In Brief
A property owner sold a shop for Rs. 4,000 to raise funds for a vehicle business, reserving the right to repurchase within five years. The trial and appellate courts treated this as a mortgage by conditional sale, but the High Court reversed, finding it was a sale with an option to repurchase. The Supreme Court affirmed the High Court. It held that the nature of such transactions depends on whether the parties intended to create a debtor-creditor relationship and mortgage (redemption right) or an absolute sale with a personal repurchase option. The document's recitals, showing a genuine sale for a specific purpose with no reference to debt or loan, indicated the latter. The mere inclusion of a repurchase clause in the document is not determinative—context and intention matter.
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