Comprehension
“The essentials of an agreement to qualify as a mortgage by conditional sale can succinctly be broadly summarised. An ostensible sale with transfer of possession and ownership, but containing a clause for reconveyance in accordance with Section 58(c) of the 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 transaction value along with 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 along with the recitals in the agreement, intention of the parties, coupled with other attendant circumstances, considered in a holistic manner.”
[Extracted from Vithal Tukaram Kadam v. Vamanrao Sawalaram Bhosale, (2018) 11 SCC 172. In the foregoing extract, ‘Act’ refers to the Transfer of Property Act, 1882]
[Extracted from Vithal Tukaram Kadam v. Vamanrao Sawalaram Bhosale, (2018) 11 SCC 172. In the foregoing extract, ‘Act’ refers to the Transfer of Property Act, 1882]
Question: 1
Which of the following expresses the distinction between a ‘mortgage by conditional sale’ and a ‘sale with a condition of repurchase’?
Which of the following expresses the distinction between a ‘mortgage by conditional sale’ and a ‘sale with a condition of repurchase’?
Updated On: Nov 7, 2024
- 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 borrowing arrangement.
- In a mortgage by conditional sale, generally the amount of consideration is far below the value of the property in the market; but, in a sale with a condition of repurchase, the amount of consideration is generally equal to or close to the value of the property
- Both (A) and (B).
- None of the above.
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The Correct Option is C
Solution and Explanation
The main distinction is that a mortgage by conditional sale allows for redemption
by the mortgagor, indicating a debt relationship, while a sale with a repurchase condition is
an outright sale agreement with repurchase terms.
The correct option is (C): Both (A) and (B).
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Question: 2
Which of the following judgements outline(s) the distinction between ‘mortgage by conditional sale’ and a ‘sale with a condition of repurchase’?
Which of the following judgements outline(s) the distinction between ‘mortgage by conditional sale’ and a ‘sale with a condition of repurchase’?
Updated On: Nov 7, 2024
- Chennammal v. Munimalaiyan, AIR 2005 SC 4397.
- Tulsi v. Chandrika Prasad, (2006) 8 SCC 322.
- Umabai v. Nilkanth Dhondiba Chavan, (2005) 6 SCC 243
- All the above.
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The Correct Option is D
Solution and Explanation
All listed judgments have addressed the legal distinctions between a mortgage by
conditional sale and a sale with a condition of repurchase, clarifying the legal implications.
The correct option is (D): All the above
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Question: 3
The proper remedy for the mortgagee in a ‘mortgage by conditional sale’ is:
The proper remedy for the mortgagee in a ‘mortgage by conditional sale’ is:
Updated On: Nov 7, 2024
- To institute a suit for foreclosure
- To institute a suit for sale.
- Both (A) and (B).
- Neither (A) nor (B)
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The Correct Option is A
Solution and Explanation
In a mortgage by conditional sale, the mortgagee’s remedy is typically to foreclose
the mortgage, terminating the mortgagor’s right to redeem the property.
The correct option is (A): To institute a suit for foreclosure
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Question: 4
A mortgage is the transfer of an interest in _____ immoveable property for the purpose of securing the payment of money advanced or to be advanced by way of loan, an existing or future debt, or the performance of an engagement which may give rise to a pecuniary liability
A mortgage is the transfer of an interest in _____ immoveable property for the purpose of securing the payment of money advanced or to be advanced by way of loan, an existing or future debt, or the performance of an engagement which may give rise to a pecuniary liability
Updated On: Nov 7, 2024
- Specific or unspecific
- Specific
- Identified or unidentified.
- All the above.
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The Correct Option is B
Solution and Explanation
A mortgage involves the transfer of an interest in specific immoveable property as
collateral for a debt or obligation.
The correct option is (B): Specific
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Question: 5
The limitation period for filing a suit by a mortgagor ‘to redeem or recover possession of immovable property mortgaged’ is:
The limitation period for filing a suit by a mortgagor ‘to redeem or recover possession of immovable property mortgaged’ is:
Updated On: Nov 7, 2024
- Three years
- Twelve years
- Twenty years
- Thirty years
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The Correct Option is D
Solution and Explanation
The limitation period for a mortgagor to file a suit to redeem or recover possession
of mortgaged property is thirty years, as per the Limitation Act, 1963.
The correct option is (D): Thirty years
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