Property lawMortgageSupreme Court of India

Seth Ganga Dhar v Shankar Lal

AIR 1958 Supreme Court 77019581 min read
The case in brief30-second read
Facts
Mortgage deed contained a clause: if not redeemed within specified period, property becomes mortgagee's absolutely. Mortgagor sought redemption after the stipulated period.
Issue
Whether a clause providing that property shall become the mortgagee's absolute property upon default is valid.
Held
The clause is a clog on redemption and void. The mortgagor retains the right to redeem regardless of such clause. The principle "once a mortgage, always a mortgage" prevents contractual extinction of the redemption right.
Principle
A clause making property absolutely mortgagee's upon default is a clog on redemption and void; once a mortgage, always a mortgage
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Facts

  • Mortgage deed contained a clause: if not redeemed within specified period, property becomes mortgagee's absolutely
  • Mortgagor sought redemption after the stipulated period
  • Mortgagee relied on the clause to deny redemption

Issue

  1. Whether a clause providing that property shall become the mortgagee's absolute property upon default is valid.

Held

  • The clause is a clog on redemption and void. The mortgagor retains the right to redeem regardless of such clause. The principle "once a mortgage, always a mortgage" prevents contractual extinction of the redemption right.

Ratio decidendi

The right of redemption (S.60) is the essence of a mortgage. Any term that makes redemption impossible or illusory defeats the very nature of the transaction. Such terms are void as clogs on redemption. Only foreclosure decree, court sale, or limitation can lawfully extinguish this right.

Exam use

How to use it in an answer

Primary authority on clogs on redemption. Cite whenever a mortgage clause purports to extinguish the right to redeem. Key line: "Once a mortgage, always a mortgage; no clause can convert a mortgage into a sale upon default."

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Citation

Seth Ganga Dhar v Shankar Lal AIR 1958 Supreme Court 770

Reported: AIR 1958 Supreme Court 770. This is an educational summary, not the judgment itself. Cite the reported version in professional or academic work.