MUNIMALAIYAN Vs. CHENNAMMAL

JUDGEMENT

(1.) THE plaintiffs who lost before the lower appellate court are the appellants herein. THEy filed the suit O. S. No. 542 of 1978 on the file of the District Munsif, Hosur for redemption. THE case of the plaintiffs is that the suit property belong to one Munimalaiyan who mortgaged the suit property along with other properties to the defendant on 20. 12. 1961 for a sum of Rs. 3,000. He was paying the interest regularly every year. On 22. 10. 1970 the said Munimalaiyan executed the mortgage by conditional sale in respect of the same property and handed over possession of the suit property to the defendant. Though the deed mentions as if it is a conditional sale, it is not a sale virtually but it is only a simple mortgage. As per the recitals in the said deed, the plaintiffs had to redeem the mortgage within three years, failing which the defendant is entitled to have the patta transferred in his name. On the date of execution of the deed of mortgage by conditional sale i. e. , 22. 10. 1970, whereas in the deed the sale consideration has been mentioned only a sum of Rs. 3,000 which is the mortgage debt. THEre is specific recital in the said deed that the said Munimalaiyan is liable to indemnify the defendant from other properties in case of any dispute and his legal representatives, the appellants are also liable to discharge the debt and as such the transaction entered into under the document dated 22. 10. 1970 is only a mortgage by conditional sale and not an out right sale. THE possession was handed over in lieu of interest. As per Sec. 8 of Tamil Nadu Act 5 of 1978 the plaintiff is liable to pay only a sum of Rs. 600 towards the debt, since the defendant is in possession of the property for the period 22. 10. 1970 to 25. 10. 1978 for which period the interest of Rs. 2,400 has to be deducted. THE said amount has to be cred-ited towards the repayment of the principal and the balance is payable by the plaintiff. During the pendency of the suit, the said Munimalaiyan died and the appellants herein were added as the legal representatives of the said plaintiff.

(2.) THE defendant filed a written statement admitting the executing of the simple mortgage on 20. 12. 1961 for a sum of Rs. 3,000 and the plaintiff was paying the interest regularly. As the said document was getting time barred, the defendant wanted the plaintiff to renew the mortgage debt. Since the plaintiff did not have sufficient funds to repay the same, he executed the sale deed in respect of the suit properties with a right of repurchase. From the date of sale, the defendant is in possession and enjoyment of the same. Under the terms of the said sale deed dated 22. 10. 1970 the plaintiff was given a right of repurchase of the suit properties within three years from the date of document. In case if he failed to exercise his right of repurchase, he would loose the said right. Subsequent to the expiry of the period of three years, the defendant is entitled to transfer the patta in his name. Since the plaintiff had failed to exercise the right of repurchase within the stipulated period of three years, the plaintiff has lost the said right. THE transaction entered into between the parties under the document dated 22. 10. 1970 is only a sale in favour of the defendant with a right of repurchase by the plaintiff and it is not a mortgage by conditional sale as contended by the plaintiff.

(3.) BOTH the counsel referred to number of reported judgments which may throw some light in deciding not only the intention of the parties but also the nature of transaction. Hence I would refer to those judgments first and then discuss the terms of the document in order to find out the intention of the parties and the nature of transaction.