Essentials of an Agreement – To qualify as a mortgage

The essentials of an agreement, to qualify as a mortgage by conditional sale, can succinctly be broadly summarized. An ostensible sale with transfer of possession and ownership, but containing a clause for reconveyance in accordance with Section 58 (c) of the Transfer of Property Act, will clothe the agreement as a mortgage by conditional sale. The execution of a separate agreement for reconveyance, either contemporaneously or subsequently, shall militate against the agreement being mortgage by conditional sale. There must exist a debtor and creditor relationship. The valuation of the property, and the transactional value, alongwith the duration of time for reconveyance, are important considerations to decide the nature of the agreement. There will have to be a cumulative consideration of these factors, alongwith the recitals in the agreement, intention of the parties, coupled with other attendant circumstances, considered in a holistic manner. Vishal Tukaram Kadam v. Vamanrao Sawalaram Bhosale, 2017 (5) AWC 4821.

Advertisements

Leave a comment

Filed under Civil Law, Mortgage by Conditional Sale

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s