Pomal Kanji Govindji v Vrajlal Karsandas Purohit

Facts

The plaintiffs' father had mortgaged property to the defendants in 1943 for 30,000 Koris by a registered deed which fixed a 99-year term for redemption. The plaintiffs alleged the mortgagees exploited their father's weak economic condition to insert harsh, oppressive conditions, including the long term. They sued to redeem before the stipulated period, also raising the tenants' right to remain in possession after redemption.

Issues

• Whether a 99-year (long-term) redemption clause amounts to a clog on the equity of redemption permitting early redemption
• Whether tenants inducted by the mortgagee retain possession after redemption under rent control law

Arguments

The mortgagors argued the long term was an oppressive clog exploiting their father's necessitous condition and was void. The mortgagees argued the term was a freely agreed bargain and tenants were protected by the Bombay Rent Act.

Held

The Court held that the doctrine of clog on the equity of redemption is a rule of justice, equity and good conscience that must be applied to the reality and individuality of each transaction. Any provision inserted to prevent, evade or hamper redemption is void. On the facts, the long term and conditions were oppressive and harsh and amounted to a clog, so the mortgagors could redeem. The Court further held tenants inducted by a mortgagee have no right to remain in possession and are not entitled to rent-control protection after redemption.

Ratio decidendi

A long redemption term is a void clog where it is oppressive, harsh or unconscionable and exploits the borrower's weak position; redemption is then permitted before the stipulated period.

Significance

Leading modern Supreme Court restatement of the clog doctrine, applying Seth Ganga Dhar's oppression test to long-term mortgages in inflationary conditions; widely cited authority on S60 and on mortgagee-inducted tenants.

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