Ponna Viyyanna Sarma vs Reddi Manikyam and Another

Govinda Menon, J.—The petitioner seeks to revise the order of the Subordinate Judge of Rajahmundry passed in I.A. No. 756 of 1946 in

O.P. No. 34 of 1928 on his file.

A sum of Rs. 1739-13-3 has been deposited in Court, as compensation for acquisition of land which belonged to the husband of Reddi

Manikyam, the first respondent to this petition, and which was in her possession. But since the estate held by her was only a widow''s estate, the

amount could not be paid over to her without the necessary safeguards. Thereupon, the petitioner, in this revision petition applied to the lower

Court stating that he was willing to mortgage his property as security and receive the amount in Court deposit, for which interest at the rate of Re.

0-11-0 per cent, per month would be paid to the widow every year from the 20th March, 1930 onwards. He has been paying the amount

regularly until sometime before the filing of the Interlocutory Application which has given rise to this Civil Revision Petition. By the said

Interlocutory Application, the petitioner prayed that the registered security bond or mortgage may be cancelled and the property released from

encumbrance since he had already deposited the amount borrowed under the security bond in Court. The learned Subordinate Judge held that the

petition was premature because, in his opinion, the question of cancellation or the enforceability of the security bond does not arise except when

the first respondent who is entitled to the benefit seeks to take action or until after her death. On this finding, the petition was dismissed and it is

that order that is sought to be canvassed in revision.

The operative portion of the security bond which is styled a simple mortgage bond for Rs. 1739-13-3 dated 20th March, 1929 is in the

following terms:

The petitioner herein stated that property belonging to her was acquired by the Government and the amount of compensation paid by the

Government and amounting to Rs. 1739-13-3 is in deposit in Court and had asked me to effect a mortgage of my property, and to draw the

money in Court and use it and to pay the interest thereon to her. I was asked to obtain the orders of the Court to that effect. I have agreed thereto

and this mortgage bond is accordingly executed. For the amount of Rs. 1739-13-3 which I borrowed from you for my necessity, i.e., for carrying

on business I have executed this bond mortgaging the property described hereunder. I have retained the property in my possession only.

I shall be paying the interest on the aforesaid sum to the petitioner ''Reddi Manikyam Garu at the rate eleven annas per cent, per month every year

by the 20th of March, from 1930 onwards, obtain receipts from her and shall file such receipts into Court. I shall pay every year to the petitioner

for her life as aforesaid, the interest that accrues every year and after her life I shall deposit-the said sum of Rs, 1739-13-3 into Court within such

time as the Court might fix. In case I fail to-pay the petitioner every year the interest that accrues and if I do not file the receipt into Court or if after

the lifetime of the petitioner I fail to pay into Court the amount due within the period fixed y Court, the said sum would be recoverable from me and

from the mortgaged property as also from my other property.

The question for consideration is what is the proper interpretation of this document. The petitioner''s learned Counsel contends that as a mortgagor

the petitioner is entitled to redeem the mortgage as the mortgage money has already become due. On the other hand the respondents'' argument is

that as neither of the contingencies contemplated in the mortgage deed has come into existence, the order of the lower Court is right. The

agreement contained in the deed that the petitioner would pay every year to the widow for her life the interest that accrues; every year and that

after her life the said sum of Rs. 1739-13-3 would be deposited in Court is, it is contended, only an outer limit for the redemption of the mortgage.

I n case the interest is not paid regularly every year, it is open to the mortgagee to realise the amount by the sale of the mortgaged property and

therefore if the mortgagee has a right to recover the money even during her lifetime, it is urged that the right to redeem cannot be postponed till her

death. Mr. Parthasarathi strenuously argues that the interpretation put upon the document by the lower Court, if correct would result in this : That

the mortgagor cannot pay the money till the death of the widow or till he himself commits default in the regular payment of interest and the

mortgagee thereupon takes actions to recover the money. Thus, he says, the clause operates as a clog on the equity of redemption. For this

argument he relies upon Section 60 of the Tranfer of Property Act and a decision of the Allahabad High Court in Him Kuar v. Gambhir Singh

(1921) 19 A.L.J. 460. In that case the learned Judges came to the conclusion that in a mortgage deed in which the period fixed for payment was

forty years and interest was payable annually, and in case of default in the payment of interest the mortgagee was entitled to sue at once for the

entire mortgage money, having regard to contract between the parties which enabled the mortgagee to sue before the expiry of the fixed period, it

was only equitable that the mortgagor should be allowed to redeem before the expiry of the said period. The principles enunciated in this case are

sought to be invoked in support of the contention here by applying them by means of an analogy.. I do not think that a fixed period recited in the

mortgage document is analogous to the terms contained in the present document. On a true construction of the document it seems to me that the

mortgagor has not bound himself by agreeing not to repay the mortgage money before the expiry of a stipulated period. All that the document is

meant to state is that so long as the petitioner keeps the mortgage money with him, he will pay the interest every year regularly to the widow during

her lifetime and that immediately after her death he would pay the entire amount into Court. This does not preclude him from redeeming the

mortgage at an earlier date.

Mr. K. Bhimasankaram for the respondent wants me to construe the document as if the mortgagor is prohibited from paying the amount before

the death of the widow who was the mortgagee and he relies upon the well-known and accepted principles laid down in a number of cases that a

stipulation in a mortgage deed by which a mortgagee in possession would not be redeemed for a number of years, say thirteen years as in

Rambaram Singh v. Ramker Singh (1911) 10 I.C. 243, fifty years as in Sundar Singh v. Hukum Singh (1914) 24 I.C. 926, and even fifty eight

years as in Ramprasai v. Jagrup (1912) 10 A.L.J. 157 would not amount to clog on the equity of redemption. Other decisions of this Court have

held that a long term fixed in an usufructuary mortgage by which the mortgage would not be redeemed till the expiry of the term cannot amount to a

clog on the quity of redemption. A recent decision reported in Kadir Bibi and Others Vs. M.V. Mailappa Pillai and Others, , is to the effect that if

the stipulation in a mortgagee deed is for its redemption only in a particular season of the year or on a particular day in the year, the mortgagor

cannot redeem on any other date during the course of the year. In my opinion, all those cases contemplated a state of things in which the

mortgagee is in possession. Such clauses are intended for the benefit of persons who should not be evicted from the mortgage property in their

possession before the expiry of the agreed period. The present Case is different in this that here it is a simple mortgage and that the mortgagor

continues to remain in possession of the hypothec. The clause in the deed that the mortgagor would continue to pay interest even if he wants to

redeem the mortgage till the widow dies, is in my opinion a clog on the equity of redemption. The date of redemption is indefinite and uncertain

though, as all human beings are mortal, there is a fixity about the redemption. An agreement that a mortgagor would not redeem the mortgage until

the happening at an uncertain period of a certain event is to my mind, clogging the equity of redemption. The right to redeem as well as the right to

foreclose, or sell, should be reciprocal and co-extensive and if the mortgagee can ask for the money even during her lifetime in case of default of

payment of interest by the mortgagor regularly, it stands to reason that the mortgagor should also have the privilege of redeeming the mortgage

before the happening at an uncertain time of the certain event in this case. As I have already stated, in my opinion, the clause does not create an

inhibition in the mortgagor from paying the mortgage money within the outer limit of period, viz., the death of the widow.

Another way of looking at the question is that the document should not be strictly construed as a mortgage, because it is a security bond

executed in favour of the Court and as such cannot be properly called a mortgage deed. The first respondent Reddi Manikyam is, on the face of

the document, not a mortgagee. She is only a beneficiary under the document. If that is so, then there is no agreement by the mortgagor by which

he is prevented from redeeming the mortgage in the usual course of things. It therefore follows that the lower Court has acted with material

irregularity in the exercise of jurisdiction in dismissing the application. The order of the lower Court is set aside and the petition is remanded to the

lower Court for disposal on the merits after ascertaining whether the entire mortgage amount and interest have been deposited in time. There will

be no order as to costs.