DUDDU KOTESWARA RAO Vs. MOTUMARRU SAMBIAH

JUDGEMENT

(1.) The proper interpretation of Exhibits A-1 and B-1 is the subject-matter of this appeal. The question that poses for consideration is whether the transactions evidenced by these two documents is a mortgage by conditional sale or an outright purchase.

(2.) The property in dispute is a house site and terraced rooms situate therein. The agreement to sell this property appears to have been entered into on i6th July, 1923 for a sum of Rs. 3,400 and the whole of the consideration paid at about the time ; but the document of sale was not executed till the and of August, 1925. On the same day, the transferees executed an instrument agreeing to reconvey the property if the sum of Rs. 3,400 paid to the transferor was repaid to him with interest at 1 percent. permensem. Under this document the option to repurchase was to be exercised between 2nd February, 1926 and 30th July, 1927. The transferor did not avail himself of this right within the stipulated period. Nothing was done by him in this behalf till the 7th of February, 1950 when he called upon, the transferees to retransfer the property to him on receipt of such amounts as might be found due on taking of accounts. The transferees refused to comply with this demand and sold the property in their turn on the 12th July, 1950 for a sum of Rs. 20.000 to a firm of which Chebrolu Audinarayana, Chebrolu Chenchu Subbiah, Vura Venkateswarlu and Kurapati Raghavulu were the partners. Notwithstanding this, no action was taken by him till the 29th of January, 1953, when the present action was initiated by him.

(3.) The basis of the suit is that, under Exhibit B-1 only a mortgage by conditional sale was created and that he was, therefore, entitled to redeem the mortgage. This suit was opposed by the transferees and their alienees, D. 1 to D. 7, on the plea that the transaction in question was not a mortgage by conditional sale, but it was an ordinary sale with an option to repurchase it within the specified time and the option not having been exercised within that time, the plaintiff could not get any relief. This defence did not prevail with the Subordinate Judge, Tenali, who was of the opinion that Exhibits A-1 and B-1 read together established that the transaction amounted to a mortgage by conditional sale and hence the plaintiff could redeem it.