Case: GANPATI BABJI ALAMWAR (D) BY LRS Vs. DIGAMBARRAO VENKATRAO BHADKE AND ORS.

2. The parties shall be referred to by their original position in the suit for convenience. The plaintiffs purchased daily necessities from the shop of defendant no.1 on credit. A sum of Rs.10,500/- became outstanding after verification of accounts. On 26.04.1970, the plaintiffs executed an instalment bond, Exhibit 53, to pay the dues in three yearly instalments on the occasion of Gudi Padwa in 1971, 1972 and 1973. The plaintiffs defaulted in payment of the first instalment itself. On 29.04.1971, Exhibit 52, the plaintiffs executed a conditional sale deed for sale of their agricultural lands measuring 2½ acres in favour of defendant no.1 for a sum of Rs.11,000/-. The earlier dues of Rs.10,500/- formed part of the consideration. The plaintiffs admitted having received a sum of Rs.500/- earlier. The agreement provided that the plaintiffs upon repayment of the dues by Gudi Padwa of 1973 shall be entitled to reconveyance of the lands. In the event of their failure to do so, the sale would become absolute. The plaintiffs having failed to repay the dues, defendant no.1 obtained mutation of the lands in his name on 13.05.1976 and sold the lands to defendant no.2 by a registered sale deed dated 13.02.1978. The plaintiffs thereafter filed the suit for redemption in the year 1980.3. The Civil Judge held that the nature of the document coupled with the recitals therein and conduct of the plaintiff, left him in no doubt that the document was a sale deed. The First Appellate Court and the High Court on an interpretation of the document held it to be a mortgage by conditional sale, opining that their existed the relationship of a debtor and a creditor, and not that of a transferor or transferee. Thus, the present appeal.

Court's reasoning:
7. The plaintiffs owed Rs.10,500/- to defendant no.1 for credit purchases of daily necessities from the shop of the latter. The instalment bond was executed by the plaintiffs on 26.04.1970, to repay the amount in three instalments falling due on the Gudi Padwa day in 1971, 1972 and 1973. On failure to pay the first instalment in 1971, the agreement in question, Exhibit 52, came to be executed on 29.04.1971. Defendant no.1 got the mutation done in his name after notice to the plaintiffs on 13.05.1976, i.e. three years after the last date for payment of instalments on Gudi Padwa in 1973. Defendant no.1 then resold the land to defendant no.2 on 13.02.1978. The suit for redemption of mortgage was filed in 1980.In the light of the aforesaid discussion and the facts of the present case, an examination of the recitals in the agreement dated 29.04.1971 holistically, including the heading of the document, we are left with no doubt that it was not a sale deed with an option for repurchase but a document of mortgage by conditional sale. An agriculturist will normally not so easily dispose his agricultural land, the source of his survival and livelihood merely for purchases made by him on credit. The dire financial straits of the plaintiffs is evident from the fact that they were left with no option but to mortgage 2½ acres of their agricultural lands for credit purchase of daily necessities. The financial stringency of the plaintiffs is apparent from their failure to repay anything even after execution of the instalment bond. Given the limitations of the plaintiffs because of their poor financial status, the fact that they may not have objected to the mutation so done three years later cannot be considered as sufficient for a contrary interpretation of the agreement dated 29.04.1971, especially when the Appellate Court held that the plaintiffs were in possession of the lands. In the facts of the case, a debtor and creditor relationship stands clearly established and hardly needs further elucidation. The limitation for the right to redeem, under Article 61(a) of the Limitation Act 1963, is 30 years. The suit for redemption was therefore within limitation. In the facts of the present case, we do not consider the delay of seven years in filing the suit so fatal, as to disinherit the plaintiff from his agricultural lands.The observations in Vithal Tukaram Kadam (supra) that attendant surrounding circumstances should be considered, and upon which learned counsel for the appellant laid much emphasis, in our opinion is of no avail to him in the facts and circumstances of the present case. The question whether the appellant was a bonafide purchaser or not cannot be considered relevant in the facts of the present case and may require further evidence. It is therefore left open for consideration vis-à-vis defendant no.1 in an appropriate proceeding if instituted by the appellant.