What did the Court decide about interest under a mortgage?

That interest due under a mortgage is also a charge on the mortgaged property unless the deed clearly shows a different contract.

Which provisions of the TPA are important here?

Sections 58(a) and 60 of the Transfer of Property Act—definition of mortgage and right of redemption.

Could the mortgagor redeem by paying only principal?

No. Redemption required payment of the mortgage money, which included interest as per the deed and law.

What was the final outcome of the appeal?

Appeal allowed. The remand to ascertain the full amount due (including interest etc.) was restored.

Why is this case useful for exams?

It shows that interest normally travels with the security and must be cleared for redemption, barring a contrary contract.

chaganlal-v-anantaraman-1961-air-mad-415

Quick Summary

This case fixes a simple rule for redemption: unless the mortgage deed clearly says otherwise, interest due is also charged on the mortgaged property. So, to redeem, the mortgagor must pay the mortgage money—which includes principal and interest.

CASE_TITLE: M.C. Chaganlal Sowear v. P. Anantaraman & Anr. PRIMARY_KEYWORDS: mortgage interest charge, redemption, mortgage money SECONDARY_KEYWORDS: TPA s.58(a), TPA s.60, AIR 1961 Mad 415 PUBLISH_DATE: 2025-11-01 AUTHOR_NAME: Gulzar Hashmi LOCATION: India Slug: chaganlal-v-anantaraman-1961-air-mad-415

Issues

Can the mortgagee treat interest as a charge on the mortgaged property in the absence of a contrary contract?

Rules

Transfer of Property Act, 1882

Section 58(a): Defines mortgage and the idea of securing payment of a debt (principal + interest).
Section 60: Right of redemption—mortgagor can redeem by paying the mortgage money due under the deed (normally principal + interest and other sums, unless contracted otherwise).

Facts (Timeline)

20 Mar 1930: Mortgage executed by the 2nd respondent and his undivided brother (with their uncle) for ₹2,000.

5 Mar 1952: 2nd respondent sells the mortgaged property to 1st respondent, directing him to redeem the mortgage.

Tender to Redeem: 1st respondent offers ₹2,000 (principal). Appellant (mortgagee) demands principal plus interest and other sums per deed.

Suit (O.S. 114/1952): Filed by 1st respondent in District Munsif Court, Poonamallee.

Trial Court: Grants redemption on deposit of ₹2,000 (principal only).

District Judge: Sets aside; remands to fix the full amount due to mortgagee (including interest etc.).

Single Judge (HC): Restores Trial Court decree; grants leave to appeal.

Present Appeal: By the mortgagee before the Madras High Court.

Arguments

Appellant (Mortgagee)

Redemption requires payment of mortgage money (principal + interest + sums due).
Interest is charged on the property unless deed says otherwise.
District Judge was right to remand for full amount ascertainment.

Respondent (Purchaser/Mortgagor)

Offered principal; interest should not block redemption.
Deed and conduct allow redemption on principal alone.
Supports Trial Court’s decree.

Judgment

The Madras High Court allowed the appeal. It held that the District Judge’s reading of the mortgage deed was correct and there was no contract to the contrary excluding interest as a charge. Therefore, interest payable formed part of the mortgage money to be cleared before redemption. The order of remand to ascertain the actual amount due (including interest etc.) was restored.

Ratio Decidendi

In mortgage law, interest is ordinarily part of the security and is charged on the mortgaged property along with principal. Unless the deed clearly shows a different bargain, redemption requires payment of the entire mortgage money (principal + interest and other due sums).

Why It Matters

Clarifies exam-favourite point: interest travels with the security.
Shows how courts handle right of redemption under TPA s.60.
Emphasises drafting: to exclude interest as charge, deed must say so clearly.

Key Takeaways

Default rule: principal + interest must be paid to redeem.
A contrary contract must be explicit; silence favours the default.
Courts may remand to compute the actual amount due.

Mnemonic + 3-Step Hook

Mnemonic: “PIC to Redeem” — Principal + Interest = Consideration to redeem.

Probe the Deed: Any clear clause excluding interest as charge?
Include Interest: If no exclusion, add interest to the mortgage money.
Compute & Pay: Ascertain full dues; redemption follows payment.

IRAC Outline

Issue: Whether interest under the mortgage is also a charge on the property and must be paid for redemption.

Rule: Under TPA ss.58(a), 60, mortgage money generally includes principal + interest unless a contrary contract exists.

Application: Deed did not exclude interest as charge; mortgagee entitled to insist on full dues; lower court’s principal-only approach was incorrect.

Conclusion: Appeal allowed; remand to fix the actual amount due (including interest).

Glossary

Mortgage Money: Total sum due under the mortgage—usually principal + interest + agreed sums.
Charge: A security interest over property for payment of money (here, interest as part of security).
Right of Redemption: Mortgagor’s right to reclaim property by paying the mortgage money (TPA s.60).