Property Redemption Dispute: Supreme Court Reverses High Court Decision

The case revolves around a long-standing property dispute regarding the interpretation of a ‘mortgage by conditional sale’ versus a ‘sale with a condition to repurchase.’ The appellants, Dharmaji Shankar Shinde and Others, challenged the High Court’s ruling that the respondents-plaintiffs had the right to redeem the property.

The respondents filed a suit seeking redemption of a property mortgaged by their father, Shripad Joshi, in 1967. The dispute arose over whether the transaction was a mortgage or an outright sale with a repurchase clause.

Arguments of the Petitioner

The appellants argued that the transaction was an absolute sale and not a mortgage. They contended:

• The sale deed contained clear terms stating that if the money was not repaid within five years, the ownership would be absolute.
• The original owner, Shripad Joshi, failed to take any legal steps to repurchase the property within the stipulated period.
• The plaintiffs had no right to reclaim the land as per the terms of the sale agreement.

Arguments of the Respondent

The respondents argued:

• The transaction should be classified as a mortgage by conditional sale under Section 58(c) of the Transfer of Property Act.
• Their father had partially repaid the loan amount, which indicated an intent to redeem the property.
• The lower court’s ruling did not properly consider key documentary evidence proving their claim.

Key Observations by the Supreme Court

The Supreme Court held:

“The question whether a transaction is a mortgage by conditional sale or an outright sale with a repurchase clause depends on the intention of the parties and the language of the deed. In this case, the document clearly states that if repayment is not made within five years, the sale becomes absolute. The plaintiffs did not take any legal action within this period.”

The court also ruled that the appellate courts misinterpreted the nature of the agreement and ignored key legal precedents on similar cases.

Judgment

The Supreme Court set aside the High Court’s order and restored the trial court’s judgment, dismissing the respondents’ claim for property redemption.

Thus, the petition was allowed, and the appeal was upheld in favor of the appellants.

Petitioner Name: Dharmaji Shankar Shinde and Others.
Respondent Name: Rajaram Shripad Joshi (Dead) Through LRs and Others.
Judgment By: Justice R. Banumathi, Justice R. Subhash Reddy.
Place Of Incident: Satara, Maharashtra.
Judgment Date: 23-04-2019.

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Download Judgment: Dharmaji Shankar Shi vs Rajaram Shripad Josh Supreme Court of India Judgment Dated 23-04-2019.pdf