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1956 Supreme(AP) 44

Andhra Pradesh High Court
Judges : K.SUBBA RAO
YENDRU SATYAVATAMMA - Appellant
Versus
GUNDAPUNEEDI PADMAVATAMMA - Respondent
Decided On : 02-08-56

A condition in a mortgage deed that enables the mortgagee to continue in possession after the redemption is a clog on the equity of redemption and is therefore void.

Headnote:

MORTGAGE - REDEMPTION - RIGHT TO REDEEM BEFORE TERM FIXED - CONDITION ENABLING MORTGAGEE TO CONTINUE IN POSSESSION AFTER REDEMPTION - CLOG ON EQUITY OF REDEMPTION - TRANSFER OF PROPERTY ACT, SECTION 60.

Fact of the Case:

A usufructuary mortgage was executed in 1947 for a period of 10 years, with a provision allowing the mortgagors to redeem the mortgage earlier if they found it convenient. The plaintiff, who purchased the equity of redemption, filed a suit for redemption before the expiry of the 10-year term. The defendant contended that the suit was premature.

Finding of the Court:

The court held that the mortgagors had a right to redeem the mortgage before the expiry of the 10-year term, as there was a specific contract to that effect in the mortgage deed. The court also held that the condition enabling the mortgagee to continue in possession after the redemption was a clog on the equity of redemption and was therefore void.

Issues: 1. Whether the mortgagors had a right to redeem the mortgage before the expiry of the 10-year term? 2. Whether the condition enabling the mortgagee to continue in possession after the redemption was a clog on the equity of redemption?

Ratio Decidendi: 1. The court held that the mortgagors had a right to redeem the mortgage before the expiry of the 10-year term, as there was a specific contract to that effect in the mortgage deed. The court relied on the principle that the right to redeem and the right to foreclose are co-extensive, and that a mortgagor can redeem the mortgage at any time after the principal money has become due. 2. The court held that the condition enabling the mortgagee to continue in possession after the redemption was a clog on the equity of redemption and was therefore void. The court relied on the principle that a mortgagee cannot stipulate for any collateral advantage that is unfair and unconscionable, or that clogs the equity of redemption.

Final Decision: The court decreed the suit for redemption and ordered the defendant to deliver possession of the mortgaged property to the plaintiff.

K. SUBBA RAO, J.

( 1 ) THIS is a Second Appeal against the decree and judgment of the Court of the Additional Subordinate Judge of Kakinada, confirming that of the district Munsif, Kakinada in a suit for redemption of a mortgage and for possession. One Ramineedi Govindarao and his sons executed a usufructuary mortgage in respect of the plaint schedule lands for Rs. 3,000/-in favour of the defendant on 17-11-1947. Underthedocument, it was agreed that the amount would be paid within a period of ten years from the date of execution i. e. by the end of November 1957 and that, if within the stipulated period the mortgagors paid the principal amount due under the deed in full discharge of the debt, the mortgagee should enjoy the schedule-mentioned property paying every year the fixed maktha to the mortgagors. The plaintiff purchased the equity of redemption from the mortgagors and filed O. S. No. 429 of 1951 on the file of the Court of the District Munsif, Kakinada for recovery of possession and for other incidental reliefs. The defendant, inter, alia, contended that the suit was premature as it was filed before the expiry of the term fixed under the mortgage deed, namely 30-11-1957. The learned District Munsif negatived the contention and decreed the suit. On appeal, the learned Subordinate Judge held that the plaintiff was entitled to redeem the mortgage prior to the date fixed in the document and that the condition in the mortgage deed entitling the mortgagee to continue in possession after the mortgage was redeemed was a clog on the equity of redemption. He confirmed the decree of the first court. Hence, the Appeal. Mr. B. V. Subrahmanyam, learned Counsel for the appellant contends that a definite term was fixed in the mortgage deed and, therefore, on the principle that the right to redeem and the right to foreclose are co-extensive, the plaintiff would not be entitled to redeem the mortgage before the time fixed, that the term in the mortgage enabling the mortgagors to redeem earlier was hedged in, with a condition that she should be allowed to continue in possession, that the term was one and indivisible and that the mortgagors could not ignore that condition and contend that there was an express contract to redeem. He would also argue that, that condition was not a clog on redemption as it was a collateral agreement between the parties providing for an additional advantage to the mortgagee. Mr. Ramachandra Rao, on the other hand, argues that there was no term fixed for payment, that there was a clear term providing for redemption earlier and that once it is conceded that the mortgagors were entitled to redeem earlier, the term providing for continuation of possession was bad as a clog on the equity of redemption. As the arguments mainly turn upon the terms of the mortgage deed, it would be convenient at this stage to read the relevant portions of the document. The document after reciting that a sum of Rs. 3,000/-is paid by the mortgagee and that the mortgagee should be in possession till the debt is discharged, proceeds to state:" As regards the principal amount of Rs. 3,000/- the debt due under the said deed any one of us will pay the same to you within a period of ten years from this day i, e. , by the end of November 1957, have the debt due under this deed discharged and take possession of the schedule property mentiond in this deed. "after stating some other conditions, with which we are not now concerned, the document continues to state :" If within the stipulated period we find it convenient to pay the principal sum of rs. 3,ooo/- due under the said deed in full discharge of the debt, it has been agreed that till the end of the stipulated time you shall enjoy the schedule mentioned property by carrying on cultivation etc and towards the profits therefor shall deliver to us every year by the 15th January a makta of 26 weighed bags of excellent white paddy weighing 166 Ibs. per bag at Medapadu village. "thereafter, the do

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