A provision in a mortgage deed that constitutes a clog on the equity of redemption is void under general law and is therefore not binding upon an assignee of the mortgagor.

Judgement

Appeal (No. 96 of 1927) from a decree of the Judicial Commissioner of the North-West Frontier Province (July 4, 1925) reversing a decree of the Divisional Judge, Deerajat Division, which affirmed a decree of the Honorary Subordinate Judge, Dera Ismail Khan.

One Mohammad Khan, the predecessor in title of respondents 17 to 21, owned thirty-one plots of lands at Dera Ismail Khan ; he had superior and inferior proprietary rights, also cultivating rights therein. By a deed dated May 6, 1898, he executed a usufructuary mortgage of the plots in favour of persons now represented by respondents 1 to 16 for a term of nineteen years to secure a loan of Rs.2150.

The deed contained the following condition "After the expiry of the fixed period, if I pay Rs.2160, the mortgage money, to the mortgagees, I shall be entitled to receive one pai per path out of the produce as my haq-khuti; and the mortgagees to the remaining dues, such as mahsul and jora. The mortgagees shall have the adna (inferior) proprietary rights and the cultivating possession, with which I shall have no concern."

In 1920 the appellant bought the properties subject to the mortgage from the heirs and representatives of the mortgagor. In 1923 he instituted the present suit against the mortgagees and their representatives, respondents Nos. 1 to 16, and his assignors, respondents Nos. 17 to 21. He claimed to redeem and prayed for possession upon payment of Rs.2160.

All three Courts in India held that the above condition in the mortgage was a clog upon the equity of redemption.

The Court of the Judicial Commissioner however, reversing the lower Courts, held that the principle by which a clog on an equity of redemption was invalid did not apply where redemption was sought by an assignee who had notice of the mortgage.

1930. Jan. 21. De Gruyther K.C. and Parikh for the appellant.

Dunne K.C. and Wallach for the respondents.

Feb. 13. The judgment of their Lordships was delivered by

LORD TOMLIN. This is an appeal from the Judicial Commissioner, North-West Frontier Province, Peshawar. The Judicial Commissioner has reversed the Divisional Judge, who, on his part, had affirmed the judgment and decree of the Subordinate Judge.

The point is a short one. The appellant is the plaintiff in the suit. He is the assign for value of the interest of a mortgagor in property comprised in a mortgage dated May 6, 1898.

Under the mortgage the mortgagees were entitled to possession for nineteen years. 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 mortgagees. If the mortgagor failed to pay off the mortgage money at the end of the nineteen years the property was apparently to belong to the mortgagees absolutely.

After the expiration of the nineteen years the appellant, as assign of the mortgagor, brought a redemption suit.

The Subordinate Judge and the Divisional Judge both held that the provisions of the mortgage deed limiting the interest of the mortgagor upon redemption constituted a clog upon the equity of redemption, and that the plaintiff was entitled to redeem without regard to these provisions.

The Judicial Commissioner agreed with the lower Courts in thinking that the provisions in question amounted to a clog upon the equity of redemption. He took the view, however, that a purchaser of the equity of redemption is bound by the terms of the mortgage deed and cannot set up that such terms amount to a clog.

Their Lordships are of opinion that the Judicial Commissioner has misapplied the principles which govern in the matter.

It is to be observed that the Transfer of Property Act, by s. 60 of which the right of a mortgagor to redeem is regulated, has no application to the North-West Frontier Province. The matter is governed by the North-West Frontier Province Law and Justice Regulations . Sect. 27 of Regulation No. VII. provides in effect