ivil Appeal No 9993 of 1983 etc From the Judgment and Order dated 16121982 of the Gujarat High Court in S A No 168 of 1982
BK Mehta Kajinder Sachhar TU Meita SK Dholakia
Vimal Dave Krishan Kumar
Mrs CM Chopra PH Parekh Ms Sunita Sharma Mrs Rani Chhahra
R C Bhatia and PC Kapur for the appearing parties The Judgment of that Court was delivered by SABYASACHI MUMKHARJI
These appeals and the special leave petition are directed against the decision of the High Court of Gujarat upholding the right of the mortgagors to redeem the properties before the period stipulated In the deeds
as well as the right of the mortgagors to recover possession of the properties from the tenants andor the mortgagees without resort to the relevant Rent Restriction Act
All these matters were separately canvassed before us as these involved varying facts yet the fundamental common question is whether long term mortgages in the present infaltionary market in fast moving conditions are clogs on equity of redemption and as such the mortgages are redeemable at the mortgagors  instance before the stipulated period and whether the tenants who have been inducted by the mortgagees can be evicted on the termination of the mortgage or do these tenants enjoy protection under the relevant Rent Restriction Acts
One basic fact that was emphasised in all these cases was that all these involve urban immovable properties
In those cirumstances whether the mortgages operate as clogs on equity of redemption is a mixed question of law and facts
It is necessary to have a conspectus of the facts involved in each of the cases herein
We may start with the facts relating to Special Leave Petition Civil  No 8219 of 1982 because that is a typical case
PG NO 834 In this matter by our order dated 9th January 1988 we had directed that this special leave petition should be heard first in these series of matters
We do so accordingly
We grant leave and dispose of the appeal by the judgment herein along with other appeals
This is an appeal from the judgment and order of the Gujarat High Court dated 26th April 182 dismissing the second appeal
The High Court observed that the learned Judge had followed the judgment of the said High Court in Khalubai Nathu Sumra vs Rajgo Mulji Nanji and others AIR 1979 Gujarat 171 where the learned Single Judge in the background of a mortgage where the mortgagor was financially hard pressed and the mortgage was for 99 years and the term gave the mortgagee the right to demolish existing structure and construct new one and the expenses of such to be reimbursed by mortgagor at the time of redemption it was held that the terms were unreasonable unconscionable and not binding
In order however to appreciate the contentions urged therein it will be necessary to refer to the decision of the first Appellate Court in the instant case before us
By the judgment the Assistant Judge Kutch at Bhuj in Gujarat disposed of two appeals
These appeals arose from the judgment and decree passed by the Civil Judge Bhuj in Regular Civil Suit No 3572 by which the decree for redemption of mortgage was passed and the tenants inducted by the mortgagees were also directed to deliver up possession to the mortgagors
The plaintiffs had filed a suit alleging that the deceased Karsandas Haridas Purohit was their father and he died in the year 1956 he had mortgaged the suit property to Kanasara Soni Shivji Jotha and Lalji Jetha for 30000 Koris by a registered mortgage deed dated 20th April 1943
The moltgage deed was executed in favour of Soni Govindji Nalayanji who was the power of attorney holder and manager of the defendants Nos 1 and 2
The defendant No 3 is the heir of said Govindji Narayanji and he was also managing the properties of the defendants Nos I and 2
The mortgage property consisted of two delis in which there were residential houses shops etc
The mortgagees had inducted tenants in the suit property and they were defendants Nos
4 to 9 in the original suit When the mortgage transaction took place thc economic condition of the father of the plaintiffs was weak
he was heavily indebted to other persons
It was alleged and it was so held by the learned Judge and upheld by the Appellate Judge that the mortgagees took advantage of  that situation and took mortgage deed from him on harsh and oppressive conditions
They got incorporated long term of 99 years for redemption of mortgage
It is further stated that though possession was to be handed over to the mortgagees they took condition for interest on the part of principal amount in the mortgage PG NO 835 deed
Moreover the mortgagees were given liberty to spend any amount they liked for the improvement of the suit property
They were also permitted to rebuild the entire property
Thus these terms and conditions according to the Appellate Judge were incorporated in the mortgage deed to ensure that the mortgagors were prevented for ever from redeeming the mortgage
The terms and conditions according to the Assistant Judge Bhuj being the first Appellate Court were unreasonable oppressive and harsh and amounted to clog on equity of redemption and as such bad and the plaintiffs were entitled to redeem the mortgage even before the expiry of the term of mortgage
A registered notice to the defendants Nos
I and 2 was given to redeem the mortgage but they failed to do so hence the present suit was filed to redeem the mortgage and to recover actual possession from the defendants Nos 4 to 9 who were the tenants inducted by the mortgagees
The defendant No 1 resisted the suit
It was his case that the term of mortgage was for 99 years so the suit filed before the expiry of that period was premature
The defendant No 3 resisted the suit by written statement
The defendants Nos 4 to 9 resisted the suit on the grounds that the plaintiffs were not entitled to redeem the mortgage and even if they were so entitled they could not get actual physical possession from the tenants who were protected by the provisions of the relevant Bombay Rent Act
It was their case that the plaintiffs were not entitled to get actual possession of the premises in which they were inducted by the mortgagees
The defendants Nos
21 to 27 who were the heirs of mortgagee Shivji Jetha were residing in London and New Delhi so the personal service of summons could not be effected upon them
The summons was published in the local newspapers but none of them appeared before the Court so the Court proceeded ex parte against them
The trial was conducted and a preliminary decree for redemption of mortgage was passed on 2nd April 1974 by the Trial Court
Thereafter the decree holder applied for final decree so the notices were issued to all the defendants
The heirs of Shivji Jetha appeared in response to that notice and filed applications before the Trial Court to set aside the ex parte decree on the ground that summons of the suit had not been duly served upon them
That prayer was rejected by the Trial Court
Thereafter they filed Civil Misc
Appeals in the District Court
The appeals were allowed by the District Court and the ex parte decree for redemption of mortgage was set aside
The Trial Court was directed to proceed with the suit after permitting the concerned defendants to take part in the proceedings right after receiving their written statements
Accordingly defendant No 21 appeared in the PG NO 836 suit and filed his written statement while other defendants remained absent
It was the case of the defendant No 21 that the sisters of the plaintiffs had not been joined as parties in the suit so the suit was bad for want of necessary parties
Moreover as per the terms and conditions of the mortgage deed dated 20th April 1943 there was usufructuary mortgage for 20000 koris and the remaining l0000 koris were advanced to the mortgagor at monthly interest at the rate of 12 per cent
There was a condition in the mortgage deed that the mortgagor should pay principal amount as well as the interest at the time of redemption
When the suit was filed in the year 1972
the mortgagees were entitled to recover interest on l0000 koris for a period of 291 ears 
That interest would be 17400 koris so the total mortgage amount will be Rs47400 which would be equivalent to Rs 15800 and and the Civil Judge had no jurisdiction to try such suit so the plaint Should have been returned for presentation in the proper court
It was further alleged that the court fees paid by the plaintiffs was also not sufficient
Moreover it was not true that the father of the plaintiffs was of weak economic condition
The grand father of the plaintiffs was an Advocate and the father of the plaintiffs was the clerk of an Advocate
The plaintiff No l was also working as an Advocate at the time of the mortgage
so they knew the legal position
It was further alleged that at the relevant time the prevalent custom in Kutch State was to take mortgages of long term for 99 years and when it was permissible to take mortgage deeds with such a long term It was also necessary to give permission for rebuilding the whole property for better enjoyment of it
So long term mortgage and the conditions for reconstruction of the property could not amount to clogs on equity of redemption of mortgage it was the case of the mortgagees andor tenants
The mortgagees did not take any it was pleaded
undue advantage and they were not present physically when the transaction took place through their power of attorney holders If the conditions in the mortgage deed did not amount to clogs on equity of redemption the suit would be clearly premature
It may be mentioned that the plaintiff No 1 had subsequently become a Civil Judge and was ultimately the Chairman of the Tribunal so if the said terms and conditions of the mortgage were onerous and oppressive he would not have sat idle for 29 years
But he remained silent because he was aware of the custom It was pleaded
It was alleged that the prices of immovable properties had increased tremendously therefore th
suit had been filed with mala fide intention
It was averred that in case the Court came to the conclusion that there was clog on equity of redemption and the plaintiffs were entitled to the PG NO 837 redemption then the interest on 10000 koris should be awarded to the mortgagees
In the premises it was averred that the suit should be dismissed as there was no clog on equity of redemption and the court had no jurisdiction to try the suit The Trial Court then recorded additional evidence in the suit and ultimately decreed the suit on 28th September 1978
The Trial Court came to the conclusion that there was mortgage transaction between the father of the plaintiffs and Soni Shivji Jetha and Lalji Mulji on 20th April 1943
The Trial Court further came to the conclusion that the terms and conditions in the mortgage deed were harsh and oppressive which amounted to clog on equity of redemption so the plaintiffs were entitled to file the suit even before the expiry of the term of the mortgage
The Trial Court also came to the conclusion that the sisters of the plaintiffs were not necessary parties to the suit and even if they were necessary parties a co mortgagor was entitled to file the suit for redemption so the suit was not bad for want of non joinder of necessary parties
The Trial Court further came to the conclusion that it had jurisdiction to try the suit and held that the mortgagees were not entitled to claim interest on 10000 koris
It was further directed that the plaintiffs were entitled to recover possession from the defendants Nos 4 to 9 who were the tenants inducted by the mortgagees
Accordingly a preliminary decree was passed in the suit
Aggrieved thereby the mortgagees filed Regular Civil Appeal No 14978 and the tenants filed Regular Civil Appeal No 15078
These were disposed of by the judgment of the first Appellate Court The learned Judge of the first Appellate Court framed the following issues 1 Whether the terms and conditions in the mortgage deed dated 2041943 amount to clog on equity of redemption 2 Whether the decree passed is bad for want of jurisdiction with trial court 3 Whether the mortgagees are entitled to get interest on 10000 koris 4 Whether the tenants are protected from the effect of redemption decree by virtue of the provisions of Bombay Rent Act PG NO 838 5 Whether the decree passed by the trial court is legal and proper 6 What order It is not necessary any longer in view of the findings made and the subsequent course of events to detain ourselves on all the issues
For the purpose of the present appeal is well as the connected appeals we are concerned with two issues namely Issue Nos 1 and 4 stated above in other words whether the terms and conditions of the mortgage deed dated 20th April 1943 amounted to clog on equity of redemption and secondly whether the tenants are protected from the effect of redemption decree by virtue of the provisions of the Bombay Rent Act
The learned Assistant Judge in the first appeal had noted that it was not in dispute that the document
103 dated 20th April 1943 the certified copy of which was also produced at Ext
51 was executed by the father of the plaintiffs in favour of Kansara Soni Shivji Jetha
According to this document an usufructuary mortgage was created on the suit property for 20000 koris and the possession was to be delivered to the mortgagees
Over and above that a further amount of 10000 koris was also paid to the mortgagor for which he had to pay interest at the rate of 12 per cent per month
The mortgage period was fixed for 99 years and after the expiry of that period the mortgagor had to pay 30000 koris as principal amount along with interest due on 10000 koris
This was a registered document and it was acted upon by the parties
The learned Trial Judge held that the long term of 99 years for redemption coupled with other circumstances indicated that there was clog on equity of redemption It was argued that the long term for redemption was not necessarily a clog on equity of redemption
Certain deeisions were referred to
The Trial Court noted that there was no quarrel with the proposition of law that long term itself could not amount to clog on equity of redemption when the bargain otherwise was reasonable one and the mortgagee had not taken any undue or unfair advantage
But if in a mortgage with long term of redemption there were other circumstances to suggest that the bargain was unreasonable one and the mortgagee had taken unfair advantage then certainly long term also will be clog on equity of redemption
It is a question to be judged in the light of the surrounding circumstances
It may be noted here that there was a condition in the mortgage deed permitting construction of structure after demolishing the existing structure costs of which were to be paid by the mortgagor
After examining the PG NO 839 facts and the relevant decisions the first Appellate Court came to the conclusion that the terms were oppressive and harsh and there was clog on equity of redemption and the mortgagor should be freed from that bondage
Shri Rajinder Sachar Shri BK Mehta as well as Shri Dholakia urged on behalf of their respective clients that in former Kutch district there was a custom to take mortgages for long term of 99 years and when the period was long
naturally the mortgagee would be required to give full authority to repair and reconstruct the mortgaged property with a view to keep pace with new demands of changing pattern so the condition permitting the mortgagee to reconstruct the whole premises was natural consequence of long term and that should not be treated as clog on equity of redemption
The learned Assistant Judge had rejected the similar contention made before him on behalf of the mortgagees and tenants in view of the decisions of the Gujarat High Court which were also arising out of the decisions in the suits filed in Kutch district and in those cases it was held that there was clog on equity of redemption
We will deal with some Gujarat decisions separately presently
The learned Assistant Judge referred to another circumstance ie to the condition of mortgage which indicated the oppressive nature of the term
By mortgage deed being Ext
103 usufructuary mortgage was created for 20000 koris only and additional mortgage of 10000 koris was also created for which the mortgagor had to pay interest at the rate of 12 per month
Furthermore the mortgagor was not allowed to discharge interest liability periodically but he had to pay to whole amount of interest at the end of 99 years at the time of redemption of the mortgage
Naturally there would be hugh accumulation of interest which for all practical probabilities in most of the cases will be an impossibility to discharge
It was held that the purpose was to ensure that the right of redemption could never be exercised
On the other hand it was contended before the learned Assistant Judge that the transaction was bona fide because reasonable consideration was paid as mortgage money
They was no direct contact between the mortgagor and the mortgagee
There could not be any collusion
The mortgagees were abroad
The learned Assistant Judge examined the evidences of one Madhavji Shivji Soni in order to show comparable instances for reasonableness of the consideration
The learned Assistant Judge after discussing the evidence proceeded on the assumption that the consideration paid as mortgage money was reasonable and proper and according to him it did not make any difference if the other conditions in the mortgage deed were found to be oppressive and amounting to clog on equity of redemption
PG NO 840 Attention of the learned Assistant Judge was drawn to the fact that this was a bona fide transaction at the time when made but subsequently the prices of immovable properties increased so the plaintiffs had come forward to file suits after a lapse of long time
It was highlighted that the plaintiff No I was serving as a Civil Judge and if he came to know that the transaction was oppressive he would not have sat idle for such for a long period
Reference was made to the decision of this Court in Seth Ganga Dhar vs Shankar Lal  Ors
 We will examine that decision in detail
The learned Assistant Judge came to the conclusion on point No 1 that there was clog on equity of redemption and accordingly answered the Issue No 1 in the affirmative
With the other issues we are not concerned in this appeal except Issue No 4
Regarding Issue No 4 as mentioned hereinbefore which is on the question whether the tenants are protected from the effect of redemption decree by virtue of the provisions of the Bombay Rent Act it may be mentioned that the tenants had filed regular civil appeal and it was urged before the learned Assistant Judge that even if the mortgage was redeemed the tenants inducted by the mortgagees would be entitled to continue in possession of the properties in question as they were protected by the provisions of the said Rent Act
There was no dispute in this case and in the facts of the other three appeals that thc tenants were inducted by the mortgagees after the mortgage was created
It is also true that in all these mortgage deeds there was provision that the mortgagees were competent to lease out the suit property and if in exercise of that power they inducted the tenants in the suit properties their tenancies would not come to an end on the redemption of mortgage it was argued
The Full Bench of the Gujarat High Court in Lalji Purshottam vs Thacker Madavji Meghaji 17 Gujarat Law Reporter 497 held that the mortgagee in possession might lease the property but authorisation to the mortgagee to let out the property to any other tenant would not amount to an intention to create tenancy beyond the term of mortgage
Following the said decision however it was held that the tenant had no right to be in possession and was not entitled to the protection of the Bombay Rent Act after the redemption of the mortgage
The appeal was accordingly disposed of
As mentioned hereinbefore there was a second appeal to the High Court and thc High Court expressed the view in brief order and dismissed the second appeal on 26th April 1982 It appears however that in second appeal two questions were agitated 1 the question of jurisdiction and Damdupat and 2 the tenants  right to be in possession
So far as the question of jurisdiction and Damdupat the High Court observed that the Assistant Judge was right
This PG NO 841 point is not before us in this appeal under Article 136 of the Constitution
So far as the question of tenants  right to be in possession after the redemption of mortgage the High Court followed the decision in Khatubai Nathu Sumra vs Rajgo Mulji Nanji and others supra
Before we deal with the question of law and the respective submissions we may briefly so far as relevant for the present purpose refer to the facts of the other three appeals
Civil Appeal No 9993 of 1983 is an appeal by the tenant arising out of the Regular Civil Appeal No 150 of 1978 before the learned Assistant Judge Kutch at Bhuj referred to hereinbefore
The facts have been set out hereinbefore and it is not necessary to reiterate these
We will deal with the contentions in respect of the same at the appropriate stage
Civil Appeal No 397 of 1980 is also an appeal by the tenant
It arises from the judgment and order of the High Court of Gujarat dated 7th November 1978 in Civil Revision Application No 1447 of 1978
One Naranji Nanshi Thacker hereinafter referred to as the decree holder instituted a Regular Civil Suit No 10 of 1968 in the Court of the learned Civil Judge JD Bhuj
The suit was originally dismissed on 29th November 1967
It was a suit for redemption of the mortgaged property located in the town of Bhuj
Thereupon the respondent No I preferred an appeal to the District Judge where the suit was decreed
The defendants filed a second appeal which was dismissed and the decree holder made an application for final decree and the Court gave the final decree on 30th November 1974
While giving the final decree for redemption of the mortgage a direction was given in the decree to the judgment debtors to hand over the possession of the mortgaged property within three months on the decree holder making payment of dues in respect of the mortgage in the Court
In pursuance of the final decree the decree holder took out the execution proceedings and deposited the dues in the Court
At the same time the decree holder claimed possession of the mortgaged property from one Shambhulal Vallabhji Thacker the appellant herein stating that he was a tenant in the possession of the property
The notice was issued to Shambhulal Vallabhji who appeared before the Court and submitted his obJections stating that he was a tenant protected by law and he could not be evicted in the execution of the decree obtained by the decree holder
He also stated that he was entitled to get the protection under the Bombay Rent Control Act
PG NO 842 The learned District Judge held that there was no conduct on the part of the decree holder which would estop him from claiming physical possession from the tenant of the mortgagee in possession
It was contended that when the mortgagee leased out the mortgaged property under the ordinary prudent management of the mortgaged property the mortgagor on redemption of the mortgage was not entitled to recover physical possession of the property from the tenant
The learned Judge negatived this contention
The High Court rejected the appeal summarily
Hence this appeal
Civil Appeal No 1286 of 1981 is also an appeal by the tenant
The appellant is the tenant of the mortgagee
The plaintiffs Nos 1 to 6 are the heirs and legal representatives of deceased Mehta Kanji Bhagvanji
It may be mentioned that the tenant was inducted by the mortgagee in 1955
The property was mortgaged in 1948 for a period of five years
It appears therefore that the tenant was inducted after the period of redemption had expired
The mortgagor had a right to redeem after the expiration of the mortgage
It was contended that though the mortgagee had inducted tenants in the suit property with a mala fide intention on the part of the mortgagee it was still an act of prudent management
The first Appellate Court on the question before us namely whether the tenant was protected by the Bombay Rent Act came to the conclusion after discussing all the relevant evidence and relying on the decision of the Lalji Purshottam vs Thacker Madhavji Meghaji supra that the tenants were not so protected under the provisions of the Bombay Rent Act in the facts of the case The appellant preferred this appeal and this is in issue in this case 
Shri Rajinder Sachar appearing for the appellant mortgagee in Special Leave Petition Civil No 8219 of 19X 2 drew our attention to the evidence of Vrajlal which appears at page 163 of the Special Leave Petition Civil No 821982 wherein he stated about the execution of the documents
He stated that when document Exhibit No 51 was made his father s economic financial position was bad
On his father there was a debt of 12000 koris of Kansara Motilal Madhavji
There was also sundry debt of 7000 8000 koris
His father was an Advocate in Kutch since old times
He was in service
The younger brother was studying
Therefore father mortgagor was in need of money it was clear
Motilal Madhavji was pressing for his debt
They were staying in suit property and had no property except the suit property
He tried to explain the circumstances in which the mortgage deed was executed
PG NO 843 Shri Sachar drew our attention to the observations of the Judicial Committee in the case of Aziz Khan vs Duni Chand and others AIR 1918 PC 48 where it was held that even where the transaction in question was undoubtedly improvident in the absence of any evidence to show that the money lender had unduly taken advantage of his position it was difficult for a Court of justice to give relief on grounds of simple hardship
Shri Sachar tried to urge in the facts and circumstances of the instant case that there is no evidence to lead to the conclusion that there was any undue influence
Great deal of reliance however by the appellants as well as the respondents was placed on the observations of this Court in Seth Ganga Dhar vs Shankar Lal  others supra
There this Court observed that the rule against clog on equity of redemption embodied in section 60 of the empowers the Court not only to relieve a mortgagor of a bargain whereby in certain circumstances his right to redeem the mortgage is wholly taken away but also where that right is restricted
The extent of the latter power is however limited by the reason that gave rise to it namely the unconscionable nature of the bargain which to a court of equity would afford sufficient ground for relieving the mortgagor of his burden and its exercise must therefore depend on whether the bargain in the facts and circumstances of any particular case was one imposed on the mortgagor by taking advantage of his difficult and impecunious position at the time when he borrowed the money
In that case it was held that in a suit for redemption where the mortgage deed by two distinct and independent terms provided that the mortgage would not be redeemed for eightyfive years alll that it could be redeemed only after that period and within six months thereafter failing which the mortgagor would cease to have any claim on the mortgaged property and the mortgage deed would be deemed to be a deed of sale in favour of the mortgagee and it was clearly evident from the facts and circumstances of the case that the bargain was quite fair and as between parties dealing with each other on equal footing
1 was held that the term providing for a period of eightyfive years was not a clog on the equity of redemption and the mere length of the period could not by itself lead to an inference that the bargain was in any way oppresive or unreasonable
The term was enforceable in law and the suit for redemption filed before the expiry of the period was premature
It was further held that the term that on the failure of the mortgagor to redeem within the specified period of six months
he would lose his right to do so and the mortgage deed was to be deemed to be a deed of sale in favour of the mortgagee was clearly a clog 011 the equity of redemption and as such invalid but its invalidity could not in any way affect the validity of the other term as to the period of the mortgage that stood apart
It was PG NO 844 explained by Sarkar J as the learned Chief Justice then was that 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
This principle was clearly established by the observations of Lindley MR in Santley vs Wilde where the Master of Rolls observed as follows 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 mortgage
It was further reiterated at page 515 of the report in Seth Ganga Dhar s case supra that the rule against clogs on the equity of redemption no doubt involves that the Courts have the power to relieve a party from his bargain
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
It is a power evolved by 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 is better to refer to the observations of Northington LC in Vermon vs Bethell  and 839
Lord Chancellor observed therein as follows 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 PG NO 845 time of making the laon 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 craft may impose upon them
 The same view was reiterated by Viscount Haldane LC in G and C Kreglinger vs New Patagonia Meat and Cold Storage Company Ltd 1914 Appeal Cases 25 where it was observed at pages 35 and 36 of the report as follows This jurisdiction was merely a special application of a more general power to relieve against penalties and to mould 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 for ever
What made the hardship on the debtor a glaring one was that the debt still remained unpaid and could be recovered from the feeoffor 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 parol 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 on with suspicion and the court was on the alert to discover want of con science in the terms imposed by lenders
 PG NO 846 The reason 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
Length of the term according to Sarkar J in the aforesaid decision was not by itself oppressive and could not operate as a clog on the equity of redemption
There was a term in the mortgage deed that the mortgagees could spend any amount on repairs and those expenses would be paid according to the account produced by the mortgagees
All that it meant was that in claiming moneys on account of repairs and construction the mortgagees had to show from their accounts that they had spent these moneys
This Court on that basis held that the clause which provided that the mortgage had to be redeemed within the specified period of six months was bad
The principle however is that it was not an unconscionable bargain and it did not in effect deprive the mortgagor of his right to redeem the mortgage or so to curtail his right to redeem that it has become illusory and non existent then there was no clog on equity of redemption
It has to be borne in mind that the English authorities relied upon by Sarkar J and the principles propounded by this Court in the case of Seth Ganga Dhar s case supra were in the background of a sedate and fixed state of affairs
The spiral and escalation of prices of the immovable properties was not then there
Today perhaps a different conspectus would be required to consider the right to redeem the property after considerable length of time pegging the price to a small amount of money the value of which is fast changing
The rights and liabilities of the mortgagor are controlled by the provisions of section 60 of the 
The clog on redemption has been noted in Mulla s 
7th Edition page 401 that a mortgage being a security for the debt the right of redemption continues although the mortgagor fails to pay the debt at due date
Any provision inserted to prevent evade or hamper redemption is void
That is implied in the maxim once a mortgage always a mortgage
Collins MR in Jarrah Timber  Wood Paving Corporation vs Samuel 1903 2 Ch 1 at page 7 observed that it is the right of a mortgagor on redemption by reason of the very nature of a mortgage to get back the subject of the mortgage and to hold and enjoy as he was entitled to hold and enjoy it before the mortgage
PG NO 847 The doctrine clog on the equity of redemption is a rule of justice equity and good conscience
It must be adopted in each case to the reality of the situation and the individuality of the transaction
We must take note of the time the condition the price spiral the term bargain and the other obligations in the background of the financial conditions of the parties
Therefore in our opinion in view of the evidence it is not possible to hold that there was no clog on the equity of redemption in these cases
A very large number of decisions have been cited at the Bar
Shri TU Mehta Shri Rajinder Sachar Shri BK Mehta and Shri Dholakia very ably and painstakingly argued this case in respect of their cotentions
Our attention was drawn to the observations of the Allahabad High Court in Chhedi Lal vs Babu Nandan AIR 1944 Allahabad 204 where it was held that the provision inserted to prevent redemption on payment or performance of the debt or obligation for which security was given was a clog on equity of redemption
Condition in mortgage was in that case that if mortgagee constructed new building by demolition of mortgaged property which was kachcha structure mortgagor would pay cost of construction at the time of redemption
Stipulation in circumstances of the case it was held did not amount to clog on equity of redemption
It was argued before us by th
mortgagees that the provision for the payment towards cost and expenses of repairs and construction did not amount to a clog on the equity of redemption because the repairs and construction were to be effectuated to keep the property in good condition
In the aforesaid decision Verma J at page 207 of the report observed that in the case before the Court it was not pleaded that any pressure and undue influence had been exercised upon the mortgagors
Verma
J referred to the observations of the Viscount Haldane LC in G  C Kreglinger vs New Patagonla Meat and Cold Storage Co supra and Lindley MR in Santley vs Wilde supra
Sir Tej Bahadur Sapru argued before Verma J that it is not his contention that the mortgagee in this case tried to gain a collateral advantage
His argument was that a onerous term has been incorporated in the deed which placed such a burden on the mortgagor as to make it impossible for him to redeem
There is a freedom of contract between the mortgagor and the mortgagee as observed by Verma J at page 207 of the report We must however observe that we live in a changed time
Freedom of contract is permissible provided it does not lead to taking advantage of the oppressed or depressed people
The law must transform itself to the social awareness
PG NO 848 Poverty should not be unduly permitted to curtail one s right to borrow money on the ground of justice equity and good conscience on just terms
If it does it is bad
Whether it does or does not must however depend upon the facts and the circumstances of each case
Reference was also be made to the case of Bhika and Anr
vs Sheikh Amir and Ors AIR 1923 Nagpur 60 where there was no provision under which power was given to the executant of the Deed to pay off the amount which was the consideration for the Deed and no accounts were to be rendered or required
It was held that relief against an agreement forming a clog on the equity of redemption can only be obtained if it was challenged within a reasonable time
It was an equitable relief which cannot be granted as a matter of course
In that decision Sri Vivian Bose as the learned counsel appearing for the appellant unsuccessfully sought to obtain relief against an agreement containing a clog on the equity of redemption
Whether in the facts and the circumstances of these cases the mortgage transaction amounted to clog on the equity of redemption is a mixed question of law and fact
Courts do not look with favour at any clause or stipulation which clogs equity of redemption
A clog on the equity of redemption is unjust and unequitable
The principles of English law as we have noticed from the decisions referred to hereinbefore which have been accepted by this Court in this country looks with disfavour at clogs on the equity of redemption
Section 60 of the  in India also recognises the same position
It is a right of the mortgagor on redemption by reason of the very nature of the mortgage to get back the subject of the mortgage and to hold and enjoy as he was entitled to hold and enjoy it before the mortgage
If he is prevented from doing so or is prevented from redeeming the mortgage such prevention is bad in law
If he is so prevented the equity of redemption is affected by that whether aptly or not and it has always been termed as a clog
Such a clog is inequitable
The law does not countenance it
Bearing the aforesaid back ground in mind each case has to be judged and decided in its own perspective
As has been observed by this Court that long term for redemption by itself is not a clog on equity of redemption
Whether or not in a particular transaction there is clog on the equity of redemption depends primarily upon the period of redemption the circumstances under which the mortgage was created the economic and financial position of the mortgagor and his PG NO 849 relationship vis a vis him and the mortgagee the economic and social conditions in a particular country at a particular point of time custom if any prevalent in the community or the society in which the transaction takes place and the totality of the circumstances under which a mortgage is created namely circumstances of the parties the time the situation the clauses for redemption either for payment of interest or any other sum the obligations of the mortgagee to construct or repair or maintain the mortgaged property in cases of usufructuary mortgage to manage as a matter of prudent management these factors must be co related to each other and viewed in a comprehensive conspectus in the background of the facts and the circumstances of each case to determine whether these are clogs on equity of redemption
These principles have been recognised by this Court in Ganga Dhar vs Shankar Lal supra
It has also to be borne in mind that long term for redemption in respect of immovable properties was prevalent at a time when things and the Society were more or less in a static condition
We live in changing circumstances
Mortgage is a security of loan
It is an axiomatic principle of life and law that necessitous men are not free men
A mortgage is essentially and basically a conveyance in law or an assignment of chattels as a security for the payment of debt or for discharge of some other obligation for which it is given
The security must therefore be redeemable on the payment or discharge of such debt of obligation
Any provision to the contrary notwithstanding is a clog or fetter on the equity of redemption and hence bad and void
Once a mortgage must always remain a mortgage and must not be transformed into a conveyance or deprivation of the right over the property
This is the English law based on principles of equity
This is the Indian law based on justice equity and good conscience
We reiterate that position
Though long term by itself as the period for redemption is not necessarily a clog on equity but in the changing circumstances of inflation and phenomenal increase in the prices of real estates in this age of population explosion and consciousness and need for habitat long term very long term taken with other relevant factors would create a presumption that it is a clog on equity of redemption
If that is the position then keeping in view the financial and economic conditions of the mortgagor the clause obliging the payment of interest even in case of usufructuary mortgage not periodically but at the time of ultimate redemption imposing a burden on the mortgagor to redeem the clauses permitting construction and reconstruction of the PG NO 850 building in this inflationary age and debiting the mortgagor with an obligation to pay for the same as an obligation for redemption would amount to clog on equity
Section 60 of the  conferred on the mortgagor the right of redemption
This is a statutory right
The right of redemption is an incident of a subsisting mortgage and it subsists so long as the mortgage subsists
See the observations in R Ghose Law of Mortgage 6th Edn page 227
Whether in a particular case there is any clog on the equity of redemption has to be decided in view of its background of the particular case
The doctrine of clog on equity of redemption has to be moulded in the modern conditions
See Mulla   17th Edn
Law does not favour any clog on equity of redemption
It is a settled law in England and in India that a mortgage cannot be made altogether irredeemable or redemption made illusory
The law must respond and be responsive to the felt and discernible compulsions of circumstances that would be equitable fair and just and unless there is anything to the contrary in the Statute Court must take cognisance of that fact and act accordingly
In the context of fast changing circumstances and economic stability long term for redemption makes a mortgage an illusory mortgage though not decisive
It should prima facie be an indication as to how clogs on equity of redemption should be judged
In the facts and the circumstances and in view of the long period for redemption the provision for interest 12 per annum payable on the principal amount at the end of the long period the clause regarding the repairs etc and the mortgagor s financial condition all these suggest that there was clog on equity
The submissions made by Mr Sachar and Mr Mehta are therefore unacceptable
In that view of the matter we are of the opinion that the decision of the High Court as well as the Courts below that there existed clog on the equity of redemption in case of these mortgages is correct and proper and we hold so accordingly
Before we dispose of the contentions on the second aspect we must deal with some of the decisions of the Gujarat High Court to which reference had been made and some of which also referred before us
We have noticed the decision of the PG NO 851 Gujarat High Court in Khatubai Nathu Sumra vs Rajgo Mulji Nanji and others supra
In Maganlal Chhotalal Chhatrapati and Ors
vs Bhalchandra Chhaganlal Shah 15 Gujarat Law Reporter 193
PD Desai J as the learned Chief Justice then was held that the doctrine of clog on the equity of redemption means that no contract between a mortgagor and mortgagee made at the time of the mortgage and as a part of the mortgage transaction or in other words as a part of the loan would be valid if it in substance and effect prevents the mortgagor from getting back his property on payment of what is due on his security
Any such bargain which has that effect is invalid
The learned Judge reiterated that whether in a particular case long term amounted to a clog on the equity of redemption had to be decided on the evidence on record which brings out the attending circumstances or might arise by necessary implication on a combined reading of all the terms of the mortgage
The learned Judge found that this long term of lease along with the cost of repairing or reconstruction to be paid at the time of redemption by the mortgagor indicated that there was clog on equity of redemption
The learned Judge referred to certain observations of Mr Justice Macklin of the Bombay High Court where Justice Macklin had observed that anything which does have the appearance of clogging redemption must be examined critically and that if the conditions in the mortgage taken as a whole and added together do create unnecessary difficulties in the way of redemption it seems that is a greater or less clog upon the equity of redemption within the ordinary meaning of the term
In our opinion such observations will apply with greater force in the present inflationary market
The other decision to which reference may be made is the decision of the Gujarat High Court in Soni Motiben vs Ms Hiralal Lakharnshi 22 Gujarat Law Reporter 473
This also reiterates the same principle
In Vadilal Chhaganlal Soni and Others vs Gokaldas Mansukh and Others also the same principle was reiterated
In that case it was held by Gajendragadkar J as the learned Chief Justice then was that the agreement between the mortgagor and mortgagee was that the mortgagor was to redeem the mortgage 99 years after its execution and the mortgagee was given full authority to build any structure on the plot mortgaged after spending any amount he liked It was held that the two terms of the mortgage were so unreasonable and oppressive that these amounted to clog on the equity of redemption
Similar was the position in the case of Sarjug Mahto and other
vs Smt
Devrup Devi and Others AIR l963 Patna 114 where also the mortgage was for 99 years
In Chhedi Lal vs Babu Nandan s case supra the court reiterated that freedom of contract unless it is vitiated by undue influence or pressure of poverty should be giver
a PG NO 852 free play
In the inflationary world long term for redemption would prima facie raise a presumption of clog on the equity of redemption
See also the observations in Rashbehary Ghose  Law of Mortgage  6th Edn
pages 227 and 228
Bearing the aforesaid principles in mind we must analyse the facts involved in these appeals
It has been noticed in SLP Civil No 8219 of 1982 that the High Court of Gujarat by its order impugned had dismissed the second appeal
The High Court had merely observed in dismissing the second appeal that the First Appellate Court had followed the decision of the Gujarat High Court in Khatubai Nathu Sumra vs Rajgo Mulji Nanji and Others supra
We have noted the salient features of the said decision
The High Court therefore found no ground to interfere with the decision of the First Appellate Court and accordingly dismissed the second appeal
The First Appellate Court by its judgment disposed of Civil Regular Appeal No 149 of 1978 and another civil appeal which was the appeal by the tenant was also disposed of by the said judgment
The learned Judge of the Appellate Court had referred to the ratio of the decision in Gangadhar vs Shankerlal supra
The learned Judge bearing in mind the principle of the aforesaid decision and the relevant clause of Ext
103 came to the conclusion that the clauses amounted to clog on the equity of redemption in the facts of this case
Shri Sachhar tried to urge before us that on the evidence and the facts in this case having regard to the position of the parties the transaction did not amount to clog on the equity of redemption
It was emphasised by the First Appellate Court that the fact that the son of the mortgagor subsequently became Civil Judge would not affect the position because what was relevant was the financial condition at the time of the transaction
We have further to bear in mind that it has come out in the evidence that the father of the plaintiff was residing in the suit property at the relevant time and there was no other residential house except the suit property
The First Appellate Court therefore emphasised in our opinion rightly that if there was no pressure from the creditor no body would like to mortgage the only house which is sole abode on the earth
In that view of the matter and in view of the position in law we are of the opinion that the First Appellate Court was right in the view it took
The First Appellate Court referred to the decision of Kunjbiharilal vs Pandit Prag Narayan AIR 1922 Oudh 283
In that case there was a condition that the mortgagor should PG NO 853 pay interest along with the principal amount at the time of redemption after 50 years
It was held that the intention was to see that right of redemption could never be exercised
If the condition was such which would result in making redemption rather difficult if not impossible it would be a dog on the equity of redemption and could not be enforced
Similar was the position of the Allahabad High Court in Rajai Singh vs Randhir Singh AIR 1925 Allahabad 643
There the term fixed for redemption was of 96 years and there was a stipulation for payment of interest along with principal not periodically but only at the time of redemption
In the instant case before us the mortgagor was required to pay the whole amount of interest at the end of 99 years which will practically make the redemption impossible
Applying the well settled principles which will be applicable to the facts of this case in determining whether there was in fact a clog on the equity of redemption we are of the opinion what the First Appellate Court was right in holding that there was a clog on equity of redemption
On the second aspect of the question whether the right of the tenants of the mortgagees are protected after the redemption of mortgage reliance was placed by the First Appellate Court on the decision of the Full Bench of the Gujarat High Court in Lalji Purshottam vs Thacker Madhavji Meghaji supra
There urban immovable property was mortgaged with possession mortgagee creating lease during the subsistence of the mortgage
The question was whether after redemption of mortgage such lease is binding on the mortgagor
It was held that Section 76a of the would not apply to such cases
There must be express words showing an intention if tenancy was to be created beyond the term of the mortgage
Mere reference that mortgagee is entitled to lease property does not create a binding tenancy on the mortgagor
After the redemption of the mortgage the relationship of landlord and tenant does not exist
Such tenant therefore does not get any protection under section 12 of the Bombay Rent Control Act it was held
The Gujarat High Court had referred to several decisions of this Court
In Mahabir Gope vs Harbans Narain Singh  which was a decision dealing with a lease created by a mortgagee with possession under the Bihar Tenancy Act this Court reiterated that the general rule is that a person cannot by transfer or otherwise confer a better title on another than he himself has
A mortgagee cannot therefore create an interest in the mortgaged property which will enure beyond the termination of his interest as mortgagee
Further the mortgagee who take possession of the mortgaged property must manage it is Person of ordinary prudence would manage if it were his own PG NO 854 and he must not commit any act which is destructive or permanently injurious to the property
Reliance may be placed for this purpose on section 76 clauses a and e of the 
It was held that the provisions of sections 20 and 21 of the Bihar Tenancy Act did not apply to the lessees since they were not settled raiyats  and the lessees could not claim to have secured under the statute occupancy rights in the land
It was further held that the mortgagor was entitled to the possession of the land upon redemption of the mortgage
In a slightly different context in Harihar Prasad Singh vs Must
of Munshi Nath Prasad  this Court was concerned with a mortgage with possession effected on agricultural land
This Court had to consider in that decision whether under the provisions of the Bihar Tenancy Act the tenant inducted on the mortgaged property during the pendency of the mortgage could claim right to remain in possession after the redemption
Venkatarama Ayyer J speaking for the Court pointed out that if the tenant could not resist the suit for ejectment either by reason of section 76a of the or section 2 1 of the Bihar Tenancy Act the tenant could not get such a right as a result of the interaction of both those sections
This Court ultimately held that the tenants inducted by the mortgagee with possession had failed to establish that they had any right of occupancy over the suit lands and that the plaintiffs were entitled to a decree in ejectment with future mesne profits as claimed in the plaint
Thus a right claimable under section 76a of the because of a lease created in the course of prudent management of the property was put on a different footing altogether from a right created by a special statute
Similarly in Asa Ram vs Mst
Ram Kali  the question before this Court was again of mortgage of agricultural land when the mortgage was with possession and of the tenant inducted by the mortgagee with possession
In Dahya Lal vs Rasul Mohammed Abdul Rahim    this Court was concerned with the case of a tenant inducted on agricultural land by a mortgagee in possession
There under the Bombay Tenancy and Agricultural Lands Act 1948 a tenant lawfully inducted by the mortgagee on the land would on redemption of the mortgage be deemed to be a tenant of the owner mortgagor under section 4 of the Bombay Tenancy and Agricultural Act
This Court held that all persons other than those mentioned in clauses a b and c of section 4 of the Bombay Tenancy and Agricultural Lands Act 1948 who lawfully cultivated land belonging to other persons whether or not their authority was derived directly from the PG NO 855 owner of the land must be deemed tenants of the lands under section 4 of the said Act
So therefore the Bombay Tenancy Act required at the relevant time the lawful cultivation by tenant
This Court had also considered this question in Prabhu vs Ramdev  There the same problem again arose in connection with a person inducted into agricultural land as a tenant by an usufructuary mortgagee and the question was whether the rights of such a tenant were protected by the provisions of the Rajasthan Tenancy Act 1955
In view of the special status the tenant in question was held to be entitled to the protection
It must be noted as observed by the Full Bench of the Gujarat High Court that all the cases that we have so far considered are cases of agricultural lands and in each of these cases the question was examined from two points first whether the lease could be said to be a lease granted in the course of prudent management and in the alternative whether the rights of the tenant inducted by the mortgagee with possession had been enlarged as a result of a special statute dealing with the rights of tenants of agricultural lands
This question however has been agitated before this Court in the background of the non agricultural lands especially in urban areas
In All India Film Corporation vs Raja Gyan Nath  the question was in respect of lease of a cinema house granted by the mortgagee with possession
Hidyatullah CJ delivering the judgment of the Court
observed in paragraph 7 that a general proposition of law is that no person can confer on another a better title than he himself has
A mortgagee is a transfer of an interest in specific immovable property for the purpose of securing repayment of a loan
A mortgagee s interest lasts only as long as the mortgage has not been paid off
It was further observed by the learned Chief Justice that on redemption of the mortgage the title of the mortgagee comes to an end
It was held that section 111c of the provides that a lease of immovable property determines where the interest of the lessor in the property terminates on or his power to dispose of the same extends only to the happening of any event by the happening of such event
The duration of the mortgagee s interest determines his position as the lessor
But there is one exception
That flows from section 76a which lays down liabilities of a mortgagee in possession
It is provided there that when during the continuance of the mortgage the mortgagee takes possession of the mortgaged property he must manage the property as a person of ordinary prudence would manage it if it were his own
It was observed that this principle applied ordinarily to the management of agricultural lands and has been extended to urban property so as to tie it up in the hands of lessees or to confer on them rights under special PG NO 856 statutes
It was emphasised by the Chief Justice that lease would continue to bind the mortgagor or persons deriving interest from him if the mortgagor had concurred to grant it
Ultimately this Court in that case held that on the termination of the mortgage in the events that had happened in that particular case that since there was no landlord and no tenant the provisions of the Rent Restriction Act could not apply beyond the date of the termination of the mortgagee s interest
Similar is the view in the case of Sachalmal Parasram vs Ratnabai There the question was whether the tenant was protected under the Madhya Pradesh Accommodation Control Act 1961
The Court did not accept the rights of the tenant in possession
The question whether the tenant from usufructuary mortgagee of building was entitled to protection on redemption of mortgage was considered by the Full Bench of the Madras High Court in SV Venkatarama Reddiar vs Abdul Ghani Rowther  Ors AIR 1980 Mad 276
There Justice Natarajan as the learned Judge then was of the Madras High Court delivering the judgment of the Full Bench of the said Court held that if a tenancy was created by a mortgagee with possession the ties of landlord and tenant were snapped eo instanti the mortgage is redeemed and unless there is a fresh forging of the relationship of landlord and tenant between the mortgagor and the erst while tenant by i the voluntary act of the parties or ii a deemed forging of the relationship by express provision in the Act itself the erstwhile tenant cannot claim protection under the Act so as to perpetuate his occupation of the building as a tenant
The rule of exception contained in Section 76a of the T P Act cannot be readily and automatically invoked by a tenant let into possession of urban property by a mortgagee with possession
The principle of exception afforded by section 76a of that Act applies ordinarily to the management of agricultural lands and has seldom been extended to urban property so as to tie it up in the hands of lessees or to confer on them rights under special statutes
It may be open to a tenant inducted upon urban property by a mortgagee with possession to rely upon Section 76a to claim tenancy right for the full term of the tenancy notwithstanding the redemption of the mortgage earlier
But it is for the person who claims such benefits to strictly establish the binding nature of the tenancy created by the mortgagee on the mortgagor
Reference may be made to a Full Bench decision of the Rajasthan High Court in Devkinandan and another etc
vs Roshan Lal and others AIR where several relevant authorities have been discussed
The question before the Full Bench was whether a tenant of a mortgagee in possession is entitled to PG NO 857 the protection of the provisions of the Rajasthan Premises Control of Rent and Eviction Act 1950 against the mortgagor after the redemption of the mortgage
PK Banerjee CJ delivering the judgment of the Court after discussing all relevant authorities held that in respect of tenancy of urban property or premises the mortgagee in possession has no right to jeopardise the right of the mortgagor by giving a tenancy which would continue even after the redemption of the mortgage
This negates the submission that as a matter of prudent management the tenants had been inducted and after induction the tenants got their rights enlarged
In Lalji Purshottam vs Thacker Madhavji Meghaji supra where the Full Bench of the Gujarat High Court had considered the effect of continuation of tenancy under the Bombay Rents Hotel and Lodging Houses Rates Control Act 1947 which are precisely the cases in the facts of the instant appeals after discussing all the relevant provisions of the Act including the theory of the prudent management the Full Bench of the Gujarat High Court observed that where a lease is created by the mortgagee in possession of an urban immovable property such a lease would not be binding on the mortgagor after redemption of mortgage assuming that the lease is such as a prudent owner of property would have granted in usual course of management
The Court observed that that was so because section 76a could not apply to a case of urban immovable property and hence a lease created by the mortgagee in possession of an urban immovable property would not be binding on the mortgagor after redemption of the mortgage
Even apart from section 76a of the if the words of the mortgage deed clearly and indubitaly express an intention to allow expressly creation of a tenancy beyond the term of the mortgage then only the lease created in exercise of the power expressly conferred by the mortgage deed would be binding on the mortgagor
If the words of the mortgage deed do not clearly and indubitably disclose the intention to allow expressly the creation of a tenancy beyond the terms of the mortgage the mere fact that the mortgage deed authorises the mortgagee with possesion to induct a tenant would not create a tenancy binding on the mortgagor after the redemption of the mortgage
In such a case a tenant inducted on the property by a mortgagee with possession when the tenancy of that tenant is not binding on the mortgagor after the redemption of the mortgage is not protected under the provisions of the Bombay Rents Hotel and Lodging House Rates Control Act 1947
We are of the opinion that the aforesaid view expressed by the Chief Justice Diven on behalf of the Full Bench represents the correct position in law in respect of the second aspect of the question canvassed before us
PG NO 858 We have noticed the view of the Full Bench of the Rajasthan A High Court on this aspect
This question was again envisaged by this Court in the background of the Rajasthan Premises Act in Om Prakash Garg vs Ganga Sahai  Ors holding that on passing of the final decree of redemption of the mortgage the lease did not subsist and the tenant is not entitled to protection under the Rajasthan Premises Control of Rent  Eviction Act 1950
Again viewing this question in the context of the Bombay Rents Hotel  Lodging House Rates Control Act 1947 in Jadavji Purshottam v Navnitbhai Amaratlal  Ors 1987 4 SCC 223 in which the judgment was delivered by Natarajan J and one of us was a party to that decision it was held that it was recognised by this Court in a number of cases that the question of imprudent management of the mortgaged property by the mortgagee would not arise where the rights of the tenant were enlarged by the tenancy legislation enacted after the tenant was put in possession by the mortgagee
Hence in that case the question was whether the tenancy rights of the appellant tenant who was inducted by the mortgagee came to be enlarged by tenancy legislation after he was put in possession by the mortgagee
The fact founding that case was that the tenant appellant was not inducted into possession soon after the execution of mortgage deed and the mortgagee was put in possession of the property but long thereafter
In fact there was already a tenant on the mortgage Property when the mortgagee was put in possession
During the period o f tenancy of that tenant the Saurashtra Act 22 of 1951 came to be enacted and gave protection to the tenants from paying exorbitant rent and from unreasonable eviction
Despite the enlargement of his tenancy right by the Act
that tenant vacated the lease premises in 1956 and thereafter the mortgagee inducted the appellant in possession
It was held that that was a case where the Saurashtra Act was already in force when the appellant cannot be inducted into possession
The tenancy rights of the appellant cannot be said to have become enlarged after the mortgagee granted him the lease by subsequent legislation enacted for affording protection to tenants
The fact that the mortgagee had granted lease only for period of one year will not alter the case in any manner as not only had the mortgagee executed the lease deed after the expiry of the lease period but also because the restriction of the lease period to one year was of no consequence in view of the provisions contained in the Saurashtra Act 22 of 1951
The enlargement of the tenancy rights cannot also be claimed on the basis of the fact that the Bombay Rent Act had been enacted after the appellant was inducted into the property because the Saurashtra Act was already In force when the mortgagee granted lease to the appellant and it was only from January  64 the Bombay Rent PG NO 859 act came to replace the Saurashtra Act
In Civil Appeal No 9993 of 1982 Pomal Kanji Govindji  Ors
vs Vrajlal Karsandas Purohit  Ors
 Shri BK Mehta took us to the factual background
The appellants who are tenants in the mortgage properties being defendants Nos 4 to 9 in the original suit had resisted the suit for redemption and contended that the plaintiffs were not entitled to recover possession from them since their rights are protected under the Bombay Rents
Hotel and Lodging House Rates Control Act 1947 and the said Act has applied to the area of kutch in the Bombay State
Therefore no decree for eviction could be passed against them except in accordance with the provisions of the said Act
The High Court held that redemption of mortgage was possible and the suit was maintainable as mentioned hereinbefore
However as regards the question of protection of the tenants under the Bombay Rent Act Shri Mehta proceeded to submit that the learned Judge did not make any finding as to when the tenants were inducted nor did he express his opinion about the evidence of respondent No 5
Shri Mehta further submitted that the learned Judge did not make any finding as to when their tenants were inducted either before or after the rent restriction Act was made applicable to the area of Kutch
On that basis following the Full Bench decision of the Gujarat High Court in Lalji Purshottam vs Thacker Madhavji Meghaji supra the courts below rejected the claim of he tenants
Shri Mehta submitted hat the High Court has erred in not following the settled legal position entrenched by a line of decision of this Court that he rights of a tenant inducted by a mortgagee with possession would enure beyond the period of redemption of the mortgage if his rights are enlarged by subsequent tenancy legislations in force in the area in which the property is situated
He drew our attention to the decision in the case of Mahabair Gope vs Harbans Narain supra
There as mentioned hereinbefore this Court had found that the provisions of sections 20 and 21 of the Bihar Tenancy act did not apply to the lessees since they were not settled raiyats 
Shri Mehta also drew our attention to the observations of this Court in Asa Ram vs Mst
Ram Kali supra
He also drew our attention to Dahya Lal vs Rasul Mahommed supra which we have discussed hereinbefore
Similar was the position in Prabha vs Ramdev supra which is also being discussed hereinbefore
Reference was made to the decision in All India Film Corporation vs Gyan Nath supra the basis of which has been explained hereinbefore
The said decision will not be applicable in respect of the facts and circumstances of the case and in view of the terms of the renancy
Our attention was drawn by Shri Mehta to the observations of this Court in Madan Lal vs Badri Narain and others 1987 3SCC 460
In that case it was contended before this Court that there PG NO 860 was no such rule of general acceptance that a lease of urban property by the mortgagee in possession cannot be regarded to be an act of prudent management within the meaning of section 76a of the which carves out an exception to the general rule that a mortgagee in possession cannot create in the tenant inducted by him a right to continue in possession beyond the period of redemption
Before this Court in that case a reference was made to the Full Bench decision of the Rajasthan High Court in Devkinandan vs Roshan Lal supra
But in view of the facts that there was no definite finding the question whether the alleged lease was an act prudent management on the part of the mortgagee in possession in terms of section 76a was left open and that to be determined by the learned trial Judge
It has been held by this Court in numerous decisions that in case of immovable properties in urban areas unless the leases specifically and categorically make an exception in favour of the tenant that they would continue in possession even after the expiry of termination of the leases and those leases were acts of prudent management in no other case the tenants inducted by the mortgagee would be titled to the production under the Rent Act after the redemption of mortgage
In this connection it will be appropriate here to refer to the position as mentioned in the Mulla s   7th Edn pages 513 and 514 which is as follows Whether a mortgagee in possession can by reason of clause a grant a lease of the mortgaged property has been considered in several decisions of the Supreme Court
In Mahabir Gope vs Harbans Narain   the Supreme court observed that the right conferred under clause a was an exception to the general rule that a person cannot confer a better title on another than he possesses himself
The Court pointed out that it followed that though a mortgagee may if it is prudent grant leases these would determine on redemption
The Court recognised however that in some cases the granting of a lease in the course of prudent management might result in the tenant acquiring rights under other laws so that he could not be evicted by the mortgagor but this was an exception and could not apply where the mortgage deed prohibits such a lease either expressly or by necessary implication
These observations do not appear to have been followed in Harihar Prasad Singh vs Deonarayan Prasad  where the Suprerne PG NO 861 Court held that even a lease created by a mortgagee in possession in the course of prudent management though binding on the mortgagors after redemption could not create the rights of a raiyat on the tenants
The question was next considered in Asa Ram vs Ram Kali  where the Supreme Court held that the creation of a lease which would create occupancy rights in favour of the tenants could not be regarded as a prudent transaction
In Prabhu vs Ramdev  however the Supreme Court without referring to Asa Ram s case held that a tenant of a mortgagee can invoke the benefit of subsequent Tenancy legislation which provided that such a tenant could not be evicted except in the circumstances set out in that legislation
The Court explained Mahabir Gope s case as being a decision given with reference to the normal relationship of landlord and tenant
and stressed that the Supreme Court in that case had contemplated an extraordinary situation arising from a tenant acquiring rights under other laws
The Court explained Harihar Prasad Singh s case as having been decided on the peculiar facts of the case viz
that in that case the tenants were not entitled under the Local law to invoke the protection of that law
In Film Corporation Ltd vs Gyan Nath the Supreme Court again considered the question
The Court did not refer to either Harihar Prasad Singhs case supra or Prabhu vs Ramdev supra
The Court observed that the principle laid down in Mahabir Gope s case supra that a bona fide and prudent lease would bind the mortgagor ordinary   applies only to agricultural lands and has seldom been extended to urban property
This observation is strictly speaking obiter as the Court found that the lease in question was neither bona fide nor prudent in view of the long term and the low rent
It is respectfully submitted that there is no warrant for limiting sec
76a to agricultural land
Whether a particular lease is bona fide or prudent is a question of fact obviously a lease of urban land which would confer on the lesson the protection of special statutes such as the Rent Acts would prima facie be imprudent
In Sachalmal Parasram vs Ratanbai  however the Supreme Court has repeated the obiter observation in the Film Corporation case supra that except in the case of agricultural land acts of a mortgagee would not bind the mortgagor
PG NO 862 It is respectfully submitted that the position could be more satisfactorily stated with reference to the language of clause a
The right conferred by that clause is to manage the property during the subsistence of the mortgage
It is unlikely that a prudent manager would create a lease for a period longer than the mortgage or in circumstances which would give the lessee rights after the redemption of the mortgage
Such leases would prima facie be imprudent and not binding on the mortgagor as beyond the powers conferred by clause a
If however it can be shown in any given case that such a lease was prudent it would bind that mortgagor even after redemption and even though the lessee acquires thereunder rights of a permanent or quasi permanent nature
No question of imprudence can arise where as in Prabhu vs Ramdev  the rights of the tenant were enlarged by Tenancy legislation enacted after the tenant was put in possession by the mortgage
It is submitted that this statement of the law is consistent with all the Supreme Court decisions quoted above
 We are of the opinion that the rationale of the various decisions of this Court have been explained by Chief Justice Diven in the Full Bench decision of the Gujarat High Court in Lalji Purshottam vs Madhavji Meghaji supra which is the correct enunciation of law The learned Chief Justice observed at pages 514 and 515 of the report as follows In our opinion on the general aspect of the matter based on facts on which judicial notice can be taken it is clear that so far as leases of agricultural lands are concerned when a lessee cultivates land by the very process of cultivation he brings inputs and improves the fertility of the soil
Constant and continuous cultivation by proper manuriny etc
would improve the fertility of the soil and on the determination of the lease that fertility would still remain in the land
It is therefore necessary that security of tenure should be given to the tenant of agricultural land so that by his proper husbandry and agricultural practices he himself may derive good benefits from the land and also improve the fertility of the soil
It is because of this aspect that in all countries legislation has been enacted to protect the actual tiller of the soil fixity of tenure has been given and all the different measures of tenancy legislation regarding agricultural lands PG NO 863 have provided for sufficiently long leases and protection of his tenure so as to induce the agriculturist to put in his best efforts and best inputs as they are called now a days during the term of the lease
A prudent owner of property would therefore see to it that the term of lease which he grants in respect of agricultural land is sufficiently long to induce the tenant to put in the best efforts which would incidentally benefit the owner of the land by improving the fertility of the land itself
In contrast to the agricultural lands
so far as non agricultural and urban lands are concerned on determination of the lease the tenant who has been on the property under the terms of the lease is bound to put back the property in the condition in which it was at the time when he entered into possession and nothing is normally done by the tenant which is likely to improve the quality of the soil property by his own ettorts put in during the terms of the tenancy
There is therefore no question of a prudent owner of urban immovable property granting a long term lease merely with a view to improve the quality of the land
Barring Rent Control and Rent Restriction Act which deal with urban immovable property in areas where there is scarcity of accommodation both for residential and nonresidential purposes there is no concept of protection to tenants of urban immovable property
We are of opinion that this is the rationale behind the distinction which the Supreme Court has pointed out between leases of agricultural lands and leases of urban immovable property while dealing with the provisions of sec
76a of the  whereas a a prudent owner would not ordinarily speaking think of creating a long term lease purely as a matter of prudent management an owner of agricultural land in the course of prudent management would create a long term lease purely from the aspect of prudent management
In our opinion therefore the word seldom used Hidayatullah CJ in All India Film Corporation s case supra while dealing with the application of the exception carved out by see 76a to urban immovable property has to be read as not being extended at all and it is merely a term of the phrase to say that this exception has seldom been extended to urban immovable property
 PG NO 864 We have noted hereinbefore the ratio and the basis of the decision of this Court in Jadavji Purshottam vs Dhami Navnitbhai Amaratlal supra
Shri Mehta submitted that there was no clear finding as to when the tenants were inducted whether before or after the Rent Restriction Act and therefore he pleaded that the matter should be referred to the larger Bench
In view of the facts found in this case which were similar to the facts mentioned in Jadavji Purshottam s case supra there is no specific authority in the lease which stated that the lease would continue beyond the period of mortgage
There is no extended authority as contemplated in Jadavji Purshottam s case found in this case
The submission was that the matter should be considered by a larger Bench in the light of the Jadavji Purshottam s case supra
We are unable to accept the said submission
In this case the words in the mortgage deed as we are taken through did not clearly allow creation of tenancy beyond the period of mortgage
That in any event would not have been prudent management
hence there is no finding that the mortgage deed permitted either expressly or impliedly
creation of tenancy beyond the period
We think that the tenants were not entitled to protection after redemption of mortgage
Furthermore in all these cases the authority of the mortgagees to lease out the property expressed or implied was circumscribed by a stipulation that the mortgagee should re deliver the possession of the property when the mortgage was redeemed
In that context we are of the opinion that the submissions on behalf of the tenants cannot be entertained
As mentioned hereinbefore Sh
BK Mehta especially in the background of the facts in CA No999383 has made certain submissions relying on the observations of this Court in Jadavji Purshottam s case supra
That decision requires recapitulation of the basic principle
That decision reiterated that the tenant appellant therein was not inducted into possession soon after the mortgage deed was executed and the mortgagee was put into possession of the property hut long thereafter
It is not necessary to detain us on the facts of this case
The basis of that decision was whether the Saurashtra Act was already in force
The appellant therein was inducted into possession and his tenancy rights could not have become enlarged after the mortgagee granted him the lease by a subsequent legislation enacted for affording protection to tenants
In this case relying on the said decision it may be reiterated that the tenancy right was not created by a mortgagee in possession wherein the mortgagor had not concurred in the grant of a lease beyond the period of mortgage
The question in that decision was whether the lease granted to the tenant by the appellant had the approval or concurrence of the PG NO 865 mortgagor so as to entitle the tenant to claim tenancy right even against the mortgagor after redemption of the mortgage
In all these cases the major term in the mortgage deed was that the possession would be delivered on redemption
In none of these cases was there any term at least none was adverted to which stipulated any condition in the mortgage deed which entitled the mortgagees to create tenancy beyond the period of the mortgage
This factor along with the condition in the mortgage deed postulating the obligation to deliver possession at the expiry of the term of mortgage to the mortgagors in our opinion are the decisive factors showing that the tenants did not get their rights enlarged on the coming into force of the subsequent Rent Legislation
The very Preamble to the Bombay Rents Hotel and Lodging House Rates Control Act 1947 indicates that it was An Act to amend and consolidate the law relating to the control of rents and repairs of certain premises of rates of hotels and lodging houses and of evictions and also to control the charges for licence of premises etc
It was thought expedient to amend and consolidate the law relating to the control of rents and repairs of certain premises
But that in our opinion has indeed never been construed as enlarging the rights of any group of tenants who were not the tenants of the mortgagors
Hence the question of enlargement of right by tenancy legislation of persons who were in occupation but had no rights as tenants of the mortgagors would not arise in the context of these cases
Incidentally it may be referred that in appeal from SLP No 821982 this question does not arise
In CA No 128681 the tenancy after the period of mortgage was not bona fide
In CA No 999383 it was submitted that the tenants were inducted after the mortgage on 28th April 1943
The Bombay Rent Act was made applicable to the area of Kutch in September 1951
See Dalal s Rent Act 4th Edn
page 814 on that basis it was submitted that as there was no Act in the area of Kutch which is in pari materia with the Bombay Rent Act and therefore the rights of the tenants were enlarged by the subsequent Act
In view of the tact that the mortgage deed did not contemplate rights of the mortgagees to grant tenancy beyond the period of mortgage and had imposed an obligation that on the expiry of the period of mortgage mortgagors were entitled to the possession of the demised premises 
In our opinion these contentions cannot be entertained
PG NO 866 Incidentially it may also be mentioned that in CA No 128681 the suit property was mortgaged in 1948 for a period of 5 years
The tenant was inducted by the mortgagee in 1955
The period of mortgage had expired in 1953
Apparently the mortgagee had inducted the tenant after expiry of the period of mortgage and such a conduct was grossly imprudent management and was not bona fide
Such tenant cannot in any event claim any protection
Having considered the facts and the circumstances and the ratio of the decision in Jadavji Purshottam s case supra we are clearly of the opinion that the tenancy rights did not come to be enlarged by the Tenancy Legislation after the tenant was put into possession by the mortgagee and the tenancy created ia favour of the tenants by the mortgagor did not have the concurrence of the mortgagor so as to claim tenancy rights even after redemption of the mortgage
See the observations in para 12 of the Jadavji Purshottam s case supra
In the premises the appeals must fail and are dismissed
Civil Miscellaneous Petition in CA No 39780 must also fail and is dismissed
The parties will pay and bear their own costs
APJ Appeals dismissed


Summary:
In August 1984 the State Government granted permission to various private bodies and individuals for starting colleges of education BEd courses with several conditions required to be complied with within a period of six months
The appellant was one among these beneficiaries
When a change of the Government ensued in September 1984 the permissions granted were suspended or cancelled
The appellant and other institutions aggrieved by the cancellation moved the HighCourt for relief under Article 226
The High Court while disposing of all the writ petitions by a common order was of the opinion that the cancellation was as arbitrary as the grant of permission
Since the parties had invested large sums money for establishing the colleges a via media was taken
The High Court laid down certain conditions and issued directions for compliance for granting permission and recognition to the colleges
The District Educational Officer inspected the appellant s college and made a report stating that there was non compliance with the directions of the High Court
Accepting that report Director of School Education made an order declaring that the College of the appellant shall cease to exist with effect from the last working day of the academic year 1985 86
Challenging the validity of that declaration the appellant again moved the High Court by filing a writ petition
He filed two more writ petitions for a direction to the Nagarjuna University to grant affiliation to the appellant s college and for a declaration that the resolution of the Nagarjuna University refusing to grant affiliation to the college of the appellant was arbitrary and illegal
The students of the college also filed a writ petition for a direction to declare the results of their BEd
examination held in 1985
The High Court by a common order disposed of all the four writ petitions
PG NO 893 PG NO 894 The appellant filed an appeal to this Court only against the order dismissing writ petition No 1645 of 1987 on the ground that the appellant has not complied with the conditions laid down by the High Court
Before the High Court the appellant did not contend that it had complied with all the conditions laid down for recognition
However it was contended that the college is a minority institution and therefore it need not comply with all those requirements
The High Court did not accept this contention
Before this Court he relied solely on the ground that the conditions laid down by the High Court have been substantially complied with
On behalf of the respondent State it was contended that the appellant has been a law breaker from the very beginning and no concession should be extended to perpetuate the illegality by permitting the students to appear in the examination and in any event more than 100 students should not be permitted
Dismissing the appeal this Court HELD 1
While considering the validity of the earlier cancellation of the permission the High Court had laid down certain guidelines and issued some directions for obedience
The High Court made that order in the interest of the institution and the students though strictly speaking it was beyond the power of the High Court
The High Court did make it clear that if those conditions were not complied with within the prescribed period the institution shall cease to function
The record reveals that there were many deficiencies in the institution
The reports of the District Educational Officer and Inspection Commission of Nagarjuna University indicated that the appellant did not satisfy all the requirements for granting permission or affiliation
900D E 2
The permission to start the college by the appellant was cancelled twice by the authorities for want of requirements
On that groundthe University also has refused to grant affiliation to the college
The order of the High Court affirming the decision of the University is not under appeal before this Court
In spite of it the appellant s sought an interim order from this Court and admitted 160 students
If the Government order had been delayed the appellant ought to have asked the Convenor BEd
Common Entrance test to allot the students for admission to the college
That was one of the conditions laid down by the High Court also
Even that was not complied with
903B D 3
They are the students who were admitted on the strength of the interim order made by this Court
It may not be proper to drive them to street if they have under gone the prescribed course with the necessary syllabi and other PG NO 895 matters relating thereto
But it would be for the Director of School Education and the Registrar Nagarjuna University to consider and satisfy themselves and not for this Court at once to permit them to appear in the examination
903E F 4
Though teaching is the last choice in the job market the role of teachers is central to all processes of formal education
The teacher alone could bring out the skills and intellectual capabilities of students
He is engine  of the educational system
He is a principal instrument in awakening the child to cultural values
He needs to be endowed and energised with needed potential to deliver enlightened service expected of him
His quality should be such as would inspire and motivate into action the benefitter
He must keep himself abreast of ever changing conditions
He is not to perform in a wooden and unimaginative way
He must eliminate fissiparous tendencies and attitudes and infusenobler and national ideas in younger minds
His involvement in national integration is more important indeed Indispensible
It is therefore needless to state that teachers should be subjected to rigorous training with scrutiny for efficiency
It has greater relevance to the needs of the day
The ill trained or sub standard teachers would be detrimental to our educational system if not a punishment on our children
The Government and the University must therefore take care to see that inadequacy in the training of teachers is not compounded by any extraneous consideration
903H 904A D