Seth Ganga Dhar v. Shankar Lal
Supreme Court of India · 15 April 1958
A term postponing redemption of a mortgage for eighty-five years was held not to be a clog on the equity of redemption, as the bargain was fair; the redemption suit filed before that period ended was premature.
Facts
In 1899 the appellant's father usufructuarily mortgaged a small shop in Naya Bazar, Ajmer, for Rs. 6,300, most of which was left with the mortgagee to redeem a prior mortgage. The deed said the property could not be redeemed for 85 years, must then be redeemed within six months, and failing that the deed would be deemed a sale deed. The mortgagee's rights were later assigned to Motilal, whose sons were the contesting respondents. In 1947 the appellant sued for redemption. The Sub-Judge held the 85-year term a clog and passed a preliminary decree. The Judicial Commissioner, Ajmer, held it was not a clog and dismissed the suit. The appellant appealed to the Supreme Court.
Questions before the Court
- Was the term that the mortgage would not be redeemable for eighty-five years a clog on the equity of redemption?
- Was the term that the deed would become a sale deed if the mortgagor failed to redeem within six months after the eighty-five years valid, and did its invalidity affect the term fixing the period?
- Was the suit for redemption, filed before the eighty-five years expired, premature?
What the Court held
- Under Section 60 of the Transfer of Property Act the right to redeem arises only when the principal money becomes due, which depends on the contract. A mortgage is always redeemable, and once the right to redeem has arisen it cannot be taken away.
- The term that the deed would be deemed a sale deed if the mortgagor did not redeem within six months after the eighty-five years was a clog and invalid. But it stood apart from the term fixing the mortgage period, and its invalidity did not affect that term.
- Courts may relieve a mortgagor not only where the right to redeem is taken away but also where it is restricted, but this power rests on want of conscience: whether the bargain was obtained by taking advantage of the mortgagor's difficulty or embarrassment. That is a question of fact in each case.
- The length of the term did not by itself show the bargain was oppressive. On the facts the bargain was fair and between parties on an equal footing, so the eighty-five year term was enforceable, the suit was premature and the appeal was dismissed with costs.
Why it matters
The judgment explains the rule against clogs on the equity of redemption under Section 60 of the Transfer of Property Act. It separates a term that destroys the right to redeem, which is void, from a term that only postpones when the right accrues, which is enforceable unless the bargain was unconscionable. The test is one of fact, whether the mortgagee took advantage of the mortgagor's difficulty; here the long term did not by itself show oppression, and the Court left open whether length alone ever could.
In the Court's words
Copied from the official judgment; each passage links to its page.
“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 reason then 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.”
“First then, does the length of the term-and in this case it is long enough being eightyfive years-itself lead to the conclusion that it was an oppressive term ? In our view, it does not do so.”
“We, therefore, think that the bargain was a reasonable one and the eighty-five years term of the mortgage should be enforced. We then come to the conclusion that the suit was premature and' must fail.”
Provisions interpreted
Case and bench
- Parties
- Seth Ganga Dhar v. Shankar Lal & Others
- Case
- Civil Appeal No. 150 of 1954
- Decided
- 15 April 1958
- Bench
- Sarkar, J.
- Opinions
- The Judgment of the Court was delivered by Sarkar, J. No separate opinion appears in the text.
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