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A executes a document in favour of B stating, “I hereby sell my house to B for ₹ 5,00,000. If I repay…

Section 58(c) of the Transfer of Property Act recognises a mortgage by conditional sale where the condition of retransfer on repayment is embodied in the same document, so…

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A executes a document in favour of B stating, “I hereby sell my house to B for ₹ 5,00,000. If I repay the amount within 3 years, B shall retransfer the property to me; otherwise, the sale shall become absolute.” The condition is included in the same document. A fails to repay within 3 years. B claims absolute ownership. Examine the correct legal position under the Transfer of Property Act, 1882.

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Section 58(c) of the Transfer of Property Act recognises a mortgage by conditional sale where the condition of retransfer on repayment is embodied in the same document, so "It is a mortgage by conditional sale; B must seek foreclosure through court." Default does not automatically make the sale absolute or extinguish the right of redemption; the mortgagee must obtain a decree of foreclosure.

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