POMAL KANJI GOVINDJI Vs. VRAJLAL KARSANDAS PUROHIT

JUDGEMENT

(1.) These appeals and the special leave petition are directed against the decision of the High Court of Gujarat, upholding the right of the mortgagors to redeem the properties before the period stipulated in the deeds, as well as the right of the mortgagors to recover possession of the properties from the tenants and/or the mortgagees without resort to the relevant Rent Restriction Act. All these matters were separately canvassed before us as these involved varying facts, yet the fundamental common question is, whether long term mortgages in the present inflationary market in fast moving conditions are clogs on equity of redemption and as such the mortgages are redeemable at the mortgagors' instance before the stipulated period and whether the tenants who have been inducted by the mortgagees can be evicted on the termination of the mortgage or do these tenants enjoy protection under the relevant Rent Restriction Acts. One basic fact that was emphasised in all these cases was that all these involve urban immovable properties. In those circumstances, whether the mortgages operate as clogs on equity of redemption is a mixed question of law and facts. It is necessary to have a conspectus of the facts involved in each of the cases herein. We may start with the facts relating to Special Leave Petition (Civil) No. 8219 of 1982 because that is a typical case.

(2.) In this matter by our order dated January 9, 1988 we had directed that this special leave petition should be heard first in these series of matters. We do so accordingly. We grant leave and dispose of the appeal by the judgment herein along with other appeals.

(3.) This is an appeal from the judgment and order of the Gujarat High Court, dated April 26, 1982 dismissing the second appeal. The High Court observed that the learned Judge had followed the judgment of the said High Court in Khatubai Nathu Sumra v. Rajgo Mulji Nanji, AIR 1979 Guj. 171, where the learned single Judge in the background of a mortgage, where the mortgagor was financially hard-pressed and the mortgage was for 99 years and the terms gave the mortgagee the right to demolish existing structure and construct new one and the expenses of such to be reimbursed by mortgagor at the time of redemption, it was held that the terms were unreasonable, unconscionable and not binding. In order, however, to appreciate the contentions urged therein, it will be necessary to refer to the decision of the first Appellate Court, in the instant case before us. By the judgment, the Assistant Judge, Kutch at Bhuj in Gujarat disposed of two appeals. These appeals arose from the judgment and decree passed by the Civil Judge, Bhuj, in Regular Civil Suit No. 35 of 1972 by which the decree for redemption of mortgage was passed and the tenants inducted by the mortgagees were also directed to deliver up possession to the mortgagors. The plaintiffs had filed a suit alleging that the deceased Karsandas Haridas Purohit was their father and he died in the year 1956, he had mortgaged the suit property to Kansara Soni Shivji Jetha and Lalji Jetha for 30,000 koris by a registered mortgage deed dated April 20, 1943. The mortgage deed was executed in favour of Soni Govindji Narayanji who was the power of attorney holder and manager of defendants Nos. 1 and 2. Defendant No. 3 is the heir of said Govindji Narayanji and he was also managing the properties of defendants Nos. 1 and 2. The mortgage property consisted of two delis in which there were residential houses, shops etc. The mortgagees had inducted tenants in the suit property and they were defendants Nos. 4 to 9 in the original suit. When the mortgage transaction took place, the economic condition of the father of the plaintiffs was weak, he was heavily indebted to other persons. It was alleged and it was so held by the learned Judge and upheld by the appellate Judge that the mortgagees took advantage of that situation and took mortgage deed from him on harsh and oppressive conditions. They got incorporated long term of 99 years for redemption of mortgage. It is further stated that though possession was to be handed over to the mortgagees, they took condition for interest on the part of principal amount in the mortgage deed. Moreover, the mortgagees were given liberty to spend any amount they liked for the improvement of the suit property. They were also permitted to rebuild the entire property. Thus these terms and conditions, according to the Appellate Judge, were incorporated in the mortgage deed to ensure that the mortgagors were prevented forever from redeeming the mortgage. The terms and conditions, according to the Assistant Judge, Bhuj, being the first Appellate Court were unreasonable, oppressive and harsh and amounted to clog on equity of redemption and, as such, bad and the plaintiffs were entitled to redeem the mortgage even before the expiry of the term of mortgage. A registered notice to defendants Nos. 1 and 2 was given to redeem the mortgage but they failed to do so, hence, the present suit was filed to redeem the mortgage and to recover actual possession from the defendants Nos. 4 to 9 who were the tenants inducted by the mortgagees.