SRI SRINIVASAIAHversusH. R. CHANNABASAPPA (SINCE DEAD) BY HIS LRS. AND ORS.

                         [2017] 3 S.C.R. 265


                       SRI SRINIVASAI \H                                 A
                                  v.
  H. R. CHANNABASAPPA (SINCE DEAD) BY HIS LRS. AND
                        ORS.
                (Civil Appeal Nos. 5576-5577 of2017)                     B
                           APRIL 25, 2017
   [R. K. AGRAWAL AND ABHAY MANOHAR SAPRE, JJ;I
       Transfer of Property Act, 1882 - s.58(c) - Nature of
document - Mortgage by conditional sale or a sale out and out C
with a condition to repurchase - Held: Document is mortgage deed
by conditional sale - Third condition of S. 58(c) that 'on condition
that such payment being made, buyer shall tran~fer the property to
seller', satisfied - Transaction is concluded in one document;
document styled as "deed of conditional sale" itself contains the
condition of repurchase on offering the sale money without interest D
for the reason that buyer-defendant no.} was allowed to use the
land till the money is not paid back to iii111 by the seller-plaintiff;
and that the parties'. intention as per terms of document also
supported by the evidence - Reasoning and the conclusion arrived
at by the trial court and the High Court that the document is a E
 'mortgage deed by conditional sale' as defined uls. 58(c) just and
proper and thus, upheld - Deeds and documents.
       Limitation Act, 1963 - Art. 61 (a) - Suit by mortgagor, to
 redeem or recove1; possession of immovable property mortgaged -
 Period of limitation - On facts, document being mortgage by way
                                                                         F
 of conditional sale, and right to redeem accrued to mortgagor on
 27.07.1974 and suit was filed on 19.09.1987 - Held: Suit was filed
 within limitation period of 30 years - Case is governed by Art. 6l(a)
 providing limitation of 30 years when right to redeem or to recover
 possession accrues to the mortgago1:
            Contract Act, 1872 - s. 65 - Obligation of person who has G
   received advantage under void agreement, or contract that becomes·
"void - Execution of mortgage deed by plaintiff-mortgagor in favour
  'a/defendant no. 1 by way of security for repayment of loan given
"to.
'
      him by defendant no. 1 - Possession of suit land delivered to
       . f,    .                                                 •
                                                                      H
                                     265
266          SUPREME COURT REPORTS                       [2017] 3 S.C.R.


A defendant no. 1 for 5 years to use the same, thereaper, on repayment
  of loan amount by plaintiff, defendant no. 1 would restore possession
  of suit land by redeeming the mortgage - However, suit land not
  redeemed in his favour - Meanwhile, defendant no. J sold suit land
  for Rs. 30,0001- to defendant no. 2-appellant - Suit to redeem by
B mortgagor-plaintiff - Suit decreed against defendants by trial court
  and upheld by High Court and this Court, whereby LRs of original
  plaintiff to repay loan amount to LRs of original defendant no. 1
  and defendant no. 1 to execute sale deed by retransferring the suit
  land to plaintiff and restore them the possession - As regards the
  sale consideration of Rs. 30,0001- with defendant no 1, held: Effect
C of the decree is that the transaction of sale of suit land between
  defendant no. 1 and defendant no. 2 vide sale deed is declared bad
  and stands nullified - Jn view thereof. defendant no. 1 has no right
   to retain the sale consideration to himself - Thus, LRs of defendant
   no.J to return the sale consideration of Rs.30,0001- to defendant
D no. 2.
          Disposing of the appeals, the Court
           HELD: 1.1 On examining the nature of document-Ex.P-1,
    it is held that the document-Ex.P-1 is a mortgage with conditional
    sale as defined under Section 58 (c) of the Transfer of Property
E Act, 1882, in view of the said reasons. Firstly, it is not in dispute
    that the plaintiff was the owner of the suit land. Second, the parties
    concluded the transaction in question by executing one document-
    Ex.P-1. Third, the document-Ex.P-1 is styled as a "Deed of
    Conditional Sale". Fourth, it contains a condition that defendant
    No.1 would be allowed to remain in possession of the suit property
F for 5 years and enjoy the fruits of the land and that during this
    period, the plaintiff would be entitled to get the suit property re-
  . conveyed in his name on paying Rs.1500/- by getting the sale
    deed executed in his name and obtain possession of the suit land
    from defendant No.1. Fifth, the plaintiff offered to pay Rs.1500/-
G to defendant No.1 with a request to resale the land to him. [Para
    26] [277-A-C)
        1.2 The said reasons satisfies the third condition of Section
  58(c) of the .T.P. Act, namely, "on condition that; such payment
  being made, the buyer shall transfer the property to the seller". It
H also satisfies the tests laid down by this Court in *Chunchun Jim~·
     SRI SRlNIVASAlAH v. H. R. CHANNABASAPPA (SINCE                      267
                    DEAD) BY HIS LRS.

   case namely, that the transaction is concluded in one document;       A
   the document styled as a "Deed of Conditional Sale" itself contains
   the condition of repurchase on offering the sale money without
   interest for the reason that defendant No.1 was allowed to use
   the land till the money is not paid back to him by the seller
   (plaintiff); and that the parties' intention as per terms of Ex.P-1   B
   is also supported by the evidence which was accepted by the trial
   court and the High Court. In view thereof, the trial court and the
   High Court were right in decreeing the plaintiff's suit whereas
   the first Appellate Court was not right in dismissing the suit. The
   reasoning and the conclusion arrived at by the trial court and the
   High Court while holding that Ex.P-1 is a "mortgage deed by           C
   conditional sale" as defined under Section 58(c) of the T.P. Act is
   just and proper and thus, it deserves to be upheld. The High
   Court rightly took note of the law laid down in the case of
    *Clmnclum Jha and the requirements of Section 58(c) of the T.P.
   Act and keeping in mind interpreted Ex.P-1 and came to a right        D
.. conclusion. (Paras 27- 30)(277-D-H; 278-Al
       Chunchun Jha v. Ebadat Ali and Another AIR 1954
       SC 345 : (1955) SCR 174 - relied on.
       Vanchalabai Raghunath lthape v. Shankarrao Baburao
       Bhilare (2013) 7 SCC 173 : [2013) 8 SCR 1028 -                    E
        distinguished.
       2. The High Court was justified in holding that the suit was
 filed within limitation. Instant case would be governed by Art.
 6l(a) of the Limitation Act which provides a limitation of 30 years
 when the right to redeem or to recover possession accrues to            F
 the mortgagor. Ex.P-1 is of 28.07.1969. In terms of the conditions,
 five years expired on 27.07.1974. The plaintiff filed a suit on
 19.09.1987. It was thus, filed within 30 years. [Para 34)(278-G)
       3.1 The effect of the decree passed in this case is that the
 original plaintiff, now represented by his legal representatives        G
 (respondent Nos.1 to 5) are required to return Rs.1500/- to the
 original defendant No. 1, now represented by his legal
 representatives (Respondent Nos.6-11) and in turn, defendant
 No. 1 (respondent Nos.6-11) are required to execute the sale
 deed by retransferring the .suit land to the plaintiff (respondent
                                    '                                    H
268          SUPREME COURT REPORTS                     [2017] 3 S.CR.


A Nos.1-5) and restore them the possession of the suit land. Since
  during the pendency of the litigation, original defendant No. 1
  transferred the suit land to the appellant (defendant No. 2) for
  Rs.30,000/-, therefore, he, as a subsequent transferee of the suit
  land, has now stepped into the shoes of original defendant No.
B !(respondent Nos.6-11). [Para 361[279-B-CI
           3.2 Yet another effect of the decree is that the transaction
    of sale of suit land between defendant No. 1 and defendant No. 2
    vide sale deed dated 25.09.1986 is declared bad in law and stands
    nullified. As a consequence thereof, defendant No. 2 (appellant),
    who had paid a sum of Rs. 30,000/- towards sale consideration to
  C defendant No. 1 for purchase of the suit land has become entitled
    to receive back the entire sum from defendant No. 1 in the
    absence of any contract to the contrary in this behalf between the
    parties. The reason being that once the sale is declared bad, the
    transaction of sale fails and, theref9re, the seller (defendant No.
• D 1) has no right to retain the sale consideration to himself and has
    to refund the sale consideration to the buyer (defendant No. 2).
    It is considered just and proper and with a view to end this
    litigation between the parties which is pending since 1969 and
    also to balance the equities amongst the parties that defendant
  E No. 1 through his legal representatives-respondent Nos.1-5 would
     return a sum of Rs.30,000/- to defendant No. 2-appellant. This
    direction is given by taking recourse to the powers under Article
    142 of the Constitution to do complete justice between the parties
    to the /is. [Paras 37, 40)[279-D-E; 280-E-F)
           Durga Prasad & Ahr. v Deep Chand & Ors. AIR 1954
 F         SC 75 : [19541 SCR 360 - referred to.
                           Case Law Reference
           [19551 SCR 174           relied on      Paras 27, 30, 33
           (2013] 8 SCR 1028       distinguished Para 33
 G
           [19541 SCR 360           referred to    Para 38
            CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 5576-
      5577 of2017.
           From the Judgment and Order dated 18.04.2012 in R. P. No. 387
 H
   SRI SRINIVASAIAH v. H. R. CHANNABASAPPA (SINCE                              269
                  DEAD) BY HIS LRS.

of 2011 and 25.07.2011 in R. S. A. No. 1253 of2005 of the High Court           A
of Karnataka at Bangalore.
      Shailesh Madi ya!, Adv. for the Appellant.
      Trideep Pais, G. V. Chandrashekar, N. K. Vernia, Ms. Deeksha
Gujral, Ms. Anjana Chandrashekar, Advs. for the Respondents.
                                                                               B
      The Judgment of the Court was delivered by
      ABHAY MANOHAR SAPRE, J. !. Leave granted.
        2. These appeals are filed by defendant No.2 against the order
dated 18.04.2012 passed by the High Court of Karnataka at Bangalore
in R.P. No. 387of2011 and the final judgment and order dated 25.07.2011 C
in R.S.A. No.1253 of2005 by which the High Court allowed the appeal
filed by the respondents herein and set aside the judgment and decree
dated 18.02.2005 passed by the Additional Civil Judge (Sr.Division),
Ramnagaram in R.A. No.35 of 2000 and restored the judgment and
decree dated 30.06.2000 passed by the Civil Judge (Jr.Division) D
Kanakapura in O.S. No.152of1987.                                ·
      3. We herein set out the facts, in brief, to appreciate the issues
involved in these appeals.                              ·
       4. The appellant is defendant No.2 whereas respondent Nos. I to
5 are the legal representatives of original plaintiff and respondent Nos. 6    E
to 11 are the legal representatives of original defendant No. I in the civil
suit out of which these appeals arise.
       5. The original plaintiff-M.N. Channabasappa was the owner of
the suit land (described in detail in schedule to the plaint). He fell in need
of money in 1969. He, therefore, approached the original defendant No. I F
- B.M. Narayana Shetty and requested him to give some money to
overcome the financial crisis faced by him during that time. Defendant
No. I agreed and accordingly gave Rs.1500/- to the plaintiff by way of
loan. In order to secure the repayment, the plaintiff on request made by
defendant No. I executed a document on28.07. l969 (Ex-P-I) in favour
of defendant No.f and got the same registered with the sub-Registrar, G
Kanakpura. Defendant No. I was also placed in possession of the suit
property pursuant to the document.
       6. On 30.06.1987, the plaintiff sent a legal notice to defendant
No. I and offered to repay Rs. I 500/- to him with a further request to
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270           SUPREME COURT REPORTS                          [2017] 3 S.C.R.


A redeem the suit land in his favour in terms of the conditions of Ex. P-1.
  The plaintiff contended that the Ex.P-1 was essentially a mortgage deed
  executed by him in favour of defendant No. I by way of security for
  repayment of the loan given to him by defendant No.I. The plaintiff
  contended that in terms of the conditions of Ex.P-1, he delivered
  possession of the suit land to defendant No. I for a period of 5 years to
8
  enable defendant No.I to reap the fruits of the suit land and on repaying
  Rs.1500/- within five years, restore the possession of the suit land by
  redeeming the mortgage.
         7. Defendant No.I sent a reply to the notice on 13.08.1987. He
  denied the plaintiff's offer and contended therein that the document dated
C 28.07 .1969 (Ex.P-1) is not a "mortgage deed" as described by the plaintiff
  in the notice but it is in substance a "sale deed" out and out in relation to
  the suit land executed by the plaintiff in his favour for Rs.1500/- pursuant
  to which defendant No. I was also placed in possession of the suit land
  as owner. It was contended that defendant No. I, in the meantime, on
D 25.09.1986 sold the suit land to the appellant herein (defendant No.2) by
  executing the deed of sale for consideration.                             ·
           8. This gave rise to filing of the Civil Suit by the plaintiff on
   19 .09.1987 against the original d~fendant No.1 and the appellant herein
   who, as mentioned above, is the purchaser of the suit land. The suit was
 E filed in the Court of Civil Judge (Jr. Division) at Kanakapura for claiming
   reliefs namely- (I) redemption of the mortgage of the suit land in
   plaintiff's favour (2) for a declaration that the sale made by defendant
   No. I of the suit land in favour of defendant No. 2 vide sale deed dated
   25.09.1986 is bad in law and not binding on the plaintiff and (3) for
   recovery of possession of the suit land from the defendants.
 F
           9. lt was alleged that the Ex.P-1 is a mortgage deed pursuant to
     which plaintiff had delivered the possession of the suit land to defendant
     No.1 for a period of 5 years on taking loan of Rs.1500/-from defendant
     No. I. It was alleged that the mortgage was created by the plaintiff of
     his suit land in favour of defendant No.1 only by way of security to
 G secure payment of loan amount and in terms of condition of the deed,
     defendant No.I was to enjoy the fruits of suit land for a period of 5
     years and within the said period, the plaintiff was to return Rs.1500/- to
     defendant No. I and, in turn, defendant No. I was to redeem the mortgage
     to the plaintiff. It was alleged that the plaintiff offered Rs.1500/- to
 H . defendant No. I but he declined and on the other hand asserted his right
    SRI SRINIVASAIAH v. H. R. CHANNABASAPPA (SINCE                                 271
     DEAD) BY HIS LRS. [ABHAY MANOHAR SAPRE, J.]

of ownership over the suit land and hence need to file the civil suit arose A
and seek aforementioned reliefs against the defendants in relation to the
suit land.
        10. Defendant No.I filed the written statement and denied the
plaintiff's claim. He reiterated his stand taken by him in reply to legal
notice. It was alleged that document in question (Ex.P-1) is not a B
mortgage deed but in substance a sale deed on the strength of which he
has become the exclusive owner. It was alleged that since the plaintiff
failed to come forward to pay the loan amount to defendant No. I on the
expiry of 5 years, he lost the right to get the suit land restored in his
name. It was alleged that defendant No. I has already sold the suit land
to defendant No.2 on 25.09.1986 by sale deed for consideration. A plea C
of suit to be barred by limitation was also raised.
       11. The Trial Court framed issues on the basis of pleadings. The
parties adduced evidence. During the pendency of the suit, both plaintiff
and defendant No.I died and, therefore, their respective legal
representatives were brought on record to continue the lis.               D
       12. The Trial Court by its judgment/decree dated 30.06.2000
decreed the plaintiff's suit. It was held that the document dated
28.07.1969(Ex.P-l) is a mortgage by conditional sale and not a sale
deed. It was held that the plaintiff is entitled to claim redemption of the
mortgage by paying the mortgage money to defendant No.I and seek                   E
restoration of the suit land from the defendants.
       13. The defendants felt aggrieved, filed first appeal before the
Additional Civil Judge (Sr.Division) being R.A. 35/2000. By judgment/
decree dated 18.02.2005, the first Appellate Court allowed the appeal
and set aside the judgment/decree oft!te Trial Court. It was held that the         F
document dated 28.07 .1969 (Ex.P-1) is not a mortgage deed but it is in
the nature of a conditional sale deed. It was also held that the suit is
barred by limitation. In the light of these findings, the plaintiff's suit stood
dismissed.
      14. Felt aggrieved, the plaintiff filed Second Appeal before the             G
High Court out of which this appeal arises. The High Court admitted the
appeal on the following substantial questions oflaw:-
       "(i) Whether the interpretation placed by the first Appellate
       Court as the suit document to hold that it is not a mortgage
       by conditional sale is proper?                                H
272           SUPREME COURT REPORTS                          [2017] 3 S.C.R.


A           (ii) Whether the finding of the first Appellate Cimrt that
            even if it is construed as a mortgage by conditional sale
            that the suit is barred by law of limitation is false?"
           15. By impugned order, the High Court allowed the appeal, set
   aside the judgment/decree of the first Appellate Court and restored the
 B judgment/decree of the Trial Court. The High Court held that the
   document dated 28,07.1969 is a mortgage by way of conditional sale
   and not a sale out and out. It was held that the suit was filed within time.
   It is governed by Article 6l(a) of the Limitation Act which prescribes
   limitation of30 years when right to redeem accrues. In this case, it was
   accrued on 27.07.1974 whereas the suit was filed on 19.09.1987.
 c
            16. Against thejudgment in second appeal, defendant No.2 filed
      review petition before the High Court. By order dated 18.04.2012, the
      review petition was dismissed.
          17. Against the order in review petition and the judgment in second
 D appeal, defendant No.2 filed these appeals by way of special leave
   petitions before this Court.
           18. Heard Mr. Shailesh Madiyal, learned counsel for the appellan'.
      and Mr. Tri deep Pais, learned counsel for respondents.

 E
             19. The only question involved in this appeal is what is the true
      nature of the document dated 28.07.1969 (Ex.P-1). ls it a "mortgage by
      conditional sale" or a "sale out and out with a condition to repurchase"?
            20. This question needs to be answered keeping in view the
      requirement of Section 58(c) of the Transfer of Prope11y Act,1882
 F    (hereinafter referred to as "the T.P. Act") and the law laid down by this
      Court in Chunchun Jha vs. Ebadat Ali and Another, AIR 1954 SC
      345.
             21. Section 58(c) of the Act reads as under:
             "58. "Mortgage", "mortgagor", "mortgagee", "mortgage-
 G           money" and "mortgage-deed" defined.-
             (c) M.ortgage by conditional sale.-Where, the mortgagor
             ostensibly sel!s 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
 H
   SRI SRINIVASAIAH v. H. R. CHANNABASAPPA (SINCE                          273
    DEAD) BY HIS LRS. [ABHAY II lANOHAR SAPRE, J.]

      on such payment being made the sale shall become void,               A
      or on condition that on such pavment being made the buyer
      shall transfer the property to the seller, the transaction is
      called mortgage by conditional sale and the mortgagee a
      mortgagee by conditional sale:
      Provided that no such transaction shall be deemed to be a            B
      mortgage, unless the condition is embodied in the document
      which effects or purports to effect the sale."
      22. In Chunchun Jha's case (sup.ra), this Court examined this
very question as to what constitutes "a mortgage byconditional sale
or a sale out and out with a condition of repurchase".                     C
      23. The learned Judge, Vivian Bose J., in his distinctive style of
writing speaking for the Bench posed the question as under:
      "This is a plaintiff's appeal in ~'suit for redemption of what
      the plaintiff calls a mortgage' dated 15-4-1930. The only
      question for determination is whether this is a mortgage             D
      by conditional sale or a sale out and out with a condition of
      repurchase. If the former the plaintiff succeeds. If the latter
      he is out of Court."
       24, His Lordship then examined the question in the context of
several leading English authorities on the subject and Section 58(c) of E
the T.P. Act and laid down the following test for deciding the true nature
of the document. This is what His Lordship held:
       "5. The question whether a given transaction is a mortgage
       by conditional sale or a sale outright with a condition of
       repurchase is a vexed one which invariably gives rise to F
       trouble and litigation. There are numerous decisions on
       the point and much industry has been expended in some of
       the High Courts in collating and analysing them. We think
       that is a fruitless task because two documents are seldom
       expressed in identical terms and when it is necessary to G
     . consider the attendant circumstances the imponderable
       variables which that brings in its train make it impossible
       to compare one cas.e with another. Each must be decided
       on its own facts. But certain broad principles remain.

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274     SUPREME COURT REPORTS                      [2017) 3 S.C.R.


A     6. The first is that the intention of the parties is the
      determining factor: see Balkishen Das v. Legge. 22 Ind.
      App.SS (P.C.) (A). But there is nothing special about that
      in this class of cases and here, as in every other case where
      a document has to be construed, the intention must be
      gathered, in the first place, from the document itself. If the
 B
      words are express and clear, effect must be given to them
      and any extraneous enquiry into what was thought or
      intended is ruled out. The real question in such a case is
       not what the parties intended or meant but what is the legal
       effect of the words which they used. If, however, there is
 c     ambiguity in the language employed, then it is permissible
       to look to the surrounding circumstances to determine what
       was intended.
      As Lord Cranworth said in Alderson v. White (1858) 44
      E.R.924 at p. 928 (B)-
 D    "The rule of law on this subject is one dictated by
      commonsense; that prima facie an absolute conveyance,
      containing nothing to show that the relation of debtor and
      creditor is to exist between the parties, does not cease to
      be an absolute conveyance and become a mortgage merely
 E    because the vendor stipulates that he shall have a right to
      repurchase .... In every such case the question is, what,
      upon a fair construction, is the meaning of the instruments?"
       Their Lordships of the Privy Council applied this rule to
       India in Bhagwan Sahai v. Bhagwan Din3 and in Jhanda Singh
  F    v. Wahid-ud-din, AIR 1916 P.C. 49 at p.54 (D).
        7. The converse also holds good and if, on the face of it, an
      · instrument clearly purports to be a mortgage it cannot be
        turned into a sale by reference to a host of extraneous and
        irrelevant considerations. Difficulty only arises in the
  G
        border line cases where there is ambiguity. Unfortunately,
        they form the bulk of this kind of transaction.
       8. Because of the welter of confusion caused by a multitude
       of conflicting decisions the legislature stepped in and
       amended Section 58(c) of the Transfer of Property Act.
       Unfortunately that brought in its train a further conflict of
  H
   SRI SRINIVASAIAH v. H. R. CHANNA BASAPPA (SINCE                       275
    DEAD) BY HIS LRS. [ABHAY MANOHAR SAPRE, J.]

       authority. But this much is now clear. If the sale and            A
       agreement to repurchase are embodied in separate
     · documents, then the transaction cannot be a mortgage
       whether the documents are contemporaneously executed
       or not. But the converse does not hold good, that is to say,
       the mere fact that there is only one document does not            B
       necessarily mean that it must be a mortgage and cannot be
       a sale. If the condition of repurchase is embodied in the
       document that effects or purports to effect the sale, then it
       is a matter for construction which was meant. The legislature
       has made a clear cut classification and excluded transactions
       embodied in more than one document from the category of           C
       mortgages, therefore it is reasonable to suppose that
       persons who, after the amendment, choose not to use two
       documents, do not intend the transaction to be a sale, unless
       they displace that presumption by clear and express words;
       and if the conditions of Section 58(c) are fulfilled, then we     D
       are of opinion that the deed should be construed as a
       mortgage."
      25. Keeping in mind the requirement of Section 58(c) of the T.P.
Act and the test laid down in Chunchun Jha's case (supra), let us
examine the nature of Ex.P-1 which reads as under:
                                                                         E
      "This Deed of Conditional Sale is made on this Twenty eighth
      day of July, Year-Nineteen Sixty nine, by M.N.
      Channabasavaiah, s/o Patel Nanjappa, resident of Kasaba
      Maralwadi village, Maraiwadi Hobli, Kanakapura Taluk to
      B.M. Narayan Shetty s/o Bhoopalam Munirama Shetty at
      Kasaba Maralwadi Village, maralwadi Hobli, Kanakapura              F
      Taluk. Witnesseth, to meet my financial necessities such
      as agricultural expenses, to clear loans and to meet
      domestic family expenses, today I am selling the schedule
      property for a sale consideration of Rs.1,500/- (Rupees one
      thousand five hundred) receiv~d in cash. The possession            G
      of the schedule property of this Conditional sale has been
      delivered to you today only. From now onwards you shall
      pay to the Government all taxes and other payments and
      shall peacefully enjoy the schedule property of this
      Conditional sale according to your wish. In the presence
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276     SUPREME COURT REPORTS                      [2017] 3 S.C.R.


A     of the witnesses, this Conditional sale deed, I have
      received the entire sale price. and no arrears are pending
      payable to me in this regard. The schedule property of this
      Conditional sale has not been alienated earlier to anyone
      in any manner either by my ancestors or by myself. In the
      event of any such litigation arises, I will clear the same at
 B
      my own expenses. There is no attachment of any minor
      claims or any charge for maintenance exists on the schedule
      property of this Conditional sale deed.
         Within five years from the aforesaid date of this
      Conditional sale deed, I will repay the entire conditional
 c    sale price of Rs.1,500/- (Rupees one thousand five hundred)
      to you and get executed a sale deed from you. In the event
      of default, after the said period of five years mentioned in
      this Conditional sale deed, then together with all the
      privileges, easements, advantages and appurtenances
 D    whatsoever in or to the schedule property and every part"
      thereof belonging to or to the said schedule property or
      hereinto before held, used, occupied or enjoyed or known
      as part and parcel thereof or appurtenant thereto shall
       belong to you and your legal heirs forever, free from all
      encumbrances, charges, liens whatsoever. Myself and my
 E    legal heirs shall have no manner of right, claim, interest or
       title whatsoever in or upon or in respect of the schedule
       property.
                           SCHEDULE
 F    All that piece and parcel of the land measuring Tuenty Eight
      Guntas in Sy.No. 168 (One hundred and sixty eight) situated
      at kasaba Maralwadi village, Maralwadi Hobli, Kanakapura
      Taluk, which is my ancestral property acquired by me by
      way of partition entered amongst myself and my brothers.
      The schedule land is bounded on:
 G
       East by          Land belonging to Narasegowda;
       West by          Lane and water channel;
       North by:        Thothi lnamthi land;
       South by:        Garden land belonging to Vendor;"
 H
   SRI SRINIVASAIAH v. H. R. CHANNABASAPPA (SINCE                             277
    DEAD) BY HIS LRS. [ABHAY MANOHAR SAPRE, J.]

       When we examine the nature of document in question (Ex.P-1),           A
we are of the opinion that the document (Ex.P-1) is a mortgage with
conditional sale as defined under Section 58 (c) of the T.P. Act. This we
say for following reasons:
       26. First, it is not in dispute that the plaintiff was the owner of the
suit land. Second, the parties concluded the transaction in question by B
executing one document (Ex.P-1 ). Third, the document (Ex.P-1) is styled
as a "Deed of Conditional Sale". Fourth, it contains a condition that
defendant No. I will be allowed to remain in possession of the suit property
for S years and enjoy the fruits of the land and that during this period, the
plaintiff will be entitled to get the suit property re-conveyed in his name
on paying Rs.1500/- by getting the sale deed executed in his name and C
obtain possession of the suit land from defendant No.1. Fifth, the plaintiff
offered to pay Rs.1500/-to defendant No.1 with a request to resale the
land to him.
        27. In our considered opinion, the aforesaid five reasons satisfies
the third condition of Section 58(c) of the T.P. Act, namely, "on condition   D
that such payment being made, the buyer shall transfer the property
to the seller'.'. 1t also satisfies the tests laid down by this Court in
Chunchun Jha' case (supra), namely, First, the transaction is concluded
in one document; Second, the document styled as a "Deed of
Conditional Sale" itself contains the condition of repurchase on offering E
the sale money without interest for the reason that defendant No. I was
allowed to use the land till the money is not paid back to him by the seller
(plaintiff); and Third, parties' intention as per terms of Ex.P-1 is also
supported by the evidence which was accepted by the two Courts -
Trial Court and the High Court.
                                                                              F
      28. In the light of foregoing discussion, we are of the considered
opinion that the Trial Court and the High Court was right in decreeing
the plaintiff's suit whereas the first Appellate Court was not right in
qismissing the suit.
        29. In other words, the reasoning and the conclusion arrived at by    G
the Trial Court and the High Court while holding that Ex.P-1 is a "mortgage
deed by conditional sale" as defined under Section 58( c) of the T.P.
Ac;t is just and proper and hence it deserves to be upheld by this Court.
       30. We also note that the High Court rightly took note of the law
laid down in the case of Chunchun Jha (supra) and the n::quirements           H
278            SUPREME COURT REPORTS                          [2017] 3 S.C.R.


A of Section 58(c) of the T.P. Act and keeping the same in mind interpreted
  Ex.P-1 and came to a right conclusion.
        31. Learned Counsel for the appellant, however, placed reliance
  on the decision in Vanchalabai Raghunath lthape vs. Shankarrao
  Baburao Bhilare, (2013) 7 SCC 173 and contended that the law laid
B down therein supports his contention that the Ex.P-1 is a sale out and
  out.
          32. We have pernsed the decision in Vanchalabai Raghunath
   Ithape's case (supra). First, we note therein that it did not take note of
   law laid down by this Court in the case of Chunchun Jha (supra),
 c which is a decision oflarger Bench (4 Judge Bench); Second, we further
   find that there the High Court had affirmed the findings of fact recorded
   by the Courts below in paras 19, 20, 25, 26 and 29 which are reproduced
   in para 9 of the decision at pages 176 and 177 wherein it is mentioned in
   para 26 of the first appellate order "Admittedly there was no relationship
   of debtor and creditor between the parties". This finding of fact was
 D affirmed by the High Court, which, in tum, was upheld by this Court;
   Third, such is not the case here because in the case at hand, the plaintiff
   came out with a case that he took loan of Rs.1500/- from defendant
   No.! and to secure the payment of loan, a conditional ·sale deed was
   executed irt the form of mortgage deed. It was not so in the case of
 E Vanchalabai Raghunath Ithape (supra).
             33. It is for these three reasons, we prefer to rely upon the law
      laid down by the earlier larger Bench in the case of Chunchun Jha
      (supra) which continues to hold the field to guide us as to how to examine
      the true nature of the document such as the one involved in the case
 F    (Ex. P-1).
         34. This takes us to the next question as to whether the High
   Court was justified in holding that the suit was filed within limitation? In
   our opinion, the High Court was right. The case at hand would be
   governed by Article 61 (a) of the Limitation Act which provides a limitation
 G of 30 years when the right to redeem or to recover possession accrues
   to the mortgagor. Ex.P-1 is of dated 28.07.1969. In terms of the
   conditions, five years expired on 27.07.1974. The plaintiff filed a suit on
   19.09.1987. It was thus filed within 30 years.                            ·
         35. Now coming to another question though not pressed in service
 H by the parties but, in our view, does arise in the case as a result of the
    SRI SRINIVASAIAH v. H. R. CHANNABASAPPA (SINCE                                279
     DEAD) BY HIS LRS. [ABHAY MANOHAR SAPRE, J.]

plaintiff's suit having been decreed against the defendants by the Trial          A
Court and affirmed by the High Court and lastly, by this Court.
        36. The question arises in this way. The effect of the decree
passed in this case is that the original plaintiff, now represented by his
legal representatives (respondent Nos.l to 5) are required to return
Rs.1500/- to the original defendant No. 1, now represented by his legal           B
representatives (Respondent Nos.6-11) and in tum, defendant No. I
(respondent Nos.6-11) are required to execute the sale deed by
retransferring the suit land to the plaintiff(respondent Nos.1-5) and restore
them the possession of the suit land. Since during the pendency of the
litigation, original defendant No. I transferred the suit land to the appellant
(defendant No. 2) for Rs.30,000/-, therefore, he, as a subsequent                 C
transferee of the suit land, has now stepped into the shoes of original
defendant No. !(respondent Nos.6-11 ).
       37. Yet another effect of the decree is that the transaction of sale
of suit land between defendant No. I and defendant No. 2 vide sale
deed dated 25.09.1986 is declared bad in law and stands nullified. As a D
consequence thereof, defendant No. 2 (appellant herein), who had paid
a sum of Rs. 30,000/- towards sale consideration to defendant No. 1 for
purchase of the suit land has become entitled to receive back the entire
sum from defendant No. I in the absence of any contract to the contrary
in this behalf between the parties. The reason being that once the sale is E
declared bad, the transaction of sale fails and, therefore, the seller
(defendant No. 1) has no right to retain the sale consideration to himself
and has to refund the sale consideration to the buyer (defendant No.
2)[See Section 65 of the Indian Contract Actj.
       38. The question arose before this Court in the case of Durga F
Prasad & Anr. vs Deep Chand & Ors., AIR 1954 SC 75 as to what
form of decree should be passed in the case of specific performance of
contract where the suit property is sold by the defendant, i.e., the owner
of the suit property to another person and later he suffers a decree for
specific performance of contract directing him to transfer the suit property
to the plaintiff in term of contract.                                        G

       39. The learned Judge-Vivian Bose, J. examined this issue and
1speaking for the Bench in his inimitable style of writing, held as under:


       "Where there is a sale of the same property in favour of a
       prior and subsequent transferee a\Jd the subsequent                        H
280            SUPREME COURT REPORTS                         [2017] 3 S.C.R.


A           transferee has, under the conveyance outstanding in his
            favour, paid the purchase-money to the vendor, then in a
            suit for specific performance brought by the prior
            transferee, in case he succeeds, the question arises as to
            the proper form of decree in such a case. The practice of
            the Courts in India has not been uniform and three distinct
B
            lines of thought emerge. According to one point of view,
            the proper form of decree is to declare the subsequent
            purchase void as against the prior transferee and direct
            conveyance by the vendor alone. A second considers that
            both vendor and vendee should join, while a third would
c           limit execution of the conveyance to the subsequent
            purchaser alone. According to the Supreme Court, the
            proper form of decree is to direct specific performance of
            the contract between the vendor and the prior transferee
            and direct the subsequent transferee to join in the
            conveyance so as to pass on the title which resides in him
D
            to the prior transferee. He does not join in any special
            covenants made between the prior transferee and his
            vendor; all he does is to pass on his title to the prior
            transferee."
            40. We, therefore, consider it just and proper and with a view to
 E   end this litigation between the parties which is pending since 1969 and
     also to balance the e_quities amongst the parties that defendant No. 1
   . through his legal representatives (Respondent Nos.1-5) would return a
     sum of Rs.30,000/-to defendant No. 2 (appellant herein). This direction
     we give by taking recourse to our powers under Article 142 of the
 F Constitution of India to do complete justice between the parties to the lis
     because we do not want another round of litigation to go on for years in
     future between the defendants inter se for recovery of this amount.
            41. In the light of foregoing discussion, the appeals are disposed
      of by modifying the judgment and decree as under:
 G                    1. The plaintiff (respondent Nos.1-5) Shall deposit a sum
            ofRs.1500/- in the executing Court for being paid to the defendant
            (Respondent Nos.6-11) within 3 months as an outer limit.
                       2. Defendant No. I (Respondent nos.6-11) shall deposit
            _in the executing Court a sum of Rs.30,000/- for being paid to the
 H          appellant (defendant No. 2) within 3 months as an outer limit
      SRI SRINIVASAIAH v. H. R. CHANNABASAPPA (SINCE'                          2~1
       DEAD) BY HIS LRS. [ABHAY MANOHAR SAPRE, J.]

                  3. Defendant No.l(Respondent Nos.6-11) and the A
        appellant(Defendant No.2) will jointly execute the sale deed in
        plaintiffs' (respoµdent Nos. l-5) favour and hand over the
        possession of the suit land to the plaintiffs (Respondent Nos.1-5)
        simultaneously and then will withdraw the money deposited for
        them in Court.
                                                                               B
        42. The executing Court will ensure completi9n of proceedings
within the time fixed and will record due satisfaction of the decree in
accordance with law. In case of any default, the parties will be entitled
to put the decree in execution for enforcement of the terms of the decree
of this Court amongst the defaulting parties ..
                                                                               c
        43. In view of foregoing discussion, the appeals stand disposed
of.


Nidhi Jain                                              Appeals disposed of.