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Equity is a separate system of law from the Common-Law. It has different rules, principles,
and remedies. Thus, to understand the principles on which the Law of Equity is based, we
must understand its origin and the reasons for its requirement despite the presence of a
system of law, i.e. the Common Law. Common Law is the body of customary law which
originated in the Curia Regis (King’s Court), London. English Common Law was primarily
developed by judges and was based on judicial decisions and precedents. The country saw
the need for the Law of Equity because of the following two main reasons:

 Under Common Law, there was only one remedy available, i.e., damages. Thus, a
just and fair remedy couldn’t always be given through Common Law where
monetary compensation was not suitable. This remedy did not always have a
significant concluding impact within cases.
 A civil action under Common Law could only be started by the means of a writ
which was a legal document where it was written why and on what legal basis a
person was being sued. Problems arose when a matter was not covered by any
 writ. Making of the writs with every new case was stopped in the 13th century
and this meant that if a case was not already covered by the writs, it was not
carried forward.

This generated a huge amount of dissatisfaction among the public because many times
they had to settle with the inappropriate remedies or their cases were not even carried to
the court as the writs were too narrow or rigid. Subsequently, the Court of Chancery was
directed to take up the case which was referred to the king by petition and the Chancery
Court developed the Law of Equity. Equity was mainly thought of as fairness and it was a
very powerful law as it overcame the conflicts with the Common Law. The Chancellor
decided the cases of which the King had taken note, he did so by largely relying on his
sense of fairness and justice and thus developed a large body of principles which became
the Law of Equity. It was very important to solve the conflict between the Law of Equity
and the Common Law, this was achieved in the 1615 Earl of Oxford’s Case. In this case,
the King decided that between the conflict of Common Law and Equity, Equity should
prevail.

This article mainly discusses the general principles on which the Law of Equity is based and
the remedies available therein.

Principles of equity
The body of the Law of Equity is preserved in the following twelve maxims. These maxims
are general principles adopted to administer justice and fairness. They govern the Law of
Equity and are discretionary.

Equity will not suffer a wrong to be without a remedy

This maxim, in Latin, is “Ubi Jus Ibi Remedium ” which means “where there is a right there
is a remedy”. The maxim states that in situations where the common law confers a right, it
also gives a remedy for infringement of that right. It must be kept in mind that this
principle is applicable only where the right and the remedy both are within the jurisdiction
of the court. In the Law of Equity, injunction and specific performance are also the types of
remedies available. In Ashby v. white a qualified voter was not allowed to vote and thus he
sued the returning officer, this case deals with the principle laid down in this maxim, i.e. if
a person has been granted a right, he is also granted with a remedy.
Equity follows the law
This maxim is also expressed as “aequitas sequitur legem”, which means that equity will
not allow a remedy that is contrary to the law. This maxims lays down that equity
supplements law and does not supersede it. The discretion of the court is governed by law
and equity which are subservient to one another. Wherever the law can be followed, it
must be followed. In the cases where the law does not apply specifically, this maxim
suffers limitation. But in modern-day England and Wales, the law follows equity. Section
49(1) of the Senior Courts Act,1981 clearly specifies that in case there is a conflict between
the rule of law and equity, equity shall prevail.

He who seeks equity must do equity

This maxim states that the plaintiff is also subject to the powers of the court and is thus
obligated to perform his duties following the principle of equity. The concern of this maxim
is the future conduct of the plaintiff. Thus, this maxim applies to the party who seeks
equitable relief as it stipulates that the plaintiff must also recognize and submit to the right
of his adversary. This maxim was attracted in the case of Lodge v. National Union
Investment Company Limited where Lodge borrowed money from an unregistered
moneylender and thus upon an action by him to recover the securities, the court refused to
make an order except upon the terms that Lodge should repay the money which had been
advanced to him. This maxim is also applicable in the following legal provisions:

 Section 19A of the Indian Contract Act – the plaintiff must restore all the benefits
arising from the contract which is rescinded by him.
 Section 35 of Transfer of Property Act – the doctrine of election says that a
benefit under a legal instrument must be adopted with all of the provisions and
obligations under such an instrument.
 The Doctrine of Consolidation of Mortgages- where a borrower has mortgaged
different properties to secure separate debts, and he defaults on one of those
debts, this doctrine allows for the lender to pool the assets which were secured by
the borrower and to realise those secured assets against the total sum owing.
 Order 8, Rule 6 of the CPC, the doctrine of set-off – in case of mutual debt
between two litigating parties, the amount due to one party shall be set-off by
the same amount which is due to the other party and only the residuary amount
shall be claimed.
He who comes to equity must come with clean hands
This doctrine relates to the past conduct of the parties and states that the person who
comes to the court seeking equity must not have involved in an inequitable act himself in
the past. This maxim is concerned with the past behaviour of the plaintiff. The maxim does
not concern the general behaviour of the plaintiff, the defence of unclean hands is only
applicable in situations where there is nexus between the applicant’s wrongful act and the
right that he wishes to enforce.
This principle was upheld in the case of D & C Builders Ltd v. Rees where the claim of the
plaintiff to apply promissory estoppel was rejected because he had taken unfair advantage
of the poor financial position of the defendant’s builder company and thus had not come
with clean hands.

If the plaintiff is involved in fraud or misrepresentation that concerns the respective case
then he cannot demand equity. This principle is also adopted in Section 17, 18, and 20 of
the Specific Relief Act, which lay down that a plaintiff’s unfair conduct will disentitle him to
the equitable relief of specific performance of a contract.

Delay defeats equity

The Latin maxim for this principle is “Vigilantibus non dormientibus aequitas
subvenit” which means that Equity assists the vigilant and not those who sleep on their
rights. Unreasonable delay in bringing forth a claim is known as laches. Laches may also
result in dismissal of the claims. Thus, a party must assert an action within a period of
reasonable time. There are certain situations where the law of limitation is expressly
applied, in such cases, there is a particularized legal situation where a time period, which
has been expressly prescribed, has elapsed and the party is barred from bringing a suit of
action.
In case of laches, the defence of acquiescence can be applied by the court and the plaintiff
may be disallowed from seeking an equitable remedy as the court would assume that he
has acquiesced to the questionable actions of the defendant. The equitable rule of
acquiescence and laches was first introduced in the case of Chief Young Dede v. African
Association Ltd. 

Equality is equity
This principle is expressed by the Latin maxim Aequitas est quasi aequalitas  which means
equality is equity. This maxim implies that as far as possible, equity strives to put the
litigating parties on an equal level and equate their rights and responsibilities. The ordinary
law may give one party advantage over the other but the court of equity, wherever
possible, puts the parties on an equal footing.

Equity looks to the intent rather than the form

This is the maxim by the means of which an equitable remedy was established which
allows for the terms of a contract to be interpreted by taking into account the intention of
the parties. The common law was very rigid and could not respond favourably to demand
of time, this meant regarding the form of the contract more important than the substance.
Equity, on the other hand, looks to the spirit and not the letter of the contract. This
principle is enshrined in the provision for relief against penalty and forfeitures which states
that the object of a contract is to perform it and not the compensation, thus the
compensation must be proportionate to the damage and not benefit the receiver (Section
74 of the Indian Contract Act provides for claiming reasonable compensation). In the case
of the contract for the sale of land, if the party fails to complete within a fixed period,
equity allows reasonable time to the party to complete it (Parkin v. Thorold).

Equity looks on that as done which ought to have been

done
This maxim states that in cases where individuals are required, by law or by agreement, to
perform any act of legal significance, equity will regard that act as having been done as it
ought to have been done even before it actually happened. This principle results in the
legal phenomenon of equitable conversion under which the buyer obtains the equitable title
to the property even before the sale has been legally effected.

Equity imputes an intention to fulfill an obligation

This maxim means that if a person is obligated to do one act and does another, the act
done by him will be taken as a close enough approximation to the fulfillment of the
required obligation. For example, if a debtor leaves a legacy to his creditor which is equal
to or greater than the debt owed by him, then equity would regard such legacy as the
fulfillment of the obligation of the payment of the debt owed by the person.
Equity acts in personam
This maxim states the equity applies to a person rather than a property. In England, the
Court of Common law and Chancery Courts were distinguished by the fact that the former
had authority over the person as well as property but the latter only acted over people.
The Equity court’s coercive power arose from their authority to hold the violator in
contempt of court and punish accordingly. Since the law of equity was applicable to the
persons and not the property, it could also apply to the property outside a jurisdiction,
provided that the person was within the jurisdiction. In the case of Penn v. Lord
Baltimore, an order of specific performance was made for the plaintiff who brought a
boundary dispute case to an English Court, yet the land was situated in Maryland, USA. the
jurisdiction of the court was applicable to the parties as they both were English and lived in
England.

Where the equities are equal, the first in time prevails

Where the legal estate is absent in the matter and the contest is among equitable estate
only, the person whose equity is attached to the property first in time will be entitled to
priority over others. Here, the term equities refer to multiple equitable interests. Thus, in
case two equities are equal, the original interest, i.e., the first in time will succeed. For
example, if A grants an equitable mortgage to X and then subsequently grants the same
mortgage to Y, X’s mortgage shall take priority.

Where the equities are equal, the law prevails

In case neither of the parties has been wronged and both stand at an equitable position,
the legal remedy will be prioritized. Equity shall not provide any specific remedy in case
both the parties have equal causes. Thus, in such cases, the parties must bring a legal
action rather than an equitable action.

Conclusion
The laws related to equity have evolved through precedent and the intention is to grant
equitable rights and remedies to the parties. The decisions of equity have largely been
based on the judge’s discretion and understanding of the fair and just cause. Equity dates
back to the centuries ago and is still as relevant, so is the case with law. Law and equity
both are important for justice. Where the rigidities of the law threaten justice, equity
prevails, and where equity has no remedy the letter of law is followed. Justice, thus,
depends upon both and thus, both must be consulted in order to deliver justice.

Doctrine of Election and it’s

Incorporation
The doctrine of election is stated in transfer of property act 1882 in section 35 and within
180-190 of Indian succession act. Election means a choice between two alternative or
conflicting rights. Granting two rights in such a way that one is higher than the other, you
can choose either of them. You cannot have both. The applicant cannot use both, the
recipient must choose between two inconsistencies or alternative rights. Basically it means
that the person taking the benefit should also bear the burden. (C. Beepathuma V. Viduri
Shankar Narayana Kadambolithya AIR 1965SC 241).it is an important part of the transfer
of property act 1882 to resolve property conflicts among people. This principle was derived
from the equity principle where a person cannot retain all the benefits of a transaction
thus, he cannot keep the property and get benefits still. They have to elect for Or against
the instrument. The doctrine of election is a general legal rule that requires the recipient to
choose whether the heir wants to own someone else#39;s property and decide whether to
preserve the property or accept his intentions. (Shukla S. N transfer of property act 24 the
edition edited by Dp Ghousal reprint 2007).

Example: A promises to give B, 50 lakh but only on one condition that he will sell his house
to C, now B here has to make the election on what to do? If he takes A’s offer he will have
to give his house to C. On the other hand if he doesn’t, he won’t get 50lakh also hence he
has to make an election on what to choose. (Ibid) Maitland’s describes its doctrine of
election as (Maitland’s lecture on equity)
  Adopt all the contents of that instrument.
 Accord to all its provisions.
 Cede all rights that are inconsonant.

Election when necessary (section 35)

 Concede to transfer property on which he has no rights.
 In the same transaction, they must elect either to accept it or not, in case he
doesn’t.
 He must release the benefits till then.
 The benefits he had till then goes back to the transferor as if not given.

Although when benefit is transferred back, he must make some good to the transferee at
least it can be done in the following cases:

 Where the transfer is voluntary and the Transferor had died or had become
incapable of doing a fresh transfer.
 Transfer is for consideration.

Example:  The farmhouse at Udaipur is a property of C. A by gift means promises to give B

1,00,000. He accepts it although C now wants to retain his farmhouse and A forfeits his
gift. In such a course of action B died, now his representative must pay C 1,00,000.

Who doesn’t have to elect?

The person who indirectly derives benefits from the transactions and not directly according
to section 35 does not need to elect.

Example::  A promises to give B 1000 given if his son buys C’s house for 1200, Nowhere
n’s son doesn’t have to elect as it is B who will have to make the decision on what to do.

When does a person elect to dissent?

According to section 35 If the owner decides not to approve the transfer, he will surrender
the transferred service to him and this service will be returned to the transferor or his
representative as if he had not been released. Following could take place:
  The transfer is voluntary and the Transferor had died or had become incapable of
doing a fresh transfer.
 In all cases where the transfer must be checked, it is the responsibility of the
transferor or his representative to compensate disappointed buyers. The
compensation amount is the amount or value of the property that will be
transferred if the option.

Exceptions to this doctrine as stated by section 35

Section 35 states that if the property owner is transferred by the seller, a particular service
is started and that the service is pressed to apply to that property if the owner claims the
property. Which must release the performance of certain properties. He is not obliged to
release the compensation given to him by the same transaction if you receive such
compensation for two years, you must assume that you have chosen the transfer.

Section 35 determines
The reception of the service by the person to whom the service is available is a decision by
that person to confirm the transfer if they know the service. The obligation to choose and
know circumstances that will affect the judgment of reasonable people in the election, or it
refuses to adapt to the Situation. Knowledge or rejection is assumed if the opposite
evidence is not available, if the person providing the service has used it for two years
without taking action to explain their disagreement. Section 35 also determines this
knowledge or rejection can be inferred from any action by that person, so that it is not
possible to place people who are interested in the property, which is believed to be
transferred, in the same conditions as if the action was not carried out.

Time limit for election

According to section 35, when the owner of the property within one year after the date of
transfer signifies to either transferor or his representative. Even if they know the expiration
period and even after knowing from their representatives does not make a decision they
are deemed to have elected to confirm the election if they don’t reply after the period is
over.

Election by a disabled person,  a disabled person cannot do election until and unless:
  His disability ceases.
 Someone else on his behalf makes election who is not disabled.

Doctrine of election applied

Hindu law

This principle has always been applied to Hindus. According to Rungamma v atchamma,
the privy council made a rule that a person cannot accept and reject according to him. One
cannot accept until he gains from it and stop accepting it until prejudiced.

English law

The buyer chosen not to be transferred, does not lose profits, but is obliged to compensate
disappointed people. Difference between English law and Bangladesh law. There is a
difference between English and! Bangladesh law in relation to elective teaching. The main
differences are as follows British law applies the principle of compensation, while English
law applies the rules of confiscation. English law does not regulate the time for election.
British law stipulates a year in which the property owner must decide whether to confirm
the transfer or not. If the owner does not comply with the reuse, he is deemed chosen to
confirm the transfer.

Basic requirements for applying this teaching

The basic conditions for applying this teaching are as follows: The seller may not be the
owner of the buyer’s property. The seller must transfer ownership to another athlete owner
The seller must simultaneously make all property available to property owners using the
same instrument outside the owner. Two transmissions, Transfer of ownership to the
owner of the transmitter and provision of benefits to the owner of the property must be
done through the same transaction. The Election obligation does not arise if the two
transfers are carried out through two separate instruments. The owner must have an
ownership interest in the property Owners who do not benefit directly from the transaction,
but indirectly divert the benefits from the transaction, do not have to make a choice.
Mandatory choice does not appear if it benefits someone of a different quality.

Case Laws
Mohd. Kader Ali fakir V lukman hakim
The basis of the doctrine of choice is that the person who uses the instrument must also
bear the burden imposed in this way and that he cannot carry under and against the same
instrument. This is a violation of general rules that cannot be accepted or rejected by
anyone. This doctrine is based on the fictional intent of this ether that the law implies that
the author of the instrument intends to manifest any part of it. There is an obligation for
anyone using a will or other instrument to make that instrument fully effective, which
donors or settlers cannot have. However, what effect can be obtained from his agreement
that has received compensation based on the same instrument? The law will apply to the
applicant’s obligation to use the instrument in full force and effect. If the tool is partially
invalid, the rest is enough to place someone to vote if they say so.

Dr Ally’s Wobben V Shri Yogesh Mehra and ors on 6

December 2010
The Supreme Court, in National Insurance Company v. Masan & Anr., 2006 (2) SCC
641 IA

No.12638/2010 in CS(OS) No.1963/2009 Page 4 spelt out what is the rule, in the following
terms:

“A party to a Lis, having regard to the different provisions of the two Acts cannot enforce
liabilities of the insurer under both the Acts. He has to elect for one. The ‘doctrine of
election’ is a branch of ‘rule of estoppel’, in terms whereof a person may be precluded by
his actions or conduct or silence when it is his duty to speak, from asserting a right which
he otherwise would have had. The doctrine of election postulates that when two remedies
are available for the same relief, the aggrieved party has the option to elect either of them
but not both. Although there are certain exceptions to the same rule but the same has no
application in the instant case.”

Baisakhi Ram Binjhwar vs South Eastern Coalfields Ltd

on 11 September, 2017
The observations of Scrutton, L.J. are as follows:
“A plaintiff is not permitted to ‘approbate and reprobate’. The phrase is apparently
borrowed from the Scotch law, where it is used to express the principle embodied in our
doctrine of election-namely, that no party can accept and reject the same instrument: Ker
v. Wauchope (1819) 1 Blight 1 (21) (E): Douglas- Menzies v. Umphelby 1908 AC 224
(232) (F). The doctrine of election is not however confined to instruments. A person cannot
say at one time that a transaction is valid and thereby obtain some advantage, to which he
could only be entitled on the footing that it is valid, and then turn round and say it is void
for the purpose of securing some other advantage. That is to approbate and reprobate the
transaction. “Hence it is proved that the doctrine of election is based on the principle of
Estoppel.

Conclusion
Election is choosing between two alternatives or conflicting rights. By giving two rights so
that one is higher than the other, you can choose one of them. You cannot have both. The
applicant cannot use both, the recipient must choose between two inconsistencies or
alternative rights. Basically, this means that the recipient must also bear the burden. Being
derived from the equity principle which clearly states that a person cannot have benefited
from both the sides. This doctrine has been successful and many poverty conflicts can be
resolved using it.

Mortgage under Transfer of Property Act, 1882

The Transfer of Property Act, 1882 deals with a) various specific transfers relating to
immovable property. b) general principles relating to the transfer of movables and
immovable property. Chapter II of The Transfer of Property Act, 1882 deals with both
movable and immovable property. Section 58 to 104 of the Transfer of Property Act, 1882
deals with mortgages and charges.

Section 58 to 104 of the Transfer of Property Act, 1882 deals with mortgages and charges.

Below mentioned sections are important sections.

As per Section 58 of Transfer of Property Act, 1882 the following words are defined

 Mortgage
A mortgage is the transfer of an interest in immovable property for the purpose of securing
the payment of money advanced, an existing or future debt or the performance of an
engagement which may give rise to a pecuniary liability.

 Mortgagor and Mortgagee

The person who transfers the interest in an immovable property is called the mortgagor.

The person to whom it is transferred is called the mortgagee.

 Mortgage Money

The principal money and interest of which payment is secured for time being is called
mortgage money.

 Mortgage Deed

The instrument by which the transfer is effected is called a mortgage deed.

Mortgage
A mortgage is a transfer of an interest in immovable property and it is given as a security
for a loan. The ownership of an immovable property remains with the mortgagor itself but
some interest in the property is transferred to the mortgagee who has given a loan.

Essential conditions of a mortgage:

1. There is a transfer of interest to the mortgagee.

2. The interest created in specific immovable property.
3. The mortgage should be supported by consideration.

Kinds of Mortgage
As per Section 58 of Transfer of Property, there are six kinds of mortgages

Simple Mortgage
  Simple Mortgage is defined under Section 58(b) of Transfer of Property Act, 1882.
 In a simple mortgage, the mortgagor does not transfer immovable property to
the mortgagee but agrees to pay the mortgage money.
 The mortgagee agrees on a condition that in the event of not paying the
mortgage money the mortgagee has every right to sell the property and can use
the proceeds of the sale and such a transaction is called a simple mortgage.

Conditional Mortgage
 Mortgage by conditional sale is defined under Section 58(c) of Transfer of
Property Act, 1882.
 In this mortgagee places three conditions to the mortgagor, and the mortgagee
shall have the right to sell the property if:

1. mortgagor defaults in payment of mortgage money on a certain date.

2. as soon as the payment is made by the mortgagor the sale shall become void.
3. on the payment of money by the mortgagor, the property is transferred and such
a transaction is called a mortgage by conditional sale.

Usufructuary Mortgage
 Usufructuary Mortgage is defined under Section 58(d) of Transfer of Property Act,
1882.
 In this mortgage, the mortgagor delivers the possession of the property to the
mortgagee and authorises the mortgagee to retain such property until the
payment is made by the mortgagor and further authorise him to receive the rent
or profit arising from such mortgaged property and to appropriate the same
instead of payment of interest. Such a transaction is called a Usufructuary
transaction.

English Mortgage
 English Mortgage is defined under Section 58(e) of Transfer of Property Act,
1882.
 In this mortgage, the mortgagor transfers the property absolutely to the
mortgagee and binds himself that he will repay the mortgage money on the
specified date and lays down a condition that on repayment of money mortgagee
 shall re-transfer the property. Such a transaction is called an English mortgage
transaction.

Deposit of title-deeds
 Deposit of title -deeds are defined under Section 58(f) of Transfer of Property Act,
1882.
 In this mortgage where a person is in Calcutta, Madras, Bombay and in any other
towns as specified by the state government and the mortgagor delivers to a
creditor or his agent the documents of title of immovable property with an intent
to create security and then such a transaction is called Deposits of title-deeds.

Anomalous Mortgage
 An Anomalous Mortgage is defined under Section 58(f) of Transfer of Property
Act, 1882.
 A mortgage which is not any one of the mortgages mentioned above is called an
anomalous mortgage.

The Doctrine Of Clog On

Redemption
When a mortgage takes place, the mortgagor has the right to get back his property when
he pays back the mortgage amount. This is known as the right of redemption and arises
out of equity. Anything which obstructs the right of the mortgagor to redeem his property
is void, and such obstruction constitutes a clog on the right to redemption. This is also
known as the doctrine of a clog on redemption.

In the case of a mortgage, two categories of interest are generated. The first interest
which is created is the interest of the creditor on the property. This interest is limited and
temporary. The second category is the residuary interest which can be determined by
deducting the interest of the creditor or the mortgagee, and this interest stays with the
mortgagor. This division of the interest gives the right of redemption to the mortgagor
when the loan is repaid. This right of the mortgagor is known as the equitable right to
redeem. The right of redemption to the mortgagor is provided under Section 60[1] of the
Transfer of Property Act, 1882. The contract of mortgage comes to an end when the
mortgagor repays the amount of the loan and exercises his right to redeem the property.
The right provided under the Act is a statutory right and to enforce it statutory provisions
has to be followed.

In the judicial pronouncement of Stanley v Wilde[2] (an English case), it was held by the
Court that a mortgage means transferring the interest in an immovable property to a third
party as security for the loan that the party has advanced. The security is redeemable by
the transferor when he pays back the loan or discharges his obligation. If any act is done,
or any provision is there which obstructs the right of redemption on payment of the debt or
performance of the obligation, then it acts as a fetter or clog on the equity of redemption
and will be held as void. This doctrine also follows the principle of “once a mortgage,
always a mortgage.” This means that there cannot be any covenant that modifies the
character of the mortgage and would bar the mortgagor to redeem his property on
payment of the loan. The doctrine of a clog on redemption is based on the principle of
justice, equity, and good conscience. The Court recognizes the fact that the party who
forwards the loan is in a dominant position than the person who takes the loan. The law
also recognizes the fact that the dominant party may insert a clause in the agreement
which can act as a barrier to the right of redemption. Such barrier in exercising the right is
struck down by the Courts as invalid so that the mortgagor can exercise his right of
redemption. In the case of U. Nilan v. Kannayyan through Lrs,[3] The Court held that
hardship of one person should not act as an opportunity for some other person. If a person
is taking a loan by giving his property as security, the opposite party cannot exploit him,
and the Court seeks to protect the victim.

There are a few situations where it was held by the Court that the condition or covenant
acts as a clog on redemption.

Long Term Mortgages

Every long term mortgage agreement cannot be said to be a clog on the right of
redemption of the mortgagor. But if a mortgage is for say 100 years, it’ll go beyond the life
of the mortgagor and seem like a clog on the right to redemption, at least superficially. The
Court also of the same opinion, but has made the stand clear by saying that only by the
virtue of a long mortgage period, the mortgage wouldn’t be considered as a clog. There
should be a condition which gives an undue advantage to the opposite party for the
mortgage to be considered as a clog.[4]

In the judicial pronounce of Vadilal Chhaganlal v. Gokaldas Mansukh,[5] there was a

condition in the mortgage deed that the period for the mortgage will be for 99 years, and
also the mortgagee will have the authority to construct any structure on the property. A
subsequent condition that there would be no limitation on the cost of the construction was
imposed. The Court was of the opinion that it would be impossible for the mortgagor to
repay the loan amount along with the expenses of the construction, and such a condition
amounted to a clog. In the case of RamkhilawanAshwasi v Mullo,[6] There was a condition
that the mortgage money will be paid after 80 years and only of Baisakh. The Court opined
that such a condition was a clog.

Condition of sale of property

If a condition is stated in the agreement of mortgage that, if the property is not redeemed
within a fixed period, it’ll be considered as a sale is a clog. This was held by the Court in
the cases of Rocky Flora v. Parvarthy Ammal[7] and Hajee Fatma Bee v. Prohlad Singh.
[8] But in the case where there is a separate agreement between the mortgagor and the
mortgagee and a sale deed is executed in the favor of the mortgagee independently, then
such sale would be valid. In the judicial pronouncement of Meherban Khan v. Mekhna,
[9] Property was mortgaged. The conditions of the mortgage were that even on payment
of the debt, the mortgagor would be able to redeem the property only till a limited interest.
It was further stipulated that in case the mortgagor is unable to pay back the loan, the
property will be considered sold to the mortgagee permanently. The Court reached the
decision that these conditions acted as a clog. Also, when the amount of the loan has been
repaid in full, the mortgagor has the right to get back his property without any
impediment. In the judicial pronouncement of Kuddi Lal v. Aisha Begam, the Court allowed
the mortgagor to redeem the property by paying through her pocket and not by
transferring the property. The Court said that such alienation of the property would act as
a clog.

Penalty in case of default

In case the mortgagor has defaulted on any grounds, then the mortgagee can impose a
penalty on the mortgagor. But the penalty should be fair and reasonable. In some
situations, penalty imposed by the mortgagee can be unreasonable.

1. In the case of default, the mortgagee charges compound interest, instead of

charging simple interest even when the original interest rate is extremely high.
[10]
2. In case there is any default on the part of the mortgagor, the mortgagee charges
the interest by taking in consideration the date when the mortgage agreement
was made and not from the date of default. For instance, the mortgage
agreement was made on 1st of the month. The mortgagor defaults of 10 th of the
month. The mortgagee, instead of charging interest from the 10 th, charges the
interest from the 1st of the month itself.[11]

Having only a high rate of interest does not mean that the condition will act as a clog.
There should be some undue influence of the dominant party over the weaker party to
constitute the stipulated condition as a clog on the right to redemption.

Subsequent agreement to postpone redemption

Any subsequent agreement which acts as an obstruction to the mortgagor by creating any
personal obligation will be considered as a clog on the right to redemption. This is because,
until and unless there is a charge on the transferred property, the mortgagor is not liable
for any sum personally except the mortgage amount. In the judicial pronouncement
of Sheo Shankar v. Parma,[12] The mortgagor transferred some property to the
mortgagee. Subsequently, the mortgagor needed more money. So through a simple
mortgage, the mortgagor took another loan from the mortgagee. A condition was inserted
in the simple mortgage agreement by the mortgagee that until and unless the amount of
simple mortgage was repaid the property cannot be redeemed by the mortgagor. The
Court opined that this condition was a clog.

Collateral benefit to the mortgagee

A mortgagee may avail some collateral benefit during the period of the mortgage, in which
case it’ll be held valid. The mortgagee can also avail some benefits after the mortgage gets
over, but in some cases, it may be considered as void and a clog.

In the case of Noakes & Co. v. Rice there was a condition in the mortgage deed that the
mortgagor will sell all the beer brewed on his land to the mortgagee. The Court held that
such a condition was valid during the existence of the mortgage, but after the property has
been redeemed, such condition would not be valid. The property should be returned to the
mortgagor without any tie.

This proposition of the law is also backed by the Indian Courts. In the case of  Bhimrao
Nagojirao Patankar v. Sakharam Sabajikathak,[13] The Court held that where a condition
in the mortgage deed allowed the mortgagee to remain in the possession of the property
through permanent tenancy will be considered as a clog. The Court was of the view that
the collateral benefit went beyond the period of redemption and hence invalid.

UNIT-3

the Specific Relief Act, 1963

As the main objectives of the Act have been vested in the very title of this statute i.e.
Specific Relief, due to which we can have a basic understanding that the Specific Relief Act
is a legal statute dealing with reliefs or recovery of the damages of the injured person. This
Act was enacted in 1963 following the approach that when a person has withdrawn himself
from the performance of a particular promise or a contract with respect to another person,
the other person so aggrieved is entitled to a relief under Specific Relief Act, 1963. This Act
is considered to be in one of the branches of the Indian Contracts Act, 1872.
Important definitions
Section 2 of the Specific Relief Act, 1963 deals with some important definitions which are
as follows: 

1. Section 2(a) deals with obligations which are duties imposed on a person by the
law or the legal body. 
2. Section 2(b) deals with the settlement that means delivery of the movable or
immovable property to their successive interests when it is agreed to be disposed
of. 
3. Section 2(c) deals with the word “trust” which has the same meaning as defined
in section 3 of the Indian Trusts Act, 1882.
4. Section 2(d) deals with the word “trustee” which means the person holding trust
in the property.
5. All other definitions which have not been explained herein are the same as
referred to the definitions of the Indian Contracts Act, 1872.

Specific relief
Section 4 of this act explains that this Act grants special relief for the enforcement of
individual rights and not for imposing penal laws. The enforcement under this Act only
bases itself on the individual civil right and the substantive nature must be established for
that fact. To be understood in a simpler way specific relief is related to providing relief for
the infringed civil rights of the individual. Its main objective is to focus on the rights and if
there is any penal nature of the case, it may have to be established for proving the same. 

Recovering the possession

The recovery of possession of this Act is provided under two heads: recovery of the
immovable property and recovery of the movable property. The law of Specific Relief
Act,1963 works on a basic principle that “Possession is itself a prima facie evidence of the
ownership”. 

Recovery of the possession of immovable property 

Section 5 explains the remedies available to a person when he is disposed from his
property. If a person has been removed through the line of possession or wants to recover
what lawfully is his property, then that person can do so through the recovery procedure
provided by the Code of Civil Procedure, 1908 and in which the person will prove that the
title belongs to him. 

Section 6 of this Act details that if a person has been dispossessed or divested from the
property against the nature of law, then that person can file a suit for recovery of
possession. This section is not only a mere legal rule but also has a wide practical
approach. There are certain essential requirements for fulfilment of recovery under this
section that are as follows:

 The person suing for dispossession must be in possession of that property.

 The person must be dispossessed from the property and such divest from the
property must be unlawfully done or must be carried out against the nature of
law. 
 The dispossession must be without the consent of the person suing.
 Section 6 sub-clause (2) explains that no suit can be bought by a person after the
expiry of 6 months from the date of dispossession. 
 Section 6 sub-clause (2) also explains that no suit by a person can be brought
against the government. 

If the person has not filed any suit in the prescribed time period (section 6) then the only
relief open to him is that of section 5 i.e to prove his title of the property in a better way.
Section 6 has certain limitations which explains that if any order or decree has been
directed by the court in regards to section 6 then, no appeal or review shall lie against such
order or decree but such order is open to revision.

Recovery of the possession of movable property

Section 7 explains that when a person wants to recover the possession of the movable
property, they can follow the procedure expressed by the Code of Civil Procedure,1908.
section 7 has further two sub-clauses which further details that a trustee may file suit
against the beneficial interest he was entitled to and the other sub-clause explains that the
ownership of the property can also be expressed with the presence of a special right given
to the person suing; which would be enough as an essential to file a suit.

Essentials of section 7 are as follows: 

1. There must be a presence of movable property which is capable of being

delivered or disposed of. 
 2. The person suing must have the possession of the property in question.
3. There may be an existence of a special or temporary right on the property.

Section 8 of the Specific Relief Act,1963 explains that when a person is in the possession of
the article to which is he is not the owner, shall be compelled to deliver such article to the
person who will have its immediate possession in following cases:

 When the article is held by the defendant as the trustee of a person who has the
immediate possession.
 When compensation in money is not an adequate relief.
 When it is difficult to ascertain actual damage caused to the person.
 When the possession of the article has been wrongfully transferred from the
person so entitled.

          Click Above

Specific Performance of contracts

Section 10 includes in what condition-specific performance of the contract may be
enforceable, specific performance usually depends upon the discretion of the court but
there are certain conditions for performance which are mentioned as follows:

1. When the damages or loss occurred due to the non-performance of the contract
cannot be ascertained.
2. When money as compensation is not an adequate relief due to the non-
performance of the contact.

Until the contrary is proved it is presumed by the court that (i) that the breach of contract
of immovable property cannot be adequately fulfilled by money (ii) the breach of contract
of movable property can be relieved except in the cases of a) where the property is not an
ordinary article of commerce, b) where the property is kept by the defendant as a trustee
for the property.

Contracts that cannot be specifically enforced

Section 14 mentions certain contracts which cannot be specifically enforced which are as
follows:
 1. When there is a non-performance for the act, and money is adequate
compensation.
2. .A contract that is full of many details and its nature is personal to the parties,
these can not be specifically enforced.
3. The contract requires continuous work for which the court cannot supervise.
4. The court whose nature is determinable. 

Persons against whom the contracts can be specifically

enforced
Section 15 deals with the person against whom the contracts can be specifically enforced:

 Any party to contract or any party to suit.

 Representative in interest or principal, which holds certain important ingredients-

1. Any special skill, or any qualification. 

2. The principal in interest shall be not be entitled to specific performance.

 Where the contract is for settling a marriage or to compromise the situation

between the family members.
 When a contract has been entered into by a tenant over a property for life.

Enforcement of awards
Section 21 deals with the power to award compensation; in various cases, compensation
can be done through the court to the aggrieved person. There are certain cases which are
as follows:

1. When there is a suit filed for specific performance of the contract due to its
breach the aggrieved person may also demand compensation in addition.
2. When according to the court the specific performance may not be granted but
there has been a breach of contract, the court accordingly will order for
compensation to be given to the aggrieved party.
3. When the court thinks that in this case specific performance of the court shall be
granted but it will not be an adequate relief so, compensation in money can be
ordered.
 4. No compensation shall be awarded when the relief for money is not itself
mentioned in the plaint.

Rectification of instruments
Section 26 deals with the ways in which instrument can be rectified:

When through fraud or mutual mistake the parties do not show their real intention then:

 Either party or representative in interest may file a suit for rectification of the
instrument,
 The plaintiff in his plaint may plead for rectification of instrument,
 The defendant in his defence may claim for rectification of instrument.

The court can direct rectification of instruments in cases where the party through fraud
does not show their real intention to prevent violation of rights to the third party.

Requirement for rectification

The party who wants to rectify the instrument firstly must give them in writing and then
mention them in their pleading. No relief shall be granted when the rectification is not
specifically mentioned.

Recession of Contracts
Section 27 deals with the recession of the contract, in law, recession means withdrawing of
the contract or in simpler terms: cancellation of the contract. It brings the party in a
situation as if the contract did not happen i.e status quo ante meaning in its original state.

Recession when cancelled

A contract can go through the recession by the pleading of any party except there are
some cases in which recession may be cancelled. Recession can be cancelled in certain
ways: a) where the contract has been terminated or “has been deemed” voidable by the
plaintiff, b) when the contract is unlawful. 
Cancelling the contracts through recession
A contract may be cancelled through the recession in cases:

a) where the plaintiff has himself given consent to the contract,

b) where the third party has gained interest in the contract and where their rights come
into question, 

c) where only a portion of the contract is to be cancelled but it is in such a position that the
faulty portion cannot get separated from the contract.

Cancellation of the contracts

Cancellation is one of the remedies which is available to parties against injuries in a
contract; section 31 to 33 deals with cancellation of instruments through the court.

Section 31 explains that when an instrument is void or voidable against a person then he
can get that instrument if it may cause damage to it. 

Section 32 deals when a contract can be partially cancelled; for example in cases where
there are certain rights and obligations connected with some parties through that contract,
then the court accordingly may cancel the faulty portion and let the other in motion. 

Section 33 has two heads in it i.e powers to aggrieved party after cancellation and orders
to the defendant after cancellation.

Power of aggrieved party

When the contract has been successfully cancelled, the aggrieved party may receive all the
restoration of benefit and compensation to ensure justice.

Orders to the defendant after cancellation

When the suit has been proven voidable against the defendant, he is required to restore
every benefit to the plaintiff which the defendant may have received during the contract.
Declaratory decrees
Section 34 and 35 deal with declaratory decrees which are declared through the courts to
the parties to suit or contract. 

Section 34 deals with that when any person has a certain right or obligation over the
property and he has been denied that right by any party, then the aggrieved party may file
a suit for the enforcement of the right over the property which has been denied to him.
The Court will give a declaration after looking over the case that the aggrieved party has a
right over the title of such property and so a declaratory decree will be passed. Such
declaratory decree will not be passed by the court when the plaintiff demands something
more than the title over that property. 

Section 35 deals with the effect of the declaration which explains that this decree will be
binding to only to those which are the parties to suit, the decree will be binding to only the
parties to suit and the trustees at the time of suit if any.

Preventive relief
Preventive relief is considered to be any relief which abstains a party from doing any act; a
relief from the court which details that the party should not perform certain acts for which
the relief shall be prescribed. Such reliefs can be imposed in the form of injunctions. 

Injunctions
Injunctions are a specific order under which a party must abstain from performing any act.
Injunctions under the Specific Relief Act,1963 may be divided into different types namely
temporary, perpetual and mandatory. Injunction is mentioned from section 36 to 44.

Perpetual injunctions
Perpetual injunctions are known as permanent injunctions. They can only be imposed after
hearing the parties on the merits of the case in which the defendant has enjoyed an
assertion of the right and by affecting the plaintiff on the contrary. The perpetual injunction
may be granted to the plaintiff to prevent the breach of an obligation and imposing rights
in his favour. When the defendants invade the plaintiff’s right to enjoyment, a perpetual
injunction may be applied in certain cases where:

1. The defendant is the trustee of the property.

2. Actual damage cannot be ascertained.
3. Money as compensation would not be adequate relief.
4. Injunctions are necessary to prevent multiplicity of judgments.

Landmark Judgments

Geeta Rani Paul v. Dibyendu Kundu 

It was held by the Hon’ble Supreme Court that when the plaintiff files suit regarding the
dispossession, it is enough if he proves that he is entitled over the title of that property.
Once the title is proved other details like being divested from the property or other things
are not required to be proved.

N.P. Thirugnanam v.Dr. R.J. Mohan Rao

It is held by the Court that when in a case it is observed that the plaintiff itself did not
perform his portion in the contract or neither does he want to perform, so the decision
regarding specific performance act will be issued under this favour. 

Prem Singh vs. Birbal

The Court, in this case, held that when a contract is valid no doubt of it being cancelled
arises and when it is void ab initio (meaning no existence in the law from the starting )
then no also no option of cancelling it arises as it is not present in the eyes of law. When a
contract has no existence no action is enforced on it. 

Conclusion
The Specific Relief Act, 1963 has a set of reliefs given to the parties to suit. They have
different reliefs and enforcing rules which focus on providing enough compensation to all.
This legal statute’s main aim is that no person shall live with the damages and losses and
those who have caused such a situation must be in a position to restore all unlawful
benefits received by them. This act focuses on providing justice to all and not inequitable
favouring a single party.