'Equity will not permit any device or contrivance designed or calculated to prevent redemption.' Discuss.

Question: 'Equity will not permit any device or contrivance designed or calculated to prevent redemption.' Discuss. [BJS 1986]

Find the answer to the mains question of Property Law only on Legal Bites. ['Equity will not permit any device or contrivance designed or calculated to prevent redemption.' Discuss.]

Answer

The maxim "Equity will not permit any device or contrivance designed or calculated to prevent redemption" reflects one of the foundational doctrines of equity in the law of mortgages. It upholds the right of redemption as a fundamental and inalienable right of the mortgagor. This principle has been elaborated and enforced by courts for centuries to prevent mortgagees from taking undue advantage of mortgagors.

The maxim arises from the equitable doctrine that:

"Once a mortgage, always a mortgage."

This means that a mortgage, irrespective of its form or the terms inserted, must always allow the mortgagor to reclaim the property upon repayment of the debt. The right of redemption is inseparable from the mortgage. Equity looks beyond form to substance, and if a transaction has the character of a mortgage, the right to redeem must necessarily follow.

Section 60 of the Transfer of Property Act, 1882 (India) codifies this equitable principle. It provides that the mortgagor has a right, on payment or tender of the mortgage money, to require the mortgagee to re-transfer the property or deliver back possession.

The section further states:

"Any condition or stipulation which prevents, evades or hampers redemption shall be void."

Thus, any clause inserted in the mortgage deed that defeats or delays the right of redemption is invalid in equity and in law.

Illustrations of Devices Preventing Redemption

Clog on Redemption

If a mortgage deed stipulates that the mortgagor cannot redeem the property for 100 years, such a term is a clog on redemption and is void.

Kreglinger v. New Patagonia Meat and Cold Storage Co. (1914) – The House of Lords held that while collateral advantages may be allowed, they must not be repugnant to the right of redemption.

Sale with Option to Repurchase

A transaction may be couched as an outright sale with a repurchase clause, but if the intent is really a mortgage, courts will treat it as such.

Samuel v. Jarrah Timber & Wood Paving Co. (1904) – A clause giving the mortgagee an option to purchase the mortgaged property was held void.

Postponing Redemption Unreasonably

A term that bars redemption for an excessively long period may also be struck down.

Vishwa Nath v. Ramraj (AIR 1921 All 345) – A stipulation preventing redemption for 85 years was declared void.

Indian courts have consistently applied the principle to protect mortgagors:

Narandas Karsondas v. S.A. Kamtam (1977 AIR 774): The Supreme Court held that the right of redemption cannot be extinguished except by lawful means, such as foreclosure or sale per law.

Lachhman Dass v. Ram Lal (AIR 1989 SC 1955): Any attempt by the mortgagee to retain the property or deny redemption through unfair means is void.

Exceptions and Clarifications

• While equity prohibits devices preventing redemption, collateral advantages to the mortgagee (e.g., option to buy goods, right to trade) may be upheld if they are not unconscionable or repugnant to redemption.
• Equitable mortgages (e.g., by deposit of title deeds) are also governed by this rule.

The doctrine ensures that a mortgage remains a security and not a mechanism for unjust enrichment or permanent deprivation of property. The maxim protects the mortgagor’s interest by invalidating any stipulation that obstructs the natural right to redeem. Thus, equity strikes down any contrivance—be it in the form of conditions, delays, or disguised sales—that seeks to defeat the right of redemption.