Seth Ganga Dhar v. Shankar Lal & Ors, AIR 1958 SC 770

Quick Summary

This case is about the equity of redemption. The mortgage deed fixed a very long period (85 years) before the mortgagor could redeem. Was that long bar a “clog” and therefore invalid? The Supreme Court said: length alone is not a clog. The 85-year term stood, so a suit filed before that period was premature. But a separate clause that turned the mortgage into a sale if the mortgagor missed a six-month window was an invalid clog and was severed.

Issues

• Does a very long contractual bar on redemption become a “clog” on the equity of redemption?
• Is a clause converting the mortgage into a sale on failure to redeem within six months valid?

Rules

• Section 60, Transfer of Property Act, protects the mortgagor’s right to redeem; any term that absolutely takes away or unreasonably restrains redemption is a clog and is void.
• Mere length of the redemption period does not automatically prove oppression; context matters.
• Invalid “clog” terms can be severed if they stand apart from valid terms.

Arguments

Judgment

Held: The 85-year redemption bar was not a clog merely because it was long; it was enforceable. Therefore, the redemption suit filed before expiry was premature. However, the clause stating that failure to redeem within six months would end the right to redeem and convert the mortgage into a sale was a clog and invalid. Its invalidity did not affect the validity of the separate term fixing the mortgage period.

• Severance applied: invalid forfeiture clause struck down; valid period term saved.
• Equity of redemption remains a basic right; absolute or illusory restraints are void.

Ratio

A long redemption period is not, by itself, a clog on the equity of redemption. But a term that destroys or makes redemption illusory—like converting the mortgage into a sale on default—is a clog and void. Such invalid terms can be severed if independent from the valid terms.

Why It Matters

• Clarity on when a mortgage term is a clog and when it is not.
• Shows courts will sever only the truly oppressive bits, not rewrite the whole bargain.
• Guides drafting: avoid forfeiture-to-sale clauses that kill redemption.

Key Takeaways

• Length alone ≠ clog; look for oppression or destruction of redemption.
• Forfeiture-to-sale clauses are classic clogs—void.
• Severance preserves valid parts of the mortgage.
• Premature redemption suits fail if the agreed period stands.

Mnemonic + 3-Step Hook

Mnemonic: “LONG OK, LOSE? NO!”

• LONG redemption period can be okay.
• LOSE the right forever by a clause? NO—that’s a clog.

3-Step Hook:

1. Ask: Does the clause destroy redemption or just delay it?
2. If destroy → void clog. If delay without oppression → may stand.
3. Sever any clog; keep the rest if independent.

IRAC Outline

Glossary

Equity of Redemption

The mortgagor’s right to get the property back on paying the secured amount.

Clog

A term that destroys or makes the right to redeem illusory; such terms are void.

Severance

Striking down the invalid term while keeping the valid, independent parts of a contract.

FAQs

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