"A mortgage isn't just a debt, it's an investment in the future you build, one payment at a
time."
Good morning…..
Mortgage is defined by Section 58 (a) of the Transfer of Property Act, 1882
(TPA)as a 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 (monetary) 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 affected is called a mortgage-deed.
The Transfer of Property Act does not leave the mortgagor uncovered, that means every
mortgage-deed leaves a right to the mortgagor and a corresponding liability for the
mortgagee and vice versa. The Transfer of Property Act does not leave the mortgagor
uncovered, that means every mortgage-deed leaves a right to the mortgagor and a
corresponding liability for the mortgagee and vice versa. The rights of mortgagor are as
follows:
1. Right to redemption 2. Obligation to transfer to the third party rather than
re-transferring it to the mortgagor 3. Right to inspection and production of documents. 4.
Right to redeem separately or simultaneously. 5. Right to accession 6. Right to Renewed
Lease 7. Right to grant a lease 8. Improvement
1. Right to redemption The word redemption means to get back the mortgaged property
by paying mortgage Debt. It is the right to recover something by making certain
payments. So, in terms of the mortgage, it is the right of the mortgagor to recover or get
back the property after he made the payment of the loan. Ramkrishna Lal versus
Manohar Lal Gupta, The right to redeem arises only after the principal money has
become due. It continues till the time the mortgagee sues for enforcement of the
mortgage. it cannot be taken away or defeated by an agreement to the contrary even if
the mortgagor had expressly agreed to abide by it.
In the case of Noakes & Co. vs. Rice (1902), the maxim of In the case of
Once a mortgage always a mortgage was discussed.
This maxim means that once a transaction is a mortgage, it remains a
mortgage, regardless of changes. The right of redemption must not be
compromised. Any agreement preventing the mortgagor from exercising this
right after the due date would be void, protecting the mortgagor's interest.
Clog on Redemption
It is a condition or stipulation which prevents the mortgagor from redeeming
his right to redeem the mortgage-property on payment of mortgage-money.
Even the mortgagor cannot stipulate against his own right of redemption. In
India, a clog on mortgagor's right of redemption is void under section 60.
in the case of Stanley v. Wilde, (1899) 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 rather than re-transferring it
to the mortgagor 60A When entitled to redemption, a mortgagor can
require the mortgagee to transfer the mortgage debt and property to a third
party, instead of re-transferring it to the mortgagor. This right also extends to
encumbrancers. However, if there are multiple encumbrancers, the priority of
their claims determines the transfer. These provisions do not apply if the
mortgagee is or has been in possession of the property.
the right to inspection and production of documents 60B:, added by
the 1929 amendment, allows the mortgagor to request the title deeds and
other documents from the mortgagee for inspection, at the mortgagor's cost,
while the mortgage is in effect.
The right to redeem separately or simultaneously 61 allows a
mortgagor, who has created multiple mortgages with the same or different
mortgagees, to redeem either one mortgage or all at once, unless a contract
states otherwise.
Right to Accession 63
The right to accession refers to the entitlement of a mortgagor to any
increase in the value of the mortgaged property that occurs while the
mortgagee holds possession. Accession includes any addition that enhances
the property. In absence of any contract to con
Types of Accession:
1. Natural Accession:
○ Occurs through natural processes, not initiated by the parties
involved.
○ The mortgagor can redeem these accessions upon settling the
mortgage, and the mortgagee has no claim over them.
2. Acquired Accession:
○ Additions made by the mortgagee during the mortgage period.
○ Separable Acquired Accessions: Can be detached from the
property. If the mortgagor wants these, they must reimburse the
mortgagee for their cost.
○ Inseparable Acquired Accessions: Permanently attached to
the property. The mortgagor receives these upon redemption but
must pay the mortgagee for the incurred expenses related to
them.
Right to Renewed Lease 64
When a mortgaged property is leasehold, if the mortgagee renews the lease
during the mortgage period, the mortgagor is entitled to the benefits of the
new lease upon redemption, unless otherwise specified in a contract.
Right to Grant a Lease 65A
Following the 1929 amendment, mortgagors can lease mortgaged property
they possess, subject to certain conditions:
● Leases must be in the ordinary course of property management and
comply with local laws.
● No rent or premium can be paid or promised in advance.
● The lease cannot include a renewal provision.
● The lease must take effect within six months of execution.
● For buildings, the lease duration cannot exceed three years.
If any conditions are not met, the mortgagee is not bound by the lease.
Parties can also agree to restrict the mortgagor's leasing rights in the
mortgage deed.
Conclusion
The rights of mortgagors under the Transfer of Property Act (TPA) play a vital
role in balancing interests between mortgagors and mortgagees. These rights
enable mortgagors to enhance their property’s value and benefit from it
during and after the mortgage period. The amendment allowing mortgagors
to lease their properties—with specified conditions—reduces previous
uncertainties and reflects a modern approach to property rights.
Ultimately, understanding these rights is crucial for mortgagors to navigate
their obligations effectively, fostering equitable relationships in property
transactions. Ongoing awareness of mortgagor rights is essential in an
evolving real estate landscape.
