Property lawMortgageSupreme Court of India

Bhaskar Waman Joshi v Narayan Rambilas Agarwal

AIR 1960 SC 30119591 min read
The case in brief30-second read
Facts
By a deed of 10 Sep 1931 the transferors conveyed three properties in Amravati, ostensibly absolutely, with a right to repurchase within five years. The deed was made to clear debts of Rs. 39,500.
Issue
Was the deed a mortgage by conditional sale (S.58(c) TPA) or a sale with an agreement to reconvey?
Held
The question is one of intention, gathered from the deed read in the light of surrounding circumstances. The form of the deed is not decisive.
Principle
Whether a deed of sale with a condition of repurchase is a mortgage by conditional sale depends on the parties' intention, gathered from the deed read with surrounding circumstances; a debtor-creditor relation and transfer as security for the debt mark a mortgage.
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Facts

  • By a deed of 10 Sep 1931 the transferors conveyed three properties in Amravati, ostensibly absolutely, with a right to repurchase within five years.
  • The deed was made to clear debts of Rs. 39,500.
  • The transferors said it was a mortgage by conditional sale. The trial court held it an absolute sale; the Nagpur High Court held it a mortgage.

Issue

  1. Was the deed a mortgage by conditional sale (S.58(c) TPA) or a sale with an agreement to reconvey?

Held

  • The question is one of intention, gathered from the deed read in the light of surrounding circumstances. The form of the deed is not decisive.
  • A mortgage by conditional sale creates a debtor-creditor relation, with the transfer as security. A sale with a condition to reconvey creates no debt.
  • Oral evidence of intention cannot interpret the deed's terms. Contemporaneous conduct is admissible; later conduct is not.
  • The deed was a mortgage, and the High Court's decree was affirmed.

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Citation

Bhaskar Waman Joshi v Narayan Rambilas Agarwal AIR 1960 SC 301

Reported: https://indiankanoon.org/doc/1158527/. This is an educational summary, not the judgment itself. Cite the reported version in professional or academic work.