DR.

RAM MANOHAR LOHIYA NATIONAL

LAW UNIVERSITY, LUCKNOW

FINAL DRAFT

PROPERTY LAW-II

TOPIC: REDEMPTION IS A STATUTORY RIGHT

SUBMITTED TO: SUBMITTED BY:

DR. MANISH SINGH BHARAT JOSHI

ASSISTANT PROFESSOR (LAW) ROLL NO- 39(6THSEM)

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 ACKNOWLEDGMENT

I hereby take this opportunity to thank all those without whose support, faith in my abilities and
guidance I would never have been able to finish my project.

I am indebted to my teacher DR. MANISH SINGH for guiding me throughout, without which
this work of mine would never seen the light of the day.

I also want to thanks my friends for giving the great support and being the fantastic critique that
they were which helped me to improve my project in every way. And our library staff who
helped a lot.

And last, but not the least, I thank my parents who supported and encouraged me to proceed with
courage and determination so as I leave no stone upturned.

Without all these people, I suppose that I would have never been able to even think about making
this project.

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 TABLE OF CONTENTS

Introduction……………………………………………………………………………….04

Right of Redemption………………………………………………………………………05

Clog On Redemption………………………………………………………………………06

Term for Redemption………………………………………………………………………07

Law Of Redemption In England- A Comparative Analysis…………..............................09

Bibliography………………………………………………………………………………..11

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INTRODUCTION

Right of redemption is the right which every mortgagor possess, which is created by virtue of the
mortgage deed. This right is considered to be inalienable, and cannot be taken away from a
mortgagor by means of any contract to the contrary. According to Black’s Law Dictionary, term
“redemption” can be defined as the act of the vendor of property in buying it back again from the
purchaser at the same or an enhanced price. “Right of Redemption” can be defined under the
same dictionary as “an agreement or paction, by which the vendor reserves to him the power of
taking back the thing sold by returning the price paid for it.”1 This right finds place under
Section 60 of the Transfer of Property Act, 1882 which makes mortgagor the owner of the
property mortgaged, and makes him able get his property back from the mortgagee on paying the
amount borrowed from him.2 Clog on a right means the insertion of any clause or any provision
under the mortgaged deed which would alienate mortgagor of his property under certain
circumstances. Under Indian legal system, such provisions would not be able to alienate a
mortgagor of his “Right of Redemption”, and such provisions would be void ab initio. The
reason for such clauses under the mortgage deed being void is quite interesting and reasonable. It
would not be difficult to understand that a person mortgages his property when he is in need of
money, and would not be in the same position as that of the mortgagee. Also, it would not be
difficult to understand that mortgagee would try to misuse his position to exploit the mortgagor,
and it is for this reason that such clause becomes obvious which would alienate a mortgagor of
his property. It is highly possible that a person agrees to enter in a mortgage having clauses
which extinguish his right of redemption, but it would not be necessary that the provisions have
been accepted by him willingly. In need of money, a person would agree to the terms and
conditions of the mortgagee even if he doesn’t want to do so. But, law doesn’t sit silent and in
such cases it steps in the picture, and save the basic rights of a mortgagor. Law doesn’t allow any
person to alienate a mortgagor of his “Right of redemption”. Such right would remain effective
unless the property has been sold off or under any statutory provision. Even if mortgage has went
to the court for the foreclosure of the property mortgaged, mortgagor can redeem his property by
paying off the full amount in the court.3

1
Henry Campbell Black, Black’s Law Dictionary (4th edn., St. Paul, Minn. West Publishing Co. 1968)
2
The Transfer of Property Act 1882, s 60, and the connection

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RIGHT OF REDEMPTION

The mortgagor in Indian law is the owner who has parted with some rights of ownership and thr
right of redemption is a right which he exercises by virtue of his residuary ownership to resume
what he has parted with. Section 60 of the Transfer of property act affirms the right of ownership
in all types of mortgages. Privy Council has also recommended the same in Thumbuswamy’s
case4 that the legislature should intervene to recognize a right of redemption in Mortgages in
conditional sale. S. 60 of the Transfer of Property Act provides that at any time after the money
has become due, the mortgagor has a right, on payment or tender, at a proper time and place of
the mortgagor-money to require the mortgagee to deliver the mortgage-deed and all documents
relating to the mortgaged property and where the mortgagee is in possession of the mortgaged
property, to deliver possession thereof to the mortgagor. Such a right of the mortgagor is called,
in English Law, the equity of redemption. 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 recognized 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.

In the case of Shivdev Singh v. Sucha Singh5, the hon’ble Supreme Court held that “the right of
redemption under the Transfer of Property Act is thus a statutory and legal right which cannot be
extinguished by any agreement made at any time of mortgage as part of mortgage consideration.
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. In this case the court relied on the case of Jayasingh
Dnyanu Mhoprekar & Anr. vs. Krishna Babaji Patil & Anr.6 Where the court held:

3
Mortgaged Property - Inalienable “Right of Redemption” of a Mortgagor (Legally India, 27 May 2011)
http://www.legallyindia.com/Blogs/Entry/mortgaged-property-inalienable-right-of-redemption-of-a-mortgagor
4
(1875) ILR 1 Mad 1
5
(2004) 4 SCC 326
6
AIR 1985 SC 1646 

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"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 the 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. A mortgagee who has entered into possession of the mortgaged property under a
mortgage will have to give up possession of the property when a 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. This flows from the legal principle which is
applicable to all mortgages, namely Once a mortgage, always a mortgage."
Any provision incorporated in the mortgage deed to prevent or hamper the redemption would
thus be void. A mortgage cannot be made irredeemable and the right of redemption not an
illusory. This Court in Ganga Dhar v. Shankar Lal7 held:
The rule against clogs on the equity of redemption is that, a mortgage shall always be
redeemable and a mortgagor's right to redeem shall neither be taken away nor be limited by any
contract between the parties. The principle behind the rule was expressed by Lindley M.R. in
Santley v. Wilde8, in these words:
"The principle is this: a mortgage is a conveyance of land or an assignment of chattles as a
security for the payment of a debt or the discharge of some other obligation for which it is given.
This is the idea of a mortgage; and the security is redeemable on the payment or discharge of
such debt or obligation, any provision to the contrary notwithstanding. That, in my opinion is the
law. Any provision inserted to prevent redemption on payment or performance of the debt or
obligation for which the security was given is what is meant by a clog or fetter on the equity of
remption and is therefore void. It follows from this, that "once a mortgage always a mortgage."
The right of redemption, therefore, cannot be taken away. The court will ignore any contract the
effect of which is to deprive the mortgagor of his right to redeem the mortgage. One thing,
therefore, is clear, namely, that the term in the mortgage contract, that on the failure of the
mortgagor to redeem the mortgage within the specified period of six months the mortgagor will
have no claim over the mortgaged property, and the mortgage deed will be deemed to be a deed
of sale in favour of the mortgagee, cannot be sustained. It plainly takes away altogether, the
mortgagor's right to redeem the mortgage after the specified period. This is not permissible, for
"once a mortgage always a mortgage" and therefore always redeemable. The same result also
7
AIR 1958 SC 770 
8
(1899) 2 Ch. 474(B)

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follows from S.60 of the Transfer of Property Act. The right of redemption is itself an incident of
a subsisting mortgage & subsists so long as the mortgage itself subsists.
CLOG ON REDEMPTION

Any clog on redemption is void. A mortgage being a security for the debt, the right of
redemption continues although the mortgagor ails to pay the debt at the due date. Any provision
inserted to prevent, hamper, or evade redemption is void.9 In Hasthimal and Sons v. Tej Raj
Sharama10,where a pre-emption clause was introduced by the mortgagee stating that he would
have a right to purchase the property if the same was intended by the mortgagor. In this case,
Supreme Court relied on a judgment of House of Lords in Lewis v. Frank Love, Ltd 11, where it
was held by the court that “where one of the terms arranged between the mortgagor and the
mortgagee was that the mortgagee should have a right to pre-emption in case the mortgagor
wishes to transfer the property to a third party, such a condition operates as a clog on the right of
redemption of the vendee from the mortgagor.

This doctrine has been described as an anarchronism by Pollock, who suggested that it be
moulded for modern conditions by limiting it to cases where there was something oppressive in
the bargain. However it is the settled law in India that a mortgage cannot be made altogether
irredeemable, nor can the right of redemption be made illusory.

WHEN DOES THE RIGHT OF REDEMPTION ARISES

The right of redemption arises when the principle money secured by the mortgage has become
due and may be exercised at any time subject to the course of limitation. There are considerably
a large number of cases wherein the court has held that the time fixed in the deed was fixed for
the convenience of the mortgagor, & that he could redeem before that time unless there was an
express stipulation for the contrary.12

TERM FOR REDEMPTION

9
Dr. GC Baruka, Mulla The Transfer of Property Act, (10th edn, Lexis Nexis ButterWorks India, 2006)
10
2007 AIR SCW 6135 
11
1961 All. E.R. 446
12
Dorappa v. Kundukuri, AIR 1927 All 144.

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Time period is not the essence in case of right of redemption. One such case was decided by the
court in Achaldas Durgaji Oswal v Gangabisan Heda 13, where a suit was filed by the mortgagee
for the foreclosure of the property, and another suit was filed by the mortgagor. Lower court
asked mortgagor to pay off the amount within 3 months, but he was not able to do so. Instead, he
paid off the amount after a period of 3 years and at that point of time his suit was rejected by the
lower court on ground of exceeding the limitation period as decided by the court. Lower court’s
decree was reversed by the High Court, which was upheld by the Supreme Court. It was held by
the Supreme Court that “the right of redemption of mortgagor being a statutory right, the same
can be taken away only in terms of the proviso appended to Section 60 of the Act which is
extinguished either by a decree or by act of parties. Admittedly, in the instant case, no decree has
been passed extinguishing the right of the mortgagor nor such right has come to an end by act of
the parties.”
Another view was taken by the Supreme Court in K.Vilasini and Ors v Edwin Periera14, where a
suit was filed by the mortgagor for the foreclosure but it was prayed by the mortgagor that he
would pay the amount and required some time. The time was granted by the court with the
consent of the mortgagee, but mortgagor was not able to pay the amount in the stipulated time.
He later deposited the amount claimed to redeem his property. The same was decreed by the
court and confirmed by the High Court. Supreme Court also decreed in favour of the mortgagor
stating that mortgagee had himself allowed mortgagor to pay off the amount and also took part in
the proceedings therein.
In Harbans v. Om Prakash15, Supreme Court referred Mulla’s The Transfer of Property Act,
9th Ed, where it is stated that “The right of redemption is an incident of a subsisting mortgage and
subsist as long as the mortgage itself subsists. It can be extinguished as provided in the section
and when it is alleged to be extinguished by a decree, the decree should run strictly in accordance
with the forum prescribed for the purpose. Dismissal of an earlier suit for redemption whether as
abated or as withdrawn or in default would not be barred the mortgagor from filing a second suit
for redemption so long as the mortgage subsists and the right of redemption is not extinguished
by the efflux of time or decree of the court in the prescribed form.”Consequently, the suit was
decreed in favour of the mortgagor. Similar view was taken by the Supreme Court in Pomal

13
(2003) 3 SCC 614 
14
CIVIL APPEAL NO. 5476 OF 2008
15
AIR 2006 SC 686

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Kanji Govindji v Vrajlal Karsandas Purohit16.Further it was held by the Supreme Court
in Shivdev Singh v Sucha Singh17, that a provision incorporated in the mortgage deed to prevent
or hamper the redemption would be void, and that the right provided by section 60 of the
Transfer of Property Act, 1882 is a statutory right and clog on this right should be determined
depending on the facts and circumstances of each case. 
LAW OF REDEMPTION IN ENGLAND- A COMPARATIVE ANALYSIS

The primary right enjoyed by the mortgagor is the right to redeem the mortgage on repayment of
the loan and payment of any interest provided for by the charge. Indian law provides better
remedy as compared to the English Law on this point.

At law the right to redeem in England is a matter of contract: the mortgagor can redeem on the
date or dates and in the manner provided for in the mortgage as compared with the Indian law
wherein right to redeem is statutory right. Thus, should the agreement provide that the mortgage
should be redeemed on a particular date; the mortgagor has, at law, a right to redeem on that day
only. The legal rule in England does not allow him to insist on redeeming the mortgage either
before or after the contractual date. But in India, date of redemption is ascertained according to
the convenience of the Mortgagor and it can be redeemed anytime before the stipulated time
unless there exist a contrary provision in the Mortgage deed. At common law, if he did not pay
on the contractual date, the mortgagor at one time forfeited the land to the mortgagee and could
still be sued in contract for the repayment of the debt. Accordingly the legal right to redeem was,
and is, very limited. Fortunately, equity took a very different view of the situation, particularly as
there were examples of mortgagees absenting themselves so that it became impossible for the
mortgagor to repay on the contractual date. As the purpose of the agreement was merely to
provide the mortgagee with security for the loan, equity took view that, as long as the advance
and any interest was paid, the mortgagee should not be able to object to redemption. Originally
equity intervened only in cases of fraud by the mortgagee but soon came to recognise a general
right to redeem in all cases. Thus, equity allows the mortgagor to redeem even after the date
fixed by the mortgage agreement for repayment has passed. Of course, since this right is
enforceable in equity only, it is subject to the general principle that equitable remedies are
discretionary in nature and all the equitable maxims (particularly the ‘clean hands’ doctrine) will

16
AIR 1989 SC 436
17
AIR 2000 SC 1935

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apply.18 Furthermore, in deciding whether redemption is possible, equity will look at the
substance of the agreement, not its form. Accordingly, a mortgage which is drafted to look like
an outright transfer of the property, rather than the creation of an interest by way of security, will
still be subject to the equitable right to redeem, if the facts are such as to indicate that only a
grant by way of security was intended.19

BIBLIOGRAPHY

STATUTES

 The Tranfer of Property Act, 1882

18
Salt v Marquess of Northampton [1892] AC 1. 
19
http://www.inbrief.co.uk/property-law/rights-of-the-mortgagor.htm (last accessed 21.03.16)

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BOOKS

 Nilima Bhadbhade, Contract Law in India (Kluwer Law International 2010)

 Dr. Poonam Pradhan Saxena, Property Law (2nd edn,Lexis Nexis 2011)

 Sir Dinshaw Fardunji Mulla, The Transfer Of Property Act (11 th edn, Lexis Nexis
Butterworks Wadhwa 2013)

 Dr. Avtar Singh, The Transfer of Property Act (3rd edn, Universal Book Publishers 2008)

 Henry Campbell Black, Black’s Law Dictionary(2nd edn, West Publishing 1999)

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