LAW OF PROPERTY

Right of Redemption and Foreclosure

Submitted By -

Navaneeth SS

1529

Semester IV
 Right of Redemption

A mortgagor is entitled to redeem their property once the debt secured by the mortgage has
been discharged, or the surplus remaining after a power of sale has been exercised by the
mortgagee. This is referred to as the mortgagor’s „equitable right of redemption‟.

However, if an option to purchase (or transfer) is included as part of the mortgage

Right of redemption Section 60 of Transfer of Property Act describes the right of redemption
as:
“Right of the mortgagor to redeem at any time once the principal cash has become due-the
mortgagor has a right, on payment or tender, at a proper time and place, of the mortgage-
money, to require the mortgage holder to deliver to the mortgagor the mortgage-deed and
every one documents concerning the encumbered property that area unit within the
possession or power of the mortgage holder, where the mortgagee has the mortgaged
property, to deliver possession thereof to the mortgagor, and at the cost of the mortgagor
either to re-transfer the mortgaged property to him or to such person as he could direct or to
execute and (where the mortgage has been affected by a registered instrument) to have
registered an acknowledgment in writing that any right in derogation of his interest
transferred to the mortgagee has been extinguished provided that the correct presented by
this section has not been destroyed by the act of the parties or by decree of a court. Nothing
during this section shall be deemed to render invalid any provision to the result that, if the
time fixed for payment of the principal money has been allowed to pass or no such time has
been fastened, the mortgagee shall be entitled to reasonable notice before payment or tender
of such money.”

There are three important provisions made in section 60 of the Transfer of Property Act 1882:

1. Right of redemption
2. Clog on Redemption
3. Once mortgage, always a mortgage.
Redemption is a right of the mortgagor by which the mortgaged property is kept secure and
the property is returned to the mortgagor. The word redemption means to make free or get
back the mortgaged property by paying mortgage debt. 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. Essential elements of Right of Redemption:

From the definition u/s 60, following essential of the right of redemption are viewed:

• Legal validity of mortgage-the first compulsory element for the applicability of right of
redemption is the legal validity of the mortgage.

• Due to principle-the mortgagor can redeem the mortgage anytime after the mortgage
money is paid and he can‟t be avoided from it accept the degree of the court or any act of the
court.

• Payment of dues money –The third essential condition of applicability of the right of
redemption is the payment of dues money can be done to mortgagee himself or to his agent.
But it is compulsory that such payment must be done without condition and at the proper time
and place.

• Filing of the suit –filling of the suit is compulsory for The Redemption of mortgage the use
of the right of redemption cannot be done without filing a suit the suit of redemption can be
filed by the mortgagor or by any transferee from hi

Right of Foreclosure

The right of foreclosure is a right available to a mortgagee to recover his outstanding money.
Mortgage is a transfer of interest in a property to secure payment of money advanced. A
mortgagee advances money to the mortgagor. The mortgagor provides some property as
security to the mortgagee.

The transaction is effected through a document called the mortgage deed. The relevant
provisions regarding foreclosure are contained under Section 67 of The Transfer Property
Act. The foreclosure right can be enforced on failure of the mortgagor to repay the money
borrowed on the due date.

The mortgagee has a right to obtain from a court a decree that the mortgagor should be
absolutely debarred of his right to redeem the property, or a decree that the property be sold.
A suit to obtain a decree that the mortgagor be absolutely debarred of his right to redeem the
mortgaged property is called a suit for foreclosure.

This right of foreclosure can be exercised by a mortgagee only if these conditions have been
met:

• The money has become due for payment

The remedy depends on the nature of the mortgage. In case of a simple mortgage, the right of
foreclosure is not available. The remedy is either to proceed against the mortgagor personally
or for sale of the mortgaged property. This is also the option available in case of usufructuary
mortgage.

In this case, the mortgagee will be in possession of the property and will continue to be so
until the debt is repaid in full. A person interested in only a part of the mortgage money may
institute a suit relating only to a corresponding part of the mortgaged property. However, this
is subject to the condition that the mortgagees have severed their interests under the mortgage
with the consent of the mortgagor. In case of anomalous mortgage, the remedy depends on
the terms of the mortgage.

In the case of an English mortgage, the mortgagee may bring a suit for sale of the property. In
case of conditional sale, the mortgage matures into sale on the failure of the payment of debt.
The mortgagee may foreclose depriving the right of redemption. In case of mortgage by
deposit of titles deeds, the remedy is to sue for personal decree or for sale of the property.

The right to institute a suit for foreclosure or sale is not available to a mortgagee for any work
of maintenance in which the public is interested. A mortgagee may hold two or more
mortgages executed by the same mortgagor. In respect of each of such mortgages, he may
have a right to obtain a decree of foreclosure. In case he sues to obtain such a decree on any
one of the mortgages, he will be bound to sue on all the mortgages in respect of which the
mortgage money has become due.