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Once a mortgage, always a mortgage
The maxim ‘once a mortgage, always a mortgage’ sets out a legal principle applicable to all mortgage transactions. This maxim denotes that a mortgage cannot be made irredeemable and any provision inserted to make it so irredeemable shall be void to that extent and will operate bad in law. The mutual rights of mortgagor and the mortgagee provide for a peculiar position of the parties to the transaction. The Right to Redemption which is available to the mortgagor, provides a right to claim back his property. It is basic right of mortgagor under the mortgage transaction. The mortgage transaction is a secondary transaction to facilitate the principal transaction. It is never intended to transfer the property. The maxim states that the original nature of mortgage transaction never changes. It continues to be a mortgage. Once a mortgage transaction is created then it continues to be a mortgage transaction. The right of redemption is available to him in future. His right of redemption is not defeated for technical reasons. Hence it is regulated by the maxim ‘once a mortgage, always a mortgage’. Thus, stating that the true nature of mortgage never changes.
A mortgage is always redeemable. And a mortgagor’s right to redeem shall neither be taken away nor be limited by any contract between the parties. The phrase also means that a mortgage would remain a mortgage and it cannot by the unilateral act of mortgagee be converted into a sale. For instance, if no period was fixed for redemption of a usufructuary mortgage when it was created, mortgagee would not become owner simply for efflux of time due to non-redemption and mortgagor’s suit for redemption would be proper.
There are four basic principles to which the law of mortgage is subject to in India which are as follows:
A mortgage in essence is a borrowing transaction, and has to be viewed as such unless contrary is proved. A mortgagor is a person who is in need of money, while the mortgagee is a party who has the money and it is presumed that the conditions that prevent the mortgagor to redeem his property or penalise him are inserted in the contract at the behest of the mortgagee.
Any condition that penalise the mortgagor in the event of non-payment of loan would be termed as a clog on his right of redemption and would be void. Such condition can validly be ignored by the mortgagor and would not be enforced by any court. And a condition that the property would be forfeited in the event of default in payment of money is a penalty.
The Supreme Court has observed in various instances that the doctrine of clog on the equity of redemption is a rule of justice, equity and good conscience. It is a right of the mortgagor to get back the subject of the mortgage and to hold and enjoy the same as he was entitled so to do before the mortgage. If he is prevented from doing so or is prevented from redeeming the mortgage, such prevention is bad in law. If he is so prevented, the equity of redemption is affected by that, and has always been termed as a clog. Such a clog is inequitable. Under Section-60 of the TP Act, it is provided that, at any time after the principal money has become payable, the mortgagor has a right to redeem. Whether a particular condition operates as a clog or not depends upon the facts and circumstances of the case. For example, A condition imposed in the mortgage deed that if the mortgagor is not able to repay the loan by 10 years from the date of execution of the mortgage deed, he would not be entitled to redeem the same and would have to sell the land to the mortgagee, would be a clog on his right of redemption and hence void.
