ACKNOWLEDGEMENT

At the outset, I take this opportunity to thank my Professor Mr.B.R.N. SHARMA, from the
bottom of my heart who have been of immense help during moments of anxiety and torpidity
while the project was taking its crucial shape. Secondly, I convey my deepest regards to the Page | 2
Viand the administrative staff of TNNLS who held the project in high esteem by providing
reliable information in the form of library infrastructure and database connections in times of
need. Thirdly, the contribution made by my parents and friends by foregoing their precious time
is unforgettable and highly solicited. Their valuable advice and timely supervision paved the way
for the successful completion of this project.

Finally, I thank the Almighty who gave me the courage and stamina to confront all hurdles
during the making of this project. Words aren’t sufficient to acknowledge the tremendous
contributions of various people involved in this project, as I know ‘Words are Poor Comforters’.
I once again wholeheartedly and earnestly thank all the people who were involved directly or
indirectly during this project making which helped me to come out with flying colours.
 INDEX

TABLE OF CONTENTS

Page | 3

1 INTRODUCTION……………………………………………………………

2 ORIGINS OR DEFINITIONS OF CERTAIN TERMS……………………...

3 THE RIGHT TO REDEMPTION……………………………………………

4 SECTION 60 OF TOPA………………………………………………………

5 THE DOCTRINE CLOG ON EQUITY OF REDEMPTION………………..

6 CAUSES AND ILLUSTRATIONS FOR CLOG ON REDEMPTION………

7 LONG TERM MORTGAGES………………………………………………..

8 CONDITION OF SALE OF PROPERTY……………………………………

9 SUBSEQUENT AGREEMENT TO POSTPONE REDEMPTION…………

10 COLLATERAL BENEFIT TO MORTGAGOR…………………………...

11 CONCLUSION…………………………………………………………….

12 BIBLIOGRAPHY………………………………………………………….
OBJECTIVES

 This research paper would be on the study of “The Doctrine of Clog on Equity of
Redemption”.
 Therein the study would include the history, evolution and would also analyse the Page | 4
provision and judicial precedents.
 To conclude, the researcher would attempt to sketch the significance of the right
of equality of redemption mortgage transaction.

RESEARCH QUESTIONS:

 What are all the conditions held by the Court as a condition or covenant acts as a
clog on redemption?
 What are all the situations where this doctrine can be applied and what are all the
situations when it can’t?
 Has clog be determined absolutely and explained in any acts or approved legally?
Is yes, where?
 Is right of redemption is applicable of the present situation in the society?

RESEARCH METHODOLOGY

The methodology used in this particular article were basically secondary data which were
collected from the internet, books, articles and blogs. These data collected was used to do astudy
on the doctrine of clog on equity of redemption. This research paper would basically deal with
the doctrinal aspects of the issues mentioned above.

TENTATIVE CHAPTERISATION:

CHAPTER I: This chapter will talk about the introduction and going to explain about the clog
and the equity of redemption briefly.

CHAPTER II: To understand about the clog, it is important to know about the right of
redemption. So this chapter will try to explain about the right of redemption
CHAPTER III: This chapter will try to explain about the history of the term called clog and
when the term called doctrine of clog did was coined and will try to explain it in brief and also
talks about the major cases which plays a major role in explaining this term.

CHAPTER IV: This chapter will explain about the doctrine of clog on the equity of redemption Page | 5
and also gives certain examples and also, mainly about the few situations where it was held by
the Court that the condition or covenant acts as a clog on redemption like covenants restricting
the right of redeem or imposing time limits or hampering the rights to redeem.

CHAPTER V: This chapter ends it all by giving an explained conclusion about the doctrine and
also my views on this doctrine and certain suggestions.
INTRODUCTION:

Before seeing what the clog is, we can see what is meant by redemption in a mortgage. In a
mortgage, the redemption is the repossessing of the property after paying the debts to the
mortgagee. But there are certain limitations for this right of mortgagor by the fact that it come to Page | 6
existence only when the mortagee decides his exercise his right of foreclosure of the property.
This way, the contact comes to an end only when the mortgage came to an end only when the
debtor exercise his right to redeem back his property after paying the debt or paying off the loan.

An obligation that continues during the term of the mortgage and beyond, which renders the
property less available in the hands of its owner apart from the realization of the mortgage debt,
it is a clog on the equity of redemption1.

This may happen in rural areas where the people thinking the maxim ‘once a mortgage always a
mortgage’ as a real issue, but it only means that there can no covenant that modifies the character
of the mortgage agreed between the parties that would stop the mortgagor to redeem his property
back on payment of the principal and respective interests. In ‘Vaanam’ Movie, the mortgagee
tries to fool the mortgagor by saying that debtor hasn’t pay off his debt, which can be considered
as an appropriate example for ‘clog on equity of redemption’. Hence, to determine whether
something would or would not qualify as a clog on the right of redemption is something that
cannot be determined absolutely. It has to be settled through a careful perusal of the mortgage
deed, the circumstances surrounding the parties entering into a mortgage, the amount advanced
and nature of the transaction.

1
S.N. Shukla, The Transfer of Property Act 219 (23 rd ed., 2001).
ORIGINS OR DEFINITIONS OF CERTAIN TERMS 2.

EQUITY: Equity mean fairness. Back in the middle Ages, in England, there were certain
grey areas where it was observed that the Common Law was inadequate to deliver justice
to the common person there in the region. This led to a directive by the King to appoint Page | 7
Chancellors in special courts who would go beyond the realm of the law to dole out
justice and fairness to the parties. Such courts were called Courts of Equity 3. Thus, in
Common Law, equity is used as a means to sharpen the meticulousness of the law in
order to achieve justice.
REDEMPTION: As mentioned in the introduction part, redemption is nothing but there
possessing of the property after paying the debts to the mortagee4.
CLOG: An obligation that continues during the term of the mortgage and beyond, which
renders the property less available in the hands of its owner apart from the realization of
the mortgage debt, it is a clog on the equity of redemption.

THE RIGHT TO REDEMPTION 5 :

2
A K R Kiralfy, Historical Introduction to English Law, (Delhi: Universal Law Publications, 4th edition, 1999)
3
F.H. Lawson & Bernard Rudden, The Law of Property 15 (Peter Birks ed., 3 rd ed., 2002).
4
Sir Hari Singh Gour, The Transfer of Property Act, 1882 1248 (10 th ed., 2002).
In a Mortgage, the mortgagor is the owner who had parted with some rights of ownership and the
mortagee is the one who have the property till the payment of the debt and the right of
redemption is right which he exercises by virtue of his residuary ownership to resume what he
has parted with. Such a right of the mortgagor is called the equity of redemption. The mortgagor,
Page | 8
who has parted with some rights of ownership has a right of ownership and has a right to get
back the mortgage deed or mortgaged property, in exercise of his right to ownership. The right of
redemption recognized under the TP Act is thus a statutory and legal right which cannot be
extinguished by any agreement made at the time of mortgage as part of the mortgage
consideration6. This right is called the right to redeem, and a suit to enforce it, is called the suit
for redemption. Therefore, the scope of a suit for redemption is primarily to enforce the right to
make a payment of the mortgage-money. A claim to redeem a mortgage actually does not attach
to the land, although the decree passed in the suit may ultimately affect possession which also an
interest in land7.

The right to redemption is a statutory right which cannot be fettered by any condition which
impedes or prevents redemption.8 Ordinarily, and in the absence of a special condition entitling
the mortgagor to redeem during the term for which the mortgage is created, the right of
redemption can only arise on the expiration of the specific period. 9 This right of the mortgagor is
known as the equitable right to redeem. The right of redemption to the mortgagor is provided
under Section 60 of the Transfer of Property Act, 1882. This right becomes alive only after the
principal money becomes paid. This right provided by the Transfer of Property Act is a statutory
right which can only be done away by compliance to the procedure established by law. It would
henceforth follow that any obstruction to this right would be declared as void as a clog on the
equity of redemption. The right to redeem the mortgage is a very valuable right to possessed by
the mortgagor. Such a right to redeem the mortgage can be exercised before it is foreclosed, or
the estate is sold, thus where in exercise of its right to sell the property of defaulting debtor,
financial corporations (mortgagee), accepted the offer of prospective purchaser but no sale deed
was executed between the two, the right of the mortgagor to redeem the property is not lost. The

5
Bruce Wayman , The Clog on the Equity of Redemption , Vol.21 HARVARD LAW REVIEW, 459-475 (1908).
6
Shivdev Singh v. Sucha Singh (2000) 4 SCC 326, Para 8, AIR 2000 SC 1935
7
Vora Aminbai Ibrahim v. Vora teherali Mohamed Ali AIR 1998 Guj 31
8
Mohammad Sher Khab v Seth Swami Dayal (1922) ILR 44 All 185
9
Seth Ganga Dhar v. Shamkar Lal (1959) SCR 509
equitable right of redemption is dependent on the mortgagor giving the mortgagee reasonable
notice of his intention to redeem, and on his family performing his obligations under the
mortgage. The right to redeem follows the interest of the mortgagor, and can be exercised by him
and also by those taking the whole of his interest, whether by assignment inter vivos, or by
Page | 9
devolution on death.
SECTION 60 OF TOPA10 :

10 Transfer of Property Act, 1882 Right of mortgagor to redeem - At any time after the principal
Page | 10
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

(a) to deliver to the mortgagor the mortgage-deed and all documents relating to the mortgaged
property which are in the possession or power of the mortgagee,

(b) where the mortgagee is in possession of the mortgaged property, to deliver possession thereof
to the mortgagor, and

(c) at the cost of the mortgagor either to re-transfer the mortgaged property to him or to such
third person as he may direct, or to execute and (where the mortgage has been effected by a
registered instrument) to have registered an acknowledgement in writing that any right in
derogation of his interest transferred to the mortgagee has been extinguished: Provided that the
right conferred by this section has not been extinguished by act of the parties or by decree of a
Court. The right conferred by this section is called a right to redeem and a suit to enforce it is
called a suit for redemption. Nothing in this section shall be deemed to render invalid any
provision to the effect that, if the time fixed for payment of the principal money has been
allowed to pass or no such time has been fixed, the mortgagee shall be entitled to reasonable
notice before payment or tender of such money. Redemption of portion of mortgaged
property.—Nothing in this section shall entitle a person interested in a share only of the
mortgaged property to redeem his own share only, on payment of a proportionate part of the
amount remaining due on the mortgage, except only where a mortgagee, or, if there are more
mortgagees than one, all such mortgagees, has or have acquired, in whole or in part, the share of
a mortgagor. According to S. 6011, at any time after the principal money becomes due, the
mortgagor has a right of redemption from the mortgagee, the documents of the property which
the mortgagee has as well the property if the mortgagee is the possessor of such property, as in

10
Transfer of Property Act, 1882
11
Transfer of property Act, 1882
the case of Sarvjni Prabhu v. Papi kutty Adiesia12. According to sec. 60(3) of TOPA, the
mortgaged property can be either re-transfer to him or any third person, as he directs. It also
mentioned that the the mortgagee have to register an acknowledgement in writing that any right
in derogation of his interest transferred to the mortgagee has been extinguished. This right cannot
Page | 11
be extinguished except by the act of parties or by a decree of a court. It is well stated that the
right of the mortgagor to deal with the mortgaged property as well as the limitation to which it is
subject depends upon the nature of this ownership which is not absolute, but qualified by reason
of the right of the mortgagee to recover his money out of the proceedings.

12
AIR 2007 Ker 44
THE DOCTRINE CLOG ON EQUITY OF REDEMPTION:

A mortgage means transferring the interest in an immovable property to a third party as security
for the loan that the party has advanced. The security is redeemable by the transferor when he
pays back the loan or discharges his obligation. If any act is done, or any provision is there which Page | 12
obstructs the right of redemption on payment of the debt or performance of the obligation, then it
acts as a fetter or clog on the equity of redemption and will be held as void. This is clearly
explained in the case of Stanley v Wilde13. It is settled law in India by statute that a mortgage
cannot be made altogether irredeemable, not can the right of redemption be made illusory. The
test suggest by Pollock14 has, however, been generally applied in determining whether conditions
which directly or indirectly fetter or limit the right to redeem, violate the doctrine.

Seth Ganga Dhar v. Shankar Lal15:

In this case, J Sarkar explained the basis of the right of the court to intervene thus: ‘The reason
then justifying the court’s power to relieve a mortgagor from the effect of his bargain is its want
of conscience. Putting it in a more familiar language, the court’s jurisdiction to relieve a
mortgagor form his bargain depends on whether it was attained by taking advantage of any
difficulty or embarrassment that he might have been in when he borrowed the money on the
mortgage. Was the mortgagor oppressed? Was he imposed upon? If he was, then he may be
entitled to relief.’

The doctrine does not apply if the transaction is not in its essence a mortgage. Thus, where the
transaction gives an option to purchase property, the sole consideration being the loan of a sum
of money secured on the property during the continuance of the option, the transaction is the
scale of an option, the consideration being the use of the money free of interest. Thus, in this
circumstances, the clog cannot be considered, as there was the consent of both the parties. This
doctrine also applies to a transaction by which were not then to a transaction by which the
mortgagor transferred his equity of redemption to the transferee in consideration of a loan; a
clause in the said transaction by which the transferee had an option to purchase, was held void.
The doctrine of clog on the equity of redemption is a rule of justice, equity, and good conscience.

13
Santley v wilde, 1899
14
The alternative classicism of classical India, Article by Sheldon Pollock
15
AIR 1958 SC 770
This has been reaffirmed by the Supreme Court in Murarilal v. Dev Karan 16 In this case, the
Supreme Court has held that, 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
Page | 13
and just; unless there is anything to the contrary in the statute. Law must take cognisance of that
fact, and act accordingly. In the context of fast changing circumstances and economic stability, a
17
long term for redemption makes an illusory mortgage, though not decisive. It should prima
facie be an indication as to how clog on equity of redemption should be judged. Though the
Transfer of property Act does not apply to Sikkim, the courts should apply the principle
contained in s.60 and strike down a clog on the right of redemption.

The term in the mortgage deed that the land is irredeemable for 95 years is a clog on the equity
of redemption. In Shivdev Singh v Sucha Singh18, the supreme court refused to interfere with the
finding of the High Court holding that on the facts of the case, the mortgage deed providing a
period of 99 years was a clog on equity of redemption. Whether in a particular transaction there
is a 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 relationship vis-à-vis him and the mortgagee, the economic and social
condition in a particular point of time, customs, if any prevalent in the community or the society
in which the transaction takes place, and the totality of the circumstances of the parties, the time,
the situation, the clauses for redemption either for payment of interest or any other sum, the
obligation of the mortgage, to manage as a matter of prudent management; there factors must be
correlated to each other and viewed in a comprehensive whether there are clogs on equity of
redemption. A long term of redemption is not necessarily a clog; whether a particular redemption
operates as a clog is to be considered having regard to the circumstances of the case. The
decision as to what amounts to a clog on the equity of redemption is a question of fact in each
case.

16
(1964) 8 SCR 239
17
Pomal Kanji Govindji v. Vrajlal Karsandas Purohit AIR 1989 SC 436, P. 448
18
(2000)4 SCC 326
CAUSES AND ILLUSTRATIONS FOR CLOG ON REDEMPTION19:

 LONG TERM MORTGAGES:

Though, the below mentioned cause is either true or false, this were mentioned as the cause for
Page | 14
the clog in the redemption by the mortgagee and the cause is nothing but ‘long term mortgage’.
Long term mortgages are common in cases of usufructuary mortgages. Every long term
mortgage agreement cannot be said to be a clog on the right of redemption of the mortgagor. But
if a mortgage is for say 100 years, it’ll go beyond the life of the mortgagor and seem like a clog
on the right to redemption, at least superficially. The Court also of the same opinion, but has
made the stand clear by saying that only by the virtue of a long mortgage period, the mortgage
wouldn’t be considered as a clog. There should be a condition which gives an undue advantage
to the opposite party for the mortgage to be considered as a clog.

Vadilal chhaganlal v. Gokaldas mansukh 20:

In this case, the mortgage agreement provided that it would subsist for 99 years and the
mortgagee would be allowed to construct any structure on the property without any limit on the
cost. The Supreme Court reasoned that it would be beyond the ability of the mortgagor to repay
the principal money along with the interests and the construction expenses. It was held that both
the conditions amounted to a clog on the mortgagee’s right of redemption.

Ramkhilawan dilrakhan ahwashi v. Mullo21 :

The brief about the case is that the plaintiff was that a covenant for the payment of principal
money after 80 years and only in the month of Baisakh, was a clog. The Trial Court dismissed
the suit by calculating that the profits from the mortgaged property was sufficient to pay the
interests on the principal. On appeal, the High Court upheld the lower court’s decision.

19
F.H. Lawson & Bernard Rudden, The Law of Property 15 (Peter Birks ed., 3 rd ed., 2002).
20
AIR 1953 Bom 408
21
AIR 1957 MP 200
Balbhaddar prasad v. Dhanpat dayal22:

In this case, the property mortgaged for 50 years was worth ₹9000. The final amount to be paid
after deducting the profits from the property was around two and a half lakhs. The Court held
that such an enormous fund had led the property to be irredeemable and the terms of the contract Page | 15
were oppressive and unconscionable.

22
AIR 1924 OUDH 193
  CONDITION OF SALE OF PROPERTY 23:

A covenant that a mortgaged property, if not redeemed within a fixed time, would translate into a
sale is a clog. However if there is a separate agreement whereby the mortgagor executes a sale
deed in favor of the mortgagee as an independent transaction, such sale deed is valid. Meharban Page | 16
khan v. Makhna24: The mortgage agreement provided that the mortgagee was to be entitled to
possession of the property for 19 years. There was a stipulation that if the mortgagor paid off his
debt, he would be allowed to redeem the property only till a limited interest and the residual
interest would belong to the mortgagor. It was further envisaged that on failure of the mortgagor
to pay, the property would be deemed to be sold to the mortgagee permanently. The Court ruled
that both conditions amounted to a clog. It was held that on payment of the full amount due, the
property would be reverted back without any encumbrance. This principle would also extend to
cases where on default of payment, the property would be deemed to have been foreclosed,
amounts to a clog. However parties are free to stipulate such a condition subsequently after the
mortgage agreement.

Kuddi lal v. Aisha jehan begam:

The plaintiff-mortgagor was allowed to redeem the property back by paying from her own
pockets and not through transferring the property. The Court held that such a covenant was a
clog on redemption since it restrained alienation by the mortgagor.

23
Mulla, The Transfer of Property Act, 1882 656 (solil paul ed., 9 th edition, 2000).
24
AIR 1930 PC 142
  SUBSEQUENT AGREEMENT TO POSTPONE REDEMPTION 25

A subsequent agreement which becomes an obstruction to the mortgagee by creating a personal

obligation is a clog on his right to redemption. The reason is that unless the agreement forms a
charge on the property, the mortgagee is not liable to pay any sum arising from his personal Page | 17
obligation except the mortgage amount.

Sheo Shankar v. Parma:

The mortgagor had already executed a usufructuary mortgage in favor of the mortgagee. He
further executed a simple mortgage in order to borrow more money. A provision in the simple
mortgage provided that the mortgagor was stopped from redeeming the property till the amount
in the simple mortgage was paid. It was held that such a provision was void as a clog.

Hari v. Vishnu:

A loan of ₹1500 was advanced to the plaintiff on mortgage by the defendant. The mortgage deed
provided that ₹5000 was still to be paid by the plaintiff on a previous mortgage and stipulated
that till both the sums were paid, the plaintiff was not entitled to redeem the property. The deed
was stamped at a value on ₹6500. It was held that since both the transactions were clubbed into
one, the provision was not a clog.

25
Sir Hari Singh Gour, The Transfer of Property Act, 1882 1248 (10 th ed., 2002).
  COLLATERAL BENEFIT TO MORTGAGOR

A mortgagor may avail of a collateral benefit either during the subsistence of the mortgage,
which is valid, or after the redemption, which in some cases is not valid 26 .
Page | 18
Noakes & Co. v. Rice 27 :

A covenant in the mortgage agreement stipulated that the mortgagee would buy all the beer he
would consume on his property from the mortgagor who was a brewer. It was held that the tie
was valid during the subsistence of the mortgage but not beyond redemption. The property must
be delivered back without any tie.

Kreglinger v. New Patagonia Meat and Cold Storage Co. Ltd. 28 :

In this case, the mortgage was of a term of 5 years with an option to the mortgagor to redeem the
property before completion of the term. The agreement further stipulated that the mortgagor
should sell sheepskins exclusively to the mortgagee as long as both parties agreed to a fixed
price. The mortgagee paid the mortgage before 5 years and filed a suit for declaring the tie of
exclusive selling to be declared as a clog on redemption. The House of Lords held that the
provision of exclusive sale to lenders did not amount to a clog. It was reasoned that the
mortgagee is allowed to stipulate for a collateral benefit beyond the period of redemption
provided that the stipulation is not unconscionable or unfair.
Equity would mean in a layman’s life as fairness. Back during the middle Ages in England, there
were certain grey areas where it was observed that the Common Law was inadequate in its
abilities to deliver justice to the common person. This led to a directive by the King to appoint
Chancellors in special courts who would go beyond the realm of the law to dole out justice and
Page | 19
fairness to the parties. In Common Law, equity is used as a means to sharpen the meticulousness
of the law in order to achieve justice. Such courts were called Courts of Equity.

Under a mortgage, two interests are generated by the owner of the property. One is the interest of
the creditor on the property, which is limited and fixed and another, is the residuary interest left
which can be quantified only by deducting the creditor’s interest from the value of the security.
The fundamental bargain from this division of interests is the presence of a right to buy back the
property without any encumbrances by paying the loan. This right is called the equitable right to
redeem. The first instance of the presence of the right of redemption was found in Roman law. It
has been rightfully said that “Redemption is purely a creature of courts of equity”.

Section 60 of the Transfer of Property Act, 1882 provides the right of redemption to the
mortgagee. This right becomes alive only after the principal money becomes. There are certain
limitations to this right by the fact that it exists only till the mortgagee decides to exercise his
right of foreclosure on the property. Thus, the contract of mortgage between the parties ends,
when the debtor exercises his right to redeem through paying off the loan.

This right provided by the Transfer of Property Act is a statutory right which can only be done
away by compliance to the procedure established by law. It would henceforth follow that any
obstruction to this right would be declared as void as a clog on the equity of redemption.

Clog on redemption

In Stanley v. Wilde, Lindley M.R. gave one of the founding explanations of the basis of this
doctrine –

“The principle is this: a mortgage is a conveyance of land or an assignment of chattels 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’.
Page | 20

The maxim ‘once a mortgage always a mortgage’ means that there can no covenant that modifies
the character of the mortgage agreed between the parties that would stop the mortgagor to
redeem his property back on payment of the principal and respective interests.

The basis of this doctrine lies in the exercise equity, justice and good conscience and is extensive
to areas where the act is not applicable. On a realistic perusal of the workings of a mortgage, it is
observed in most of the cases that the mortgagor enters into such an agreement because of some
financial predicament. The law recognizes the power of the dominant party to insert clauses
which will serve his personal interests by creating impediments on the right to redeem the
property. Such obstructions are henceforth struck down by the courts to enable the mortgagee to
redeem his property. In U. Nilan v. Kannayyan (Dead) Through Lrs, explaining the philosophy
behind the doctrine, it was said that –

“Adversity of a person is not a boon for others. If a person in stringent financial conditions had
taken the loan and placed his properties as security therefor, the situation cannot be exploited by
the person who had advanced the loan. The Court seeks to protect the person affected by adverse
circumstances from being a victim of exploitation. It is this philosophy which is followed by the
Court in allowing that person to redeem his properties by making the deposit under Order 34
Rule 5 C.P.C.”

Leading cases

There are no fixed qualifying circumstances in determining what would or would not amount to
a clog. It has been something that would have to be decided on the facts and circumstances of the
case. There are certain situations where it was held that the covenant was a clog on the right.
Long Term Mortgages

Long term mortgages are common in cases of usufructuary mortgages. A term of 95 years or 100
years would definitely extend beyond one’s lifetime and superficially seems like a clog. Taking
Page | 21
cognizance of the same, the Supreme Court has ruled that only by virtue of lengthy period, a
mortgage would not amount to a clog, there must exist a presence of undue advantage or fraud to
term it as a clog.

In Vadilal Chhaganlal v. Gokaldas Mansukh, the mortgage agreement provided that it would
subsist for 99 years and the mortgagee would be allowed to construct any structure on the
property without any limit on the cost. The Supreme Court reasoned that it would be beyond the
ability of the mortgagor to repay the principal money along with the interests and the
construction expenses. It was held that both the conditions amounted to a clog on the
mortgagee’s right of redemption.

In Ramkhilawan Dilrakhan Ahwashi v. Mullo, the case of the plaintiff was that a covenant for
the payment of principal money after 80 years and only in the month of Baisakh, was a clog. The
Trial Court dismissed the suit by calculating that the profits from the mortgaged property was
sufficient to pay the interests on the principal. On appeal, the High Court upheld the lower courts
decision. However in Balbhaddar Prasad v. Dhanpat Dayal, the property mortgaged for 50 years
was worth ₹9000. The final amount to be paid after deducting the profits from the property was
around two and a half lakhs. The Court held that such an enormous fund had led the property to
be irredeemable and the terms of the contract were oppressive and unconscionable.

Condition of Sale of Property

A covenant that a mortgaged property, if not redeemed within a fixed time, would translate into a
sale is a clog. However if there is a separate agreement whereby the mortgagor executes a sale
deed in favor of the mortgagee as an independent transaction, such sale deed is valid.

In Meharban Khan v. Makhna, the mortgage agreement provided that the mortgagee was to be
entitled to possession of the property for 19 years. There was a stipulation that if the mortgagor
paid off his debt, he would be allowed to redeem the property only till a limited interest and the
residual interest would belong to the mortgagor. It was further envisaged that on failure of the
mortgagor to pay, the property would be deemed to be sold to the mortgagee permanently. The
Court ruled that both conditions amounted to a clog. It was held that on payment of the full
amount due, the property would be reverted back without any encumbrance.
Page | 22

This principle would also extend to cases where on default of payment, the property would be
deemed to have been foreclosed, amounts to a clog. However parties are free to stipulate such a
condition subsequently after the mortgage agreement.

In Kuddi Lal v. Aisha Jehan Begam, the plaintiff-mortgagor was allowed to redeem the property
back by paying from her own pockets and not through transferring the property. The Court held
that such a covenant was a clog on redemption since it restrained alienation by the mortgagor.

Penalty in case of default

Payment of a penalty if there is default on behalf of the mortgagor can reasonable but in certain
situations it may be unreasonable and penal. Certain situations where a penalty has been held to
be unreasonable are –

1. On default, compound interest is stipulated even when the original interest was very high.

2. On default, increased rate of interest would apply from the time the agreement is made.

By merely the virtue of there being a high interest does not lend the condition to be a clog on
redemption unless it could be shown that there was undue influence in the dealing.

Collateral Benefit to Mortgagor

A mortgagor may avail of a collateral benefit either during the subsistence of the mortgage,
which is valid, or after the redemption, which in some cases is not valid.

In Noakes & Co. v. Rice, a covenant in the mortgage agreement stipulated that the mortgagee
would buy all the beer he would consume on his property from the mortgagor who was a brewer.
It was held that the tie was valid during the subsistence of the mortgage but not beyond
redemption. The property must be delivered back without any tie.

One of the famous cases on collateral benefit was Kreglinger v. New Patagonia Meat and Cold
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Storage Co. Ltd. In that case, the mortgage was of a term of 5 years with an option to the
mortgagor to redeem the property before completion of the term. The agreement further
stipulated that the mortgagor should sell sheepskins exclusively to the mortgagee as long as both
parties agreed to a fixed price. The mortgagee paid the mortgage before 5 years and filed a suit
for declaring the tie of exclusive selling to be declared as a clog on redemption.

The House of Lords held that the provision of exclusive sale to lenders did not amount to a clog.
It was reasoned that the mortgagee is allowed to stipulate for a collateral benefit beyond the
period of redemption provided that the stipulation is not –

1. Unconscionable or unfair.
2. A penalty amounting to a clog on the right to redeem.
3. Contrary to the right of redemption.

Kreglingers case is important in recognizing the limits of the doctrine by the terms of the
contract unless they are oppressive, unconscionable or unreasonably hard. The freedom of the
parties to contract is asserted by this case.

The rule enunciated in Kreglingers met with approval in re Cuban Land and Development Co.,
where it was stipulated that in the event of the winding up of the company, the debenture-holders
were entitled to a part of the remaining profits. Such a provision was held not to be a penalty
clogging the right of redemption.

It has also been approved by Indian Courts. A provision that allowed the mortgagee to remain in
possession of the mortgaged property through permanent tenancy was held to be clog because
the collateral benefit extended beyond the period of redemption.
Subsequent Agreement to postpone redemption

A subsequent agreement which becomes an obstruction to the mortgagee by creating a personal

obligation is a clog on his right to redemption. The reason is that unless the agreement forms a
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charge on the property, the mortgagee is not liable to pay any sum arising from his personal
obligation except the mortgage amount.

In Sheo Shankar v. Parma, the mortgagor had already executed a usufructuary mortgage in favor
of the mortgagee. He further executed a simple mortgage in order to borrow more money. A
provision in the simple mortgage provided that the mortgagor was stopped from redeeming the
property till the amount in the simple mortgage was paid. It was held that such a provision was
void as a clog.

In Hari v. Vishnu, a loan of ₹1500 was advanced to the plaintiff on mortgage by the defendant.
The mortgage deed provided that ₹5000 was still to be paid by the plaintiff on a previous
mortgage and stipulated that till both the sums were paid, the plaintiff was not entitled to redeem
the property. The deed was stamped at a value on ₹6500. It was held that since both the
transactions were clubbed into one, the provision was not a clog.
CONCLUSION:

As we have seen, we cannot determine absolutely which could be considered as whether

something would qualify as clog on the right of redemption. It has to be settled through a careful
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perusal of the of the mortgage deed, the circumstances surrounding the parties entering into a
mortgage, the amount advanced and nature of the transaction. However the doctrine has not
escaped without controversy. Sir Fredrick Pollock has made his disapproval of this doctrine by
calling this doctrine as an ‘anachronism’. He believed that the doctrine cannot keep on assuming
that the mortgagor is a victimized party in the bargain. According to him, in the modern age,
both parties are at a level playing field and giving a mortgagor a ground to repudiate his
obligations by portraying one of the clauses of the contract Pollock isn’t completely wrong in his
analysis of the doctrine. The doctrine was envisioned at a time when landlords would use their
power peasants to enter into unfair agreements and contracts by virtue of the necessity of the
peasants. But with the growth of commerce and passage of time, such inequality has been more
or less abolished. Providing an excuse to one party to escape his obligations is a bad precedent to
set. However these criticisms have not stopped the courts in India to apply this test. Where a
major chunk of the population in India still works in the agrarian sector and lives under below
poverty line without any formal banking systems, the doctrine still has some prevalence in such
situations. It is left at the discretion of the judiciary to decide in which cases a prudent
application of this doctrine lies.
BIBLIOGRAPHY:

ARTICLES AND BOOKS REFERRED:

1. S.N. Shukla, The Transfer of Property Act 219 (23rd ed., 2001). Page | 26

2. F.H. Lawson & Bernard Rudden, The Law of Property 15 (Peter Birks ed., 3rded.,2002).

3. Mulla, The Transfer of Property Act, 1882 656 (Solil Paul ed., 9th edition, 2000).

4. Sir Hari Singh Gour, The Transfer of Property Act, 1882 1248 (10th ed., 2002)

5. Wyman, Bruce. "Clog on the Equity of Redemption." Harv. L. Rev. 21 (1907)

WEBSITES REFERRED:

1. https://www.lawctopus.com/academike/doctrine-of-clog-on-redemption

2. https://www.ipleaders.in/doctrine-clog-redemption

3. http://advocateji.com/what-is-meant-by-clog-on-redemption

CASES REFERRED:

1. Shivdev Singh v. Sucha Singh (2000) 4 SCC 326, Para 8, AIR 2000 SC 1935

2. Vora Aminbai Ibrahim v. Vora teherali Mohamed Ali AIR 1998 Guj 31

3. Mohammad Sher Khab v Seth Swami Dayal (1922) ILR 44 All 185

4. Seth Ganga Dhar v. Shamkar Lal (1959) SCR 509

5. Sarvjni Prabhu v. Papi kutty Adiesian, AIR 2007 Ker 44

6. Santley v wilde, 1899

7. Seth Ganga Dhar v. Shankar Lal, AIR 1958 SC 770

8. Murarilal v. Dev Karan, (1964) 8 SCR 239

9. Pomal Kanji Govindji v. Vrajlal Karsandas Purohit AIR 1989 SC 436, P. 448
10. Shivdev Singh v Sucha Singh, (2000)4 SCC 326

11. Vadilal chhaganlal v. Gokaldas mansukh, AIR 1953 Bom 408

12. Ramkhilawan dilrakhan ahwashi v. Mullo AIR 1957 MP 200

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13. Balbhaddar prasad v. Dhanpat dayal, AIR 1924 OUDH 193

14. Meharban khan v. Makhna, AIR 1930 PC 142