Introduction 

• The right of redemption is the right of the mortgagor to redeem back his mortgaged property once he paid the principal amount back to the mortgagee. 
• This is a clog on the doctrine “once a mortgage always a mortgage.” 

What is Mortgage? 

• Section 58 defines mortgage as the transfer of an interest in specific immoveable 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. 

What are the Types of Mortgages? 

Who is a Mortgagor and Mortgagee? 

• As per Section 58 of TPA, the transferor is called a mortgagor, the transferee a mortgagee. 
• The one who takes the mortgage money and transfers his property as the security against such mortgage money is the mortgagor. 
• The one who takes the mortgaged property and gives the mortgage money against the mortgaged property is the mortgagee. 

What is Mortgage Money and Mortgage Deed? 

• The principal money and interest of which payment is secured for the time being are called mortgage money. 
• The instrument by which the transfer is effected is called a mortgage -deed. 

What are the Rights of Mortgagor? 

• The TPA offers privileges to a mortgagor in a mortgage-deed under Section 60 - 66, which are as follows: 
  • Right of mortgagor to redeem (Section 60) 
  • Right to transfer to the third party (Section 60A) 
  • Right to inspection and production of documents (Section 60B) 
  • Right to redeem separately or simultaneously (Section 61) 
  • Right of usufructuary mortgagor to recover possession (Section 62) 
  • Accession to mortgaged property (Section 63) 
  • Improvements to mortgaged property (Section 63A) 
  • Renewal of Mortgaged Lease (Section 64) 
  • Implied Contracts by Mortgagor (Section 65) 
  • Mortgagor's power to lease (Section 65A) 
  • Waste by mortgagor in possession (Section 66) 

What are the Liabilities of Mortgagor? 

• If the title of the mortgaged property is flawed or defective, the mortgagee has the legal right to initiate legal action against the mortgagor. 
• If the property title held by the mortgagor is flawed or defective, the mortgagor is responsible for compensating the mortgage for any damages incurred. 
• The mortgagor has the liability to avoid wasting property or destroying or injuring the property, reducing its value and making it insufficient for security. (Section 66). 
• The mortgagor has the liability to make payments to the mortgagee for the improvements made to mortgaged property (Section 63A).

What is the Right of Redemption?

About: 

• It is the right of the mortgagor to redeem his mortgaged property back from the mortgagee. 
• This right can be exercised only after fulfilling the requisite conditions mentioned in the mortgage deed or by paying back the mortgaged money. 
• This right can be exercised within the time period agreed between the mortgagor and mortgagee any by filing a suit for redemption. 
• The right of redemption can be exercised only by filing the suit for redemption 

Equity of Redemption: 

• This gives the right to the mortgagor to redeem his mortgaged property after paying the mortgage money. 
• This also gives the right to the mortgagor to redeem even after not paying the mortgaged money on time. 
• This principle protects the right of redemption of the mortgagor. 
• This principle allows redemption even if the restrictions are levied on redemption in the redemption deed. 

Clog on Redemption: 

• Clog means restriction. 
• Any restriction on the right to redemption is invalid and is void ab initio. 
• This is practice against the mortgagor by inserting any restrictive terms against his rights in the mortgage deed. 
• The clog on redemption can only be applied after passing of the decree of the court and not otherwise. 
• The clog on redemption can only come into operation when the right of redemption of the mortgagor completely extinguish. 

Partial Redemption: 

• This means redeeming the property in parts or in multiple transfers. 
• This is void ab initio and the right of redemption cannot be exercised in multiple transfers for the same mortgage.  

What is the Provision Related to the Right of Redemption? 

• Section 60 of the TPA states that 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. 

(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 mortgager. 

What are Landmark Judgements Related to “Right to Redemption”?

• Ganga Dhar v. Shankar Lal (1958): In this case a condition in the agreement between parties regarding redemption of mortgaged property was in question, which was plainly taking away altogether, the mortgagor’s right to redeem the mortgage after a specified period.  
  • The Court held that the term that on the failure of the mortgagor to redeem within the specified period of six months, he would lose his right to do so and the mortgage deed was to be deemed to be a deed of sale in favor of the mortgagee, was clearly a clog on the equity of redemption and as such invalid. 
• Sampuran Singh v. Niranjan Kaur (Smt.) (1999): In this case the Supreme Court held that when there is no restriction in the mortgage deed, mortgagors have a right to redeem the mortgage from the very date when the mortgage was executed. 
• Bandhrau Ram (died) through his LR’s Vs Sukh Ram (2000): The period of limitation for filing a suit for recovery of immovable property or redemption of usufructuary mortgages which have not fixed any time for repayment of mortgage money is 30 years as prescribed under Article 61 to the Schedule to the Limitation Act, 1963. 

Conclusion 

The right of redemption is an inherent right provided in the mortgage. It forms a fundamental part of the mortgage deed. This right can only be exercised if the mortgagor has completed all his duties and requisite conditions of the mortgage deed.