Ram Padarath Ram v. Sheikh Abdur Rahman — 1944 DIGILAW 147 (ALL)

JUDGMENT Bennett and Ghulam Hasan, JJ. - This is the Defendants' appeal from a judgment and decree of the District Judge of Gonda in reversal of a judgment and decree of the Additional Civil Judge, remanding the case to the latter for determing the amount in a redemption suit. 2. The suit was one for redemption of a mortgage with possession dated the 13th October, 1915, executed by one Prag Bhoj in favour of Defendants Nos. 1 to 3 for Rs. 2,150 for 51 years. There was a previous mortgage dated the 2nd March, 1914, for Rs. 1,500 executed by the same mortgagor in favour of the same mortgagees. This was for a term of 15 years. Under the terms of the mortgage deed in suit, the sum of Rs. 1,500 was to carry no interest as the mortgagees being in possession of the mortgaged property were to appropriate the, usufruct thereof in lieu of interest. The remaining sum of Rs. 650 was to carry interest at the rate of Rs. 1-8.0 per cent per mensem compounable yearly. The interest was to be paid yearly and in the event of default compound interest was to run. The mortgagor was also required to make repairs to the mortgaged property and if the mortgagees carried out the repairs in the event of his default, the expenses incurred in the repairs were to be added to the redemption money. The entire redemption money at the end of 51 years was to be paid along with the interest and the expenses of repairs incurred by the mortgagees if any. Prag Bhoj died leaving Defendants Nos. 4 and 6 as his heirs. On the 27th July, 1938, Defendants No. 4 sold his interest to Ram Padarath Ram Plaintiff Thereupon the Plaintiff brought the suit on the 20th April, 1939, for redemption of the property alleging that the terms of 51 years was a clog upon the equity of redemption. 3. The defence to the suit with which we are concerned in the present appeal was that the suit was premature. Issues Nos. 2 and 5 were to the effect whether the terms operated as a clog or whether the suit was premature. 4. Both the issues were taken together by the trial Court and decided in favour of the Defendants. The defence to the suit with which we are concerned in the present appeal was that the suit was premature. Issues Nos. 2 and 5 were to the effect whether the terms operated as a clog or whether the suit was premature. 4. Both the issues were taken together by the trial Court and decided in favour of the Defendants. The trial Court held on the authrity of a Bench decision of this Court in Sarfaraz v. Udwat Singh (1929) 4 Luck. 147, that the terms of the mortgage deed did not create any clog on the equity or redemption and consequently the suit was premature The trial Court observed that the stipulation for 51 years per se did not constitute a clog on the equity of redemption. It also observed that the terms of the deed were not harsh and unconscionable and the rats of interest could not be put forward as a clog on the equity of redemption in the absence of any allegation as to undue influence and unfair dealing and that the mortgagor could in any case claim reduction of interest under the provisions of Usurionu Loans Act. In the result the trial Court dismissed the suit. 5. The learned District Jude held that the cumulative effect of the conditions relating to the period of 51 years, the amount of interest payable by the mortgagor and his liability to pay for the repairs of the mortgaged property, was to act as a clog on the equity of redemption. He further said that the mortgagor will have to pay Rs. 8,117 at the end of 51 years for redemption of the property which was worth only Rs. 3,000 or Rs. 4000. This amount of Rs. 8,117 was arrived at by the learned Judge by adding to the principal of Rs. 2,150 a sum of Rs. 5,967 as interest which the mortgagor would have paid year after year. He also considered the rate of interest to be very high and came to the conclusion that the mortgagees took undue advantage of the mortgagor in imposing upon him such conditions as to make redemption well nigh impossible. The learned Judge, however, did not refer to the Bench decision upon which the trial Court had relied and made no attempt to distinguish it. He appears to have altogether ignored the decision as if it was not worth any consideration. 6. The learned Judge, however, did not refer to the Bench decision upon which the trial Court had relied and made no attempt to distinguish it. He appears to have altogether ignored the decision as if it was not worth any consideration. 6. We regret we are unable to uphold the view taken by the learned District Judge. We agree with the principle of the decision in Sarfaraz Singh's case and as it fully applies to the facts of the present case we have no alternative but to follow it. The authority of this decision has not been doubted in any case of this Court and no decision has been cited to us on behalf of the Respondents which lays down a contrary law. The mortgage in the above mentioned case was executed in 1925 for Rs. 1,600 out of which Rs. 900 were left with the mortgagee for redemption of a prior mortgage of 1911. The term of the mortgage was 35 years and six months. The mortgagee was to appropriate the profits in lieu of interest on Rs. 1,000 and interest was to be paid by the mortgagors on the remaining Rs. 600 at Rs. 18-12-0 per cent per annum, compoundable yearly. The mortgagors sold the property in dispute to the brother of the prior mortgagee. The suit was brought in 1927 for redemption of the mortgage of 1915 on the allegation that the terms of the mortgage deed constituted a clog on redemption. Upon these facts the learned Judges held that the suit was premature. They did not consider the rate of interest of Rs. 1812-0 per cent. per annum with yearly rests a high rate. 7. The learned Judges went on to observe:-- "It is true that interest, if it remains unpaid, may accumulate but who is to blame for that? It cannot accumulate, if it is paid by the mortgagors at the proper time. The mortgagors can easily stop the running of interest by making payment at the proper time. If they fail to do so they have themselves to thank for the consequences. We do not find that the conditions entered in the deed are unreasonable. The covenants in the mortgage in suit do not show that there was any intention on the part of the mortgagee to render redemption impossible or extremely difficult." 8. If they fail to do so they have themselves to thank for the consequences. We do not find that the conditions entered in the deed are unreasonable. The covenants in the mortgage in suit do not show that there was any intention on the part of the mortgagee to render redemption impossible or extremely difficult." 8. On behalf of the Respondents reference has been made to a decision of the Judicial Commissioner's Court in Raza Mohammad Khan v. Ram Lal Kalwar (1925) 12 O.L.J. 222. This case is referred to in Sarfaraz Singh's case and is to be distinguished on the ground that in that case there were other provisions in the deed of mortgage which were wholly advantageous to the mortgagee with no corresponding advantages to the mortgagors. The mortgage was for a period of 25 years. The judgment, however, does not show what those provisions were. The learned Additional Judicial Commissioner on this state of facts held that the postponement of the right of redemption for a period of 25 years was a clog on the equity of redemption. 9. The cases in AIR 1937 49 (Lahore) and Suppan Chettiar Vs. Rangan Chetty and Others, AIR 1938 Mad 405 and Mohammad Sher Khan v. Raja Seth Swami Dayal (1922) 49 I.A. 60 are inapplicable. In the first case a permanent lease was executed by a mortgagor in favour of the mortgagee by a separate deed and for consideration not included in the mortgage debt. It was held that it was a part of the same mortgage transaction and was a clog on the equity of redemption. In the second case the right of redemption was to accrue after ten years from the date of mortgage. It was also stipulated in the deed that if the mortgagor did not redeem the property on that date, thereafter he was entitled to redeem in any succeeding year only on a particular day of the year. It was held that the latter stipulation was a clog on the equity of redemption, the right being liable to be defeated by the mortgagor's own fault or omission, or by the mortgagee's cunning or evasion. It was held that the latter stipulation was a clog on the equity of redemption, the right being liable to be defeated by the mortgagor's own fault or omission, or by the mortgagee's cunning or evasion. In the third case, the deed provided that after the end of five years the mortgagor was entitled to redeem the property and in default the mortgagee was entitled to take possession and that for 12 years from his doing so, the mortgagor was not entitled to redeem. The mortgage money not having been paid the mortgagee took possession. A few months after the suit for redemption was instituted. Their Lordships held that u/s 60 of the Transfer of Property Act the mortgage money became payable at the end of five years and the section being unqualified in its terms, the right to redeem could not but be affirmed. Neither of these cases has any bearing upon the facts of the present case. 10. Reference was also made on behalf of the Respondents to Abdul Hakim v. Sajjad Husain (1923) 26 O.C. 209. There the mortgage was made for a period of 101 years. The mortgagee was to enjoy the usufruct in satisfaction of his interest and mortgagor was entitled to redeem on payment of three times the principal money. There was a further provision that the mortgagor was not entitled to a rendition of accounts or payment of surplus profits, if any, but the mortgagee was entitled to claim any deficiency accruing on the mortgage from the mortgagor. This case is, therefore, distinguishable. 11. We may also notice the case of AIR 1930 142 (Privy Council) , referred to on behalf of the Respondents. This case is also distinguishable upon the facts. The mortgagee was entitled to possession for 19 years under the terms of the mortgage deed. At the end of that period if the mortgagor paid off the mortgage money, the property was to belong as to a limited interest therein only, to the mortgagor, and as to the major interest therein to the mortgagee. If the mortgagor failed to pay off the mortgage. money at the end of 19 years the property was to belong to the mortgagee absolutely. After the expiration of the stipulated period the assignee of the mortgagor sued for redemption. If the mortgagor failed to pay off the mortgage. money at the end of 19 years the property was to belong to the mortgagee absolutely. After the expiration of the stipulated period the assignee of the mortgagor sued for redemption. It was held that the provisions in the deed being a clog on the equity of redemption were void and could have no more binding force against the assignee of the mortgagor than they could have against the mortgagor himself. It is clear from this decision that mortgagor was getting a limited interest even after the redemption and the clog imposed upon the equity was of a very severe character. 12. In Raghuath Prasad v. Sarju Prasad (1924) 51 I.A. 101, their Lordships of the Judicial Committee were dealing with a contract between a lender and a borrower which was sought to be avoided on the ground of undue influence. They held that the first requirement lo be established in a case u/s 16(3) of the Indian Contract Act was that the relationship of the parties to each other must be such that one is in a position to dominate the will of the other. Once that position is substantiated, the second stage is reached whether the contract has been induced by undue influence. The observations made by their Lordships at pages 106-107 appear to us to be singularly apposite to the case:-- "It is sufficient to say that the borrower in the present case was sui juris; had the full power of bargaining and of burdening his estate, that his estate was not under the Court of Wards, and that he lay under no disability. With regard to his helplessness nothing whatsoever is proved in the case except the bare fact that he, being a man of wealth as owner of one half of certain joint family property, wished to obtain and did obtain certain moneys on loan. The only relation between the parties that was proved was simply that they were lender and borrower." 13. Their Lordships held that the lender was not in a position to dominate the will of the borrower. 14. Accordingly we hold that the view taken by the lower appellate Court is not justified. We allow the appeal, set aside the decision of the lower appellate Court and restose that of the trial Court with costs throughout.