Holding

In the absence of any stipulated limitation, the mortgagor's right to redeem under Section 60 of the Transfer of Property Act, 1882 remains perpetual and any provision restricting it is a void clog on the equity of redemption.

Summary

Harbans (plaintiff) and co‑defendants claimed ownership of a suit land on the basis that a usufructuary mortgage created over a century ago had become extinguished because the statutory limitation period for redemption (60 years) had expired. The defendant, Om Prakash, asserted that he had redeemed the mortgage by paying a nominal sum and that, in any event, the mortgage contained no stipulated redemption period, so the mortgagor's right to redeem could not be lost by limitation. The trial court declared the plaintiffs owners and granted an injunction; the High Court reversed, holding that without a fixed redemption period the mortgage remained redeemable at any time, and the defendant failed to prove redemption. The Supreme Court affirmed the High Court, holding that under Section 60 of the Transfer of Property Act, 1882 the right of redemption subsists as long as the mortgage subsists and any clause that limits redemption is a void clog on equity of redemption. Consequently, the appeal was dismissed.

Issues considered

The effect of the absence of a stipulated redemption period on the mortgagor's right to redeem under Section 60 of the Transfer of Property Act, 1882.
Whether the statutory limitation period for redemption extinguishes the right of redemption when no time limit is agreed.
Whether a clause making a mortgage irredeemable for a long term constitutes a clog on the equity of redemption.
Whether the plaintiff could claim ownership by foreclosure based on alleged lapse of redemption period.

Legislation cited

Subjects

mortgageright of redemptionequity of redemptionclog on redemptionlimitation periodusufructuary mortgageSection 60foreclosurepermanent injunction

Judgment

HARBANS A
v.
OM PRAKASH AND ORS.

NOVEMBER I 0, 2005

[ARIJIT PASAYAT AND C.K. THAKKER, JJ.] B

Transfer of Property Act, I 882-Section 60-Right of mortgagor to
redeem,-land mortgaged JOO years ago without stipulating any redemption
period and in possession of mortgagees since then-Mortgagee's case that C
land not redeemed within limitation period as such became owner of land due
to foreclosure-Held: When there is no /imitation for redeeming the mortgage,
right of redemption cannot be extinguished, it can be redeemed at any point
of time-Rule against clogs on the equity of redemption is that right to redeem
cannot be taken away-Once a mortgage always a mortgage, as such always
redeemable-Limitation Act, 1963. D
It was appellant-plaintiff's case that more than 100 years ago,
ancestors of BH mortgaged the suit land to the forefathers of plaintiff and
defendant Nos.2 and 3 and since then they continued to be in possession
of the suit land as mortgagees. The suit land had not been redeemed and
the period of limitation of 60 years had expired and as such the appellant- E
plaintiff filed a suit for declaration against defendant no.1 that the plaintiff
and defendant Nos. 2 and 3 became owners in possession of the suit land
on ground of forclosure since limitation for redemption of land had expired
and also sought relief of permanent injunction. Defendant no.1 alleged that
he procured decree in his favour against BH and became the owners of F
the suit land; that the description of the mortgage was not given in the
plaint; and that he had got the suit land redeemed after paying redemption
money to the plaintiff. Trial Court decreed the suit in favour of the plaintiff
and defendant nos. 2 and 3 and held them to be owners in possession of
the suit land with consequential relief of permanent injunction and
restraint for alienation of the suit land in any manner. Defendant No.1 G
filed appeal which was allowed holding that the plaintiff and defendant
nos. 2 _and 3 had not become owners as there was no period of limitation
to redeem the usufructuary mortgage. However, since defendant no.1
failed to prove that the mortgage had been redeemed, but plaintiff and

141 H
142 SUPREME COURT REPORTS [2005] SUPP. 5 S.C.R.

A defendant Nos. 2 and 3 were in possession of the suit land as mortgagees
only, they could only be dispossessed by due course of law. Plaintiff then
filed second appeal which was dismissed by the Single Judge of High Court
holding that since no time was fixed for redeeming the land, the mortgagor
had right to get the property redeemed, there being no limitation. Hence
B the present appeal.

Appellant contended that the right to redeem or recover possession
starts from the first date of mortgage and has to be exercised within 30
years.

Respondents contended that when there is no stipulation regarding
C period of limitation it can be redeemed any time.

Dismissing the appeal, the Court

HELD: 1.1. Under section 60 of the Transfer of the Property Act,
at any time after the principal money becomes due, the mortgagor has a
D right on payment or tender of the mortgage money to require the
mortgagee to reconvey the mortgage property to him. The right conferred
by this section has been called the right to redeem .. Under this section,
however, that right can be exercised only after the mortgage money has
become due. The mortgagee's right to e~force the mortgage and the
mortgagor's right to redeem are co-extensive. [151-B-C; 152-El
E
1.2. Any provision inserted to prevent redemption on payment or
performance of the debt or obligation for which the security was given is
clog or fetter on the equity of redemption and is void. The rule against
clogs on the equity of redemption is that, a mortgagor's right to redeem
shall neither be taken away nor be limited by any contract between the
F parties. The Courts will ignore any contract the effect of which is to
deprive the mortgagor of his right to redeem the mortgage. Once a
mortgage always a mortgage and therefore, shall always be redeemable.
[146-G; 147-A, BJ

G 1.3. The reason justifying the Court's power to relieve a mortgagor
from the effects of his bargain is its want of conscience. It depends on
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 mortga~e. Whether the mortgagor was oppressed or was he
imposed upon are questions essentially of fact to be decided on the
H circumstances of each case. lf he was, then he may be entitled to relief.
..~

HARBANSv. OM PRAKASH [PASAYAT, J.] 143
Furthermore, the length of the term of the mortgage can never by itself A
show that the bargain was oppressive. It is not uncommon in various parts
of India to have long term mortgages. (153-C, DI

1.4. In view of the factual position as noticed by the Courts below,
when there is no stipulation regarding period of limitation mortgagor can
redeem the property at any time. (156-BJ B
Ganga Dhar v. Shankar lal and Ors., AIR (1958) SC 770, relied on.

State of Punjab & Ors. v. Ram Rakha & Ors., JT (1997) 2 SC 577 :rnd
Panchanan Sharma v. Basudeo Prasad Jaganani and Ors., (1995) Supp. (2)
sec 574, referred to. c
Mulla's The Transfer of Property Act, Ninth Edition, referred to.

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 6580 of 1999.

From the Judgment and Order dated 27 .1. 98 of the Punjab and Haryana D
High Court in R.S.A. No. 1288 of 1997.

B.S. Chahar, Mrs. Jyoti Chahar and Vinay Garg for the Appellant.

P.C. Jain and Balbir Singh Gupta for the Respondents.
E
The Judgment of the Court was delivered by

ARIJIT PASAYAT, J. Judgment of a learned Single Judge of the
Punjab and Haryana High Court dismissing the second appeal filed by the
appellant under Section l 00 of the Code of Civil Procedure, 1908 (in short
the 'Code') is the subject matter of challenge. F
Background facts sans unnecessary details are as follows:

A suit was instituted by the appellant against the defendants seeking
decree cf declaration to the effect that the plaintiff had become the owner in
possession to the extent of Yi share and defendants 2 and 3 have become G
owner and possession of the balance suit property, on the ground of foreclosure
since limitation for redemption of the land had expired. Consequential relief
of permanent injunction, for restraining defendant no. I from alienating the
suit land and in any manner from interfering with the peaceful possession of
plaintiff and defendants 2 and 3 was sought for.
H
\
'

144 SUPREME COURT REPORTS [2005] SUPP. 5 S.C.R.

A Specific stand of the plaintiff was that forefathers of the plaintiff
alongwith forefathers of Prem and Lakhpat sons of Banswari took the land
in suit as mortgagees from the ancestors of Shira about more than l 00 years
ago, and since then they have continued to be in possession of the suit land
as mortgagees. Therefore, the plaintiff and defendants no.2 and 3 are in
B cultivating possession of the suit land since Smt. Patori daughter of Nanha
has not been seen and heard by the plaintiff since he attained majority and
her name has been wrongly shown by Halqa Patwari in place of Banwari son
of Nanha due to clerical mistake. That plaintiff and defendants no. 2 & 3
have become owner in possession of the suit land by way of adverse
possession. The suit land has not been redeemed yet and period of limitation
C of sixty years had already expired. Therefore, the plaintiff and defendant nos.
2 & 3 have become owners in possession of the suit land whereas the defendant
no. I has no right, title or interest in the suit land, but he alleges that he
procured a decree in his favour against Shri Bhira and has become the owner
of the suit land. In fact, Shri Bhira and no other person had any title to pass
a better title than he had. Hence, the alleged decree is not binding on the
D rights of the plaintiff. The plaintiff several times asked the defendant no. I to
admit the plaintiff and defendants no.2 and 3 to be owner in possession of
the suit land and also not to interfere into the peaceful possession of the
plaintiff and also not to create any charge thereon, but he was acting and did
not pay any heed to the said advice.
E
Defendant no. I filed his written statement raising a preliminary objection
that in the original plaint, the plaintiff claimed himself to be exclusive owner
in possession of the suit Jami by way of adverse possession, but in the present
plaint he is claiming only half share. Hence the plaintiff cannot be allowed
to take contradictory stands and the suit is liable to be dismissed on this score
F alone and the plaintiff cannot claim any relief for defendant nos. 2 and 3. The
plaint is vague since the details of mortgage are not given in the plaint and
the plaintiff as well as defendant nos. 2 & 3 are not owners in possession of
any part of the suit land, the suit is not maintainable in the present form and
plaintiff has no locus-standi to file the present suit; the suit is bad for non-
G joinder of Bhira as necessary party and the plaintiff has not come to the court
with clean hands and prayed for the dismissal of the suit. Plaint is vague
since description of the mortgage is not given in the plaint and the plaintiff
and defendant nos. 2 & 3 have no concern whatsoever with the ownership
and possession of the suit land whereas the defendant no. I is owner in
possession of the suit land vi de mutation No.4 728 dated 18.8.1984. The
H defendant no. I got the suit land redeemed after paying redemption money of
HARBANS v. OM PRAKASH [PASA YAT, J.] 145
Rs.99/- to the plaintiff and plaintiff and other defendants have no concern A
whatsoever with the ownership and possession of the suit land. He, therefore,
prayed for the dismissal of the suit.

The trial Court held that the suit was to succeed and, therefore, decreed
the same in favour of the plaintiff and defendant nos. 2 & 3. It held them to
be owner in possession of the suit land with consequential reliefof pennanent B
injunction and restraint for alienation of the suit land in any manner. An
appeal was preferred by defendant no. I imp leading the plaintiff and defendant
11111(
nos. 2 & 3 as respondents. Learned Additional Sessions Judge, Panipat allowed
the appeal and held that the plaintiff and defendant nos. 2 and 3 had not
become owners as there was. no period of limitation to redeem the usufructuary
mortgage. It was, however, held that defendant no. I had failed to prove that
c
the mortgage has been redeemed. But plaintiff and defendant nos. 2 & 3 were
in possession of the land in dispute as mortgagees only and they cannot be
dispossessed except in due course of law. Regarding injunction the appeal
filed was dismissed. The suit filed by the plaintiff was decreed to the effect
that defendant no. l was restrained from interfering with the peaceful possession D
of the plaintiff and defendant nos. 2 and 3 except in due course of law. A
second appeal was filed by the plaintiff and by the impugned order learned
Single Judge dismissed the same holding that there was no limitation for
redeeming the mortgage as there was no evidence brought on record to show
that the mortgage was for a fixed period. Since no time was fixed for redeeming
E
the land the mortgagor has right to get the property redeemed, there being no
limitation for the mortgagor.

Learned counsel for the appellants submitted that the view taken by
learned Single Judge is clearly contrary to the law laid down by this Court
in State of Punjab & Ors. v. Ram Rakha and Os. JT (1997} 2 SC 577. F
Accor<Ung to him Article 61 Part V clearly support the case of the plaintiff.
Right to redeem or recover possession starts from the first date of the mortgage,
and has to be exercised within 30 years and in the State of Punjab, case
(supra} this Court held so.

Reference may be made to certain paragraphs in Ganga Dhar v. Shan/car G
. Lal and Ors., AIR (1958) SC 770 whic.h read as follows:

"4. It is admitted that the case is governed by the Transfer of Property
Act. Under section 60 of that Act, at any time after the principal
money has become due, the mortgagor has a right on payment or
H
'
....1.

146 SUPREME COURT REPORTS (2005] SUPP. 5 S.C.R.

A tender of the mortgage money to require the mortgagee to reconvey
the mortgage property to him. The right conferred by this section has
been called the right to redeem and the appellant sought to enforce
this right by his suit. Under'this section, however, that right can be
exercised only after the mortgage money has become due. In
Bakhtawar Begum v. Husaini Khanam, [1913] L.R. 41 I.A. 84, 89,
B also the same view was expressed in these words:

"Ordinarily, and in the a~~ence of a special condition entitling
the mortgagor to redeem during t~e term for which the mortgage
is created, the right of redemption can only arise on the expiration
of the specified period."
c
Now, in the present case the term of the mortgage is eighty-five
years and there is no stipulation entitling the mortgagor to redeem
during that term. That term has not yet expired. The respondents,
therefore, contend that the suit is premature and liable to be
dismissed."
D
6. The rule against clogs on the equity of redemption is that, a mortgage
shall always be redeemable and a mortgagor's right to redeem shall
neither be taken away nor be limited by any contract between the
parties. The principle behind the rule was expressed by Lindley MR.
In Santley v. Wilde, (1899) 2 Ch. 474) in these words:
E
"The principle is this: a mortgage is a conveyance of land or an
assignment of chattles as a security for the payment of a debt or
the discharge of some other obligation for which it is given. This
is the idea of a mortgage: and the security is redeemable on the
payment or discharge of such debt or obligation, any provision
F to.the contrary notwithstanding. That, in my opinion, is the law.
Any provision inserted to prevent redemption on payment or
performance of the debt or obligation for which the security was
given is what is meant by a clog or fetter on the equity of
redemption and is therefore void. It follows from this, that "once
G a mortgage always a mortgage".

7. The right of redemption, therefore, cannot be taken away. The
Courts will ignore any contract the effect of which is to deprive the
mortgagor of his right to redeem the mortgage. One thing, therefore,
is clear, namely, that the term in the mortgage contract, that on the
H failure of the mortgagor to redeem the mortgage within the specified ;
HARBANS v. OM PRAKASH [PASA YAT, J.] 147
period of six months the mortgagor will have no claim over the A
mortgaged property, and the mortgage deed will be deemed to be a
deed of sale in favour of the mortgagee, cannot be sustained. It plainly
takes away altogether, the mortgagor's right to redeem the mortgage
after the specified period. This is not permissible, for "once a mortgage
always a mortgage" and therefore always redeemable. The same result B
also follows from section 60 of the Transfer of Property Act. So it
was said in Mohammad Sher Khan v. Seth Swami Dayal, (1921) L.R.
49 I.A. 60, 65):
"An anomalous mortgage enabling a mortgagee after a lapse of
time and in the absence of redemption to enter and take the rents
in satisfaction of the interest would be perfectly valid if it did not C
also hinder an existing right to redeem. But it is this that the
present mortgage undoubtedly purports to effect. It is expressly
stated to be for five years, and after that period the principal
money became payable. This, under section 60 of the Transfer
of Property Act, is the event on which the mortgagor had a right D
on payment of the mortgage money to redeem.
The section is unqualified in its terms, and contains no saving
provision as other sections do in favour of contracts to the
contrary. Their lordships therefore see no sufficient reason for
withholding from the words of the section their full force and E
effect.
14. In comparatively recent times Viscount Haldane L.C. repeated
the same view when he said in G. and C. Kreglinger v. New Patagonia
Meat and Cold Storage Company Ltd., ((1914) A.C. 25, 35, 36):

"This jurisdiction was merely a special application of a more F
general power to relieve against penalties and to mould them
into mere securities. The case of the common law mortgage of
land was indeed a gross one. The land was conveyed to the
creditor upon the condition that if the money he had advanced
to the offer was repaid on a date and at a place named, the fee G
simple would revest in the latter, but that if the condition was not
strictly and literally fulfilled he should lose the land for ever.
What made the hardship on the debtor a glaring one was that the
debt still remained unpaid and could be recovered from the offer
notwithstanding that he had actually forfeited the land to the H
148 SUPREME COURT REPORTS [2005) SUPP. 5 S.C.R.

A mortgagee. Equity, therefore, at an early date began to relieve
against what was virtually a penalty by compelling the creditor
to use his legal title as a security.
My Lords, this was the origin of the jurisdiction which we are
now considering, and it is important to bear that origin in mind.
B For the end to accomplish which the jurisdiction has been evolved
ought to govern and limit its exercise by equity judges. That end
has always been to ascertain, by parol evidence if need be, the
real nature and substance of the transaction, and if it turned out
to be in truth one of mortgage simply, to place it on that footing.
It was, in ordinary cases, only where there was conduct which
c the Court of chancery regarded as unconscientious that it interfered
. with freedom of contract. The lending money, on mortgage or
otherwise, was looked on with suspicion, and the court was on
the alert to discover want to conscience in the terms imposed by
lenders."
D 15. The reason then justifying the Court's power 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 on whether it was obtained by taking
,. '·advantage of any difficulty or embarrassment that he might have
E ·· been in when he borrowed the moneys on the mortgage. Was the
mortgagor oppressed? Was he imposed upon? If he was, then he may
be entitled to relief.

16. We then have to see if there was anything unconscionable in the
· . agreeinent. that the mortgage would not be redeemed for eighty five
F years. Is it oppressive? Was he forced to agree to it because of his
·difficulties? Now this question is essentially one of fact and has to be
. ~ecided on the circumstances of each ca!;e. It would be wholly
, unprofitable in enquiring into this question to examine the large number
of reported cases on the subject, for each turns on its own facts.

G 17. First then, does the length Qf the term - and in this case it is long
enough being eighty five years - itself lead to the conclusion that it
was an oppressive term? In our view, it does not do so. It is not
necessary for us to go so far as to say that the length of the term of
the mortgage can never by itself show that the bargain was oppressive.
We do not desire to say anything on that question in this case. We
H
HARBANS v. OM PRAKASH [PASA YAT, J.] 149
.think it enough to say that we have nothing here to show that the A
length of the tenn was in any way disadvantageous to the mortgagor.
It is quite conceivable that it was to his advantage. The suit for
redemption was brought over forty-seven years after the date of the
mortgage. It seems to us impossible that if the tenn was oppressive,
that was not realised much earlier and the suit brought within a short B
time of the mortgage. The learned Judicial Commissioner felt that the
respondents' contention that the suit had been brought as the price of
landed property had gone up after the war, was justified. We are not
prepared to say that he ws:ts wrong in this view. We cannot also
ignore, as appears from a large number of reported decisions, that ii
is not uncommon in various parts of India to have long term mortgages. C
Then we find that the property was subject to a prior mortgage. We
are not aware what the term of that mortgage was. But we find that
that mortgage included another property which became free from it
as a result of the mortgage in suit. This would show that the mortgagee
under this mortgage was not putting any pressure on the mortgagor. D
That conclusion also receives support from the fact that the mortgage
money under the present mortgage was more than that under the
earlier mortgage but the mortgagee in the present case was satisfied
with a smaller security. Again, no complaint is made that the interest
charged, which was to be measured by the rent of the property, was
in any manner high. All these, to our mind, indicate that the mortgagee E
had not taken any unfair advantage of his position as the lender, nor
that the mortgagor was under any financial embarrassment.
18. It is said that the mortgage instrument itself indicates that the
bargain is hard, for, while the mortgagor cannot redeem for eighty-
five years, the mortgagee is free to demand payment of his dues at F
any tinie he likes. This contention is plainly fallacious. There is nothing
in the mortgage instrument permitting the mortgagee to demand any
money, and it is well settled that the mortgagee's right to enforce the
mortgage and the mortgagor's right to redeem are co-extensive."

On the contrary, learned counsel for the respondent submitted that in
G
Panchanan Sharma v. Basudeo Prasad Jaganani and Ors., (1995) Supp. 2
sec 574 it ~as clearly held that when there is no stipulation regarding
period of limitation it can be redeemed at any time. It was, inter alia, held
as follows:
H
l 50 SUPREME COURT REPORTS [2005] SUPP. S S.C.R.

A "The sale certificate, Ex. C-11 does not bind the appellant and,
therefore, the mortgage does not stand extinguished by reason of the
sale. It is inoperative as against the appellant."

Though the decision in State ofPunjab case (supra) primafacie supports
the stand of the appellant, the decision rendered by a three-judge Bench of
B this Court in Ganga Dhar 's, case (supra), according to us had dealt with the
legal position deliberately and stated the same succinctly.

In Mulla's The Transfer of Property Act, Ninth Edition, certain
statements are relevant. They read as follows:
c "Right of redemption: The mortgagor in Indian Law is the owner
who had parted with some rights of ownership an the right of
redemption is a right which he exercises by virtue of his residuary
ownership to resume what he has parted with. The Section affirms a
right of redemption in all mortgagees and thus carries out the
D recommen.dation of the Privy Council in Thumbuswamy's case (1875
1 Mad l, 2 IA, 241) that the Legislature should intervene to recognize
a right of redemption in mortgagees by conditional sale. In India this
right of redemption is, however, a statutory one, and, therefore a
legal right as stated by the judicial .committee. Right of redemption
cannot be extinguished by any agreement made at the time of the
E mortgage as part of the mortgage transaction.
The right of redemption is an incident of a subsisting mortgage
and subsists so long as the mortgage itself subsists. It can be
extinguished as provided in the section and when it is alleged to be
extinguished by a decree, the decree should run strictly in accordance
F with the forum prescribed for the purpose. Dismissal of an earlier suit
for redemption whether as abated or as withdrawn or in default would
not be barred the mortgagor from fifing a second suit for redemption
so long as the mortgage subsists and the right of redemption is not
extinguished by the efflux of time or by a decree of the court in the
G prescribed form.
A redemption pre-supposeg the existence of a 'mortgage'. As
defined in the Act, a mortgage is a transfer of an interest in immovable
property for the purpose of securing the payment of a loan. It is
created by the act of parties. In an usufructuary mortgage, a transfer
H is made of the right of possession and enjoyment of the usufruct. The
HARBANS v. OM PRAKASH [PASA YAT, J.] 151
rights of a usufructuary ·mortgagee forms part of the bundle which A
constitute ownership. The remainder still remains with the mortgagor
and cab'be transferred by him. The mortgagor's right is as indicated
in section 60 of the Act i.e. after the principal money has become
due, the mortgagor has a right to pay the mortgage money and on
such. payment, he has the right to require the mortgagee to deliver
possession. This right cannot be extinguished except by the act of B
parties or by a decree of a Court. This right is called the right to
redeem and a suit to enforce it is called a suit for redemption. Thus
the scope of a s\1it for redemption is preliminary to enforce the right
to make a payment. of the mortgage money. A claim to redeem a
mortgage actually does not attach to tlie land, although the decree C
passed in the suit may ultimately affect possession which is also an
interest in land.
The section is not prefaced by any such words as 'in the absence
of a contract to the contrary'. The right of redemption is therefore a
statutory right which cannot be fe~ered by any condition which D·
impedes or· prevents redemption. Any such condition is void as a clog
on redemption. A mortgagee's suit for sale was compromised on
terms that the mortgagor should pay within a specified time and that
in default, the mortgagee should take possession as usufructuary
mortgagee; and that thereafter the mortgagor should have a right to E
redeem at any time taking out execution. The Madras High Court
held that this term of the~"'°nsent decree was invalid as it had the
effect of reducing the time for redemption from 60 to three years. On
appeal to the Privy Council, the point did not arise as their Lordships
held that on a proper construction of the decree it did not exclude the
mortgagor's remedy by suit. The section further explains when the F
right of redemption arises; how the right of redemption is exercised
and what the mortgagor's right on redemption are. A mere agr~ement
between the mortgagor and the mortgagee by which the mortgagor
agrees to convey certain lands to the mortgagee in satisfaction of the
mortgage does not extinguish the mortgage.
G
The Supreme Court has held that the right of redemption under
a mortgage deed can come to an end only in a manner known to law.
Such extinguishment of the right can take place by a contract between
the parties, by a merger or by a statutory provision which debars the
mortgagor from redeeming the mortgage. A mortgagee in possession H
152 SUPREME COURT REPORTS [2005] SUPP. S S.C.R.

A of the property will hav€! to deliver possession to the mortgagor when
a suit of redemption is filed unless he, is able to show that the right
of redemption has come to an end or that a s,uit is liable to be dismissed
on some other valid ground. The mortgago~'s right of redemption is
exercised by thi payment or tender to the mortgagee at the proper ~
time and the proper place, of the mortgage money. When it is
B extinguished by the act of parties, the act must take the shape and
observe the formalities which the law prescribes. The expression 'act
of the parties' refers to some transaction subsequent to the mortgage
and standing apart from the mortgage transaction. A usufructuary
mortgag~e cannot by mere assertion of his own or by a unilateral

c action on his part, convert his position on moiety of the property as
mortgagee into that of an absolute owner.
The right to redeem follows the interest of the mortgagor, and
can be exercised by him and also by those taking the whole of his
interest, whether by assignment inter vivos, or by devolution on death.
D Right of redemption and right of foreclosure co-extensive.
··-
The mortgagor's rig_!lt of redemption and the mortgagee's right of
foreclosure or sale are co-extensive. When the mortgagor's right to
redeem accrues, the-mortgagee has a right to enforce his security. But
the rule may be limited by the terms of the mortgage and if the
E
limitation is not oppressive or unreasonable, it will be given effect to.
Thus when a mortgage .for a fixed term provided that the mortgagee
might sue for sale· before the expiry of the term if his security were
jeopardized, it was held that the right of redemption was not
accelerated. /

F
It has been held that the mortgagor can adopt the course provided
under Section 60 only before the mortgagee has filed a suit for
enforcement of the mortgage.
Clog on redemption
.a A mortgage being a security for the debt, the right of redemption
continues although the mortgagor fails to pay the debt at the due date.
Any provision inserted to prevent, evade or hamper redemption is
void.
The doctrine has been described as an anachronism by Pollock,
H ,
'
HARBANS v. OM PRAKASH [PASA VAT, .1.) 153
who suggested that it be moulded for modem conditions by limiting A
it to cases where there was something oppressive or unconscionable
in the bargain. Butt is settled law in India (by statute) that a mortgage
cannot be made altogether irredeemable (except re. companies) nor
can the right of redemption be made illusory. The test suggested by
Pollock has however been generally applied in determining whether
conditions which directly or indirectly fetter or limit the right to B
redeem violate the doctrine. In Seth Ganga Dhar v. Shankar Lal,
Sarkat J, explained the basis of the right of the court to intervene
thus:
"The reason then justifying the court's power to relieve C
a mortgagor from the effects of his bargain is its want of
conscience. Putting it in a more familiar language, the court's
jurisdiction to relieve a mortgagor from his bargain depends on
whether it was attained by taking advantage of any difficulty or
embarrassment that he might have been in when he borrowed the
moneys on the mortgage. Was the mortgagor oppressed? Was he D
imposed upon? If he was, when he may be entitled to relief."
The doctrine does not apply if the transaction is not in its essence a
mortgage. Thus, where the transaction gives an option to purchase
property, the sole consideration being the loan of a sum of money
secured on the property during the continuance of the option, the E
transaction is the sale of an option, the consideration being the use of
the money free of interest.
The doctrine applies to anomalous mortgages. There were decisions
to the contrary when the definition of anomalous mortgages was in
a later section, but these are overruled by the Privy Council in F
Mohammed Sher Khan v. Seth Swami Dayal, AIR (1925) Mad 366.
Even before this decision, the doctrine was applied to simple mortgages
usufructuary which were not then classed as anomalous.
This doctrine also applies to transaction by which the mortgagor
transferred his equity of redemption to the transferee in consideration G
of a loan; a clause in the said transaction by which the transferee had
an option to purchase was held void.
Doctrine of clog on equity

The doctrine of a clog on the equity of redemption is a rule of H
154 SUPREME COURT REPORTS (2005] SUPP. 5 S.C.R.

A justice, equity and good conscience - this ·has been reaffirmed by the
Supreme Court in Murarilal v. Dev Karan, AIR (1965) SC 225.
Gajendragadkar, CJ delivering the judgment of the Court, observed
that there was a long line of authorities in India in which it had been
so held, notwithstanding the decisions of the Privy Co.1.1ncil in two
cases. It follows that the doctrine is applicable in an area where the
B Act is not in force. This is also supported by the fact that Section 60
is not subject to a contract to the contrary. The ~upreme Court has
held that, it is a settled law in England and in India that a mortgage
cannot be made altogether irrecieemable or redemption made illusory.
The law must respond and be responsive to the felt and discernible
c compulsions of circumstances that would be equitable, fair and just;
unless there is anything to the contrary in the Statue, law must take
cognizance of that fact and act accordingly. In the context of fast
changing circumstances and economic stability, a long term for
redemption makes an illusory mortgage, though not decisive. It should
prim a facie be an indication as to how clogs on equity of redemption
D should be judged.

Though the Act does not apply to Sikkim, the courts should apply
the principle contained in Section 60 and strike down a clog on the
right of redemption, since the principle 'once a mortgage always a
m.ortgage' is a rule of justice, equity and good conscience.
E
The term in the mortgage deed that the land is irredeemable for
95 years is a clog on the equity of redemption.

Whether or not in a particular transaction there is a clog on the
equity of redemption, depends primarily upon the period of
F redemption, the circumstances under which the mortgage was created,
the economic and financial position of the mortgagor and his
relationship vis-a-vis him and the mortgagee, the economic and social
condition 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
G which a mortgage is created, namely, circumstances of the parties,
the time, the situation, the clauses of redemption either for payment
of interest or any other sum, the obligation of the mortgagee to
construct or repair or to maintain the mortgaged property in cases of
usufructuary mortgage, to manage as a matter of prudent management;
H these factors must be co-related to each other and viewed in a
HARBANS v. OM PRAKASH [PASA YAT, J.] 155
comprehensive conspectus in the background of the facts and A
circumstances of each case, to determine whether there are clogs on
equity of redemption.
A long term of redemption is not necessarily a clog; whether a
particular term of redemption operates as a clog is to be considered
having regard to the circumstances of the case. B
What is, or, what is not, a clog on the equity of redemption is a
question of fact in each case.
Condition postponing redemption in case of default.

Such a condition is a clog on the equity of redemption and is C
invalid. In Mohammed Sher Khan v. Seth Swami Dayal, the mortgage
was for a term of five years with a condition that if the money was
not paid, the mortgagee might enter into possession for a period of
12 years during which the mortgagor could not redeem. The Privy
Council held that the condition hindered an existing right to redeem D
and was therefore invalid. Again, a condition that in default the
mortgage should be renewed for a period of 40 years is invalid. The
Allahabad High Court has said that no hard and fast rule can be laid
down as to what is improper restraint on alienation and upheld a
condition that in default of redemption on due date, the mortgage
should not be redeemable for a further period of 20 years. It is E
submitted that this decision is inconsistent with Mohammed Sher
Khan's case. In a Bombay case, the mortgage was for a term of 21
years in order that the mortgagee should plant an orchard, but there
was a condition that in default of redemption at the expiry of 21
years, the mortgage should be allowed to retain possession as long as F
the trees bore fruit. The condition was not enforced as the mortgagor
was an agriculturist within the Dakkan Agriculturists' Relief Act.
Terms of Redemption

It has been held that if the mortgagor allows the normal limitation
period to expire, he can then only file a suit on the basis of deferred G
date of redemption. But he will be precluded from saying that the
deferred date amounts to clog on redemption. On the question of
postponement of date of redemption not amounting to a clog, the
court referred to an earlier Supreme Court judgment."
H
156 SUPREME COURT REPORTS [2005) SUPP. S S.C.R.

A It. appears that the decision in Ganga Dhar 's, case (supra) was not
noticed by the two-judge Bench in State of Punjab, case (supra). The decision
according to us lays down correct position in law which is applicable.

In the background of the factual position as noticed by the Courts
below, and the legal principles indicated above the inevitable result of this
B appeal is dismissal which we direct. There shall be, however, no order as to
costs.

N.J. Appeal dismissed.

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