# Ram Das Gupta v. Bhajan Prakash Girhotra and others

- **Citation:** (2005) 1 ILRA 207
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2004-12-09
- **Case number:** Second Appeal No. 5 of 2004
- **Bench:** Janardan Sahai
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/ram-das-gupta-v-bhajan-prakash-girhotra-and-others-40354
- **Pages:** 5

## Headnote

Sri G.N. Verma
Sri B.N. Agarwal
Sri Sanjay Agarwal
Sri A.N. Verma
Sri S.C. Srivastava

Transfer of Property Act-Section-60words Phrases-'Once Mortgage always
mortgage'-the
condition
specifying
period-failing to which the mortgage
shall be deemed as sale-held-illegalstatutory
rights
provided
to
the
mortgagor to redeem the property-can
not
be
denid-principle
behind
the
doctrine elog on redemption-explained.

Held: Para 4

If a transaction is not a sale in its origin
but is a mortgage in origin a condition
which provides that on the default of the
mortgagor to redeem the mortgage within
a stipulated time, the transaction would
become a sale, would be void for once a
mortgage always a mortgage.Section 60
of the Transfer of Property Act gives
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INDIAN LAW REPORTS ALLAHABAD SERIES
[2005
 208
statutory right to the mortgagor to
redeem the mortgage.

The principle behind the doctrine has
been stated to be that a person in need
of money is not a free person and he will
readily accept whatever condition is
imposed upon him.
Case law discussed:
AIR 1965 SC-225
AIR 2000 Sc -1935
AIR 2000 SC-1085
1999 (1) ARC-632
AIR 1977 SC-242
1989 (1) ARC-41

## Text

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Ram Das Gupta V. Bhajan Prakash Girhotra and others
207
consider as what process would be
suitable to procure the attendance of the
accused. In instant case when 3 out of 5
applicants are ladies and their case is that
due to dispute between husband and wife
applicants started to live in Gwalior and it
was proper that when application under
section 319 Cr.P.C. moved by the
complainant was allowed the attendance
of the applicants was to be procured by
summoning them rather than directly
issuing non-bailable warrant against them
and in case reasonable opportunity was
given to them to appear in court they
would have appeared, if they would have
not appeared then coercive process in the
nature of warrant can be issued but the
learned Addl. Sessions Judge while
allowing the application under section
319 Cr.P.C. passed orders for issuing of
non-bailable
warrant
against
the
applicants. In the circumstances of the
case issue of summon was the proper
remedy rather than non-bailable warrant
and upto this extent impugned order
deserves to be modified.

11. Revision is dismissed with the
modification that orders passed for
issuing of non-bailable warrant against
applicants Umesh Verma, Smt. Laxmi
Verma, Smt. Mohini Verma, Rishi Verma
and Chanchal Verma is set aside. They
are directed to appear in court of
Addl.Sessions Judge, Fast Track Court
no.3, Agra within a month and in case
they appear they will be given opportunity
to file bail bonds to the satisfaction of the
trial court to proceed with the case. In
case they do not appear only thereafter
coercive process may be issued against
them. If the court of Addl. Sessions
Judge, Fast Track Court No. 3, Agra is
not in existence the applicants have to
appear in court where the Sessions Trial
No. 455 of 2004 State v. Shayam Verma
as mentioned above is transferred by
learned Sessions Judge, Agra.
Revision dismissed.
---------
APPELLATE JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 09.12.2004

BEFORE
THE HON'BLE JANARDAN SAHAI, J.

Second Appeal No. 5 of 2004

Ram Das Gupta

 ...Appellant
Versus
Bhajan Prakash Girhotra and others

 ...Respondent

Counsel for the Appellants:
Sri R.P. Tewari

Counsel for the Respondents:
Sri G.N. Verma
Sri B.N. Agarwal
Sri Sanjay Agarwal
Sri A.N. Verma
Sri S.C. Srivastava

Transfer of Property Act-Section-60words Phrases-'Once Mortgage always
mortgage'-the
condition
specifying
period-failing to which the mortgage
shall be deemed as sale-held-illegalstatutory
rights
provided
to
the
mortgagor to redeem the property-can
not
be
denid-principle
behind
the
doctrine elog on redemption-explained.

Held: Para 4

If a transaction is not a sale in its origin
but is a mortgage in origin a condition
which provides that on the default of the
mortgagor to redeem the mortgage within
a stipulated time, the transaction would
become a sale, would be void for once a
mortgage always a mortgage.Section 60
of the Transfer of Property Act gives
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INDIAN LAW REPORTS ALLAHABAD SERIES
[2005
 208
statutory right to the mortgagor to
redeem the mortgage.

The principle behind the doctrine has
been stated to be that a person in need
of money is not a free person and he will
readily accept whatever condition is
imposed upon him.
Case law discussed:
AIR 1965 SC-225
AIR 2000 Sc -1935
AIR 2000 SC-1085
1999 (1) ARC-632
AIR 1977 SC-242
1989 (1) ARC-41

(Delivered by Hon'ble Janardan Sahai, J)

1. A suit for redemption of mortgage
of 2 shops filed by the plaintiffrespondent has been decreed by both the
courts below. The plaintiff's case was that
Ashok Kumar Sharma the original owner
of the two shops in dispute had executed a
deed of mortgage dated 13.1.1969 in
favour of the appellant Ram Das Gupta.
Ashok
Kumar
Sharma
subsequently
executed a sale deed dated 15.9.1975 of
the disputed shops in favour of the
plaintiff respondent who brought the suit
for redemption. The defence was that the
deed in question though described as
mortgage was a sale as it bears a
condition that if the mortgage money was
not paid within a period of four years the
transaction will be treated as a sale. Both
the courts below have found that this
condition in the deed was a clog on the
equity of redemption and therefore void.

2. Heard Shri R.P. Tewari learned
counsel for the appellant and Shri G.N.
Verma, learned senior counsel for the
respondent.

The appeal was admitted on the
following substantial question of law.
(1) Whether the courts below were
right in holding that the condition in the
mortgage deed dated 13.1.1969 that if the
mortgage is not redeemed within four
years, it will be treated as sale is a clog on
the equity of redemption?

3. Before dealing with the contention
of the learned counsel for the parties, it is
necessary to state the material terms of
the deed. The deed recites that Ashok
Kumar Sharma is the owner of the two
shops in dispute; that he has taken a loan
of Rs.8,000/- from the appellant on the
assurance that the money will be paid
back; that the mortgagee was being put
into possession of the two shops; that no
interest
would
be
payable
by
the
mortgagor on the loan taken by him nor
any rent would be paid by the mortgagee;
that if the payment is made within a
period of four years the possession of the
property would be handed over to the
mortgagor but if the payment is not made
within the stipulated time the mortgage
deed would be treated as a sale deed.

4.
Counsel
for
the
appellant
submitted that it is clear from the terms of
the deed that it was the intention of the
parties to make a sale of the property and
therefore the condition referred to does
not amount to a clog on the equity of
redemption. In support of this submission
he laid emphasis upon the fact that the
mortgagee has been given a right to
remain in occupation himself or to let out
the property to any person and that no
interest was to be paid to the mortgagor
nor any rent was payable by the
mortgagee and that if the mortgage is not
redeemed within 4 years the transaction
will be treated as sale. I am not inclined to
accept the submission made by the
learned counsel. It is well settled that the
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Ram Das Gupta V. Bhajan Prakash Girhotra and others
209
intention of the parties is to be gauged
from the recitals in the deed itself. It is
stated in the deed that Ashok Kumar was
in need of money that advance of
Rs.8,000/- was paid to him and that the
deed was being executed as an assurance
(security) for the loan. The transaction
was described as a 'mortgage'. From the
terms it is clear that a usufructuary
mortgage was created. The intention of
the parties was to secure the money paid
to Ashok Kumar by the deed and interest
was not payable by the mortgagor nor rent
was payable by the mortgagee. A
mortgage
by
conditional
sale
and
usufructuary
mortgage
are
both
mortgages. Where the intention of the
parties is to secure a debt, it is a
mortgage. If therefore there is a subsisting
relationship
of
debtor
and
creditor
between the parties created by the deed it
will be a mortgage deed but if the
ownership is transferred outright it would
be a sale. If a transaction is not a sale in
its origin but is a mortgage in origin a
condition which provides that on the
default of the mortgagor to redeem the
mortgage within a stipulated time, the
transaction would become a sale, would
be void for once a mortgage always a
mortgage. Section 60 of the Transfer of
Property Act gives statutory right to the
mortgagor to redeem the mortgage. Any
condition, which puts a clog on the equity
of redemption, is void. From the terms in
which the deed is couched it appears that
the transaction was not a sale in its origin
but was a mortgage. The condition in the
deed that if the money is not paid within
four
years
by
the
mortgagor
the
transaction would be treated as sale, is a
clog on the equity of redemption. Any
obstruction in the way of the mortgagor
for the redemption of the mortgaged
property is a clog. The principle behind
the doctrine has been stated to be that a
person in need of money is not a free
person and he will readily accept
whatever condition is imposed upon him.

5. Learned counsel for the appellant
relied upon the provisions of Section 58
(c) of the Transfer of Property Act and
submitted that it relates to an ostensible
sale. Reliance has been placed upon the
proviso to the Section which stipulates
that no such transaction shall be deemed
to be a mortgage unless the condition is
embodied in the document which effects
or purports to effect the sale. This
provision does not support the case of the
appellant. In this case the condition that
after a period of 4 years the deed would
be treated as a sale deed is incorporated in
the mortgage deed itself.

6. In Murari Lal Vs. Devakaran
[AIR 1965 SC 225] the stipulated period
for the redemption was 15 years. It was
agreed that if the redemption was not
made within this time the transaction
would be treated as 'Mala Kalam' which
was interpreted literally to mean 'where
there is no scope for any say' and in effect
to mean a sale. In para 5 of the judgment
the apex court observed that it was
undisputable that a stipulation of this kind
amounts to a clog on the equity of
redemption. In Shivdev Singh and
another Vs. Sucha Singh and another
[AIR 2000 SC 1935] it was held in para
10 that the court will ignore any contract
the effect of which is to deprive the
mortgagor of his right to redeem the
mortgage and the term in the mortgage
deed that on the failure of the mortgagor
to redeem the mortgage within the
specified period of six months the
mortgagor will have no claim over the
mortgage property and the mortgage deed
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INDIAN LAW REPORTS ALLAHABAD SERIES
[2005
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would be deemed to be a deed of sale in
favour the mortgagee was unsustainable.
In Mushir Mohammed Khan Vs. Smt.
Sajeda Bano and others [AIR 2000 SC
1085] the distinction between a mortgage
by conditional sale and a sale with the
condition
of
repurchase
has
been
explained - the distinction being that in a
mortgage by conditional sale there is a
relationship of debtor and creditor and the
money sought to be secured is a charge
upon the property whereas in a sale with a
condition for repurchase there is no
relationship of debtor and creditor nor is
the price a charge upon the property sold.
The right to repurchase is a personal right
of the seller like a right of pre-emption.

7. Learned counsel for the appellant
submitted that the decisions cited by the
counsel for respondent are not applicable
to the facts of the present case. The
decision of the Apex Court in Murari Lal
Vs. Devakaran (Supra) has been sought to
be distinguished on the ground that it was
based on the principles of equity and good
conscience and not upon the provisions of
Section 58 of the Transfer of Property
Act. The decision of the Apex Court in
Mushir Mohammed Khan Vs. Smt.
Sajeda Bano and others (Supra) is also
sought to be distinguished on the ground
that the Supreme Court did not interpret
the effect of Section 58 (c) of the Transfer
of Property Act.
The distinction is of
no consequence. The application of the
equitable doctrine of clog on the equity of
redemption applied in Murrari Lal's case
is not affected by Section 58 (c) of the
Transfer of Property Act. Section 60 of
the Transfer of Property Act gives
statutory sanction to the mortgagor to
redeem the mortgaged property.

8. Learned counsel for the appellant
relied upon Vidyadhar Vs. Manikrao
and another [1999 (1) ARC 632]; Gulab
Chand Sharma Vs. Saraswati Devi and
another [AIR 1977 SC 242] Pomal
Kanji Govindji and others Vs. F
Vrajilal Karsandas Purohit and others
[1989 (1) ARC 41]. The decisions cited
by the counsel for the appellant do not
advance the case of the appellant. In
Vidyadhar's case the transaction in
question was held to be a mortgage by
conditional sale. Section 60 of the
Transfer of Property Act which gives the
mortgagor
a
right
to
redeem
the
mortgaged property is applicable to all
mortgages. In Gulab Chand Sharma
(Supra) it was held that the condition in
the mortgage deed, which seeks to take
away the right of redemption even before
the period within which the mortgagor
was entitled to pay off the mortgage debt
had run out is a clog on the right of
redemption. This case is distinguishable
on facts and does not help the appellant.
In Pomal Kanji Govindji (Supra) it was
held that if the mortgagor is prevented
from
redeeming
the
mortgage
the
prevention is bad in law. Whether or not
in a particular transaction there is a clog
on the equity of redemption, said the
Supreme Court, depends upon the period
of redemption, the circumstances in which
the mortgage was created, the economic
and financial position of the mortgagor
the economic and social conditions of the
country and the totality of circumstances
in which the mortgage is created. In that
case there was a long period of
redemption. On facts it was held that there
was a clog on the equity of redemption.
The condition in the impugned deed that
if the mortgage is not redeemed within 4
years it shall be treated as sale obstructs
the right of the mortgagor to redeem the
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211
 property after four years and is therefore
a clog on the equity of redemption.

9. In view of the above discussion,
the question is answered in favour of the
plaintiff-respondent and it is found that
the condition in the mortgage deed that if
the security money is not paid within 4
years the document would be treated as
sale is void. The appeal therefore lacks
merit and is dismissed.
---------
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 23.12.2004

BEFORE
THE HON'BLE R.P. MISRA, J.
THE HON'BLE A.P. SAHI, J.

Civil Misc. Writ Petition No. 51175 of 2004

Shivalik Sahkari Avas Samiti

 ...Petitioner
Versus
State of U.P. and others ...Respondents

Counsel for the Petitioner:
Sri Rakesh Pandey

Counsel for the Respondents:
Sri Anurag Khanna
S.C.

Land Acquisition Act S.-48- read with
U.P. Industrial Area Development Act
1976 read with U.P. Urban Planning
Development Act 1973-Exclusion from
acquisition-can be made only when the
Possession not taken -instructions issued
in the shape of G.O. or execution
instruction-without taking recourse of
section 48-can not sustained.

Held: Para 12 & 13

Further the impugned order in the
present case has also not taken into
account as to whether the government
order dated 22.10.2002 is a direction
issued by the State Government as
contemplated under section 12 of the
1976 Act read with section 41 of the U.P.
Urban Planning and Development Act or
not.

The provisions under which, exemption
of a land acquired under the Land
Acquisition Act can be granted, is section
48 of the Land Acquisition Act. The land
can
be
excluded
from
acquisition
proceeding by taking resort to the
notification in the official Gazette under
section 48 which provides that such an
exemption can be made where the
possession of the land has not been
taken over. In view of the aforesaid
position, no instructions issued by the
State Government either in the shape of
a
government
order
or
any
other
executive instructions can be pressed
into service for exempting the land
without taking recourse to section 48.
Case law discussed:
(1988) 1 SCC-63

(Delivered by Hon'ble R.P. Misra, J.)

1. The present writ petition has been
filed questioning the legality of the order
dated 11.10.2004. Annexure-11 to the
writ petition, on the ground that the
reasons
given
for
rejecting
the
representation suffer from manifest error
of law inasmuch as the respondent-State
Government has failed to take into
consideration the provisions of Sections 6
and 12 of the U.P. Industrial Area
Development Act, 1976 and Section 41 of
the
U.P.
Urban
Planning
and
Development Act, 1973.

2. We have heard Sri Rakesh
Pandey, learned counsel for the petitioner,
learned Standing Counsel for respondent
nos. 1,2 and 3 and Sri Anurag Khanna,
learned counsel for respondent no 4.