Seth Ganga Dhar v. Shankar Lal & Ors
A.K. Sarkar, J.L. Kapur and N.H. Bhagwati, JJ.
Date of Decision:
The appeal is originated from a suit regarding the redemption of a mortgage which was dated on 1st August 1899. The mortgage was formed by the deceased Purshottamdas and the mortgage was made in the favor of Dhanurpmal, one of the respondents in this appeal. The mortgage instrument established the fact that the property had been usufructuary mortgaged in lieu of Rs. 6,300, out of which Rs. 5,750 was left with the mortgagee to redeem a previous mortgage with a commercial mortgage refinancing service, on the same property and another property. It was also given by the mortgage instrument, that on redemption of the previous mortgage, the possession of the shop would be consumed and maintained by the mortgagee, Dhanurpmal, who would secure the rent from the property in lieu of interest on the money lent by him and possession of the other property by the previous mortgage, being a share in a Kacheri, would be handed over to the mortgagor, Purshottamdas. The mortgagee, Dhanurpmal, properly redeemed the prior mortgage and, got the possession of the shop while the possession of the Kacheri was transferred to the mortgagor.
On 12th April 1939, Dhanurpmal appointed his rights under the mortgage to Motilal who passed away later and his estate was represented by his sons, other respondents in this appeal. The estate of Purshottamdas. the original mortgagor is represented by his son, the petitioner. Appealing for a short-term loan for payday cash advance or unemployed is the simplest thigh to do and also to qualify it. There are only two drawbacks to it, first, they never default on a previous payday loan and should have enough income.
The petitioner filed the suit against the respondents in the Court of the Sub-Judge, Ajmere on 2nd January 1946. The suit was debated by the assignee of the mortgage, the sons of Motilal, the respondents in this appeal. They told that the suit was untimely and according to the contract, there was no right to redemption for 85 years after the date of the mortgage. i.e., 1st August 1984. The Sub-Judge asserted to follow the decision given by the Judicial Commissioner, Ajmere, who held that the provision delaying redemption for 85 years was invalid as it leads to the flog on the equity of redemption. He passed a prior decree for redemption. On Appeal, the Judicial Commissioner, Ajmere, stated that the decision which the Sub Judge had asserted to follow was distinct. He observed a huge number of cases on the same subject and came to the decision that the provision in question did not lead to a clog on the equity of redemption. He, hence, permitted the appeal and dismissed the petitioner's suit. From this decision, the appeal arose. The said provisions in the mortgage instrument on which the dispute turns were written in these words: “I or my heirs will not be entitled to redeem the property for a period of 85 years. After the expiry of 85 years, we shall redeem it within a period of six months. In case we do not redeem within a period of six months, then after the expiry of the stipulated period, I, my heirs, and legal representatives shall have no claim over the mortgaged property….
Whether a term in the mortgage instruments, prevents the right to redeem from accumulating for a time, which is a clog on the equity of redemption?
According to section 60 of the Transfer of Property Act, the mortgagor has a right to obligate the mortgagee to transfer the mortgaged property back to him at any time after the mortgage money has been paid. The right under this section is called the right to redeem and the right under section can only be exercised once the mortgage money has become due. The right to redeem cannot be taken away under section. The Courts shall overlook any contract which affects the right to redeem the mortgage of the mortgagor. As per the principal, one thing is absolute that the length in the mortgage contract, that if the mortgagor fails to redeem the mortgagee in the specified time period i.e. sic\x months, the mortgagor will have no right over the property, and the mortgage deed will turn to a sale deed which will be in the favour of the mortgagee, and that cannot be sustained. It clearly takes the mortgagor's right of redemption after the specified period. This is not admissible, for “once a mortgage always a mortgage” and hence always redeemable.
Now in the present case, the court observed that rule against clogs on the equity of redemption under Section 60 of the Transfer of Property Act gives the court the right to not only dismiss a mortgagor from the bargain but to also assure that mortgagor's right to redemption is not restricted under certain circumstances. The extension of the latter power is limited by the reason which gave birth to the unconscionable character of the bargain which would be considered as an appropriate ground for reliving mortgagor from his burden and also to analyse the situation in which the mortgagor borrowed money.
Hence, in a suit, for redemption, where the mortgage deed by two different and independent terms are important:
1. the mortgage shall not be redeemed for 85 years
2. It can be redeemed after that period within 6 months
and if the mortgagor fails any of this will lead to losing the claims over the property. The Court observed that the term period on the failure of the mortgagor to recover within the stated time period of six months, he would mislay his right to do so and the mortgage deed was to be considered to be a deed of sale in favor of the mortgagee, was evidently a clog on the equity of redemption and as such illegal but its unjustifiability could not in any way disturb the legality of the other term as to the time of the mortgage, that mounted visibly apart.
The court held that the bare term of the period could not lead to an obstacle that the bargain was in any way unreasonable or onerous. According to the facts and situations of a case, the Court has the right to relieve a mortgagor of the bargain and also to help where the right to redemption is restricted.
Written By Parul Sharma