SUPREME COURT: TRANSACTION CANNOT BE REGARDED AS MORTGAGE BY CONDITION SALE IF CONDITION FOR RECONVEYANCE IS NOT SPECIFIED IN SAME DEED | TP ACT

The Supreme Court in the case Prakash (Dead) By LR. V G. Aradhya and Ors observed and has held that under Section 58(c) of the Transfer of Property Act,1882 no transaction shall be deemed to be a mortgage unless the condition for reconveyance is contained in the document which purports to effect the sale.

- 

The Division bench comprising of Justice Hima Kohli and Justice Rajesh Bindal in the case observed while dealing with the case wherein two documents were being executed on the same day, one was the sale deed and the other was a reconveyance or agreement of buy back deed.

The Apex Court in the case observed and has held that the proviso stated under Section 58(c) of the Act was added to create a deeming fiction that a transaction cannot be deemed to be a mortgage unless the condition for reconveyance is contained in the document which purports to effect the sale.

The Supreme Court in the case referred to the catena of judgments with regards to the interpretation as stated under Section 58(c) of the Act to reach this conclusion.