Introduction

• This case is based on Section 60 of the Transfer of Property Act, 1882 (TOPA).
• In this case a condition in the agreement between parties regarding redemption of mortgaged property was in question, which was plainly taking away altogether, the mortgagor’s right to redeem the mortgage after the specified period.
  • The condition was that that on the failure of the mortgagor to redeem the mortgage within the specified period of six months the mortgagor would have no claim over the mortgaged property, and the mortgage deed would be deemed to be a deed of sale in favor of the mortgagee, cannot be sustained.

Facts

• Purshottamdas (appellant), created a mortgage in favor of Dhanurpmal (respondent).
• The mortgage instrument stated that the property (four roomed shop & a land) had been usufructuary mortgage in the lieu of 6,300 of which Rs. 5,750 were left with the mortgage to redeem a prior mortgage on the same and another property.
• As per the agreement between them, on redemption of the prior mortgage, the possession of the shop would be taken over and retained by the mortgagee.
• The mortgagee duly redeemed the earlier mortgage and went into possession of the shop.
• The mortgage deed had a provision that the Appellant and his legal heir would not be entitled to the right to redeem the property for a period of 85 years.
• After 85 years, they fixed a six-month period to redeem the property. If they fail to do the same, then they shall not have any right to claim the property.
• The appellant filed the case in court before completion of 85 years contending that this condition of 6 months is a clog on the right to redemption.

Issue Involved

Whether the term in mortgage instrument prevents the right to redeem?

Observation

• It was held that the mentioned duration of mortgages is 85 years, and the mere length of the period could not by itself lead to a clog to redemption.
• The period of 85 years was enforceable in law and the suit for redemption, filed before the expiry of the period was premature.
• Court further observed that the term that on the failure of the mortgagor to redeem within the specified period of six months, he would lose his right to do so and the mortgage deed was to be deemed to be a deed of sale in favor of the mortgagee, was clearly a clog on the equity of redemption and as such invalid.
• The court, through their judgment specified that the right to redeem has not been taken away but restricted.
• The court came to the conclusion that the suit was premature and must fail.
• In the result, they dismissed this appeal with costs.

Conclusion

• The court disallowed the appeal and stated that the mere length of the period could not by itself lead to a clog to redemption and the right to redeem has not been taken away but restricted.

Notes

Section 60 of TOPA: At any time after the principal money has become due, the mortgagor has a right, on payment or tender, at a proper 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 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 registered an acknowledgment in writing that any right in 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 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.
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 p ass or no such time has been fixed. The mortgagee shall be entitled to reasonable notice before payment or tender of such money.

Redemption of portion of mortgaged property -- Nothing in this section shall entitle a person interested in a share only of the mortgaged property to redeem his own share only, on payment of a proportionate part of the amount remaining due on the mortgage, except only where a mortgagee, or, if there are more mortgagees than one, all such mortgagees, has or have acquired, in whole or in part, the share of a mortgager.