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Issues Involved:
1. Whether the transaction dated 15th April 1930 is a mortgage by conditional sale or an outright sale with a condition of repurchase. Issue-wise Detailed Analysis: 1. Nature of the Transaction: Mortgage by Conditional Sale vs. Outright Sale - Background: The plaintiff appeals in a suit for redemption of a mortgage dated 15th April 1930. The plaintiff argues that the transaction is a mortgage by conditional sale, while the first defendant contends it is an outright sale with a condition of repurchase. - Previous Transactions: The property originally belonged to Bijai Tanti and was mortgaged multiple times before the disputed transaction. The second defendant obtained a decree on a prior mortgage and sold the property to the plaintiff. - Plaintiff's Argument: The plaintiff claims the transaction of 15th April 1930 is a mortgage, and since the subsequent mortgagee was not joined in the earlier suit, the plaintiff is entitled to redeem. - Defendant's Argument: The first defendant argues that the transaction was an outright sale with a covenant for repurchase, which became infructuous as no attempt was made to act on the covenant within the specified time. - Trial and Appellate Court Findings: The trial court and lower appellate court held the document to be a mortgage, but the High Court on second appeal reversed these findings, holding it as a sale. 2. Interpretation of the Document - Legal Principles: The intention of the parties is the determining factor. The document must be construed primarily from its language. If the words are clear, they must be given effect. Ambiguity allows for consideration of surrounding circumstances. - Document Analysis: The document, Exhibit A, contains ambiguous language. It purports to be a sale but calls itself a "conditional sale." Clause 6 states that if the executants repay the consideration within two years, the property will revert to their possession, implying the title remains with them. Clause 7 suggests the sale becomes absolute if the money is not paid within the specified time. - Section 58(c) of the Transfer of Property Act: The document fits the criteria of an "ostensible sale" with conditions that align with a mortgage by conditional sale. The presence of a single document and the fulfillment of section 58(c) conditions indicate it should be construed as a mortgage unless expressly stated otherwise. 3. Surrounding Circumstances and Intent - Respondent's Reliance on Deed Clauses: The respondents highlight clauses indicating an absolute transfer of title and the use of the word "sale." However, the essence of a mortgage by conditional sale requires the form of a sale with attached conditions. - Adequacy of Consideration and Absence of Interest: The consideration was deemed fair, and no interest was charged. The transferee was placed in possession and not required to account for the usufruct. - Crucial Points: The executants borrowed Rs. 65-6-0 for commutation proceedings under section 40 of the Bihar Tenancy Act, indicating an ongoing interest in the property. The relationship of debtor and creditor existed at the time of the transaction, supporting the mortgage interpretation. Conclusion: - Judgment: The Supreme Court concluded that the document is a mortgage by conditional sale under section 58(c) of the Transfer of Property Act. The appeal was allowed, the High Court's decree was set aside, and the lower appellate court's decree was restored except as to costs. - Costs: Each party was directed to bear its own costs due to the speculative nature of both sides. Appeal allowed.
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