Once a Mortgage always a Mortgage

The doctrine of equity of redemption is expressed in this maxim

and it is an exception to the principle, ‘the agreement of the
parties overrides the law.’ Reiteratively, the maxim, established
in 1681 by Lord Nottingham in the case of Harris v. Harris is
basically to safeguard the mortgagor’s right to redemption. In the
case of Noakes & Co v. Rice, [3]the maxim was interpreted by
Lord Davey as ‘That a mortgage cannot be made irredeemable
and that a provision to that effect is void’. Therefore, one of the
manifestations of this maxim is that the clog on the equity of
redemption is void. No matter whether the provision that makes
a mortgage irredeemable is there in the mortgage deed itself or
any collateral but connected transaction outside the mortgage
contract, it is void to the extent to which it prevents the
mortgagor from getting his whole of the property back on
repayment of the mortgaged money.

Sometimes, such provision may have been disguisedly inserted in

the mortgage deed, like in the case of Samuel v. Jarrah Timber
and wood paving corporation.[4] Wherein, a Timber Company
borrowed money on the security of its debenture stock and
granted the lender with an option to buy its stocks within the
next twelve months upon the nonpayment of the loan. Within the
stipulated time, the lender wanted to exercise the granted option,
before the company gave notice of its intention to repay the loan
amount. It was held by the House of Lords that the option itself is
void as it debars the mortgagor from redeeming his property
back upon the repayment of the principal amount along with the
interest and costs.

Historical Development of the Doctrine “Once A

Mortgage Always A Mortgage”
This doctrine “Once A Mortgage Always A Mortgage” is the
outcome of combined notions viz. Equity, Justice, and Good
Consciences. In layman’s terms, equity is equivalent to fairness
and egalitarianism. Back then, the major lacuna in the justice
delivery system was emerging in England. To cope with such an
inadequacy, the Chancellors were appointed by the king in special
courts to outreach the sphere of the law to dole out justice and
fairness to common people. Court under the control of Lord
Chancellor was named the Court of Chancery qua Court of Equity,
which was developed to provide remedies that are not available
in the Court of Common Law.

The mortgage law was developed almost completely in the Court

of Equity. It is pertinent to note that the equity of redemption
principle was found in England mortgage law originated under
roman civil law.[5]

The basis of the maxim was explicated by Lindley M R in the case

of Stanley v. Wilde[6]as ‘Any provision inserted to prevent
redemption on payment or performance of the debt or obligation
for which the security was given is what is meant by a clog or
fetter on the equity of redemption and is therefore void. It follows
from this, that ‘once a mortgage always a mortgage.’

The maxim ‘once a mortgage always a mortgage,’ is the

connotation of the fact that the mortgagee will always remain as
mortgagee and can never become an owner. All acts he commits
in order to exalt himself as an owner are perceived to be a clog
on redemption.

Pursuant to equity of redemption, a clog on redemption is void; in

the Indian context, its philosophy was explained by the Supreme
Court in the case of U. Nilan v. Kannayyan (Dead) Through
Lrs[7]as,

Adversity of a person is not a boon for others. If a person in

stringent financial conditions had taken the loan and placed
his properties as security therefore, the situation cannot be
exploited by the person who had advanced the loan. The
Court seeks to protect the person affected by adverse
circumstances from being a victim of exploitation. It is this
philosophy which is followed by the Court in allowing that
person to redeem his properties by making the deposit under
Order 34 Rule 5 C.P.C.[8]
CASE LAWS

Long Term Mortgage: Vadilal Chhaganlal v. Gokaldas

Mansukh[9]

This case is of a mortgage of 99 years, where the mortgagee was

allowed to construct any structure on the property at any
expense. It was observed by the Apex court that repayment of
the principal money along with interest and the cost of
construction make the mortgage practically impossible as it is
something beyond the ability of the mortgagor. Thus, it is quite
clear that the mortgagee had taken advantage of a helpless
mortgagor to sign that agreement, hence, the conditions were
held clog on redemption. The same was held in the cases
like Fateh Mohd. v. Ram Dayal,[10] Massa Singh v. Gopal
Singh, Ganga Dhar Lal v. Shankar Lal,[11] so on.

Condition of the sale in default: Kuddi Lal v. Aisha Jehan

Begam,[12]

In this case, the mortgagor was allowed to redeem his property

not through transferring the property but only paying out of her
own pockets. It was held as a clog on redemption since it
restraint alienation by the mortgagor.[13]

Conclusion
In extenso, the maxim ‘once a mortgage always a mortgage’
provides that the true nature of the mortgage can never be
changed. The mortgage and the right of redemption are
inseparable i.e. the right of redemption can never be limited or
closed as it will always remain in the mortgage deed. Any clause/
condition/ stipulation is included in the mortgage deed by the
mortgagee, which is unreasonable and against public policy, as it
put absolute restraint on the mortgagor’s right to redemption is
void.