Vinod K. Sharma, J.@mdashThis regular second appeal arises from the judgments and decree passed by the learned courts below vide which suit for possession by way of redemption filed by the plaintiff-appellant was ordered to be dismissed.
2. The plaintiff-appellant herein filed a suit against Smt. Pushpa Devi, Darshan Singh and Des Raj Dhir, for possession by way of redemption of a single storeyed house, situated in Mohalla Shergarh, Kapurthala. The said house was under the ownership of Smt Kesra Devi, widow of Mool Raj. She had mortgaged this house with possession to Pushpa Devi, respondent, No. 1 herein for a consideration of Rs. 3,000/- (Rs. Three thousands) through a Regd. Mortgage Deed dated 30th November, 1962. After the mortgage, defendant No. 1 Pushpa Devi inducted defendant Nos. 2 and 3 as tenants in the house in question and, therefore, they were made parties to the suit. It was claimed that plaintiff-appellant had purchased this house from its owner Smt. Kesra Devi for a consideration of Rs. 7,500/- (Rs. Seven thousand five hundred) through a Regd. sale deed dated 4th July, 1982. On the basis of the sale deed executed in her favour, she filed a suit for possession by way of redemption of mortgaged property on payment of Rs. 3,000/-.
3. The suit was contested by respondent No. 1 on the plea that the house was mortgaged with her for a period of 58 years and the same could not be redeemed before expiry of that period. However, this plea was disputed on the ground that the stipulation amounts to clog on the equity of redemption and, therefore, it was not finding on the plaintiff-appellant. A plea was further raised that as the right to rent out the house in dispute was given to the mortgagee, the defendants Nos. 2 and 3 being tenants could not be evicted except under the Rent Act. It was further claimed that as the mortgagee had spent a sum of Rs. 5,000/- (Rs. Five thousands) on the improvement of the said house, she was entitled to this amount along with interest @ 1% per month. It was also claimed that as Smt. Kesra Devi was not impleaded as a party, the suit was liable to be dismissed.
4. On the pleadings of the parties, following issues were framed:
1. Whether the plaintiff has purchased the suit land from Smt. Kesra Devi as alleged? OPP
2. If Issue No. 1 is proved, whether the plaintiff is entitled to redeem the mortgage in dispute? OPP
3. Whether the period of redemption mentioned in the mortgage deed is a clog on the equity of redemption? OPP
4. Whether the suit is premature? OPD
5. Whether defendant No. 1 has made improvement on the property in dispute. If so, of what value and to what effect? OPD
6. Whether the defendants No. 2 and 3 are the tenants in the property in dispute under Kesra Devi mortgagee? OPD
7. Whether the provisions or the East Punjab Urban Rent Restriction Act bar this suit against defendant Nos. 2 and 3.
8. Relief.
5. On the basis of the evidence brought on record, the learned courts below have recorded a finding that the plaintiff purchased the disputed property from Smt. Kesra Devi. However, on issue No. 2, it was held that the plaintiff was not entitled to redeem the mortgage in view of the stipulation contained in the mortgage deed which barred the redemption for 58 years. On issue No. 3, it was held that the stipulation contained did not amount to clog on the equity or redemption. In view of the finding recorded on issues No. 1 to 3, the suit was held to be premature; The second condition granting permission to the mortgagee by the mortgagor to raise construction on the existing house and claim the charges spent thereon from the mortgagor was also held to be not unreasonable so as to treat it to be a clog on the equity of redemption. In view of these findings, issues Nos. 5, 6 and 7 were held to be redundant. Consequently the suit filed by the plaintiff-appellant was dismissed.
6. The appeal against the judgment of the trial court was filed by the plaintiff. The learned lower Appellate Court affirmed the findings recorded by the learned trial Court and thus dismissed the appeal.
Mr. J.R. Mittal, learned senior counsel appearing on behalf of the appellant, has raised the following substantial questions of law for consideration:
1.Whether the conditions of mortgage mentioned in mortgage deed dated 30.11.1962 are a clog on the equity of redemption?
2. Whether the Courts below erred in holding that the civil suit was premature as the postponement of redemption for a long period of 58 years is in the nature of clog on the equity of redemption?
7. In support of the question of law raised above, the learned senior counsel vehemently contended that the judgments and the decrees passed by the learned courts below are based on the judgment of the Hon''ble Supreme Court in the case of
20. The reason justifying the court''s order to relieve a mortgagor from the effects of his bargain is its want of conscience. Putting it in more familiar'' language the court''s jurisdiction to relieve a mortgagor from his bargain depends upon whether it was obtained by taking advantage of any difficulty or embarrassment that he might have been in when he borrowed the moneys on the mortgage. Length of the term, according to Sarkar, J. the aforesaid decision, was not by itself oppressive and could not operate as a clog on the equity or redemption. There was a term in the mortgage deed that the mortgagees could spend any amount on repairs and those expenses would be paid, according to the account produced by the mortgagees. All that it means was that in claiming moneys on account of repairs and construction the mortgagees had to show from their accounts that they had spent these moneys. This Court on that basis held that the clause which provided that the mortgage had to be redeemed within the specified period of six months was bad. The principle, however, is that if it was not an unconscionable bargain and it did not in effect deprive the mortgagor of his right to redeem the mortgage or so to curtail his right to redeem that it has become illusory and non-existent, then there was no clog on equity of redemption. It has to be borne in mind that the English authorities relied upon by Sarkar, J. and the principles propounded by this Court in the case of Seth Ganga Dhar were in the background of a sedate and fixed state of affairs. The spiral and escalation of price of the immovable properties was not then there. Today, perhaps, a different conspectus would be required to consider the right to redeem the property after considerable length of time pegging the price to a small amount of money, the value of which is fast changing.
21. The rights and liabilities of mortgagor are controlled by the provisions of Section 60 of the Transfer of Property Act, 1882. the clog on redemption has been noted in Mulla''s Transfer of Property Act, 7th Edn., page 401 that a mortgage being a security for the debt, the right of redemption continues although the mortgagor fails to pay the debt at due time. Any provision inserted to prevent, evade or hamper redemption is void. That is implied in the maxim "once a mortgage always a mortgage". Collins MR. in Jarrah Timber & Wood Paving Corporation v. Samuel at page 7 observed that it is the right of a mortgagor on redemption, by reason or the very nature of a mortgage to get back the subject of the mortgage and to hold and enjoy as he was entitled to hold and enjoy -it before the mortgage.
22. The doctrine "clog on the equity of redemption" is a rule of justice, equity and good conscience. It must be adopted in each case to the reality of situation and the individuality of the transaction. We must take note of the time, the condition, the price spiral, the term bargain and the other obligations in the background of the financial conditions of the parties. Therefore, in our opinion, in view of the evidence it is not possible to hold that there was no clog on the equity to redemption in these cases.
26. Whether in the facts and circumstances of these cases, the mortgage transaction amounted to clog on the equity of redemption is a mixed question of law and fact. Courts does not look with favour at any clause or stipulation which clogs equity of redemption. A clog on the equity of redemption is unjust and unequitable. The principles of English Law, as we have noticed from the decisions referred to herein before which have been accepted by this Court in this country, looks with disfavour at clogs on the equity of redemption. Section 60 of the Transfer of Property Act, in India, also recognise the same position.
27. It is a right of the mortgagor on redemption by reason of the very nature of the mortgage, to get back the subject of the mortgage and to hold and enjoy as he was entitled to hold and enjoy it before the mortgage. If he is prevented from redeeming the mortgage, such prevention is bad in law. If he is so prevented, the equity of redemption is affected by that whether aptly or not, and it has also ways been termed as a clog. Such a clog is inequitable. The law does not countenance it. Bearing the aforesaid background in mind, each case has to be judged and decided in its own perspective. As has been observed by this Court that long term for redemption by itself, is not a clog on equity of redemption. Whether or not in a particular transaction there is clog on the equity of redemption, depends primarily upon the period of redemption, the circumstances under which the mortgage was created, the economic and financial position of the mortgagor and his relationship viz-a-viz him and the mortgagee, the economic and social conditions in a particular country at a particular point of time, custom, if any, prevalent in the community or the society in which the transaction takes place, and the totality of the circumstances under which a mortgage is created, namely circumstances of the parties, the time, the situation, the clause for redemption either for payment of interest or any other sum, the obligations of the mortgagee to construct or repair or maintain the mortgaged property in cases of usufructuary mortgage to manage as a matter of prudent managent, these factors must be co-related to each other and viewed in a comprehensive conspectus in the background of the facts and circumstances of each case, to determine whether these are clogs on equity of redemption.
28. These principles have been recognized by this Court in Seth Ganga Dhar v. Shankar Lal. It has also to be borne in mind that long term for redemption in respect of immovable properties was prevalent at a time when things and the society were, more or less, in a static condition. We live in changing circumstances. Mortgage is a security for loan. It is an axiomatic principle of life and law that necessitous men are not free men. A mortgage is essentially and basically a conveyance in law or an assignment of chattels as a security for the payment of debt or for discharge of some other obligation for which it is given. The security must, therefore, be redeemable on the payment or discharge of such debt or obligation. Any provision to contrary, notwithstanding, is a clog or fetter on the equity of redemption and hence, bad and void. "Once a mortgage must always remain. a mortgage", and must not be transformed into a conveyance of deprivation of the right over the property.
30. Section 60 of the Transfer of Property Act, 1882 conferred on the mortgagor the right of redemption. This is a statutory right; The right of redemption is an incident of a "sub-sisting mortgage and it subsists so long as the mortgage subsists." See the observations in R. Ghose Law of Mortgage 6th edn., Page 227.
31. Whether in a particular case there is any clog on the equity of redemption, has to be decided in view of its background of the particular case. The doctrine of clog on equity of redemption has to be moulded in the modern conditions. See Mull: Transfer of Property Act, 17th edn., page 402. Law does not favour any clog on equity of redemption.
8. Learned senior counsel for the appellant'' further relied upon the judgment of this Court in the case of
In view of the decision of the Supreme Court in Pomal Kanji Govindijit Karsandas Purohit''s case (supra), the question of law, as framed, are answered in favour of the appellant and it is held that any condition restricting the right of mortgagor to redeem the property of Kesra Devi would amount to clog oh the equity of redemption.
9. Consequently, this appeal is allowed and the judgments and decree passed by the learned Courts below are set aside and the suit filed by the plaintiff-appellant is ordered to be decreed. The plaintiff-appellant would be entitled to redeem the property in suit on payment of redemption amount along with the amount spent on repairs of the mortgaged property, if any, alongwith interest as mentioned in the mortgage deed.
