Shivdev Singh v Sucha Singh (2000)

Shivdev Singh is the case in which the two great clog authorities were squarely pitted against each other — the appellants relying on Ganga Dhar, the respondent on Pomal Kanji — and the Court chose. It is therefore the most current statement of the doctrine on this syllabus, and it does three things a student needs:

1. It sets out the complete list of factors by which a clog is judged, quoted from Pomal Kanji. 2. It states the three ways in which a right of redemption can lawfully come to an end. 3. It shows the appellate posture: whether there is a clog is a mixed question of law and fact, and concurrent findings will not be disturbed unless shown to be perverse.

Prakash Singh owned 23 kanals 2 marlas at Village Sansra, Tehsil Ajnala, Punjab. By a mortgage deed of 19 March 1968 he mortgaged it to Smt Basant Kaur for Rs 7,000, the term for redemption being ninety-nine years. On her death the appellants stepped into her shoes as mortgagees in possession.

By a registered sale deed of 25 March 1987 Prakash Singh sold 19 kanals 2 marlas of the mortgaged land to Sucha Singh, keeping the mortgage money of Rs 7,000 with the purchaser as amanat to be paid to the mortgagees. Sucha Singh, though he had bought only part, offered the whole of the mortgage money — partial redemption not being permissible — and sued for possession by redemption.

His case was that Prakash Singh had been financially tight in 1968 and that the mortgagees, taking undue advantage of his poor financial condition and helplessness, had got the ninety-nine year term incorporated; and that they had been enjoying the usufruct for more than twenty years. The mortgagees answered that the suit was premature under s. 60.

1. Is the land liable to be redeemed?
2. Is the period of ninety-nine years a clog on the equity of redemption?
3. Has the plaintiff locus standi?

The trial court, the appellate court and the High Court all held there was a clog. The Supreme Court dismissed the appeal. The trial court's finding, which the Supreme Court set out, is the one to quote:

"The clause in the mortgage deed providing for the mortgage of the land for a period of 99 years constitutes a clog on the equity of redemption and as such is illegal and void and the same cannot be allowed to stand in the way of the plaintiff to get the suit land redeemed or acquire its possession. The statutory right of redemption cannot be fettered by any condition which impedes or prevents the redemption clause."

1. Redemption is an incident of ownership and a statutory right. Under s. 60, once the money is due, the mortgagor may on payment or tender require delivery of the mortgage deed and, where the mortgagee is in possession, of possession. "The mortgagor being an owner who has parted with some rights of ownership has a right to get back the mortgage deed or mortgaged property, in exercise of his right of ownership. The right of redemption recognised under the Transfer of Property Act is thus a statutory and legal right which cannot be extinguished by any agreement made at the time of mortgage as part of the mortgage transaction."

2. The three ways redemption may end. From Jayasingh Dnyanu Mhoprekar v Krishna Babaji Patil:

"It is well settled that the right of redemption under a mortgage deed can come to an end only in a manner known to law. Such extinguishment of right can take place by a contract between the parties, by a merger or by a statutory provision which debars the mortgagor from redeeming the mortgage."

And the burden that follows: a mortgagee in possession "will have to give up possession of the property when the suit for redemption is filed unless he is able to show that the right of redemption has come to an end or that the suit is liable to be dismissed on some other valid ground."

3. Ganga Dhar is not displaced but qualified. The Court reproduced Ganga Dhar at length, including the Santley v Wilde passage, the Mohammad Sher Khan reasoning on the unqualified terms of s. 60, the want-of-conscience test, and the deliberate reservation: "It is not necessary for us 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."

4. Pomal Kanji supplies the modern rule. Two passages were adopted. First, on freedom of contract:

"Freedom of contract is permissible provided it does not lead to taking advantage of the oppressed or depressed people. The law must transform itself to the social awareness. Poverty should not be unduly permitted to curtail one's right to borrow money on the ground of justice, equity and good conscience on just terms."

Second, and this is the most useful single passage in the whole mortgage module, the list of factors:

"Whether or not in a particular transaction there is a clog on the equity of redemption, depends primarily upon the period of redemption, the circumstances under which the mortgage was created, the economic and financial position of the mortgagor, and his relationship vis-à-vis him and the mortgagee, the economic and social conditions in a particular country at a particular point of time, custom, if any, prevalent in the community or the society in which the transaction takes place, and the totality of the circumstances under which a mortgage is created"

together with the clauses for redemption, the obligations of the mortgagee to construct, repair or maintain, and the prudent management of a usufructuary mortgage — all of which "must be correlated to each other and viewed in a comprehensive conspectus".

The Court also adopted the statement that the mortgagor's right on redemption is "to get back the subject of the mortgage and to hold and enjoy as he was entitled to hold and enjoy it before the mortgage", and that whether there is a clog "is a mixed question of law and fact."

5. Application. All the courts below had found on the facts that the ninety-nine year term was a clog, given Prakash Singh's financial position on 19 March 1968, the mortgagees' advantageous position, and their enjoyment of the usufruct for over twenty-six years by the date of suit for a meagre sum of Rs 7,000. Those findings were not shown to be perverse or against the evidence, and were not disturbed.

1. A term postponing redemption for ninety-nine years, imposed on a financially pressed mortgagor by a mortgagee in possession who takes the usufruct for a small advance, is a clog and is void. 2. The right of redemption under s. 60 is statutory and cannot be extinguished by an agreement made as part of the mortgage transaction; it ends only by contract, merger or statute. 3. Whether a stipulation is a clog is a mixed question of law and fact, decided on the full list of factors in Pomal Kanji, and concurrent findings will not be reopened absent perversity.

Partial redemption is not permissible. Sucha Singh had bought only 19 kanals 2 marlas out of 23 kanals 2 marlas, and therefore offered the whole mortgage money. That is the integrity of the mortgage rule in action, and it is an easy mark in a problem where a purchaser of part of the mortgaged property sues to redeem.