1. The only point for determination in this second appeal is as to whether a clause in a deed of mortgage, for redemption before the mortgage money has become due, is enforceable, and a suit will lie before the right of the mortgagee to enforce the mortgage has accrued.
2. The trial Court decreed the suit relying on the terms of the mortgage deed Exhibit A1 in this case, providing for redemption even before the mortgage money has become due.
3. The lower appellate Court has reversed the decision of the trial Court and has dismissed the suit holding that the mortgagor's right of redemption is co-extensive with the mortgagee's right to demand the mortgage money and the suit for redemption before the mortgage money has become due, is premature. It is against this that the plaintiff has come up in Second Appeal.
4. Under Section 60 of the T. P. Act the mortgagor has a right on payment or tender of the mortgage money to redeem the mortgage at any time after the principal money has become due.
5. Before its amendment by Act 20 of 1929 a mortgagor was entitled to redeem the mortgage at any time after the principal money has become 'payable'. The word 'payable' in Section 60 was substituted by the word 'due' by the Amending Act 20 of 1929 making it clear thereby that the right to redeem is co-extensive with the right to enforce the mortgage. If the right of the mortgagee to enforce the mortgage and the right of the mortgagor to redeem are coextensive under Section 60 of the T. P. Act, whether a provision in the deed of mortgage for redemption, before the mortgage money has become due, is enforceable, is the question that requires determination in this case.
6. In the decision in Mt. Bakhtawar Begam v. Husaini Khanum (AIR 1914 PC 36) it was held at page 37 :
'Ordinarily, and in the absence of a special condition entitling the mortgagor to redeem during the term for which the mortgage is created, the right of redemption can only arise on the expiration of the specified period. But there is nothing in law to prevent the parties from making a provision that the mortgagor may discharge the debt within the specified period and take back the property. Such a provision is usually to the advantage of the mortgagor.'
Even though this case was decided prior to the amendment of the T. P. Act by Act 20 of 1929, the Privy Council, has recognised the principle that the right of redemption of the mortgagor and the right of the mortgagee to enforce the mortgage are coextensive, but it is open to the parties to agree and make provision for redemption of the mortgage even before the mortgage money has become due.
7. In the decision in Satyawatamma v. Padmavatamma (AIR 1957 Andh Pra 30), Subba Rao, C. J. after considering the decisions in AIR 1914 PC 36 and (1898) ILR 23 Mad 33 held at page 32, as follows :
'After the amendment of Section 60 by Act 20 of 1929, the mortgagor's right to redeem and that of the mortgagee's to enforce his right have become co-extensive. But as was held by the Judicial Committee, it is subject to a specific contract between the parties.' In Dhanammal v. Raju Gramani (AIR 1954 Mad 193), Krishnaswami Nayudu, J. in paragraph 7 of the judgment quoting the above passage from AIR 1914 PC 36, stated that the decision of the Privy Council has been accepted by all the Courts in subsequent decisions on the subject.
8. A Full Bench of the Madras High Court in Bhagvantulayya v. Venkandhora (AIR 1941 Mad 484) construed a provision in a deed of mortgage for payment of the mortgage money and interest by a particular date as a provision for payment on or before the said date, and proceeded on the basis that such a provision for redemption before the mortgage money becomes due is a valid option given to the mortgagor by agreement of parties.
9. In Jodhiram Sah v. Harihar Missir (AIR 1958 Pat 464) a learned Judge of the Patna High Court after considering the decided cases on the point held in paragraph 9 as follows :
'9. On the authorities discussed above, in my opinion, there cannot but be one opinion on the question under consideration that subject to any contract to the contrary a mortgagor is not in law entitled to redeem a usufructuary mortgage before the expiry of the due date of payment and the question of such a right by way of equitable relief does not arise in the face of the clear provision of law embodied in Section 60 of the Transfer of Property Act.'
The learned Judge has taken the view that the principle in Section 60 of the T. P. Act that the right of the mortgagor to redeem and the right of the mortgagee to foreclose are co-extensive is subject to any contract to the contrary between the parties.
9A. A Division Bench of the Andhra Pradesh High Court in Jalappa v. Narasimha Satty (AIR 1963 Andh Pra 420), after referring to the observations of the Privy Council in AIR 1914 PC 36 quoted above, stated in paragraph 24 of its judgment as follows:
'24. The aforesaid observations of the learned Judge lends support to the view that the mortgage could be redeemed before the period stipulated by consent of parties.'
10. The relevent provision of Ext. A1 mortgage in the present case is quoted in paragraph 6 of the judgment of the lower appellate court. The document expressly authorises the mortgagor to redeem within ten years from the date of execution of the document and the right of sale of the mortgagee to enforce the mortgage accrues after the aforesaid period of ten years. Ext. A1 is dated 26-3-1965. The suit for redemption was filed on 18-12-1973 within the period of ten years mentioned in the document. On the terms of the document there can hardly be any doubt that the mortgage money becomes due only after the period of ten years when only the, mortgagee can enforce the mortgage.
11. From the decisions discussed above, it is clear that a provision in a deed of mortgage for redemption even before the mortgage money has become due is perfectly valid and enforceable.
12. Section 60 of the T. P. Act enables the mortgagor to redeem the mortgage when the mortgage money becomes due. The mortgage money would become due when the mortgagee's right to enforce the mortgage accrues. The section does not however inhibit the parties from agreeing for earlier redemption even before the mortgage money has become due.
13. Learned Counsel for the respondent relies on the decision in Ganga Dhar v. Shanker Lal (AIR 1958 SG 770), for the proposition that the mortgagor's right to redeem accrues under Section 60 of the T. P. Act only when the principal money under the mortgage has become due. The Supreme Court in paragraph 4 of its judgment accepts the dictum in AIR 1914 PC 36 that ordinarily and in the absence of a special condition entitling the mortgagor to redeem during the term for which the mortgage is created, the right of redemption can only arise on the expiration of the specified period'. In the case before the Supreme Court the term of the mortgage was for 85 years, and there was no stipulation entitling the mortgagor to redeem during that term. In para 18 of the judgment it is stated :
'18. It is said that the mortgage instrument itself indicates that the bargain is hard, for while the mortgagor cannot redeem for eighty five years, the mortgagee is free to demand payment of his dues at any time he likes. This contention is plainly fallacious. There is nothing in the mortgage instrument permitting the mortgagee to demand any money, and it is well settled that the mortgagee's right to enforce the mortgage and the mortgagor's right to redeem are coextensive.'
As is clear from the judgment, the Supreme Court was considering a case where there was no agreement for an earlier redemption of the mortgage before the mortgage money became due. The Supreme Court has approved in para 4 of its judgment the dictum of the Privy Council in AIR 1914 PC 36 that the right of the mortgagor to redeem and of the mortgagee to enforce the mortgage are co-extensive, subject to the special conditions for earlier redemption to which the parties may agree.
14. Reliance is next placed on the decision of Raghavan, J. (as he then was) in Krishnamma v. Parukutty Amma (1964 Ker LT 153). The learned Judge observed :
'I am of opinion, that the right to redeem comes into existence when the mortgage money becomes due; and if that happened prior to the date on which the T. P. Act became applicable, the law existing then regarding the right of redemption must apply; and the subsequent fact of Section 60 becoming applicable cannot alter the nature of the right of redemption that already vested in the party.'
The learned Judge was considering the question as to whether the suit was defective as one for partial redemption and it was held that the mortgage being one created before the T. P. Act was extended to the Travancore Area, Section 60 of the Act did not apply and the suit was not defective as one for partial redemption. It was in that context that the learned Judge made the observation quoted above. No such question as to the right of the mortgagor to redeem even before the mortgage money has become due on the basis of a specific provision in the deed of mortgage arose in the case before the learned Judge. The decision in 1964 Ker LT 153 is not an authority for the proposition urged by the learned counsel that even in spite of a specific provision for earlier redemption in the deed of mortgage the mortgagor can enforce his right of redemption only after the mortgage money has become due.
15. As adverted to earlier, there is clear provision in Ext. A1 authorising the mortgagor to redeem the mortgage before the principal money under the mortgage has become due. Such a provision in the document is perfectly valid and the plaintiff is entitled to sue for redemption on the strength of the specific clause in the deed of mortgage. The lower appellate Court was wrong in dismissing the suit as premature. The judgment and decree of the lower appellate Court are set aside and the decree of the trial Court is restored.
The Second Appeal is allowed. There will be no order as to costs.