Introduction

The doctrine of clogs on redemption is expressed in the maxim called “once a mortgage is always a mortgage nothing but a mortgage”. This maxim is explained by the Lord. Devey in Noakes & Co Vs. Rice to mean that “the mortgagee shall not make any stipulation which will prevent a mortgagor who has paid principal, interest and costs, from getting back his mortgaged property in the condition in which he parted with it”. This doctrine is recognized under section 60 of TP Act, 1882. Which says that, it is not necessary that the fusion of rights should be by act of parties. What is necessary is that the mortgage should have acquired the share of mortgagor. Whether he acquired it by purchase or inheritance or otherwise, the result is the same and the mode of acquisition is immaterial.

However, Article 61(a) of the Limitation Act, 1963 which says that “the mortgagor can exercise his right to redeem within 30 years from the time of the accrual of the right to redeem”. And Section 27 read with section 3 of Limitation Act, 1963 says that “On the expiry of 30 years above said, the right in mortgaged property is extinguished”. The contradiction between supra is briefly discussed herewith.

Transfer of Property Act

The mortgagor’s right to redeem the mortgage is jealously guarded by the Courts. If the mortgagor stipulates with the mortgagee to redeem the property with a specific time and to forfeit the property in the event of default, he will not be held to his contract right to redeem has gone by, the mortgagor can still in equity claim to redeem the property. This right of the Mortgagor is called Equity of Redemption as provided in TP Act, 1882, extracted herein;

Section 60- Right of mortgagor to redeem

……Provided that the right conferred by this section has not been extinguished by act of the parties or by decree of a Court. The right conferred by this section is called a right to redeem, and a suit to enforce it is called a suit for redemption.

Nothing in this section shall be deemed to render invalid any provision to the effect that, if the time fixed for payment of the principal money has been allowed to pass or no such time has been fixed. The mortgagee shall be entitled to reasonable notice before payment or tender of such money.

Redemption of portion of mortgaged property.—Nothing in this section shall entitle a person interested in a share only of the mortgaged property to redeem his own share only, on payment of a proportionate part of the amount remaining due on the mortgage, except only where a mortgagee, or, if there are more mortgagees than one, all such mortgagees, has or have acquired, in whole or in part, the share of a mortgagor”..

From the above, it is clear that there can be no additional contract in the mortgage deed which alters the essential nature of the mortgage contract so as to preclude the mortgagor from redeeming. A clause in a mortgage making it irredeemable after a period is clearly repugnant to the mortgagor’s equity of redemption or equitable right to redeem. The familiar instance of such clause is where the mortgagee is asked to treat himself – himself as the owner of the property if the mortgage money is not repaid on or before the specified day. Such covenant is ignored as it is a clog on the equity of redemption. Hence, the only remedy for the mortgagee is to file a suit for foreclosure before the competent Court of Law for relief of foreclosure, after the stipulated time is reckoned.

LAW OF LIMITATION. – As earlier stated, Article 61(a) of the Limitation Act, 1963 which says that;

(a) to redeem or recover possession of immovable property mortgaged;

When the right to redeem or to recover possession accrues.

“Section 27: Extinguish the right to property. – At the determination of the period hereby limited to any person for instituting a suit for possession of any property, his right to such property shall be extinguished.

Section 3: Bar of limitation.—(1) Subject to the provisions contained in sections 4 to 24 (inclusive), every suit instituted, appeal preferred, and application made after the prescribed period shall be dismissed, although limitation has not been set up as a defence”.

From the above, it is clear that, the legislators have put a time period upon the plaintiff is suit for possession, on its expiry, the plaintiff, neither entitled to claim possession nor entitled to the title over the suit property. However, the plaintiff can claim following remedies under two circumstances:

1. If mortgaged property partly/ wholly conveyed to 3 rd party. – The mortgagee has conveyed the mortgaged property either partly or wholly to the 3 rd party without the concern of the mortgagor, after the stipulation of time period is reckoned. Then the mortgagor has the right to file suit for redemption within the period of 12 years when the date of knowledge on the transfer to the mortgagor accrues Provided under Article 61(b) of Limitation Act, 1963. On its expiry, not only remedy to file a suit for redemption is barred, also the right to the mortgage property is extinguished under section 27 read with Section 3 of Limitation Act 1963.
2. If mortgaged property is not conveyed to 3 rd parties. – The mortgagee has not conveyed the mortgaged property to the 3 rd party. Then the mortgagor has the right to file suit for redemption within the period of 30 years when the date of knowledge on the transfer to the mortgagor accrues provided under Article 61(a) of Limitation Act, 1963. On its expiry, not only remedy to file a suit for redemption is barred, also the right to the mortgage property is extinguished under section 27 read with Section 3 of Limitation Act 1963.

Issues

From the above discussion, Since, the law of limitation puts a prescribed time period for redemption of mortgage upon mortgagor, on its expiry, the right in mortgaged property is extinguished. Then,

1. Why can the mortgagor be entitled to redeem the mortgage whenever he can?
2. Why anything precluding the mortgagor’s right to redeem is clog on redemption and that is void?

Judicial precedent

Aforesaid two issues have been discussed with Hon’ble Supreme Court and High Court judgements are extracted herein;

• State of Punjab and ors Vs. Ram Rakha and Ors. – Gobind Mal was a father of Respondent, and had possession of Mortgage from the holders of the suit land in the year 1887 – 1888. – When land was declared as Evacuee Property, Union of India claimed such mortgaged property belongs to them. – From the evidence on record – mutation entries have been affected to show that the respondents were in possession of property as mortgagees through the tenants. – Question as to better title arose – Held. – When the Evacuee Interest Act came into force, the land became irredeemable by mortgagor. – Mortgagor had lost the title to the hypothica. The title to the land was rightly declared to belong to the respondents and it cannot be an evacuee property.

• Prabhakaran and Ors Vs. M. Azhagiri Pillai (Dead) by Lrs. And Ors .

“11. …In case of a usufructuary mortgage which does not fix any date for repayment of the mortgage money, but merely stipulates that the mortgagee is entitled to be in possession till redemption, the right to redeem would accrue immediately on execution of the mortgage deed and the mortgagor has to file a suit for redemption within 30 years from the date of mortgage. Section 27 of the Limitation Act, provides that at the determination of the period hereby limited to any person for instituting a suit for possession of any papery his right to such property shall be extinguished this would mean that on the expiry of the period of limitation prescribed under the Act, the mortgagor would lose his right to redeem and the mortgagee would become entitled to continue in possession as the full owner.”

• Bandhrau Ram (died) through his LR’s Vs Sukh Ram

“The period of limitation for filing a suit for recovery of immovable property or redemption of usufructuary mortgages which have not fixed any time for repayment of mortgage money is 30 years as prescribed under Article 61 to the Schedule to the Limitation Act, 1963.”

• Venugopal Padayachi (D) LR’s Vs. V. Pichaikaran (D) LR’s . – Adverse possession of mortgagee – effect of – respondent had executed simple mortgage in favour of appellant. – Also executed an unregistered sale in favour of appellant/mortgagee. Respondent filed suit for redemption of mortgage against – appellant. – Trial Court dismissed the suit on the ground that appellant/mortgagee become absolute owners of mortgaged property due to adverse possession for 12 years. – High Court set – aside the said order – Appeal filed against HC judgement. – Held. – Mortgagee acquires title of the mortgaged property after being in adverse possession for 12 years. – Findings of the Trial Court & I st Appellate Court are confirmed by set-a-siding the HC judgement.

Conclusion

In my opinion, Firstly, when the stipulated time to redeem the mortgaged property is reckoned, Under Section 27 read with Section 3 of Limitation Act, the Mortgagee shall be owner of mortgaged property. Secondly, However, Mortgagee would only get a better title to the mortgaged property by way of obtaining decree from the appropriate Court by invoking Section. 27 of Limitation Act, 1963, after stipulated time is reckoned. Because, it is Res-Integra that the right to redeem is extinguished either by merger or by subsequent Agreement between the same parties or by decree passed by the competent Court of law.

Finally, instead of following English law of mortgage, we have capability of creating our own legislation as per the recent citation in India. So far, if no limitation period is fixed for redemption of mortgage as said by English law of mortgage, it will deprive the mortgagee of the right to the great extent.

References

1. Transfer of Property Act, 1882 – BARE ACT.
2. Indian Limitation Act, 1963 – BARE ACT.
3. Transfer of Property Act by Prof. GC. V. Subba Rao, (Reprinted in 1999).
4. Law of Limitation by UN Mitra,(12 th Edition).
5. Noakes & Co Vs. Rice 1902 A.C. 24.
6. Hamida Vs. Ahmed Husian, 31 All. 3335.
7. State of Punjab and ors Vs. Ram Rakha and Ors AIR [1997] SC 2151.
8. Prabhakaran and Ors Vs. M. Azhagiri Pillai (Dead) by Lrs. And Ors 2006 [2] CTC 412.
9. Bandhrau Ram (died) through his LR’s Vs Sukh Ram 2012 [2] CTC 257.
10. Venugopal Padayachi (D) LR’s Vs. V. Pichaikaran (D) LR’s 2018 SAR (Civil Supp. II) 294.

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