Seth Ganga Dhar v Shankar Lal (1958)

Transfer of Property · Redemption & Clog

Facts.

A mortgage of 1899 stipulated a term of 85 years before redemption, and further provided that if the mortgagor failed to redeem within a stated period, his right to redeem would be lost and the mortgage treated as a sale to the mortgagee. The mortgagor sued to redeem before the 85 years expired.

Issue.

Is a long postponement of redemption, by itself, a clog on the equity of redemption? And what of the term converting the mortgage into a sale on default?

Held.

The Supreme Court held that the mere length of the term (even 85 years) does not by itself amount to a clog; a long term is valid unless shown to be oppressive or unconscionable in the circumstances, so the suit to redeem before the term expired was premature. The separate term making the mortgage a sale on failure to redeem, however, was a clog and void.

Why it matters.

It refines the clog doctrine for Indian law — postponement is tested for oppression or unconscionability, not struck down for length alone — while confirming that a “mortgage-becomes-sale” clause is a void clog.

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