied in the present case. On behalf ofthe respondents, it was submitted that the existence of creditor-debtorrelationship can be derived from the recital in the document “I haveGborrowed”. As pointed out earlier, there are no recitals in the documentto establish creditor-debtor relationship; nor does it contain the right offoreclosure, payment of interest etc. which are essential requirementsin a deed of mortgage.

20. As per Section 58(a) of the Transfer of Property Act, theHmortgage is the transfer of an interest in specific immovable property as security for the repayment of the debt; but such interest itself is immovableproperty. In the case in hand, non-mention of the mortgage amount forwhich the interest in the immovable property was created as security,indicate that the parties have never intended to create a mortgage deed.If really the parties have intended the transaction to be a mortgage,while handing over possession of the property to Shankar Shinde forcultivation, the parties would have stated that the cultivation andenjoyment of usufructs are in lieu of the interest payable by ShripadJoshi on the amount. But that was not to be so. The transfer of possessionand right to cultivate the suit land could be conceived as the intention ofthe executant to transfer the right, title and interest in the property whichare essentials in any transaction of a sale.

21. Moreover, as per the clauses in Ex.P-73-document, thepossession of the suit property was also handed over to Shankar Shinde-father of the appellants. Though, it is stated that the transferee-ShankarShinde was to pay the revenue to the government after five years,according to the appellants, ever since 1967, land revenue was paid bythe father of the appellants. In his evidence, PW-1 admitted that revenuecess of the suit property has been paid by Shankar Shinde from 1967and after his demise, by his legal heirs. Likewise, a mutation was alsoeffected in the name of Shankar Shinde even in the year 1967. Duringhis life time, father of the respondents-Shripad Joshi has not raised any objection to the mutation nor for the payment of the revenue cess byShankar Shinde. Considering the contemporaneous conduct of the parties,it is clear that Shankar Shinde and thereafter the appellants were dealingwith the suit property as if they were the owners of the land. The clausein Ex.P-73 that if the amount is not paid within a period of five years, thetransaction will become a permanent sale deed and thereafter, thetransferee will have the absolute right over the property are consistentwith the express intention of parties making the transaction a conditionalsale with option to repurchase.

22. The respondents-plaintiffs contended that the market value ofthe suit property was higher than the transaction value and therefore,Ex.P-73 is to be construed as a mortgage. In support of their contention,reliance was placed upon the judgment in Vithal Tukaram. The factsin Vithal Tukaram are clearly distinguishable with the facts and evidenceon record in the present case. In that case, the value of the land wasRs.3500/- far in excess of the amount of Rs.700/- mentioned in the AB

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Adocument. Considering the evidence of the respondent-defendant thereonand the facts of the said case, the Supreme Court held that the value ofthe land was far in excess of Rs.700/- mentioned in the agreement.Further, in the said case, the defendant thereon did not take any step formutation of the land for three long years and the plaintiff thereonspecifically objected to mutation in the name of respondent-defendant.BThe case in hand is clearly distinguishable on facts.

23. In the present case, there are no averments in the plaint as tothe market value of the property and as to the inadequacy of theconsideration. In his evidence, PW-1 has stated that the transaction ofabsolute sale could have been worth Rs.60,000-70,000/- in the year 1967;Cbut the respondents-plaintiffs have not produced the certificate ofvaluation of the land or the circle rate of the property at the time whenEx.P-73 was executed. The appellants contended that the suit propertywas sold for a proper consideration and relied upon the transaction thattook place in the village in the year 1957 to establish that the saleDconsideration is appropriate. The trial court while deciding issue No.4has held that the respondents-plaintiffs have failed to adduce any evidenceto show that the market value of the suit property in the year 1967 wasmuch more than what was paid by the appellants-defendants.

24. The respondents-plaintiffs have placed much reliance uponEEx.P-69-receipt to show that Shripad Joshi paid an amount of Rs.800/-to Shankar Shinde who in turn executed the receipt dated 26.07.1972 infavour of his father and at that time, PW-1 was also present. Theappellants-defendants contend that Ex.P-69-receipt is forged. Admittedly,neither parties to Ex.P-69-receipt nor the scribe who wrote the receiptare alive. In the light of defence plea questioning the correctness ofFEx.P-69, the burden of proof is on the respondents-plaintiffs to adducethe best possible evidence to prove Ex.P-69-receipt. The respondents-plaintiffs examined PW-2-Prabhakar, son of the scribe-Gopal TukaramShivade to identify the handwriting and signature of the scribe of Ex.P-69. In his evidence, PW-2 stated that he is acquainted with the handwritingGand signature of his father and that Ex.P-69-receipt was written by hisfather.

25. Gopal Tukaram Shivade-scribe, father of PW-2, was a PolicePatil of Kudal for ten years and he expired in the year 1990. Ex.P-69-receipt was of the year 1972 and PW-2 was examined in the year 1994.

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After perusal of Ex.P-69-receipt, the trial court held that there are glaringdefects in the said receipt i.e. faded and incomplete thumb impression ofShankar Shinde on the revenue stamp. The trial court has observed thatexcept the evidence of PW-2, no other evidence has been adduced bythe respondents-plaintiffs to prove Ex.P-69-receipt. Since the scribewas a Police Patil of Kudal, it was very much possible for the respondents-plaintiffs to prove the execution of the document by producing the admittedhandwriting of the scribe so as to compare them with the questionedwriting in the receipt. The trial court also pointed out that though PW-1-Rajaram Joshi claims that he was present at the time of execution ofEx.P-69, PW-1 had not signed in it nor attested it, so PW-1’s evidenceis of no help to prove the execution of the receipt. Be it noted thatthough Ex.P-69-receipt was of the year 1972, during his life time, basedon Ex.P-69-receipt, Shripad Joshi had not taken any step to redeem theproperty. Even after death of Shripad Joshi in 1973, Ex.P-69-receipt didnot see the light of the day till 1980 when the notice was said to havebeen issued by the respondents-plaintiffs. In these factual circumstances,it cannot be said that the plaintiffs have discharged the burden in provingEx.P-69-receipt as genuine to hold that the parties had intended thatEx.P-73-document is only a “mortgage by conditional sale” and not asale with condition to repurchase. The receipt Ex.P-69 cannot be reliedupon as corroborative piece of evidence to hold that part payment wasmade by Shripad Joshi and that the parties treated Ex.P-73 as a “mortgageby conditional sale”.

26. When Ex.P-73 is clear and unambiguous, the first AppellateCourt erred in relying upon Ex.P-69-receipt to draw inference as to theintention of the parties. The first Appellate Court did not keep in viewthat the appellants-defendants have denied Ex.P-69-receipt, hence,burden lies upon the plaintiffs to prove the contents of Ex.P-69 to bringin the intention of the parties that the transaction between the partieswas only a “mortgage by conditional sale”. When the recitals inEx.P-73-document is sufficient to gather the intention of the parties, thefirst Appellate Court erred in placing reliance on Ex.P-69-receipt toascertain the intention of the parties to upset the findings of fact recordedby the trial court. The findings of the first Appellate Court and the HighCourt in placing reliance upon Ex.P-69-receipt to conclude that thetransaction was a mortgage and not a sale are erroneous and the samecannot be sustained.

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A27. Though the transaction and condition to repurchase areembodied in one document, having regard to the intention of the partiesand the surrounding circumstances, in our considered view, Ex.P-73 doesnot fall within the proviso to Section 58(c) of the Transfer of PropertyAct. Ex.P-73 a registered document, in our considered view, is not amortgage but a transaction of sale with condition to repurchase. TheBHigh Court and the first Appellate Court did not properly appreciate therecitals in Ex.P-73 and that it does not create expressly or by implicationthe relationship of debtor and creditor. The High Court failed to note thatsince Shripad Joshi failed to pay the amount within the stipulated periodof five years, the respondents-plaintiffs have lost their right to repurchaseCthe property. When the findings of the first Appellate Court and theHigh Court though concurrent, whey they are shown to be perverse, thisCourt would certainly interfere with the findings of fact recorded by thecourts below. The High Court has not properly appreciated the evidenceand Ex.P-73 in the light of the surrounding circumstances and theimpugned judgment is liable to be set aside.

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