AIR 1960 SUPREME COURT 301 ::1967 JabLJ 1032 ::1960 MPLJ 409 ::1960 SCJ 327 ::1960 2 SCR 117

Supreme Court Of India

(From Nagpur : AIR 1954 Nag193)

Hon'ble Judge(s): P. B. Gajendragadkar, K. Subba Rao, J. C. Shah , JJJ

Transfer of Property Act (4 of 1882) , S.58(c)— Sale and mortgage by conditional sale - Distinction - Test of - Evidence admissible - Document held to be mortgage and not sale. Evidence Act (1 of 1872) , S.92— The question whether by the incorporation of a condition a transaction ostensibly of sale may be regarded as a mortgage is one of intention of the parties to be gathered from the language of the deed interpreted in the light of the surrounding circumstances. The circumstance that the condition is incorporated in the sale deed must undoubtedly be taken into account, but the value to be attached thereto must vary with the degree of formality attending upon the transaction. The definition of a mortgage by conditional sale postulates the creation by the transfer of a relation of mortgagor and the mortgagee, the price being charged on the property conveyed. In a sale coupled with an agreement to recovery there is no relation of debtor and creditor nor is the price charged upon the property conveyed, but the sale is subject to an obligation to retransfer the property within the period specified. What distinguishes the two transactions is the relationship of debtor and creditor and the transfer being a security for the debt. The form in which the deed is clothed is not decisive. The circumstance that the transaction as phrased in....