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Nainu and ors. Vs. Kishan Singh and anr. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtHimachal Pradesh High Court
Decided On
Case NumberSecond Appeal No. 25 of 1952
Judge
Reported inAIR1957HP46
ActsTransfer of Property Act, 1882 - Sections 1 and 60
AppellantNainu and ors.
RespondentKishan Singh and anr.
Advocates: L. Sud, Adv.
DispositionAppeal dismissed
Excerpt:
.....amount by the due date, (viz., within five years) we agree to this document being treated as a sale deed.' horwill j. held under the circumstances that : 'the conveyance was not a sale but was to operate as a sale after the period of five years if the amount was not paid, and the transferor was entitled to redeem. the recital that 'after the due date you and your heirs will have absolute powers in respect of the property. we and our heirs will not have any rights' would merely amount to a clog on the equity of redemption.' (d) raman pillai v. gowri pillai, air 1954 trav-c 7 (h). there a division bench of that high court held: 'the agreement to the effect that a would acquire title to the property on default by a branch to pay the value of improvements due to him was illegal, being..........amount by the due date, (viz., within five years) we agree to this document being treated as a sale deed." horwill j. held under the circumstances that : "the conveyance was not a sale but was to operate as a sale after the period of five years if the amount was not paid, and the transferor was entitled to redeem. the recital that "after the due date you and your heirs will have absolute powers in respect of the property. we and our heirs will not have any rights" would merely amount to a clog on the equity of redemption." (d) raman pillai v. gowri pillai, air 1954 trav-c 7 (h). there a division bench of that high court held: "the agreement to the effect that a would acquire title to the property on default by a branch to pay the value of improvements due to him was illegal, being a.....
Judgment:

Ramabhadran, J.C.

1. This second appeal by defendants arises out of a suit for redemption. It is common ground, that the property in question was mortgaged by the predecessors-in-interest of the plaintiffs, in favour of Sundar, father of the appellants 1, 2, 3, and 4 and Tulsi appellant 5, on 17th Kartak 1992 Sambat, for a sum of Rs. 1400/. Subsequently on 22-9-49, the plaintiffs purchased the equity of redemption from the original mortgagors for a sum of Rs. 4000/-. Consequently the plaintiffs sought a decree for redemption on payment of the sum of Rs. 1400/- (original mortgage amount) to the defendants-mortgagees.

2. The suit was resisted by the defendants-mortgagees mainly on the ground that the plaintiff had no right to redeem, since the period prescribed in the mortgage deed (10 years) had expired. They, therefore, contended that their (mortgagees') status had matured into that of owners and consequently the suit was bad. In the alternative, it was contended that, they were further entitled to the costs of the improvements effected by them.

3. The Courts below have found, that the right of redemption still existed and the status of the defendants-appellants continued to be that of mortgagees. As regards the alleged improvements, they have found that these were effected during the pendency of the suit, and, consequently, no sum was payable to them (i.e., mortgagees) on that account. In the result, the plaintiffs were granted a decree for redemption on payment of the sum of Rs. 1400/- i.e., the original mortgage amount. Hence, this second appeal by the mortgagees-defendants.

4. Arguments of the learned counsel for the contesting parties were heard yesterday. For reasons to be stated shortly, I am of the opinion, that there is no force in this appeal.

5. Mr. M.L. Sud for the appellants, argued vehemently, that under the terms of the mortgage deed of 1992 B, the mortgage could have been redeemed only within the period of 10 years, commencing from the date of the mortgage, but not later. Mr. Sud conceded, that there was a slip of the pen in the mortgage deed, inasmuch as, it purports to lay down that the mortgage could not be redeemed within the aforesaid period of 10 years.

Mr. Sud admitted, that the word 'Nahin' had inadvertently crept in, in this context, and the intention of the parties was, that the mortgage should be redeemed within the first 10 years, and not later on. Reading the mortgage deed as a whole, there is no room for doubt that there has been a slip of the pen, as conceded by Mr. Sud. The true intention of the parties was, that the mortgage could be redeemed within the first 10 years but not later.

Both the Courts below, have held that this condition amounted to a clog on redemption and consequently, would not be binding upon the plaintiffs. Mr. Sud for the appellants urged, that the provisions of the Transfer of Property Act, were not in force in Bilaspur State in 1992 B, when the mortgage was created. Consequently, I was requested to hold, that the principles embodied in the Transfer of Property Act, could not be applied here.

6. Taking the last point first, it is true, that the provisions of the Transfer of Property Act, were not in force in Bilaspur State in 1992 B. Those provisions were applied to this District on 29-7-49, while the suit, giving arise to this second appeal, was instituted on 27-6-50. In Shero v. Chamaru, AIR1955 Him-P 46 (A), I had occasion to point out :

"Section 67, Transfer of Property Act, which defines the rights of a mortgagee, as against the mortgagor, so far as the right to maintain a suit for the foreclosure, or sale is concerned, is only procedural and as such, is retrospective in its operation and a mortgagee, claiming under a mortgage executed before the Act, can enforce his remedies according to the present section, even though the procedure before the Act was different."

"A mortgage remains a mortgage until such time as the right of redemption is taken away. In the case of a mortgage by conditional sale, the mortgage does not automatically mature into a sale. Section 67 confers upon the mortgagee, any time after the mortgage-money has become due and before a decree for the redemption of the mortgaged property is made, a right to obtain from the Court a decree to the effect that the mortgagor is absolutely debarred to redeem his land or the property is sold."

7. I may also refer to the following authorities :

(a) Punjab and Sind Bank Ltd. v. Kishen Singh Gulab Singh, AIR 1935 Lah 350 (B). There a Division Bench consisting of Coldstream and Bhide, JJ. observed that :

"The Transfer of Property Act is not in force in this Province, but its principles are generally held to be applicable."

(b) Nizam Din v. Ramsukh Das, AIR 1938 Lah. 286 (C), where a Division Bench of that High Court remarked that :

"It should always be presumed that in India, a purchaser of previous mortgagee rights intends to keep the mortgage alive for his benefit. Though the Transfer of Property Act is not in force in the Punjab, the general principles to be applied are those embodied in the Amended Act of 1929 which must be held to be more in accordance with the principles of justice, equity and good conscience."

(c) Roshan Lal v. Arjan Dev, AIR 1942 Pesh 68 (D), wherein Mir Ahmad, J., held that :

"The Transfer of Property Act does not apply to the N. W. F. P., but the principles underlying its Sections are used by the Courts there, as principles of equity, justice and good conscience under Section 28, Frontier Law and Justice Regulation."

8. Under these circumstances, it is immaterial if the provisions of the Transfer of Property Act, were not in force in Bilaspur State in 1992 B, when the mortgage was created.

9. We now come to the question as to whether the provision in the mortgage deed shutting out the right of redemption, after 10 years, would amount to a clog on redemption, Mr. Sud for the appellants, desired me to hold in the negative, i.e. that it would not amount to such a clog. Mr. Anand, for respondent No. 1 urged vehemently--and in my opinion with considerable justification--that the findings of the trial Court below On this point, must be upheld. As the mortgage deed stands (bearing in mind Mr. Sud's statement in this Court yesterday), the mortgagors were entitled to redeem the mortgage, within the first 10 years but not later. Such a condition, in my opinion, clearly amounts to la clog on redemption, and, therefore would be invalid. There is plenty of authority for this view. I rely upon the following decisions :

(a) Guljar Singh v. Madho Ram, AIR 1925 Oudh 11 (E), where a Division Bench of that Chief Court indicated that :

"The equity of redemption in the mortgaged property will subsist all through in spite of the expiration of the period for redemption agreed on till a decree for foreclosure is made in a suit brought by the mortgagee or till the confirmation of the sale in pursuance of a decree for sale obtained by the mortgagee."

(b) Mehrban Khan v. Makhana, AIR 1930 PC 142 (F). There the facts were :

"Under the mortgage the mortgagee was entitled to a possession for 19 years. At the end of the period if the mortgagor paid off the mortgage money the property was to belong, as to a limited interest therein only, to the mortgagor, and as to the major interest therein, to the mortgagee. If the mortgagor failed to pay off the mortgage money at the end of 19 years the property was to belong to the mortgagee absolutely. After the expiration of the stipulated period the assignee of the mortgagor brought a redemption suit."

In those circumstances, it was held by their Lordships of the Privy Council that :

"The provisions in the deed being a clog on the equity of redemption were void and could have no more binding force against the assignee, of the mortgagor than they had against the mortgagor himself."

(c) Jadam Jampur Bai v. Jinki Siddappa, AIR 1944 Mad 237 (G). There the facts were that :

"In a deed of conditional sale it was recited by the transferor, if we do not pay your amount by the due date, (viz., within five years) we agree to this document being treated as a sale deed."

Horwill J. held under the circumstances that :

"The conveyance was not a sale but was to operate as a sale after the period of five years if the amount was not paid, and the transferor was entitled to redeem. The recital that "after the due date you and your heirs will have absolute powers in respect of the property. We and our heirs will not have any rights" would merely amount to a clog on the equity of redemption."

(d) Raman Pillai v. Gowri Pillai, AIR 1954 Trav-C 7 (H). There a Division Bench of that High Court held:

"The agreement to the effect that A would acquire title to the property on default by a branch to pay the value of improvements due to him was illegal, being a clog on the equity of redemption."

(e) George Mathai v. Mathew Danial, AIR 1954 Trav-C 165 (I). There a Division Bench of that High Court pointed out that :

"A condition in a mortgage deed that in the event of non-payment of the loan within a stipulated time, the mortgage shall become a sale, will be treated as a clog on the equity of redemption and will, therefore, be void and ineffective. Such a condition has only to be ignored as being void and the same cannot affect the mortgagor's right to redeem the property even though there has been default in the repayment of the loan within that period."

(f) Nanhku Babu Lal Teli v. Mitlal Khunkhun Lal Jaiswal, AIR 1955 Vindh P 4 (J). There it was held that:

"A document which is essentially a simple mortgage with an express personal covenant to pay does not cease to be a simple mortgage and become a mortgage by conditional sale merely because it contains a term under which the mortgaged property is to be deemed to have been sold outright on failure of payment of the principal money with interest by a certain date. Such a term in the mortgage amounts to a clog on the equity of redemption under Section 60 and is void."

10. Under these circumstances and in view of the authorities cited above, I have no hesitation, in holding that the time limit for redemption, prescribed in the mortgage deed amounted to a clog on redemption and was hence void.

11. In the next place, Mr. Sud for the appellants urged, that his clients were entitled to the cost of the improvements effected by them. In this connection, he contended that the trial Court should have passed a preliminary decree--if it felt that the plaintiffs were entitled to a decree for redemption--under Order 34, Rule 7. Mr. Anand for the contesting respondent, pointed out that on 16-5-51, i.e., during the pendency of the suit, an application was put in by Nainu, defendant, praying for the appointment of a Commissioner to assess the costs of the improvements, effected by the mortgagees.

On the back of this application, there is a statement of the plaintiffs' counsel, to the effect that the appointment of a Commissioner, was not necessary and requesting the Court to inspect the site. Nevertheless, a Commissioner was appointed, and his report dated 15-8-51 is to the effect that certain constructions had been made during the three or four months, preceding his report. Mr. Anand for the contesting respondent, rightly pointed out, that these new constructions were not covered by the mortgage deed, which merely provided, that the mortgagees could extend or improve two houses and one Deorhi, previously existing on the mortgaged land. Mr. Anand also took me through the statements of the defendants' witnesses, examined on this point, i.e., Bhoga, Anant Ram, Maldev and Sant Ram, defendant.

I see no reason to differ from the view of the Courts below that the testimony of these witnesses cannot be relied upon; although the constructions were put up by the mortgagees during the pendency of the suit, and they could not have legally claimed the cost of such improvements. Mr. Anand made a statement in Court yesterday to the effect that his client would have no objection to the mortgagees-defendants removing the Malba of the houses standing on the land, old or new. Thus it is unnecessary to pursue this matter any further.

12. Only one question now remains to be disposed of, and that is whether the trial Court has erred in not passing a preliminary decree for redemption under Order 34, Rule 7, C. P. C. As already pointed out, a specific issue regarding the cost of improvements was framed by the trial Court. Evidence of the parties was led thereupon, and on the request of Nainu, defendant, a Commissioner was appointed to estimate the cost of the improvements. The trial Court has given reasons for coming to the conclusion, that the improvements had been effected during the pendency of the suit, and consequently, they could not be taken into consideration. Under these circumstances, there was no point in passing a preliminary decree under Order 34, Rule 7, C. P. C. Nor can I see how the appellants have been prejudiced on that account.

13. In view of all that has been said above, it follows, that this second appeal must fail. As agreed to by Kishan Singh, respondent No. 1, the Malba may be removed by the appellants.

ORDER.

14. This second appeal fails and is dismissed with costs payable to respondent No. 1 (Kishan Singh). The appellants may remove the Malba from the land in suit.


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