Inadequate Compensation Does Not Deem a Sale as a Mortgage: Calcutta High Court

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Excerpt

The case over the contested assets began in 1975, when the plaintiff’s predecessor-in-interest filed a Title Suit in the 1st Court of Munsiff at Serampore, seeking a declaration that the alleged deed of the sale he executed was just a mortgage and not an absolute sale.

Facts of the Case

The case over the contested assets began in 1975, when the plaintiff’s predecessor-in-interest filed a Title Suit in the 1st Court of Munsiff at Serampore, seeking a declaration that the alleged deed of the sale he executed was just a mortgage and not an absolute sale.  The forerunner of the show appealing party was the proprietor of the suit properties depicted in Plan “A” and “B” thereto by ideals of the dints of buy and was confronting a budgetary crunch and drawn closer the litigant in that, i.e., the Respondent no. 1, for credit and in arrange to secure the same executed an apparent sale-deed with the clear stipulation that upon reimbursement of the same with intrigued it would be reconveyed. It was also stated that ownership would remain with the plaintiff’s predecessor-in-interest and that no title would transfer to Defendant No. 1 or the other defendants through him in respect of the property.

The contesting defendants filed separate written statements, claiming that the present plaintiffs’ predecessor in interest sold, transferred, and conveyed the property to Defendant No. 1 upon approval of the consideration, and that possession was also delivered at the same time.

Arguments on behalf of the Petitioners

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The first Appellate court’s conclusions were criticized by the lawyer. He claimed that the first Appellate court had not reported satisfaction, that the application for additional proof does not meet the requirements of the said clause, and that the Appellate court should not have reopened the earlier suit’s problem.

Arguments on behalf of the Respondents

The council for the Respondents argued that The Appellate Court had no objection to a party presenting additional evidence if it is needed for substantive reasons. He also claims that there was no question that the additional records requested to be relied on by his client are public documents that are marked as exhibits. He adamantly contends that ownership has always stayed with the plaintiff or his predecessor in interest and that since the issue was not resolved conclusively in a previous round of litigation, the litigant has no bar to re-agitate the issue in a subsequent proceeding and the court to return its findings thereon. As a result, he contends that the First Appellate Court’s judgment and 11 decrees are without flaws or illegalities and that the instant appeal does not present a substantive question of law.

Court’s Judgment

The Appellate Court overturned the Trial Court’s judgment and decree on the essence of the transactions between the parties, focusing on the alleged sale-deed, holding that if the plaintiff purchased the property in 1959 for Rs. 800/-, it is improbable that the same property would be sold for Rs. 1000/- after a 13-year gap. 

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The Judgment and decree of the First Appellate Court were again challenged before this court and it held that the low value shown is insufficient to consider a transaction to be a loan in substance. 

Click here to view full judgment.


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