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Usufructuary mortgagor has a right to redeem the mortgage at any point of time

Citation : Harminder Singh Vs Surjit Kaur, Civil Appeal  No.89 Of 2012

Date of Judgment/Order : 27th April, 2022

Court/Tribunal : The Supreme Court Of India

Corum : Hemant Gupta & V. Ramasubramanian. J.

Background

One Gulab Singh – mortgaged his share of land in favour of Rajinder Singh on 02.05.1921 with possession. The defendants inherited the estate of Gulab Singh whereas Rajinder Singh - mortgagee died issueless and his rights were inherited by his wife – Rajinder Kaur. Rajinder Kaur sold her mortgagee rights to the plaintiff vide sale deed dated 18.06.1979.

Since the mortgage was not redeemed by the mortgagor within a period of 30 years, the plaintiff filed a suit for declaration that she had become the owner after the extinguishment of the mortgage rights and for permanent injunction.

The suit was decreed by the trial Court. Such decree was affirmed by the First Appellate Court as well but in Second Appeal, the suit was dismissed relying upon the judgment of this Court in ‘Sampuran Singh Vs. Niranjan Kaur’, reported in (1999) 2 SCC 679.

Judgment

Agreeing with the Appellate court and while dismissing the appeal, the Supreme Court observed that  the Full Bench of the Punjab and Haryana High Court in ‘Ram Kishan & Ors. Vs. Sheo Ram & Ors.’ reported in AIR 2008 P&H 77 held that once a usufructuary mortgage is created, the mortgagor has a right to redeem the mortgage at any point of time on the principle that once a mortgage always a mortgage. Such judgment was affirmed by this Court in ‘Singh Ram (Dead) Through Legal Representatives Vs. Sheo Ram & Ors.’ reported in (2014) 9 SCC 185.

The maxim ‘once a mortgage always a mortgage’ means that there can no covenant that modifies the character of the mortgage agreed between the parties that would stop the mortgagor to redeem his property back on payment of the principal and respective interests. It is the connotation of the fact that the mortgagee will always remain as mortgagee and can never become an owner. All acts he commits in order to exalt himself as an owner are perceived to be a clog on redemption.

The doctrine of equity of redemption is expressed in this maxim and it is an exception to the principle, ‘the agreement of the parties overrides the law.’ The maxim, established in 1681 by Lord Nottingham in the case of Harris v. Harris is basically to safeguard the mortgagor’s right to redemption. In the case of Noakes & Co v. Rice, the maxim was interpreted by Lord Davey as ‘That a mortgage cannot be made irredeemable and that a provision to that effect is void’. Therefore, one of the manifestations of this maxim is that the clog on the equity of redemption is void. No matter whether the provision that makes a mortgage irredeemable is there in the mortgage deed itself or any collateral but connected transaction outside the mortgage contract, it is void to the extent to which it prevents the mortgagor from getting his whole of the property back on repayment of the mortgaged money.

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