Panelists: Sijal Zafar & Rabah Kabeer

Subject: land laws

Semester: 5
Date: 9-Nov-2020

Case: PLD 2012 SINDH 381

ALI AHMED (PLAINTIFF) Vs AISHA WARSI AND ANOTHER

(DEFENDANT)

CASE SUMARY
FACTS:
 Suit property was mortgaged with bank and plaintiff entered into agreement to sell
regarding the same.
 Mortgagor after receipt of earnest money, handed over the possession of suit property
to plaintiff, who stepped into the shoes of mortgagee.
 Initially bank accepted instalments being deposited by plaintiff but subsequently
stopped accepting the same.
 Plaintiff sought restraining order against bank from disposing of suit property to some
third person.
 Plaintiff had informed bank right from inception and had thereafter made payments of
instalments that were accepted by the later.
 Prima facie bank had accepted that plaintiff had stepped into the place of mortgagor
and bank was estopped from questioning and challenging position of plaintiff.
 After initially accepting instalments from the latter, bank could not thereafter turnabout
and refuse to accept any further payments.

ISSUE:
Did the agreement between the bank and defendant would restrict from transferring or selling
of the property and amount on equity of redemption?

HELD:
Equity was in favour of plaintiff as interest of bank in suit property was only to the extent and
for the purposes of repayment of finance provided by it, which plaintiff was at all times ready
and willing to do so. Plaintiff had done nothing that would jeopardize position of bank, whose
position as mortgagee of suit property was also secure. Balance of convenience was in favour of
plaintiff and against bank and he would suffer irreparable loss and injury if he would be
dispossessed from suit property. High Court restrained bank from interfering in possession of
plaintiff over suit property.

Principle of the case:

Based on section 58 of Transfer of property At 1882, Equity of redemption is itself immovable
property and can be transferred or assigned and if second or subsequent mortgage is created, it
is created with reference to such right. Mortgagor cannot be prevented from assigning/
transferring his rights in equity of redemption and if such provision is in mortgage deed that
may amount to a clog on equity of redemption and would therefore, be invalid.