Property Law

Vidhyadhar v. Manikrao

AIR 1999 SC 1441; (1999) 3 SCC 573

Facts

The original owner executed a document called Kararkharedi in favour of Manikrao for ₹1,500 and delivered possession.
The document provided that the property would be returned if ₹1,500 was repaid by a specified date.
The owner later executed a registered sale deed in favour of Vidhyadhar for ₹5,000.
Vidhyadhar sought:
redemption, treating the earlier transaction as a mortgage by conditional sale; or
alternatively, enforcement of the right of repurchase.
Manikrao argued that:
Vidhyadhar’s sale was invalid because the full sale consideration had not been paid; and
the earlier document was an absolute sale rather than a mortgage.
The original owner admitted executing the sale deed in Vidhyadhar’s favour.

Whether non-payment of the entire price invalidated Vidhyadhar’s registered sale.
Whether the earlier document was a sale with a repurchase clause or a mortgage by conditional sale.
What inference could be drawn from a material party’s failure to enter the witness box.

Under Section 54, sale is transfer of ownership for a price:
paid;
promised;
part-paid and part-promised.
Full payment at execution is not essential if the parties intended ownership to pass.
The unpaid seller ordinarily has a statutory charge for the balance under Section 55(4)(b).
Under Section 58(c), a transaction may be a mortgage by conditional sale where:
ostensible sale and condition are contained in the same document; and
the real intention is to secure repayment.
A party who avoids the witness box despite possessing special knowledge may face an adverse inference.

The registered deed in Vidhyadhar’s favour showed an intention to transfer ownership immediately.
Even assuming that ₹4,500 remained unpaid, Section 54 expressly recognised a sale for a promised or partly promised price.
Non-payment therefore created a claim for the balance; it did not automatically revest ownership in the seller.
Regarding the earlier instrument:
the condition for return of the property appeared in the same document;
a specific amount was described as mortgage money;
repayment by the specified date would restore the property.
These features showed that the transaction was intended as security for a loan.
The amount had been tendered in time, but Manikrao refused it.
He could not rely on his own refusal to argue that the mortgage became an absolute sale.
The original owner’s admissions also supported Vidhyadhar.
A person who could have contradicted the transaction but withheld himself from examination could not expect the court to accept unsupported allegations against the registered deed.

Vidhyadhar’s sale deed was valid even if part of the price remained unpaid.
The earlier transaction was a mortgage by conditional sale.
The mortgage money had been validly tendered.
Vidhyadhar, as transferee of the mortgagor, was entitled to redeem the property.