The mortgage is a conditional conveyance of land designed as a security for the payment of money, the fulfillment of some contract, or the performance of some act, and to be void upon such payment, fulfillment or performance. The person who gives its property to credit some money is known as mortgagor, and the person who takes property and lends money to the other person is known as mortgagee. When a person gives his property as a mortgage, he expects to take it back after the competition of payment, but in certain cases mortgagee refuses to give the property back. Section 60 of the transfer of property act, 1882 deals with this problem and does the equity to the weaker party.
Section 60 of the Transfer of Property Act
It talks about the right of the mortgagor to take his property back from the mortgagee by giving the money back with its interest, it says “At any time after the principal money has become [due], the mortgagor has a right, on payment or tender, at a proper time and place, of the mortgage-money, to require the mortgagee”[1]. It binds the mortgagee to follow these following conditions-
- To deliver the mortgagor property and every document of the property which deals with its area, location, possession or any detail. It is the duty of the mortgagor to deliver these documents just after the payment of the money.
- It is the duty of the mortgagee to deliver the possession of the property to the mortgagor and if the mortgagee has transferred the possession to some third party then it is duty to of mortgagee to take possession back from him and deliver it to the mortgagor.
- It is the duty of mortgagee that at the cost of the mortgagor, to transfer the possession of the property to the mortgagor or to the person he has directed, it is also duty of the mortgagee to give the documents, to show that, mortgagor has paid the money and mortgage property has been transferred to him.
It is to be noted that the right that this section provides defined as a right to redeem and an action to enforce it is called a redemption action. In this section, nothing shall be deemed to make null any provision to the effect that, if the time fixed for payment of the principal money has passed or no such date has been set, the mortgagee shall be entitled to reasonable notice before payment or tender of such money.
Essential Conditions for Redemption
1. The mortgage should not be illegal:
To use the right of redemption, it is very important that mortgage is legal and there should not be any question on the validity of the mortgage. It can be said that where mortgage registration is required, a mortgage without registration shall be deemed illegal and the mortgage shall not be entitled to receive mortgage compensation[2].
2. The appropriate time to take the mortgage back:
It is necessary to give money first and then the only mortgagor can take the property back, but there is question on this topic that that whether the mortgage can be redeemed in prior periods? To answer this question in Rozamma vs Rajaratnam case court held that, if nothing is mentioned in the contract then he can take the mortgage back prior to the time, but if something is mentioned in the contract then the mortgagor cannot take it back before the prior time, this decision was held in Begum vs Hussaini Khanam[3] case.
3. Time and place for payment:
It is also a necessary condition that the payment of the money should happen the time and place, which is mentioned in the contract or according to the mortgagee, also the person giving and taking the payment should be either mortgagor and mortgagee respectively or their agents.
4. There must be a suit:
To enjoy the right of redemption it is necessary to file a suit from the mortgagor’s side and then only the court will interfere.
Clog on redemption
One person’s adversity isn’t a boon to others. If a person had taken the loan under severe financial conditions and placed his properties therefor as security, the situation can not be exploited by the person who had advanced the loan. The Court seeks to protect the person concerned from being a victim of exploitation by adverse circumstances[4]. This philosophy introduced “Clog”.
Any clause introduced in order to prevent redemption in lieu of payment or performance of the debt or duty for which the security was given is what is meant by a clog or fetter on the redemption equity and is therefore void. Clog prevent the mortgagor to take back his property and cancels the idea of “Once a mortgage always a mortgage” which means that, if any property has been given on mortgage then after the repayment of the money that property can be taken back.
A. Different types of clogs in any contract–
1. Long term redeems-
when there is a clause in contract, which allows a mortgagor to take mortgage back after a long period of time like 90 or 100 years, then this would restrict the mortgagor to the property back and thus act as a clog.[5] The court looks for evil and malicious intention I such contract, if court thinks that there is the malicious intention behind this clause in contract, then it would declare it as a clog.[6]
2. Condition of the sale in default-
If there is some condition in the contract which says, that if the mortgagor is not able to pay money under some certain time, then his right of redemption will become futile and he will not be able to redeem his property. The court found it as taking advantage of the weaker party and thus called clog.
In Meharban Khan v. Makhna[7], the mortgage agreement specified that the mortgagee would have the right to own the property for 19 years. There was a stipulation that if the mortgage paid off his debt, he would only be allowed to redeem the property until a limited interest and the mortgage’s residual interest belonged to it. Further, it says that if the mortgagor fails to pay, then the mortgaged property would be sold to mortgagee permanently. Court declared these conditions as clog.
3. Restriction on alienation-
This is an indirect way to restrict someone from taking his property back. If there is a clause in the contract which restrict the transfer of possession of the property, then eventually it would restrict the mortgagee to transfer possession of the property, the court declared this clause as a clog on the right of redemption.
4. The penalty in case of default-
Payment of a penalty where there is a default on behalf of the mortgage may be reasonable but it may be unreasonable and punishable in certain situations. Many cases where a fine has been considered unfair-
· To use compound interest on the amount, though the normal interest is very high.
· Very high interest from the very beginning.
Conclusion
The major gist of section 60 revolves around the maxim “once a mortgage, always a mortgage” which clearly says that, the mortgagor has the right to take the property back from the mortgagee no matter what. Mortgage always remains is mortgage note change or revision can be done in it. In Knocks vs Roulds[8] lord Dev made an amendment in the above principle that-
“once a mortgage, always a mortgage and nothing but a mortgage”
[1] The transfer of property act 1882, s60.
[2] Vishnu kaya v Vishnu Maya (1980) 23 A.I.R (Sikkim HC).
[3] Musammat Bakhtawar Begum v Hussaini Khanam (1914) 16 BOMRL.
[4] U. Nilan v Kannayyan (1999) 8 SCC SC 621.
[5] Poonam Pradhan Saxena, Property Law (2nd ed, Lexis Nexis 2017).
[6] Vadilal Chhaganlal v. Gokaldas Mansuk (1953) 55 AIR BOMRL 773.
[7] Meharban Khan v Makhna (1930) AIR PC 132.
[8] Knocks v Roulds (1902) 24 SC.
This Article is Authored by Manas Shrivastava, 1st Year BA.LLB Student at National Law University Odisha.
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