What is the main question in Vidhyadhar v. Manikrao?

Whether the 1971 ‘kararkharedi’ was a mortgage by conditional sale, whether the 1973 sale to the plaintiff was valid, and if redemption or reconveyance could be claimed.

Can a defendant challenge the plaintiff’s title?

Yes. A defendant can take any lawful plea, including that the plaintiff’s sale deed is void, sham, collusive, or not meant to be acted upon.

How did the Supreme Court finally decide?

The Supreme Court allowed the appeal, set aside the High Court’s judgment, and restored the lower appellate court’s decree, with no order as to costs.

Does registration prove full consideration?

No. Courts look at actual payment and evidence. Bare claims of cash paid “at home” may not be accepted without proof.

What is a mortgage by conditional sale?

It’s a mortgage in the form of a sale with a condition for retransfer on repayment. If it is truly a mortgage, the mortgagor can redeem.

Vidhyadhar v. Manikrao (AIR 1999 SC 1441)

Quick Summary

The dispute is about a 1971 “kararkharedi” for ₹1,500 (with return clause till 15-3-1973) and a later 1973 registered sale for ₹5,000. The questions: Was the first document a mortgage by conditional sale? Did the plaintiff really buy in 1973? Could he redeem or demand retransfer?

The Supreme Court held that a defendant may attack the plaintiff’s title by saying the sale deed is void/sham/collusive. The appeal was allowed, the High Court’s decree was set aside, and the lower appellate court’s decree was restored (no costs).

Issues

Did D2 mortgage the suit field with D1 for ₹1,500 on 24-3-1971?
Did the plaintiff buy the suit field from D2 for ₹5,000 on 19-6-1973?
Is the plaintiff entitled to redeem the 1971 transaction?
Was D2 ready and willing before 15-3-1971 to purchase the suit field?
Can the plaintiff claim retransfer from D1?

Rules

A defendant can raise any lawful plea to defeat the suit, including that the plaintiff’s sale deed is void, fictitious, or collusive and never meant to operate.
Whether a deed is a mortgage by conditional sale or an out-and-out sale depends on intention, terms, timing, and surrounding facts.
Consideration must be proved by evidence; mere claim of cash payment “at home” is weak without proof.

Facts (Timeline)

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24-3-1971: D2 executes a kararkharedi in favour of D1 for ₹1,500; possession delivered; clause: return of amount before 15-3-1973 → property to go back to D2.

5–7-6-1973: D2 sends notice (5-6-1973) and money order (7-6-1973) to D1; D1 allegedly refuses.

19-6-1973: D2 executes a registered sale deed in favour of the plaintiff for ₹5,000 (₹500 admitted before Sub-Registrar; rest disputed).

Trial: D2 admits plaintiff’s claim; D1 says 1971 deed is sale, not mortgage; time for return lapsed—no reconveyance.

High Court: Treats ₹800 as paid under 1971 deed; finds only ₹500 paid to D2 under 1973 sale; orders restoration to D2 with instalment paybacks.

Supreme Court: Allows appeal, sets aside High Court, restores lower appellate court decree; no order as to costs.

Timeline of key steps in Vidhyadhar v. Manikrao, 1971 deed to 1999 Supreme Court decision

Arguments

Plaintiff (Appellant)

1971 deed was a mortgage by conditional sale; D2 tried to repay before the cut-off.
1973 sale is valid; plaintiff can redeem or seek retransfer.
Money order and notice show readiness and willingness.

Defendant 1 (Respondent)

1971 deed was an absolute sale; time lapsed—no reconveyance.
1973 sale consideration not fully paid; title to plaintiff is doubtful.
Defendant can lawfully challenge plaintiff’s sale as void/fictitious.

Judgment (Held)

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Appeal allowed. High Court’s judgment set aside.
Lower appellate court’s decree restored (no order as to costs).
Reaffirmed: a defendant can take the plea that the plaintiff’s sale deed is void/sham/collusive.

Key 'Held' points in Vidhyadhar v. Manikrao

Ratio Decidendi

Courts may look beyond form to find the true nature of the transaction—mortgage or sale. A defendant can lawfully dispute the plaintiff’s title, including by alleging that the sale deed is void or collusive. Proof of consideration and conduct (notice, tender, refusal) matter.

Why It Matters

Clarifies defence rights: defendants can attack the plaintiff’s deed.
Guides on mortgage vs sale classification in conditional sale cases.
Stresses evidence of consideration and readiness to repay for redemption or retransfer.

Key Takeaways

Form vs substance: Look at intention and terms to decide mortgage or sale.
Defence toolkit: Defendant may plead void/sham/collusive sale to defeat suit.
Proof counts: Show real payment, not just registration recitals.
Redemption path: Notices, tenders, refusals help prove readiness.
Appellate control: Higher courts may restore lower appellate findings on facts/law.

Mnemonic + 3-Step Hook

Mnemonic: “MOR–PROOF–PLEA” — MORtgage or sale? PROOF of money? PLEA by defendant allowed.

Map the deed: Terms + timeline = mortgage or sale?
Track money: Who paid what, where proved?
Check defences: Any plea that sale is void/sham/collusive?

IRAC Outline

Issue

1971 deed: mortgage or sale; 1973 sale: valid consideration; rights to redeem or retransfer; defendant’s right to challenge plaintiff’s title.

Rule

Defendant can take any legitimate plea, including that the sale deed is void/fictitious/collusive. Intention and consideration decide mortgage vs sale.

Application

Courts examined payments (₹500 admitted; other sums disputed), notices, and conduct; defence could attack plaintiff’s title based on proof.

Conclusion

Supreme Court set aside the High Court; restored lower appellate court’s decree; no costs.

Glossary

Kararkharedi: A deed used in some regions to record sale/mortgage-like transactions with conditions.
Mortgage by Conditional Sale: Transfer that looks like sale but is meant as security, with a right of retransfer on repayment.
Reconveyance: Return of title to the original owner after conditions are met (e.g., repayment).