DR. THAKAR SINGHversusSH. MULA SINGH (D) THR. LR. & ORS.

                  [2014) 10 S.C.R. 953


        DR. THAKAR SINGH (0) BY LRS. & ANR.                  A
                            v.
         SH. MULA SINGH (D) THR. LR. & ORS.
             (Civil Appeal No. 1740 of 2007)
                   OCTOBER 14, 2014
                                                             B
        [DIPAK MISRA AND R.F. NARIMAN, JJ.]

    Transfer of Property Act, 1882:

    S. 111 rlw ss. 72 and 76 - Determination of lease        c
executed by mortgagees - Redemption of mortgage -
Mortgagees were entitled to create tenancies by virtue of
mortgage deed - However, there is nothing in mortgage deed
to indicate that tenancies created by mortgagees would be
binding on mortgagors.                                       o
    In the instant appeal arising out of a suit by the
mortgagors for possession of the mortgaged property
leased by the mortgagees, the question for consideration
before the Court was whether the suit was barred under
the provisions of the Rent Restrictions Act.                 E

    Disposing of the appeal, the Court

    HELD: The mortgagees were entitled to create
tenancies by virtue of the mortgage deed dated 9th
                                                             F
March 1942. However, there is nothing in the language
of the mortgage deed to indicate that the tenancies
created by the mortgagees would be binding on the
mortgagors. At the highest, after redemption, and after
possession is taken, the mortgagors will also be entitled    G
to receive rent in future. It will be seen that the
mortgagors' right to get back possession is expressly
recognised by the mortgage deed entitling tenants
created by the mortgagees to become tenants of the

                            953                              H
    954      SUPREME COURT REPORTS               [2014] 10 S.C.R.


A mortgagors. The entitlement to receive rent in future can
  by no stretch be held to create a tenancy between the
  mortgagors and the tenants of the mortgagees. In the
  circumstances, the judgment of the High Court is set
  aside. All other issues are left open and can be agitated
B before the High Court. It will be open to all parties to raise
  such pleas as are available to them in law. [para 8] [969-
  D-H; 970-A-E]

      Poma/ Kanji Govindji & Ors.· v. Vraj/al Karsandas Purohit
C & Ors. 1988(3) Suppl. SCR 826 = 1989 (1) SCC 458 - relied
  on

       All Indian Film Corpoation Ltd. & Ors. v. Sri Raja Gyan
  Nath & Ors. 1969 (3) SCC 79; Mis. Sacha/ma/ Parasam v.
  Smt. Ratnabai & Ors. 1973 (3) SCC 198; Shivdev Singh &
D Anr. v. Sucha Singh & Anr. 2000 (2) SCR 878 =2000 (4) SCC
  326; Mahomed Muse v. Jijibhai Bhagvan (1885) 9 Born 524;
  Parmanand Pandit v. Mata Din Rai (1925) 47 All 582; Shea
  Singh v. Birbahadar Singh, (1910) 6 IC 707 (All); Aukinidu
  v. Subbiah, (1912) 35 Mad 744; Dao/a/ Rai v. Sheikh Chand,
E (1915) 31 IC 869 (Nag); Ram Narain Pathak v. Surathnath,
  (1920) 57 IC 327 (Pat); Bhimrao v. Sakharam, AIR 1922
  Born 277; Satyavatamma v. Padmanabhan, AIR 1957 AP 30;
  Gobind Ram v. Rajphul Singh, AIR 1973 P & H 94; Maina
  Devi v. Thakur Mansingh & Ors., AIR 1986 Raj 44 - referred
F to.
                         Case Law Reference:
          1969 (3) sec 79          referred to           para 4
          1973 (3) sec 198         referred to           ~ara 4
G
          1988 (3) Suppl. SCR 826 relied on              para 5
          2000 (2) SCR 878         referred to           para 6
          (1885) 9 Born 524        referred to           para 7
H         (1925) 47 All 582        referred to           para 7
DR. THAKAR SINGH (D) BY LRS. v. MULA SINGH (D) 955
                  THR. LR.

    (1885) 9 Born 524           referred to         para 7     A
    (1925) 47 All 582           referred to         para 7
    (1910) 6 IC 707 (All)       referred to         para 7
    (1912) 35 Mad 744           referred to         para 7
                                                               B
    (1915) 31 IC 869 (Nag)      referred to         para 7
    (1920) 57 IC 327 (Pat)      referred to         para 7
    AIR 1922 Born 277           referred to        ·para 7
                                                               c
    AIR 1957 AP 30              referred to         para 7
    AIR 1973 P & H 94           referred to         para 7
    AIR 1986 Raj 44             referred to         para 7

    CIVIL APPELLATE JURISDICTION : Civil Appeal No.            D
1740 of 2007.

    From the Judgment & Order dated 31.03.2004 of the High
Court of Punjab & Haryana at Chandigarh in RFA No. 238 of
1979.                                                          E

    AP. Mohanty for the Appellants.

    Nagendra Rai, Abhay Kumar, Anil Kumar Jha, Debasis
Misra, R.D. Upadhyay for the Respondents.
                                                               F
    The Judgment of the Court was delivered by

     R.F. NARIMAN, J. 1. In this Civil Appeal an interesting
question arises for decision. One Nand Singh and Dr. Thakar
Singh filed a suit for recovery for possession of various shops G
cum vacant sites situated in the main Bazar of Moga Town
against 14 defendants. The suit property had been mortgaged
to one Suba Singh and Saudagar Singh, defendants 1 and 2,
for a sum of Rs.26,000/- vide registered mortgage deed dated
9th March 1942. After taking an additional amount of Rs.3,000/ H
    956       SUPREME COURT REPORTS                 [2014) 10 S.C.R.


A   - from the aforesaid Suba Singh and Saudagar Singh, the
    plaintiffs executed an additional registered mortgage deed
    dated 3rd March 1943. The material terms of the mortgage
    deed dated 9th March 1942, with which we are concerned,
    reads as follows:
B
          "Now we the executants while in our full senses and with
          our free will having mortgaged with possession the
          aforesaid shops, Ahatas including lane passage together
          with material (malba) chob kari (wooden shafts) etc.,
          including well together with right to ingress and egress
c         convenience and residence in favour of Suba Singh s/o
          Mutsada Singh, caste Jat resident of Wara Bhai and
          Saudagar Singh son of Sh. Rattan Singh caste Jet r/o
          Jawahar Singh Didar Singh wala in equal share for a sum
          of Rs.26,000/- (Twenty Six thousand) only half of which
D         comes to Rs.13000/-(Thirteen thousand) only possession
          of which has been given to them. The present mortgagees
          shall get the actual possession from the previous
          mortgagees after paying their mortgage money to them
          and after getting the land redeemed from them. The
E         mortgagees are competent either to be in occupation
          themselves or to give on rent to anyone. Whenever the total
          mortgage money is paid in two lots the half of the mortgage
          property shall be got redeemed in two lots at the discretion
          of the mortgagors. The redemption of southern side of the
F         lane shall be deemed to be half and that of the northern
          side shall be other half, meaning thereby that it will be
          discretion of the mortgagors to redeem the southern side
          of lane or the northern side on receipt of the half of the
          mortgage money. We shall be liable for any proceedings
G         arising out of any objection thereto. We shall also be liable
          to make good the loss or damage caused to the
          mortgagees on account of any legal or factual defect in the
          'llortgaged property. The expenses for white washing and
          plastering shall be borne by the mortgagees, but the
H         expenses of repairs and reconstructions shall be borne by
DR. THAKAR SINGH (D) BY LRS. v. MULA SINGH (D) 957
          THR. LR. [R.F. NARIMAN, J.)
     us, the executants. In case of our failure, the mortgagees       A
     shall get it done after giving notice to us and then we shall
     be liable to pay the expenses borne by the mortgagees.
     On the payment of mortgage money when the mortgage
     money is paid. from that day on taking possession we shall
     be entitled to receive rent in future." (Underlining ours)       B

      2. On 25th August 1969, the plaintiffs redeemed the
mortgaged properties by depositing a sum of Rs.29,000/- . The
cause of action for filing the present suit arose on account of
the fact that physical possession of the suit property was not        C
handed over to the plaintiffs even after the redemption of the
mortgaged property. The defendants 1 and 2 are said to have
rented out portions of the suit property to defendants 3 to 14.
Since the defendants failed to deliver possession, the plaintiffs
filed a suit for possession and recovery of damages. In the Trial
                                                                      0
Court, a number of issues were-struck between the parties. In
the present appeal, we are concerned basically with Issue 4,
which reads as under:

     'Whether the suit is barred under the provisions of the Rent
     Restrictions Act?"                                               E

The Trial Court decided the case on all 11 issues and held that
on a true reading of the mortgage deed, the mortgagor had
recognized the tenants of the mortgagee whose tenancy
therefore did not come to an end with redemption of the               F
mortgage. In First Appeal, the High Court of Punjab and
Haryana did not go into any of the other issues including the
issue as to whether the tenancies were created before or after
the execution of the two mortgage deeds. It held on a reading
of a clause in the first mortgage deed that since the mortgagors      G
would be entitled to future rent after redemption, it is clear that
the mortgagors recognized all tenants created by the
mortgagees during the subsistence of the mortgage. Issue No.4
was answered accordingly and the suit for vacant possession
of the suit property from defendants was held not to be               H
maintainable in law.
    958       SUPREME COURT REPORTS               [2014) 10 S.C.R.


A      3. Learned counsel for the appellants raised a two-fold
  contention before us. Firstly, a correct reading of the two
  mortgage deeds would only lead to the conclusion that on
  redemption all tenancies created by the mortgagees would
  cease to have any effect and would not be binding on the
B mortgagors. Alternatively, it was also argued that if it were found
  that on a true construction of the mortgage deed the
  mortgagors' right to redeem was in fact clogged such clog
  would not be countenanced by the courts and full effect of
  redemption including the right to take back possession of the
C mortgaged property free from all encumbrances would ensue.
  Learned counsel for the respondents basically supported the
  judgment under appeal and argued that it was clear from a
  reading of the mortgage deed that the mortgagors had in fact
  recognized tenancies created by the mortgagees and therefore
D the present suit would not be maintainable - the mortgagors
  have to go to a Rent Court to make out some ground of eviction
  against tenants recognized by them.

         4. The right of a mortgagor to redeem is dealt with by
E   Section 60 of the Transfer of Property Act. Section 60 reads
    as follows:

          "60.      Right      of     mortgagor      to    redeem
          At any time after the principal money has become due, the
          mortgagor has a right, on payment or tender, at a proper
F         time and place, of the mortgage-money, to require the
          mortgagee (a) to deliver to the mortgagor the mortgage-
          deed and all documents relating to the mortgaged property
          which are in the possession or power of the mortgagee,
          (b) where the mortgagee is in possession of the mortgaged
G         property, to deliver possession thereof to the mortgagor,
          and (c) at the cost of the mortgagor either to re-transfer
          the mortgaged property to him or to such third person as
          he may direct, or to execute and (where the mortgage has
          been effected by a registered instrument) to have
H
DR. THAKAR SINGH (D) BY LRS. v. MULA SINGH (D) 959
          THR. LR. [R.F. NARIMAN, J.]

    registered an acknowledgement in writing that any right in        A
    derogation of his interest transferred to the mortgagee has
    been extinguished:

    Provided that the right conferred by this section has not
    been extinguished by act of the parties or by decree of a         8
    Court.

    The right conferred by this section is called a right to
    redeem and a suit to enforce it is called a suit for
    redemption.
                                                                      c
    Nothing in this section shall be deemed to render invalid
    any provision to the effect that, if the time fixed for payment
    of the principal money has been allowed to pass or no
    such time has been fixed, the mortgagee shall be entitled
    to· reasonable notice before payment or tender of such            D
    money."

Section 62 also recognizes the right of a usufructuary
mortgagor to recover possession under certain circumstances.
Further, the rights of a mortgagee in possession are dealt with       E
by Section 72 of the Transfer of Property Act. Suffice it to say
that the right to create tenancies is not one of the rights
enumerated in this section. Section 76 (a) deals with a
usufructuary mortgagee managing the property as a person of
ordinary prudence would manage if it were his own. Section
111 (c) of the Transfer of Property Act states:                       F

    "S. 111 Determination of lease. -A lease of immovable
    property determines -

    (c) where the interest of the lessor in the property              G
    terminates on, or his power to dispose of the same
    extends only to, the happening of any event - by the
    happening of such event;"

In All Indian Film Corpoation Ltd. & Ors. v. Sri Raja Gyan Nath
                                                                      H
    960       SUPREME COURT REPORTS               [2014] 10 S.C.R.


A & Ors. [1969 (3) sec 79], a similar question arose before this
  Court. In the facts of that case, the mortgage was redeemed
  on 19th April 1958 after which the respondent No.1 filed a suit
  for possession of the property from the head lessee and his
  sub-lessees. The sub-lessees claimed the benefit of the East
B Punjab Urban Restriction Act. In repelling the contention of the
  sub-lessees that they were protected tenants as against the
  mortgagor, this Court stated:

          "7. The first question to consider is this: Did the tenancy
          created by the mortgagee in possession survive the
c         termination of the mortgagee interest so as to be binding
          on the purchaser? A general proposition of law is that no
          person can confer on another a better title than he himself
          has. A mortgage is a transfer of an interest in specific
          immovable property for the purpose of securing -
D         repayment of a loan. A mortgagee's interest lasts only as
          long as the mortgage has not been paid off. Therefore on
          redemption of the mortgage the title of the mortgagee
          comes to an end. A derivative title from him must ordinarily
          come to an end with the termination of the mortgagee's
E         title. The mortgagee by creating a tenancy becomes the
          lessor of the property but his interest as lessor is co-
          terminous with his mortgagee interest. Section 111 (c) of
          the Transfer of Property Act provides that a lease of
          immovable property determines where the interest of the
F         lessor in the property terminates on, or his power to
          dispose of the same, extends only to the happening of any·
          event-by the happening of such event. The duration of the
          mortgagee's interest determines his position as the lessor.
          The relationship of lessor and lessee cannot subsist
G         beyond the mortgagee's interest unless the relationship is
          agreed ~o by the mortgagor or a fresh relationship is
          recreated. This the mortgagor or the person succeeding
          to the mortgagor's interest may elect to do. But if he does
          not, the lessee cannot claim any rights beyond the term of
H         his original lessor's interest. These propositions are well-
DR. THAKAR SINGH (D) BY LRS. v. MULA SINGH (D) 961
          THR. LR. [R.F. NARIMAN, J.]

     understood and find support in two rulings of this Court in     A
     Mahabir Gope and Ors. v. Harbans Narain Singh
     [1952]1SCR775 and Asaram and Ors. v. Mst. Ram Kali
     (1958) S.C.R.986

     8. To the above propositions there is, however, one             B
     exception. That flows from Section 76(a) which lays down
     liabilities of a mortgagee in possession. It is provided
     there that when during the continuance of the mortgage,
     the mortgagee takes possession of the mortgaged
     property, he must manage the property as a person of            C
     ordinary prudence would manage it if it were his own. From
     this it is inferred that acts done bona fide and prudently in
     the ordinary course of management, may bind even after
     the termination of the title of the mortgagee in possession.
     This principle applies ordinarily to the management of
                                                                     0
     agricultural lands and has seldom been extended to urban
     property so as to tie it up in the hands of lessees or to
     confer on them rights under special statutes. To this again
     there is an exception. The lease will continue to bind the
     mortgagor or persons deriving interest from him if the
                                                                     E
     mortgagor had concurred to grant it."

This judgment was followed in M/s. Sacha/ma/ Parasam v.
Smt. Ratnabai & Ors. (1973 (3) SCC 198) at paragraphs 5 to
9.
                                                                     F
    5. In Poma/ Kanji Govindji & Ors. v. Vrajlal Karsandas
Purohit & Ors. (1989 (1) SCC 458), this Court dealt with the
same question and arrived at two basic conclusions. The first
is that a clog on the equity of redemption will be disregarded
by a Court of law and secondly that a lease created by a             G
mortgagee in possession of an urban immovable property
would not be binding on the mortgagor after redemption of a
mortgage even assuming such lease is as a prudent owner'of
property would have granted in the usual course of
management. This Court held:                                         H
    962       SUPREME COURT REPORTS                 [2014] 10 S.C.R.


A         "32. It is a settled law in England and in India that a
          mortgage cannot be made altogether irredeemable or
          redemption made illusorv. The law must respond and be
          responsive to the felt and discernible compulsions of
          circumstances that would be equitable, fair and just, and
8         unless there is anything to the contrary in the statute, court
          must take cognisance of that fact and act accordingly. In
          the context of fast changing circumstances and economic
          stability, long-term for redemption makes a mortgage an
          illusory mortgage, though not decisive. It should prima facie
c         be an indication as to how clogs on equity of redemption
          should be judged.

          33. In the facts and the circumstances and in view of the
          long period for redemption, the provision for interest@ Y:z
          per cent per annum payable on the principal amount at the
D         end of the long period, the clause regarding the repairs
          etc., and the mortgagor's financial condition, all these
          suggest that there was clog on equity. The submissions
          made by Mr. Sachar and Mr. Mehta are, therefore,
          unacceptable.
E
          35. Before we dispose of the contentions on the second
          aspect, we must deal with some of the decisions of the
          Gujarat High Court to which reference had been made and
          some of which was also referred before us. We have
F         noticed the decision of the Gujarat High Court in Khatubai
          Nathu Sumra v. Rajgo Mulji Nanji. In Maganlal Chhotalal
          Chhatrapati v. Bhalchandra Chhaganlal Shah, P.O. Desai,
          J. as the learned Chief Justice then was, held that the
          doctrine of clog on the equity of redemption means that
G         no contract between a mortgagor and mortgagee made
          at the time of the mortgage and as a part of the mortgage
          transaction or, in other words, as a part of the loan, would
          be valid if it in substance and effect prevents the mortgagor
          from getting back his property on payment of what is due
H         on his security. Any such bargain which has that effect is
DR. THAKAR SINGH (D) BY LRS. v. MULA SINGH (D) 963
          THR. LR. [R.F. NARIMAN, J.]
   invalid. The learned Judge reiterated that whether in a A
   particular case long term amounted to a clog on the equity
   of redemption had to be decided on the evidence on
   record which brings out the attending circumstances or
   might arise by necessary implication on a combined
   reading of all the terms of the mortgage. The learned B
   Judge found that this long term of lease along with the cost
   of repairing or reconstruction to be paid at the time of
   redemption by the mortgagor indicated that there was clog
   on equity of redemption. The learned Judge referred to
   certain observations of Mr. Justice Macklin of the Bombay C
   High Court where Justice Macklin had observed that
   anything which does have the appearance of clogging
   redemption must be examined critically, and that if the
   conditions in the mortgage taken as a whole and added
   together do create unnecessary difficulties in the way of D
   redemption it seems that is a greater or less clog upon
   the equity of redemption within the ordinary meaning of the
   term. In our opinion, such observations will apply with
   greater force in the present inflationary market. The other
   decision to which reference may be made is the decision E
   of the Gujarat High Court in Soni Motiben v. M/s. Hiralal
   Lakhamshi. This also reiterates the same principle. In
   Vadilal Chhaganlal Soni v. Gokaldas Mansukh also, the
   same principle was reiterated. In that case, it was held by
   Gajendragadkar, J., as the learned Chief Justice then was, F
   that the agreement between the mortgagor and mortgagee
   was that the mortgagor was to redeem the mortgage 99
    years after its execution and the mortgagee was given full
    authority to build any structure on the plot mortgaged after
    spending any amount he liked. It was held that the two G
    terms of the mortgage were so unreasonable and
    oppressive that these amounted to clog on the equity of
    redemption. Similar was the position in the case of Sarjug
    Mahto v. Smt. Devrup Devi, where also the mortgage was
    for 99 years. In Chhedi Lal v. Babu Nandan, the court H
    964       SUPREME COURT REPORTS                 [2014) 10 S.C.R.


A         reiterated that freedom of contract unless it is vitiated by
          undue influence or pressure of poverty should be given a
          free play. In the inflationary world, long term for redemption
          would prima facie raise a presumption of clog on the equity
          of redemption. See also the observations in Rashbehary
B         Ghose's 'Law of Mortgage' 6th Edn. pages 227 and 228.

          39. On the second aspect of the question whether the right
          of the tenants of the mortgagees are protected after the
          redemption of mortgage, reliance was placed by the First
          Appellate Court on the decision of the Full Bench of the
c         Gujarat High Court in Lalji Purshottam v. Thacker Madhavji
          Meghaji. There urban immovable property was mortgaged
          with possession, mortgagee creating lease during the
          subsistence of the mortgage. The question was whether
          after redemption of mortgage such lease is binding on the
D
          mortgagor. It was held that Section 76(a) of the Transfer
          of Property Act would not apply to such cases. There must
          be express words showing an intention if tenancy was to
          be created beyond the term of the mortgage. Mere
          reference that mortgagee is entitled to lease property does
          not create a binding tenancy on the mortgagor. After the
          redemption of the mortgage the relationship of landlord and
          tenant does not exist. Such tenant, therefore, does not get
          any protection under Section 12 of the Bombay Rent
          Control Act, it was held. The Gujarat High Court had
F
          referred to several decisions of this Court. In Mahabir
          Gope v. Harbans Narain Singh which was a decision
          dealing with a lease created by a mortgagee with
          possession under the Bihar Tenancy Act, this Court
          reiterated that the general rule is that a person cannot by
G
          transfer or otherwise confer a better title on another than
          he himself has. A mortgagee cannot, therefore, create an
          interest in the mortgaged property which will enure beyond
          the termination of his interest as mortgagee. Further the
          mortgagee; who takes possession of the mortgaged
H
DR. THAKAR SINGH (D) BY LRS. v. MULA SINGH (D) 965
          THR. LR. [R.F. NARIMAN, J.]

   property, must manage it as person of ordinary prudence A
   would manage if it were his own; and he must not commit
   any act which is destructive or permanently injurious to the
   property. Reliance maybe placed for this purpose on
   Section 76, clauses (a) and (e) of the Transfer of Property
   Act, 1882. It lNas held that the provisions of 8
   Sections 20 and 2'1 of the Bihar Tenancy Act, did not apply
   to the lessees since they were not 'settled raiyats' and the
   lessees could not claim to have secured under the statute
   occupancy rights in the land. It was further held that the
   mortgagor was entitled to the possession of the land upon C
   redemption of the mortgage. In a slightly different context
   in Harihar Prasad Singh v. Mst. of Munshi Nath Prasad,
   this Court was concerned with a mortgage with
   possession effected on agricultural land. This Court had
   to consider in that decision whether under the provisions o
   of the Bihar Tenancy Act the tenant inducted on the
   mortgaged property during the pendency of the mortgage
   could claim right to remain in possession after the
   redemption. Venkatarama Ayy~, J., speaking for the Court
   pointed out that if the tenant could not resist the suit for E
   ejectment either by reason of Section 76(a) of the Transfer
   of Property Act cpr Section 21 of the Bihar Tenancy Act, the
   tenant could not get such a right as a result of the
   interaction of both those sections. This Court ultimately
   held that the tenants inducted by the mortgagee with F
   possession had failed to establish that they had any right
   of occupancy over the suit lands and that the plaintiffs
   were entitled to a decree in ejectment, with future mesne
    profits as claimed in the plaint. Thus a right claimable under
   Section 76(a) of the Transfer of Property Act because of G
   a lease created in the course of prudent management of
   the property was put on a different footing altogether from
    a right created by a special statute.

    46. We have noted hereinbefore the ratio and the basis
                                                                H
    966.    SUPREME COURT REPORTS                [2014] 10 S.C.R.


A       of the decision of this Court in Jadavji Purshottam v. Dhami
        Navnitbhai Amaratlal. Shri Mehta submitted that there was
        no clear finding as to when the tenants were inducted
        whether before or after the Rent Restriction Act and
        therefore, he pleaded that the matter should be referred
B       to the larger Bench. In view of the facts found in this case
        which were similar to the facts mentioned in Jadavji
        Purshottam's case, there is no specific authority in the
        lease which stated that the lease would continue beyond
        the period of mortgage. There is no extended authority as
c       contemplated in Jadavji Purshottam case found in this
        case. The submission was that the matter should be
        considered by a larger Bench in the light of the Jadavji
        Purshottam case. We are unable to accept the said
        submission. In this case the words in the mortgage deed.
D       as we are taken through. did not clearly allow creation of
        tenancy beyond the period of mortgage. That, in any event,
        would not have been prudent management, hence, there
        is no finding that the mortgage deed permitted, either
        expressly or impliedly, creation of tenancy beyond the
E       period. We think that the tenants were not entitled to
        protection after redemption of mortgage. Furthermore. in
        all these cases the authority of the mortgagees to lease
        out the property. expressed or implied. was circumscribed
        by a stipulation that the mortgagee should re-deliver the
F       possession of the property when the mortgage was
        redeemed. In that context, we are of the opinion that the
        submissions on behalf of the tenants cannot be
        entertained."

                                              (Emphasis supplied)
G
         6. In Shivdev Singh &Anr. v. Sucha Singh & Anr. [2000
    (4) SCC 326], this Court held that a mortgage for a period of
    99 years being an unreasonably long period before which
    redemption could not take place would be a clog on the equity
H   of redemption and would therefore be disregarded by the Court.
DR. THAKAR SINGH (D) BY LRS. v. MULA SINGH (D) 967
          THR. LR. [R.F. NARIMAN, J.]

On the facts of the case, the mortgage deed was dated 19th           A
March 1968 and the mortgage was sought to be redeemed long
before the period of 99 years came to an end. It was held that
such redemption was possible and the 99 year period was held
unenforceable. It was further held that it is a right of the
mortgagor on redemption to get back the subject of the               B
mortgage and to hold and enjoy the property in the same
manner as he was entitled to hold and enjoy it before the
mortgage. If he is prevented from so doing such prevention is
bad in law.
                                                                     c
     7. There is a long line of High Court judgments which hold
that a mortgagee continuing in possession as a tenant after
redemption is a clog on redemption and is invalid as it prevents
the mortgagor from getting back the property in the same
condition as he gave it when the mortgage was executed. In
                                                                     0
Mahomed Muse v. Jijibhai Bhagvan [(1885) 9 Born 524 at pg
525], it was held:

    "The objection to the condition in the mortgage, that if the
    mortgagor redeemed the land, the mortgage right only
    should be extinguished, and the lands should remain in the       E
    right hands of the mortgagee, he paying a rent of 2 Rupees
    per bigha, has not been dealt with by the Assistant Judge,
    although it was raised by the fourth ground of the plaintiffs'
    appeal. Such a condition, although it does not exclude the
    right of redemption, fetters it with the onerous obligation      F
    of accepting the mortgagee as a perpetual tenant, and
    ought not, therefore, in our opinion, to be enforced in a
    Court of Equity."

In Parmanand Pandit v. Mata Din Rai ((1925) 47 All 582 at            G
pg 584], it was held:

    "As to the first point, it seems to me that the condition that
    even after redemption the mortgagees would hold on the
    land, was a clog on the equity of redemption. Conditions
                                                                     H
    968       SUPREME COURT REPORTS                    [2014] 10 S.C.R.


A         which prevent or impede the right of redemption even after
          redemption, if such conditions are entered into at the same
          time when the mortgage is made, must be taken to be a
          clog on the equity of redemption. On the other hand, a
          subsequent contract which modifies the right of redemption
B         may not be such a clog. Altt\ough the principle underlying
          the rule .ofa clog en redemption is very old yet it still prevails
          and will not permit any device or contrivance, being part
          of the mortgage transaction or contemporaneous with it,
          to prevent or impede redemption. It follows that any
c         covenant under which some right to retain possession is
          reserved to the mortgagee even after the property is
          redeemed is a clog on redemption as it both prevents and
          impedes redemption. That such a clause amounts to a
          clog on redemption is covered by authority. In the case of
          Mahomed Muse v. Jijibhai Bhagvan, which was followed
D
          by a learned judge of this court in the case of Sheo Singh
          v. Birbahadur Singh, and has been subsequently followed
          by the Madras High Court in the case of Ankinedu v.
          Subbiah, a covenant under which the mortgagee, even
          after redemption, was entitled to retain the property on
E         payment of a fixed rent, was considered to be a clog on
          the equity of redemption and unenforceable in a court of
          equity. I am accordingly of opinion that the clause cannot
          bind the mortgagor's representatives and that, therefore,
          if they have paid the entire amount due, they are entitled
F         to take possession of the land unencumbered of any
          contract for the grant of perpetual lease."

  To the same effect the following judgments have also held that
  a mortgagee remaining in possession as a tenant post-
G redemption is invalid as a clog on redemption:

        Sheo Singh v. Birbahadar Singh, (1910) 6 IC 707 (All) at
    pg 708, 709;

          Aukinidu v. Subbiah, (1912) 35 Mad 744 at pg 749;
H
DR. THAKAR SINGH (D) BY LRS. v. MULA SINGH (D) 969
          THR. LR. [R.F. NARIMAN, J.]       -

    Dao/al Rai v. Sheikh Chand, (1915) 31 IC 869 (Nag) at          A .
pg 870;

     Ram Narain Pathak v. Surathnath, (1920) 57 IC 327 (Pat)
at pg 338;
                                                                   B
    Bhimrao v. Sakharam, AIR 1922 Born 277 at pg 278;

    Satyavatamma v. Padmanabhan, AIR 1957 AP 30 at
para 19;

     Gobind Ram v. Rajphu/ Singh, AIR 1973 P & H 94 at para        c
11, and

     Maina Devi v. Thakur Mansingh & Ors., AIR 1986 Raj 44
at para 30.

      8. On the facts of this case, it will be seen that the       D
mortgagees were entitled to create tenancies by virtue of the
mortgage deed dated 9th March 1942. However, there is
no~hing in the language of the mortgage deed to indicate clearly
that the tenancies created by the mortgagees would be binding
on the mortgagors. At the highest, afte~ redemption, and after     E
possession is taken, the mortgagor or mortgagors will also be
entitled to receive rent in future. It will be seen that the
mortgagor's right to get back possession is expressly
recognised by the mortgage deed without any clear and
unambiguous language entitling tenants created by the              F
mortgagees to become tenants of the mortgagors. The
entitlement to receive rent in future can by no stretch be held
to create a tenancy between the mortgagor and the tenants of
the mortgagees. This phrase has to be reconciled with the
expression immediately preceding it namely "on taking              G
possession". It is clear that taking of possession from the
mortgagees and his tenants Is completely antithetical to
recognizing the mortgagees' tenants as the mortgagors'
tenants. If the clause is to be read in the manner that the High
Court has read it, the mortgagors would not be able to get back    H
    970      SUPREME COURT REPORTS                 [2014] 10 S.C.R.


A   possession on redemption which would in fact be a serious
    interference with their right to redeem the property inasmuch
    as the mortgagors would have to evict such tenants after
    making out a ground for eviction under the Rent Act. Such
    ground can only be bonafide requirement of the landlord or
B   some ground based on a fault committed by the tenant such
    as non-payment of rent or unlawful subletting etc. Further, such
    ground may never become available to the mortgagor/landlord
    or may become available only after many years. It has already
    been seen that a mortgagee continuing in possession after
C   redemption as tenant of the mortgagor is regarded as a clog
    on redemption. The position is not different if the mortgagee's
    tenants continue in possession after redemption. This would
    necessarily have to be disregarded as a clog on redemption
    as the right to redeem would in substance be rendered illusory.
D   In the circumstances, the judgment of the Punjab and Haryana
    High Court dated 31st March 2004 is set aside. All other issues
    are left open and can be agitated before the High Court. It will
    be open to all parties to raise such pleas as are available to
    them in law. Considering that the cause of action in the suit
E   arose in 1969, the High Court is requested to take up RFA
    No.238/1979 to decide the other issues as early as possible
    and preferably within six months from the date of delivery of this
    judgment.

    Rajendra Prasad                                 Appeal disposed of.