Vol. 12 · pages 536–540

SECTION II THE RIGHTS AND LIABILITIES OF THE MORTGAGE INTRODUCTION 1. The property which is the subject-matter of the mortgage is subject to the rights of the mortgagor and the mortgagee. 2. There are two questions to be considered— (i) What are the rights of the mortgagor and mortgagee ? (ii) What is the nature of those rights ? § What is the nature of the rights 1. The English Law divides :—the interests of the mortgagor is spoken of as an equitable estate, while the interests of the mortgagee is spoken of as a legal estate. The Indian Law does not recognize this distinction between legal and equitable estate. (1872) I.A. Supp. 47 (71). 30 I.A. 238. 2. Even under the Trust Act this distinction is not recognized. 58 I. A. 279. 3. Both have legal rights—there is nothing equitable as opposed to legal. II. Under the English Law mortgagee is owner while the mortgagor has a bare right of reconveyance. 1. Under the Indian Law it is just the reverse. The mortgagor is the owner and the mortgagee has only a right in re abena. Rights of the Mortgagor 1. The Rights of the mortgagor fall into three divisions— I. The Right to redeem. II. The Right to manage the property. III. The Right to obtain re-transfer.

516 DR. BABASAHEB AMBEDKAR : WRITINGS AND SPEECHES § Right to redeem Section 60 1. The right to redeem entitles the mortgagor to require the mortgagee to do three things— (i) To deliver to the mortgagor the mortgage-deed. (ii) To deliver possession if the mortgagee is in possession. (iii) To have executed and registered an acknowledgement in writing that the right (is redeemed)* 2. This right to redeem he can exercise on the following conditions:— (i) On payment or tender of the mortgage money. (ii) At any time after the principal money has become due. (iii) If the right to redeem is not extinguished by act of parties or by decree of a Court (iv) If the mortgagor is prepared to redeem the whole. I. RIGHT TO REDEEM 1. The section is not prefaced by any such words as in the absence of a contract to the contrary. 2. The right of redemption is therefore a statutory right which cannot be fettered by any condition which impedes or prevents redemption. 49 I.A. 60. 3. Any such condition is void as a clog on redemption. II. CLOG ON REDEMPTION—Any provision inserted in the mortgage transaction to prevent redemption by a mortgagor is void : (1) The principle underlying the rule against clog is that, mortgage is a conveyance as a security for the payment of a debt. Nothing ought to prevent a man from getting back his security. (2) There is a difference between sale and security. If sale, there is no right to get back property. If security, there is a right to get back property. (3) This right cannot be taken away by a contract. If it does, it will be treated as a clog and will not be enforced. * inserted—ed.

517THE TRANSFER OF PROPERTY ACT III. INSTANCES OF CLOG ON REDEMPTION I. The following clauses are clogs on Redemption :— (1) Redeem during the life of the mortgagor. (2) Redeem with his own money—not from any other person. (3) Redeem by payment on due debt or the mortgage will become sale. (4) Redeem on condition that mortgagor shall grant permanent lease to the mortgagee. II. The following clauses are not deemed to be clogs on Redemption:— (1) Not to redeem unless prior mortgages are redeemed. (2) Not to redeem an usufructuary mortgage until after the expiry of 15 years. (3) Postponement of the right to take possession after redemption for a reasonable and necessary period. III. No hard and fast rule as to what is a clog and what is not:— (1) The mere fact that the terms of a mortgage are hard, does not make the clause a clog. (2) The test is whether it hampers the mortgagor in the exercise of his right to redeem in such a way as to place the right to redeem beyond his reach. (3) If the clause is a clog, then it will not be enforced, even though it may be contained in a consent decree. The right to redeem cannot be said to have been waived by consent. IV. The doctrine of clog on redemption relates only to the dealings which take place between the parties to the mortgage at the time when the contract of mortgage has been entered into. It does not apply to a contract made subsequently with each other. 1. That means that parties are not free at the time when the contract of mortgage is made to take away the right of the mortgagor to redeem. 2. But they are at liberty subsequently to alter the terms of the contract of mortgage and any clause which fetters the right to redeem will not be treated as a clog. V. Due. 1. Must be distinguished from payable. Money may be payable but not due.

518 DR. BABASAHEB AMBEDKAR : WRITINGS AND SPEECHES 2. Due = demandable. 3. If it is not paid on due date, the right to redemption is not lost. Mortgage remains a mortgage—only it can be exercised. VI. Payment. (i) Payment must be to all if there are more than one mortgagee. (ii) Mode of payment—legal tender or any other medium acceptable to the creditor, (iii) Place of payment—(Page left blank in Ms—ed.) Redemption and Improvements Section 63 A. 1. The mortgagor on redemption is entitled to improvements in the absence of a contract to the contrary. 2. The mortgagor shall be liable to pay the cost of improvements if the improvement was— (i) necessary to preserve the property from destination. (ii) necessary to prevent security from being insufficient. (iii) made in compliance with lawful order of a public authority. 3. This also is subject to a contract to the contrary. 4. Section 63 A lays down the general rule that ordinarily a mortgagee is not at liberty to effect improvements and charge the mortgagor therewith. The object of the law is to prevent a mortgagee from laying out large sums of money and thereby increasing his debt to such an extent as to cripple the power of redemption. The mortgagee cannot be allowed to make redemption impossible by making improvements—This is called improving a mortgagor out of his estate. 5. The mere consent of the mortgagor to improvements is not enough to make him liable, unless it amounts to a promise to re-imburse. Right of Redemption and the benefit of the renewal of a lease Section 64 The renewal of a lease is a kind of an accession to the original interest of the mortgagor.

519THE TRANSFER OF PROPERTY ACT 1. If the mortgagee obtains a renewal of the lease, the mortgagor is entitled to the benefit of the renewed lease on redemption. 2. This is subject to a contract to the contrary. Right of the Mortgagor to manage Section 66 1. As long as the mortgagor remains in possession, he is at liberty to exercise the ordinary rights of property and to receive the rents and profits without accounting for them. 2. Question is whether the mortgagor is liable for waste ? 3. This is a Section which deals with the doctrine of waste. Waste is either voluntary or permissive. Voluntary waste implies the doing of some act which tends to the destruction of the premises, as by pulling down houses, or removing fixtures; or to the changing of their nature as the conversion of pasture land into arable or pulling down buildings. Permissive Waste implies an omission whereby damage result to the premises, where for instance houses are suffered to fall into decay. To constitute voluntary waste by destruction of the premises, the destruction must be wilful or negligent; it is not waste if the premises are destroyed in the course of reasonable user and any user is reasonable if it is for the purposes for which it is intended to be used, and if the mode and extent of the user is apparently proper, having regard to the nature of the property and what the tenant knows of it. 4. According to Section 66 the mortgagor is not liable for permissive waste. He is liable for voluntary waste which renders the security insufficient. 5. A security is insufficient if the value is less than 1/3 of the money due and less than 1/2 if the security is buildings. For Section 65 A. —Please see page No. 523