BHIMRAO RAMCHANDRA KHALATE (DECEASED) THROUGH LRS. versus NANA DINKAR YADAV (TANPURA) & ANR.

[2021] 8 S.C.R. 151

BHIMRAO RAMCHANDRA KHALATE (DECEASED)THROUGH LRS.

NANA DINKAR YADAV (TANPURA) & ANR.

(Civil Appeal No. 10197 of 2010)

AUGUST 13, 2021

[HEMANT GUPTA AND A. S. BOPANNA, JJ.]

Transfer of Property Act, 1882: ss. 58(c) proviso and 63 –Redemption of mortgaged property – Plaintiff, owner of agriculturalland borrowed Rs.3,000/- from defendant No. 1 by executing adocument titled “conditional sale deed” as security for the loanamount, which was to be returned and the defendant was bound tore-transfer the land – Plaintiff requested defendant No. 1 toreconvey the suit land by accepting the loan amount of Rs.3,000/-but defendant No. 1 refused to do so – Subsequently, defendantNo. 1 transferred the suit land in favour of his brother-defendantNo. 2 – Suit for redemption of mortgaged property and possessionby plaintiff, claiming that the transaction was in the nature ofmortgage even though it was titled as the conditional sale – Dismissalof suit by trial court and High Court – Sustainability of – Held: Notsustainable – Condition of re-transfer is part of the samedocument, as expressed by the proviso of s. 58(c) – Transactionwhich takes the outward form of sale but in essence thedocuments are of mortgage, though it is couched in the form ofa sale – Document has to read as whole and if any word isambiguous, then the intention of the parties has to be seen whensuch document was executed – Thus, reading of the document wouldshow that the document was executed for the reason that the plaintiffhas borrowed sum of Rs.3,000/- and the defendant is bound tore-transfer the land if the amount is paid within one year – Advanceof loan and return thereof are part of the same document whichcreates relationship of debtor and creditor – Thus, it would becovered by proviso in s . 58(c) – Thus, the judgment and decreepassed by the First Appellate Court and that of the High Court areset aside and the suit is decreed.

CDEF

152SUPREME COURT REPORTS

AAllowing the appeal, the Court

HELD: 1.1 The intention of the parties has to be seen whenthe document is executed. It is not in dispute that the conditionof re-transfer is part of the same document. Such condition isin terms of an amendment inserted by the proviso of SectionB58(c) of the Transfer of Property Act, 1882 in the year 1929. Atransaction which takes the outward form of sale can still beconsidered in essence mortgage. It is impossible to compareone case with another. Each case must be decided on its ownfacts and circumstances. The document has to read as wholeand if any word is ambiguous, then to find out the intention of theCparties when such document was executed. Therefore, readingof the document would show that the document was executed forthe reason that the plaintiff has borrowed sum of Rs. 3,000/- forhis household expenses and the defendant is bound to re-transferthe land if the amount is paid within one year. The advance ofDloan and return thereof are part of the same document whichcreates relationship of debtor and creditor. Thus, it would becovered by proviso in Section 58(c) of the Act. [Paras 11, 12][160-D-H]1.2 Section 63 of the Act contemplates that any accessionEby the mortgagee, during the continuance of the mortgage, themortgagor shall on redemption be entitled to such accession inthe absence of contract to the contrary. Under Section 63(a) ofthe Act, the liability of mortgagor to pay for improvement willarise if the mortgagee had to incur the costs to preserve theproperty from destruction or deterioration or was necessary toFprevent the security from becoming insufficient or being made incompliance with the lawful order of any public servant or publicauthority. None of the eventualities arose in the instant casecompelling the mortgagor to pay for the improvements if anycarried out by the mortgagee. mortgagee spends such moneyGas is necessary for the preservation of the mortgaged propertyfor destruction, forfeiture or sale; for supporting the mortgagor’stitle to the property; for making his own title thereto good againstthe mortgagor; and when the mortgaged property is renewablelease-hold, for the renewal of the lease, such expenditure incurredby the mortgagee can be added to the cost of improvements inH

the principal amount due. However, in the absence of any positiveevidence of any improvement and the cost incurred, thedefendants are not entitled to recover anything more than themortgage amount. Since the possession was given to themortgagee, he has enjoyed usufruct from the mortgage propertywhich compensates not only of the user of the land but alsoimprovements made by him. The improvements were to enjoythe usufruct of the property mortgaged. [Para 22][165-D-H; 166-A]

1.3 The submission that plaintiff has filed suit for redemptionafter 20 years of execution of the document is not tenable as thesuit for redemption can be filed within 30 years from the datefixed for redemption. The period of 30 years would commenceon 22.2.1969 and the suit was filed in the year 1989, which iswithin the period of limitation. [Para 23][166-A-B]

1.4 The order of the First Appellate Court accepting theappeal of the defendants and dismissing the suit for redemptionis not sustainable in law, so as the order passed by the HighCourt. Consequently, the judgment and decree passed by theFirst Appellate Court and that of the High Court are set asideand the suit is decreed. [Para 24][166-B-C]

Pandit Chunchun Jha v. Sheikh Ebadat Ali & Anr. AIR1954 SC 345 : [1955] 1 SCR 174; Shri Bhaskar WamanJoshi v. Shri Narayan Rambilas Agarwal AIR 1960 SC301 : [1960] 2 SCR 117; P. L. Bapuswami v. N. PattayGounder AIR 1966 SC 902 : [1966] 2 SCR 918 – reliedon.

Vanchalabai Raghunath Ithape (Dead) by LR v.Shankarrao Baburao Bhilare (Dead) by LRs & Ors.(2013) 7 SCC 173 : [2013] 8 SCR 1028 – per incuriam.

Umabai & Anr. v. Nilkanth Dhondiba Chavan (Dead)by LRs & Anr. (2005) 6 SCC 243 : [2005] 3 SCR 521;Tulsi & Ors. v. Chandrika Prasad & Ors. (2006) 8 SCC322 : [2006] 5 Suppl. SCR 255; Vithal Tukaram Kadam& Anr. v. Vamanrao Sawalaram Bhosale & Ors. (2018)

A11 SCC 172 : [2017] 8 SCR 379; Ganpati BabjiAlamwar (Dead) by LRs Ramlu & Ors. v. DigambarraoVenkatrao Bhadke & Ors. (2019) 8 SCC 651; DharmajiShankar Shinde & Ors. v. Rajaram Shripad Joshi(Dead) through LRs & Ors. (2019) 8 SCC 401 : [2019]6 SCR 257; Sopan (Dead) through his LR v. Syed NabiB(2019) 7 SCC 635 : [2019] 9 SCR 969 – referred to.

CaseLawReference

CIVIL APPELLATE JURISDICTION: Civil Appeal No.10197of 2010.

From the Judgment and Order dated 11.08.2006 of the High Courtof Judicature at Bombay in Second Appeal No.832 of 2001.G

Prashant Padmanabhan, T. Harish Kumar, Asish Sarkar, Advs.for the Appellants.

Satyajit Desai, Ms. Anagha S. Desai, Satya Kam Sharma, Advs.for the Respondents.H

The Judgment of the Court was delivered by

HEMANT GUPTA, J.

1. The plaintiff is in appeal before this Court aggrieved againstthe judgment passed by the High Court on 11.8.2006 in second appealwhereby the order passed by the First Appellate Court on 14.1.2000was affirmed, while dismissing the suit for redemption of the mortgageproperty.

2. Brief facts leading rise to the present appeal are that the plaintiffwas the owner of 20 gunthas of agricultural land[1] situated in VillageKhunte. The plaintiff was in need of money so he borrowed Rs.3,000/-from defendant No. 1 on 22.2.1969 by executing document titled“conditional sale deed” as security for the loan amount. The plaintiffrequested defendant No. 1 to reconvey the suit land by accepting theloan amount of Rs.3,000/- but defendant No. 1 refused to do so. On25.2.1989, defendant No. 1 transferred the suit land in favour of hisbrother (defendant No. 2). The plaintiff filed suit against the defendantson 5.4.1989 under the Transfer of Property Act, 1882[2] for redemption ofmortgaged property and possession. The claim of the plaintiff is that thetransaction dated 22.2.1969 was in the nature of mortgage even thoughit was titled as the conditional sale.

3. The entire dispute revolves around whether the document dated22.2.1969 is document of conditional sale or mortgage?

4. Before we advert to the nature and terms of the document,certain principles of law need to be stated. Section 58(c) of the Act wasamended in the year 1929 when proviso was inserted that “providedthat no such transaction shall be deemed to be mortgage, unless thecondition is embodied in the document which effects or purports to effectthe sale”.

5. In Pandit Chunchun Jha v. Sheikh Ebadat Ali & Anr.[3], theplaintiff’s suit for redemption was dismissed by the High Court but appealallowed by this court reading the deed as mortgage. The questionexamined was whether given transaction is mortgage by conditionalsale or sale outright with condition of repurchase. It was held thattwo documents are seldom expressed in identical terms and when it is

1 For short, the ‘suit land’

2 For short, the ‘Act’

3 AIR 1954 SC 345

Anecessary to consider the attendant circumstances the imponderablevariables which that brings in its train make it impossible to compare onecase with another. Each must be decided on its own facts. But certainbroad principles were stated. The Court found that the document had noclause for retransfer and instead says (clause 6) that if the executantspay the money within two years, the property shall come in exclusiveBpossession and occupation with the transferors. The document had noclause for retransfer. In these circumstances, this Court held as under:

“12. The next step is to see whether the document is covered bySection 58(c) of the Transfer of Property Act, for, if it is not, thenit cannot be mortgage by conditional sale. The first point there isCto see whether there is an “ostensible sale”. That means atransaction which takes the outward form of sale, for the essenceof mortgage by conditional sale is that though in substance it isa mortgage it is couched in the form of sale with certain conditionsattached. The executants clearly purported to sell the property inDclause (5) because they say so, therefore, if the transaction is notin substance mortgage, it is unquestionably sale: an actual saleand not merely an ostensible one. But if it is mortgage, then thecondition about an “ostensible sale” is fulfilled.

13. We next turn to the Conditions. The ones relevant to the presentEpurpose are contained in clauses (6) and (7). Both are ambiguous,but we have already said that on fair construction clause (6)means that if the money is paid within the two years then thepossession will revert to the executants with the result that thetitle which is already in them will continue to reside there. Thenecessary consequence of that is that the ostensible sale becomesFvoid. Similarly, clause (7), though clumsily worded, can only meanthat if the money is not paid, then the sale shall become absolute.Those are not the actual words used but, in our opinion, that is afair construction of their meaning when the document is read as awhole. If that is what they mean, as we hold they do, then theGmatter falls squarely within the ambit of Section 58(c).

20. ………….It is true this can also be read the other way butconsidering these very drastic provisions as also the threat of acriminal prosecution in sub-clause (a), we think the transfereewas out to exact more than his pound of flesh from the unfortunateHrustices with whom he was dealing and that he would not have

agreed to account for the profits : indeed that is his own case, forhe says that this was sale out and out. In these circumstances,there would be no need to keep reasonable margin between thedebt and the value of the property as it ordinarily done in the caseof mortgage. Taking everything into consideration, we are ofopinion that the deed is mortgage by conditional sale underSection 58 (c) of the Transfer of Property Act..”

6. In judgment reported as Shri Bhaskar Waman Joshi v. ShriNarayan Rambilas Agarwal[4], Bench of this Court has upheld theright of redemption. The argument raised by the transferor was that theproperty transferred was intended to be mortgage under deed ofconditional sale. The transferees contended that the deed was absolutesale and that the conveyance was subject to condition of repurchase.It was, inter alia, held that transaction shall not be deemed to be amortgage unless the condition referred to in the clause is embodied inthe document which affects or purports to affect the sale. It was heldthat the mortgage by conditional sale postulates the creation by thetransfer of relation of mortgagor and mortgagee, the price being chargedon the property conveyed. The Court held as under:

“7. …………….. The question whether by the incorporation ofsuch condition transaction ostensibly of sale may be regardedas 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 mortgage by conditional sale postulates the creation by thetransfer of relation of mortgagor and mortgagee, the price beingcharged on the property conveyed. In 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 securityfor the debt. The form in which the deed is clothed is not decisive.The definition of mortgage by conditional sale itself contemplates

4 AIR 1960 SC 301

Aan ostensible sale of the property. …………………… Thequestion in each case is one of determination of the real characterof the transaction to be ascertained from the provisions of thedeed viewed in the light of surrounding circumstances. If the wordsare plain and unambiguous they must in the light of the evidenceof surrounding circumstances be given their true legal effect. ItBthere is ambiguity in the language employed, the intention may beascertained from the contents of the deed with such extrinsicevidence as may by law be permitted to be adduced to show inwhat manner the language of the deed was related to existingfacts. Oral evidence of intention is not admissible in interpretingCthe covenants of the deed but evidence to explain or even tocontradict the recitals as distinguished from the terms of thedocuments may of course be given. Evidence of contemporaneousconduct is always admissible as surrounding circumstance; butevidence as to subsequent conduct of the parties is inadmissible.

Dxx

xxxx

13. Counsel for the transferees sought to rely upon the evidenceof subsequent conduct of the transferors as indicative of thecharacter of the transaction as sale, but as already observed,that evidence is inadmissible.”

E7. In another judgment reported as P.L. Bapuswami v. N. PattayGounder[5], this Court decreed the suit for redemption though the samewas dismissed by the High Court. The High Court held that the transactionwas an outright sale and not mortgage by conditional sale. Thealternative plea based on the covenant for re-conveyance, the High CourtFconsidered that there was no proof that the plaintiff had tendered theamount within the period stipulated in the document. In appeal, this courtheld that the distinction between the conditional sale and mortgage is therelationship of debtor and creditor and the transfer being security forthe debt. The Court held as under:

G“5. …The definition of mortgage by conditional sale postulatesthe creation by the transfer of relation of mortgagor andmortgagee, the price being charged on the property conveyed. Ina sale coupled with an agreement to reconvey there is no relationof debtor and creditor nor is the price charged upon the property

H5 AIR 1966 SC 902

conveyed, but the sale is subject to an obligation to retransferproperty within the period specified. The distinction between thetwo transactions is the relationship of debtor and creditor and thetransfer being security for the debt. The form in which the deedis clothed is not decisive. The question in each case is one ofdetermination of the real character of the transaction to beascertained from the provisions of the of document viewed, in thelight of surrounding circumstances. If the language is plain andunambiguous it must in the light of the evidence of surroundingcircumstances be given its true legal effect. If there is ambiguityin the language employed, the intention may be ascertained fromthe contents of the deed with such extrinsic evidence as may bylaw be permitted to be adduced to show in what manner thelanguage of the deed was related to existing facts…”

8. In view of the Judgments referred to above, now we examinethe facts of present case. The deed in question is Ex. 68. The documentreads as under:

“I, above Executant, given in writing that I am executing thisconditional sale deed in your favour in front of Sub-Registrar,Phaltan as I am taking Rs.3,000/- (three thousand) in cash fromyou for my household expenses in respect of land which is in mypossession owned by me and enjoyed by me absolutely on thisdate. The description of the land located within limits of townKhunte, Division Satara, Tq. Phaltan, irrigated by GovernmentCanal. Its boundaries and other particulars are –

xxxxxx

The above land owned and enjoyed by me along with all materialsstanding on it including trees, stones, mud etc. is being handedover to you by me for your possession on the condition that youare giving back its possession to me anytime within one year fromthe date of this sale deed when I repay the above amount to youwhile re-transferring the above land to my name. In case non-payment by me of the said amount within the stipulated period,this sale deed will be taken as permanent one and you will enjoythe possession of the land as your own. Any future disputes inrespect of the said land will be dealt by me if they arise.

I sign this sale deed today on 22[nd] February, 1969.”

A9. perusal of the aforesaid document would show that:

(i)The plaintiff has borrowed sum of Rs.3,000/- from thedefendant for his household expenses in respect of theland which was in his possession.

(ii) The possession of land was handed over to the defendantBon the condition that the possession will be given back tohim within one year from the date of conditional sale deed.

(iii) The defendant is bound to retransfer the land to the plaintiffwhen he repays the amount of Rs.3,000/-.

(iv) If the amount is not paid within the stipulated period, theconditional sale deed may be taken as permanent one.

10. complete reading of the document would show that sumof Rs.3,000/- was taken as loan from the defendant for householdexpenses. The same was to be returned and the defendant was boundDto retransfer the land. The condition that if the plaintiff is not able to paythe loan amount within one year, the document will be taken as apermanent sale deed is the contentious clause between the parties.

11. In view of the judgments mentioned above, the intention of theparties has to be seen when the document is executed. It is not in disputethat the condition of retransfer is part of the same document (Ex. 68).ESuch is the condition inserted by an amendment in the year 1929 expressedby the proviso of Section 58(c) of the Act. As held in Pandit ChunchunJha, transaction which takes the outward form of sale but in essencethe documents are of mortgage, though it is couched in the form of asale. This Court held that it is impossible to compare one case withFanother. Each case must be decided on its own facts and circumstances.The document has to read as whole and if any word is ambiguous,then to find out the intention of the parties when such document wasexecuted.

12. Therefore, reading of the document would show that theGdocument was executed for the reason that the plaintiff has borrowed asum of Rs.3,000/- for his household expenses and the defendant is boundto retransfer the land if the amount is paid within one year. The advanceof loan and return thereof are part of the same document which createsa relationship of debtor and creditor. Thus, it would be covered by provisoin Section 58(c) of the Act. Now, some of the later judgments of thisH

Court interpreting the proviso in Section 58(c) of the Act need to beconsidered.

13. This Court in Umabai & Anr. v. Nilkanth Dhondiba Chavan(Dead) by LRs & Anr.[6]was examining contemporaneous documentsexecuted on 30.12.1970 whereby the plaintiff had agreed to sell theproperty for consideration of Rs.45,000/-. sale deed was executed aswell. Another agreement to sale was executed between the parties onthe same date where the defendants agreed to reconvey the property onreceipt of Rs.45,000/-. It was, thus, held that the benefit of Section 58(c)of the Act would not be applicable to the plaintiff as the document ofreconveying the property was not part of the same document. This Courtheld as under:

“21. There exists distinction between mortgage by conditionalsale and sale with condition of repurchase. In mortgage, thedebt subsists and right to redeem remains with the debtor; but asale with condition of repurchase is not lending and borrowingarrangement. There does not exist any debt and no right to redeemis reserved thereby. An agreement to sell confers merely personalright which can be enforced strictly according to the terms of thedeed and at the time agreed upon. Proviso appended to Section58(c), however, states that if the condition for retransfer is notembodied in the document which effects or purports to effect asale, the transaction will not be regarded as mortgage.

………………”

14. In Tulsi & Ors. v. Chandrika Prasad & Ors.[7], this Courtheld that distinction exists between mortgage by way of conditionalsale and sale with condition to repurchase. In the former the debtsubsists and right to redeem remains with the debtor but in case of thelatter, the transaction does not evidence an arrangement of lending andborrowing, thus, right to redeem is not reserved. The circumstanceswhich weighed with the High Court holding are that the transaction inquestion was mortgaged by way of sale, it reads thus:

“9. The following circumstances weighed with the learned trialcourt as well as the High Court in arriving at the finding that thetransaction in question was mortgage by way of conditionalsale:

6 (2005) 6 SCC 243

7 (2006) 8 SCC 322

162SUPREME COURT REPORTS

A(i) The husband of Appellant 1 was tenant in respect of theproperty and he continued to occupy the same in the same capacity.

(ii) The appellants bore the costs of stamp duty which is not thenormal practice in case of absolute sale.

(iii) The transaction essentially was Baibulwafa viz. mortgageBby conditional sale.

(iv) The land was required to be kept in the existing condition.

(v) The transferor had an option to repay the entire considerationin one instalment whereupon deed of reconveyance was to beCexecuted by the transferor in her favour. For the said purpose aspecific date was fixed viz. 30-12-1971 and on obtaining suchamount the transferee was to restore possession of the land tothe plaintiff and only in the event of default on her part to repaythe same was the sale to become absolute and perfect.

D(vi) In the margin of the deed, the transferor categorically statedthat he had executed deed of Baibulwafa in respect of twoparts of the shop.

(vii) The amount has been received by the transferor in thepresence of the husband of the transferee.”

EIn view of the factors mentioned in para 9, the defendants appealwas dismissed and, the decree for redemption was maintained.

15. In Vithal Tukaram Kadam & Anr. v. Vamanrao SawalaramBhosale & Ors.[8], the suit for redemption was decreed by setting asidethe judgment of the High Court. It was held as under:F

“14. The essentials of an agreement to qualify as mortgage byconditional sale can succinctly be broadly summarised. Anostensible sale with transfer of possession and ownership, butcontaining clause for reconveyance in accordance withSection 58(c) of the Act, will clothe the agreement as mortgageGby conditional sale. The execution of separate agreement forreconveyance, either contemporaneously or subsequently, shallmilitate against the agreement being mortgage by conditional sale.There must exist debtor and creditor relationship. The valuationof the property and the transaction value along with the duration

of time for reconveyance are important considerations to decidethe nature of the agreement. There will have to be cumulativeconsideration of these factors along with the recitals in theagreement, intention of the parties, coupled with other attendantcircumstances, considered in holistic manner.”

16. In another judgment reported as Ganpati Babji Alamwar(Dead) by LRs Ramlu & Ors. v. Digambarrao Venkatrao Bhadke &Ors.[9], the decree in suit for redemption was maintained by the HighCourt. The Court held as under:

“10. Whether an agreement is mortgage by conditional sale orsale with an option for repurchase is vexed question to beconsidered in the facts of each case. The essentials of anagreement, to qualify as mortgage by conditional sale, cansuccinctly be summarised. An ostensible sale with transfer ofpossession and ownership, but containing clause forreconveyance in accordance with Section 58(c) of the Act, willclothe the agreement as mortgage by conditional sale. Theexecution of separate agreement for reconveyance, eithercontemporaneously or subsequently, shall militate against theagreement being mortgage by conditional sale. There must exista debtor and creditor relationship. The valuation of the property,and the transaction value, along with the duration of time forreconveyance, are important considerations to decide the natureof the agreement. There will have to be cumulative considerationof these factors, along with the recitals in the agreement, intentionof the parties, coupled with other attendant circumstances,considered in holistic manner. The language used in theagreement may not always be conclusive.”

17. On the other hand, learned counsel for the defendants reliedupon Vanchalabai Raghunath Ithape (Dead) by LR v. ShankarraoBaburao Bhilare (Dead) by LRs & Ors.[10]. It was case where thesuit for redemption filed by plaintiff-appellant was maintained. However,the judgment of this Court reported in Umabai and Tulsi were not broughtto the notice of this Court. In the absence of consideration of suchjudgments, we find that the judgment of this Court in VanchalabaiRaghunath Ithape will not lay down binding precedent.

9 (2019) 8 SCC 651

10 (2013) 7 SCC 173

A18. In Dharmaji Shankar Shinde & Ors. v. Rajaram ShripadJoshi (Dead) through LRs & Ors.[11], the defendants appeal was allowedby this court and the suit for redemption was dismissed. It was, interalia, held that if the sale and agreement to repurchase are embodied inthe separate documents then the transaction cannot be “mortgage byconditional sale” irrespective of whether the documents areBcontemporaneously executed; but the converse does not hold good. ThisCourt held as under:

“22. ………………. Considering the contemporaneous conductof the parties, it is clear that Shankar Shinde and thereafter theappellants were dealing with the suit property as if they were theCowners of the land. The clause in Ext. P-73 that if the amount isnot paid within period of five years, the transaction will becomea permanent sale deed and thereafter, the transferee will havethe absolute right over the property are consistent with the expressintention of parties making the transaction conditional sale withDoption to repurchase.”

19. perusal of the above judgment shows that the plaintiff hasborrowed sum of Rs.7000/- for the marriage of his daughter eightdays prior to execution of the document. While executing document on28.7.1967, the plaintiff borrowed an additional amount and documentEtitled as “mortgage by conditional sale” was executed for considerationof Rs.2500/-, but the plaintiff received Rs.1800/- only. This Court heldthat the intention of the parties in putting an end to the debtor creditorrelationship with respect to the sum of Rs.700/- is clear from the recitalsof the document. It was held that clauses in the document are consistentwith the intention of the parties making the transaction of conditionalFsale with an option to repurchase. The Court held that there are norecitals in the document to establish creditor debtor relationship, nor doesit contain the right of foreclosure, payment of interest etc. which areessential requirements in mortgage deed. The Court held thatundetermined mortgage amount for which the interest in the immovableGproperty was created as security, indicates that the parties have neverintended to create mortgage deed.

20. The said judgment does not help the argument raised by thedefendants, as the document in the present case clearly stipulates theamount of Rs.3000/- was borrowed by the plaintiff and on return of

such amount, mandate to defendant No. 1 to execute reconveyance ofsuit land was asked for which was refused by defendant no.1.

21. Another judgment referred to by the learned counsel for thedefendants is Sopan (Dead) through his LR v. Syed Nabi[12]but thatwas case where the registered sale deed was executed on 10.12.1968and on the same date, separate agreement was executed whereby theplaintiff has agreed to repay the amount and secure reconveyance ofthe property. Since the two separate documents were executed, thisCourt has rightly found that it is not document of mortgage but ofconditional sale which is not covered by the proviso to Section 58(c) ofthe Act.22. Learned counsel for the defendants has also referred to thefact that the suit for redemption was filed after twenty years of thedocument being executed and, in the meantime, defendants have madeimprovements over the land. Thus, the plaintiff would not be entitled toseek redemption. Section 63 of the Act contemplates that any accessionby the mortgagee, during the continuance of the mortgage, the mortgagorshall on redemption be entitled to such accession in the absence of acontract to the contrary. Under Section 63(a) of the Act, the liability ofmortgagor to pay for improvement will arise if the mortgagee had toincur the costs to preserve the property from destruction or deteriorationor was necessary to prevent the security from becoming insufficient orbeing made in compliance with the lawful order of any public servant orpublic authority. None of the eventualities arose in the present casecompelling the mortgagor to pay for the improvements if any carried outby the mortgagee. mortgagee spends such money as is necessary forthe preservation of the mortgaged property for destruction, forfeiture orsale; for supporting the mortgagor’s title to the property; for making hisown title thereto good against the mortgagor; and when the mortgagedproperty is renewable lease-hold, for the renewal of the lease, suchexpenditure incurred by the mortgagee can be added to the cost ofimprovements in the principal amount due. However, in the absence ofany positive evidence of any improvement and the cost incurred, thedefendants are not entitled to recover anything more than the mortgageamount. Since the possession was given to the mortgagee, he has enjoyedusufruct from the mortgage property which compensates not only of the

Auser of the land but also improvements made by him. The improvementswere to enjoy the usufruct of the property mortgaged.

23. The argument that plaintiff has filed suit for redemption after20 years of execution of the document is not tenable as the suit forredemption can be filed within 30 years from the date fixed for redemption.BThe period of 30 years would commence on 22.2.1969 and the suit wasfiled in the year 1989, which is within the period of limitation.

24. In view thereof, we find the order of the First Appellate Courtaccepting the appeal of the defendants and dismissing the suit forredemption is not sustainable in law, so as the order passed by the HighCCourt. Consequently, the judgment and decree passed by the FirstAppellate Court and that of the High Court are set aside and the suit isdecreed. The plaintiff may pay or deposit the mortgage amount withinthree months of the receipt of copy of the order. The appeal is allowedwith no order as to costs.

Nidhi Jain

Appeal allowed.