Appeal No 150 of 1954
Appeal from the judgment and decree dated March 21 1950 of the Court of Judicial Commissioner at Ajmer in Civil First Appeal No 13 of 1948 arising out of the judgment and decree dated March 30 1948 of the Court of Sub Judge 1st Class Ajmer in Civil Suit No I of 1947
Tarachand Brijmohan Lal for the appellant
section section Deedwania and K L Mehta for the respondents
April 15
The Judgment of the Court was delivered by SARKAR J
This appeal arises out of a suit for the redemption of a mortgage dated August 1 1899
The property mortgaged was a four roomed shop with certain appurtenances standing on a piece of land measuring 5 yards by 15 yards in Naya Bazar Ajmere
The mortgage was created by Purshottamdas who is now dead and was in favour of Dhanrupmal a respondent in this appeal
The mortgage instrument stated that the property had been usufructuarily mortgaged in lieu of Rs 6300 of which Rs 5750 had been left with the mortgagee to redeem a prior mortgage on the same and another property
It also provided that on redemption of the prior mortgage the possession of the shop would be taken over and retained by the mortgagee Dhanrupmal who would appropriate its rent in lieu of interest on the money advanced by him and the possession of the other property covered by the prior mortgage being a share in a Kachery would be made over to the mortgagor Purshottamdas
The provisions in the mortgage instrument on which the present dispute turns were in these terms 511  I or my heirs will not be entitled to redeem the property for a period of 85 years
After the expiry of 85 years we shall redeem it within a period of six months
In case we do not redeem within a period of six months then after the expiry of the stipulated period 1 my heirs and legal representatives shall have no claim over the mortgaged property and the mortgagee shall have no claim to get the mortgage money and the lagat i e repairs expenses that may be due at the time of default
In such e case this very deed will be deemed to be a sale deed
There will be no need of executing a fresh sale deed
The expenses spent in repairs and new constructions will be paid along with the mortgage money at the time of redemption according to account produced by the mortgagee
 The mortgagee Dhanrupmal duly redeemed the earlier mortgage and went into possession of the shop while possession of the Kacheri was delivered to the mortgagor
On April 12 1939 Dhanrupmal assigned his rights under the mortgage to Motilal who died later and whose estate is now represented by his sons who are the other respondents in this appeal The estate of Purshottamdas the original mortgagor is now represented by his son the appellant
On January 2 1947 the appellant filed the suit in the Court of the Sub Judge Ajmere against the respondents
The suit was contested by the sons of Motilal the assignee of the mortgage who are the only respondents appearing in this appeal and whom we shall hence hereafter refer to as the respondents
They said that the suit was premature as under the mortgage contract there was no right of redemption for eighty five years after the date of the mortgage that is to say till August 1 1984
The learned Sub Judge purporting to follow a decision of the Judicial Commis sioner Ajmere to whom he was subordinate held that the provision postponing redemption for eightyfive years was invalid as it amounted to a clog on the equity of redemption
He therefore passed a preliminary decree for redemption
On appeal the learned Judicial Conmmissioner Ajmere held that the decision 512 which the Sub Judge had purported to follow was distinguishable
He examined a large number of cases on the subject and came to the conclusion that the provision in question did not amount to a clog on the equity of redemption
He therefore allowed the appeal and dismissed the appellant s suit
From this decision the appeal to this Court arises
It is admitted that the case is governed by the Transfer of Property Act
Under section 60 of that Act at any time after the principal money has become due the mortgagor has a right on payment or tender of the mortgage money to require the mortgagee to reconvey the mortgage property to him
The right conferred by this section has been called the right to redeem and the appellant sought to enforce this right by his suit
Under this section however that right can be exercised only after the mortgage money has become due
In Bakhtawai Begum vs HusainiKhanam 1 also the same view was expressed in these words  Ordinarily and in the absence of a special condition entitling the mortgagor to redeem during the term for which the mortgage is created the right of redemption can only arise on the expiration of the specified period
 Now in the present case the term of the mortgage is eighty five years and there is no  stipulation entitling the mortgagor to redeem during that term
That term has not yet expired
The respondents therefore contend that the suit is premature and liable to be dismissed
The appellant s answer to this contention is that the covenant creating the long term of eightyfive years for the mortgage taken along with the provision that the mortgagor must redeem within a period of six months thereafter or not at all and the other terms of the mortgage and also the circumstances of the case is really a clog on the equity of redemption and is therefore invalid
He contends that in the result the mortgage money had been due all along and the suit was not premature
1 1913 LR 41 IA 84 89
513 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 vs Wilde 1 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 redemption 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 Courts will ignore any contract the effect of which is to deprive the mortgagor of his right to redeem the mortoage
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 follows from section 60 of the Transfer of Property Act
So it was said in Mohammad Sher Khan vs Seth Swami Dayal 2  An anomalous mortgage enabling a mortgagee after a lapse of time and in the absence of redemption to enter and take the rents in satisfaction of the interest
would be perfectly valid if it did not also hinder an 1 2 1921 LR 49 1A 60 65
514 existing right to redeem
But it is this that the present mortgage undoubtedly purports to effect
It is expressly stated to be for five years and after thatperiod the principal money became payable
This under section 60 of the Transfer of Property Act is the event on which the mortgagor had a right on payment of the mortgage money to redeem
The section is unqualified in its terms and contains no saving provision as other sections do in favour of contracts to the contrary
Their lordships therefore see no sufficient reason for withholding from the words of the section their full force and effect
 Under the section once the right to redeem has
arisen it cannot be taken away
The mortgagor s right to redeem must be deemed to continue even after the period of six months has expired and the attempt to confine that right to that period must fail
The term in the mortgage instrument providing that the mortgage can be redeemed only within the six months and not thereafter must be held period of to be invalid and ignored
The learned Judicial Commissioner took the same view and this has not been challenged in this appeal on behalf of the respondents
With this term however this case is not really con cerned
Learned advocate for the appellant directed his attack on the term in the instrument of mortgage that it will not be redeemable for eighty five years
He contended that this term amounts to a clog on the equity of redemption
We wish to observe here that the learned advocate did not contend that the invalidity as we have earlier held of the term taking away the right to redeem the mortgage after the period of six months makes the term fixing the period of the mortgage at eighty five years invalid
This latter term stands quite apart
It only fixes the time when the principal sum is to become due that is when the right to redeem will accrue and has therefore nothing to do with a term which provides when that right will be lost
The invalidity of one does not make the other also invalid
The term providing that the right to redeem will arise after eightyfive years does not of course take 515 away the mortgagor s right to redeem and is not therefore in that sense a clog on the equity of redemption
It does however prevent accrual of the right to redeem for the period mentioned
Is it then in so far as it prevents the right to redeem from accruing for a time a clog  As we have already said the right to redeem does not arise till the principal money becomes due
When the principal sum is to become due must of course depend on the contract between the parties
In the present case the parties have agreed that the right to redeem will arise eightyfive years after the date of the mortgage that is to say the principal money will then become due
The appellant says that he should be relieved from this bargain that he has made
This is the contention that has to be examined
The rule against clogs on the equity of redemption no doubt involves that the Courts have the power to relieve a party from his bar gain
If he has agreed to forfeit wholly his right to redeem in certain circumstances that agreement will be avoided
But the Courts have gone beyond this
They have also relieved mortgagors from bargains whereby the right to redeem has not been taken away but restricted
The question is the term now under consideration such that a Court will exercise its power to grant relief against it  That depends on the extent of this power
It is a power evolved in the early English Courts of Equity for a special reason
All through the ages the reason has remained constant and the Court s power is therefore limited by that reason
The extent of this power has therefore to be ascertained by having regard to its origin
It will be enough for this purpose to refer to two authorities on this question
In a very early case namely Vermon vs Bethell Earl of Northington L C said  This court as a court of conscience is very jealous of persons taking securities for a loan and converting such securities into purchases
And therefore I take it to be an established rule that a mortgagee can never provide at the time of making the 1   113  839
516 loan for any event or condition on which the equity of redemption shall be discharged and the conveyance absolute
And there is great reason and justice in this rule for necessitous men are not truly speaking free men but to answer a present exigency will submit to any terms that the crafty may impose upon them
 In comparatively recent times Viscount Haldane L Crepeated the same view when he said in G and C Kreglinger vs New Patagonia Meat and Cold Storage Company Ltd 1 This jurisdiction was merely a special application of a more general power to relieve against penalties and to could them into mere securities
The case of the common law mortgage of land was indeed a gross one
The land was conveyed to the creditor upon the condition that if the money he had advanced to the feoffor was repaid on a date and at a place named the fee simple would revest in the latter but that if the condition was not strictly and literally fulfilled he should lose the land forever
What made the hardship on the debtor a glaring one was that the debt still remained unpaid and could be recovered from the feoffor notwithstanding that he had actually forfeited the land to the mortgagee
Equity therefore at an early date began to relieve against what was virtually a penalty by compelling the creditor to use his legal title as a mere security
My Lords this was the origin of the jurisdiction which we are now considering and it is important to bear that origin in mind
For the end to accomplish which the jurisdiction has been evolved ought to govern and limit its exercise by equity judges
That end has always been to ascertain by patrol evidence if need be the real nature and substance of the transaction and if it turned out to be in truth one of mortgage simply to place it on that footing
It was in ordinary cases only where there was conduct which the Court of Chancery regarded as unconscientious that it interfered with freedom of contract
The lending of money on mortgage or otherwise was looked 517 on with suspicion and the court was on the alert to discover want of conscience in the terms imposed by lenders
 The reason then justifying the Court s power to relieve a mortgagor from the effects of his bargain is its want of conscience
Putting it in more familiar language the Court s jurisdiction to relieve a mortgagor from his bargain depends on whether it was obtained by taking advantage of any difficulty or embarrassment that he might have been in when he borrowed the moneys on the mortgage
Was the mortgagor oppressed  Was he imposed upon  If he was then he may be entitled to relief
We then have to see if there was anything unconscionable in the agreement that the mortgage would not be redeemed for eightyfive years
Is it oppressive  Was he forced to agree to it because of his difficulties  Now this question is essentially one of fact and has to be decided on the circumstances of each case
It would be wholly unprofitable in enquiring into this question to examine the large number of reported cases on the subject for each turns on its own facts
First then does the length of the term and in this case it is long enough being eightyfive years itself lead to the conclusion that it was an oppressive term  In our view it does not do so
It is not necessary for us to go so far as to say that the length of the term of the mortgage can never by itself show that the bargain was oppressive
We do not desire to say anything on that question in this case
We think it enough to say that we have nothing here to show that the length of the term was in any way dis advantagous to the mortgagor
It is quite conceivable that it was to his advantage
The suit for redemption was brought over forty seven years after the date of the mortgage
It seems to us impossible that if the term was oppressive that was not realised much earlier and the suit brought within a short time of the mortgage
The learned Judicial Commissioner felt that the respondents  contention that the suit had been brought as the price of landed property had gone up after the war was 66 518 justified
We are not prepared to say that he was wrong in this view
We cannot also ignore as appears from a large number of reported decisions that it is not uncommon in various parts of India to have long term mortgages
Then we find that the property was subject to a prior mortgage
We are not aware what the term of that mortgage was  But we find that mortgage included another property which became freed from it as a result of the mortgage in suit
This would show that the mortgagee under this mortgage Was not putting any pressure on the mortgagor
That conclusion also receives support from the fact that the mortgage money under the present mortgage was more than that under the earlier mortgage but the mortgagee in the present case was satisfied with a smaller security
Again no complaint is made that the interest charged which was to be measured by the rent of the property was in any manner high
All these to our mind indicate that the mortgagee had not taken any unfair advantage of his position as the lender nor that the mortgagor was under any financial embarrassment
It is said that the mortgage instrument itself indicates that the bargain is hard for while the mortgagor cannot redeem for eighty five years the mortgagee is free to demand payment of his dues at any time he likes  This contention is plainly fallacious
 There is nothing in the mortgage instrument permitting the mortgagee to demand any money and it is well settled that the mortgagee s right to enforce the mortgage and the mortgagor s right to redeem are co extensive
Then it is said that under the deed the mortgagee can spend any amount on repairs to the mortgage property and in putting up new constructions there and the mortgagor could only redeem after paying the expenses for these
We are unable to agree that such is the effect of the mortgage instrument
We cannot lose sight of the fact that the mortgaged shop and the area of the land on which it stood were very small
It was not possible to spend a large
sum on repairs or construction there
Furthermore having agreed to 85 years as the term of the mortgage the parties must 519 have imagined that during this long period repairs and constructions would become necessary
It is only such necessary repairs as are contemplated by the instrument and we do not consider that it is hard on the mortgagor to have to pay for such repairs and construction when he redeems the property and gets the benefit of the repairs and construction
Neither do we think that there is anything in the contention that under the document the mortgagor was bound to accept whatever was shown in the mortgagee s account as having been spent on the repairs and con struction
That is not in our view the effect of the relevant clause which reads  The expenses spent in repairs and new constructions will be paid according to the account produced by the mortgagee
 All that it means is that in claiming moneys on account of repairs and construction the mortgagee will have to show from his account that he spent these moneys
It is really a safeguard for the mortgagor
It was also said that all the terms in the deed were for the benefit of the mortgagee and that showed that the bargain was a hard one
We do not think that all the terms were for the benefit of the mortgagee or that what there was in the instrument was for his benefit and indicated that the mortgagee had forced a hard bargain on the mortgagor
We have earlier said how the bargain appears to us to have been fair and one as between parties dealing with each other on equal footing
We have no evidence in this case of the circumstances existing at the date of the mortgage as to the pecuniary condition of the mortgagor or as to anything else from which we may come to the conclusion that the mortgagee had taken advantage of the difficulties of the mortgagor and imposed a hard bargain on him
It was said that the fact that the property was subject to a prior mortgage at the date of the mortgage in suit indicates the impecunious position of the mortgagor
We are unable to agree with this contention
Every debtor is not necessarily impecunious
The mortgagor certainly derived this advantage from that mortgage that he was able to free from the earlier mortgage the kacheri and he has been in enjoyment of it ever since
520 That to our mind indicates that the bargain had been freely made There was nothing else to which our attention was directed as showing that the bargain was hard
We therefore think that the bargain was a reasonable one and the eighty five years term of the mortgage should be enforced
We then come to the conclusion that the suit was premature and  must fail
In the result we dismiss this appeal with costs
Appeal dismissed


Summary:
In 1969 the Govt
of India announced through public notice a scheme for registration of contracts involving deliveries extending over a period of not less than 12 months for cash assistance m respect of certain exports
The scope of the scheme was extended in 1970 allowing cash assistance at the same percentage as was prevailing on the date of the firm contract so registered provided the invoice was attested by the Banks concerned
It was also provided that even if the rate of cash assistance is reduced by Govt
the higher rate that existed on the date of the Firm con tract would be admissible
And in case of increase in the rate exports made during the contract would normally be eligible for the benefit of the increased rate
It was also made clear that if the rate is likely to affect an exporter adversely Govt would consider its matter on merits
In 1972 the cash assistance scheme on export of engi neering goods was modified allowing additional cash assist ance of 5 of the fob value on all exports effected during 1472 to 30972 to certain countries
It was fur ther announced that in respect of transmission towers ex ported from Ist Oct 1972 till 31st March 1973 cash assist ance would be at the rate of 25 of the fob value
The appellant company entered into contracts with the National Electricity Board of Malaysia and in respect of some of the exports of transmission towers the appellant received cash assistance and in respect of others it was denied on the ground that the exports made during the ex tended delivery period of the contract were not covered under the Import Trade Control Policy and as such no cash assistance could be granted on exports made after March 1974
The appeal preferred by the appellant was rejected by the Deputy 502 503 Chief Controller of Imports and Exports on the ground that the benefit of registration on export in execution of the supplementary contract was additional quantity at increased rates and could not be allowed under Govt
policy
The second appeal was rejected by the Chief Controller of Im ports  Exports stating that after execution of the supple mentary order there was increase in quantity of goods to be supplied as also price on the date of execution of the supplementary order and the import policy did not provide for protection of benefits where there was increase in the value of contract
The review petition filed by the appel lant was also rejected
Thereafter the appellant moved the High Court under Article 226 of the Constitution
The High Court partly allowed the petition restraining the respondents from en forcing the demand for the refund of the cash assistance already paid and rejected the appellant s claim in respect of contracts entered into in the context of the offers made subsequent to April 1972 since the cash assistance declared as on April 1 1972 and thereafter was in terms made avail able upto a specific date
This appeal by special leave is against the High Court s judgment
On behalf of the appellant it was contended that at different stages the respondents gave different reasons for refusing to pay cash assistance
Dismissing the appeal HELD 11 There could arise no question of granting cash assistance to different exports under the original scheme and the prevalent amended scheme at the same time
508E 12 Paragraph 10 in the 1970 scheme made it quite clear that exports effected after the specified date would not be eligible for cash assistance
Consistently with this para graph in the subsequent schemes the periods were pre scribed
The amended scheme dated 20th April 1972 pre scribed the period from 1472 to 30972 and the amended scheme dated 16th June 1973 applicable to this case pre scribed the period from 1st October 1972 upto and including 31st March 1973
In other words exports of Transmission Towers made after the prescribed period would not be eligi ble to assistance under the prevalent scheme
The word amendment  would imply that the scheme of 1969 stood amend ed
508C E 504 13 In view of the unequivocal language of paragraph 10 of
the 1970 scheme and clear prescription of the different periods during the subsequent amended schemes and the admit ted facts that the export in respect of these two contracts were made only after July 1974 there is no reason to allow the appellant s claim
Whether the Government s policy was conducive to maximisation of exports and foreign exchange earning is entirely a different matter
508F G