1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY, BENCH AT AURANGABAD SECOND APPEAL NO. 119 OF 2005 Baburao Rajaram Shinde (deceased through LRs) & others .. APPELLANTS VERSUS Namdeo s/o Tukaram Gadhave (deceased through LRs) & another .. RESPONDENTS Shri V.M. Maney, Advocate for the appellants. Shri S.K. Shinde, Advocate for respondent nos. 1A to 1C. ===== CORAM : R. M. BORDE, J. DATE : 21 st August, 2009 PER COURT : 1 This is an appeal by original defendants raising exception to the judgment an decree passed by the Additional District Judge, Kopergaon on 2-9-2004 in Regular Civil Appeal no. 948/1988 whereby the appeal presented by the plaintiff came to be allowed and the suit presented by the plaintiff claiming redemption of mortgage came to be decreed. 2 Plaintiff instituted suit claiming redemption of mortgage. It is 2 contended that the agricultural land being ancestral property belonging to the plaintiff was transferred by virtue of executing the document, mortgage by conditional sale on 26-6-1961. As per the terms contained in the document, the property was to be redeemed within a period of three years. Amount advanced is noted as Rs.1,000/- and the defendants were to remain in possession of the property. As per the terms contained in the document, plaintiff was to repay the amount of Rs.3,000/- borrowed by him within a period of three years and in the event of failure to pay the amount, the sale was to become absolute. On making payment of the amount, it was agreed that the defendants shall re-execute the document. It is the contention of the plaintiff that the document is mortgage by conditional sale. Defendant contended that the document is not a mortgage but the same is the sale with stipulation in respect of transfer of property. 3 Trial court adopted a view that the document in question is a conditional sale and not a mortgage whereas the appellate court has reversed the finding and held that the transaction is a mortgage within meaning of section 58(c) of the Transfer of Property Act. 4 I have perused the judgments recorded by both the courts below. 3 Provisions of section 58(c) of the Transfer of Property Act are thus : 58 ‘Mortgage’, ‘mortgagor’, ‘mortgagee’, ‘mortgage-money’, and ‘mortgage’deed’ defined : (c) Mortgage by conditional sale – Where the mortgagor ostensibly sells the mortgaged property - . on condition that on default of payment of the mortagage-money on a certain date the sale shall become absolute, or . on condition that on such payment being made the sale shall become void, or . on condition that on such payment being made the buyer shall transfer the property to the seller, . the transaction is called a mortgage by conditional sale and the mortgagee a mortgagee by conditional sale: . Provided that no such transaction shall be deemed to be mortgage, unless the condition is embodied in the document which effects or purports to effect the sale. . As per the stipulations contained in the document, father of the plaintiff has borrowed sum of Rs.1,000/- and has put the defendant in possession of the property. The document recites that on repayment of the amount within a period of three years, defendant is required to re-execute the document. In the event of failure to pay amount as stipulated in the 4 document, the document itself was to be considered as absolute sale. Vesting of title thus in accordance with the terms of the document, stands postponed for a period of three years. Considering this aspect of the matter, the first appellate court took a view that the document in question shall have to be construed as mortgage by conditional sale as defined in section 58(c) of the Transfer of Property Act. It has been observed by the Apex court in the matter of Tulsi and others vs. Chandrika Prasad and others reported in 2007(1) Mh.L.J. 893 thus : . In terms of section 58(c) of the Transfer of Property Act, a transaction may be held to be a mortgage with conditional sale if it is evidenced by one document. The condition precedent for arriving at a finding that the transaction involves mortgage by way of conditional sale is that there must be an ostensible sale. It must contain a condition that on default of payment of mortgage money on a certain date, the sale shall become or on condition that on such payment being made the sale shall become void, or on condition that on such payment being made buyer shall transfer the property to the seller. A distinction exists between a mortgage by way of conditional sale and a sale with condition of purchase. In the former the debt subsists and a right to redeem remains with the debtor but in case of the latter the transaction does not evidence an arrangement of lending and borrowing and, thus, right to redeem is not reserved thereby. In the present case, it was clearly stipulated in the deed that in the event the executant repayed the entire consideration by 30-12-1971 the purchaser would reconvey the property and furthermore deliver possession thereof. The sale was to become absolute 5 only when the transferee failed to pay the said amount within the stipulated period. Therefore, the parties intended to enter into a transaction of mortgage and not sale. . Applying the test as laid down by the Apex court in the judgment cited supra, I am of the opinion that the view adopted by the first appellate court is correct. No interference is called for in this appeal. Appeal does not give rise to any substantial question of law. Appeal therefore stands dismissed summarily. Interim relief granted earlier shall stand vacated. 5 In view of dismissal of the appeal, pending civil application, if any, stands disposed of. ( R. M. BORDE, J.) dyb/office/ds119.05.odt