Case: Muramlal Vs. Dev Karan

The mortgage sought to be redeemed was executed on the 19th March, 1919 for a sum of Rs. 6,500/-. The mortgaged property consisted of a shop which was delivered over in the possession of the mortgagee alter the execution of the mortgage-deed. The mortgage deed had provided that the amount due under the mortgage should be repaid to the mortgagee within 15 years, whereupon the property would be redeemed. It had also stipulated that if the payment was not made within 15 years, the mortgagee would become the owner of the property. The mortgagor was Mangal Ram who died and the respondent claims to be the heir and legal representative of the said deceased mortgagor. In the plaint filed by the respondent, it was averred that the transaction was, in substance. a mortgage and the mortgagors right to redeem was alive even though the stipulated period of 15 years for the repayment of the loan had passed. On these allegations, the respondent claimed a decree for redemption of the suit mortgage on payment of Rs. 6,500/-, it appears that the original mortgagee Gangadhar had also died before the institution of the suit, and so, the appellant Murarilal was impleaded as the defendant on the basis that he was the only, heir and legal representative of the deceased mortgagee Gangadhar.2. The claim for redemption thus made by the respondent was resisted by the appellant on several grounds. It was alleged that after the expiry of the stipulated period of 15 years, the property had become the absolute property of the mortgagee and it was urged that the original transaction was, in substance, and in reality, not a mortgage but a sale, several other pleas were also raised by the appellant in resisting the respondents claim, but it is not necessary to refer to them. The learned trial Judge framed appropriate issues which arose on the pleadings of the parties. In substance, he held that the claim for redemption made long after the 15 years period had expired could not be sustained. Findings were made on other issues also and they were against the respondent. In the result, the respondents suit was dismissed.3. The respondent then took the matter in appeal before the Rajasthan High Court. He urged that the view taken by the trial Court that the stipulation as to the mortgagors liability to re-pay the loan within 15 years did not bar his present suit for redemption, because the said stipulation amounted to a clog on the equity of redemption and as such, could not affect the mortgagors right to redeem, and he added that the transaction, in subsance, was a mortgage and not a sale, and so, his right to redeem was alive and could be effectively enforced by the present suit. The High Court has upheld his first contention that the relevant provision as to the period within which the mortgage amount had to be repaid amounted to a clog on the equity of redemption and could not be pleaded as a bar to the present suit. But on the question about the character of the original transaction itself, the High Court appears to have been inclined to take the view that the relevant clause on which the plea about the bar was raised did not really support the said plea, because it was by no means clear that even after the expiration of 15 years, the mortgagee was intended to be the absolute owner of the property. On these findings, the decree passed by the trial Court dismissing the respondents suit has been reversed and the suit has been remanded to the trial Court to be disposed of in accordance with law. It is against this order that the appellant has come to this Court by special leave. Pending the appeal before this Court both the appellant and the respondent have died, and their respective heirs have been brought on the record.

Reasoning:
12. These decisions show that the High Courts in India conformed to the view that whether or not there is a statutory provision directing the Judges to give effect to the principles of justice, equity and good conscience, it is their duty to enforce that principle where they are dealing with stipulations introduced in mortgage transactions which appear to them to be unreasonable, oppressive or unjust.13. It is true that according to the strict letter of the ancient Hindu law, a stipulation that the mortgagor shall pay the amount advanced to him by the mortgagee within a specified period, was intended to be enforced. The ancient Hindu law texts use the word "Adhi" to denote pledge o a movable or mortgage of immovable property. Nar. IV 124 divides Adhi into two sorts, viz., one that is to be redeemed within a certain time fixed(by agreement at the time off contracting the debt) or to be retained till the debt is paid off. In regard to the first category of mortgages, if the money is not paid at the time fixed, the thing pledged or mortgaged would belong to the creditor (Vide Yaj. II. 58 and as explained by (Mitakshara.*) It also appears that if the mortgage is not redeemed even when the debt has grown to double off the principal by non-payment of the interest agreed upon, the mortgagor lost his title over the mortgaged property; so that it must be conceded that under the strict letter of the Hindu law texts, if a mortgage deed contains a stipulation for the repayment of the mortgage amount within a specified period, at the expiration of the said period the mortgagor may lose his title over the mortgaged property. The principle underlying this provision appears to be that Hindu law as enunciated by the ancient texts, attached considerable importance to a person keeping his promise. Though that is so, we ought also to add that according to Sir R.B. Ghose, ordinarily, time was not of the essence of the contract of mortgage in Hindu Law+and in support of this opinion the learned author quotes with approval Colebrookesdo not know what the true position of the Hindu law was in the State of Alwar at the relevant time. In fact, we do not know what the provisions of the Contract Act were in the State of Alwar. Even so, we think it would be reasonable to assume that civil courts established in the State of Alwar were like civil courts all over the country, required to administer justice and equity where there was no specific statutory provision to deal with the question raised before them. Whether or not the Hindu law which prevailed in Alwar was similar to that prescribed by ancient Hindu Sanskrit texts, is a point on which no material is produced before us. It may, well be that just as in Bombay and Madras, notwithstanding the ancient provisions of Hindu Law which seems to entitle the mortgagee to insist upon the performance of a stipulation as to time within which the mortgage debt has to be paid, the High Courts had consistently refused to enforce such stipulations, the Courts in the State of Alwar also may have adopted the same approach. In the absence of any, material on the record on the point, i .e., are reluctant to accept Mr. Sarjoo Prasads argument that the doctrine of equity and justice should be treated as irrelevant in dealing with the present dispute.Thus it is clear that the equitable principle of justice, equity and good conscience has been consistently applied by Civil Courts in dealing with mortgages in a substantial part of Rajasthan and that lands support to the contention of the respondent that it was recognised even in Alwar that if a mortgage deed contains a stipulation which unreasonably restrains or restricts the mortgagors equity of redemption courts were empowered to ignore that stipulation and enforce the mortgagors right to redeem, Subject, of course, to the general law of limitation prescribed in that behalf. We are, therefore, satisfied that no case has been made out by the appellant to justify our interference with the conclusion of the Rajasthan High Court that the relevant stipulation on which the appellant relies ought to be enforced even though it creates a clog on the equity of redemption.