{"id":61379,"date":"1987-11-04T00:00:00","date_gmt":"1987-11-03T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/laxmanrao-krishnaji-kulkarni-vs-balakrishna-yellappa-ghodake-on-4-november-1987"},"modified":"2018-05-29T02:30:32","modified_gmt":"2018-05-28T21:00:32","slug":"laxmanrao-krishnaji-kulkarni-vs-balakrishna-yellappa-ghodake-on-4-november-1987","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/laxmanrao-krishnaji-kulkarni-vs-balakrishna-yellappa-ghodake-on-4-november-1987","title":{"rendered":"Laxmanrao Krishnaji Kulkarni vs Balakrishna Yellappa Ghodake on 4 November, 1987"},"content":{"rendered":"
Karnataka High Court<\/div>\n
Laxmanrao Krishnaji Kulkarni vs Balakrishna Yellappa Ghodake on 4 November, 1987<\/div>\n
Equivalent citations: ILR 1988 KAR 1987, 1987 (3) KarLJ 589<\/div>\n
Author: K Swami<\/div>\n
Bench: K Swami, D V Rao<\/div>\n<\/p>\n
<\/pre>\n
JUDGMENT<\/p>\n
K.A. Swami, J.<\/p>\n
1. The appellants are defendants 1 to 3. Respondents 1 to 5 are the
\nplaintiffs Respondent No. 6 is the 4th defendant. In this Judgment,
\nthe parties will be referred to with reference to the position
\nassigned to them in the trial Court. Defendants 1 to 3 have preferred
\nthis appeal against the Judgment and decree dated 31-10-1986 passed by
\nthe Additional Civil Judge. Hubli in O.S.No. 146 of 1980<\/p>\n
2. The trial Court apart from other findings has also recorded a
\nfinding that Clause 9 of the mortgage deed in so far it enables the
\nmortgagees to continue in possession as tenants even after the
\nredemption of the mortgage is a clog on the right of redemption and as
\nsuch is not enforceable. The terms of the decree are as follows:\n<\/p>\n
“1) The suit of the plaintiff is decreed as under. 2)
\nPreliminary decree be drawn as follows:\n<\/p>\n
(1) The plaintiffs are entitled to redeem the suit property
\nmortgaged by them under Ex.P. 1 to the defendant 1 to 3 in respect of
\nCTS Nos.3560\/3.3600.3601 and 3561 and<\/p>\n
A<\/p>\n
3562 (HDMC Nos.32\/2, 32\/3 and 32\/4).\n<\/p>\n
(2) Defendants 1 to 4 are directed to execute the registered
\nreconveyance deed in favour of the plaintiffs and defendants 1 to 4
\nare directed to deliver the mortgage deed Ex.P. 1 after substituting
\nit by a certified copy in Court.\n<\/p>\n
(3) Defendants 1 to 4 and 10 shall put plaintiffs in actual
\npossession of the property which are lying in their possession,
\nfailing which the plaintiffs are entitled to actual possession of the
\nproperties by dispossessing defendants 1 to 4 and 10 from their
\npossession.\n<\/p>\n
(4) The plaintiffs are entitled to nominal possession of the
\nproperty which are in possession of defendants 5 to 9 and 11.\n<\/p>\n
(5) Plaintiffs are entitled to future mesne profits and a separate
\nenquiry be held after the plaintiffs are put in possession of the
\nproperty under Order 20 Rule 12 CPC;\n<\/p>\n
(6) The plaintiffs are entitled to recover costs from the
\ndefendants 1 to 4 only;\n<\/p>\n
(7) Defendants 1 to 4 are entitled to recover Rs. 2,000\/- towards
\nthe improvements made in the building on payment of Court fee on this
\namount under Section 32(2) of the Karnataka Court Fees and Suits
\nValuation Act, on their W.S.”\n<\/p>\n
3. Defendants 1 to 3 are the mortgagees. Plaintiffs 1 to 5 are the
\nmortgagors. The suit properties in question were mortgaged to
\ndefendants 1 to 3 by the, plaintiffs on 21st April, 1965 under a
\nregistered deed of possessory mortgage marked as Ex.P. 1 for a sum of
\nRs. 25,000\/-.\n<\/p>\n
4. Sri V. Tarakaram, learned Counsel for defendants 1 to 3 has
\nadvanced one and the only contention. It is contended that as per
\nClause 9 of the deed of mortgage even after redemption of mortgage the
\nmortgagees are entitled to continue in possession as tenants and
\ntherefore the decree for possession passed by the trial Court pursuant
\nto redemption of mortgage is illegal. The learned Counsel submits that
\nthe trial Court is not justified in holding that Clause 9 of the deed
\nof mortgage amounts to clog on the right of redemption and it is
\nunreasonable and unconscionable, therefore, it is void and
\nunenforceable in law.\n<\/p>\n
5. After the expiry of the period of 15 years, the plaintiffs
\ncalled upon the defendants 1 to 3 to receive the mortgage amount and
\nredeem the mortgage and hand over possession of the mortgaged
\nproperties Defendants 1 to 3 did not comply with it and gave a reply
\ndated 26-5-1980 as per Ex.P. 2 stating that as per the terms of Clause
\n9 of the deed of mortgage they are entitled to be continued as tenants
\neven after the redemption of mortgage and as such they are to be
\ncontinued as tenants and they have no objection for redeeming the
\nmortgage.\n<\/p>\n
6. In the light of the contentions urged, the point that arises for
\nconsideration in this appeal is as to whether Clause 9 of the mortgage
\ngives an unqualified right to the defendants 1 to 3 mortgagees to
\ncontinue as tenants even after the redemption of mortgage. If so
\nwhether such a term is a clog on the right of redemption and as such
\nis not enforceable?\n<\/p>\n
7. Clause 9 of the mortgage deed reads thus:\n<\/p>\n
“On repayment of Rs. 25,000\/- the mortgagees at the
\ncost of mortgagors shall redeliver the mortgaged properties to the
\nmortgagors of the first part free from encumbrances; and the
\nmortgagees of the second part shall be allowed to continue if
\nnecessary as tenants on reasonable rent after the expiry of 15
\nyears.”\n<\/p>\n
(Underlining by us)<\/p>\n
8. Sri. Tarakaram, learned Counsel for defendants 1 to 3 the
\nappellants contends that Clause 9 cannot at all be regarded as a clog
\non the right of redemption as it only enables the mortgagees to
\ncontinue as tenants of the mortgaged properties on payment of
\nreasonable rent on the expiry of the period of 15 years stipulated in
\nthe mortgaged deed; that leasing of the properties is one of the
\naccepted and normal modes of enjoying and exercising the right of
\nownership, there is nothing wrong with Clause 9, as such, defendants 1
\nto 3 – the appellants are entitled to continue in possession of the
\nmortgaged properties tenants even after redemption of the
\nmortgage.\n<\/p>\n
9.1. Clause 9 neither reserves the rent payable by defendants 1 to
\n3 if they are to continue in possession of the mortgaged properties,
\nas tenants even after redemption, nor specifies the period of lease.
\nThus, Clause 9 does not stipulate essential ingredients of a lease. It
\nis vague in this regard. However, it is not necessary to go into this
\naspect of matter. We shall first examine Clause 9 on the basis that it
\ngives an unqualified right to defendants 1 to 3 – mortgagees to
\ncontinue in possession of the mortgaged properties as tenants even
\nafter redemption of the mortgage.\n<\/p>\n
9.2. It has always been anxious to protect the right of redemption.
\nIt has always been the attempt not to recognise a condition in the
\nmortgage deed which has the effect of placing fetter on the right of
\nredemption. In this connection, it is very relevent to notice the
\nwords “in the absence of any contract to the contrary” which are found
\nin many of the Sections of the Transfer of Property Act (for short the
\nT.P. Act) are not found in Section 60 of the T.P. Act. When the
\nlegislature has enacted Section 60 of the T.P. Act in unqualified
\nterms, the Courts have endeavoured and must endeavour to relieve the
\nmortgagors from a condition in the mortgage deed which fetters their
\nright of redemption by refusing to recognise and enforce it or by
\ndeclaring it as void. Right of redemption is of the very nature, and
\nessence of the mortgage. It is inherent in the mortgage. To put it
\naxiomatically “Once a mortgage always a mortgage.” This maxim is
\nfurther reinforced by Lord Davey in NOAKES v. RICE, 1902 AC 24 by adding to it
\nthe words “and nothing but a mortgage.” Of course, we are aware that
\nstill there are some decisions which have adopted the line of
\nreasoning that even though Section 60 of the T.P. Act is unqualified
\nin its terms, but nothing prevents the parties to agree to the
\ncontrary. Whether a particular term in the contract should be regarded
\nas a clog on the right of redemption depends upon the terms of the
\nmortgage and the circumstances as they existed at the time of the
\nexecution of the mortgage. No hard and fast rule can be laid down. If
\non taking into consideration the circumstances that existed at the
\ntime of execution of the mortgage and all the terms of the mortgage
\ndeed, the Court is able to come to the conclusion that a particular
\ncovenant is undoubtedly hard and unconscionable and has the effect of
\nnullifying the right of redemption or restricts the exercise of right
\nof redemption in such manner as practically to deny it, such a
\nconvenant can be regarded as a clog on the right of redemption and as
\nsuch it has to be ignored and the party has to be relieved from it. As
\nfar as the condition in a mortgage deed which enables the mortgagee to
\ncontinue in possession of the mortgaged property even after redemption
\nas a permanent lessee is concerned it is a settled position in law in
\nIndia that such a condition is invalid and unenforceable.\n<\/p>\n
9.3. In GANGADHAR v. SHANKAR LAL AND ORS., , the Supreme Court
\nhas observed thus:\n<\/p>\n
“The rule against clogs on the equity of redemption is
\nthat, a mortgage shall always be redeemable and a mortgagor’s right to
\nredeem shall neither be taken away nor be limited by any contract
\nbetween the parties.\n<\/p>\n
 xx        xx       xx         xx      xx    xx<\/p>\n
The right of redemption, therefore, cannot be taken away. The
\nCourts will ignore any contract the effect of which is to deprive the
\nmortgagors of his right of redemption of the mortgage.\n<\/p>\n
 xx           xx           xx        xx     xx<\/p>\n
The rule against clogs on the equity of redemption no doubt
\ninvolves that the Courts have the power to relieve a party from his
\nbargain. If he has agreed to forfeit wholly his right to redeem in
\ncertain circumstances, that agreement will be avoided. But the Courts
\nhave gone beyond this. They have also relieved mortgagors from
\nbargains whereby the right to redeem has not been taken away but
\nrestricted.\n<\/p>\n
The reason then justifying the Court’s power to relieve a mortgagor
\nfrom the effects of his bargain is its want of conscience. Putting it
\nin more familiar language the Court’s jurisdiction to relieve a
\nmortgagor from his bargain depends on whether it was obtained by
\ntaking advantage of any difficulty or embarrassment that he might have
\nbeen in when he borrowed the moneys on the mortgage. Was the mortgagor
\noppressed? Was he imposed upon? If he was, then he may be entitled to
\nrelief.”\n<\/p>\n
10. On examining the terms of the mortgage deed, we find that all
\nthe terms are in favour of the mortgagees. The mortgagors are made to
\neffect repairs immediately to the mortgaged properties to suit the
\nbusiness requirements of the mortgagees and in case they fail to
\neffect repairs the mortgagees were at liberty to get it repaired and
\nto recover the costs of such repairs from the mortgagors. The
\nmortgagors were required to pay all the taxes of the mortgaged
\nproperties. The mortgagors were also made to fix rolling shutter to
\nthe shop, doors, stone slabs flooring and partition wall in the ground
\nfloor within a fortnight in addition to the repairs, failing which the
\nmortgagees were given liberty to get it done and recover the costs
\nfrom the mortgagors. The mortgagors were not entitled to claim any
\nrent to the mortgaged properties given into the possession of the
\nmortgagees and the mortgage money had to carry no interest. From
\nClause 7 of the mortgage deed, it is clear that the mortgaged
\nproperties were subjecte of earlier mortgage. Thus, from the aforesaid
\nterms of the mortgage deed it is clear that the mortgagees have tried
\nto take advantage of the situation in which the mortgagors were placed
\nat the time when they borrowed the money on the mortgage and imposed
\nthe terms in the deed which were wholly to the benefit of the
\nmortgagees. This becomes further clear when we consider the extent of
\nthe properties mortgaged. The Schedule to the deed of mortgage
\ndescribes the mortgaged properties as follows:\n<\/p>\n
SCHEDULE OF PROPERTIES:\n<\/p>\n
All that building with ground floor and two storeyed above,
\ntogether with right of way, privy and easement of right appurtenant to
\nthe properties mortgaged with possession, situated on Azad Road
\n(Station Road) Hubli, District Dharwad in the jurisdiction of the
\nSub-Registrar, Hubli Taluk, bearing C.T.S. No. 3560\/3, 3600, 3601<\/p>\n
A<\/p>\n
Ward I, and measuring 183 Square Yards and as all properties are
\ntogether forming one whole and complete building, bounded by:\n<\/p>\n
   To East – Municipal Road; To West – The property belonging
\nto one Srimati Divalibai;\n<\/p>\n
    To North – Property of Balannavar Sullad; To South – Property of
\nBalannavar Sullad.\n<\/p>\n
Thus a vast extent of valuable properties situated in an important
\ncommercial city like Hubli were mortgaged for a sum of Rs. 25,000\/-
\nonly for a period of 15 years in the year 1965. Clause 9 read in the
\nbackground of the other terms of the mortgage and the extent of the
\nmortgaged properties in so far it enables the mortgagees to continue
\nas tenants even after the redemption of the mortgage, is
\nunconscionable and it is undoubtedly a clog on the right of
\nredemption. It comes in the way of the mortgagors to secure possession
\nof the mortgaged properties even after redemption. The mortgaged
\nproperties are situated in Hubli City and are governed by the
\nKarnataka Rent Control Act. Mortgagees become the tenants on the
\nredemption of the mortgage, the mortgagors will not be able to secure
\npossession of the mortgaged properties except in accordance with the
\nprovisions of the Karnataka Rent Control Act. The mortgagors may or
\nmay not be able to secure possession under the provisions of the
\nKarnataka Rent Control Act as they would be required to make out a
\ncase for possession as per the provisions of the said Act. Thus,
\nClause 9, if read as enabling the mortgagees to continue in possession
\nof the mortgaged properties as tenants even after the redemption of
\nthe mortgage it is undoubtedly a clog on the right of redemption
\nbecause it nullifies the right of redemption, inasmuch as, it deprives
\nthe mortgagors of their right to redeem the mortgage and secure
\npossession of the mortgaged properties, and thereby it renders the
\nright of redemption illusory and enables the mortgagees to remain in
\npossession of the mortgaged properties beyond the period of, and
\nafter, the redemption of the mortgage.\n<\/p>\n
11. In GOVIND RAM AND ANR. v. RAJPHUL SINGH AND ORS., ; while
\nconsidering the similar terms in the mortgage deed, it has been held
\nthus:\n<\/p>\n
 “…….A long term provided in the mortgage deed, for
\nredemption may not necessarily be a clog on equity of redemption but a
\ncollateral advantage, which goes beyond the period of redemption, is a
\nclog and such a condition is invalid. A condition that after
\nredemption the mortgagee should continue in possession as a permanent
\ntenant has been held to be invalid in India. After coming into force
\nof legislation providing security of tenancies in urban as well as
\nrural areas, the agreement to retain property as tenants by the
\nmortgagees after redemption is equally cumbersome and onerous. In case
\nof commercial premises, the rent legislation in the State of Haryana
\nprovides that it cannot be got vacated even for personal requirements.
\nThe chances of vacation of such premises become very bleak and the
\ncondition in mortgage deed to retain possession as a tenant after
\nredemption is harsh and burdensome and amounts to a clog on equity of
\nredemption. Such a clause cannot be enforced after the property has
\nbeen redeemed. In my view, the decision of the learned Additional
\nDistrict Judge is correct on this issue and I affirm the
\nsame.”\n<\/p>\n
We are in agreement with the aforesaid view expressed in Govind
\nRam’s case, . Accordingly, the contentions urged on behalf of
\ndefendants 1 to 3 (appellants) are liable to be rejected and the same
\nare rejected. Accordingly, the point raised for determination is
\nanswered as follows:\n<\/p>\n
Even if it is regarded that Clause 9 enables the mortgagees
\n(defendants 1 to 3) to remain in possession of the mortgaged
\nproperties (suit properties) as tenants even-after redemption of the
\nmortgage, it operates as a clog on the right of redemption and as such
\nit is void and unenforceable.\n<\/p>\n
12. No other contention is urged.\n<\/p>\n
13. In the view we take it is not necessary to consider whether
\nClause 9 gives an unqualified right to the mortgagees (defendants 1 to\n<\/p>\n
3) to continue in possession of the mortgaged properties as tenants
\neven after redemption of the mortgage.\n<\/p>\n
14. For the reasons stated above, we do not see any ground to
\ninterfere with the decree passed by the trial Court. Accordingly, the
\nappeal fails and the same is dismissed.<\/p>\n","protected":false},"excerpt":{"rendered":"
Karnataka High Court Laxmanrao Krishnaji Kulkarni vs Balakrishna Yellappa Ghodake on 4 November, 1987 Equivalent citations: ILR 1988 KAR 1987, 1987 (3) KarLJ 589 Author: K Swami Bench: K Swami, D V Rao JUDGMENT K.A. Swami, J. 1. The appellants are defendants 1 to 3. Respondents 1 to 5 are the plaintiffs Respondent No. 6 […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[8,20],"tags":[],"class_list":["post-61379","post","type-post","status-publish","format-standard","hentry","category-high-court","category-karnataka-high-court"],"yoast_head":"\nLaxmanrao Krishnaji Kulkarni vs Balakrishna Yellappa Ghodake on 4 November, 1987 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/laxmanrao-krishnaji-kulkarni-vs-balakrishna-yellappa-ghodake-on-4-november-1987\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Laxmanrao Krishnaji Kulkarni vs Balakrishna Yellappa Ghodake on 4 November, 1987 - 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