Mohammed Moideen v. Mohammed Moideen — 1999 DIGILAW 252 (KER)

JUDGMENT P.K. Balasubramanyan, J. 1. The second defendant in a suit for redemption is the appellant The predecessor of the plaintiffs mortgaged the plaint schedule property to the defendants on 9.4.1949 under Ext. A1. The term of the mortgage was five years. There was a partition between the mortgagees under Ext. B1 dated 15.12.1970 under which the properties sought to be redeemed was allotted to the share of the second defendant. The second defendant resisted the suit contending that the mortgagor has lost his right over the property, and hence was not competent to seek redemption of the mortgage. The mortgagors pleaded that the relevant clause in the deed of mortgage relied on by the mortgagee to resist their claim for redemption was invalid in law being a clog on redemption and hence there submitted in them the right to redeem and recover possession of the mortgaged property on payment of the mortgage money. The trial Court held that the relevant clauses relied on by the mortgagee to deny the redemption to the mortgagors was invalid being a clog on redemption and that no other valid objection having been put forward by the mortgagees, the mortgagors were entitled to a decree for redemption. The appeal by the second defendant challenging this decree and pleading that the rights of the mortgagors have become extinguished was repelled by the lower appellate Court which dismissed the appeal filed by the second defendant. Feeling aggrieved the second defendant has filed this Second Appeal by raising the following two substantial questions of law:- "i) Whether the time for redemption fixed in the document is in any way inaccurate or uncertain? ii) Whether the prescriptive title put forward by the appellant is liable to be enquired into and decided on?" 2. The relevant terms of the mortgage Ext. A1 dated 9.4.1949 can now be referred to. The document is described as a possessory mortgage. Rs.100 was borrowed. The term of the mortgage was five years. The document provided that the mortgage money was to be tendered within four months of the expiry of five years from the date of the mortgage. Then it was provided that if the mortgage money was not tendered or paid within 4 months after the expiry of the term of the mortgage of five years, the mortgagee could keep the property thereafter as owner of the property. Then it was provided that if the mortgage money was not tendered or paid within 4 months after the expiry of the term of the mortgage of five years, the mortgagee could keep the property thereafter as owner of the property. Obviously there was no tender of the mortgage money within four months of the expiry of the term of five years. The mortgagees on 15.12.1970 divided their properties and treated the mortgaged property as if it was held by them in ownership presumably in view of the relevant clause in that behalf in the mortgage. It was allotted in B Schedule to defendant No. 2. A notice was issued on behalf of the legal representatives of the original mortgagor, the present plaintiffs on 20.11.1983 calling upon the mortgagees to permit the mortgagors to redeem the mortgage by paying the mortgage money. Therein the mortgagors had adopted the stand that the clause which purports to extinguish their right to redeem was invalid,in law. A reply was sent on behalf of the mortgagees on 10.12.1983 denying the claim for redemption. The suit was thereafter filed on 15.3.1984 for redemption of the mortgage. 2. The relevant clause provides that if inspite of demand in that behalf by the mortgagees the mortgagor does not pay the mortgage money in four months of the expiry of the term of five years then the mortgagor agreed that the mortgagee may hold the property as owner of the property and treat the mortgage amount of Rs.100 as the purchase price for the property. I must notice here that the right to have the property treated as being held in title would arise to the mortgagee only on the mortgagee demanding repayment of the mortgage money after the expiry of the term of five years and on the failure of the mortgagor to tender the mortgage money. Since the clause is one which seeks to extinguish the rights of the mortgagor to redeem the mortgage, it has necessarily to be construed strictly and so construed, question of extinguishment would arise only if inspite of demand in that behalf by the mortgagee, the mortgagor had failed to tender the mortgage money within four months of the expiry of the term of the mortgage. There is no pleading or evidence on the side of the mortgagees to establish that on the expiry of the term of five years they did make a demand to the mortgagor to pay off the mortgage money and there was a failure on the part of the mortgagor to tender the mortgage money inspite of such a demand. It therefore, appears to me that the mortgagees in this case have not laid the foundation for claiming that the right of the mortgagor stood extinguished in terms of the relevant clauses in Ext. A1 mortgage. On that short ground it has to be held that the mortgagors have not lost their right to redeem on the basis of the relevant clauses in Ext. A1. 3. It may incidentally be noticed that two substantial questions of law formulated in the Memorandum of Second Appeal do not project the contention that the rights of the mortgagors are lost and the mortgagees has become the owner of the property. But the main argument addressed before me at the hearing by Senior Counsel Mr. P.N.K. Achan was that the relevant clause was valid and in the absence of any evidence on the side of the mortgagors, the same could not be treated as a clog on redemption as was done by the Courts below and consequently the decrees of the Courts below called for interference in this Second Appeal. Since this question arises out of the term of the deed and the findings by the Courts below and this contention was met on merits by counsel for the plaintiffs, I have decided to raise the question of the validity of the relevant clause in the deed of mortgage as one of the substantial questions of law arising for decision. I shall straightaway tackle that aspect. 4. The main argument of counsel for the appellant was based on the absence of evidence on the side of the mortgagors to establish that in the circumstances of the case the relevant clause operates as a clog on the equity of redemption. No evidence was adduced by the plaintiffs about the circumstances that surrounded the transaction of mortgage. Counsel placed considerable reliance on the decision of the Supreme Court in Ganga Dhar v. Shankar Lal ( AIR 1958 SC 770 ). No evidence was adduced by the plaintiffs about the circumstances that surrounded the transaction of mortgage. Counsel placed considerable reliance on the decision of the Supreme Court in Ganga Dhar v. Shankar Lal ( AIR 1958 SC 770 ). Therein, after holding that a term in the mortgage instrument providing that the mortgage can be redeemed only within the period of six months and not thereafter, must be held to be invalid as a clog and ignored, the Supreme Court went on to point out that in the circumstances of that case the term in the mortgage that it will not be redeemed until the expiry of 85 years was not a clog on the equity of redemption. After referring to the origin of the jurisdiction and the nature of the jurisdiction, their Lordships observed that the reason 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 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. The Court indicated that in that particular case there was no evidence of the circumstances existing at the day of the mortgage as to the pecuniary condition of the mortgagor or as to anything else from which the Court could come to the conclusion that the mortgagee had taken advantage of the difficulties of the mortgagor and imposed a hard bargain on him. According to learned counsel, it was therefore, necessary for the mortgagors to establish that at the time the mortgage deed was executed, the mortgagor was in such a condition that his position had been taken advantage of by the mortgagee and in the absence of such evidence, the mortgagor cannot be relieved of his obligation under the bargain. 5. It appears to me that in Ganga Dhar v. Shankar Lal ( AIR 1958 SC 770 ) two different aspects as to what constituted a clog on redemption arose. The first was the existence of a term in the mortgage which provided that the mortgage could be redeemed only within a period of six months and not thereafter. 5. It appears to me that in Ganga Dhar v. Shankar Lal ( AIR 1958 SC 770 ) two different aspects as to what constituted a clog on redemption arose. The first was the existence of a term in the mortgage which provided that the mortgage could be redeemed only within a period of six months and not thereafter. The second was a provision in the deed that the mortgage would not be redeemed until the expiry of 85 years. As regards the first provision, the Supreme Court referred to the decision of the Privy Council in Mohammed Sher Khan v. Seth Swami Dayal (49 Ind App 60) on the scope of S. 60 of the Transfer of Property Act to the effect :- "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 effect" and then observed:- "Under the section, once the right to redeem has arisen it cannot be taken away. The mortgagor's right to redeem must be deemed to continue even after the period of six months has expired and the attempt to confine that right to that period must fail. The term in the mortgage instrument providing that the mortgage can be redeemed only within the period of six months and not thereafter must be held to be invalid and ignored." After thus stating the law regarding the provision which confined the right to redeem to a particular period by way of contract, the Supreme Court considered the second provision in that particular document which provided that the right to redeem would arise only after 85 years of the mortgage. It is while considering whether the term providing for such a long period for the subsistence of the mortgage and which prevents accrual of the right to redeem for the period mentioned would operate as a clog on the equity of redemption, their Lordships held that that would depend upon the facts and circumstances of the case, reasonableness of the bargain and the position of the mortgagor and mortgagee and the other relevant matters. It appears to me that on the question whether the confinement of the right to redeem to a period of six months found in a mortgage would be invalid as a clog on redemption, the Supreme Court did not postulate any enquiry and held that the same was a clog. Only on the question of the fixing of a long period of 85 years as the period of the mortgage that the Supreme Court postulated an enquiry with reference to the circumstances that surrounded the transaction before deciding whether that would amount to a clog on redemption. 6. Lord Macnaghten in Nokes & Co. v. Rice (1900-3 All.E.R.Rep. 34(HL) stated the principle thus :- "Redemption is of the very nature and essence of a mortgage as mortgages are regarded in equity. It is inherent in the thing itself, and it is, I think, as firmly settled now as it ever was in former times that equity will not permit any device or contrivance designed or calculated to prevent or impede redemption. It follows as a necessary consequence that, when the money secured by a mortgage of land is paid off, the land itself and the owner of the land in the use and enjoyment of it must be as free and unfettered, to all intents and purposes, as if the land had never been made the subject of the security". In view of the decision of the Supreme Court referred to earlier I do not think it necessary to multiply authorities on this question except to notice the following observation in Ghose on Mortgages:- "The Court is bound to invalidate any device which creates any clog on the right of redemption." 7. It was not the argument of Mr. P.N.K. Achan, Senior Counsel appearing for the defendants that the Court should not strike down a clause placing a clog on redemption by the mortgagor. His argument was that going by the ratio of the decision of the Supreme Court in Ganga Dhar v. Shankar Lal referred to earlier it was necessary for the mortgagor to lead evidence of the circumstances surrounding the transaction of mortgage including the respective positions then occupied by the mortgagor and mortgagee and since the mortgagors have failed to lead any evidence on that aspect the Court could not declare that the provision in question is a clog on redemption. The attempt made by counsel was to bring the clause in the present deed of mortgage into the latter category of cases discussed by the Supreme Court in Gangadhar's case. Considering the nature of the provision and the restriction it placed on the right of the mortgagor leading to the extinguishment of the right to redeem it is not possible to accept the contention of Mr. Achan that any further enquiry is needed before the Court could decide that the provision acts as a clog on redemption. In my view, the provision that if the mortgagor failed to tender the mortgage money within four months of the expiry of the term of the mortgage which was five years the property would be deemed to be owned by the mortgagee with the mortgage amount originally advanced being treated as the purchase price is a term which falls within the first limb of the decision of the Supreme Court in Gangadhar's case. Their Lordships had held that the term in the mortgage instrument providing that the mortgage can be redeemed only within the period of six months and not thereafter must be held to be invalid as a clog and ignored. The Supreme Court has not postulated that any enquiry into the circumstances surrounding the transaction was called for in deciding whether the same would be a fetter on the right to redemption. In the case on hand, the term by itself amounts to a clog on redemption and hence is not liable to be given effect to or to have the effect of depriving the mortgagors of their right to redeem the mortgage in the present suit. Thus on the point sought to be raised on behalf of the defendants at the time of argument it is to be held that the Courts below were right in holding that the right of the mortgagor to redeem survives and the clause in question has to be held to be inoperative as a clog on redemption. 8. In the light of this position, there is no substance in substantial question of law No. 1 formulated as to whether the time for redemption fixed in the document is in any way inaccurate or uncertain. The suit has been filed within 30 years of the expiry of the term of the mortgage. The mortgagors are therefore, merely entitled to the relief of redemption. 9. The suit has been filed within 30 years of the expiry of the term of the mortgage. The mortgagors are therefore, merely entitled to the relief of redemption. 9. The other question argued is that the mortgagees have acquired a title by prescription. Obviously mortgagees went into possession as mortgagees. It has not been shown the point of time at which their possession became adverse to the mortgagors. Moreover possession of the mortgagee cannot become adverse so long as the right to redemption still subsist in the mortgagor. Here the suit for redemption has been filed within the time provided by law. Having taken possession of the property as mortgagee, the defendants cannot be heard to say that their possession was adverse to the mortgagor from its inception. There is nothing to show that at any point of time the mortgagees issued a notice to the mortgagors demanding the mortgage money in terms of the clause relied on in the deed of mortgage and thereby altered their position. The very fact that the property was included in the deed of partition entered into by the mortgagees on 15.12.1970 and this property was allotted to one of the mortgagees cannot by itself constitute the position of the mortgagee adverse to the mortgagor. What could be divided is only a right that is available and that right is only that of the mortgagee. The contention therefore that the mortgagee have prescribed for a title or have prescribed against the equity of redemption cannot be accepted. The Courts below were right in holding that there is no extinguishment of the right of the mortgagor to redeem the mortgage. Thus I find no justification for interfering with the judgment and decree of the lower appellate Court. I confirm the judgment and decree of the lower appellate Court and dismiss this Second Appeal. I make no order as to costs.