1 2025:CGHC:56097 NAFR HIGH COURT OF CHHATTISGARH AT BILASPUR SA No. 710 of 2017 1 - Munidas S/o Ghursai Aged About 55 Years R/o Sahanpur, Police Station Dhourpur, Tahsil Lundra District Surguja Chhattisgarh. ... Appellant versus Shivnath Yadav (Since Died) S/o late Bharosa Das, aged about 52 years, Police Station Dhourpurr, Tehsil Lundra, District Surguja, Chhattisgarh. 1- Sukul Yadav S/o Late Shivnath Aged About 40 Years, 2- Gopal Yadav S/o Late Shivnath Aged About 38 Years 3 - Amrikan Yadav S/o Late Shivnath Aged About 18 Years Respondent No.1 to 3 are R/o Village Patora, Post Patora, Dhourpur, Tahsil Lundra District Surguja Chhattisgarh. 4 - State of Chhattisgarh through Collector Surguja, Ambikapur Chhattisgarh. ... Respondent(s) For Appellant : Shri Anurag Singh, Advocate. For Respondents 1 to 3 : None. Though served. For State : Shri Kalpesh Ruparel, Panel Lawyer. Hon’ble Shri Justice Ravindra Kumar Agrawal, J Judgment on Board 18.11.2025 1. This Second Appeal under Section 100 of Code of Civil Procedure, 1908 has been filed by the appellant/plaintiff against the impugned judgment and decree dated 21.04.2017 passed by IVth Additional District Judge, Ambikapur, District Surguja, in Civil Appeal No.A- 25/2014 whereby the First Appeal filed by the appellant against the Digitally signed by INDRAJEET SAHU Date: 2025.11.21 15:00:09 +0530 2 impugned judgment and decree dated 30.07.2012 passed by Ist Civil Judge Class-II Ambikapur, District Surguja, in Civil Suit No.44-A/2010 has been dismissed and the judgment and decree of trial court has been affirmed. 2. For the sake of convenience, the status of parties are being taken in the present Second Appeal as per their status shown in the Civil Suit. 3. The present Second Appeal was admitted by this court on 04.09.2025 for hearing on the following substantial question of law: “Whether both the courts below were justified in recording its finding that agreement (Ex.P/2) is not mortgaged by conditional sale but it is a sale deed executed by the plaintiff?” 4. The plaintiff filed a Civil Suit for declaration of title and permanent injunction over the suit land Khasra No.95/4 Area 0.222 Hect. situated at village Sahanpur, Tehsil Lundra, District Surguja. The pleadings made in the plaint are that, the plaintiff was the owner of suit land. In the year, 1999 the plaintiff was in need of money to repay the bank loan and he contacted the defendant No.1 and borrowed an amount of Rs.25,000/- from him and pledged the said land to the defendant No.1. The suit land was usufructuary mortgaged with the defendant No.1 till repayment of loan amount. However, instead of executing the mortgage deed, the defendant No.1 got executed a sale deed in his favour. The defendant No.1 has also assured that whenever the plaintiff repay the borrowed amount, he will execute a re-conveyance deed in his favour. As per the assurance and mutual settlement between the parties, the plaintiff repaid the entire amount of Rs.25,000/- in three installments up to December, 1999 and took 3 possession of the suit land back from the defendant No.1. In the year, 2009, the defendant No.1 tried to possess the suit land saying that he is the owner of suit property and he will not permit the plaintiff to cultivate the same. He has not executed any sale deed and it was only a mortgage deed, but with the collusion of revenue authorities he got his name mutated in the revenue records. Therefore, a suit has been filed by the plaintiff. 5. The defendant No.1 contested the suit of plaintiff and filed his written statement with the pleading that after obtaining entire sale consideration the plaintiff has executed the sale deed and from the date of execution of sale deed, the defendant No.1 is in possession of the suit land and got his name mutated in the revenue records also. A false and frivolous claim has been raised by the plaintiff to grab the property of defendant No.1. By his full consciousness mind and in presence of attesting witnesses he signed the sale deed and handed over possession of the suit land to defendant No.1 and after about 10 years of sale transaction the plaintiff is raising dispute which is an afterthought and no cause of action arose in his favour and therefore the suit is liable to be dismissed. 6. On the basis of the pleadings made by the counsel for the parties, the trial court has framed the following issues: dz0 okn iz’u fu"d"kZ 1 D;k oknh xzke lguiqj fLFkr Hkwfe [kljk ua095@4 jdck 0-222 gs0 dk LoRokf/kdkjh gS~ ugh 2 D;k oknh izfroknh ds fo:) mDr of.kZr Hkwfe ds laca/k es LFkk;h fu"ks/kkKk izkIr djus ds vf/kdkjh gS ugh 4 7. In support of the case of respective parties, the plaintiff examined himself as PW-1, Harvansh, PW-2 and Ramdas, PW-3 and he relied upon document Ex.P/1 which is the copy of sale deed dated 02.07.1999 and Ex.P/2 which is an agreement dated 02.07.1999. The defendant No.1 examined himself as DW-1, Shankar Singh, DW-2 and Ram Karan, DW-3 and relied upon documents Ex.D/1 i.e. sale deed dated 02.07.1999. 8. After appreciation of oral as well as documentary evidence led by the parties and after having gone through the records, the trial court has considered that sale deed 02.07.1999 was outright sale and not a mortgage deed. The sale deed was executed by the plaintiff in favour of the defendant and also held that the defendant No.1 is in possession of the suit land by holding that plaintiff has not claimed possession of the suit land and as such his suit is not maintainable. It was also observed that the plaintiff has also not claimed declaration of sale deed as null and void and therefore he cannot be considered to be title holder of the suit property and dismissed the suit vide judgment and decree dated 30.07.2012. 9. The said judgment and decree of trial court was challenged by the plaintiff before the first appellate court which was also dismissed vide judgment and decree dated 21.04.2017 upholding the consideration of the trial court with respect to execution of sale deed by the plaintiff in favour of defendant on 02.07.1999. The first appellate court has also considered that there is no endorsement in the sale deed Ex.P/1 & D/1 about execution of any re-conveyance or with respect to execution of mortgage deed. The appellate court also considered that Ex.P/2 is an 5 agreement and plaintiff has not sought for execution of said agreement and the suit also has not been filed after three years of time as fixed in the said agreement and therefore the claim of plaintiff is not bonafide and accordingly dismissed the appeal. 10. Learned counsel appearing for the appellant/plaintiff would submit that on 02.07.1999 itself at the time of execution of sale deed in place of mortgage deed, there was an agreement between the parties that the entire amount of Rs.25000/- shall be returned back by the plaintiff to the defendant No.1 within seven months and then a re-conveyance deed would be executed in favour of plaintiff. The execution of agreement dated 02.07.1999 is not denied by the defendant No.1 which clearly shows that deed Ex.P/1 is a nominal sale deed executed in place of the mortgage deed and transaction between the parties is a mortgage and not an outright sale. In the evidence of PW-1, the defendant No.1 has given suggestion that property was earlier pledged with the defendant No.1 and therefore the bonafide of sale transaction is suspicious and it is only a loan transaction between the parties for which the defendant No.1 got the sale deed executed with the condition that amount will be refunded within seven months along with the incurred expenses. He would also submit that the said agreement was executed at the same time and it is not afterthought or subsequently executed. The witnesses to the alleged sale deed Ex.P/1 & D/1 are the same in the agreement Ex.P/2 also. Therefore, transaction between the parties are only a loan transaction and deed Ex.P/1 & D/1 are the mortgage deed and no title was conveyed to defendant No.1 by the said deed. The plaintiff is still in possession of 6 the suit land which also supports the bonafide of loan transaction and not the sale. Since the defendant No.1 tried to dispossess the plaintiff in the year 2009, cause of action and necessity arose to file the suit for declaration of title and permanent injunction and the plaintiff is entitled for decree as claimed by him. 11. No one appears on behalf of respondents No.1 to 3 despite service of notice. 12. I have heard the counsel for the appellant, perused the record of courts below and have gone through the evidence. 13. Section 58(c) of the Transfer of Property Act, 1882 defines “mortgage by conditional sale”, which reads as under: “58. (c) Mortgage by conditional sale.—Where 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, and the mortgagee, a mortgagee by conditional sale: Provided that no such transaction shall be deemed to be a mortgage, unless the condition is embodied in the document which effects or purports to effect the sale.” 14. The effect of this proviso is that no document of sale can be treated as mortgage unless the document effecting the sale itself contains a recital to that effect. The whole object is to exclude or shut out the oral evidence to be adduced in the case when such a condition is contained in a separate document. Thus, if the document effecting a sale does not contain a stipulation regarding the conversion of the sale into a mortgage and such a stipulation is contained in a separate 7 document, in such a case, it is not at all open in law to enquire into the nature of the transaction and to take extrinsic evidence for holding that the document which purports to be an absolute sale is in reality, a mortgage. 15. The question is, whether the abovestated transaction contained in Ex.D1, which is in the nature of sale, is a mortgage by conditional sale or it is an outright sale? 16. The question so posed for consideration is no longer res integra and stood adjudicated authoritatively by Their Lordships of the Supreme Court which may be referred herein usefully and profitably as well. The Supreme Court in the matter of Chunchun Jha v. Ebadat Ali and Another, AIR 1954 SC 345, considered the matter by posing a question in paragraph 5 as under: “(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 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 consider the attendant circumstances the imponderable variables which that brings in its train make it impossible to compare one case with another. Each must be decided on its own facts. But certain broad principles remain.” 17. The question so passed for consideration was answered by Their Lordships in paragraphs 9 and 13 as under: “(9) The document with which we are concerned (Ex. A) is in the following terms and our first duty is to construe the language used and see whether it is ambiguous. (We have paragraphed the document for convenience of construction and have omitted unnecessary words.) (1) "Rs. 634 principal with interest under a registered rehan bond " (simple mortgage) "dated the 6th May 1927 is justly due ............ 8 by us the executants. Now we further require Rs. 6560 more to meet costs of the suit under section 40." (Bihar Tenancy Act.) (2) “and at present there is no other way in view rather it seems impossible and difficult to arrange for the money without selling the property let out in rehan " (simple mortgage) "under the above mentioned bond" (3) "Therefore, we the executants declare .... that we …. sold and vended the properties detailed below on condition (given below) for a fair and just price of Rs. 700....…" (4) "That we set off Rs. 634100 against the consideration money " (torn) "payable under the aforesaid bond in favour of the said vendee and received Rs. 6560 in cash from the said vendee. In this way the entire consideration money was realised from the said vendee." (5) "and we put the said vendee in possession and occupation of the vended property detailed below and made him an absolute proprietor in our places." (6) "If we, the executants, shall repay the consideration money to the said vendee within two years ............ the property vended under this deed of conditional sale attached shall come in exclusive possession and occupation of us, the executants." (7) "If we do not pay the same, the said vendee shall remain in possession and occupation thereof, generation after generation, and he shall appropriate the produce thereof." (8) "We, the executants, neither have nor shall have any objection whatsoever in respect of the vended property and the consideration money. Perchance if we do so it shall be deemed null and void in Court." (9) "and we declare also that the vended property is flawless in every way and that if in future any kind of defect whatsoever be found on account of which the said vendee be dispossessed of a portion or the entire property vended under this deed of conditional sale and will have to pay the loss or damage, in that event we, the executants, (a) shall be liable to be prosecuted under the possession against the said vendee or his (b) we shall pay the entire consideration money together with loss and damage and interest at the rate of Rs. 2 per mensem per hundred rupees from the date of the execution of this deed till the date of realisation from our person and other properties (c) and we shall not claim the produce of the vended property for the period of vendee's possession against the said vendee or his heirs and representatives." (10) "Therefore we, the executants ......… have executed this deed of conditional sale so that it may be of use in future." (13) We next turn to the conditions. The ones relevant to the present purpose are contained in Clauses (6) and (7). Both are ambiguous, but we have already said that on a fair construction clause (6) means that if the money is paid within the two years then the possession will revert to the executants with the result 9 that the title which is already in them will continue to reside there. The necessary consequence of that is that the ostensible sale becomes void. Similarly, clause (7), though clumsily worded, can only mean that if the money is not paid, then the sale shall become absolute. Those are not the actual words used but, in our opinion, that is a fair construction of their meaning when the document is read as a whole. If that is what they mean, as we hold they do, then the matter falls squarely within the ambit of Section 58(c).” 18. The decision rendered in Chunchun Jha (supra) has been followed by Their Lordships of the Supreme Court in the matter of Srinivasaiah v. H.R. Channabasappa (since dead) by his Legal Representatives and others, (2017) 12 SCC 821. 19. Similarly, in the matter of Dharmajit Shankar Shinde and others v. Rajaram Shripad Joshi (dead) through legal representatives and others, (2019) 8 SCC 401 their Lordships of the Supreme Court has considered the provisions contained in Section 58(c) of the Transfer of Property Act, 1882 and has held that sale with a mere condition of re- transfer is not mortgage. It was further held that if the sale and agreement to repurchase are embodied in the separate documents then the transaction cannot be a “mortgage by conditional sale” irrespective of whether the documents are contemporaneously executed. It was further held that in case of single document, real character of the document is to be ascertained from the provisions of the deed viewed in the light of the surrounding circumstances and intention of the parties. 20. Aforesaid judgment of the Supreme Court in the matter of Dharmajit Shankar Shinde and others (supra) has been followed with approval by the Supreme Court in the matter of Sopan (DEAD) through his legal representatives v. Syed Nabi, (2019) 7 SCC 635. 10 21. In the matter of Prakash (Dead) by LRs Vs. G. Aradhya and Others, 2023 SCC Online SC 1025, the Hon’ble Supreme Court in paragraph 29 to 31 has held as under: “29.The scope of Section 58(c) of the 1882 Act4 was considered in detail in paras 27 to 33 thereof which are extracted below: “27. A bare perusal of the said provision clearly shows that a mortgage by conditional sale must be evidenced by one document whereas a sale with a condition of retransfer may be evidenced by more than one document. A sale with a condition of retransfer, is not mortgage. It is not a partial transfer. By reason of such a transfer all rights have been transferred reserving only a personal right to the purchaser (sic seller), and such a personal right would be lost, unless the same is exercised within the stipulated time. 28. In Pandit Chunchun Jha v. Sk. Ebadat Ali [(1955) 1 SCR 174 : AIR 1954 SC 345] this Court clearly held : (SCR p. 177) “We think that is a fruitless task because two documents are seldom expressed in identical terms and when it is necessary to consider the attendant circumstances the imponderable variables which that brings in its train make it impossible to compare one case with another. Each must be decided on its own facts.” 29. Yet again in Mushir Mohd. Khan v. Sajeda Bano [(2000) 3 SCC 536] this Court upon construing Section 58(c) of the Transfer of Property Act opined : (SCC pp. 541-42, para 9) “9. The proviso to this clause was added by Act 20 of 1929 so as to set at rest the conflict of decisions on the question whether the conditions, specially the condition relating to reconveyance contained in a separate document could be taken into consideration in finding out whether a mortgage was intended to be created by the principal deed. The legislature enacted that a transaction shall not be deemed to be a mortgage unless the condition for reconveyance is contained in the document which purports to effect the sale.” 30. Referring to Chunchun Jha [(1955) 1 SCR 174 : AIR 1954 SC 345] it was held : (SCC p. 544, para 14) “14. Applying the principles laid down above, the two documents read together would not constitute a ‘mortgage’ as the condition of repurchase is not contained in the same documents by which the property was sold. The proviso to clause (c) of Section 58 would operate in the instant case also and the transaction between the parties cannot be held to be a ‘mortgage by conditional sale’.” 31. In Umabai v. Nilkanth Dhondiba Chavan [(2005) 6 SCC 243] wherein one of us was a party, this Court held: “21. There exists a distinction between mortgage by conditional sale and a sale with a condition of repurchase. In a mortgage, the debt subsists and a right to redeem remains with the debtor; but a sale with a condition of repurchase is not a lending and 11 borrowing arrangement. There does not exist any debt and no right to redeem is reserved thereby. An agreement to sell confers merely a personal right which can be enforced strictly according to the terms of the deed and at the time agreed upon. Proviso appended to Section 58(c), however, states that if the condition for retransfer is not embodied in the document which effects or purports to effect a sale, the transaction will not be regarded as a mortgage. (See : Pandit Chunchun Jha v. Sk. Ebadat Ali [(1955) 1 SCR 174 : AIR 1954 SC 345], Bhaskar Waman Joshi v. Narayan Rambilas Agarwal [(1960) 2 SCR 117 : AIR 1960 SC 301], K. Simrathmull v. S. Nanjalingiah Gowder [1962 Supp (3) SCR 476 : AIR 1963 SC 1182], Mushir Mohd. Khan [(2000) 3 SCC 536] and Tamboli Ramanlal Motilal [Tamboli Ramanlal Motilal v. Ghanchi Chimanlal Keshavlal, 1993 Supp (1) SCC 295].)” 32. The High Court relied upon Indira Kaur v. Sheo Lal Kapoor [(1988) 2 SCC 488 : AIR 1988 SC 1074]. Therein the Court took into consideration the factors adumbrated therein, particularly, a long stipulated period of 10 years for conveying the property and the vendee was prohibited from selling and parting with his right, title and interest for 10 years. The vendor was allowed to occupy the property as a tenant on payment of Rs. 80 per month. No order of mutation was passed in his favour. It was held: “6. … In the present case having regard to the facts and circumstances highlighted in the course of the discussion pertaining to the question as to whether or not the transaction was a transaction of mortgage having regard to the real intention of the parties it would be difficult to hold that the agreement to sell executed by the defendant in favour of the plaintiff was by way of a ‘concession’. It was a transaction entered into by the defendant who was a hard-headed businessman and the documents in question have been carefully framed in legal terminology taking into account the relevant provisions of law. The transaction also discloses the awareness of the defendant about Section 58(c) of the Transfer of Property Act as is evident from the fact that the reconveyance clause is not embodied in the sale deed itself. In the agreement to sell, no reference has been made to the transaction of sale though it has been executed contemporaneously. The defendant who has permitted the plaintiff to continue in possession on payment of rent equivalent to about 13½ per cent interest and was evidently aware of all the dimensions of the matter would not have granted any concession or executed the agreement by way of a concession. The agreement was executed evidently because the plaintiff would not have executed the sale deed unless an agreement to sell by a contemporaneous document was also executed to enable the plaintiff to enforce specific performance within ten years. It was therefore a transaction entered into with open eyes by the defendant and there was no question of granting any concession.” 12 33. In the instant case, as noticed hereinbefore, the transfer is complete and not partial, no stipulation has been made that the appellant cannot transfer the property. Not only that, the appellant was put in possession of the land, his name was also mutated.” 30. A perusal of the aforesaid paras of the judgment shows that the proviso was added in Section 58(c) of the Act4 vide Act No. 20 of 1929, so as to put at rest the conflicting decisions on the issue. A deeming fiction was added in the negative that a transaction shall not be deemed to be a mortgage unless the condition for reconveyance is contained in the document which purports to effect the sale. 31. The judgment of this Court in Umabai v. Nilkanth Dhondiba Chavan, (2005) 6 SCC 243, has also been referred to, which defines the distinction between mortgage by conditional sale and a sale with a condition of repurchase. In a mortgage, the debt subsists and a right to redeem remains with the debtor; but a sale with condition of repurchase is not a lending and borrowing arrangement. Proviso to Section 58(c) of the 1882 Act4 was referred to in the aforesaid judgment to hold that if the condition for re-transfer is not embodied in the document which effects or purports to effect a sale, the transaction will not be regarded as a mortgage. The judgment of this Court in Ramlal's case (supra), relied upon by learned Senior counsel for the appellant, was specifically dealt with and distinguished in paras 34 and 35 thereof in Bishwanath Prasad Case (supra) and the same are extracted below: 34. In Ramlal v. Phagua this Court having regard to the peculiar fact situation obtaining therein opined : (SCC p. 173, para 18) “18. In our opinion, agreement to reconvey the property will not ipso facto lead to the conclusion that the sale is nominal and in view of the stand of Defendant 8, as also of the fact that the property worth Rs. 700 has been purportedly sold for Rs. 400, we are of the considered opinion that the sale deed dated 1-12-1965 did not convey any title to Defendant 8. It is well settled by a catena of decisions that the vendor cannot convey to the vendee better title than she herself has.” 35. As of fact, it was held therein that the sale deed in question was not a real sale deed but was by way of a surety. In that case, furthermore, the defendant categorically admitted that the plaintiff had taken loan. It is in that situation, the transaction was held to be a mortgage. Apart from it, there were other circumstances which led the court to arrive at the said conclusion. The said decision, therefore, cannot have any application in the instant case.” 22. Reverting to the facts of the present case in light of the proviso to Section 58(c) of the Transfer of Property Act, 1882 and in light of the 13 principles rendered by the Supreme Court in the aforecited cases (supra), examining Ex.P/1 & D/1, it is quite vivid that Ex. P/1 & D/1 purports to be an absolute sale and it does not contain any stipulation for treating the sale as mortgage. The agreement is said to have been executed separately vide Ex.P/2 but it has not been proved as to why the contents of said agreement is not there in the deed Ex.P/1 & D/1. The transaction cannot be regarded as mortgage, on the basis of the oral evidence and there is no embodiment of such agreement in the said deed Ex. P/1 & D/1. Therefore, the transaction in question, in absence of embodiment as contained in proviso to Section 58(c) of the Transfer of Property Act, 1882, cannot be regarded as mortgage and it is held to be an outright sale. Further, the specific term used in the document Ex.P/2 is the agreement executed by defendant No.1 in favour of the plaintiff. It is clearly mentioned therein that the property in question has already been sold and registered in the name of defendant No.1. On a request made by the plaintiff, the right to repurchase the property was given within seven months on payment of sale consideration of Rs.25,000/- plus incurred expenses. Perusal of contents of sale deed Ex.P/1 & D/1 shows that it is clearly mentioned therein that the same was an absolute sale for its total sale consideration of Rs.25,000/- required by the vendor to meet the domestic expenses. Out of Rs.25,000/-, Rs.13,000/- was received earlier and Rs.12,000/- was to be received in present of Sub Registrar at the time of registration of sale deed. Possession of property was also delivered on registration of sale deed and the vendee was entitled to get the land mutated in his name and enjoy the property. It further 14 transpires that agreement of buy back, Ex.P/2, dated 02.07.1999 mentions that after registration of sale deed the vendor had requested the vendee to resale the property within the time given and the vendee granted seven months time to repurchase the property after return of the entire sale consideration along with incurred expenses. However, despite expiry of seven months period till filing of suit in the year, 2010, the plaintiff has not challenged the sale deed and has not claimed for specific performance of the agreement. In terms of the sale deed and agreement, reconsidered in the light of the enunciation of the law as referred to above, in the opinion of this court, the same cannot be held to be a transaction of mortgage of property. The sale of property was initially absolute by way of execution of the sale deed Ex.P/1 & D/1. 23. Accordingly, I do not find any substance in the appeal filed by the appellant/plaintiff and the substantial question of law is answered accordingly in favour of defendant No.1 and against the plaintiff. 24. As as fallout and consequence of the above, the Second Appeal is dismissed. Parties to bear their own costs. 25. Decree be drawn accordingly. Sd/- (Ravindra Kumar Agrawal) Judge inder