DR.

RAM MAHOHAR LOHIYA NATIONAL LAW

UNIVERSITY

(PROJECT)
PROPERTY LAW-2

RIGHTS OF SUBSQUENT MORTRAGORS

SUBMITTED TO: SUBMITTED BY:

Dr. Vipul Vinod Sankalp Patel

Asst. Prof. (Law) Roll no. 131

RMLNLU, Section: B

Lucknow VIthSemester

B.A. LL.B. (Hons.)

 ACKNOWLEDGMENT

Firstly, I would like to thank my Property Law teacher Ms.Shakuntala Sangam for giving me
such a golden opportunity to show my skills through this project. The project is a result of an
extensive research study, hard work and labour, that is put into to make it worth reading.

I wish to acknowledge that in completing this project I had full support of my friends as well
as my teacher. This project would not have been completed without the help of my
university’s library Dr.Madhu Limaye library and through the university’s internet.

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Table of Contents

INTRODUCTION ................................................................................................................................. 4
The Uses of Mortgages ....................................................................................................................... 4
RIGHTS OF MORTGAGORS : THE TRANSFER OF PROPERTY ACT,1882 ............................. 6
RIGHT OF REDEMPTION:JUDICIAL INTERPRETATION....................................................... 10
CONCLUSION .................................................................................................................................... 15
BIBLIOGRAPHY ................................................................................................................................ 17

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 INTRODUCTION

A mortgage is a means of securing a debt with real estate. A long time ago, the mortgage was
considered an actual transfer of title, to become void if the debt was paid off. The modern
view, held in most states, is that the mortgage is but a lien, giving the holder, in the event of
default, the right to sell the property and repay the debt from the proceeds. The person giving
the mortgage is the mortgagor, or borrower. In the typical home purchase, that’s the buyer.
The buyer needs to borrow to finance the purchase; in exchange for the money with which to
pay the seller, the buyer “takes out a mortgage” with, say, a bank. The lender is the
mortgagee, the person or institution holding the mortgage, with the right to foreclose on the
property if the debt is not timely paid.

The Uses of Mortgagesi

Most frequently, we think of a mortgage as a device to fund a real estate purchase: for a
homeowner to buy her house or for a commercial entity to buy real estate (e.g., an office
building), or for a person to purchase farmland. But the value in real estate can be mortgaged
for almost any purpose (a home equity loan): a person can take out a mortgage on land to
fund a vacation. Indeed, during the period leading up to the recession in 2007–08, a lot of
people borrowed money on their houses to buy things: boats, new cars, furniture, and so on.
Unfortunately, it turned out that some of the real estate used as collateral was overvalued:
when the economy weakened and people lost income or their jobs, they couldn’t make the
mortgage payments. And, to make things worse, the value of the real estate sometimes sank
too, so that the debtors owed more on the property than it was worth (that’s called being
underwater). They couldn’t sell without taking a loss, and they couldn’t make the payments.
Some debtors just walked away, leaving the banks with a large number of houses,
commercial buildings, and even shopping centres on their hands.

The Transfer of Property Act, 1882, governing the territories of India confers certain rights
on a mortgagor in case of mortgage of a house. The rights may be enforced by the mortgagor
or by any encumbrancer. In case there are many encumbrances for the same property the
requisition of a prior encumbrancer will prevail over that of a subsequent encumbrancer.

A mortgagor has these rights after payment of the mortgage money to the mortgageeii:

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  Deed and possession
 Transfer of property
 Redemption
 Documents and inspection
 Profits from property

HYPOTHESIS

The researcher proposes the hypothesis that The transfer of Property Act confers certain
rights on a mortgagors which safeguards the mortgagor against various misuse by the second
party

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 RIGHTS OF MORTGAGORS : THE TRANSFER OF PROPERTY
ACT,1882
A mortgage is the transfer of an interest in specific immovable property for the purpose of
securing the payment of money advanced or to be advanced by way of loan, an existing or
future debt, or the performance of an engagement which may give rise to a pecuniary
liability.

The transferor is called a mortgagor, the transferee a mortgagee; the principal money and
interest of which payment is secured for the time being are called the mortgage-money, and
the instrument (if any) by which the transfer is effected is called a mortgage-deed.

CREATION OF MORTGAGE

Where the principle money secured is one hundred rupees or upwards, a mortgage otherwise
than a mortgage by deposit by title deeds can be effected only by a registered instrument
signed by the mortgagor and attested by at least two witnesses. When the principle money
secured is less than one hundred rupees, mortgage may be effected either by a registered
instrument signed by the mortgagor and attested as aforesaid, or (except in the case of a
simple mortgage) by delivery of the property.
Type of mortgages:
SIMPLE MORTGAGE

Where, without delivering possession of the mortgaged property, the mortgagor binds himself
personally to pay the mortgage-money, and agrees, expressly or impliedly that in the event of
his failing to pay according to his contract, the mortgagee shall have a right to cause the
mortgaged property to be sold and the proceeds of sale to be applied, so far as may be
necessary, in payment of the mortgage-money, the transaction is called a simple mortgage and
the mortgagee a simple mortgagee.

MORTGAGE BY CONDITIONAL SALE

Where, the mortgagor ostensibly sells the mortgaged property-

1. On condition that on default of payment of the mortgage-money on a certain date the

sale shall become absolute, or;
2. On condition that on such payment being made the sale shall become void, or;
3. On condition that on such payment being made the buyer shall transfer the property to
the seller,

The transaction is called a mortgage by conditional sale and the mortgagee a mortgagee by
conditional sale:

PROVIDED that no such transaction shall be deemed to be a mortgage, unless the condition is
embodied in the document, which effects or purports to effect the sale.

USUFRUCTUARY MORTGAGE

Where the mortgagor delivers possession, or expressly or by implication binds himself to

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deliver possession of the mortgaged property to the mortgagee and authorises him to retain
such possession until payment of the mortgage money, and to receive the rents and profits
accruing from the property or any part of such rents and profits and to appropriate the same in
lieu of interest or partly in payment of the mortgage money, partly in lieu of interest and partly
in payment of the mortgage money, the transaction is called a usufructuary mortgage and the
mortgagee a usufructuary mortgagee.

ENGLISH MORTGAGE

Where the mortgagor binds himself to repay the mortgage money on a certain date, and
transfers the mortgaged property absolutely to the mortgagee, but subject to a proviso that he
will re-transfer it to the mortgagor upon payment of the mortgage money as agreed, the
transaction is called an English mortgage.

ANOMALOUS MORTGAGE

A mortgage which is not a simple mortgage, a mortgage by conditional sale, an usufructuary

mortgage, an English mortgage or a mortgage by deposit of title deeds within the meaning of
section 58 is called an anomalous mortgage.
Equitable Mortgage
MORTGAGE BY DEPOSIT FO TITLE DEEDS/EQUITABLE MORTGAGE

Where a person in any of the following towns, namely, the towns of Calcutta, Madras and
Bombay and in any other town which the State Government concerned may by notification in
the Official Gazette, specify in this behalf, delivers to a creditor or his agent documents of title
to immovable property, with intent to create a security thereon, the transaction is called a
mortgage by deposit of title deeds.

To create a valid mortgage by deposit of title deeds, there must be a delivery of the title deeds
relating to an immovable property by the debtor to a creditor or his agent in a notified town
with the intention to create a security thereon.
Rights and liabilities of a mortgagor
The rights and liabilities of a mortgagor under a mortgage are as under:

1. Right of mortgagor to redeem:

Section 60iii, Transfer of Property Act provides that at any time after the principal money has
become due, the mortgagor has right on payment or tender, at a proper time and place, of the
mortgage money, to require the mortgagee

i. to deliver to the mortgagor the mortgage deed and all documents relating to the
mortgaged property which are in the possession or power of the mortgagee;
ii. where the mortgagee is in possession of the mortgaged property, to deliver
possession thereof to the mortgagor; and
iii. at the cost of the mortgagor either to re-transfer the mortgaged property to him
or to such third person as he may direct, or to execute and where the mortgage
has been effected by a registered instrument to have registered an
acknowledgement in writing that any right in derogation of his interest

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 transferred to the mortgage has been extinguished:

Provided that the right conferred by this section has not been extinguished by the act of the
parties or by decree of court.

The property mortgaged is only a security for the payment of the money lent. The mortgagor
is entitled to get back his property on payment of the principal and interest after the expiry of
the due date for the repayment of the mortgagee's money. This right of the mortgagor is called
the Right of Redemptioniv. Section 60 of the Transfer of Property Act reserves this right. The
right cannot be fettered by any condition which prevents redemption. The right cannot be
controlled by any contract to the contrary.

Where a mortgagor is entitled to redemption, on the fulfilment of requisite conditions which

enable a retransfer, he may require the mortgagee to either, re-transfer the property to him or
instead of re-transferring the property, to assign the mortgage debt and transfer the mortgaged
property to such a third person as the mortgagor may direct. In such a case, the mortgagee
shall be bound to assign and transfer accordingly.

The Right of Redemption is an essential ingredient of a mortgage process. The mortgagor's

right of redemption is not merely a contractual right. It is a legal right given to him by the
statute itself under Section 60 of the Transfer of Property Act, 1882.

As per the provisions, at any time after the principal money has become due, and upon
payment at a proper time and place of the mortgage-money, the mortgagor has the following
rights:

Right to require the mortgagee to deliver to the mortgagor the mortgage-deed and all
documents relating to the mortgaged property which are in the possession of the mortgagee

Anywhere the mortgagee is in possession of the mortgaged property, to deliver possession of

it to the mortgagor, and

The cost of the mortgagor either to re-transfer the mortgaged property to him or to such
third person as he may direct,

Into execute and to have registered an acknowledgement in writing that any right in
derogation of his interest transferred to the mortgagee has been extinguished.

The right conferred by this section is called a right to redeem. A suit to enforce this is
referred to as a suit for redemption. The mortgagor can exercise the right before it is
extinguished by the act of the parties or by the operation of law.

The right can also be extinguished by a decree of the court. The mortgagor is not entitled to
redeem before the mortgage money is due i.e. before the time fixed for the payment of
mortgage money. The rights as conferred above may be enforced by the mortgagor or by any
encumbrancer.

The rights are subject to the condition that the right conferred as above have not been

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extinguished by the act of the parties or by decree of a court. The mortgage deed may provide
that the time fixed for payment of the principal money should be allowed to pass or in case no
such time has been fixed, the mortgagee shall be entitled to reasonable notice before payment
or tender of such money.

It is to be noted that the above statutory provisions shall not apply to redemption of portion of
mortgaged property. The provisions shall not entitle a person interested in a share only of the
mortgaged property to redeem his own share only, on payment of a proportionate part of the
amount remaining due on the mortgage

2. Obligation to transfer to third party instead of re-transference to mortgagor

Section 60 Av, Transfer of Property Act provides that where a mortgagor is entitled to
redemption, then on the fulfilment of any conditions on the fulfilment of which he would be
entitled to require a retransfer, he may require the mortgagee, instead of retransferring the
property, to assign the mortgage debt and transfer the mortgaged property to such third person
as the mortgagor may direct the mortgagee and the mortgagee shall be bound to assign and
transfer accordingly.

The provisions of this section do not apply in the case of mortgagee, who is or has been in
possession.

3. Rights to inspection and production of documents

A mortgagor as long as his right of redemption subsists, shall be entitled at all reasonable
times at his request and at his own cost, and on payment of the mortgagee’s cost and expenses
in this behalf, to inspect and make copies or abstracts of or extracts from documents of title
relating to the mortgaged property which are in the custody or power of the mortgagee.

4. Rights to redeem separately or simultaneously

A mortgagor who has executed two or more mortgages in favour of the same mortgagee shall,
in the absence of a contract to the contrary, when the principal money of any two or more of
the mortgages has become due, be entitled to redeem any one such mortgage separately or any
two or more of such mortgages together.

5. Right of usufructuary mortgagor to recover possession

In the case of usufructuary mortgage, the mortgagor has a right to recover possession of the
property together with the mortgage deed and all documents relating to the mortgaged
property which are in the possession or power of the mortgagee.

6. Accession to mortgaged property

Where mortgage property in possession of the mortgagee has during the continuance of the
mortgage received any accession, the mortgagor upon redemption, shall, in the absence of a

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contract to the contrary, be entitled as against the mortgagee to such accession.

7. Improvements to mortgaged property

Section 63A (1), Transfer of Property Act provides that where mortgaged property in
possession of the mortgagee has during the continuance of the mortgage, been improved, the
mortgagor, upon redemption, shall, in the absence of a contract to the contrary, be entitled to
the improvement and the mortgagor shall save only in cases provided for in sub-section (2) be
liable to pay the cost thereof.

Where a mortgaged property in possession of the mortgagee has been improved during the
continuance of the mortgage, the mortgagor, upon redemption, will be entitled to the
improvement. The mortgagor will not be liable to pay the cost.

However, in these cases, a mortgagor will be liable to pay the cost as an addition to the
principal money with interest:

1.If the improvement was made at the cost of the mortgagee

2.If the improvement was necessary to preserve the property from destruction or deterioration

3.If it was necessary as the security was insufficient

4.If it was made in compliance with the lawful order of any public servant or public authority

Profits accruing because of the improvements should be credited to the mortgagor.vi

8. Renewal of mortgaged lease

Where the mortgaged property is a lease, and the mortgagee obtains a renewal of the lease, the
mortgagor, upon redemption, shall in absence of a contract by him have the benefit of the new
lease.

9. Mortgagor’s power to lease

Section 65A(1), Transfer of Property Act provides that a mortgagor, while lawfully in
possession of the mortgaged property, shall have power to make leases thereof which shall be
binding on the mortgagee.

10. Waste by mortgagor in possession

A mortgagor in possession of the mortgaged property is not liable to the mortgagee for
allowing the property to deteriorate; but he must not commit any act, which is destructive or
permanently injurious thereto, if the security is insufficient or will be rendered insufficient by
such act.

A security is insufficient, unless the value of the mortgaged property exceeds by one-third or,
if consisting of buildings, exceeds by one-half the amount for the time being due on the
mortgage.

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 RIGHT OF REDEMPTION:JUDICIAL
INTERPRETATION

Right of redemption is the right which every mortgagor possess, which is created by virtue of
the mortgage deed. This right is considered to be inalienable, and cannot be taken away from
a mortgagor by means of any contract to the contrary. According to Black’s Law Dictionary,
term “redemption” can be defined as the act of the vendor of property in buying it back again
from the purchaser at the same or an enhanced price. “Right of Redemption” can be
defined under the same dictionary as an agreement or paction, by which the vendor reserves
to himself the power of taking back the thing sold by returning the price paid for it. This
right finds place under Section 60 of the Transfer of Property Act, 1882 which makes
mortgagor the owner of the property mortgaged, and makes him able get his property back
from the mortgagee on paying the amount borrowed from him.

Clog on a right means the insertion of any clause or any provision under the mortgaged deed
which would alienate mortgagor of his property under certain circumstances. Under Indian
legal system, such provisions would not be able to alienate a mortgagor of his “Right of
Redemption”, and such provisions would be void ab initio. The reason for such clauses under
the mortgage deed being void is quite interesting and reasonable. It would not be difficult to
understand that a person mortgages his property when he is in need of money, and would not
be in the same position as that of the mortgagee. Also, it would not be difficult to understand
that mortgagee would try to misuse his position to exploit the mortgagor, and it is for this
reason that such clause becomes obvious which would alienate a mortgagor of his property.

It is highly possible that a person agrees to enter in a mortgage having clauses which
extinguish his right of redemption, but it would not be necessary that the provisions have
been accepted by him willingly. In need of money, a person would agree to the terms and
conditions of the mortgagee even if he doesn’t want to do so. But, law doesn’t sit silent and in
such cases it steps in the picture, and save the basic rights of a mortgagor. Law doesn’t allow
any person to alienate a mortgagor of his “Right of redemption”. Such right would remain
effective unless the property has been sold off or under any statutory provision. Even if
mortgage has went to the court for the foreclosure of the property mortgaged, mortgagor can
redeem his property by paying off the full amount in the court.

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Time period is not the essence in case of right of redemption. One such case was decided
by the court in Achaldas Durgaji Oswal v Gangabisan Hedavii (2003) 3 SCC 614 , where a
suit was filed by the mortgagee for the foreclosure of the property, and another suit was filed
by the mortgagor. Lower court asked mortgagor to pay off the amount within 3 months, but
he was not able to do so. Instead, he paid off the amount after a period of 3 years and at that
point of time his suit was rejected by the lower court on ground of exceeding the limitation
period as decided by the court. Lower court’s decree was reversed by the High Court, which
was upheld by the Supreme Court. It was held by the Supreme Court that “the right of
redemption of mortgagor being a statutory right, the same can be taken away only in terms of
the proviso appended to Section 60 of the Act which is extinguished either by a decree or by
act of parties. Admittedly, in the instant case, no decree has been passed extinguishing the
right of the mortgagor nor such right has come to an end by act of the parties.”

Another view was taken by the Supreme Court in K.Vilasini and Ors v Edwin Perieraviii
CIVIL APPEAL NO. 5476 OF 2008, where a suit was filed by the mortgagor for the
foreclosure but it was prayed by the mortgagor that he would pay the amount and required
some time. The time was granted by the court with the consent of the mortgagee, but
mortgagor was not able to pay the amount in the stipulated time. He later deposited the
amount claimed to redeem his property. The same was decreed by the court and confirmed by
the High Court. Supreme Court also decreed in favour of the mortgagor stating that
mortgagee had himself allowed mortgagor to pay off the amount and also took part in the
proceedings therein.

In Hasthimal and Sons v. Tej Raj Sharamaix 2007 AIR SCW 6135 , where a pre-emption
clause was introduced by the mortgagee stating that he would have a right to purchase the
property if the same was intended by the mortgagor. In this case, Supreme Court relied on a
judgment of House of Lords in Lewis v. Frank Love, Ltd,x 1961 All. E.R. 446, where it was
held by the court that “where one of the terms arranged between the mortgagor and the
mortgagee was that the mortgagee should have a right to pre-emption in case the mortgagor
wishes to transfer the property to a third party, such a condition operates as a clog on the right
of redemption of the vendee from the mortgagor.

In Harbans v. Om Prakashxi AIR 2006 SC 686, Supreme Court referred Mulla’s The Transfer
of Property Act, 9th Ed, where it is stated that “The right of redemption is an incident of a

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subsisting mortgage and subsist as long as the mortgage itself subsists. It can be extinguished
as provided in the section and when it is alleged to be extinguished by a decree, the decree
should run strictly in accordance with the forum prescribed for the purpose. Dismissal of an
earlier suit for redemption whether as abated or as withdrawn or in default would not be
barred the mortgagor from filing a second suit for redemption so long as the mortgage
subsists and the right of redemption is not extinguished by the efflux of time or decree of the
court in the prescribed form.”Consequently, the suit was decreed in favour of the mortgagor.

Similar view was taken by the Supreme Court in Pomal Kanji Govindji v Vrajlal Karsandas
Purohitxii AIR 1989 SC 436. Further it was held by the Supreme Court in Shivdev Singh v
Sucha Singhxiii AIR 2000 SC 1935, that a provision incorporated in the mortgage deed to
prevent or hamper the redemption would be void, and that the right provided by section 60 of
the Transfer of Property Act, 1882 is a statutory right and clog on this right should be
determined depending on the facts and circumstances of each case. In case of Parichhan
Mistry v Acchiabar Mistryxiv AIR 1997 SC 456, question as to how can right of redemption
can come to an end was resolved and it was stated by the Supreme Court that “It is true that a
right of redemption under a mortgage deed can come to an end, but only in the manner
known to law. Such extinguishment of right can take place by contract between the parties or
by a decree of the court or by a statutory provision which debars the mortgagors from
redeeming the mortgage.”

In the case of Madhagonda Ramgonda Patil v Shripal Balwant Rainadexv AIR 1988 SC 1200,
mortgagee obtained a decree for the sale of the mortgaged property but he was not able to
sale the property, and his heirs and legal representatives were in the possession of the
mortgaged property. A suit for redemption was filed by the mortgagors and it was decreed in
their favour by the court stating that mortgage deed still existed between mortgage and the
mortgagee.

In Jayasingh Dnyanu Mhoprekar v Krishna Babaji Patilxvi AIR 1985 SC 1646, it was held by
the Supreme Court that “A mortgagee who has entered into possession of the mortgaged
property under a mortgage will have to give up possession of the property when a suit for
redemption is filed unless he is able to show that the right of redemption has come to an end
or that the suit is liable to be dismissed on some other valid ground. This flows from the

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principle which is applicable to all mortgages, namely “Once a mortgage, always a
mortgage”

But, it is also interesting to note that a co-mortgager cannot file a suit for redemption of his
part of the mortgaged property. Mortgagee would not be liable to return a part of the
mortgager property to one of the co-mortgagors. The same was held by the Supreme Court in
case of Chhaganlal Keshavlal Mehta v Patel Narandas Haribhaixvii AIR 1982 SC 121, where
it was held by the Supreme Court that “a perusal of Section 60 indicates that a co-mortgagor
cannot be permitted to redeem his own share of the mortgaged property only on payment of
proportionate part of the amount remaining due. In other words the integrity of the mortgage
cannot be broken.

Another problem which can arise for a mortgagor while claiming his property back is when
the property is purchased by the mortgagor himself and become assignee of the property
mortgaged. This problem was resolved by the Supreme Court in case of C.V. Raghavachar v
Lakshminarasammaxviii AIR 1981 SC 160, where it was held by the Supreme that when
mortgagee himself becomes the assignee of the property mortgaged, and problem arises as to
whether he should be considered as mortgagee or assignee. It such condition, his position as a
mortgagee would get preference and also the right to redeem would remain in existence.

Another issue relating to clog on right to redemption was raised in the case of Gulab Chand
Sharma v Saraswati Devixix AIR 1977 SC 242, where an issue pertaining to a clause in the
mortgage deed was raised. In this case, there was clause which was supposed to make
mortgagee the owner of the mortgaged property absolutely on mortgagor receiving the notice
of re-entry from the Land and Development Officer or any other such authority. But, this
clause was termed by the Supreme Court as a clog on the equity of redemption and was
decreed accordingly in favour of the mortgagor.

From above cases, it would be easy to understand some of the few situations showing that
right to redeem is an inalienable right and it would not be possible for a mortgagee to take
away this right from a mortgagor so easily. Right of redemption can only be extinguished in
two ways viz. Act of the parties, or by a decree of a court. Act of the parties can be
understood in various ways. One can be the sale of the property by the mortgagee, but sale
would not be complete unless the money is paid by the purchased and hence the right to
redeem would exist unless the amount agreed the mortgagee and the purchaser are paid off.

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Moreover, a mortgagee may lose his right over the mortgaged property if he doesn’t take any
remedial steps in a reasonable time and his right to sale the mortgaged property becomes
invalid because of his inability to file a suit for the foreclosure of the property within the
limitation period. But, it is also the necessary to understand the need of this right to remain
present under legal system. Reason being very simple, as in the absence of such provision on
any of the enacted statues or laws in the legal system it would become easy for mortgagee to
gain advantage of his position.

The principle behind can be the responsibility of the state towards society where every breed
of person stay, and a person who is at a higher position would try to take advantage of that
position. Reason for having the provisions relating to mortgages is also the same. It was
generally a tradition in ancient time to take the possession of the property by the money
lender and if debtor was not able to pay the amount, then money lender would get the
ownership of the property. Usually, the price of the property kept as a security was much
higher than that of the money borrowed.

“Justice may be blind, but she has very sophisticated listening devices.” - Edgar Argo

CONCLUSION
A mortgagor’s entitlement to redeem his mortgage in order to obtain title back has evolved
from being exercisable within a minuscule window of time into a fundamental right, even
existing in the face of a final court order for foreclosure. Essential to this evolution were the
courts of equity, who recognized that the underlying transaction is at, its heart, the granting of
security for the performance of a debt obligation and not a conditional conveyance upon non-
repayment of the debt. By expanding the single right of redemption, the mortgagor’s right to
redeem is now available prior to, on and subsequent to the “redemption” date as well as
following a final order for foreclosure.

By contract, the modern day mortgagor enjoys more rights then ever before, and this is as a
result of commercial competitiveness. There are more lenders today seeking borrowers and it
is not uncommon for mortgages to contain prepayment privileges, assignability and
assumption clauses in favour of borrowers. Yet in the background of the transaction is the

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ever present common law and statutory provisions governing lending transactions which
serve to protect the lender’s security and entitle a mortgagee to seize and sell the property in
satisfaction of the debt while still retaining the right to continue as against the mortgagor on
account of any deficiencies arising from the sale.

The primary right enjoyed by the mortgagor is the right to redeem the mortgage on
repayment of the loan and payment of any interest provided for by the charge.

Right to redeem at law

At law the right to redeem is a matter of contract: the mortgagor can redeem on the date or
dates and in the manner provided for in the mortgage. Thus, should the agreement provide
that the mortgage should be redeemed on a particular date; the mortgagor has, at law, a right
to redeem on that day only. The legal rule does not allow him to insist on redeeming the
mortgage either before or after the contractual date. At common law, if he did not pay on the
contractual date, the mortgagor at one time forfeited the land to the mortgagee and could still
be sued in contract for the repayment of the debt. Accordingly the legal right to redeem was,
and is, very limited.

Right to redeem in equity

Fortunately, equity took a very different view of the situation, particularly as there were
examples of mortgagees absenting themselves so that it became impossible for the mortgagor
to repay on the contractual date. As the purpose of the agreement was merely to provide the
mortgagee with security for the loan, equity took view that, as long as the advance and any
interest was paid, the mortgagee should not be able to object to redemption. Originally equity
intervened only in cases of fraud by the mortgagee but soon came to recognize a general right
to redeem in all cases. Thus, equity allows the mortgagor to redeem even after the date fixed
by the mortgage agreement for repayment has passed. Of course, since this right is
enforceable in equity only, it is subject to the general principle that equitable remedies are
discretionary in nature and all the equitable maxims will apply. Furthermore, in deciding
whether redemption is possible, equity will look at the substance of the agreement, not its
form. Accordingly, a mortgage which is drafted to look like an outright transfer of the
property, rather than the creation of an interest by way of security, will still be subject to the

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equitable right to redeem, if the facts are such as to indicate that only a grant by way of
security was intended.

Thus, in the light of the above statements and cases cited we do come to the
conclusion that rights of a mortgagor are provided to secure the mortgagor against any
gross misuse or to protect him from any disadvantageous circumstances. Saying so, the
hypothesis proposed by the researcher stands proven.

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 BIBLIOGRAPHY

WEBSITES:

 http://www.inbrief.co.uk
 http://articles.economictimes.indiatimes.com
 www.ebrd.com/downloads/legal/core/azerlom.pdf
 www.indiankanoon.org
 https://www.canlii.org/en/on/laws/stat/rso-1990-c-m39/latest/rso-1990-c-m39.html
 http://www.helplinelaw.com/real-estate-wills-probate-and-
trust/MGDD/mortgage.html
 http://2012books.lardbucket.org/books/the-legal-environment-and-business-law-
master-of-accountancy-edition/s25-03-nonconsensual-lien.html
 http://www.mondaq.com/canada/x/68856/Rights+of+Mortgagor+And+Subsequent+E
ncumbrancers+In+Mortgage+Enforcement+Proceedings
 http://www.hummingbirdlaw.com/the-mortgagors-equity-of-redemption/
 http://www.blaney.com/articles/subsequent-mortgagees-rights-curing-default-and-
importance-breached-covenants

BOOKS:

 Textbook on The Transfer of Property Act, 3rd Edn., Avtar Singh

 Transfer of Property Act, B.B.Mitra, & S.P.Sengupta
 Transfer of Property Act, Vol. 1, Dr. Sir Hari Singh Gour, revised by Dr. J.C.Batra
 The Transfer of Property Act, Dr. G.P.Tripathi
 The Transfer of Property, Justice P .S. Narayana

i
http://2012books.lardbucket.org/books/the-legal-environment-and-business-law-master-of-accountancy
edition/s25-01-uses-history-and-creation-of-m.html (last accessed on 22:05 hrs, IST, on 4th October,2014)
ii
http://www.blaney.com/articles/subsequent-mortgagees-rights-curing-default-and-importance-breached-
covenants (last accessed on 22:35hrs IST on 4th October,2014)
iii
The Transfer of Property Act,1882
iv
http://www.helplinelaw.com/real-estate-wills-probate-and-trust/MGDD/mortgage.html (last accessed at
10.14 hrs, IST on 5th October,2014)
v
The Transfer of Property Act, 1882
vi
http://articles.economictimes.indiatimes.com/2004-09-10/news/27375547_1_mortgage-money-mortgagee-
mortgage-deed (last accessed at 11.24 hrs, IST on 5th October,2014)
vii
(2003) 3 SCC 614
viii
CIVIL APPEAL NO. 5476 OF 2008
ix
2007 AIR SCW 6135

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x
1961 All. E.R. 446,
xi
AIR 2006 SC 686
xii
AIR 1989 SC 436
xiii
AIR 2000 SC 1935
xiv
AIR 1997 SC 456
xv
AIR 1988 SC 1200
xvi
AIR 1985 SC 1646
xvii
AIR 1982 SC 121
xviii
AIR 1981 SC 160
xix
AIR 1977 SC 242

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