Holding

A mortgage deed fixing a term of 99 years is a clog on the equity of redemption and is void; the mortgagor is entitled to redeem the property upon payment of the mortgage money notwithstanding the stipulated period.

Summary

The original owner, Prakash Singh, mortgaged his land to Basant Kaur for Rs 7,000 in 1968, the mortgage deed stipulating a term of 99 years. After Basant Kaur's death, the appellants stepped into her shoes as mortgagees in possession. In 1987 the mortgagor sold a portion of the mortgaged land to the respondent, who held the mortgage money as security and offered the full amount to redeem the property, but the mortgagees refused to deliver possession. The respondent filed a suit for possession by way of redemption; the trial court and the appellate courts ordered delivery of possession upon payment of the mortgage money, and the mortgagees appealed to the Supreme Court. The Supreme Court held that a 99‑year mortgage term is a clog on the equity of redemption, rendering the clause void, and that the statutory right of redemption under Section 60 of the Transfer of Property Act subsists irrespective of the stipulated period. Consequently, the respondent was entitled to redeem the land on payment of Rs 7,000, and the appeal of the mortgagees was dismissed.

Issues considered

Whether the mortgagor (respondent) can redeem the mortgaged property before the expiry of the 99‑year mortgage term.
Whether a clause fixing a mortgage term of 99 years constitutes a clog on the equity of redemption.
Whether the respondent has locus standi to file a suit for redemption.

Legislation cited

Transfer of Property Act, 1882s. 60

Subjects

equity of redemptionclog on redemptionmortgageright of redemptionSection 60mortgage termusufructpartial redemptionmortgageemortgagor

Judgment

A SHRI SHIVDEV SINGH AND ANR.
v.
SH. SUCHA SINGH AND ANR.

MARCH 31, 2000

B [S. SAGHIR AHMAD AND R.P. SETHI, JI.]

Transfer of Property Act 1882-Section 60-Right of Redemption-
Provision regarding-Held, at any time after the money has become due, the
mortgagor has a right, on payment or tender of the mortgage-money, to
c require the mortgagee to deliver the mortgage deed and all documents relating
to the mortgaged property and where the mortgagee is in possession of the ·
mortgaged property, to deliver possession thereof to the mortgagor-Right of
redef11ption being a statutory and legal right, cannot be extinguished by any
agreement made at the time ofmortgage as part of the mortgage transaction-
Such right being an incident of a su~sisting mortgage, subsists so long as
D mortgage subsists-Clog on the equity of redemption-Constitution of-Held,
whether in a particular case there is any clog on the equity of redemption, has
to be decided in view of the background of a particular case-In the present
case, the mortgage deed being for a period of 99 years constitutes a clog on
the equity of redemption having regard to the financial position under which
E the mortgagor was placed at the time of execution of the mortgage-deed and
the advantageous position of the mortgagee qua the mortgagor-Moreover,
mortgagees having already enjoyed the usufructs of the mortgaged land for
over 26 years at the time of filing of the suit.

The disputed property was owned by P who had mortgaged the
F same in favour of B for a sum of Rs. 7000. B having died, the appellants
stepped into her shoes qua the disputed and became mortgagees in posses-
sion of the said land•. P sold a .part of the mortgaged property to the
respondent vide a registered sale deed for a valid consideration by which
the mortgage money of Rs. 7000 was kept with the respondent as security
G to be paid to the appellants. Despite the respondent having purchased only
a part of the mortgaged land, he offered the whole of the mortgage money
to the appellants realising that partial redemption was not permissible.
The appellants having refused to deliver possession, the respondent filed a
suit for possession by way of redemption against the appellant in the
H Court of Addi.tional Senior Sub-Judge. The suit was decreed with a direc-
878
SHIVDEV SINGH v. SUCHA SINGH 879
ti on for delivery of possession by way of redemption on paying/depositing A
the mortgage money of Rs. 7000 minus the cost of the decree. Both the
first and the second appeals preferred by the appellants were dismissed.
Hence this appeal.

On behalf of the appellants, it was contended that the clause pre-
B
scribing the period of mortgage for a period of 99 years did not constitute
a clog on the equity of redemption and that the suit filed before the expiry
of the stipulated time was premature in terms of Section 60 of the Trasfer
of Property Act.

Dismissing the appeal, this Court c
HELD : 1.1. The right of redemption is an incident of a subsisting
mortgage and it subsists so long as the mortgage subsists. Whether in a
particular case there is any clog on the equity of redemption, has to be
decided in view of the background of a particular case. In the present
D
case, the mortgage deed being for a period of 99 years is a clog on the
equity of redemption having regard to the facts and circumstances of the
case and the financial position under which the mortgagor was placed at
the time of execution of the mortgage deed. The appellants were in an

- advantageous position qua the mortgagor. They have been deriving the
usufructs of the mortgaged land for a period of over 26 years at the time
of filing of the suit on payment of meagre sum of Rs. 7000 only to the
mortgagor. [887-B; E-F]
E

1.2. Section 60 of the Transfer of Property Act provides that at any
time after the money has become due, mortgagor has a right, on payment
F
or tender, at a proper time and place of the mortgagor-money to require
the mortgagee to deliver the mortgage-deed and all documents relating to
the mortgaged property and where the mortgagee is in possession of the
mortgaged property, to deliver possession thereof to the mortgagor. Such
a right of the mortgagor is called, in English law, th~ equity of redemp-
tion. The mortgagor being an owner who has parted with some rights of G
ownership has a right to get back the mortgage deed or mortgaged prop-
erty, in exercise of his right of ownership. The right of redemption recog-
nised under the Transfer of Property Act is thus a statutory and legal
right which cannot be extinguished by any agreement made at the time of
mortgage as part of the mortgage transaction. [882-G-H; 883-A-B] H
880 SUPREME COURT REPORTS [2000] 2 S.C.R.
A Jayasingh Dnyanu Mhoprekar & Anr. v. Krishna Babaji Patil & Anr.,
AIR (1985) SC 1646; Ganga Dhar v. Shaf!kar La4 AIR (1958) 770; Poma/
Kanji Govindji & Ors. v. Vrajlal Karsandas Purohit & Ors., AIR (1989) SC
436, relied on.

l!ernon v. Bethel4 (1762) 2 Eden 110: 28 ER 838; G & C Krr!glingerv.
B New Patagonia Meat and Cold Storage Company Ltd., (1914) AC 25, re-
ferred to.

CIVIL APPELLAIB JURISDICTION Civil Appeal No. 2333 of
2000.
c From the Judgment and Order dated 28.7.99 of the Punjab and
Haryana High Coutt in RS.A. No. 2897 of 1998.

S.P. Singh and Prem Sunder Jha for the Appellants.

Manoj Swamp for the Respondents.
D
The Judgment of the Court was delivered by

SETHI, J. Leave granted.

Claiming to be the owner of the disputed property being land meas-
E uring 23 kanals 2 marlas situate in Village Sansra, Tehsil Ajnala, Punjab, the
respondent-plaintiff filed a suit for possession by way of redemption against
the appellants in the Court of Additional Senior Sub- Judge, Ajnala. The suit
was decreed by the Trial Court with a direction for delivery of possession
by way of redemption on paying/ depositing the mortgage money of
F Rs.7,000/- minus the cost of the decree. The appeal filed by the appellants
was dismissed by the First Appellate Court on 25th July, 1998 and second
appeal was dismissed vide the judgment ~mpugned in this appeal.

It is contended on behalf of the appellants that the clause prescribing
the period of mortgage did not constitutes a clog on the equity of redemption
G and that the suit filed before the expiry of the stipulated time was premature
in terms of Section 60 of the Transfer of Property Act. In support of their
contentions the appellants have relied upon the judgment of this Court in
Ganga Dhar v. Shankar Lal, AIR (1958) SC 770 = [1959] SCR 509 and
distinguished the judgment relied upon by the High Court in the case of
H Pomal Kanji Govindji & Ors. v. Vrajlal Karsandas Purohit & Ors., AIR
SHIVDEV SINGH v. SUCHA SINGH [SETHI, J.] 881
(1989) SC 436. A

In order to appreciate the rival contentions, it is necessary to take note
of the facts of the case which have given rise to the filing of the present
appeal. The disputed property was owned by one Prakash Singh who had
mortgaged the same in favour of Smt.Ba~t Kaur for a sum of Rs.7,000 vide
B
mortgage deed dated 19.3.1968. The said Smt. Basant Kaur died whereafter
the appellants herein stepped into her shoes qua the suit property and,
according to the plaintiffs became mortgagees in possession of the said land.
The said Shri Prakash Singh, the original owner, sold the land measuring 19
kanals 2 marlas out of the mortgaged property in favour of the respondent
Sucha Singh vide registered sale deed dated 25th March, 1987 for a valid c
consideration by which the mortgage money of Rs. 7,000 was kept with the
respondent-plaintiff as security (Amanat) to be paid to the appellants. It was
further pleaded by the plaintiff that at the time of the original mortgage deed
dated 19.3.1968 the said Shri Prakash Singh was financially tight and
allegedly taking undue advantage of his poor financial condition and D
helplessness the appellants got incorporated a term in the mortgage deed, to
the effect that the mortgage was for a period of 99 years which constituted
a clog on the equity of redemption and that the appellants had been enjoying
the usufructs of the mortgage for more than 20 years before the date of the
filing of the suit. Despite the fact that the respondent-plaintiff had purchased E
only 19 kanals 2 marlas out of the mortgaged land, he offered the whole of
the mortgage money to the appellants-defendant realising that partial redemp-
tion was not permissible. The appellants were stated to have refused to
deliver possession which necessitated the filing of the suit.

Prakash Singh who was impleaded as defendant No.3 was proceeded F
ex-parte. The appellants, though admitted that the disputed land under
mortgage was in their possession on the basis of a mortgage for a sum of
Rs.7,000/- since the year 1968, yet contended that the plaintiffs had no right
to get the suit land redeemed before the expiry of mortgage period of 99
years. The suit was stated to be premature and liable to be dismissed. G
On the basis of the pleadings of the parties, the Trial Court framed
, the following issues:

"l. Whether the disputed land is liable to be redeemed in favour of
the plaintiff as claimed through this Suit?- OPP. H
882 SUPREME COURT REPORTS [2000) 2 S.C.R.
A 2. Whether the period of 99 years of mortgage is a clog on the equity
. of redemption? OPP.

3. Whether the plaintiff has no locus standi to file this suit? OPD

4. Relief?"
B
The Trial Court while deciding Issue Nos.1 and 2 held:

"The clause in the mortgage deed providing for the mortgage of the
land for a period of 99 years constitutes a clog on the equity of
redemption and as such is illegal and void and the same cannot be
c allowed to stand in the way of the plaintiff to get the suit land
redeemed or acquire its possession. The statutory right of redemption
cannot be fettered by any condition which impedes or prevents the
redemption clause. This view stands fully fortified from the relevant
law laid down through an authority, 1992(1) All India Land Laws
Reporter (P&H) 524, Ajit Singh v. Kakhbir Singh and Others. As such
D the argwnent advanced on behalf of the defendants on this account
must fail. The case of the plaintiff could not be resisted on any other
cogent ground."

The plaintiff-respondent was held to have proved that he was entitled
E to get whole of the disputed land redeemed by payment of the mortgage
money of Rs.7,000/- to the appellants-defendants. In view of positive
findings on Issue Nos. I and 2 in favour of the plaintiffs, issue No.3 was
decided against the defendants and suit decreed as noticed earlier. The
appellate cpurt also decided on facts that the plaintiff after the purchase of
I
the land, the subject matter of the suit, had become mortgagor and was
• F
entitled to redeem the same prior to the period of 99 years fixed in the
mortgage deed. The clog or fetter of redemption imposed in the mortgage
deed was held to be void which did not prevent the plaintiffs to seek
redemption of the mortgaged property prior to the aforesaid period.

G Section 60 of the Transfer of Property Act provides that at any time
after the money has become due, the mortgagor has a right, on payment or
tender, at a proper time and place of tl1e mortgagor-money to require the .
mortgagee to deliver the mortgage-deed a!1d all docwnents relating to the
mortgaged property and where the mortgagee is in possession of the mort-
gaged property, to deliver possession thereof to the mortgagor. Such a right
H
SHNDEV SINGH v. SUCHA SINGH [SETHI, J.] 883
of the mortgagor is called, in English Law, the equity of redemption. The A
mortgagor being an owner who has parted with some rights of ownership has
a right to get back the mortgage deed or mortgaged property, in exercise of
his right of ownership. The right of redemption recognised under the Transfer
of Property Act is thus a statutory and legal right which cannot be extin-
guished by any agreement made at the time of mortgage as part of the
mortgage transaction. B

This Court in Jayasingh Dnyanu Mlzoprekar & Am: v. Krishna Babaji
Patil & Am: A1R (1985) SC 1646 held:

"It is well settled that the right of redemption under a mortgage deed
can come to an end only in a manner known to law. Such extinguish-
c
ment 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 who has entered into posses-
sion of the mortgaged property under a mortgage will have to give
up possession of the property when a suit for redemption is filed D
unless he is able to show that the right of redemption has come to an
end or that the suit is liable to be dismissed on some other valid
ground. This flows from the legal principle which is applicable to all
mortgages, namely "Once a mortgage, always a mortgage."

Any provision incorporated in the mortgage deed to prevent or hamper E
the redemption would thus be void. A mortgage cannot be made irredeemable
and the right of redemption not an illusory. This Court in Ganga Dhar v.
Slzankar Lal, AIR (1958) SC 770 held:

"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 F
neither be taken away nor be limited by any contract between the
parties. The principle behind the rule was expressed by Lindley M.R.
in Santley v. Wilde, (1899) 2 Ch. 474(B) in these words:

"The principle is this: a mortgage is a conveyance of land or an
G
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 to
the contrary notwithstanding. That, in my opinion is the law. Any
provision inserted to prevent redemption on payment or perform- H
884 SUPREME COURT REPORTS (2000] 2 S.C.R.
A ance of the debt or obligation for "'.hich the security was given is
what is meant by a clog or fetter on the equity of remption and is
therefore void. It follows from this, that "once a mortgage always
a mortgage."

The right of redemption, therefore, cannot be taken away. The court
B 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
failure of the mortgagor to redeem the mortgage within the specified
pe1iod of six months the mortgagor will have no claim over the
c 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 also follows from S.60 of the Transfer of Property Act.
D
So it was said in Mohammad Sher Khan v. Seth Swami Dayal, 49 Ind
App. 60 at p.65: AIR (1922) PC 17 at p.19 (C).

An anomalous mortgage enable a morgagee after a lapse of time and
in the absence of redemption to enter and take the rents in satisfaction
E of the interest would be perfectly valid if it did not 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 S.60 of the Transfer of Property Act, is the event on which the
mortgagor had a right on payment of the mortgage money to redeem.
F
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 on sufficient reason for withholding
from the words of the section their full force and effect."

G It was observed that the rule against clog on equity of redemption
empowered t11e courts to relieve a party from his bargain. If a person has
agreed to forfeit wholly his right to redeem in certain circumstances, that
agreement will be avoided. After referring to judgments in Vernon v. Bethell, "
(1762) 2 Eden 110 at 113; 28 ER 838 at p. 839 (D), G & C. Kreglinger v. New
H Patagonia Meat and Cold Storage Company lJd., (1914) AC 25 at pp. 35 &
SHNDEV SINGH v. SUCHA SINGH [SETHI, J.] 885

- 36) this Court held:

"The reason then justifying the court's power to relieve a mortgagor
A

from the effects of his bargain is its want of conscience. Putting it in
mere familiar language the Court's jurisdiction to relieve a mortgagor
from his bargain depends on whether it was obtained by talcing
advantage of any difficulty or embarrassment that he might have been B
in when he borrowed the moneys on the mortgage. Was the mortgagor
oppressed? Was he imposed upon? Ifhe was, then he may be entitled
to relief.

We then have to see if there was anything unconscionable in the
agreement that the mortgage would not be redeemed for eighty five
c
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 decided on the circumstances of each case. 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 D
facts."

The Court further held that the length of term by itself would not lead to the
conclusion that it was an oppressive term. Restricting their findings on the
facts of the case, the Court observed "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 E
that the bargain was oppressive. We do not desire to say anything on that

- question in this case. We think it enough to say that we have nothing here to
show that the length of the term was in any way disadvantageous to the
mortgagor".
F
In Poma[ Kanji Govindji & Ors. v. Vrajlal Karsandas Purohit & Ors., AIR
(1989) SC 436 this Court held that "freedom of contract is permissible
provided it does not lead to taking advantage of the oppressed or depressed
people. The law must transform itself to the social awareness. Poverty should
not be unduly permitted to curtail one's right to borrow money on the ground
of justice, equity and good conscience on just terms. If it does, it is bad. G
· Whether it does or does not, must, however, depend upon the facts and the
circumstances of each case". The doctrine "clog on equity of redemption" was
held to be a rule of justice, equity and good conscience. It must be adopted
to the reality of situation and the individuality of transaction. The couit' should
take note of the time, the condition, the price spiral, the tenn bargain and the H
886 SUPREME COURT REPORTS [2000] 2 S.C.R.
A ·• parties.
other obligations in the background of the financial conditions of the
. After referring to various judgments of the High Courts in the country this
Court held:
"Whether in the facts and the circumstances of these cases, the
mortgage transaction amounted to clog on the equity of redemption,
B is a mixed question of law and fact. Courts do 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 decision referred to
hereinbefore which have been accepted by this Court in this country, ·
c look with disfavour at clogs on the equity of redemption. Section 60
of the Transfer of Property Act, in India, also recognises: the same
position.

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
D to hold and enjoy as he was entitled to hold and enjoy it before the
mortgage. If he is prevented from doing so or 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 always been termed as a clog. Such a clog is·
inequitable. The law does not countenance it. Bearing the aforesaid
E 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 a clog OJ!-the equity
of redemption, depends primarily upon the period of redefuption, the
F circumstances under which the mortgage was created, the economic
and fmancial position of the mortgagor, and his relationship vis-a-vis
him and the mortgagee, the economic and social conditions in a
particulcu- 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
G mortgage is created, namely, circumstances of the parties, the time,
the situation, the clauses for redemption either for payment pf interest
or any other sum, the obligations of the mortgagee to construct or
repair or maintain the mortgaged property in cases of usufmctuary
mortgage, to manage as a matter of prudent management, these
H factors must be correlated to each other and viewed in a comprehen-
SHNDEV SINGH v. SUCHA SINGH [SETHI, J.] 887

-
'
sive conspectus in the background of the facts and the circumstances
of each case, to determine whether these are clogs on equity of
redemption."
A

It was further held that Section 60 of the Transfer of Property Act
confers on the mortgagor right of redemption which is a statutory right. The
right of redemptiOn is an incident of a subsisting mortgage and it subsists so B
long as the mortgage subsists. Whether in a particular case there is any clog
on the equity of redemption, has to be decided in view of the background of
a particular case. The doctrine of clog on equity of redemption has to be
moulded in modem conditions. In this regard the Court held:

"It is a settled law in England and in India that a mortgage cannot C
be made altogether irredeemable or redemption made illusory. The
law must respond and be responsive to the felt and discernible
compul&ions of circumstances that would be equitable, fair and just,
and unless there is anything to the contrary in the statute, law must
take cognisance of that fact and act accordingly. In the context of fast D
changing circumstances and economic stability, Jong term for re-
demption makes a mortgage an illusory mortgage, though not deci-
sive. It should prima facie be an indication as to how clogs on equity
of redemption should be judged."

In the present case all the courts below on facts held that the mortgage E
deed being for a period of 99 years was a clog on the equity of redemption.
Such findings were returned keeping in view the facts and circumstances of
the case and the financial position under which the mortgagor Shri Prakash
Singh was placed at the time of execution of the mortgage deed on 19.3.1968.
The appellants were found to be in an advantageous position qua the
mortgagor. They were also found to be deriving the usufructs of the mort-
F
gaged land for a period of over 26 years at the time of filing of the suit on
payment of meager sum of Rs. 7,000/- only to the mortgagor. The findings of
the facts returned by the courts below do not require any interference
particularly when the learned counsel appearing for the appellants has not
contended that such findings were perverse or uncalled for or against the G
evidence.

There is no merit in this appeal which is accordingly dismissed but
without any order as to costs.

M.P. Appeal dismissed. •