Dr.

Tabassum Choudhary
Dept. of Law
AMU
Study Material
TRANSFER OF PROPERTY ACT-II
B.A.LL.B. (HONS) VIII SEMESTER
Unit 2
Sec. 60 Right of Mortgagor to Redeem, Right of Redemption, Clog on Redemption.
Section 60, Right of mortgagor to redeem: At any time after the principal money 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 mortgagee
(a) 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], (b) where the
mortgagee is in possession of the mortgaged property, to deliver possession thereof to the
mortgagor, and (c) 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 transferred to the mortgagee has been extinguished:
Provided that the right conferred by this section has not been extinguished by act of the parties
or by [decree] of a Court.
The right conferred by this section is called a right to redeem and a suit to enforce it is called
a suit for redemption.
Nothing in this section shall be deemed to render invalid any provision to the effect that, if the
time fixed for payment of the principal money has been allowed to pass or no such time has
been fixed, the mortgagee shall be entitled to reasonable notice before payment or tender of
such money.
Redemption of portion of mortgaged property: Nothing in this section shall 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, except [only] where a
mortgagee, or, if there are more mortgagees than one, all such mortgagees, has or have
acquired, in whole or in part, the share of a mortgagor.
Rights of Mortgagor
Every mortgage-deed leaves a right to the mortgagor and a corresponding liability for
mortgagee and vice versa. Following are the rights given to a mortgagor given by the Transfer
of Property Act, 1882:
1. Right to redemption
2. Right to transfer mortgaged property to a third party instead of retransferring
3. Right of inspection and production of documents
4. Right to accession
5. Right to improvements

SFA
Dr. Tabassum Choudhary
Dept. of Law
AMU
6. Right to a renewed lease
7. Right to grant a lease
Right to Redemption (section-60)
It is one of the most important rights of a mortgagor given under section of the Act. This right
puts an end to mortgage by returning the property of mortgagor. The right to redeem further
grants three rights to the mortgagor:
1. Right to end mortgage deal
2. Right to transfer mortgaged property to his name
3. To take back possession of property in case of delivery of possession
In the case of Noakes & Co. vs. Rice (1902) AC 24, Rice was a dealer who mortgaged his
property, premise and goodwill to N subject to the provision that if R paid back the whole
amount, the property would be transferred back to his name or any other person’s. A covenant
was attached that stated whether or not the amount is due, R would only sell Malt liquor by N
in his premises. Because of this covenant, R had difficulty in redemption and it didn’t give him
absolute right over his property. House of Lords held that anything which clogs this right is
bad and they came up with the concept that ‘once a mortgage always a mortgage’ and said
that mortgage could never be irreducible.
This principle was added to protect the interest of a mortgagor. Any condition or provision
which prevents a mortgagor from redeeming his mortgaged property is a clog on the right of
redemption. The right to redemption continues even though the mortgagor fails to repay the
loan amount to mortgagee. In the case of Stanley v. Wilde, (1899) 2 Ch 474, it was held that
any provision mentioned in the mortgage-deed which has an effect of preventing or impeding
the right to redemption is void as a clog on redemption.
 Exceptions to the right- The right to redeem has three exceptions. It can be
extinguished under the following cases:
 By the act of parties
 By operation of law
 By decree passed by the court
Obligation to transfer to the third party instead of transferring it to mortgagor (section-60A)
This right was added in the Act by Amendment Act of 1929. This right provides the mortgagor
with authority to ask the mortgagee to assign the mortgage debt and transfer the property to a
third person directed by him. The purpose of this right is to help the mortgagor to pay off the
mortgagee by taking a loan from a third person on the same security.
Right to inspection and production of documents (section-60B)
This section is also inserted by the Amendment Act of 1929. It is the right of mortgagor to ask
mortgagee for the production of copies of documents of the mortgaged property in his
possession for inspection on notice of reasonable time. The expenses incurred on production

SFA
Dr. Tabassum Choudhary
Dept. of Law
AMU
or copies of documents or travel expenses of a mortgagee are to be paid by the mortgagor. This
right is available to the mortgagor only as long as his right to redeem exists.
Right to Accession (section-63)
Basically, accession means any addition to property. According to this right mortgagor is
entitled to such accession to his property which is in the custody of mortgagee. There are two
types of accession:
 Artificial accession- It is when mortgagor made some efforts and it increased the value
of land.
 Natural accession- The name itself defines i.e. without any man-made efforts.
In case an accession is made to the property due to the efforts of mortgagee or at his expense
and such accession is inseparable, mortgagor, in order to be entitled to such succession, needs
to pay the mortgagee the expense of acquiring such accession.
If such separate possession or enjoyment is not possible, the accession must be delivered with
the property; it is the liability of mortgagor, in the case of an acquisition which is necessary to
preserve the property from destruction, forfeiture or sale, or made with his assent, to pay the
proper cost thereof, as an addition to the principal money, with interest at the same rate as is
payable on the principal amount, or, where no such rate is fixed, at the rate of nine percent per
annum.
Right to Improvements (section-63A)
According to this right if the mortgaged property has been improved while it was in possession
of mortgagee, then on redemption and in the absence of any contract to the contrary mortgagor
is entitled to such improvement. The mortgagor is not liable to pay mortgagee unless:
 Improvements made by the mortgagee were to protect the property or with the prior
permission of mortgagor.
 Improvements were made by the mortgagee with the permission of the public
authority.
Right to Renewed Lease (section-64)
If the mortgagor is entitled the mortgaged property is a leasehold property and during the
duration of mortgage the lease gets renewed then, on redemption the mortgagor is entitled to
have the benefit of the new lease. This right is available to the mortgagor unless he enters into
any contract to the contrary with mortgagee.
Right to grant a Lease (section-65A)
This right was introduced by the Amendment Act of 1929. Prior to this right, the Transfer of
Property Act did not allow a mortgagor to lease out the mortgaged property on his own but
only with the permission of mortgagee. Now, a mortgagor has the right to lease out the
mortgaged property while he is in lawful possession of that property, subject to the following
conditions:

SFA
Dr. Tabassum Choudhary
Dept. of Law
AMU
 All conditions in the lease should be according to the local laws and customs to prevent
any fraudulent transaction.
 No rent or premium shall be paid in advance or promised by mortgagee.
 The contract shall not contain any provision for the renewal of the lease.
 Every such lease shall come into effect within a period of six months from the date of
its execution.
 Where the mortgaged property is a building, the term of the lease should not exceed
three years in total.
Duties/liabilities of a mortgagor
Along with the rights given to a mortgagor, the Transfer of Property Act has also conferred
some duties on him. Following are the duties of a mortgagor:
1. Duty to avoid waste
2. Duty to indemnify for defective title
3. Duty to compensate mortgagee
4. Duty to direct rent of a lease to mortgagee
Duty to avoid waste (section-66)
This section imposes a duty on the mortgagor to not to commit any act which leads to the waste
of property or any act which reduces the value of the mortgaged property. Waste is divided
into two categories:
 Permissive waste– A mortgagor who is in possession of the mortgaged property is not
liable to the mortgagee for any minor waste.
 Active waste– When an act is done which causes major waste of the property or leads
to the reduction in the value of mortgaged property, then the mortgagor will be liable
to the mortgagee.
Duty to indemnify for defective title
It is the duty of a mortgagor to compensate the mortgagee for a defective title in the mortgaged
property. A defective title refers to a situation when a third party starts claiming or interferes
with mortgaged property. It is a liability for the mortgagor to compensate for the expenses
incurred by mortgagee for protecting the title of that property.
Duty to compensate mortgagee
If the mortgaged property is in possession of mortgagee who is paying all the taxes and other
public charges, then it is the duty of mortgagor to compensate mortgagee for incurring such
expenses. Similarly, when there is no delivery of possession i.e. the mortgaged property is still
in possession of mortgagor, then it is his duty to pay all public charges and taxes levied on it.
Duty to direct rent of a lease to mortgagee

SFA
Dr. Tabassum Choudhary
Dept. of Law
AMU
Where the mortgaged property is leased by mortgagor then it is his duty to direct lessee to pay
the rent, etc. to the mortgagee.
Right of Redemption
Right of redemption section 60 of Transfer of Property Act describes the right of redemption
the word redemption means to make free or get back the mortgaged property by paying
mortgage Debt. Redemption is a right of the mortgage by which the mortgaged property is kept
secure and the property is returned to the mortgagor.
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.
Section 60 under Right of Redemption
Section 60 Under Transfer of Property Act 1882- 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 mortgager 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.
The right presented by this section known as a right to redeem and a suit to enforce it’s called
a suit for redemption. 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.
Redemption of the portion of encumbered property-Nothing during this section shall entitle
someone inquisitive about a share solely of the encumbered property to redeem his own share
solely, on payment of a proportionate a part of the quantity remaining due on the mortgage,
except only where a mortgagee, or, if there are more mortgagees than one, all such mortgagees,
has or have nonheritable, in whole or part, the share of a mortgager.
Essential elements of Right of Redemption:
From the above definition following essential of the right of redemption are viewed:

SFA
Dr. Tabassum Choudhary
Dept. of Law
AMU
1. Legal validity of mortgage- the first compulsory element for the applicability of right
of redemption is the legal validity of the mortgage. In Vishnu kaya vs Vishnu Maya
(A.I.R 1980 Sikkim 1) it was decided by the Sikkim High Court that where registration
of mortgage is necessary there a mortgage without registration will be considered illegal
and the mortgage does not become entitled to getting compensation on the basis of the
mortgage.
2. Due to principle- the mortgagor can read the mortgage any time after the mortgage
money speed and he can’t be avoided from it accept the degree of the court or any act
of the court. Ismite Nathabhaikhatri vs Mooljibhai Shankar Bhai Brahma Bhatt A.I.R.
194 Gujrat. Many times, a question arises that whether the mortgage can be redeemed
in prior periods? There is different view in this regard. In the case Rozamma vs
Rajaratnam 1900 Chennai 33 it has been held that the mortgage can be redeemed prior
to the period if nothing is contrary to contract but in the case of Bakhatawar Begum vs
Hussaini Khanam 1914 Allahabad 195 it has been said that in absence of contract
contrary to the mortgage cannot be redeemed prior to the fixed period.
3. 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. Botten vs William’s 1870 C.H.A.655. But it is compulsory that such payment
must be done without condition and at the proper time and place Vardara Julu vs
Dhanlaxmi1914 M.l.t.365.
4. 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 his side.
It was decided in the case of Pranil Kumar vs KishoriLal A.I.R 2003 Kolkata 1 that the
purchaser of the property by auction can also file a suit of redemption because he has his
interest in such property. In the case of Vora Ameen Bhai Ibrahim vs Vora Teharall
Mohammadee A.I.R 1998 Gujarat 31, it has been held by the Gujarat High Court that the suit
of redemption of mortgage can be filed up to A period where the right of redemption does not
end.
The doctrine of Clog on Redemption and Once a mortgage, always a mortgage:
Two important principles have been propounded in section 60 of the Transfer of Property Act
1882:
1. Clog on Redemption and
2. Once a mortgage, always a mortgage.
It is mentionable hair that the right of redemption is a right free from restrictions and always
remains. In other words, it can be said that the mortgage is always redeemable. It can neither
be finished nor making limits. In Rama Shankar Singh vs Silver Screen Corp. Pvt. Ltd ( A.I.R
1998 Kolkata 46) it was decided the right of redemption of mortgagor cannot be finished. In
Shiv Dev Singh vs Sucha Singh 2001 L.C.D 121 it was sad that no condition can be put in the
deed of mortgage which makes it irredeemable.

SFA
Dr. Tabassum Choudhary
Dept. of Law
AMU
In the case Gangadhar vs Shankarlal (A.I.R 1958 SC 770) it has been stated by the supreme
court that the right of redemption of mortgage to mortgagor there exist forever this right neither
can be finished no limited by any condition of the parties if any such condition is imposed then
it will be void.
In Murarilal vs Devkaranit was said that the parties cannot restrict the right of redemption of
mortgages Ever After a fixed period if done so such agreement will be void.
It is known that the main object of mortgage is to secure the repayment of mortgage money
hence the mortgage exists in the repayment of Debt irrespective of the matter passing of the
date of repayment. the right of redemption neither can be extinguished nor be made Limited or
restricted.
Exception
Some exception is always there for the rule the right of redemption of mortgage cannot be
extinguished under the following circumstances this right can be limited or restricted.
1. The right of redemption cannot be finished in mortgage deed of the agreement but after
it can be finished by submission of the right of redemption or by sale or by any method
by the free transaction.
2. The right can be finished by the degree of court, the mortgagor only has the right to get
such decree the right of redemption can be awaited till exercising after the degree for
forfeiture of the right of redemption can be passed by the court.
3. If the right of redemption and interest of mortgage vested in one person then the right
is finished.
4. If the mortgaged property is vested in-state or if the mortgaged property acquisition by
the government the right
Once a mortgage, always a mortgage
The rule of opposition on the right of redemption is based on the maximum once a mortgage
always a mortgage. Mortgage always remain is mortgage note change or revision can be done
in it. such right of redemption of mortgage cannot be put to an end or cannot be Limited.
In this regard, the case of Knocks vs Roulds (1902 Sc 24) is a good example where under lord
Dev laid down while making an amendment in the above principle that-
“Once a mortgage always a mortgage and nothing but a mortgage”.
Thus, the word and nothing but a more get had been added in the above magazine by Lord
Devy. It has been held in the case of Knocks vs Roulds that the right of redemption of mortgage
cannot be filled by any activity that is it cannot be made non-redeemable. If any exercises made
then it will null and void. If any condition is imposed by the party then it will also be void. In
the instant case, the goodwill and premise were mortgaged by Mr rice to company and a
condition was laid down that on payment of mortgage money and interest by Mr rice he will
have the right to get back the mortgaged property. The court stated the mortgage deed create a
mortgage and search mortgage always remain mortgage. But the limitation of the right of
redemption after mortgage by a contract will not be considered an opposition.

SFA
Dr. Tabassum Choudhary
Dept. of Law
AMU
It is to mention hair that is the condition of converting the mortgage into the sale is also white
for the reason of opposition on the right of redemption. A condition that in case of non-payment
of mortgage money the mortgagee will hold the mortgaged property as a lease, in the mortgage
deed has also been considered illegal and ineffective. At all the intention is that mortgage and
the right of redemption of mortgage are co-extensive whether the right of redemption has been
a mention or not.
In the case of Vishnu Kaya vs Vishnu Maya (A.I.R 1980 SIKKIM), it has been held by the
Sikkim High Court that if any transaction is a transaction of mortgage then on the basis of
equity the right of redemption will always be vested in it. It is also the requirement of the
principle of natural justice.
On the whole, the mortgage and right of redemption are coextensive whether the right of
redemption is described or not, on the whole, the meaning is that once a mortgage is done it
will always a mortgage-
1. It cannot be transferred in any other transaction.
2. The right of redemption neither can be ended nor can be Limited or restricted.
Doctrine of clog on redemption
Equity would mean in a layman’s life as fairness. Back during the middle Ages in England,
there were certain grey areas where it was observed that the Common Law was inadequate in
its abilities to deliver justice to the common person. This led to a directive by the King to
appoint Chancellors in special courts who would go beyond the realm of the law to dole out
justice and fairness to the parties. In Common Law, equity is used as a means to sharpen the
meticulousness of the law in order to achieve justice. Such courts were called Courts of Equity.
Under a mortgage, two interests are generated by the owner of the property. One is the interest
of the creditor on the property, which is limited and fixed and another, is the residuary interest
left which can be quantified only by deducting the creditor’s interest from the value of the
security. The fundamental bargain from this division of interests is the presence of a right to
buy back the property without any encumbrances by paying the loan. This right is called the
equitable right to redeem. The first instance of the presence of the right of redemption was
found in Roman law. It has been rightfully said that “Redemption is purely a creature of courts
of equity”.
Section 60 of the Transfer of Property Act, 1882 provides the right of redemption to the
mortgagee. This right becomes alive only after the principal money becomes. There are certain
limitations to this right by the fact that it exists only till the mortgagee decides to exercise his
right of foreclosure on the property. Thus, the contract of mortgage between the parties ends,
when the debtor exercises his right to redeem through paying off the loan.
This right provided by the Transfer of Property Act is a statutory right which can only be done
away by compliance to the procedure established by law. It would henceforth follow that any
obstruction to this right would be declared as void as a clog on the equity of redemption.
Clog on redemption

SFA
Dr. Tabassum Choudhary
Dept. of Law
AMU
In Stanley v. Wilde, Lindley M.R. gave one of the founding explanations of the basis of this
doctrine –
“The principle is this: a mortgage is a conveyance of land or an assignment of chattels as a
security for the payment of a debt or the discharge of some other obligation for which it is
given. This is the idea of a mortgage: and the security is redeemable on the payment or
discharge of such debt or obligation, any provision to the contrary notwithstanding. That, in
my opinion, is the law. Any provision inserted to prevent redemption on payment or
performance of the debt or obligation for which the security was given is what is meant by a
clog or fetter on the equity of redemption and is therefore void. It follows from this, that ‘once
a mortgage always a mortgage’.”
The maxim ‘once a mortgage always a mortgage’ means that there can no covenant that
modifies the character of the mortgage agreed between the parties that would stop the
mortgagor to redeem his property back on payment of the principal and respective interests.
The basis of this doctrine lies in the exercise equity, justice and good conscience and is
extensive to areas where the act is not applicable. On a realistic perusal of the workings of a
mortgage, it is observed in most of the cases that the mortgagor enters into such an agreement
because of some financial predicament. The law recognizes the power of the dominant party to
insert clauses which will serve his personal interests by creating impediments on the right to
redeem the property. Such obstructions are henceforth struck down by the courts to enable the
mortgagee to redeem his property. In U. Nilan v. Kannayyan (Dead) Through Lrs., explaining
the philosophy behind the doctrine, it was said that –
“Adversity of a person is not a boon for others. If a person in stringent financial conditions
had taken the loan and placed his properties as security therefor, the situation cannot be
exploited by the person who had advanced the loan. The Court seeks to protect the person
affected by adverse circumstances from being a victim of exploitation. It is this philosophy
which is followed by the Court in allowing that person to redeem his properties by making the
deposit under Order 34 Rule 5 C.P.C.”
Leading cases
There are no fixed qualifying circumstances in determining what would or would not amount
to a clog. It has been something that would have to be decided on the facts and circumstances
of the case. There are certain situations where it was held that the covenant was a clog on the
right.
 Long Term Mortgages
Long term mortgages are common in cases of usufructuary mortgages. A term of 95 years or
100 years would definitely extend beyond one’s lifetime and superficially seems like a clog.
Taking cognizance of the same, the Supreme Court has ruled that only by virtue of lengthy
period, a mortgage would not amount to a clog, there must exist a presence of undue advantage
or fraud to term it as a clog.
In Vadilal Chhaganlal v. Gokaldas Mansukh, the mortgage agreement provided that it would
subsist for 99 years and the mortgagee would be allowed to construct any structure on the
property without any limit on the cost. The Supreme Court reasoned that it would be beyond

SFA
Dr. Tabassum Choudhary
Dept. of Law
AMU
the ability of the mortgagor to repay the principal money along with the interests and the
construction expenses. It was held that both the conditions amounted to a clog on the
mortgagee’s right of redemption.
In Ramkhilawan Dilrakhan Ahwashi v. Mullo, the case of the plaintiff was that a covenant for
the payment of principal money after 80 years and only in the month of Baisakh, was a clog.
The Trial Court dismissed the suit by calculating that the profits from the mortgaged property
was sufficient to pay the interests on the principal. On appeal, the High Court upheld the lower
court’s decision. However, in Balbhaddar Prasad v. Dhanpat Dayal, the property mortgaged
for 50 years was worth ₹9000. The final amount to be paid after deducting the profits from the
property was around two and a half lakhs. The Court held that such an enormous fund had led
the property to be irredeemable and the terms of the contract were oppressive and
unconscionable.

 Condition of Sale of Property

A covenant that a mortgaged property, if not redeemed within a fixed time, would translate into
a sale is a clog. However, if there is a separate agreement whereby the mortgagor executes a
sale deed in favor of the mortgagee as an independent transaction, such sale deed is valid.
In Meharban Khan v. Makhna, the mortgage agreement provided that the mortgagee was to be
entitled to possession of the property for 19 years. There was a stipulation that if the mortgagor
paid off his debt, he would be allowed to redeem the property only till a limited interest and
the residual interest would belong to the mortgagor. It was further envisaged that on failure of
the mortgagor to pay, the property would be deemed to be sold to the mortgagee permanently.
The Court ruled that both conditions amounted to a clog. It was held that on payment of the
full amount due, the property would be reverted back without any encumbrance.
This principle would also extend to cases where on default of payment, the property would be
deemed to have been foreclosed, amounts to a clog. However, parties are free to stipulate such
a condition subsequently after the mortgage agreement.
In Kuddi Lal v. Aisha Jehan Begam, the plaintiff-mortgagor was allowed to redeem the
property back by paying from her own pockets and not through transferring the property. The
Court held that such a covenant was a clog on redemption since it restrained alienation by the
mortgagor.

 Penalty in case of default

Payment of a penalty if there is default on behalf of the mortgagor can reasonable but in certain
situations it may be unreasonable and penal. Certain situations where a penalty has been held
to be unreasonable are –
1. On default, compound interest is stipulated even when the original interest was very
high.
2. On default, increased rate of interest would apply from the time the agreement is made.
By merely the virtue of there being a high interest does not lend the condition to be a clog on
redemption unless it could be shown that there was undue influence in the dealing.
 Collateral Benefit to Mortgagor

SFA
Dr. Tabassum Choudhary
Dept. of Law
AMU
A mortgagor may avail of a collateral benefit either during the subsistence of the mortgage,
which is valid, or after the redemption, which in some cases is not valid.
In Noakes & Co. v. Rice, a covenant in the mortgage agreement stipulated that the mortgagee
would buy all the beer he would consume on his property from the mortgagor who was a
brewer. It was held that the tie was valid during the subsistence of the mortgage but not beyond
redemption. The property must be delivered back without any tie.
One of the famous cases on collateral benefit was Kreglinger v. New Patagonia Meat and Cold
Storage Co. Ltd. In that case, the mortgage was of a term of 5 years with an option to the
mortgagor to redeem the property before completion of the term. The agreement further
stipulated that the mortgagor should sell sheepskins exclusively to the mortgagee as long as
both parties agreed to a fixed price. The mortgagee paid the mortgage before 5 years and filed
a suit for declaring the tie of exclusive selling to be declared as a clog on redemption.
The House of Lords held that the provision of exclusive sale to lenders did not amount to a
clog. It was reasoned that the mortgagee is allowed to stipulate for a collateral benefit beyond
the period of redemption provided that the stipulation is not –
1. Unconscionable or unfair.
2. A penalty amounting to a clog on the right to redeem.
3. Contrary to the right of redemption.
Kreglingers case is important in recognizing the limits of the doctrine by the terms of the
contract unless they are oppressive, unconscionable or unreasonably hard. The freedom of the
parties to contract is asserted by this case.
The rule enunciated in Kreglingers met with approval in re Cuban Land and Development Co.,
where it was stipulated that in the event of the winding up of the company, the debenture-
holders were entitled to a part of the remaining profits. Such a provision was held not to be a
penalty clogging the right of redemption.
It has also been approved by Indian Courts. A provision that allowed the mortgagee to remain
in possession of the mortgaged property through permanent tenancy was held to be clog
because the collateral benefit extended beyond the period of redemption.
 Subsequent Agreement to postpone redemption
A subsequent agreement which becomes an obstruction to the mortgagee by creating a personal
obligation is a clog on his right to redemption. The reason is that unless the agreement forms a
charge on the property, the mortgagee is not liable to pay any sum arising from his personal
obligation except the mortgage amount.
In Sheo Shankar v. Parma, the mortgagor had already executed a usufructuary mortgage in
favour of the mortgagee. He further executed a simple mortgage in order to borrow more
money. A provision in the simple mortgage provided that the mortgagor was stopped from
redeeming the property till the amount in the simple mortgage was paid. It was held that such
a provision was void as a clog.

SFA
Dr. Tabassum Choudhary
Dept. of Law
AMU
In Hari v. Vishnu, a loan of ₹1500 was advanced to the plaintiff on mortgage by the defendant.
The mortgage deed provided that ₹5000 was still to be paid by the plaintiff on a previous
mortgage and stipulated that till both the sums were paid, the plaintiff was not entitled to
redeem the property. The deed was stamped at a value on ₹6500. It was held that since both
the transactions were clubbed into one, the provision was not a clog.
Sec. 67 Right to Fore closure
Section 67, Right to fore-closure or sale: In the absence of a contract to the contrary, the
mortgagee has, at any time after the mortgage-money has become [due] to him, and before a
decree has been made for the redemption of the mortgaged property, or the mortgage-money
has been paid or deposited as hereinafter provided, a right to obtain from the Court [a decree]
that the mortgagor shall 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 a mortgagor shall be
absolutely debarred of his right to redeem the mortgaged property is called a suit for
foreclosure. Nothing in this section shall be deemed—
(a) to authorise any mortgagee other than a mortgagee by conditional sale or a mortgagee
under an anomalous mortgage by the terms of which he is entitled to foreclose, to institute a
suit for foreclosure, or an usufructuary mortgagee as such or a mortgagee by conditional sale
as such to institute a suit for sale; or
(b) to authorise a mortgagor who holds the mortgagee’s rights as his trustee or legal
representative, and who may sue for a sale of the property, to institute a suit for foreclosure;
or
(c) to authorise the mortgagee of a railway, canal, or other work in the maintenance of which
the public are interested, to institute a suit for foreclosure or sale; or
(d) to authorise a person interested in part only of the mortgage-money to institute a suit
relating only to a corresponding part of the mortgaged property, unless the mortgagees have,
with the consent of the mortgagor, severed their interests under the mortgage.
A mortgage is a transfer of an interest in some immovable property, as a security for
advancement of some loan. A person who gives security and takes the loan is called as
mortgagor and person who advances the money is known as mortgagee. The relationship
between the mortgagor and mortgagee is that of a creditor and debtor. The law on mortgage in
India is governed by Transfer of Property Act, 1882.
The right of foreclosure is a right available to a mortgagee to recover his outstanding
money. This right is available under Section 67 of the Transfer of Property Act, 1882. After
the principal amount has become due, and before payment of mortgage money by mortgagor
or before decree of redemption has been passed by Court, mortgagee has a right to obtain a
decree of foreclosure from the Court. A suit to obtain a decree that a mortgagor will be
absolutely debarred from exercising his right to redeem the mortgaged property is called a suit
for foreclosure.
Conditions:
The right to foreclosure can be exercised by mortgagee only when:

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Dr. Tabassum Choudhary
Dept. of Law
AMU
 The debt amount has become due for payment.
 There are no contrary conditions in the mortgage deed as to the time fixed for repayment
etc.
 Mortgage money has become due but mortgagor has not got a decree of redemption of
the mortgaged property.
 Mortgage money has become due but mortgagor has not paid or deposited the amount.
After the mortgage money has become due, the mortgagor can pay off his debt in three
ways:
 By tendering or making payment of the mortgage money directly to mortgagee
 By filing a suit for redemption.
 By depositing the amount in court.
 Mortgagee should not be mortgagee of public works like canal, railway etc.
 A trustee or legal representative of mortgagee cannot file a suit for foreclosure but for
sale only.
However, when mortgagor fails to redeem the property, the mortgagee does not become the
owner of the property, he has to file a suit for recovery of the amount due. The limitation period
for instituting a suit is 12 years. The final decree in a suit for foreclosure on the failure of
defendant to pay all amounts due extinguishes the right of redemption which has to be
specifically declared. 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.
Right to foreclosure and right of redemption:
The right of foreclosure is counter-part of right of redemption. Mortgagor gets a right of
redeeming his security after payment of debt amount; similarly, mortgagee has a right of
foreclosure or sale in default of redemption by the mortgagor. Section 67 protects interest of a
mortgagee who has advanced a loan in pursuance of some interest in a security and mortgagor
has defaulted in payment. The right of foreclosure of mortgagee is co-extensive to right of
redemption of mortgagor. Subject to the intention expressed in the contract, the mortgagee gets
the right to enforce his security when the mortgagor’s right to redeem accrues. But the rule may
be limited by the terms of the mortgage and if the limitation is not oppressive or unreasonable,
it will be given effect to. Right to foreclosure can be limited in nature subject to the contract
between parties, but right to redemption is an absolute right, which cannot be limited in any
way.
It follows that when a mortgagee makes a statement about his right to recover the mortgage
amount, such statement impliedly acknowledges the corresponding right of redemption of the
mortgagor. Further, a statement admitting jural relationship, need not refer to or reiterate the
rights and obligations flowing there from. Where a party to the mortgage, by his statement,
admits the existence of the mortgage or his rights under the mortgage, he admits all legal

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Dr. Tabassum Choudhary
Dept. of Law
AMU
incidents of the mortgage including rights and obligations of both parties that is mortgagee and
mortgagor.
Foreclosure and different kinds of mortgages:
The act contemplates six kinds of mortgage, namely simple mortgage, mortgage by conditional
sale, usufructuary mortgage, English mortgage, mortgage by deposit of title deeds and
anomalous mortgage.
Simple mortgage: The mortgagee in such scenario does not get possession of the mortgaged
property and therefore cannot exercise right of foreclosure. The remedy is either to proceed
against the mortgagor personally or for sale of the mortgaged property.
Mortgage by conditional sale: Mortgage by conditional sale provides in case of default of
payment, mortgage will become a sale. The remedy in such a situation is not foreclosure but
debarring mortgagor’s right of redemption.
Usufructuary mortgage: Under this mortgage, mortgagee retains possession until repayment
of money and receives rents and profits or part thereof in lieu of interest, or in payment of
mortgage money or partly in lieu of interest and partly in payment of mortgage money. There
is redemption when the amount due is personally paid or is discharged by rents or profits
received. He does not have a right to foreclose or sale.
English mortgage: A mortgagor binds himself personally to pay the debt, and there is an
absolute transfer of mortgaged property in favour of mortgagee. Therefore, he does not have a
right of foreclosure but a right to file a suit for sale of the mortgaged property.
Mortgage by deposit of title deeds: As per Section 96, the mortgagee of title deeds is on the
same footing as a simple mortgagee, therefore remedy available is sale of the mortgaged
property.
Anomalous mortgage: The remedy depends on the terms contained in the mortgage deed as
anomalous mortgage is combination of two or more types of mortgages.
Partial foreclosure:
Partial foreclosure is not a remedy under Section 67. The rule is that one of the several
mortgagees cannot foreclose or sell in respect of his share unless several mortgagees have, with
consent of the mortgagor, severed their interests under the mortgage. The reason of this rule
is to protect the mortgagor from being harassed by a multiplicity of suits where the severance
of interest of the mortgagees has taken place without the consent of the mortgagor. Accordingly
all the co-mortgagees must join together and file one suit in respect of the whole mortgage
money.
Subrogation:
Where redemption of mortgaged property is carried out by any person who has interest in the
mortgaged property other than the mortgagee, like subsequent mortgagees, co- mortgagors,
buyer of mortgaged property, surety of mortgaged debt or creditor of mortgagor, such person
enters into the shoes of mortgagee. He gets all the rights that the creditor (mortgagee) had
against the principal debtor (mortgagor) including right to foreclosure, redemption or sale. This
is known as subrogation. However, the entire mortgage should be paid off by the person.

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Dr. Tabassum Choudhary
Dept. of Law
AMU
The person can enforce the security over the original debtor for reimbursement. A person pays
a mortgage to protect his/her own interest in the property or because s/he is secondarily liable
for the debt or for the discharge of the lien. However, if the borrower used the proceeds of the
loan to discharge a prior encumbrance, it is not a sufficient reason to entitle the lender to
subrogation. There should be ample proof that the loan was made for that purpose.
A co- mortgagor in possession, of excess share redeemed by him can enforce his claim against
non-redeeming mortgagor by exercising rights if foreclosure or sale as exercised by mortgagee
under Section 67 of the Transfer of property Act but that does not make him a mortgagee. The
remedy of redemption, foreclosure and sale available to such co-mortgagor are the rights as a
subrogee not as a mortgagee reincarnate but by way of rights akin to those vesting in the
mortgage.
Estoppel of right of foreclosure:
Where mortgagee has accepted the redemption amount and revalued amount and right to
redeem has been enforced, it cannot be interfered with. Mortgagee could not approbate and
reprobate, since mortgagee didn’t challenge execution proceedings during pendency of appeal
in Supreme Court, the right of foreclosure is lost by estoppel.
Sec. 68 Right to Sue for Mortgage – Money
Section 68, Right to sue for mortgage-money: (1) The mortgagee has a right to sue for the
mortgage-money in the following cases and no others, namely:
(a) where the mortgagor binds himself to repay the same;
(b) where, by any cause other than the wrongful act or default of the mortgagor or mortgagee,
the mortgaged property is wholly or partially destroyed or the security is rendered insufficient
within the meaning of section 66, and the mortgagee has given the mortgagor a reasonable
opportunity of providing further security enough to render the whole security sufficient, and
the mortgagor has failed to do so;
(c) where the mortgagee is deprived of the whole or part of his security by or in consequence
of the wrongful act or default of the mortgagor;
(d) where, the mortgagee being entitled to possession of the mortgaged property, the
mortgagor fails to deliver the same to him, or to secure the possession thereof to him without
disturbance by the mortgagor or any person claiming under a title superior to that of the
mortgagor: Provided that, in the case referred to in clause (a), a transferee from the mortgagor
or from his legal representative shall not be liable to be sued for the mortgage-money.
(2) Where a suit is brought under clause (a) or clause (b) of sub-section (1), the Court may, at
its discretion, stay the suit and all proceedings therein, notwithstanding any contract to the
contrary, until the mortgagee has exhausted all his available remedies against the mortgaged
property or what remains of it, unless the mortgagee abandons his security and, if necessary,
re-transfers the mortgaged property.
Transfer of Property act has provided some remedies for mortgagee when mortgage-money is
not repaid to him. This Act has provided mortgagee right to foreclosure or sale. Even mortgagee
has also been granted right to sue for mortgage-money under this Act.

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Dr. Tabassum Choudhary
Dept. of Law
AMU

Mortgagee’s Right to sue for mortgage money

According to Transfer of Property act, mortgagee possesses right to sue for mortgage-money.
Grounds on basis of which Mortgagee has right to sue for mortgage-money
Followings are grounds on basis of which mortgagee has right to sue for mortgagee-money;
(i) Default in Payment
Mortgagee has right to sue for mortgage-money when mortgagor binds himself to repay
mortgage money but defaults.
(ii) Destruction of Mortgaged-property
Mortgagee has right to sue for mortgage-money when mortgaged property is wholly or partially
destroyed. However, such destruction should not be caused wrongful act or default of
mortgagor or mortgagee.
(iii) Insufficient security
Mortgagee has right to sue for mortgage-money when rendered security is insufficient, and
mortgagee has given mortgagor a reasonable opportunity to provide further sufficient security,
but mortgagor has failed to do so.
(iv) Deprivation of Security
Mortgagee has right to sue for mortgage-money when mortgagee is deprived of whole or part
of his security by or in consequence of wrongful act or default of mortgagor.
(v) Non-delivery of Possession
Mortgagee has right to sue for mortgage-money when mortgagee is entitled to possession of
mortgaged-property, but mortgagor fails to deliver the same to mortgagee.
(vi) Securing of Possession
Mortgagee has right to sue for mortgage-money when mortgagee is entitled to secure
possession of mortgaged-property without disturbance by mortgagor or any person, who claims
under a title, which is superior to that of mortgagor.
To conclude, it can be stated that mortgagee does not possess right to sue for mortgage-money
against a transferee from mortgagor or from his legal representative when mortgagor binds
himself to repay mortgage-money.
Sec. 81 Marshalling of Securities and Sec. 82 Contribution to Mortgage – Debt
Section 81, Marshalling, securities: If the owner of two or more properties mortgages them
to one person and then mortgages one or more of the properties to another person, the
subsequent mortgagee is, in the absence of a contract to the contrary, entitled to have the prior
mortgage-debt satisfied out of the property or properties not mortgaged to him, so far as the
same will extend, but not so as to prejudice the rights of the prior mortgagee or of any other
person who has for consideration acquired an interest in any of the properties.

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Dr. Tabassum Choudhary
Dept. of Law
AMU
Section 82, Contribution to mortgage-debt: Where property subject to a mortgage belongs
to two or more persons having distinct and separate rights of ownership therein, the different
shares in or parts of such property owned by such persons are, in the absence of a contract to
the contrary, liable to contribute rateably to the debt secured by the mortgage, and, for the
purpose of determining the rate at which each such share or part shall contribute, the value
thereof shall be deemed to be its value at the date of the mortgage after deduction of the amount
of any other mortgage or charge to which it may have been subject on that date.] Where, of
two properties belonging to the same owner, one is mortgaged to secure one debt and then
both are mortgaged to secure another debt, and the former debt is paid out of the former
property, each property is, in the absence of a contract to the contrary, liable to contribute
rateably to the latter debt after deducting the amount of the former debt from the value of the
property out of which it has been paid. Nothing in this section applies to a property liable under
section 81 to the claim of the [subsequent] mortgagee.
The Rule of Marshalling and Contribution are concepts embodied in the Transfer of Property
Act, 1882. Section 81 and 82 of TOPA deals with the Rule of Marshalling and contribution
respectively. Before the supersession of the rules are discussed, an understanding of the
concepts themselves is imperative.
Rule of Marshalling
Marshalling means “to arrange” and the Rule is first introduced in TOPA under Section 56.
Section 56 may be explained in the following manner:
1. There must be an owner of two or more properties,
2. He must mortgage two or more of his properties to any person,
3. Thereafter, he must sell one or more of these properties to any person other than the
one he mortgages the properties to. The sale must include at least one property that has
been mortgaged by the owner,
4. The buyer of such properties is entitled to have the owner satisfy the mortgage-debt out
of the property or the properties not sold him before he purchases the property. This
can be subject to a contract stating the contrary,
5. The rule of marshalling should not be so exercised so as to prejudice the rights of the
mortgagee, any persons claiming under the mortgagee, or any person who has acquired
an interest with consideration in any of the properties.
In short, the Rule of Marshalling provides the buyer, in the above case, the right to demand
from the owner that the property be free from any and all encumbrances before the buyer
purchases the property.
Section 81 also adopts the Rule of Marshalling but in cases of Mortgages. Section 81 may be
understood in the following manner:
1. There must be an owner of two or more properties. He must mortgage two or more of
these properties to any person,
2. He must then mortgage one or more of these properties to another person,

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Dr. Tabassum Choudhary
Dept. of Law
AMU
3. The subsequent mortgagee is entitled to have the mortgage-debt of the prior mortgagee
satisfied out of the properties not sold to him. This can be subject to a contract stating
the contrary too,
4. Similar to Section 56, the rule of marshalling here too should not be so exercised so as
to prejudice the rights of the mortgagee or any person who has acquired an interest with
consideration in any of the properties.
Marshalling, in this context, may be explained by an illustration. If the mortgagor mortgages
three of his properties X, Y and Z to A and then mortgages X to B, B is entitled to have the
mortgagor satisfy his debt from the sale proceeds of the properties Y and Z and only if the said
sale proceeds fall short, can property X be sold.
In Barness v. Rector, W mortgaged two of his properties A and B to X. W then mortgaged
property A to Y and property B to Z. Here, the court held that X’s mortgages will be
apportioned proportionately between properties A and B and the surplus of A will go to Y and
surplus of B will go to Z.
The doctrine of Marshalling is thus based on the principle that a creditor who has the means of
satisfying his debt out of several funds shall not, by the exercise of his right, prejudice another
creditor whose security comprises only one of those funds.
Rule of Contribution
The Rule of Contribution relates to the collective contribution towards a mortgage debt by
mortgagors. It gives one mortgagor the right to have the other’s property contribute to the
discharge of the mortgage debt. When a creditor has a single claim against several debtors, he
can realize the debt from any one of them, but as per the rule of contribution he can claim
contribution to the debt by the other debtors, so that the burden might fall on all equally. The
rule is encapsulated under Section 82 of TOPA and may be divided as per the following:
Mortgaged Property Belonging to two or more persons
This is based on the following essentials:
1. A mortgaged property must belong to two or more persons based on a common loan,
2. Each mortgagor, in absence to a contrary contract, is liable to contribute as per his share
of the mortgage,
For example, X, Y and Z mortgaged their properties to D mortgaging a common debt. Now if
D can recover the entire debt from the properties mortgaged by X, X is entitled to demand Y
and Z to contribute their portion of the debt out of their mortgaged properties. The Privy
Council has lucidly explained it in Kampta Singh v. Chaturbhuj. The Privy Council held that
if a person owns one property subject, with the property of other persons, to a common
mortgage, and has paid off the mortgage debt, he is entitled to call upon the owners of the other
property to bear their proper proportion of the burden.
When One Property is Mortgaged First and then again mortgaged with another Property
When the mortgagor has two properties and he mortgages one to secure one debt and then
mortgages both to secure another debt, if the former debt is paid out of the former property,

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Dr. Tabassum Choudhary
Dept. of Law
AMU
each property is then liable to contribute to the latter debt after deducting the amount of the
former debt from the value of the property from which it has been paid.
In Bohra Thakur Das v. Collector of Aligarh,the mortgagor mortgaged the village
of Kachaura to one, Nand Kishore. He again mortgaged
villages, Kachaura and Agrana, to Nand Kishore. The Plaintiffs purchased the equity of
redemption from Agrana. The first mortgagees purchased Kachaura by a decree. The plaintiffs
sued and contended that the first mortgagees were liable to pay the proportionate share of the
debt for redemption of the second mortgage. The court held that since the whole
of Kachaura was swallowed up by the first mortgage by the decree, the entire burden of the
second mortgage fell entirely on Agrana. The Privy Council, in appeal, overruled the decision
of the court and held that the first mortgagees would have to contribute to the second mortgage,
as they purchased Kachaura.
However, in Sesha Iyer v. Krishna Iyenger, the situation was quite different. Two properties X
and Y were mortgaged to R and properties X and Z were mortgaged to P. R executed his decree
on the mortgage by sale of X. P then sued to enforce his mortgage. However, X had already
been sold. P sought to sell Z and also demanded contribution against Y. The Court held that if
the plaintiffs had bought part of the mortgaged property subsequently sold under R’s decree,
they might by paying off the debt and saving the property from sale, have acquired a right to
contribution by securing a lien on the other property. However, since the plaintiffs did nothing,
no right to contribution arose.
Supersession of the Rule of Marshalling over the Contribution
The proviso to Section 82 denotes that the rule of Marshalling under section 81 supersedes
Contribution under Section 82. The Hon’ble Madras High Court has even held it to be well
settled that the Right to Contribution is controlled by the Right of Marshalling. This may be
best understood by an example:
There is an owner of two properties X and Y, who mortgages property X to A then to B then
X and Y properties to C and lastly property X to D. Since X and Y both contribute to C’s
mortgage, the value of the said contribution must include a deduction from property X, the
value of A’s mortgage and from property Y, the value of B’s mortgage. However, D being the
last mortgagee still has a right of marshalling and he can ask C to pursue property Y first instead
of property X. Thus, right of D to marshal his securities supersedes his contribution that is to
be made.
The reason why marshalling supersedes contribution is because the last mortgagee is given an
opportunity to make the mortgagor discharge the mortgage debt from other mortgaged
properties first before he realizes the mortgage debt from the properties mortgaged to the
person who holds the right of marshalling. However, if after exercising the right of marshalling,
the amount realized from the other properties is insufficient, the last mortgagee must then
contribute as his is the only mortgage debt left to be realized.
Marshalling is the right of subsequent mortgagees whereas contribution is with respect to
mortgagors. Marshalling is if a creditor has multiple funds to realize his debt, he must first
pursue the multiple funds instead of prejudicing the creditor who is secured only by one
fund. Whereas in contribution all the co-mortgagors who have taken a debt by mortgaging

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Dr. Tabassum Choudhary
Dept. of Law
AMU
their properties have to make contributions towards debt proportionately according to their
respective shares. The Proviso to Section 82 of TOPA gives precedence to the former over the
latter.
Recommended Readings:
1. S.N. Shukla: The Transfer of Property Act
2. R.K. Sinha: The Transfer of Property Act
3. Mulla’s: The Transfer of Property Act
4. B.B. Katiar: Law of Easements & Licences in India
5. G.P. Tripathi: Easement Act, 1882
6. Tagore’s Lecture on the Transfer of Property Act.

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