1. This was a suit to redeem a usufructuary mortgage, dated 17th May 1873. The mortgage provided for redemption at the expiration of ten years. The usufruct was to go against interest. The defendants pleaded that there were five other deeds and that the property could not be redeemed without paying up the amount due for principal and interest on the said five other deeds. The question for decision is whether this plea is good. The five other deeds are practically in the same form. The first is dated 27th November 1873, and is in the words and figures following:
I, Ahmad Ullah, son of Muhammad Baksh, Sheikh by race, resident of Qasba Sikandrabad, District Bulandshahr, do declare as follows: That 24 bighas and 9 biswas pukhta of resumed land, situate in Khalisa mahal, village Kanora, pargana and Tahsil Sikandrabad, owned by me, is mortgaged for Rs. 700 to Umrao Khan, Dalmir Khan, Daljit Khan and Banjit Khan, sons of Darah Khan, Musalman Rajputs, residents and zamindars of village Kanora, pargana Sikandrabad, under the document, dated 17th May 1873, whereunder the mortgagees are up to this time in possession of the mortgaged property. I have now; in addition to the mortgage money, borrowed Rs, 200 in cash from the said mortgagees fixing interest at Re. 1-8-0 per cent, per mensem and agreeing that I would repay this sum, principal and interest, to the mortgagees along with the mortgage money when I obtain redemption of the mortgaged property on payment of the mortgage consideration, and have brought the same to my use. I therefore covenant in writing that I shall repay the aforesaid sum principal with interest, along with the mortgage consideration, and then the mortgaged property will be redeemed, and that redemption of the mortgaged property will is no way be obtained without the repayment of this sum. Is waste ye chand kalme batariq tamasuk mashrutul rehan wa qabzul wasul moblighan ke likhdiye ki sanad ho.
2. The plaintiff had obtained a simple money decreo against the mortgagor and had purchased the equity of redemption or mortgagors' rights in the property with a notification of the claim under the usufructuary mortgage and the bonds tacked on to the mortgage. The first point for consideration is whether the deed set forth above operates as a mortgage or charge on the property. I think it certainly does operate as one or the other, and it is not very material to consider which. To hold otherwise would be to ignore the plain intention of the parties as expressed in the deed itself. Redemption of the usufructuary mortgage meant obtaining of possession by the mortgagor, and by the terms of the second deed redemption, that is possession, was only to be obtained on payment of the amount mentioned therein. Was there anything illegal in this? I think not. After the usufructuary mortgage had been execited, the equity of redemption remained with the mortgagor. He was entitled to deal with it as he thought fit and to repledge it to secure further advances. He did repledge the equity of redemption, and the transaction was carried out by an agreement that possession would not be given back to the-mortgagor until the amount of the further advances were repaid. Mortgage is defined by Section 58 of the Transfer of Property Act as the transfer of an interest 'in specific immoveable property.' A mortgage in the strict sense of this definition is rare in these provinces, and I think that the framers of the Act must have had in their mind the English idea of a mortgage. In England a mortgage is created by the transfer of an' interest, generally a transfer of the mortgagor's own estate, followed by a proviso for redemption of the mortgaged property. In these provinces in what is called a simple mortgage there very seldom, if ever, is a transfer of any interest of the mortgagor. The mortgagor generally uses words equivalent to 'I hypothecate' or 'I pledge.' He does not transfer the estate, he hypothecates. In a mortgage by conditional sale an interest U transferred, and in a usufructuary mortgage also the mortgagor, though he does not convey his estate, he transfers a right to possession which is perhaps 'an interest)' within the meaning of the definition. A charge is defined by Section 100 of the Transfer of Property Act as being where immoveable property is by act of the parties or by operation of law made security for payment of money to another, and the transaction does not amount to a mortgage. In the present case the mortgagor agreed that the mortgagees might remain in possession until the amount of the original mortgage and the amount of the further advances were repaid. It might perhaps be urged that this was a transfer of an interest within the meaning of Section 58, the interest transferred being the right to remain in possession. However this may be, I am clearly of opinion that the deeds at least amounted to charges, Is there anything in the Act itself to prevent this? I think not. Section 60 deals with redemption and adds a proviso that redemption may be defeated if by the act of parties or by order of a court the right to redeem is extinguished. Section 61 seems to provide that a mortgagor can only insist on redemption of individual mortgages when the several mortgages comprised different properties. The law in England as to the rights of mortgagees making further advances is I think correctly stated at page 1168 of Coote on Mortgage, 7th edition. 'It is a settled rule of equity that a mortgagee, whether his security is legal or equitable, shall not be deprived thereof without payment of all sums of money due to him from the mortgagor which form a general or specific lien on the land; and therefore if the mortgagee advance other sums of money to the mortgagor expressly by way of further charge, thereby creating a specific lien, or on a judgment, whereby an actual charge is created, or on statute, thereby creating a general lien, neither the mortgagor, nor generally speaking, any one claiming under him though for valuable consideration and without notice, is allowed to redeem without payment of the full amount advanced.' It is said however that the subsequent deeds in the present case are clogs on the equity of redemption. The doctrine of clogging the equity of redemption is the creature of the English Courts of equity, and it would be strange indeed if the plaintiff, who comes here seeking equitable relief, should be allowed to set up such a doctrine to work what would be inequitable and to set aside a 'settled rule' of the English Courts of equity. I know of no English case in which the doctrine of clogging the equity of redemption has ever been applied where the mortgagor had pledged his equity of redemption to secure further advances. Speaking generally the doctrine of clogging the equity of redemption is comprised in this that 'a mortgagee will not be allowed as such to avail himself of the necessities of his debtor so as to obtain a collateral or additional advantage beyond the payment of principal, interest, and costs.' Vide Coote on Mortgage, 7th edition, page 15.
3. The only question that remains to be considered is whether there is any binding authority of this Court standing in the way of the view I take. I think not. In the case of Allu Khan v. Roshan Khan (1881) I.L.R. 4 All. 85 is in favour of my view. The case of Muhammad Abdul Hamid v. Jairaj Mal Weekly Notes 1906 267 there was a usufructuary mortgage followed by a simple mortgage containing a covenant that the usufructuary mortgage should not be redeemed without redeeming the simple mortgage. Stanley, C.J., and Rustomji, J., say: 'It appears to us that it would be altogether inequitable to permit the mortgagor, despite his express covenant to pay both debts together, to redeem one mortgage without redeeming the other. The relief which we are asked to give is equitable, and it is only just that we should see that the party to whom equitable relief is given should do equity and fulfil the obligations which he undertook. It has been contended that the covenant contained in the later mortgage for payment of both debts simultaneously is a clog on the equity of redemption and therefore unenforceable. But it seems to us that we should be extending the rule which forbids the imposition of a clog or fetter on redemption were we to hold that the agreement under consideration in this case falls under it.' This case cannot be distinguished from the present case save for the fact that in the case quoted the second document was held to be a mortgage whereas in the case before us the document perhaps amounts to not more than a charge. The case of Bhikam Singh v. Shankar Dayal (1909) 6 A.L.J.R. 255 cannot be distinguished from the present case. There are no doubt some authorities in which perhaps a contrary view was taken. They may be distinguished from the present case on the ground of the particular construction placed on the particular documents by the courts. If those cases cannot be so distinguished, I cannot with all respect agree with them. If there is a conflict of authority, I think the conflict is such as to entitle us to consider the questions involved apart from authority.
4. The question to be decided in this case is whether a mortgagor who obtains further advances from his mortgagee upon bonds which, in my opinion, purport to charge the property already mortgaged as security for the later loans, and expressly stipulates that without payment of the moneys subsequently borrowed there shall be no redemption, can claim to redeem his original mortgage without at the same time paying off the later bonds. The lower courts, holding that there was no charge, allowed the plaintiff to redeem on payment of the original debt only. The construction which the learned District Judge put on the documents which Mere subsequently executed was that although they were 'nominally mortgages' they had not 'the true attributes of mortgages or charges.' The learned Counsel for the respondent has contended that the decision in the courts below was correct; in the first place, because there was no charge on the property; in the second place, because charge or no charge the effect of the stipulation was to clog or fetter the equity of redemption; and finally because under any circumstances it is only in cases where the later document is a true mortgage that the principle on which the appellant relies can take effect. These contentions make it necessary to consider with some detail certain decisions of this. Court. The earliest reported case on the subject is of the year 1881. It is the case of Allu Khan v. Roshan Khan (1881) I.L.R. 4 All. 85. There Duthoit and Straight, JJ., held that although certain bonds, which had been executed subsequently to a usufructuary mortgage, were not strictly speaking charges on the property yet as it was 'the intention of the contracting parties that the equity of redemption should be postponed till the money advanced under them had been repaid' it would be inequitable to allow redemption of the usufructuary mortgage without payment of the bonds. The authorities relied on for this view were two passages cited from the Roman Law and the French Civil Code respectively, an extract from Fisher on the Law of Mortgages,, and certain rulings of the Sadar Dewani Adalat. This decision was considered in the case of Sheo Shankar v. Parma Mahton Weekly Notes 1904 page 123 when Stanley, C.J. and Burkitt, J. dissented from it. Their Lordships held in the first place that the validity of the decision was affected by the circumstance that it was pronounced before the Transfer of Property Act came into existence, and they particularly referred to Sections 60 and 83 of that Act. They further observed that the decision overlooked the rule which 'precludes the enforcement of any agreement between a mortgagor and a mortgagee the effect of which is to impose what is commonly called a clog upon the equity of redemption.' In the case before their Lordships it was said, in reply to the contention that the bond in question created 'a charge upon the mortgaged property in respect of the money secured by it,' that as the court was of opinion that the bond in question did not create a charge upon the property it was 'unnecessary to consider what the effect would have been if a charge had been imposed on the property in respect of the later debt.' In my opinion the finding that there was no charge on the property was a sufficient answer to the plea that the plaintiff must pay off both debts before he could redeem j and the result would be the same whether the doctrine of clogging, which in England has never been applied to such cases, were considered applicable or not. According to the well-known authority Coot's Law of Mortgages, Vol. II, p. 1168, 7th edition: 'the general principle governing the question as to when a mortgagee will be allowed to charge further advances in account appears to be that such advances must have been made on the faith of an actual charge on the land and not on merely personal security,' As the Court had found in both the above-mentioned cases that there was no charge on the land, it followed that in neither case could the principle appealed to by the mortgagee apply. In Rugad Singh v. Sat Narain Sing (1893) I.L.R. 16 All. 295 Blair and Burkitt, JJ. followed the last cited case. They held that the later document in the case before them was a mere bond which in their opinion 'did not create any charge.' This finding was sufficient to put out of court the mortgagee claim to have the subsequent debt paid off at the time of redemption of the original mortgage; although the rule against clogging and fettering was again invoked in support of the decision. The next-case to which I refer is Khuda Baksh v. Alimunnissa Weekly Notes 1906 p. 267. Here a usufructuary mortgage, dated 14th March 1889, was followed by a qabuliat, dated 15th March 1889, which, after acknowledging that the mortgagor had taken a lease of the mortgaged property from the mortgagees until September 1893, stated that the rent payable on this lease was made a charge upon the property. When in 1902, the mortgagor's representatives sued for redemption on payment of the original mortgage money, the mortgagee claimed (amongst other things) to have certain arrears of money which were due on the lease added to the amount due on the original mortgage debt. The question was whether this claim could be allowed. Stanley, C.J., held that it could not, basing his decision on the finding that the mortgage and lease were different transactions independent of each other and not one indivisible transaction; and he added that there was nothing in the qabuliat or in the mortgage to show 'that there wks any agreement between the parties that the usufructuary mortgage should not be redeemed unless the charge created by the qabuliat was also paid off.' Baneji, J., in a separate judgment concurred and remarked that, as the learned Chief Justice had pointed out, 'the fact that they held a lien on the mortgaged property for such arrears cannot preclude the plaintiffs from redeeming the usufructuary mortgage of 1889 upon payment of what is due under that mortgage.' His Lordship also held that 'the intention of the parties was that the lease was not to be regarded as part of the mortgage transaction.' In support of his opinion the learned Chief Justice had referred with approval to a decision of Edge, C.J., and Burkitt, J., Tajjo Bibi v. Bhagwan Parasad Weekly Notes 1904 p. 208 where it was held that 'in the absence of a special agreement' that two mortgages, a usufructuary and a simple mortgage, should be redeemed simultaneously, the mortgagor was entitled to redeem the former without redeeming the latter. The learned Chief Justice's approval of the judgment in this case prepares us for his decision in the next reported case, which however was not the next case in point of time. The case is Muhammad Abdul v. Jairaj Mal Weekly Notes 1904 p. 273 where Stanley, C.J. and Rustomji, J. had before them just such a special agreement as was referred to in the last mentioned case. The first mortgage, was again a usufructuary mortgage, followed three months later by a simple mortgage, which after reciting the earlier mortgage went on to say that-the mortgagor covenanted to repay the money due under it 'together with' the money due on the earlier mortgage. The purchaser of the equity of redemption at a sale held in execution of a decree had deposited in court a sum sufficient to pay off the first mortgage only; thereupon the defendants objected to the usufructuary mortgage being paid off unless the subsequent advance was also paid. In consequence of this objection the suit out of which the appeal arose was instituted. The learned Judges after stating the facts went on to say: 'The only question in the case is whether the plaintiff is entitled to redeem the usufructuary mortgage without also redeeming the later mortgage. Both the lower courts held that the defendants were justified in their refusal to permit redemption of one of the mortgages only, and that the plaintiff was not entitled to redeem the first mortgage without redeeming the second also. We are of opinion that this decision is correct. The property comprised in both mortgages is the same. The second mortgage contains a covenant on the part of the mortgagor for payment of both debts simultaneously. It creates in effect a further charge on the property in respect of the further advance made by the mortgagees to the mortgagor, and no doubt the fact that the mortgagees were in possession of the mortgaged property was some inducement to them to make that advance It appears to us that it would be altogether inequitable to permit the mortgagor, despite his express covenant to pay both debts together, to redeem one mortgage without redeeming the other. The relief which we are asked to give is equitable and it is only just that we should see that the party to whom equitable relief is given should do equity and fulfil the obligations which he undertook.' Referring to the argument that the covenant was a clog on the equity of redemption their Lordships say: 'We should be extending the rule which forbids the imposition of a clog or fetter on redemption were we to hold that the agreement under consideration in this case falls under it.' In other words their Lordships held that the rule as to clogging or fettering had nothing to say to such a case, with which opinion I agree, f now come to the case of Bhartu v. Dalip Weekly Notes 1906 p. 278 which is the next reported case, although it was decided five weeks before Muhammad Abdul v. Jairaj Mal. At first sight this decision may appear to be opposed to the last mentioned one but it is possible to distinguish the two cases. In this case Stanley, C.J., and Knox, J., said: 'It may be that if parties to mortgage transactions determine and agree so to consolidate mortgage securities as to preclude the mortgagor from redeeming one without redeeming all their contract in that regard would be enforced. But in this case we are unable to discover that there was any such clear and distinct contract entered into between the parties as obliged the mortgagor to redeem both mortgages at the same time.' Their Lordships then point out certain peculiarities in the case, and continue: 'From this we gather that the parties contemplated that the mortgagor should be at liberty to redeem the later mortgage on payment of the sum secured by it, namely Rs. 1,500. If he was so at liberty to redeem that mortgage at any time, then there is no reason why he should be precluded from redeeming the earlier mortgage by payment of the amount secured by it. It may be that the parties intended to consolidate the two mortgages, but they have not expressed their intention with sufficient clearness so as to enable the Court to say that they had done so, and prevent full operation being given to the provisions of Sections 60 and 62 of the Transfer of Property Act.' That is to say the Court held upon the facts that there was in this case no such special agreement between the parties as they found in the last cited case. The next case is Bhikham v. Shankar Dayal (1909) 6 A.L.J. 55. In this case Richards and Karamat Husain, JJ., stated what I conceive to be the law on the subject. They point out that simple money bonds creating no charge on the property would not come within the principle applicable. They refer to the rule against clogging or fettering the equity of redemption and say: 'But notwithstanding these well-known principles there is nothing to prevent a mortgagor taking from the mortgagee a further advance and making the mortgaged property security for such further advances, Transactions of this kind are of every day occurrence in England and we are unaware of any principle of law in this country that renders such a transaction illegal.' After describing the documents in the case their Lordships continue: 'Reading these documents we have not the least hesitation in saying that the parties intended that the mortgaged property should be made security for payment of the further advances. We infer this intention from the language of the documents themselves.' Dealing with the contention that in the case of Muhammad Abdul Hamid v. Jairaj Mal the later document was a simple mortgage, whereas in the case before them the later security was possibly a charge only, their Lordships say: 'But for the purposes of the question before us we can see no distinction between a simple mortgage and a charge.'
5. The next decision of this Court to which I refer is an unreported one, Ram Das Chowbe v. Musammat Smirkha Kuar S.A. No. 142 of 1908 decided on 20th April 1909, The later bonds in this case were simple mortgages and contained the following clause: 'Whenever I am paying off the mortgage debt I shall first pay the principal sum due under this document with compound interest and then the amount of the mortgage.' It was held by Banerji and Tudball, JJ., that no clog or fetter was imposed by this stipulation, and that the case was 'very similar' to that of Muhammad Abdul Hamid v. Jairaj which they followed. The unreported case of Sobha Ram v. Gokhla S.A. 1388 of 1907 decided on 15th January 1969, is not really opposed to these later decisions, as might at first sight appear; for the conclusion arrived at upon a consideration of the documents by Stanley, C.J., and Banerji, J., was that the earlier mortgage was 'entirely independent of the later mortgage.' They accordingly declined to enforce simultaneous redemption of the two mortgages. The last case of this kind which supports the view for which the appellant contends is Dorasami v. Venkata Seshayyar (1901) I.L.R. 25 Mad. 115 in which White, C.J. and Bhashyam Ayyanagar, J., observed that Section 61 of the Transfer of Property Act suggested, by the wording of the illustration to it, that the legislature did not, in abolishing the practice of consolidation, intend to touch the ' principle governing these cases.
6. Considered in the light of the above analysis, all the decisions of this Court since the decision of Duthoit and Straight, JJ. fail into line and present no contradictions, so far at least as the law governing them is concerned. On the construction of the particular documents before the court in each case the decision is of course an authority only for itself.
7. The learned Counsel for the respondent contends that the doctrines of 'consolidation' and 'tacking' have no application to such a case as the present. I entirely agree, for we have not here two properties but one and there is no intermediate incumbrancer. When however he goes on to argue that such cases are subject to the rule against clogging or fettering the equity of redemption, I am unable to agree. In Noakes v. Rice (1902) L.R.A.C. 24 Lord Macnaghten defined the rule against clogging as one which prohibited 'any device or contrivance designed or calculated to prevent on impede redemption,' and added, 'when the money secured by a mortgage of land is paid off, the land itself and the owner of the land in the use and enjoyment of it, must be as free and unfettered to all intents and purposes as if the land had never been made the subject of the security.' Lord Davey said that the mortgagor on redeeming must get back his property 'in the condition in which he parted with it.' I am unable to see how a mortgagee who lends a further sum of money to his mortgagor and takes a charge upon the land already mortgaged, can be said to be devising or contriving to prevent or impede redemption because he stipulates with the mortgagor that the latter will not redeem his mortgage without at the same time paying off the subsequent loan. Nor can I see that any such injury to the mortgagor or his property as the rule is designed to prevent can result from such a stipulation, for as soon as he pays off the loans he will recover his property intact with all the rights which he possessed at the time he mortgaged it. One has but to state the principle which governs such cases as the present and then consider the English cases where the rule against clogging or fettering has been applied to see that the rule can have no application. Moreover, whatever may have been said in the earlier cases, six of the Judges of this court, as at present constituted, have now expressed the opinion that the rule against dogging or fettering the equity of redemption has no application to such a case as the present. To hold that a mortgagor cannot obtain a further advance from his mortgagee by giving him a charge on the property mortgaged, at the same time stipulating that he will pay off both the advances before redeeming, would in my opinion be to fetter not his right to redeem but his right to contract. The principle which governs such cases is defined in Coote's Law of Mortgage, p. 1168, as follows: 'If the mortgagee advance other sums of money to the mortgagor expressly by way of further charge, thereby creating a specific lien, neither the mortgagor, nor generally speaking any one claiming under him, though for valuable consideration and without notice is allowed to redeem without payment to the full amount advanced'; but the later advances must have been made 'on the faith of an actual charge on the land and not on mere personal security.' This Court has adopted the qualification that the further advance must have been made on the faith of an actual charge. It has also held that there must be a special agreement between the parties on the subject in order that the principle may take effect. As my learned colleague has set out the facts of this case I need not repeat them. On those facts I hold that the later transactions were not separate transactions independent of the r earlier one; that the later documents charged and were intended to charge the mortgaged property; that the parties stipulated that redemption of the usufructuary mortgage should not take place unless the later loans were paid off,-and it was upon this understanding that the later advances were made. Applying to these findings the principles laid down in the decisions of this Court to which I have referred, I would decree this appeal.