PANNACHAN ALIKUTTY Vs. MUHAMMED HASAN AND ORS.

JUDGEMENT

(1.) Plaintiff in a suit for redemption is the appellant Ext. A3 is the mortgage of 1955 sought to be redeemed. It was executed by his deceased mother in favour of Koya, the predecessor of defendants. The dispute is whether it is a mortgage by conditional sale coming under Sec. 58(c) of the Transfer of Property Act and, therefore, liable to be redeemed or it is an outright sale with a condition for repurchase and as such the suit is liable to be dismissed for the reason that the option for re-purchase was not exercised within the stipulated time. Trial Court decreed the suit holding that Ext. A3 is a mortgage by conditional sale, but the appellate court reversed the decision and dismissed the suit on the finding that it is an outright sale with a condition for re-purchase in which the option was not exercised in time.

(2.) The subject-matter is two acres of garden land with improvements. Appellant's mother Pathumma was the kanam tenant. She was in dire need for money and hence borrowed Rs. 1,000.00 from Koya in 1952 and mortgaged the properties under Ext. A2. When her need for money persisted, she executed Ext. A3 in 1955 as if it is a sale of her rights for Rs. 2,000.00 including Rs. 1,000.00 under Ext. A2. It provided that if the amount of Rs. 2,000.00 received under it is paid after one year but before five years, Koya should re-convey the properties to her.

(3.) A mortgage is the transfer of an interest in specific immovable property for the purpose of securing the payment of a loan. When the mortgagor ostensibly sells the mortgaged property on condition that on default of payment of the mortgage money on a certain date, the sale shall become absolute or on condition that on such payment being made, the sale shall become void or on condition that on such payment being made, the buyer shall transfer the property to the seller, the transaction is called a mortgage by conditional sale. On the other hand, a sale with a condition of re-transfer or re-purchase is not a mortgage. Relationship of debtor and creditor is not there. There is no debt for which the transfer operates as security. It is not a partial transfer, but a full transfer of all the rights reserving only a personal right of repurchase or pre-emption, which is lost if not exercised within the specified time. The rule of law on the subject is that prima facie an absolute conveyance containing nothing to show that the relationship of debtor and creditor is to exist between the parties does not cease to be an absolute conveyance and become a mortgage merely because the vendor stipulates that he shall have a right to repurchase. Even though the difference between the two types of transactions is clear, it is often a matter of extreme difficulty to decide which of those two transactions the particular document disclose. The distinction is purely on the question of intention on the basis of which the document came into being. In other words, the question is whether the intention was that the relation ship of debtor and creditor should subsist between the parties.