Sangar Gagu Dhula vs Shah Laxmiben Tejshi And Ors. on 10 January, 2001

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Gujarat High Court

Equivalent citations: AIR 2001 Guj 329, (2001) 1 GLR 697

Author: Y Bhatt

Bench: D Dharmadhikari, Y Bhatt, J Panchal

JUDGMENT Y.B. Bhatt, J.

1. This appeal has been placed before this Bench for consideration of specific questions framed by the learned single Judge who was hearing this appeal, on the facts and circumstances as under.

2. The original plaintiff as mortgagor had mortgaged his property, being a residential house with appurtenant land, with the defendant-mortgagee. The consideration for the same was taken by the mortgagor in the sum of Rs. 11000/-. The mortgage deed specifically contemplated that this consideration will be repayable by the mortgagor to the mortgagee on the expiry of 99 years from the date of the transaction (the deed of mortgage), and on the consideration being repaid, the mortgagor shall be entitled to redemption of the property.

3. The mortgage deed was executed on 15th December, 1914. However, before the expiry of the stipulated period of 99 years, the heirs of the mortgagor sought to redeem the property by filing a suit on 5th February, 1974. The redemption was sought before the expiry of the stipulated period on the specific averment and contention that the period of 99 years before which redemption could not be enforced was an oppressive term and would in law amount to “a clog on the equity of redemption”.

4. I may only note in passing that the specific prayer made in the suit plaint only seeks a decree for redemption of the property in question. However, the plaint also contains a specific averment that the plaintiff-mortgagor has a right “to seek avoidance” of this oppressive term at any time, and therefore, on this clog being lifted, the plaintiff has a right to obtain a decree of redemption. However, the frame of the suit and the nature of the pleadings as referred to above would make no difference inasmuch as the parties were ad idem on the nature of the controversy. A specific issue had been raised by the trial Court as also by the lower appellate Court, and both the parlies to the suit had consciously led evidence on the nature of the controversy. In substance, therefore, the plaintiff sought avoidance of the oppressive term which according to the plaintiff amounted to “a clog on the equity of redemption” and consequently sought a decree of redemption of the mortgage.

4.1 It also requires to be noted that under the terms of the mortgage. the mortgagee entered into possession of the property, coupled with the right to reconstruct the same or to make further construction.

5. The trial Court, after considering the evidentiary material on record, found that the relevant term in the mortgage deed postponing the right of redemption to the expiry of 99 years from the date of the mortgage is oppressive qua the mortgagor and amounts to clog on the equity of redemption, and therefore, the clog requires to be lifted. The trial Court, however, found that the suit was barred by limitation.

6. In the appeal filed by the plaintiff-mortgagor, the lower appellate Court upheld the findings of fact on the appreciation of the evidentiary material on record, also found that the oppressive clause amounted to a clog on the equity of redemption which requires to be lifted, and also confirmed the finding of the trial Court that the suit was filed beyond limitation. The appeal, was therefore, dismissed. The lower appellate Court came to this conclusion on the basis that the limitation for such a suit under Article 61(a) of the Limitation Act would commence to run from the date of the document, since the oppressive term is void. The lower appellate Court therefore found that the suit was filed beyond 30 years from the date of the document, and was therefore, barred by limitation.

7. The plaintiff-mortgagor thereupon filed a Second Appeal under Section 100, C. P. C., in the High Court. During the course of hearing of the Second Appeal before the learned single Judge of this Court, a question arose as to whether the oppressive term would be “voidable” or whether it would be “void ab initio”, even if the finding that the oppressive term in the mortgage deed amounts to a clog on the equity of redemption is accepted.

7.1 The learned single Judge hearing the appeal was of the opinion that there is a conflict of opinion between two decisions of this High Court, and that this conflict requires to be resolved by a Larger Bench. It is under these circumstances that this appeal has been placed before this Larger Bench for consideration of the following questions framed by the learned single Judge :

 [1]     Whether a condition in a mortgage deed which is found by the Court to be a clog on the equity of redemption is void ab initio or merely voidable at the instance of the suffering party i.e., the mortgagor?  
 

 [2]     When a mortgage deed stipulates a condition that the mortgage is irredeemable for a period of 99 years or any such long period, whether the starting point of the period of limitation prescribed by Article 61(a) of the Limitation Act, 1963 for filing a suit for redemption would be the date of execution of the mortgage deed or the date of declaration by the Court that such a condition was a clog on the equity of redemption?  
 

 [3]      Whether a suit for a declaration that any such condition is void or voidable (with or without a prayer for redemption of mortgage) filed after expiry of the period of 30 years from the date of execution of the mortgage deed would be time-barred under Section 61(1) (sic?) of the Limitation Act, 1963?

It is under these circumstances and in respect of the aforesaid questions framed for our consideration, that this Bench is required to apply our minds to the resolution of the controversy. In this context, it would be both relevant and pertinent, in order to retain focus on the root of the controversy, to refer to Article 61(a) of the Limitation Act, 1963, which reads as under :

Description of the suit Period of limitation Time from which period begins to run

61.(a) By a mortgagor-to redeem or recover possession of immovable property mortgaged.

Thirty years When the right to redeem or to recover possession accrues.

8. It is also relevant and pertinent to retain focus on the concurrent findings of fact recorded by both the Courts below, that the offending clause complained of by the plaintiff-mortgagor has in fact been found to be oppressive to the mortgagor, that it amounts to a clog on the equity of redemption, and that the same requires to be lifted. Since this is a question of fact and law on which concurrent findings of fact have been recorded, I am required to address ourselves only to the legal consequences flowing from this finding, without questioning the merits of this finding.

9. Without elaborating at length I may merely summarise the concept of what amounts to “a clog on the equity of redemption”, as laid down by Courts of Law formerly under English Law and subsequently followed by Courts in India.

10. The doctrine of the equity of redemption flows from the early development of case law on the subject by the Courts in England to the effect that although a transaction of a mortgage pertains to immovable properly, it is also a contract between the parties relating to such property. Since, it is a transaction in the nature of a contract, it is not beyond the scope and ambit of the law pertaining to contracts (in India this refers to the Contract Act). Normally, Courts would bind each party and make each of them responsible for the mutual rights and obligations created by such a contract voluntarily entered into by the parties. However, the Courts have always refused to recognise or enforce contracts which are unconscionable, opposed to public policy, immoral contracts, etc. A transaction of a mortgage has always been recognised by Courts under the principle “once a mortgage always a mortgage”. A mortgagor’s right to redeem the property, the subject of the mortgage, has been recognised as fundamental to the transaction of a mortgage. If the right to redeem the property is denied to the mortgagor, the same would amount to usurpation of the title by the mortgagee, which would result in the transgression of the intention of the mortgagor and would therefore tend to frustrate the transaction etc. The Courts have therefore taken a view that the denial of a right to redeem the property, or delaying the exercise of this right to redeem by an unconscionable period, or creating other contractual barriers against the exercise of the right to redeem, is not acceptable to the Courts in equity. The Courts have therefore struck down, have refused to recognise or have refused to enforce such covenants.

10.1 It is in the context of such oppressive covenants that I am required to examine the question, as referred to this Bench, as “voidable” or “void ab initio”.

11. Again without dilating at length I may merely summarise the case law on what amounts to “a clog on the equity of redemption”. It is well settled law that what precisely amounts to a clog is a mixed question of fact and law. Whether a particular clause alleged to be offending against the doctrine amounts to a clog or not, is not a question that can be answered without examining the peculiar facts and circumstances attendant and appurtenant to the transaction itself This examination can only be accorded upon the facts and circumstances established by appropriate and acceptable evidence on record.

11.1 Merely because the mortgagor’s right to redeem is delayed or postponed by a long period of time would not ipso facto amounts to a clog. The material aspect which requires emphasis at this stage is that relief from the specific terms of the mortgage deed (although alleged to be oppressive to the mortgagor and amounting to a clog) is not granted merely for the asking, or merely by resorting to the overriding principles of equity, but only when the inequity of the particular clause of the contract is actually brought home and established by facts and evidence.

12. In the aforesaid context, when I shift my attention to the scope and ambit of Article 61 (a) of the Limitation Act, I must take note of the fact that the period of limitation commences to run from that point of time “when the right to redeem or to recover possession accrues”.

12.1 For all practical purposes and particularly on the facts of the present case, the right to recover possession is both incidental and consequential to the right to redeem the property. It is only when the right to redeem accrues to the mortgagor that the mortgagor also acquires the right to recover possession. In the premises therefore, I may retain our focus on the prime question, as to when does the right to redeem accrue to the mortgagor?

13. Reverting to the specific controversy placed before us for resolution, the contesting parties in turn contend that the offending clog is “void ab initio” and “voidable”. Learned Counsel for the mortgagor and mortgagee have referred to various decisions in support of their respective contentions. Obviously, learned Counsel for the mortgagor submits that the offending clause is merely “voidable”, as against which learned Counsel for the mortgagee submits that it is “‘void ab initio”. It is further submitted on behalf of the mortgagee that if it is void ab initio, it is as though the offending clause never existed or never had any place in the mortgage deed at all, and that therefore, the right to redeem would commence on the day of the execution of the document itself. If that is so, the period of limitation would expire 30 years from the date of the document itself. As against this, the mortgagor would submit that the actual term in the mortgage deed would confer on him a right to redeem only after the stipulated period has expired viz. 99 years. However, if the offending term is found on facts to be a “clog on the equity of redemption” and therefore, the clog is lifted, it is only then that the right to redeem the property accrues to the mortgagor, and that therefore, the limitation would commence only from the date when the clog is lifted, by an appropriate finding or declaration by the Court.

13.1 To my mind, particularly in the backdrop of the controversy before us, the two terms “voidable” and “void ab initio”, and the requirement to choose between either of the two, is merely an exercise in semantics. In our opinion, this exercise is also academic, inasmuch as in the ultimate analysis, it does not really matter whether either of the two terms is considered more appropriate when the offending clause is struck down as being a clog.

13.2 It is urged on behalf of the mortgagee (on the basis of certain decisions discussed hereinafter) that since such a clog is void ab initio, the offending term must be treated as non-existent from the very beginning, and that it must be deemed not to have been incorporated in the mortgage deed at all. On this premise, it is submitted that if there is no stipulated period in the mortgage deed for the exercise of the right of redemption, the right of redemption would accrue from the very day of the execution of the mortgage deed. The period of limitation would then commence from the execution of the mortgage deed and would therefore expire on the completion of 30 years from the said date.

13.3 On the other hand, it was contended on behalf of the mortgagor that the offending clause effectively delays the accrual of the right of redemption until the expiry of the stipulated period. Unless the offending clause is struck down by an appropriate declaration by the Court on the basis of the findings of fact recorded, the right of redemption cannot possibly accrue to the mortgagor. Thus, according to the mortgagor, the right to redeem accrues only when the Court confers upon the mortgagor the right to redeem by striking down the offending clause as a clog.

14. With a view to resolve this controversy, I would adopt different perspectives in the matter. I would also examine the consequences flowing from the acceptance of either view canvassed before this Bench.

15. On the plain reasoning presented by the mortgagor, it would appear to be obvious that the offending clause postpones the mortgagor’s right to redeem for 99 years. It is only when the mortgagor desires to redeem the property prior to 99 years that he approaches the Court. The mortgagor is conscious of the fact that by contract he is a party to the postponement to the right to redeem for 99 years. In order to escape from this clause on the ground that it is oppressive and unconscionable, he satisfies the Court by leading appropriate and credible evidence, and satisfies the Court that the oppressive clause amounts to a clog. It is only when the Court finds on facts that this is a clog, that the Court strikes down the offending clause and thereby lifts the clog. To my mind, it is then and only then, can the mortgagor seek redemption of the property. In other words, it is only when the offending clause is struck down by the Court, that the right to redeem the property accrues in favour of the mortgagor. It is also pertinent to note that the plaintiff does not acquire a right to redeem the property merely on the plea or averment that the offending clause is voidable. He has to establish the same on facts. It is only on the establishment of such facts that the Court would find that the oppressive clause is a clog on the equity of redemption and consequently lift or set aside such a clog. It can only be this action of the Court which confers on the mortgagor a right to redeem the property. In my opinion, therefore, the period of limitation would commence only from the date of such declaration. Thus, in a suit filed by the mortgagor for the composite purpose of lifting the clog as also for redemption, it could not possibly be said that the suit is beyond limitation.

16. On the other hand, in case the contention of the mortgagee was to be accepted, let me examine the consequences and impact of such a finding.

17. If the offending clause is regarded to be “void ab initio”, and regarded to be non-existent from the very beginning, and the mortgage document be regarded to be free from all stipulations as to when the property could be redeemed, it would prima facie appear that the right to redeem would accrue from the day of the mortgage itself. If this was so, the period of limitation would commence from the day of the execution of the mortgage deed itself. However, if such a view were to be accepted, it would amount to conferring upon the plaintiff a retrospective cause of action, which is neither pleaded nor urged by the plaintiff, and on the basis of which no relief was sought by the plaintiff. The conferment of such a retrospective cause of action is to my mind, contrary to all jurisprudential principles, and even contrary to the principles of interpretation of statutory intent.

17.1 It requires to be noted that it is only this conferment by the Court of a retrospective cause of action that causes the limitation to start running, and this suit to be labelled as time-barred.

18. Another consequence of such a view would be that on the one hand the Court frees the mortgagor from an oppressive covenant and on the other hand dismisses the suit on the ground of limitation.

19. Another consequence of the acceptance of such a view would be that a mortgagor who chooses to suffer by accepting the oppressive clause retains his right to redemption (albeit exercisable after the expiry of that term), but a mortgagor who chooses to challenge the restrictive term effectively loses his right of redemption.

20. Another consequence that follows is that the mortgagor who prefers to suffer the oppressive term would only postpone the redemption for the stipulated period, whereas the mortgagor who succeeds in his protest against the offending term, loses his right of redemption forever.

21. The fundamental principles underlying the law of Limitation, as accepted by judicial interpretation over decades, is that the Courts would give relief to those plaintiffs who are vigilant in the exercise of their rights, but would refuse relief to those plaintiffs who are indolent or indifferent in the timely exercise of their rights. In case the view canvassed by the mortgagee is accepted, the consequence would be that the mortgagor who prefers or chooses to sleep over his right to challenge the offending clause (by accepting the restrictions thereof) would be entitled to redeem the property on the expiry of the stipulated period; on the other hand the vigilant and assertive mortgagor who approaches the Court with a view to strike down the offending clause and succeeds in this attempt, ultimately loses for ever his right to redemption. Surely, this cannot be the legislative intent behind Article 61(a).

22. Another perspective may also be brought to bear on the controversy. I may consider a hypothetical case where a mortgagor sues only for a declaration that the offending clause is a clog on the equity of redemption, but does not seek in the same suit the redemption of the mortgage. Let us assume for the sake of argument that such a suit is not dismissed only on the ground that a declaratory relief cannot be granted without a consequential relief, or that Order 2, Rule 2 would be a bar to a subsequent suit for redemption. In such a case, if the mortgagor succeeds on facts and establishes that the offending clause amounts to a clog on the equity of redemption, it is then and only then, could it be urged against the mortgagor that the period of limitation commences from the date of such a declaration, since it is this declaration/ decree which confers on the mortgagor a right to redeem the property.

23. In the light of the aforesaid discussion, I may now examine the various decisions referred to and relied upon by the contesting parties.

24. Learned Counsel for the mortgagor relies upon a decision of the learned single Judge of this Court in the case of Rajgor Bhanji Mulji v. Sonbai Wd/o. Shah Kanji Vershi, reported at 1993 (2) GLH 286 : [1993 (2) GLR 1243]. The view expressed therein in unequivocal terms is to the effect that the offending clause, postponing the mortgagor’s right to redeem the property for an unconscionable period (coupled with other necessary and relevant facts) is merely voidable and not void ab initio. This decision specifically finds that the right to redeem the mortgaged property and to seek possession would accrue in favour of the mortgagor only when the clog on equity of redemption is removed. Until the embargo is lifted, the right to redeem the mortgaged property or to seek its possession would not accrue in favour of the mortgagor. The starting point of limitation in that case would be the date on which the clog on equity of redemption is lifted. To hold otherwise would tantamount to violating the principle behind grant of equitable relief and it would operate against the principles of equity, justice and good conscience.

25. Reliance is sought to be placed upon a decision of a single Judge of this Court in the case of Maganlal Chhotalal v. Bfialchandra, reported at 1974 GLR 193. I, however, find that this decision is restricted to the interpretation of Section 60 of the Transfer of Property Act, and deals with the principles of equity of redemption, explains the doctrine, and discusses what amounts to a clog on the equity of redemption. However, this decision does not in any manner deal with the controversy as to whether such a clog was “voidable” or “void ab initio”, neither does it consider the impact of either finding on the question of limitation.

26. Learned Counsel for the mortgagee, however, placed strong reliance on another decision of the single Judge of this Court in the case of Soni Motiben v. M/s. Hiralal Lakhatnshi, reported at 1981 GLR 473. In this decision, I find that it is mainly concerned with the interpretation of Sec, 60 of the Transfer of Property Act, deals with the principles of what amounts to clog on the equity of redemption, and that an unconscionable term must be held as a clog on the equity of redemption. It is only incidentally that the decision holds that such a clog on an equity of redemption is void. In my opinion, when the learned Judge referred to such a clog as “‘void ab initio” this was a mere label attached to the offending clause with a view to establish that the same requires to.be struck down. The reference to such a clog being “ab initio null and void and non est” was not with a view to differentiate between “void ab initio” and “voidable”. Furthermore, the phrase “void ab initio” has not been used in the aforesaid decision in centra-distinction of the phrase “voidable “. It is further found that the entire reference to the offending clause as being void ab initio is merely in the context of the discussion as to what amounts to a clog, and not in the context of the question of limitation. Reliance has been placed by learned Counsel for the mortgagee on certain observations in the said decision to the effect that once the fact is established (that the offending term amounts to a clog), “the term becomes non-existence from the very inception”. In short, such observations appear to have been made in the aforesaid decision only with a view to demonstrate that any such or similar terms found oppressive by the Court, on facts and evidence, cannot be held against the mortgagor and his right to redeem the property, and consequently the clog is required to be lifted. However, this decision does not in any manner lay down the proposition propounded by the mortgagee before us, that since the offending clause is non est, the right to redeem the property would accrue to the mortgagor on the date cf the mortgage itself and that the limitation would commence from that day.

27. Learned Counsel for the mortgagee heavily relied upon a decision of a single Judge of the Madras High Court in the case of Ramasubramania Mudaliar v. Soorianarayana lyer, reported at AIR 1977 Mad. 297. No doubt, this decision clearly lays down that once an offending term is held to be invalid as a clog on redemption, the right to sue for redemption accrues not from the date when the term was held as invalid, but from the date of the mortgage itself. With all due respect to the learned single Judge of the Madras High Court, I am unable to agree with the line of reasoning adopted in the said decision, particularly in the light of the discussion in the earlier part of the present opinion, and the detailed reasons assigned therefor.

28. Learned Counsel for the mortgagee also sought to rely upon a decision of single Judge of the High Court of Punjab and Haryana in the case of Parma Nand v. Babu Ram, reported at AIR 1986 P & H 233. The view expressed in the aforesaid decision is based on the peculiar facts of the case. The observations made in the said decision are to the effect :

“…Therefore, it is clear that if the mortgagor himself allowed the ordinary period of limitation to expire to seek redemption, after the expiry of limitation, he can only file a suit on the basis of the deferred date of redemption under the terms of the mortgage, which would be within time, but he would not be entitled to say in such a suit (when filed beyond the period of limitation, to be counted from the date of the mortgage) that the deferred date of redemption amounts to clog on the equity of redemption and should be so held. Therefore, if the mortgagor wanted to avoid the deferred clause of 59 years on the plea of clog on the equity of redemption, he had to file a suit for redemption within 30 years from the date of the mortgage and if he had done so, the question of deferred date of redemption, whether it was clog or not could be gone into. …”

It, therefore, appears that the aforesaid observations indicate that the mortgagor may accept the stipulated date only after which he can seek redemption, in which case he must file the suit for redemption within the normal and statutory period of limitation. However, the mortgagor would not be entitled to say in a suit which has been filed beyond the period of limitation, to be counted from the date of the mortgage, that the deferred date of redemption (stipulated in the mortgage) amounts to a clog on equity of redemption, and that therefore, the limitation would commence from the date when the clog is lifted. It would, therefore, appear that in the said decision, in a suit filed by the mortgagor which was beyond limitation with reference to the stipulated period contemplated by the mortgage deed, it was not open to the mortgagor (in order to save himself from the bar of limitation) to urge that the said offending term was a clog, that the same should be lifted and that the limitation would then commence to run from the date when the clog is lifted. In other words, what the Court held, though not so specifically explained, is that the mortgagor cannot approbate or reprobate. In effect what the Court has held is that once the mortgagor accepts the stipulated period after which he can exercise his right of redemption, the redemption suit must be filed within the prescribed statutory period of limitation. If on these facts the suit is found to be beyond limitation, it cannot be saved by pleading that limitation would run from the date when the clog is lifted. Thus, on the peculiar facts of that case, I do not see how the decision lays down any principle supporting the contention of the mortgagee. Even otherwise, even if it is presumed that the decision lays down any proposition propounded by the mortgagee in the instant case, I respectfully decline to accept the view taken therein for the reasons stated hereinabove.

29. Learned Counsel for the mortgagee also sought to rely upon a decision of the Supreme Court in the case of Ganga Dhar v. Shankar Lal, reported at AIR 1958 SC 770. In the said decision the Supreme Court has discussed the principle of equity of redemption, and what amounts to a clog on the equity of redemption. After discussing the basic principles (which are otherwise well settled and discussed hereinabove), the Supreme Court in this decision held that the particular clause complained of, whereby the mortgage could be redeemed only within six months from the stipulated date and not thereafter was in fact and law unconscionable, held to be invalid as a clog, and therefore, ignored. However, in the peculiar facts and circumstances of that case, it was found that the stipulated date for redemption viz., on expiry of 85 years from the mortgage was not a clog on the equity of redemption. Therefore, this particular stipulation that the mortgagor could only obtain redemption on the expiry of 85 years from the date of mortgage was enforceable against the mortgagor, and consequently on the facts of the case the suit filed for an earlier redemption before the expiry of 85 years was found to be premature, and therefore, deserves to be dismissed. I do not find any proposition in this decision which would be of assistance to the mortgagee in the context of the present controversy.

30. Learned Counsel for the mortgagee also sought to rely upon a decision of the House of Lords in the case of Noakes & Co. v. Rice, reported in 1900 (3) All ER Reprint 34. An examination of this decision discloses that it deals with only the interpretation on what is a clog on the equity of redemption and whether on the facts of the case, the offending clause amounted to a clog on the equity of redemption or not. This decision does not in any manner contemplate the effect of such an offending clause on limitation, nor does it deal with, in any manner whatsoever, the distinction between “void” and “voidable”.

31. Learned Counsel for the mortgagee also sought to place reliance upon a decision of the Supreme Court in the case of Pomal v. Vrajlal, reported at AIR 1989 SC 436. This decision also examines the question of a clog on the equity of redemption in the context of the doctrine of justice, equity and good conscience. Specific reliance was placed on the observations made in paragraphs 21 and 25 of the said decision. These paragraphs deal only wilh the facts of the case before the Supreme Court, wherein the Supreme Court found on the basis of the evidence on record that it is not possible to hold that there was no clog on the equity of redemption. It can only be noted that this decision does not in any manner deal with the so-called distinction between void and voidable, neither does it deal with its effect on the question of limitation sel out by Article 61(a) of the Act.

32. Learned Counsel for the mortgagee also sought reliance upon a decision of the Supreme Court in the case of Shivdev Singh v. Sucha Singh, reported at AIR 2000 SC 1935. Once again it is found that this decision only discusses the principles pertaining to the right of redemption, clauses which prevent or hamper redemption and that clauses alleged to be oppressive and which create a clog on the right of redemption are questions of fact which require to be determined on the evidence on record; that such terms which place a clog on the right of redemption have to be avoided. No doubt, paragraph 10 of the said decision does refer to such offending clauses as void. However, this is an observation only in the context of the offending terms and does not in any manner hold such offending term to be “void ab initio” so as to confer a retrospective cause of action to the mortgagor and to permit the mortgagee to plead that the period of limitation would commence from the date of mortgage itself. Therefore, this decision could not be of any assistance to learned Counsel for the mortgagee.

33. Reliance was also sought to be placed upon a decision of the Supreme Court in the case of Satnpumn Singh v. Niranjan Kaur, reported at 1999 (2) SCC 679. This decision, firstly, deals with the redemption of an oral mortgage and consequently there were no restrictive terms or covenants in respect of which any complaint as to oppression could be made. Secondly, this decision deals with mainly with the validity of such an oral mortgage in the year 1893, when Section 59 of the Transfer of Property Act was not applicable to the State of Punjab. It was therefore in this context that the Supreme Court held such an oral mortgage to be valid, and that in the absence of any restriction contained in the mortgage deed, a right to redeem had accrued from the very first day of the mortgage and consequently the suit filed in 1960 was barred by limitation. Once again, I am obliged to wonder as to how this decision is applicable or relevant to the present controversy. In this case, limitation had commenced from the date of the mortgage merely because there was no restriction contained in the mortgage deed, it being a case of an oral mortgage. Therefore, there was no question of there being any offending clause, or consideration of lifting of a clog on the equity of redemption.

34. Reliance was also sought to be placed on a decision of the Supreme Court in the case of Jayasingh v. Krishna, reported at AIR 1985 SC 1646. This decision examines the right of redemption in the light of the interplay of the rights of the mortgagor and the mortgagee, in the context of Section 60 of the Transfer of Property Act and Section 90 of the Trusts Act. It is in this context that the Supreme Court held that where a mortgagee avails himself of his position as a mortgagee and gains an advantage which would be in derogation of the right of a mortgagor, he has to hold the advantage so derived by him for the benefit of the mortgagor. Once again, I am obliged to observe that this decision has no relevance to the controversy at hand.

35. Reliance was also sought to be placed on the decision of the Supreme Court in the case of Murarilal v. Devkamn, reported at AIR 1965 SC 225. Once again, I am obliged to observe that this decision deals only with the facts of that case in the light of Section 60 of the Transfer of Property Act and holds (on the facts of that case) that if the mortgage is not redeemed within 15 years of the mortgage, the same would be deemed to be an absolute transfer amounting to a sale. This clause was found by the Supreme Court to be oppressive, found to be violative of the principle “once the mortgage always a mortgage” and therefore, found to be a clog on the equity of redemption. This decision therefore has no relevance to the controversy at hand.

36. Reliance was also placed on a decision of the Supreme Court in the case of Beepathuma v. Shankaranarayana, reported at AIR 1965 SC 241. In this decision the Supreme Court considered the cumulative effect of Sees. 35, -60 and 62 of the Transfer of Property Act, and explained the doctrine of election and its applicability to mortgage transactions. The Supreme Court held that a person who accepts a benefit under a deed or a will or other instrument must adopt the whole of the contents of that instrument, must conform to all its provisions and renounce all rights that are inconsistent with it. The Supreme Court explained that this principle is often put in another form that a person cannot approbate and reprobate the same transaction. Once again, I find that this decision has no application to the controversy at hand.

37. In the light of the aforesaid discussion, I find that the contentions raised by learned Counsel for the mortgagee are not well founded and cannot be sustained. In view of the aforesaid discussion, I find and hold that “the right to redeem or to recover possession” would accrue to the mortgagor within the meaning of Article 61(a) of the Limitation Act only when the Court lifts the clog on the equity of redemption. Consequently, limitation would begin to run only from that day, and therefore, necessarily such a suit could not be said to be barred by limitation (provided the suit prays both for lifting the clog against the equity of redemption and also prays for a decree of redemption of the mortgage).

38. The questions referred for consideration are answered accordingly.

39. This appeal, will therefore, be placed before the learned single Judge for decision on meriis in the light of the opinion expressed above.

D.M. Dharmadhikari, C.J. (Concurring) :

40. Learned brother Y. B. Bhatt, J., has dealt with all the questions referred to the Full Bench from different angles and with the reasons and conclusions reached by him, I find myself respectfully in complete agreement. I, however, consider it necessary to add few more reasons to reinforce the conclusion reached by my learned brother Y. B. Bhatt, J.

41. The learned single Judge has posed three questions for answer by this Larger Bench and they are reproduced in the opinion prepared by Y. B. Bhatt, J.

42. Addressing myself firstly to question No. 1, the condition in a mortgage deed restricting right of redemption to the mortgagor after a long period of 99 years may be ‘void’ or ‘voidable’ and in the circumstances as obtaining in the present case, nature of its invalidity is not of much relevance for deciding the question of limitation. My learned brother Y. B. Bhatt, J., has rightly stated that such unreasonable or inequitable condition of mortgage fixing unduly long 99 years period for redemption can be invalidated by the Court only when remedy is sought for the purpose, by filing suit by mortgagor. As has been observed by Prof. Wade in his authoritative work on Administrative Law :

” ‘void’ is meaningless in any absolute sense. Its meaning is relative, depending upon the Court’s willingness to grant relief in any particular situation. If this principle of legal relativity is borne in mind, confusion over ‘void or voidable’ can be avoided…… The truth of the matter is that the Court will invalidate an order only if the right remedy is sought by the right person in the right proceedings and circumstances. The order may be hypothetically a nullity, but the Court may refuse to quash it because of the plaintiff’s lack of standing, because he does not deserve a discretionary remedy, because he has waived his rights, or for some other legal reason. In any such case the ‘void’ order remains effective and is, in reality, valid.”

Learned brother Y. B. Bhatt is, therefore, right in stating that it is only when in a suit such unreasonable period fixed for redemption is challenged as invalid that right to seek redemption would arise in favour of the mortgagor.

43. So far as question No. 2 referred by the learned single Judge to the Full Bench is concerned, period of limitation under Article 61 of the Limitation Act, 1963 commences when ‘right to redemption or to recover possession accrues’. Under the condition of the mortgage deed, right to redemption or to recover possession would accrue to the mortgagor only on expiry of 99 years. Had the suit been filed after 99 years and within 30 years thereafter, in accordance with period of limitation under Article 61(1) of the Limitation Act, the suit could not have been dismissed by the Court on the ground of limitation. The suit, therefore, filed by the mortgagor before 99 years for redemption with prayer for lifting the clog on redemption cannot be held to be barred by limitation.

44. It is contended on behalf of the mortgagee that a suit seeking a declaration that clog on equity of redemption contained in the terms of the mortgage deed is invalid or void and consequently for relief of redemption of mortgage, had it been filed within prescribed 30 years from the date of execution of the mortgage deed would not be barred, but such a suit brought after the prescribed period of 30 years is barred. The snag in the above argument is that the period of 30 years prescribed as limitation under Article 6I(a) would not commence unless right to redemption or recover possession accrues. Right to redemption or recover possession would accrue either on expiry of 99 years as stipulated in the mortgage deed or on the Court declaring such a long period as a ‘clog’ on redemption and hence, invalid. The clog will then get lifted and the period of limitation for seeking redemption will start then. The suit filed before 99 years but after 30 years and without any prayer for lifting the clog on equity of redemption could be resisted by the mortgagee only on the ground that it was premature. The suit filed with combined relief of lifting the clog on equity of redemption and granting consequential relief of redemption filed within a period of 99 years and may be after 30 years, cannot be held to be barred by time because in such suit, period of limitation prescribed of 30 years under Article 61(a) would commence only when the Court, after considering the terms of the mortgage deed and the circumstances obtaining in the case, conies to the conclusion that such term in the mortgage deed and the period fixed for redemption is inequitable and clog which deserves to be lifted. The available period for filing suit for redemption even without lifting of clog here is 99 years as stipulated in the mortgage deed plus 30 years thereafter being the prescribed period of limitation. The total period available to mortgagor is merefore 129 years.

45. For the reasons aforesaid, I fully agree with the conclusion reached by my learned brother Y. B. Bhatt, J., and answer the questions posed by the learned single Judge as under :

(1) Whether a condition in a mortgage deed which is found by the Court to be a clog on the equity of redemption is void ab initio or merely voidable at the instance of the suffering party i.e., the mortgagor?

Answer : The condition in a mortgage deed which is found to be clog on the equity of redemption is ab initio void or invalid but it is not so in absolute sense, meaning that it would become so only upon the mortgagor resorting to remedy in a Court of law and on the Court, in the facts and circumstances of the case, coming to the conclusion that the condition in the mortgage deed is clog on the equity of redemption.

(2) When a mortgage deed stipulates a condition that the mortgage is irredeemable for a period of 99 years or any such long period, whether the starting point of the period of limitation prescribed by Article 61(a) of the Limitation Act, 1963 for filing a suit for redemption would be the date of execution of the mortgage deed or the date of declaration by the Court that such a condition was a clog on the equity of redemption?

Answer : Where a condition in the mortgage deed is a clog on the equity of redemption, period of limitation under Article 61(a) for filing suit of redemption can never commence from the date of execution of the mortgage deed but would commence from the date the Court holds that period of redemption fixed in the mortgage deed of unreasonably long period of time is a clog on the equity of redemption. Period of limitation would, therefore, commence from the date of declaration of such condition as a clog by the Court.

(3) Whether a suit for a declaration that any such condition is void or voidable (with or without a prayer for redemption of mortgage) filed after expiry of the period of 30 years from the date of execution of the mortgage deed would be time-barred under Article 61(a) of the Limitation Act, 1963?

Answer : As discussed above, where a mortgagor files a suit for grant of relief of declaration of the condition in the mortgage deed as a clog on the equity of redemption with consequential relief of granting redemption of the mortgaged property, such a suit cannot be barred under Article 61(a) of the Limitation Act, because the right of redemption and to recover possession would accrue only when clog on the equity of redemption is lifted by the Court by declaring the condition in the mortgage deed as invalid or void and the prescribed period of limitation of 30 years would commence only from the decision or decree of the Court.

46. With the above addition to the reasonings of learned Justice Y. B.

Bhatt, I respectfully agree with his opinion. As directed by him, the matter may now be placed before the learned single Judge for deciding other issues in the case.

47. Questions answered.

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