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1983 Supreme(P&H) 285
PUNJAB & HARYANA HIGH COURT
J.V.Gupta, J.
Massa Sigh
Versus
Gopal Sigh
Second Appeal No. 15 of 1975,
Decided On : MAY 30, 1983
A clog on the equity of redemption is a term in a mortgage that prevents or restricts the mortgagor's right to redeem the mortgaged property.
Headnote:
MORTGAGE - CLOG ON EQUITY OF REDEMPTION - LONG TERM OF 90 YEARS COUPLED WITH COVENANTS AUTHORISING MORTGAGEE TO PLANT TREES AND CLAIM THEIR COST AT REDEMPTION AND GIVING HIM RIGHT TO RECOVER MORTGAGE AMOUNT BY SALE BEFORE EXPIRY OF 90 YEARS - NOT A CLOG ON EQUITY OF REDEMPTION - MORTGAGEE ENTITLED TO ENFORCE 90 YEARS TERM - SUIT FOR REDEMPTION BEFORE EXPIRY OF 90 YEARS - PREMATURE.
Fact of the Case:
Plaintiffs filed a suit for possession, by way of redemption, of agricultural land mortgaged to the defendants for a sum of Rs. 7,000.00 for a period of 90 years. The mortgage deed contained conditions authorizing the mortgagees to plant fruit-bearing and other trees, making the mortgagors liable to pay the price of the trees at the time of redemption, and entitling the mortgagees to recover the mortgage money by sale of the land before the expiry of the 90-year period. The trial court dismissed the suit, holding that there was no clog on the equity of redemption. The lower appellate court reversed the trial court's decision, holding that the terms of the mortgage deed amounted to a clog on the equity of redemption and that the plaintiffs were entitled to redeem the land before the expiry of 90 years.
Finding of the Court:
The High Court held that the terms of the mortgage deed did not amount to a clog on the equity of redemption and that the plaintiffs were not entitled to redeem the land before the expiry of 90 years. The court found that the mortgage amount was virtually the market price of the land and that there was no evidence of undue influence or fraud. The court also held that the condition of planting trees and realizing their price at the time of redemption was in accordance with the provisions of Section 63-A of the Transfer of Property Act.
Issues: Whether the terms of the mortgage deed amounted to a clog on the equity of redemption.
Ratio Decidendi: The court held that the terms of the mortgage deed did not amount to a clog on the equity of redemption because there was no evidence of undue influence or fraud and because the mortgage amount was virtually the market price of the land. The court also held that the condition of planting trees and realizing their price at the time of redemption was in accordance with the provisions of Section 63-A of the Transfer of Property Act.
Final Decision: The High Court allowed the appeal, set aside the judgment and decree of the lower appellate court, and restored the judgment and decree of the trial court dismissing the plaintiffs' suit.
1. This is defendants second appeal against whom the suit for possession, by way of redemption, was dismissed by the trial Court, but has been decreed in appeal.
2. On 11-5-1962 Smt. Swaran Kaur entered into an agreement Exhibit D-2 with Massa Singh whereby she agreed to mortgage her agricultural land measuring 87 kanals for a sum of Rs. 5,500.00 . A sum of Rs. 3,000.00 was paid by way of earnest money. The registered deed was to be executed within fifteen days thereof. However on 16-5-1962, she executed the mortgage deed Exhibit P-1, for a sum of Rs. 7,000.00 in favour of the predecessor-in-interest of the defendants-mortgagees. According to the terms of the mortgage deed, the mortgage was with possession and a usufructory mortgage; the period of mortgage was mentioned as 90 years. According to one of the conditions of the mortgage deed, it authorised the mortgagees to plant fruit bearing and other trees making the mortgagors liable to pay the price of the fruit bearing and other trees at the time of the redemption. Another condition of the mortgage deed was that the mortgagees were entitled to get their mortgage money at any time they liked. One Gurbax Singh filed a suit for pre-emption alleging the said mortgage to be sale. However, the suit was dismissed by the trial Court on 31-1-1964, vide certified copy of the judgment Exhibit DW 2/3. It was held by the trial Court in that suit that the transaction in dispute was virtually a sale. The suit was dismissed as the plaintiffs had failed to prove their superior right of pre-emption. The decree of the trial Court was maintained in appeal vide its judgment dt. 27th Mar. 1965, certified copy of which is Exhibit DW 2/4. In appeal the learned District Judge reversed the finding of the trial Court and came to the conclusion that the mere fact that the mortgage in question is for a period of 90 years, could not be a cogent ground to term the mortgage as a sale. It was further observed that this document i.e. the mortgage deed, does not contain any onerous condition. Thus it was concluded that the transaction in question is a mortgage and not a sale. However, the decree of the trial Court was maintained as the finding of the trial Court to the effect that the plaintiffs have failed to prove their superior right of pre-emption, was affirmed. Later on the said Smt. Swaran Kaur sold her equity of redemption for a sum of Rs. 8,000.00 in favour of the plaintiffs-Gopal Singh and others on 1st Oct. 1966. Out of the sum of RS. 8,000.00 , Rs. 7,000.00 were left out for payment to the mortgagees at the time of redemption and only a sum of Rs. 1,000.00 was paid to the mortgagor Smt. Swaran Kaur. The present suit has been filed on 29-4-1967 on behalf of Gopal Singh and others who purchased the equity of redemption from Smt. Swaran Kaur. It was alleged in the plaint that the sale deed dt. 1st Oct 1966 executed in their favour authorised them to redeem the mortgage; that the period of 90 years barring redemption of the mortgage, was illegal, invalid, void, unlawful and a clog on the equity of redemption and was thus not binding on the plaintiffs; that the condition in the mortgage deed authorising the mortgagees to plant fruit bearing and other trees making the mortgagors liable to pay the price of fruit bearing and other trees, at the time of redemption, is also a clog an the equity of redemption; that the condition in the mortgage deed entitling the mortgagees to get the land mortgaged sold for the recovery of mortgage money forthwith irrespective of the restriction of ninety years, was also invalid, illegal and highly adverse to the mortgagors. Thus it was claimed that the plaintiffs were entitled to get the property redeemed on payment of Rupees 7,000.00 .
3. The suit was contested by the defendants-appellants, wherein it was pleaded that the mortgage amount of Rs. 7,000.00 had been correctly mentioned. It was admitted that in the agreement the mortgage amount of Rupees 5,500.00 had be
