# Murarilal v. Dev Kar«

- **Citation:** [1964] 8 S.C.R. 239
- **Court:** Supreme Court of India
- **Decided:** 1964
- **Case number:** Civil Appeal No. 484 of 1961
- **Bench:** P. B. Gajendragadkar, M. Hidayatullah, K. c. DAS GUPTA, J. c. SHAH, Raghubar Dayal
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/murarilal-v-dev-kar-3255
- **Pages:** 14

## Headnote

Jlortgage-Clog on equity of rtdemption-Enforcet~bility-Principk tJ/
Justice, equity and good conscience-A.pplication-Power of Coun.
The respoodent sought to redeem a mortgage e~etuted in the Sta~
of Alwar in 1919. By a stipulation in the mortgage deed the mortgagor
aareed that if the debt was not paid within l.S years the mortgagee would
become the owner of the property. The respondent's case was that the
transaction was a mortgage and that he could redeem the mortgage
even though the stipulated period was over. The appellant resisted the
auit on the ground that the transaction amounted to a sale and not a
mortgage. The trial Judge dismissed the suit holding that the claim
for redemption was not maintainable after the expiry of the stipulated
period. The Rajasthan High Court on appeal reversed the decision of
the trial Judge holding that the stipulation was a clog on the equity
of redemption and remanded the suit. The stipulation in question was
u follows,-
.. After the expiry of the stipulated penod of lS yean this shop
would be deemed as an absolute transfer 'Mala Kalam' for
this amount. Till the mortgage money is paid, I shall have
no concern with the shop ...
Held: If the stipulation were to prevail, the use of the words 'mala
llllamt, which meant that there would be no scope for the mortgagor
to say anything, W<'uld indicate that the mortgagee became the absolute
owner of the property.
But the stipulation, which was undoubtedly a clog on the equity
ol redemption, must fail and the suit for redemption must succ:eed.
1964
ShivagoiiiU
"'·
C lunulrakttrtt ·
Sllbba Rao 1.
1N4
.,,. '
\
1964
Murarilal
v.
Dev Kar«
SUPREME COURT REPORTS
[1g64]
The equitable principle of justice, equity and good conscience, Jon1
and consist~ntly applied by Civil Courts in Inoia, could be applied in
the State of Alwar even though the Transfer of Property Act had no
application there at the time when the mortgage document was executed
or its period expired. The strict provisions of the texts of Hindu Law
in this regard wouJd be of no avail.
Namdeo Lokman Lodhi v. Narmadabai, [1953} S.C.R. 1009, applied.
Pattabhiramier v. Vencutarow Naicken and Narasimha Naicken,.
(1870) 13 M.I.A. 560 and Thumbusaway Moodelly v. Hossain Rowthen,
I.L.R. 1 Mad. 1. cons:dered.
V ~nkata Reddy v. Pai'Vati A.mmal. 1 Mad. H.C. Rep. 460, Ramii bin
Tukaram v. Chinto Sakharam, 1 Born. H.C. Rep. 199 (1864), Bapuji
A.paji v. Senavaraji Marvadi, l.L.R. II Bom. 231, Ramasami Sastrigal Y.
Samiyappanayakan, I.L.R. 4 Mad. 179, Amba Lal v. Amba Lal, l.L.R.
1957 Raj. 964, Seleh Raj v. Chandan Mal, I.L.R. 1960 Raj. 88 aDd
N«inu Y. Kishan Singh, A.I.R. 1957 H.P. 46, referred to.

## Text

s s .. c.R.
SUPREME COURT REPORTS
239
.Partnership Act, therefore, does not apply to him. He is
not a partner of the finn and, therefore, he cannot
be
ad\uruca£ed insolvent for the acts of insolvency committed by
respondents 2 and 3, ithe partners of the finn.
The order
of the High Court is correct.
In the result, the appeal fails and is dismissed with costs.
\
Appeal dismissed.
MURARILAL
v.
DEV KARAN
(P. B. GAJENDRAGADKAR, C.J., M. HIDAYATULLAH, K. c.
DAS GUPTA, J. c. SHAH AND RAGHUBAR DAYAL, JJ.)
Jlortgage-Clog on equity of rtdemption-Enforcet~bility-Principk tJ/
Justice, equity and good conscience-A.pplication-Power of Coun.
The respoodent sought to redeem a mortgage e~etuted in the Sta~
of Alwar in 1919. By a stipulation in the mortgage deed the mortgagor
aareed that if the debt was not paid within l.S years the mortgagee would
become the owner of the property. The respondent's case was that the
transaction was a mortgage and that he could redeem the mortgage
even though the stipulated period was over. The appellant resisted the
auit on the ground that the transaction amounted to a sale and not a
mortgage. The trial Judge dismissed the suit holding that the claim
for redemption was not maintainable after the expiry of the stipulated
period. The Rajasthan High Court on appeal reversed the decision of
the trial Judge holding that the stipulation was a clog on the equity
of redemption and remanded the suit. The stipulation in question was
u follows,-
.. After the expiry of the stipulated penod of lS yean this shop
would be deemed as an absolute transfer 'Mala Kalam' for
this amount. Till the mortgage money is paid, I shall have
no concern with the shop ...
Held: If the stipulation were to prevail, the use of the words 'mala
llllamt, which meant that there would be no scope for the mortgagor
to say anything, W<'uld indicate that the mortgagee became the absolute
owner of the property.
But the stipulation, which was undoubtedly a clog on the equity
ol redemption, must fail and the suit for redemption must succ:eed.
1964
ShivagoiiiU
"'·
C lunulrakttrtt ·
Sllbba Rao 1.
1N4
.,,. '
\
1964
Murarilal
v.
Dev Kar«
SUPREME COURT REPORTS
[1g64]
The equitable principle of justice, equity and good conscience, Jon1
and consist~ntly applied by Civil Courts in Inoia, could be applied in
the State of Alwar even though the Transfer of Property Act had no
application there at the time when the mortgage document was executed
or its period expired. The strict provisions of the texts of Hindu Law
in this regard wouJd be of no avail.
Namdeo Lokman Lodhi v. Narmadabai, [1953} S.C.R. 1009, applied.
Pattabhiramier v. Vencutarow Naicken and Narasimha Naicken,.
(1870) 13 M.I.A. 560 and Thumbusaway Moodelly v. Hossain Rowthen,
I.L.R. 1 Mad. 1. cons:dered.
V ~nkata Reddy v. Pai'Vati A.mmal. 1 Mad. H.C. Rep. 460, Ramii bin
Tukaram v. Chinto Sakharam, 1 Born. H.C. Rep. 199 (1864), Bapuji
A.paji v. Senavaraji Marvadi, l.L.R. II Bom. 231, Ramasami Sastrigal Y.
Samiyappanayakan, I.L.R. 4 Mad. 179, Amba Lal v. Amba Lal, l.L.R.
1957 Raj. 964, Seleh Raj v. Chandan Mal, I.L.R. 1960 Raj. 88 aDd
N«inu Y. Kishan Singh, A.I.R. 1957 H.P. 46, referred to.
CIVIL APPELLATE JURISDICTioN: Civil Appeal No. 484
of 1961.
Appeal· by special leave from the judgment and decree
dated Ma.:~h 28, 1958 of the Rajasthan High Court (Jaipur
Bench) at Ja.ipur in D. B. Civil First Appeal No. 64 of
1951.
Sarjoo Prasad and Harbans Singh, for the appellants.
B. P. Sinha and Naunit Lal, for the respondents.
1fay 8, 1964.
The Judgm~nt of the Court was delivered by
GAJENDRAGADKAR, C.J. This appeal by special leave
arises out of a redemption suit filed by the respondent Dev
Karan against the appellant Murarilal. The mortgage
sought to be redeemed was executed on the
19th March,
1919 for a sum of Rs. 6,500.
The mortgaged property
con~.isted of a shop which was
delivered
over in the
po~session of the mortgagee after the execution of the mortgage deed.
The mortg.~ge deed had provided that the
amount due under the mortgage should be repaid to the
mortgagee within 15 years, whereupon the property would
be redeemed. It had also stipulated that if the payment
was not made within 15 years, the mortgagee would become
the owner of the property. The mortgagor was Man gal
S S.C.R
SUPREME COURT REPORTS
Ram who died and the respondent claims to be the heir ·and
legal representative of the said deceased mortgagor.
In
the plaint filed by the respondent, it was averred that the
transaction was, in substance, a mortgage and the
mortgagor's right to redeem was alive even though the
stipulated period of 15 years for the repuyment of the loan
had passed. On these allegations, the respondent claimed
a decree for redemption of the suit mortgage on payment
of Rs. 6,500. It appears that the original mortgagee
Gangadhar had also died before the institution of the suit,
and so, the appellant Murarilal was impleaded as
the
defendant on the basis that he was the only heir and legal
representative of the deceased mortgagee Gangadhar.
The claim for redemption thus made by the respondent
was resisted by the appellant on several grounds.
It was
alleged that after the expiry of the stipulated period of 15
years, the property had become the absolute property of
the mortgagee and it was urged that the original transaction
was, in substance, and in reality, not a mortgage but a sale.
Several other pleas were also raised by the appellant in
resisting the respondent's claim, but it is unnecessary to
refer to them. The learned trial Judge framed appropriate
issues which arose on the pleading of
the parties.
In
substance, he held that the claim for redemption made long
after the 15 years' period had expired could not be su r;;tc.ined. Findings were made on other issues also and
they
were against the respondent. In the result, the respondent's
suit was dismissed.
The respondent then took: the m.atter in appeal bctore
the Rajasthan High Court. He urged that the view taken
by the trial Court that the stipulation as to the mortgagor·s
liability to re-pay the loan withjn 15 years did not bar his
present suit for redemption, because the said stipulation
amounted to a clog on the equity of redemption and as
such, could not affect the mortgagor's right to redeem, and
he added that the transaction, in substance, was a mortgage
and not a sale, and so, his right to redeem was alive and
could be effectively enforced by the present suit.
The
High Court has upheld his first contention that the relevant
51 S.C.-16.
1964
Murarikll
v.
Dev Karan
Gajendragadka
c.].
1964
Murariltzl
V.
Dev Karan
Gajendragadkar
C.J.
SUPREME COURT REPORTS
[1964]
provision as to the period within which the mortgage amount
had to be repaid amounted to a clog on the equity of
redemption and could not be pleaded as a bar to the present
suit.
But on the question about the character of the original transaction itself, the High Court appears to have been
inclined to take the view that the relevant clause on whkh
the plea about the bar was raised did not really support the
said plea, because it was by no means clear that even after
the expiration of 15 years, the mortgagee was intended to
be the absolute owner of the property.
On these findings,
the decree passed by the tria] Court dismissing the respondent's suit has been reversed and the suit h.as been remanded
to the trial Court to be disposed of in accordance with law.
It is against this order that the appellant has come to this
Court by special leave.
Pending the appeal before this
Court, both the appellant and the respondent have died, and
their respective heirs have been brought on the record.
The first question which calls for our decision is whether
the relevant clause on which the appellant relies rn akes the
mortgagee the owner of the property at the end of the stipulated period of 15 years.
The mortgage provides, inter
alia, that after the house which w.1s the mortgage property
was delivered over to the mortgagee~ it \vas open to him
either to live in it, or to let it out to tenants.
T~e mortgagee
was further given liberty to spend up to Rs. ~5 for repairing
the house and if more expenses were intended to be incurred.
the said expenditure
would
be incurred through -the
mortgagor.
On the expenditure thus incurred the mortgagor was liable to pay
interest
at the
rate of
As. 0-6-0 per ce-nt per month. Then the document proceeded to add that the mortgagor would get the property
redeemed on payment of the mortgage amount as weJI t1s
the cost of Patta which may have been incurred by tl1e
mortgagee and the repairing expenses within a period of l 5
years.
Then, occurs the relevant clause: ''After the expiry
of the stipulated period of 1:; :·: ::trs, this shop would be
deemed as an absolute transfer ''Mala Kalam" for this very
amount.
Till the mortgage money is paid, I shaH have ;-lc
concern with the shop." The High Court appears to haY~
taken the view that the words "Mala Kalam .. which oc•~t!r ~t
8 S.C.R.
SUPREME COURT REPORTS
243
the end of the relevant clause do ·not necessarily impon the
notion that the mortgage property w9uld be the absolute
property of the mortgagee.
According to the High Court,
the said words literally mean "where there is no scope for
having any say". If that is the meaning of the relevant
words, it seems difficult to accept the view that the doc~ent
did not intend to make the mortgagee the owner of the property at the end of . 15 years if the debt due was not paid
within that period. When the document says that there
would be no scope for the ~ortgagor to say anything, it
neeessarily means, in the context, that the mortgagor would,
in tbat case, have lost his title . to the· property, and that
means the mortgagee would become the absolute owner of
the property. Therefore, we feel no difficulty in holding
that if the terms of the document were to prevail, the appellanes contention that the present suit for
redemption
is
barred, must succeed. It is
common ground that
the
amount due under the mortgage deed was not paid by the
mungagor or his heir within the stipulated period and that
would extinguish the title of the mortgagor and make the
mortgagee to be the owner of the property.
Rut the question is whether such a stipulation c.'ln be
allowed to be pleaded as a bar to the respondent's claim
for redemption.
Just as it is common ground that if the
terms of the document were to prevail, the suit would be
barred, it is also common ground that if the doctrine that
the clog on the equity of redemption cannot be enforced is
to prevail in the present proceedings, the respondent's action
for ~edemption must succeed. The fact that a stipulation
of tbe kind with which we are concerned in the present case
amounts to a clog on the equity of redemption, is not and
cannot be disputed.
Therefore, the main question which
arises in the present appeal is: does the equitable doctrine
ensuring the mortgagors equity of redemption in spite of a
clog created on such equity by stipulations in the mortgage
deed apply to the present case? Thh question arises in
this form, because the Transfer of Pr.operty Act did not apply
to Alwar at the time when tbe mortgage was executed nor
at the time when the 15 years' stipulated period expired.
1964
Mlll"ffriW
"·
Dn 'KANII
Gajendragadw
C. I.
1964 -
Mur11rllal
v.
Dev Karan
Gajendr(igadkar
C.J.
244
SUPREMR COURT ·REPORTS
[rg64]
Mr. Sarjoo Prasad for· the appellant contends that the
High Court w.as in error in applying the equitable principle,
because tHe said principle cannot be invoked in cases where
the Transfer of Property Act does not apply.
In support of
this argument, he has very strongly relied on an early decision
of the Privy Council pronounced in 1870, in the case of
Pattabhiramier v. Vencatarow
Naicken and Narasimha
Naicken(l). In that case, the Privy Council was dealing
with a
Bye4bil~wutfa, or mortgage and conditional sale
usufructuary executed in 1806 under which the mortgagees
were put in possession. The deed ·contained a condition
that if the mortgagor failed to redeem within five years, the
conditional sale was to be absolute. The mortgagor failed to
redeem within the stipulated p·eriod, and the mortgagee,
without foreclosing the mortgage, sold the mortgaged property.
Thereafiter, the mortgagor's representative sued to
redeem the mortgage under s. 8 of the Madras Regulation
XXXIV of 1802. The Privy Council held that the interest
of the mortgagee after the expiry of the stipulated period had
become absolute.
In dealing with thiS'
question,
Lord
Chelmsford who delivered the opinion of the Board observed
that the form of security with which the Board was concerned
had long been common in India, and he added that the sti·
pulations in such contracts were recognised and enforced
according to their letter by the ancient Hindu law as well as
under Mohammedan law; and in support of this statement,
reference -was made to certain passages from Colebrooke's
Digest on Hindu ·Law and Baillie's introduction to his book
on M'ohammedan Law of Sale.
If the ancient Jaw of the
country, observed Lord Chelmsford, has been modified by
any later rule, having the force of law, that rule must be
founded either on positive legislation, or on established
practice; and since neither any specific statutory provision
had been cited before the Board, nor established practice
in that behalf had· been proved, the Privy Council upheld
the mortgagee's plea that he became the absolute owner of
the property at the expiration of the stipulated period. While
pronouncing this decision, Lord Chelmsford, however, took
the precaution of adding that while the Board was allowing
(I) [ISgo] I3 Moore's I.A. s6o
8 S.C.R.
SUPREME COURT REPORTS
245
the appeal, "it must not be supposed that their Lordships
design to disturb any rule of property established by judicial
decisions so as to form part of the Law of the Forumt
wherever such may prevailt or to affect any title founded
thereon." As we will presently point outt the appeal of
Pattabhiramier was pending before the Privy Council for as
many as 10 years.
Meanwhile, Indian High Courts were
enforcing the equitable principle that stipulations contained
in mortgage-deeds which amounted to clog on the equity of
redemption could not be enforced. In other words, the
iurisdiction which courts of equity exercised in England by
refusing to enforce clogs on the equity of redemption, was
being exercised by High Courts in India.
However, before we refer to those decisions, it would be
convenient to cite another decision of the Privy Council pro--
nounced in Thumbusawmy Moodelly v. Hossain Rowthen &
Ors(l). In that case, the Privy Cmmcil held that the contract of mortgage by conditional sale is a form of security
known throughout India, and by the ancient law of India,
it must be taken to prevail in every part of India, where it
has not been modified by actual legislation or established
practice, and so, must be enforced according to its letter.
In this case, Sir James W. Col vile who delivered the opinion
of the Board, referred to the earlier decision of the Privy
Council in Pattabhiramiers case(2), noticed the trend of
judicial pronouncements made by the High Courts in India
while Pattabhiramier's case was pending before the Privy
Council, and strongly reiterated· the view that the said
decisions of the High Courts were radically unsound.
He
referred to the fact that unfortunately, Pattabhiramier's case
"slept for nine years, and that in the interval .the Sudar
Court, and afterwards the High Court which succeeded it,
continued the course of decision which the former had given
in 1858,. Then he mentioned the relevant decisions of the
Madras and the Bombay High Courts and expressed the
opinion that in trying to enforce principles of equity in dealing with stipulations contained in mortgage documents, the
High Coons were really assuming the functions of Legislature. So, it is clear that the Privy Council emphatically
(I) I.L.R. I Mad. I
1964
Murarilal
Y.
Dev Karan
Gaiendragadkar
C.J.
1964
Murarilal
v.
Dev Karan
-
Gajendragadkar
C.J.
246
SUPREME COURT REPORTS
[1g64]
declared in 1875 that unless there is a legislative enactment
or established practice to the contrary, terms in the contract
of mortgage by conditional sale must be taken to prevail in
every part of India and must be strictly enforced according
to their letter.
Mr. Sarjoo Prasad naturally relies on these
decisions and contends that so far as the State of Alwar is
concerned, there is no legislative enactment to the contrary,
nor is there any established practice on which the equitable
doctrine could be pleaded by the respondent in support of
his case that though 15 years have elapsed, his right to
redeem still survives.
There are two other decisions of the Privy Council to
which we may refer at this stage. In Kader Moideen v.
Nepean(l), the Privy Council was dealing with a case from
Burma, and it observed that the Burmese Courts are direct·
ed, in the absence of any statutory law applicable to accounts
against a mortgagee in possession, to follow the guidance of
justice, equity, and good conscience.
Acting on this principle, the Privy Council accepted Mr. Haldane's contention
that there was no rule of abstract justice in taking the
accounts of a mortgagee in possession, and that the Indian
rule, which was embodied ins. 76 of the Transfer of Property
Act, should, though the Act had not been extended to Burma,
be followed there in preference to the English practice. It
would thus be seen that the equitable principle underlying
the provisions of s. 76 was extended to the case on the
specific ground that the Bunnese Courts had been directed
by the relevant sta.tutory provision to follow the guidance
of justice, equity and good conscience in the absence of any
statutory law applicable to accounts against a mortgagee in
possession.
This decision, therefore, is in line with the two
earlier decisions of the Privy Council.
Similarly, in Mehrban Khan v. Makhna(2 ), where the
Privy Council was dealing with the provisions in a mortgage
deed conferring on the mortgagee upon redemption an
interest in the mortgaged property, it was held that the said
provisions amounted to a clog or fetter on the equity of
redemption and as such, were void not only against the
mortgagor, but also against the purchaser of his interest,
(t) 25l.A. 24t
(~)57 l.A. t68
8 S.C.R.
SUPRErv!E COURT REPORTS
247
since they were inconsistent with the very nature and essence
of a mortgage.
In this case, again, s. 28 of Regulation
No. VII which was applicable to the North-West Frontier
Province, had expressly provided that in cases not otherwise
specially provided for, the Judges shall decide according to
justice, equity 'lnd good conscience; and so, recourse to the
equitable doctrine was pcrmissib!e .because there was the
statutory mandate requiring the Judges to l1pply t!1e said
doctrine where there was no specific legislative provi~,ion in
relation to the matter with which they were dea1ing. .
Though the position of the Privy Council decisions is
thus clear and consistent, the trend of the decisions of the
High Courts in India continued to conform to the same pattern which was set up by the decision of the Madras High
Court in the case of Venkata Reddi v. Parvati Ammal(l) and
adopted by the Bombay High Court in Ramji bin Tukaram v.
Chinto Sakharam(2). The question was elaborately argued on
.several occasions before the said High Courts .and the two
earlier decisions of the Privy Council in
the
case of
Pattabhiramier( 3 ) as well as in the case of Thumbusawmy
Moodelly(4 ) were cited and yet, the High Courts have con-
·sistently adhered to the view that in dealing .with mortgage
transactions which contain unfair~ unjust or oppressive stipulations unreasonably restricting the mortgago{s right to
redeem, the Court would be justified in refusing to enforce
such stipulations and recognising the paramount character of
the equity of redemption.
In Bapuji Apaji v. Sonavaraji
Marvati(i>), Westropp, C.J., h().s elaborately considered the
relevant aspects of this question.
He referred to the two
Privy Council's decisions and observed that the doctrine of
Ramji v. Chinto() had been uniformly folJO\ved jn the
Bombay Pre~idency in a multitude of cases, and he ~aw no
reason to depart from that decision.
In expressing his firm
adherence to the pattern of the law prescribed
by the
decision of .the Bombay High Court in Ramji v. Cldmo, the
le3rned Chief Justice elaborately considered ali the prece·
dents on the point. trend of authorities bearing on the question, the opinion of scholars~ and held that he was inclined
(I) I Mad. H.C. Rep. 460
(2) I Born. H.C.'Rep. 199 [rS6.d
(3) [IS7o] 13 M.I.A. 560
(4) I.L.R. I Mad. I,
(5) J.L.R. II Born. 231
1964
!vlurarilal
v.
Dev Karan
Gnjendragadkar
C.J.
1964
Murarilal
v.
Dev Karan -
248
SUPREME COURT REPORTS
[1g64]
to take the law to be that which was settled in Ramji v.
Chinto(l) and gave effect to it.
So far as the Bombay
High Court is concerned, the practice consistently had been
Gajendragadkar
C.J.
to follow the decision of Westropp, C.J. till the Transfer of
Property Act was extended to Bombay.
In Madras, we find that same position.
In Ramas~mi
Sastrigal v. Samivappanayakan(:l), the majority view of the
Full Bench was that in the Madras Presidency, where conw
tracts of mortgage by way of conditional sale have been
entered into subsequent to the year 1858, redemption after
the expiry of the term limited by the contract must be allowed.
The point with which we are dealing in the present
appeal was elaborately .argued before the 1vladra5 High Court;
the opinion expressed emphatica1ly by the Privy Council was
cited, but Turner, C.J ., with whose opinion Muttusami
Ayyar, J., agreed made a very significant observation after
elaborately examining the merits of the question.
"For these
reasons," said the learned C.J ., "we conceive that we shall
not be wanting in due respect for the distinguished tribunal
by whose decisions we are bound, if we follow the course
they have pronounced there were strong reasons for adopting and apply the rules introduced, however erroneously,
by judicial decisions in these provinces."
That view has
prevailed in the Madras High Court ever since.
These decisions show that the High Courts in India
conformed to the view that whether or not there is a statutory
provision directing the Judges to give effect to the principles
of justice, equity and good conscience. it is their duty to
enforce that principle where they are dealing with stipulations introduced in mortgage transactions which appear to
them to be unreasonable, oppresive or unjust.
It is true that according to the strict letter of the ancient
Hindu Law, a stipulation that the mortgagor shall pay the
amount advanced to him by the mortgagee within a specified
p~riod, was intended to be enforced.
The ancient Hindu bw
texts use the word "Adhi'' to denote pledge of a movable
or mortgage of immovable property.
Nar. IV 124 divides
A~hi into two sorts, viz., one that is to be redeemed within
-----------------
tt) 1 Bon· H.C. Rep. 199 (1864)
(2) I.L.R. 4 Mad. 179 at p. 1.90
••
8 S.C.R.
SUPREME COURT REPORTS
249
a certain time fixed (by agreement at the ti.rile of contracting
the debt) or to be retained till the debt is paid off. In
regard to the first category of mortgages, if the money ·is not
paid at the time fixed, the thing pledged or mortgaged would
belong to the creditor (vide Yaj. II. 58 and as explained by
Mitakshara) ( 1). It also appears that if the mortgage is not
redeemed even when the debt has grown to double of the
principal by non-payment of the interest agreed upon, the
mortgagor lost his title over the mortgaged property; so that
it must be conceded that under the strict letter of the Hindu
law texts, if a mortgage deed contains a stipulation for the
repayment of the mortgage amount within a specified period,
at the expiration of the said period the mortgagor may Jose
his title over the mortgaged property. The principle underlying this provision appears to be that Hindu law as enunciated by the ancient texts, attached considerable importance to
a person keeping his promise.
Though that is so, we ought
also to add that according to Sir R. B. Ghose, ordinarily,
time was not of the essence of the contract of mortgage in
Hindu law(2), and in support of this opinion the learned
author quotes with approval Colebrooke's opinion.
Basing himself on this position of the Hindu law, Mr.
Sarjoo Prasad contends that we ought to assume that Hindu
Law which ~as applicable to Alw.ar recognised the importance of compelling the mortgagor to perform his promise
that he would repay the debt within a specified time and if
he failed to do so, he would lose his title over the mortgaged
property. He urged that the dispute between the parties in
the present appeal should be dedded in the light of this
position of the Hindu law as well as the principles enunciated
by the Privy Council in the cases of Pattabhiramier(3 ) and
Thumbusawmy Moodelly(4').
In dealing with this argument, it would be relevant to
observe that traditionally,· courts in India have been con·
sistently enforcing the principles of equity which prevent the
enforcement of stipulations in mortgage deeds which unreasonably restrain or restrict the mortgagor's
right to
(I) Dr. Kane's HistoryofDharmasastra Vol. III. p. 428
(::) Ghose on (The Law of Mortgage in India, Tagore Law Lectures
I87S-6t 5thEd. Vol. I. p. 56.
{3) [1870] 13 M.I.A. 560
(4) I.L.R. I Mad. I
1964
Mllrarilal
v.
Dev Katan
Gajendragadka;
C. I.
1964
M11rarilal
v.
Dev Karan
'Jajendragadkar
C.J.
250
SUPREME COURT REPORTS
[1964]
redeem. We may, in this connection, refer to some of the
statutes which were in force in India. The old Bengal
Regulation III of 1793 by s. 21 directed the Judges of the
District and City Courts in cases where no specific rule
existed to act according to justice, equity and good con~
science.
Similar pro~li';ion occurs in s. 17 of the Madras
Regulation II of 1802. The Bengal Civil Courts Act, 1887,
and the Madras Civil Courts Act, 1873. contain similar pro~
visions in ss. 37 and 16 respectively.
Likewise, in regurd
to Courts in the Mufassal of Bombay! Bombay Regulation
IV of 1827 by s. 26 provides that the law to be observed in
the trial of suits shall be Acts of Parli3ment and Regulations
of Government applicable to the case; in the absence of
such Acts and Regulations, the usage of the country in which
the suit arose; if none such appears, the law of the defendant,
and in the absence of specific law and usage, equity and good
conscience. In fact,
in Namdeo Lokman Lodhi v.
Narmadabai(l), this Court has emphaticaiJy observed that
it is axiomatic that the courts must apply the principles of
justice, equity .and good conscience to transactions which
come before them for
determination even
though the
statutory provisions of the Transfer of Property Act are not
made applicable to these transactions. These observations,
in substance, represent the same traditional judicial approach
in dealing with oppressive~ unjust and unreasonable restrictions imposed by the mortgagees on needy mortgagors when
mortgage documents are executed.
There is one other circumstance to which we ought to
refer.
We do not know what the true position of the Hindu
law was in the State of Alwar at the relevant time. In fact,
we do not know what the provisions of the Contract Act
were in the State of Alwar.
Even so, \Ve think it would be
reasonable to assume that civil courts established in the State
of Alwar were like civil courts .aU over the country~ required
to administer justice and equity where there was no specific
statutory provision to deal with the question raised before
them.
Whether or not the Hindu law which prevailed in
Alwar was similar to that prescribed by ancient Hindu
Sanskrit texts, is a point on which no material is produced
(I) [1953] S.C.R. I009
r
c·---
1
' •
8 :S.C.R.
SUPREME CUURT REPORTS
251
before us. It may well be that just as in Bombay
and
Madras, notwithstanding the ancient provisions of Hindu
Law which seem to entitle the mortgagee to insist upon
the performance of a stipulation as to time within which
the mortgage debt has to be paid, the High Courts had consistently refused to enforce such stipulations, the Courts in
the State of Alwar also may have adopted the same approach.
In the absence of any material on the record on the point~
we are reluctant to accept Mr. Sarjoo Prasad's atgument
that the. doctrine of equity and justice should be treated as
irrelevant in dealing with the present dispute .
. In this connection, it is material to refer to the recent
decisions pronounced by the Rajasthan High Court in which
this position has been upheld either because it was conceded,
or because the High Court took the view that the principles
of equity were enforceable in dealing with mortgage transactions in Rajasthan.
In Amba Lal v. Amba Lal(l), the
Rajasthan High Court held that s. 60 and its proviso contained a general principle of law applicable to mortgages in this
country, which should be applicable even in those places
where the Transfer of Property Act m.ay not be in force as
such, but where its principles may be in force.
The property
in question which was the subject-matter of the mortgage was
situated in the State of Udaipur.
Similarly, in the case of Seleh Raj v. Chandan Mal(2),
the Rajasthan High Court held that the principle underlying
s. 60 may well be regarded to be a salutary one and in
accordance with the principles of equity, justice .and good
conscience.
Accordingly it too.1c the view that though the
Transfer of Property Act may not be in force in the territory
in question, it would not be unreasonable to decide a case
in accordance with the principles underlying the said section.
The property with which the Court was concerned in
this case was situated in the State of Jodhpur.
The same principle has been applied in Himachal Pradesh (vide Nainu v. Kishan Singh) (3).
(t) I.L.R. 1957 Raj. 964.
(2) I.L.R. 1960 Raj. 88.
(3) A.I.R. 1957 H . .P. 46.
1964
Murarilal
v.
Dev Karan
Gajendragadkar
C. I.
1964
Murarilal
v.
Dev Karan
Gajendragadkar
C. I.
1964 -
May, 8
SUPREME COURT REPORTS
Thus, it is clear that the equitable principle of justice,
equity .and good conscience has been consistently applied by
Civil Courts in dealing with mortgages in a substantial part
of Rajasthan and that lends support to the contention of the
respondent that it was recognised even in Alwar that if a
mortgage deed contains a stipulation which unreasonably
restrains or restricts the mortgagor's equity of redemption,
courts were empowered to ignore that stipulation and enforce
the mortgagor's right to redeem, subject, of course, to the
general law of limitation prescribed in that behalf.
We are,
therefore, satisfied that no case has been made out by the
appellant to justify our interference with the conclusion of
the Rajasthan High Court that the relevant stipulation on
which the appellant relies ought to be enforced even though
it creates a clog on the equity of redemption.
In the result, the appeal fails and is dismissed with costs.
Appeal dismissed
SRI JAGADGURU KARl BASAVA
RAJENDRASWAMI OF GAVIMU'IT
v.
COMMISSIONER
OF
HINDU
RELIGIOUS
CHARITABLE ENDOWMENTS, HYDERABAD
(P. B. GAJENDJUGADKAR, C.J., M. HIDAYATULLAH, J. c.
SHAH, RAGHUBAR DAYAL AND S.M. SIKRI, JJ.)
Constitution of India, Art. 19(1)(/)-Mutt-Framing of 5clremeRepeal of old Act by new Act-Promulgation of Comtitution -in
the meantime·-Notice on Matadhipati to hand over possession to
Executive Officer-Validity-Scheme, it must be tested by
funda~
mental rights conferred by the Constitution-Madras Hirz•lu Religious
and Charitable Endowments Act, 1951 (Mad. XIX of 1951), ss.
103(d), 62(3)(a)-(Mad. 11· of 1923), a. 63.
lbe appellant, who was a Matadhipati, moved the High Court for
a writ quashina the notice served on him in 1952 by the Executive
Oftlcer to hBDd over to the latter the administration and the properties
' .-
,'·:;