Redemption of Mortgage and Clog on Redemption

The law relating to mortgage under the Transfer of Property Act, 1882 recognises that a mortgage is not an absolute transfer of ownership. It is only a transfer of a limited interest in immovable property as security for a debt. The ownership substantially remains with the mortgagor, subject to the rights of the mortgagee.

One of the most important features of a mortgage is the right of redemption. This right ensures that the mortgagor can recover the property after repayment of the loan. Closely connected with this is the doctrine of clog on redemption, which prevents any restriction that defeats or unreasonably limits this right.

These two concepts form the foundation of mortgage law and ensure fairness between the mortgagor and the mortgagee.

Meaning of Mortgage

Section 58 of the Transfer of Property Act, 1882 defines a mortgage as the transfer of an interest in specific immovable property for securing the payment of a loan, existing or future debt, or performance of an obligation giving rise to pecuniary liability.

• The mortgagor is the person who transfers the interest and takes the loan.
• The mortgagee is the person who advances the loan and receives the interest in the property as security.

The amount secured, including principal and interest, is called mortgage money, and the instrument effecting the transfer is known as the mortgage deed.

Rights of the Mortgagor

The Transfer of Property Act provides several rights to the mortgagor under Sections 60 to 66. These rights are essential to maintain balance between the parties.

Some important rights include:

• Right to redeem the mortgaged property (Section 60)
• Right to transfer interest to a third party (Section 60A)
• Right to inspect title documents (Section 60B)
• Right to redeem separately or simultaneously (Section 61)
• Right to recover possession in usufructuary mortgages (Section 62)
• Rights relating to accession and improvements (Sections 63 and 63A)
• Power to lease (Section 65A)

These rights ensure that the mortgagor retains control and interest in the property despite the mortgage.

Right of Redemption

The right of redemption is the right of the mortgagor to get back the mortgaged property upon repayment of the mortgage money. It is both a statutory right and an equitable right.

This right arises from the principle that a mortgage is only a security and not a transfer of ownership. Therefore, once the debt is repaid, the mortgagor must regain full ownership of the property.

Statutory Basis of Right of Redemption: Section 60 of the Transfer of Property Act

Section 60 provides that at any time after the principal money becomes due, the mortgagor has the right, upon payment or tender of the mortgage money at a proper time and place, to require the mortgagee to:

Deliver Documents

• Return the mortgage deed
• Hand over all documents relating to the mortgaged property

Deliver Possession

• If the mortgagee is in possession, restore possession of the property

Re-transfer Property

• Re-transfer the property to the mortgagor or a third person as directed
• Execute and register an acknowledgement extinguishing the mortgagee’s rights

This right continues unless it is extinguished by:

• Act of the parties, or
• Decree of a competent court

A suit filed to enforce this right is known as a suit for redemption.

When Does the Right of Redemption Arise?

The right of redemption arises:

• After the principal money becomes due
• Upon fulfilment of conditions in the mortgage deed
• Even after default, subject to legal limitations

In Sampuran Singh v. Niranjan Kaur (1999), the Supreme Court held that where no restriction exists in the mortgage deed, the right to redeem arises from the very date of the mortgage.

Equity of Redemption

The concept of equity of redemption is an important extension of the right of redemption. It means that even if the mortgagor fails to repay on the exact due date, the right to redeem continues.

Key features include:

• The right survives default in payment
• It cannot be taken away by contractual terms
• It ensures fairness and prevents unjust enrichment

This principle protects the mortgagor against harsh or oppressive conditions.

Partial Redemption

As a general rule, partial redemption is not allowed. A person having interest in only a part of the mortgaged property cannot redeem that part alone by paying a proportionate amount.

However, an exception exists where the mortgagee has acquired the share of a mortgagor. In such cases, redemption of that portion may be permitted.

Redemption Clause in Mortgage Deed

A redemption clause specifies the manner and time within which redemption can be exercised.

Typical clauses may include:

• Period for which possession is given to the mortgagee
• Obligation to repay after expiry of a fixed term
• Requirement to execute a release deed upon repayment

However, such clauses must not restrict or defeat the right of redemption. If they do, they may be treated as invalid.

Doctrine of Clog on Redemption

A clog on redemption refers to any condition or provision in a mortgage which prevents, restricts, or makes it difficult for the mortgagor to exercise the right of redemption.

Such conditions are considered void because they are contrary to the fundamental principle of mortgage law.

Principle: “Once a Mortgage, Always a Mortgage”

This doctrine is based on the principle that a mortgage cannot be converted into an absolute transfer. The mortgagor must always retain the right to redeem.

In Santley v. Wilde (1899), it was observed that any provision inserted to prevent redemption upon repayment of the debt is a clog on the equity of redemption and is therefore void.

This principle was reaffirmed in Pomal Kanji Govindji v. Vrajlal Karsandas Purohit (1989).

Rationale Behind the Doctrine

The doctrine is based on considerations of:

• Justice and fairness
• Protection against exploitation
• Unequal bargaining power

The mortgagee often occupies a stronger financial position, and the mortgagor may be in urgent need of funds. Courts intervene to ensure that the mortgagor is not unfairly deprived of property.

In U. Nilan v. Kannayyan, it was held that hardship of one party cannot be used as an opportunity for exploitation by the other.

Situations Constituting Clog on Redemption

Condition Converting Mortgage into Sale

A clause stating that on default the property shall become the absolute property of the mortgagee is a clog.

In Ganga Dhar v. Shankar Lal (1958), such a condition was held invalid as it deprived the mortgagor of the right to redeem.

Similarly, in Meherban Khan v. Mekhna, a condition converting mortgage into sale upon default was held to be a clog.

Long-Term Redemption Restrictions

A long-term mortgage is not automatically a clog. However, if the period is excessive and coupled with oppressive conditions, it may amount to a clog.

In Vadilal Chhaganlal v. Gokaldas Mansukh, a 99-year mortgage with additional burdens was held to be a clog.

In Ramkhilawan Ashwasi v. Mullo, an unusual condition fixing repayment after 80 years was treated as a clog.

Renewal Clauses and Postponement

A clause requiring renewal of the mortgage or postponing redemption unreasonably is a clog.

In Sheo Shankar v. Parma, a subsequent agreement preventing redemption until repayment of another loan was held invalid.

Unreasonable Penalties

Penalty clauses become a clog when they are excessive or oppressive.

Examples include:

• Charging compound interest unfairly
• Charging interest from an earlier date than default

However, a high rate of interest alone does not amount to a clog unless it is coupled with unfair advantage.

Collateral Benefits Extending Beyond Mortgage

A mortgagee may enjoy certain benefits during the subsistence of the mortgage. However, such benefits cannot extend beyond redemption.

In Noakes & Co. v. Rice, a condition requiring exclusive sale of products to the mortgagee was held valid only during the mortgage period.

In Bhimrao Nagojirao Patankar v. Sakharam Sabajikathak, a condition allowing permanent possession to the mortgagee was held to be a clog.

Restrictions on Mode of Redemption

Conditions restricting how redemption may be carried out may also be invalid.

In Kuddi Lal v. Aisha Begam, requiring redemption through transfer rather than payment was considered a clog.

Limitation Period for Redemption

The limitation period for filing a suit for redemption is governed by the Limitation Act, 1963.

In Bandhrau Ram v. Sukh Ram (2000), it was held that where no time is fixed for repayment, the limitation period for redemption of immovable property is 30 years under Article 61.

Extinguishment of Right of Redemption

The right of redemption can be extinguished only in the following ways:

• By act of parties (for example, valid sale after redemption period)
• By decree of a competent court

Until such extinguishment, the right continues to exist and remains enforceable.

Conclusion

The right of redemption is an inseparable and fundamental feature of a mortgage. It ensures that the mortgagor retains the ability to reclaim the property upon repayment of the debt. This right is protected both by statute and by equitable principles.

The doctrine of clog on redemption acts as a safeguard against any attempt to defeat this right. Courts consistently strike down conditions that restrict or take away the right to redeem, thereby upholding the principle that a mortgage is only a security.

Together, these concepts maintain the balance between the mortgagor and mortgagee and ensure that the law remains just, equitable, and fair in its application.

Note: This article was originally written by Shanu chandwasia (3rd year student of B.A. LL.B. (Hons.) at Amity University, Kolkata) and published on 28 February 2020. It was subsequently updated by the LawBhoomi team on 06 April 2026.