CLAT 2024 Passage 10 by Career Leaders | Dec 7, 2023 | 0 comments “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]. 1. Which of the following expresses the distinction between a ‘mortgage by conditional sale’ and a ‘sale with a condition of repurchase’? None of the above. 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 2. Which of the following judgements outline(s) the distinction between ‘mortgage by conditional sale’ and a ‘sale with a condition of repurchase’? Chennammal v. Munimalaiyan, AIR 2005 SC 4397. All the above. Umabai v. Nilkanth Dhondiba Chavan, (2005) 6 SCC 243. Tulsi v. Chandrika Prasad, (2006) 8 SCC 322. None 3. The proper remedy for the mortgagee in a ‘mortgage by conditional sale’ is: N either (A) nor (B). To institute a suit for foreclosure. To institute a suit for sale. Both (A) and (B). None 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. All the above. Specific or unspecific. Specific. Identified or unidentified. None 5. The limitation period for filing a suit by a mortgagor ‘to redeem or recover possession of immovable property mortgaged’ is: Thirty years Three years Twelve years Twenty years None Submit a Comment Cancel replyYour email address will not be published. Required fields are marked *Comment * Name * Email * Website Save my name, email, and website in this browser for the next time I comment.
