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Panchoolal and anr. Vs. Kesharimal and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtRajasthan High Court
Decided On
Case NumberSecond Appeal No. 31 of 1965
Judge
Reported inAIR1972Raj293; 1971(4)WLN355
ActsTransfer of Property Act, 1882 - Sections 60
AppellantPanchoolal and anr.
RespondentKesharimal and ors.
Appellant Advocate C.L. Agarwal and; R.S. Khejariwal, Advs.
Respondent Advocate R.N. Surolia, Adv.
DispositionAppeal allowed
Cases Referred and Har Bakhsh Singh v. Mahabir Singh
Excerpt:
.....oppressive and the plaintiffs are entitled to be relieved of the clog. - - 700/- by a registered mortgage deed dated 14-6-1900. it is provided in the mortgage deed that the mortgagors would not be entitled to redeem the mortgage for a period of 90 years, and even after 90 years, it should be redeemed only within six months and if the mortgagors failed to redeem the property within six months after the expiry of 90 years, the right of redemption would be lost. the latter term debarring the mortgagors from making any claim to the mortgaged property if they failed to redeem it within the period of six months after the expiry of the stipulated period was held to be a clog on the equity of redemption, and in the present case also it has been held to be so by the court below. 1 the defendant..........dealing with the question of clog on equity of redemption in a case involving the length of the term of mortgage their lordships of the supreme court were pleased to observe in the case referred to above that this question is essentially one of fact and has to be decided on the circumstances of each case. it was further pointed out that the length of the term--even though it may be long enough--itself does not lead to the conclusion that it was oppressive. their lordships further made it clear that it is not necessary to go so far as to say that the length of the term of the mortgage can never by itself show that the bargain was oppressive. in that case the term was 85 years, and it was further provided in the mortgage deed that if the mortgagors do not redeem within a period of six.....
Judgment:

C.M. Lodha, J.

1. This is a second appeal by the plaintiffs whose suit for redemption of the mortgaged property in question, situated in Ajmer has been dismissed by the Courts below on the ground that the suit is premature.

2. It is the common case of the parties that Baldeo, (grand-father of the plaintiffs and defendant No. 8 Ramdas) mortgaged the house with Surajkaran and his son Chhaganlal, ancestors of the defendant-mortgagees in consideration of a sum of Rs. 700/- by a registered mortgage deed dated 14-6-1900. It is provided in the mortgage deed that the mortgagors would not be entitled to redeem the mortgage for a period of 90 years, and even after 90 years, it should be redeemed only within six months and if the mortgagors failed to redeem the property within six months after the expiry of 90 years, the right of redemption would be lost. The present suit was filed on 4-7-1960 before the expiry of the stipulated period of 90 years and consequently the defendant-mortgagees pleaded inter alia that the suit was premature and liable to be dismissed as such. It was also pleaded by them that in case the suit was held to be maintainable, they were entitled to get Rs. 10,000/- on account of cost of improvements carried out by them in the mortgaged property as stipulated in the mortgage deed. They also pleaded that some property over and above what had been mortgaged had been wrongly claimed by the plaintiffs.

3. After recording the evidence produced by the parties the Munsiff, Ajmer City (West), Ajmer by his Judgment dated 18-4-64 dismissed the suit as being premature. Aggrieved by the judgment and decree by the trial Court the plaintiffs filed appeal but the same was dismissed by the Additional Civil Judge, Ajmer by his Judgment dated 28-9-1964. Consequently, the plaintiffs have filed this second appeal.

4. Learned counsel for the appellants has urged that the Courts below have committed an error of law in coming tothe conclusion that the terms contained in the mortgage deed do not amount to a clog on the equity of redemption. It is submitted that there are glaring circumstances in the case which go to show that the condition debarring the mortgagors to redeem the property for 90 years is unconscionable and oppressive, and that the mortgagees had taken an unfair advantage of their position. It has been submitted that the Supreme Court case: Ganga Dhar v. Shankar Lal, AIR 1958 SC 770, relied upon by the first appellate Court is distinguishable on facts and the rule laid down therein is not applicable to the facts and circumstances of the present case.

5. Before considering the argument raised on behalf of the appellants, it would be necessary to point out that while dealing with the question of clog on equity of redemption in a case involving the length of the term of mortgage their Lordships of the Supreme Court were pleased to observe in the case referred to above that this question is essentially one of fact and has to be decided on the circumstances of each case. It was further pointed out that the length of the term--even though it may be long enough--itself does not lead to the conclusion that it was oppressive. Their Lordships further made it clear that it is not necessary to go so far as to say that the length of the term of the mortgage can never by itself show that the bargain was oppressive. In that case the term was 85 years, and it was further provided in the mortgage deed that if the mortgagors do not redeem within a period of six months after the expiry of the stipulated period of 85 years, the mortgagors or their legal representatives would have no claim over the mortgaged property. The latter term debarring the mortgagors from making any claim to the mortgaged property if they failed to redeem it within the period of six months after the expiry of the stipulated period was held to be a clog on the equity of redemption, and in the present case also it has been held to be so by the Court below. Consequently, there is no dispute about the latter clause. As regards the term of 85 years, it was held y the Supreme Court that the term was not oppressive in as much as there was nothing to show that the mortgagees took any undue advantage out of the deal. There was a condition in the mortgage deed that the money spent by the mortgagees on repairs and new constructions would be paid along with the mortgage money at the time of redemption according to the account produced by the mortgagees. In this connection their Lordships observed that looking to the size of the mortgaged shop and the area of the land on which it stood, the same being a small one, it was not possible to spend a large sum on repairs or construction. The shop and some other property were under a previous mortgagefor Rs. 5750/- and the mortgage in dispute was made for Rs. 6300/- and consequently the other property under the previous mortgage became free, This circumstance was held to be to the advantage of the mortgagor.

6. In the present case, the mortgaged property consists of a house, the area of which is not known but from its description given in the mortgage deed, it appears that it was a big one consisting of several apartments and open land. It had been previously mortgaged for Rs. 350/-and the mortgage in question was made for Rs. 700/- out of which Rs. 350/- were utilised for the discharge of the previous mortgage. It is further provided in the mortgage deed that the mortgagors would be liable to pay charges for repairs, new construction and other alterations, which may be carried out by the mortgagees. The cost of improvements claimed by the mortgagees in the present case is Rupees 10,000/-. No limit was fixed to the improvements which may be carried oat by the mortgagee even by way of new construction. It appears from the terms of the mortgage deed that it was possible for the mortgagees to have spent any sum on repairs or new construction. The mortgagee has in fact claimed a big sum of Rupees 10,000/- on account of rebuilding the whole house. It further transpires that in the application dated 23-2-63 the defendant-mortgagees stated that they had not maintained any accounts of expenses, incurred by them due to the reason that they never contemplated that such a redemption would ever be claimed. It has been further stated that it was with a view to evade the enforcement of the rights of preemption that a regular sale deed was not obtained from the mortgagors meaning thereby that the mortgage deed was only a device otherwise the transaction was a sale out and out. In his statement as D. W. 1 the defendant Kesarimal has stated that the mortgagees had purchased another property contiguous to the property in question from one Mukandram about an year after the mortgage in suit and that after purchasing the property of Mukandram the mortgagees had converted the mortgaged property as well as the house purchased from Mukandram into one consolidated house after razing the old construction to the ground and that a single three storeyed building had been built. From these facts it appears that the stipulation of 90 years contained in the mortgage deed was only a device in its inception to make it impossible for the mortgagors to redeem - the mortgage. This fact is also borne out by the conduct of the mortgagees in destroying the identity of the mortgaged property and encumbering it to such an extent that it may be impossible for the mortgagors to redeem it. Even assuming for the sake of argument that itwas not originally intended to be a device, I have no doubt that, on the facts of the case, it was converted into one by the mortgagees so as to make it impossible for the mortgagors to redeem. Learned counsel for the respondents failed to show why the subsequent conduct and acts of the mortgagees should not be taken into consideration.

7. In V. C. Soni v. Gokaldas, AIR 1953 Bom 408, the amount advanced was a small one of Rs. 176/- and on the record it did not appear that it was necessary that the mortgagors should have submitted to this long term of 99 years. It was further found that the mortgagee was the owner of a neighbouring property so that the long term for redemption conferred upon the mortgagee a collateral advantage which was unfair to the mortgagor. The mortgagee was given full liberty to spend any amount he liked for building the structure on the open space which had been mortgaged to him, and no restrictions were placed as to the nature of the structure which the mortgagee would be entitled to raise and as to the amount which he should spend on raising such a structure. In these circumstances the learned Judges held that the option given to the mortgagee by the Clause of 99 years was wholly unreasonable and it conferred upon the mortgagee an advantage to which he was legitimately not entitled.

8. In the present case, the mortgage amount is only Rs. 700/- and the mortgagees have claimed Rs. 10,000/- by way of cost of improvements. Besides that they have also tried to destroy the identity of the mortgaged property by razing it to the ground and building a new house at the site after including some other property which the mortgagees allege to have purchased from Mukandram. No doubt, there is no direct evidence in the case as to the pecuniary condition of the mortgagors at the time of the mortgage nor is there any evidence to show that the mortgagees had put any pressure on the mortgagors at the time of the execution of the mortgage deed, but the above mentioned circumstances leave no manner of doubt that the term of 90 years is oppressive, and unreasonable and it is a fit case in which the mortgagors should be relieved of the same.

9. Learned counsel for the respondents urged that the term regarding cost of repairs, and improvements is separate and may not be enforced, but the term regarding the period of 90 years is nevertheless enforceable as being not a clog on the equity of redemption. In support of his contention he relied upon Md. Rahman v. Md. Muzammilullah, AIR 1933 All 468; and Babasaheb v. Rajaram, AIR 1931 Bom 264. In my opinion, these cases are not at all in point. The principle laid down in these cases that in an agreement, ifdifferent clauses are separable, the fact that one clause is void does not necessarily cause the other clauses to fail is unexceptionable. The point arising in the present case is as to the effect of the various terms contained in the mortgage deed to ascertain whether the bargain was oppressive, and whether the length of the term in the facts and circumstances of the case operates as clog on the equity of redemption? The above mentioned authorities relied upon by the learned counsel for the respondents have, in my opinion, no bearing on the point at issue.

10. Learned Counsel for the respondents also relied upon Jodhiram v. Hari-har, AIR 3958 Pat 464; and Har Bakhsh Singh v. Mahabir Singh, AIR 1936 Ondh 130, in support of his contention that long term by itself does not operate as a clog on the equity of redemption and further that even if the mortgagee had done some thing which he was not authorised to do, the mortgagor cannot be relieved of the length of the 'term.

11. In AIR 1958 Pat 464, the due date of payment under the terms of the mortgage deed was after 60 years and there was no other circumstance indicating that the transaction was in any way unreasonable or unfair for the mortgagor. As already stated above, length of term by itself may or may not amount to a clog but in the present case it is not the length of term alone on account of which I have held the transaction to be oppressive as against the mortgagor, but have taken note of a number of circumstances as pointed out above which taken along with the length of the term make the length of the term a clog.

12. In AIR 1936 Oudh 130, a mortgage was executed for a period of 60 years and the mortgagee was entitled to retain possession of the mortgaged property consisting of groves and land for the specified term. The mortgagor brought a Suit on the ground that the mortgagee had cut down a number of trees in contravention of the terms of the mortgage deed. It was found that although the mortgagee had cut down some trees he had planted new trees and constructed a masonry wall and had thus improved the value of the property instead of causing any permanent injury to it and the mortgagee was also found to have cultivated some portion of the grove. It was in these circumstances that the learned Judges held that the suit for redemption was premature and the mortgagor had no right to redeem the property before the expiry of the stipulated term on the ground that the cultivation ona portion of the land had caused any permanent injury to the grove. The facts of the case, as narrated above, unmistakablygo to show that the principle laid down in the case has no application to the facts and circumstances of the present case.

13. Fisher in his book on Law of Mortgages says

'The improvements must always be reasonable, having regard to the nature and value of the estate; for if it were not so, a weapon would be put in the mortgagee's hands with which he might greatly clog the right of redemption which he has no right to make more expensive than is necessary to keep the estate in good repair and working order and to protect the title. And the mortgagee should inform the mortgagor as soon as possible of the necessity or the intention to incur extraordinary expenses.'

14. In the present case the effect of the mortgage instrument is that the mortgagee can spend any amount on repairs and additions to the mortgaged property and in putting up new constructions. In fact this is what the mortgagees themselves have claimed.

15. Taking all the facts and circumstances into consideration, I have come to the conclusion that the conditions in the present case are definitely oppressive and the plaintiffs are entitled to be relieved of the clog.

16. Accordingly, I allow this appeal, set aside the judgment and decree by the learned Additional Civil Judge, Ajmer as well as the finding by the trial Court that the suit is premature and send the case back to the Court of Additional Civil Judge, Ajmer for disposal of the appeal on merits. In the circumstances of the case the parties are left to bear their own costs.

17. Learned counsel for the respondents prays for leave to appeal to Division Bench. However, I do not consider it a fit case for grant of leave. The prayer is disallowed.


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