Mortgager should not be preventing from getting redemption of his Property
In Pomal Kanji Govindji and Ors. v. Vrajalal Karsandas Purohit and Ors. etc , the Court examined the principles of redemption of a mortgage and clog on equity of redemption. The Court observed that freedom of contract is permissible provided it does not lead to taking advantage of the oppressed or depressed people. The law must transform itself to the social awareness. Poverty should not be unduly permitted to curtail one’s right to borrow money on the ground of justice, equity and good conscience on just terms. If it does, it is bad; whether it does or does not, must, however, depend upon the facts and the circumstances of each case. The Court proceeded to hold to the following effect:
It is a right of the mortgagor on redemption, by reason of the very nature of the mortgage, to get back the subject of the mortgage and to hold and enjoy as he was entitled to hold and enjoy it before the mortgage. If he is prevented from doing so or is prevented from redeeming the mortgage, such prevention is bad in law. If he is so prevented, the equity of redemption is affected by that whether aptly or not, and it has always been termed as clog. Such a clog is inequitable. The law does not countenance it….
These principles have been recognised by Supreme Court in Ganga Dhar v. Shankar Lal. It has also to be borne in mind that long term for redemption in respect of immovable properties was prevalent at a time when things and the Society were, more or less, in a static condition. We live in changing circumstances. Mortgage is a security of loan. It is an axiomatic principle of life and law that necessitous men are not free men. A mortgage is essentially and basically a conveyance in law or an assignment of chattels as a security for the payment of debt or for discharge of some other obligation for which it is given.
The security must, therefore, be redeemable on the payment or discharge of such debt or obligation. Any provision to the contrary, notwithstanding, is a clog or fetter on the equity of redemption and, hence, bad and void. “Once a mortgage must always remain a mortgage”, and must not be transformed into a conveyance or deprivation of the right over the property.
Right of redemption when extinguished by a decree of the Court
One of the earliest judgments examining the said expressions is Raghunath Singh and Ors. v. Mt. Hansraj Kunwar and Ors. 22 A.I.R. 1934 Privy Council 205. The question in the aforesaid case was whether on account of non-payment of the mortgage amount in terms of the decree extinguishes the right of the mortgagor to seek redemption. In the aforesaid case, the plaintiff was granted time to deposit the mortgage amount and, in case of default, it was ordered that his case will stand dismissed. It was held to the following effect:
…The right to redeem is a right conferred upon the mortgagor by enactment, of which he can only be deprived by means and in manner enacted for that purpose, and strictly complied with. In the present case, the only basis for the claim that the right to redeem has been extinguished is Section 60; but in their Lordships’ view the old decree cannot properly be construed as doing that which it does not purport to do, viz., as extinguishing the right to redeem.
No authority was cited to their Lordships in any way conflicting with the view which they have formed. 24 All. 44(2) was a case of a usufructuary mortgage. The proper decree in a suit to redeem such a mortgage ought to have provided that in default of redemption the property should be sold. In fact it provided that in a case of default the judgment should be deemed non-existent.
It was held by the Full Bench that a second redemption suit was maintainable.
The Federal Court in Thoda China Subnet Rao and Ors. v. Mattapalli Raju and Ors. 23 A.I.R. 1950 Federal Court 1, considered the judgment of Privy Council and found that the Civil Procedure Code dealt with the procedure relating to all suits. There was a special law which dealt with the rights of the mortgagors and mortgages and that substantive law was found to be in the Transfer of Property Act.
That substantive law provided only two ways in which the right of redemption can be extinguished and they were: (i) by act of the parties, (ii) by decree of the Court. It was held to the following effect:
In our opinion, the view of the Madras High Court is incorrect. We prefer the view taken by the Bombay High Court on this point. The right of redemption is an incident of a subsisting mortgage and it subsists so long as the mortgage itself subsists. As held by the Privy Council in Raghunath Singh’s case the right of redemption can be extinguished by a decree, the decree should run strictly in accordance with the form prescribed for the purpose.
Unless the equity of redemption is so extinguished, a second suit for redemption by the mortgagor, if filed within the period of limitation, is not, therefore, barred. The Board expressly held that if the appellants failed to establish that the old decree extinguished the right to redeem, there was no ground for saying that the old decree operated as res judicata and the Courts are prevented from trying the second suit under Section 11, Civil P.C. They, therefore, held that the right to redeem was not extinguished by the procedural provisions contained in the Civil Procedure Code.
In K. Parameswaran Pillai (dead) v. K. Sumathi alias Jesis Jessie Jacquiline and Anr. , while considering the provisions of Order 34 Rules 7 and 8 of the Code of Civil Procedure, 1908, it was held that by operation of Sub-rule (1) of Rule 8 where, before a final decree debarring the plaintiff from all rights to redeem the mortgaged property has been passed or before the confirmation of a sale held in pursuance of a final decree passed under Sub-rule (3) of Rule 8, the plaintiff makes payment into court of all amounts due from him, the final decree is discharged.
In view of the aforesaid judgments, it can be safely concluded that right to redemption exist at all times but before confirmation of sale. Even second suit for redemption has been found to be maintainable.