Right to Redemption and Clog of Redemption

Or
Maxim: Once a mortgage, always a mortgage and nothing but a
Mortgage

Right to Redemption
 Section 60 of transfer of property Act confers the right to redeem the
mortgaged property on the mortgagor.
 This right to redeem back is a statutory right conferred on mortgagor
by the act itself.
 Legal definition of right to redemption under Merriam Webster means
the right to regain ownership of property by freeing it from a debt,
charge and lien etc.
 It means right to recover back property by making certain payments
of loan. This is mortgagor right to redeem his property which is also
called ‘call back the interest’ given to mortgagee as security for
repayment.
 The right to redemption can be exercised at any time after the
principal money has been paid to mortgagee at a proper time and
place.
 The mortgagor on payment is entitled to the following rights against
the mortgagee-
1. He is entitled to get back the mortgage deed and all document
relating to mortgaged property which are in the possession or
power of the mortgagee.
2. He is entitled to get the possession of the property, where the
possession is with the mortgagee.
3. He is entitled that the mortgagee transfers the mortgaged property
to mortgagor.
4. He is entitled to receive a registered acknowledgement from the
mortgagee in writing that any right in derogation of his interest
transferred to the mortgagee has been extinguished.
 This right is also based on principle of equity, justice and good
conscience which would not allow that a transaction which is
basically a borrowing transaction should become an absolute
conveyance only because there was no payment on a fixed date.
 It is also based on the equity of redemption under English law. In
England, the mortgagor’s right to redemption was introduced by the
Chancery courts. Chancery Courts were the Courts of Equity. The
Equity Courts introduced this right in order to do justice with cases
on mortgage decided under the common law.
 The main object of developing the doctrine of redemption was to
protect the interest of mortgagor who in default of repayment of
loan had to lose all rights in their properties. To protect the interest
of mortgagor, equity declared that “Once a mortgage, always a
mortgage and nothing but a Mortgage”
 The maxim means that a transaction which at one time is mortgage
could not cease to be so by having any stipulation in the mortgage
deed calculated to prevent the right of redemption. In other words,
the rule that agreement of the parties overrides the law, does not
apply to mortgages.
 This maxim is applied to explain following two situations:
1. Where a transaction is intended by the parties to be a borrowing
transaction under a mortgage, though it is carried out in the form
of a sale, equity will not allow the mortgagor to be deprived of
his right of redemption.
2. Equity does not permit any clog on redemption. A clog on
redemption means any stipulation or provision in the mortgage
deed which restricts the mortgagor rights of redemption. A clog
on redemption is void and cannot be enforced as being contrary
to the very nature of mortgage.
 A condition or stipulation is void in the following
circumstances:
1. The condition or stipulation has been imposed only by the
mortgagee, not by any other person who is stranger to
transaction.
2. The condition or stipulation must be incorporated in the
mortgage deed itself.
3. The condition or stipulation included in the deed must be
reasonable, against public policy and with mala fide intention.
4. The condition or stipulation puts either absolute restraint on
mortgagor’s right of redemption or prevents him from
redeeming the mortgage for unreasonably long period.
 Whether condition or stipulation amounts to clog or not, depends
on the facts of each case and upon the nature of condition or
stipulation.
 Instances of clog on redemption:
1. A condition which makes mortgage a sale in default is clog on
redemption.
 2. Postponement of redemption for long period.
3. Conditions postponing redemption in default on a certain
date.
4. A condition which restraints the mortgagor from transferring
mortgage property is a clog.
5. Collateral benefits to mortgagor.
6. An agreement which amounts to penalty in case of
nonpayment of debt is a clog on redemption.
 Mortgagor may exercise his right to redemption in any of
the following ways:
a. By paying or tendering the mortgage money to the
mortgagee.
b. By depositing the mortgage money in the court.
c. By filing a suit for redemption.
 Right to redemption can be extinguished in manner provided
in second paragraph of section 60 in two ways:
a. By act of parties themselves in a separate agreement.
b. By decree of Court. Such decree must be final decree.

Judgements:
 Ram kishun Prasad v. Manohar Lal Gupta AIR 2008 NOC 845 (Pat).
 Mathew Varghese v. A. Amritha Kumar, AIR 2015 SC 50.
 Ram Kishan v. Sheo Ram AIR 2008 P & H 77.
 Gulab Chand Sharma v. Sarsawati Devi AIR 1977Sc 242.
 Seth Ganga Dhar v. Shankar Lal AIR 2000 SC 770.
 Mannathan v. Chinnu AIR 2012 Mad. 210.
  Kreglinger v. New Patagonia Meat & Cold Storage Company Ltd.
1914.
 Dipak Digambhar Naik v. Bank of Maharashtra AIR 2016 Bom.1.
 Bishnu Devi Shaw v. Federal Bank of India, Air 2014 Cal 90.
 Shivdev Singh v. Sucha Singh AIR 2000 SC 1935.
Held that a provision incorporated in the mortgage deed to prevent or
hamper the redemption would be void.
 Allokam Peddabbayya v. Allahabad Bank 2017 SCC SC671.
Held that where the mortgaged property has already put to auction
sale and sale certificate has been issued, there remains no property
mortgaged to be redeemed and hence, the mortgagor cannot claim the
right to redemption of the mortgaged property by virtue of section 60
of TPA 1882.

Note: These are brief notes on right to redemption and clog of redemption and
maxim ‘Once a mortgage, always a mortgage and nothing but a Mortgage”
Detailed study material is in books of TPA. This is important from examination
point of view also. Rest of mortgagor and mortgagee right and liabilities are given
in books. Read from books. In case of any doubt u can mail or whatapp only.

Dr. Jaswinder Kaur