Subrogation

Section 92 in The Transfer of Property Act, 1882

92. Subrogation—
• Any of the persons other than the mortgagor
referred to in section 91and any co-mortgagor,
• on redeeming the mortgage property,
• shall have the same right as the mortgagee whose
mortgage he redeems may have against the
mortgagor or any other mortgagee,
• the rights are regarding redemption, foreclosure or
sale of such mortgaged property
• this right is known as the right of subrogation and
a person acquiring the same is said to be
subrogated to the rights of the mortgagee whose
mortgage he redeems.
Subrogation is a Roman word which means
substitution.
• Right of Subrogation is a very old equitable
doctrine. It has been recognized in all legal
system.
• In TPA subrogation was included in S. 92 by
the, but amending Act of 1929.
• Before that no statutory provisions were there in
Indian Law on subrogation, but the equitable
doctrine of subrogation was existed and its
principles were applied.
• Where mortgagor redeems, subrogation not
applicable.
• A right of subrogation typically arises by
operation of law.
 Kinds of Subrogation
• It is of two kinds- Legal and Conventional
• Legal subrogation takes place by operation of law
• Conventional subrogation takes place where the
person paying off the debt has no interest in
mortgage but he advances the money under an
agreement of subrogation
Legal subrogation
• It takes place by the operation of law and is
based on the principle of re-imbursement.
• It can be claimed by the following persons-
o Puisne (subsequent) mortgagee
o Co-mortgagor
o Surety
o Purchaser of Equity of redemption
Puisne mortgagee – who redeems a prior mortgage,
has a right to be subrogated to the position of the prior
mortgagee
Illustration
(i) A mortgages property ‘P’ to B in 2015
(ii) A mortgages property ‘P’ to C in 2016
(iii) A mortgages property ‘P’ to D in 2017
Here the last mortgagee D can redeem the mortgage (i)
executed in 2015 by making payment to B. When D
discharges the debt due to B he (D – the subsequent
mortgagee) is entitled to be substituted in place of B
for all purposes of redemption, foreclosure or sale.
Co-mortgagor: He is also a co-debtor. He is liable to
the extent of his share of debt only. When besides
redeeming his own share, he pays off the share of the
other mortgagor also, he becomes entitled to be
subrogated in place of such other mortgagor.
Surety- When the surety of the mortgagor redeems
the property he is subrogated to the position and
rights of the creditor.
Purchaser of Equity of Redemption- Based on the
doctrine of intention, the purchaser of equity of
redemption subrogated the mortgagee to keep the
mortgage alive.
Equity of redemption is a property of the mortgagor
which he can sell or assign.
Conventional Subrogation
Conventional subrogation takes place where the person
paying off the debt has no interest in mortgage but he
advances the money under an agreement of
subrogation.
The right of subrogation can be claimed only if the
mortgagor has agreed by registered instrument that he
shall be so subrogated.
Redemption in full- It is necessary that mortgage must
be redeemed in full to attract the provisions of
subrogation under section 92 of TPA.