Karnataka High Court
Suryakanth S/O Shivasharanappa Godi vs Amruth Rao S/O Veerabhadrappa Kattergi on 9 April, 2012
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the appellant refused to re-convey the property.
Therefore, the first respondent has prayed for specific performance •of Ex.P. 1 and permanent injunction restraining the appellant from withdrawing the compensation amount.
33. The first defendant i.e.. the appellant has contended that the first respondent approached the appellant offering to sell the suit property for a sum of t80.000/- in the year 1990. A sale agreement dated 22.6.1990 was executed in favour of the appellant agreeing to sell the stilt property for a sum of t80.000/-
and a sum of ?.50,000/- was paid as advance. The first respondent Issued receipt as per Ex.D.3. Thereafter. the first respondent executed sale deed on 240 July, 1991 as per Ex.D. 1 by receiving the balance amount of t30,000/-. The sale deed dated 24.7.1991 i.e.. Ex.D.l is an out and out sale and Ex.P. 1 is a concocted document. It is contended that mutation has been effected in the name of the appellant and he has I 1 (1t' tE( .'jfl)j (1l)i.flit lilt' 11 11i( Ii .11%'. W.ILIIC(J. I tt'tliti 11 fl i iu)t"[klnI t1 1 1 IlIflal) \wit': aiI$ tills G'lli Ut lijiti I Ii€id tfft(j :1 '--lilt l' (1 c '\ . 11)1 '2'''"" h 1 11' 4 r mdci I lb rec 'ntrv fl M ii I Z I £2 C )61 II i it C 'ill I ( i 1 %cS 1 Ii 1' 1 1 Whit 1 tin J 11 e lant htcd .pp1s •i1IC1l 1(1 ' icilSt i1th hint lit. It uns raiccl 11k' lust ltspolsieifl (liii 11)1 tclkt' dliv %t' mi raking ol iI1wkliii lb.
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favour of the appellant agreeing to sel l the sub property for a sum of t80.000/- and a sum of t50,000/- was paid as advance as per Ex.D.3. Th ere is reference to Ex.D.2 in Ex.D. 1. The plaintiff has not whispered anything about Exhibits D.2 or D.3 in the plaint. The plaintiff i.e., the first respondent con tends that Ex.P. 1 was executed to re-convey the. proper ty on repayment of the loan amount within four years.
The case of the first respondent is that he approached the appellant's father for hand loan of ?. 1,50,000/- for his family necessity and contract business. The father of the appellant agreed to pay the amount and insisted the first respondent to execute the sale dee d in respect of (he suit property in favour of the app ellant as security.
Therefore, the first respondent exe cuted the sale deed and a sum of Rupccs one laid-i inc luding the previous loan was paid to the first responden t and ?.50.000/-
was calculated towards the intere st on the previous loan. Thereafter. Ex.P. I was exe cuted agreeing to re La-
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"13. The High Court it is manifest from the judgment undcr appeal overlooked the proviso according IC) which the condition regarding payment of the mortgage money as a condlt ion Ibr transfer of the property to the seller must be embodied in the sale deed itself. That is not so in the instant case. The sale deed executed by the plaintiff In the Instant ease does not embody any condition like the one referred to in clause (c) of Section 58 extracted above. The broad statement of law made by the High Court to the effect that every sale accompanied by an agreement for re-conveyance of the property will constitute a mortgage by conditional sale is not, therefore. correct. That is also the view taken by this Court in K. Simrathmiill V. Nanjalingiah Gowder. AIR 1963 SC 1182 where the plaintiff had borrowed a certain amount from the defendant and in lieu thereof executed a deed of conveyance of certain land together If. i i s. --
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'The sale deed. the deed of re conveyance Ext. A- 1 and the rent note Ext. B-i were undoubtedly parts ol' the same transaction. The plea of the plaintiff that the sale deed Ext. A-I constituted a transaction of mortgage by conditional sale is inadmissible. because the sale deed and the covenant for rcconveyance are p contained In separate docurnents.'
14. The finding of the High Court as to the legal effect of the transaction of sale followed by an agreement for re transfer of the property Is not, therefore, legally sound.
15. Mr. Jam learned counsel for the appellants all the same argued that the transaction in question was in the nature of an English Mortgage as defined under Section 58(c) of the Transfer of Property Act, 1882 which reads as under:
58 (e) English mortgage Where -
the mortgagor binds himself to repay the mortgage--money on a certain date I and transfers the mortgaged property absolutely to the mortgagee. but subject to a proviso that he will re transfer it to the mortgagor upon payment of the mortgage-money as agreed. the transaction Is called an English mortgage.
16. A plain reading of the above would show that for a transaction to constitute an English mortgage the following essential conditions must be satisfied:
(I) The Mortgagor must cind himself to re-pay the mortgage money on a certain date.
(2) The property mortgaged should be transferred absolutely to the Mortgagee.
(3) Such absolute transfer should be made subject to proviso that the Mortgagee shall re-convey the I)rPIY to the Mortgagor upon payment by him of the mortgage money on the date the Mortgagor binds himself to pay the same.4
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first respondent was capable or ready and willing to perform his pan of the contract. Therefore. Ex.P. 1 cannot be enforced. Point No.1 answered accordingly.
PoInt No.2.
52. The trial Court has tailed to consider the evidence on record in proper perspective. The first respondent has executed sale deed in favour of the appellant as per Ex.D. l4rlor to Ex.D. I then was sale I--
agreement as per Ex.D.2. The execution of the sale deed and delivery of possession Is not in dispute. The first respondent has failed to prove that. the sale deed was executed as security and he was ready and willing to perform his part of the contract. Therefore, in my considered view, the trial Court. was 1101 justified in decreeing the suit. Therefore. the impugned judgment and decree cannot be sustained in law.
Accordingly, the appeal is allowed and the impugned ji. tdgrnent ai id decree passed by the trial Court in O.S. No.118/98 Is hereby set aside and the N U, N H H H
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