PROPERTY LAW final

RIGHTS OF SUBSEQUENT MORTGAGORS BY: OYSHEE GUPTA ROLL NUMBER: 950 STREAM: B.A.LL.B.(Hons.) SUBMITTED TO: DR. PKVS. RAMA RAO FINAL DRAFT SUBMITTED IN FULFILLMENT OF PROJECT FOR THE SUBJECT PROPERTY LAW OCTOBER 2014 CHANAKYA NATIONAL LAW UNIVERSITY NYAYA NAGAR, MITHAPUR, PATNA, BIHAR 800001 ACKNOWLEDGEMENT In the second semester of B.A.LL.B. Course at Chanakya National Law University, we have got the good fortune to learn about ‘The Transfer of Property Act, 1882’. The success and completion of this project is an amalgamation of various valuable inputs provided by many people. I am fortunate that I have got this support all along till the completion of the project. Firstly, the guidance of Dr. PKVS. Rama Rao has enabled me to understand the intricacies of the Transfer of Property Act, 1882. Thus, my chief debt is to him. He has given a proper direction to my study and that is the very reason why I have been able to complete this project. It would be highly ungrateful if I do not thank the highly acclaimed other Faculty Members of CNLU, for their help. I am indebted to the librarians of CNLU, by whom I have got perpetual assistance. I cannot deny their support. I would take this opportunity to thank my mother, for her valuable inputs related to the provisions of Mortgage and my friends who did put up with me while I worked on this project and came with their suggestions. I remain, of course, entirely responsible for any errors. Thanking you, Oyshee Gupta  Table of Contents TABLE OF CASES 4 INTRODUCTION 5 The Uses of Mortgages 5 Short History of Mortgage Law 6 RIGHTS OF SUBSEQUENT MORTGAGORS: INTERNATIONAL PROVISIONS 9 Statutory Rights in a Power of Sale Scenario 10 Technical Attacks in a Power of Sale Scenario 11 Injunction 12 Partial Payments 12 Costs 12 RIGHTS OF MORTGAGORS : THE TRANSFER OF PROPERTY ACT,1882 14 RIGHT OF REDEMPTION:JUDICIAL INTERPRETATION 20 CONCLUSION 25 BIBLIOGRAPHY 27  TABLE OF CASES Achaldas Durgaji Oswal v Gangabisan Heda (2003) 3 SCC 614 (2003) 3 SCC 614 K.Vilasini and Ors v Edwin Periera CIVIL APPEAL NO. 5476 OF 2008 CIVIL APPEAL NO. 5476 OF 2008, Hasthimal and Sons v. Tej Raj Sharama 2007 AIR SCW 6135 2007 AIR SCW 6135 Lewis v. Frank Love, Ltd, 1961 All. E.R. 446, 1961 All. E.R. 446 Harbans v. Om Prakash AIR 2006 SC 686 AIR 2006 SC 686 Pomal Kanji Govindji v Vrajlal Karsandas Purohit AIR 1989 SC 436 AIR 1989 SC 436 Shivdev Singh v Sucha Singh AIR 2000 SC 1935 AIR 2000 SC 1935 Parichhan Mistry v Acchiabar Mistry AIR 1997 SC 456 AIR 1997 SC 456 Madhagonda Ramgonda Patil v Shripal Balwant Rainade AIR 1988 SC 1200 AIR 1988 SC 1200 Jayasingh Dnyanu Mhoprekar v Krishna Babaji Patil AIR 1985 SC 1646 AIR 1985 SC 1646, Chhaganlal Keshavlal Mehta v Patel Narandas Haribhai AIR 1982 SC 121 AIR 1982 SC 121 C.V. Raghavachar v Lakshminarasamma AIR 1981 SC 160 AIR 1981 SC 160 Gulab Chand Sharma v Saraswati Devi AIR 1977 SC 242 AIR 1977 SC 242  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 Mortgages 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) 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. Short History of Mortgage Law http://www.inbrief.co.uk/property-law/rights-of-the-mortgagor.htm (last accessed on 22:15 hrs, IST, on 4th October, 2014) The mortgage has ancient roots, but the form we know evolved from the English land law in the Middle Ages. Law helps to understand modern mortgage law. In the fourteenth century, the mortgage was a deed that actually transferred title to the mortgagee. If desired, the mortgagee could move into the house, occupy the property, or rent it out. But because the mortgage obligated him to apply to the mortgage debt whatever rents he collected, he seldom ousted the mortgagor. Moreover, the mortgage set a specific date (the “law day”) on which the debt was to be repaid. If the mortgagor did so, the mortgage became void and the mortgagor was entitled to recover the property. If the mortgagor failed to pay the debt, the property automatically vested in the mortgagee. No further proceedings were necessary. This law was severe. A day’s delay in paying the debt, for any reason, forfeited the land, and the courts strictly enforced the mortgage. The only possible relief was a petition to the king, who over time referred these and other kinds of petitions to the courts of equity. At first fitfully, and then as a matter of course (by the seventeenth century), the equity courts would order the mortgagee to return the land when the mortgagor stood ready to pay the debt plus interest. Thus a new right developed: the equitable right of redemption, known for short as the equity of redemption. In time, the courts held that this equity of redemption was a form of property right; it could be sold and inherited. This was a powerful right: no matter how many years later, the mortgagor could always recover his land by proffering a sum of money. Understandably, mortgagees did not warm to this interpretation of the law, because their property rights were rendered insecure. They tried to defeat the equity of redemption by having mortgagors waive and surrender it to the mortgagees, but the courts voided waiver clauses as a violation of public policy. Hence a mortgage, once a transfer of title, became a security for debt. A mortgage as such can never be converted into a deed of title. The law did not rest there. Mortgagees won a measure of relief in the development of the foreclosure. On default, the mortgagee would seek a court order giving the mortgagor a fixed time—perhaps six months or a year—within which to pay off the debt; under the court decree, failure meant that the mortgagor was forever foreclosed from asserting his right of redemption. This strict foreclosure gave the mortgagee outright title at the end of the time period. In the United States 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 22:18 hrs IST, on 4th October,2014) today, most jurisdictions follow a somewhat different approach: the mortgagee forecloses by forcing a public sale at auction. Proceeds up to the amount of the debt are the mortgagee’s to keep; surplus is paid over to the mortgagor. Foreclosure by sale is the usual procedure in the United States. At bottom, its theory is that a mortgage is a lien on land. 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 mortgagee http://www.blaney.com/articles/subsequent-mortgagees-rights-curing-default-and-importance-breached-covenants (last accessed on 22:35hrs IST on 4th October,2014): Deed and possession Transfer of property Redemption Documents and inspection Profits from property OBJECTIVE The objectives for undertaking the research are To explore the provisions related to Rights of Mortgagor and find out the various limitations and effects arising out of exercising this option. To study cases and landmark judgments that bring out the essence of this option. SCOPE The end product of the project will be: A thorough study of rights of mortgagor. To study the historical development of these rights. To bring out the utility of this option. 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. RESEARCH METHODOLOGY The researcher has used doctrinal method of research. The researcher has confined his study to various books related to Mohammedan law. Sources of data:- a. Primary source- The Transfer of Property Act, 1882 b. Secondary source- Reference books such as by Dr. R.K.Sinha, Dr. P.P. Saxena etc., and legal data resources such as Manupatra, SCC Online, Westlaw etc. RIGHTS OF SUBSEQUENT MORTGAGORS: INTERNATIONAL PROVISIONS On default of payment by the mortgagor, the mortgagee develops the right over the mortgaged property and can lend out the property for mortgage, becoming the subsequent mortgagor. The rights of the subsequent mortgagor are same as that of the first mortgagor. In this paper, we shall explore the rights of subsequent mortgagors in Canada and compare it with that under the Transfer of Property Act, 1882 in India. Although a mortgage is a legal document, equity has always played a large role in mortgage transactions. The fundamental term that equity has incorporated into a mortgage is the right of the borrower/mortgagor to "redeem" the mortgage – in other words, to pay off the mortgage debt in exchange for the return of the security after enforcement proceedings have been commenced and there has been a legal or technical forfeiture under the mortgage. In addition, there are certain statutory and other rights that the borrower/mortgagor may exercise in the event of legal or technical default. Article by James Hilton and Evelyne Kostanska, available at http://www.mondaq.com/canada/x/68856/Rights+of+Mortgagor+And+Subsequent+Encumbrancers+In+Mortgage+Enforcement+Proceedings (accessed at 22:45 hrs, IST on 4th October,2014) Since most lender/mortgagees generally prefer to exercise their power of sale remedy (as opposed to foreclosure or judicial sale), the focus of this article is on the steps that the borrower/mortgagor and subsequent encumbrancers may take to protect or enhance their positions in a power of sale scenario. The term "mortgagor" is defined in Section 1 of the Mortgages Act (Ontario) as including "any person deriving title under the original mortgagor or entitled to redeem a mortgage, according to its estate, interest or right in the mortgaged property". Thus, a "mortgagor" includes the original borrower/mortgagor, a purchaser of the mortgaged property, a second or subsequent mortgagee and any other person to whom the notice of sale has or should have been addressed (as those persons are subsequent in interest to the mortgagee). Therefore, the comments that follow regarding the statutory rights of the borrower/mortgagor are also rights in favour of the other parties receiving the notice of sale, such as a second or subsequent mortgagee. Statutory Rights in a Power of Sale Scenario 1. Section 42 Mortgages Act (Ontario),1990. The mortgagor should first consider whether the mortgagee issued a notice or demand to pay, and if so, whether such demand had expired at the time the notice of sale was issued. If the time stated in the demand had not expired, Section 42 of the Mortgages Act (Ontario) permits the mortgagor to apply for a declaration that the notice of sale, being a "further proceeding," is a nullity. 2. Section 22(1) Mortgages Act (Ontario),1990. If, as in most cases is appropriate, the mortgagee under a notice of sale accelerates all of the monies secured by the mortgage, both principal and interest, Section 22(1) of the Mortgages Act (Ontario) will "negate" the "acceleration clause" and the mortgagor may pay the amount due under the mortgage (exclusive of the accelerated sum) and any expenses incurred by the lender to put the mortgage back into good standing, and the enforcement proceedings will be considered to be at an end. 3. Section 23(1) Mortgages Act (Ontario),1990. If an action has been commenced to enforce the mortgage, Section 23(1) of the Mortgages Act (Ontario) is applicable. Upon payment of C$100 into court as security for the costs associated with the action, the mortgagor may apply to the court for relief conditional upon payment of the money due under the mortgage, exclusive of the amount payable pursuant to the acceleration clause. If judgment has not been recovered, the action will be dismissed. If judgment has been recovered, the proceedings in the action will be stayed provided that "no sale or recovery of possession of the land or final foreclosure of the equity of redemption has taken place." 4. Section 22(2) Mortgages Act (Ontario),1990. To enable the mortgagor to pay the arrears under the mortgage in accordance with Sections 22(1) or 23(1), the mortgagor may need further information, such as the unaccelerated amount due under the mortgage. Section 22(2) of the Mortgages Act (Ontario) permits the mortgagor to require the lender to provide the mortgagor with a written statement specifying the amount of principal or interest with respect to which the mortgagor is in default and the amount of the expenses necessarily incurred by the lender. The section also requires the lender to respond to such a request within 15 days of its receipt. If the lender fails to respond without a reasonable excuse or, if the response is incomplete or incorrect, any rights that the lender may have to enforce the mortgage shall be suspended until the mortgagor has complied with Section 22(2). 5. Section 2 Mortgages Act (Ontario),1990. Where a mortgagor is entitled to redeem, the mortgagor may require the lender, instead of giving a discharge of mortgage, to assign the mortgage debt and convey the mortgaged property to a third person. Section 2(2) of the Mortgages Act (Ontario) states that the right of the mortgagor to require an assignment belongs to and is capable of being enforced by each encumbrancer or by the mortgagor, notwithstanding any intermediate encumbrance. A requisition of an encumbrancer prevails over that of the mortgagor and, as between encumbrancers, a requisition of a prior encumbrancer prevails. Section 2 does not apply if the lender is or has been in possession of the mortgaged property. In certain circumstances – and provided that the first lender has not taken possession of the mortgaged property – a third lender may require the first lender to assign the first mortgage to the third lender, as a means of preventing the first lender from exercising its power of sale while, at the same time, preventing the second lender from gaining an improved priority position. Technical Attacks in a Power of Sale Scenario In addition to statutory rights, the mortgagor may raise several technical grounds to invalidate a notice of sale. The courts will be receptive to technical arguments, perhaps at the penalty of costs, particularly if there is compelling evidence that the parties receiving the notice of sale could have been confused or misled by the technical defect. Accordingly, a mortgagor that has received a notice of sale should review it carefully to determine whether or not the notice has been properly prepared and executed. The mortgagor should raise any technical objections as soon as possible. www.gowlings.com/KnowledgeCentre/article.asp?pubID=3036 ( last accessed at 23:05hrs, IST on 4th October,2014) If there is any delay in raising such objections, there is greater risk that the lender will complete the sale of the mortgaged property under power of sale proceedings. In such event, provided that the notice was given in "professed compliance" Mortgages Act (Ontario),1990 with the Mortgages Act (Ontario), the purchaser will obtain good title to the mortgaged property from the lender, leaving the mortgagor with a remedy solely against the lender exercising the power of sale. Injunction Generally, lender acting in good faith and without fraud will not be restrained from a proper exercise of the power of sale remedy unless the mortgagor pays the lender the principal monies and interest due under the mortgage and the lender's costs. An application by a mortgagor for the postponement of a sale on a mortgagor's vague and indefinite hope of finding new financial backing would be an unwarranted interference with the contractual rights of the lender, even if the mortgaged property is ample security for the loan. Where the mortgagor raises a triable issue, the court will grant an injunction restraining the lender from selling the mortgaged property on the condition that the mortgagor keep the mortgage in good standing until trial or other final disposition of the action. https://www.canlii.org/en/on/laws/stat/rso-1990-c-m39/latest/rso-1990-c-m39.html ( last accessed at 23:15hrs, IST on 4th October,2014) The director of titles may approve a caution under Section 71 Land Titles Act (Ontario) of the Land Titles Act (Ontario) if a claim is made by the registered owner that the power of sale proceedings are improper because the owner had redeemed the charge prior to the sale of the mortgaged property. However, the registration of a certificate of pending litigation by the mortgagor has been held to be an abuse of process where the mortgagor raised no substantial ground for the invalidity of the power of sale proceedings. Partial Payments If the lender accepts merely a partial payment of the outstanding arrears, the lender is not precluded from relying on the notice of sale so long as the partial payment does not put the mortgage into good standing. A lender can best protect itself when receiving a partial payment by ensuring that the mortgagor is made aware at the time the payment is accepted that notwithstanding the acceptance of the partial payment, strict compliance with the notice of sale is still insisted upon. The lender should also confirm that neither agreement nor any accommodation has been made with the mortgagor. Costs Form 1 of the Mortgages Act (Ontario) requires a lender to set out its costs being claimed in the power of sale proceedings. The costs recoverable by a lender are those on a substantial indemnity (i.e., solicitor and client) basis if the mortgage so provides, provided that the costs are not unreasonable. If there is a dispute as to costs payable by the person who is tendering the monies due, such costs may be taxed by an assessment officer. Further, the costs of the exercise of the power of sale, and the costs incidental to the exercise of the power of sale, may be taxed by a taxing officer of the Superior Court or a local master having jurisdiction at the instance of any interested person. The costs are at the discretion of the taxing officer. 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- On condition that on default of payment of the mortgage-money on a certain date the sale shall become absolute, or; On condition that on such payment being made the sale shall become void, or; 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 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:  Right of mortgagor to redeem: Section 60 The Transfer of Property Act,1882, 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 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; where the mortgagee is in possession of 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 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 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 Redemption http://www.helplinelaw.com/real-estate-wills-probate-and-trust/MGDD/mortgage.html (last accessed at 10.14 hrs, IST on 5th October,2014). 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 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 Obligation to transfer to third party instead of re-transference to mortgagor Section 60 A The Transfer of Property Act, 1882, 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. 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. 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. 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. 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 contract to the contrary, be entitled as against the mortgagee to such accession. 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. 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) 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. 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. 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. 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. 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 Heda (2003) 3 SCC 614 (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 Periera CIVIL APPEAL NO. 5476 OF 2008 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 Sharama 2007 AIR SCW 6135 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, 1961 All. E.R. 446, 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 Prakash AIR 2006 SC 686 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 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 Purohit AIR 1989 SC 436 AIR 1989 SC 436. Further it was held by the Supreme Court in Shivdev Singh v Sucha Singh AIR 2000 SC 1935 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 Mistry AIR 1997 SC 456 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 Rainade AIR 1988 SC 1200 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 Patil AIR 1985 SC 1646 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 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 Haribhai AIR 1982 SC 121 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 Lakshminarasamma AIR 1981 SC 160 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 Devi AIR 1977 SC 242 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. 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 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 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. 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+Encumbrancers+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. 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