Shankar Sakharam Kenjale (Died) Through His Legal Heirs v/s Narayan Krishna Gade & Another
This case is related to Paragana Watan Property which was governed by the Bombay Hereditary Offices Act 1874. Owner of the aforesaid property transferred it to the tenant; the latter mortgaged that property to someone else for 10 years (conditional mortgage). The new Bombay Paragona and Kulkarni Watans (abolition) Act 1950 abolished the Paragana Watan Property and it was under the government possession. But there was a right given to the holder of the property to seek re-grant by paying some amount to the government. The mortgagee paid requisite amount to the government and obtained re-grant of the suit land in 1960. The suit was filed by the mortgagor for the redemption of the mortgage.
The Hon’ble Supreme Court observed that the right of redemption of a mortgagor is not extinguished by virtue of re-grant in favour of the mortgagee. It was said that the right of redemption under a mortgage deed can come to an end or be extinguished only by the way of a contract between the parties or by the merger or by the statutory provision. It was enunciated that “Once a mortgage is always a mortgage”. In case a suit for redemption is filed, the mortgagee is obliged to give up his possession over the mortgaged property unless he is able to prove that the right of redemption has come to an end as per law. It was also held that the right to redemption of the mortgagor cannot extinguish by virtue of re-grant in favour of the mortgagee. Section 90 of the Indian Trusts Act, 1882 was referred which clearly states that it is obligatory for the mortgagee to hold any right acquired by him in the mortgaged property provided that it should be done only for the benefit of the mortgagor as he acts in a fiduciary capacity in respect of such transactions. It was held that the advantage derived by the mortgagee by way of the re-grant must be surrendered to the benefit of the mortgagor deducting the payment made of the expenses incurred by them in securing the re-grant.