Rights and Liabilities of Mortgagor (Section 60-63)

1. Section 60- Right of mortgagor to Redeem

Right to Redemption has evolved out of Equity of Redemption which was prevalent in England
and was introduced by Chancery Courts. It is the right which the mortgagor exercises by virtue
of his residuary ownership to resume what he has parted with. When the money becomes due,
the mortgagor has a right to require the mortgagee to deliver the mortgage deed and all
documents relating to mortgaged property. RoR is a statutory and legal right which cannot be
extinguished by any agreement made at the time of the mortgage. It is a statutory right which
continues even after the money has become due.

Extinguishment of the RoR:

i. By act of parties: When parties themselves stipulate for it under a separate agreement after
execution of the mortgage deed. Such termination is possible only when it is outside the
transaction of mortgage. If such stipulation is included in the mortgage-deed, it is a clog
and therefore void. Such stipulation must be subsequent to the mortgage deed; the RoR
must not form the part of mortgage transaction.
 Pandurang Maruti v Bapurao Piraji: A mortgaged his property to B. B later filed a suit
for foreclosure, i.e. a declaration that in case A was unable to pay the mortgage money,
his RoR may be treated as forfeited. A, filed a counter-suit for redemption of mortgage
and deposited the mortgage- money in court.
The court held that the decree of foreclosure could only be passed if the mortgagor could
not ask for redemption but since A has filed a counter-claim for redemption and had
deposited money in the court, it was necessary for the court to pass a decree for
redemption rather than for disclosure.
ii. By decree of court
In suit of mortgages, two decrees are passed by the court. One is initial decree and the
second is the final decree. Termination by court is by the final decree of the court which
declares that the mortgage is foreclosed which ultimately terminates the mortgagor’s RoR.

Partial Redemption

A person having share in the mortgaged property, has no right to redeem only his own share of
the property. If the mortgagor is allowed to redeem the property in part, the mortgagee’s interest
of getting back the whole amount including interest thereon, would be jeopardized and hence
is disfavored. The reason behind this is that the mortgagee values his security as one and
indivisible.

Exception

• Narendra Narain v Dwarka Lal: If the mortgagee himself acquires the share in the
mortgaged property, the indivisibility of the property is broken and the sharer in the
remaining property is then entitled to redeem his share.

1.1 Section 60-A Obligation to transfer to the third party instead of retransference to the
mortgagor

The object of this section is to enable the mortgagor to pay off the debt of mortgagee by taking
loan from another person on security of the same property. Obligation is imposed on the
mortgagee to transfer the mortgage debt to the third person nominated by the mortgagor. The
reason as to why the mortgagee being or having been in possession is expected, is that a
mortgagee who has taken possession remains accountable in respect of profits, and other
matters even after the transfer.

1.2 Section 60-B Right to inspection and production of documents

This section states that the mortgagor may have to handover the title-deed or other documents
relating to mortgaged property to the mortgagee. During the maintenance of the mortgage, such
documents are to remain with the mortgagee. When the documents are in custody or possession
of the mortgagee, the mortgagor has right to ask the mortgagee to produce the documents for
his inspection.

2. Section 61- Right 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 anyone such mortgage separately, or any
two or more of such mortgages together.

Contrary to contract

A provision has to be explicitly stated that the contract of mortgage may allow the mortgagee
to consolidate. Stipulation for simultaneous redemption is equivalent to contract for
consolidation and mortgages cannot be redeemed separately. However, the above stipulation
cannot be considered as a clog on redemption.
  Ganga Rai v Kitharath Rai: Two mortgagors mortgaged one property and one them
mortgaged the second one and covenanted to pay before redeeming the first mortgage.
This was held not to be a contract of consolidation but to be a provision fixing time for
payment.

3. Section 62- Right for usufructuary mortgagor to recover possession

Clause A

Principal and interest is paid out of the usufructuary property. There is recovery of possession
rather than redemption. ‘When such money is paid’ refers to payment out of the rents and
profits. Mortgagee pays out of the rents and profits and surrenders the possession when the
debt is paid off. Mortgagee cannot remain in possession after the mortgage money has been
satisfied.

• Tirugana v Nallatambi: The suit would be considered as premature if the mortgagor sues
to recover the possession before the debt is discharged out of the usufructuary property.

• Aga Muhammadally v Venkatappayya: Their was a condition that mortgagee should

Clause B

It deals with the part of rents and profits taken part in lieu of interest and part in payment of
mortgage money. A period is fixed for the payment of principle money or the balance including
the interest which is to be paid out of the income of profit. After such payment, the mortgagor
can recover the possession of the mortgaged property. When no period is fixed and the
stipulation is for the payment of debt out of the rents and profits, the mortgagor is entitled to
redeem and recover the possession when the principal money is discharged.

• Mohan Lal v Mohan Lal: The mortgaged money was offered by the mortgagor to the
mortgagee several times and after his demise by his son but he refused. The son brought an
action to enforce the RoR. But more than 30 years had passed from the date when the RoR
accrued. Therefore, the Rajasthan High Court held the suit barred by limitation as according
to Article 61(a) of the Limitation Act, 1963.
 • Singh Ram v Sheo Ram: The Supreme Court held that mere expiry of the period of 30
years from the date of mortgage does not extinguish RoR under section 62.

4. Section 63- accession to mortgaged property

Accession

i. Natural
ii. Acquired
 Separable
 Inseparable

Accession to property- Any kind of addition to the property which increases its value so that
the property becomes more advantageous. Accessions acquired at the expense of the
mortgagee, the mortgagor must pay the expense of acquiring it.

 Natural Accession: Accession to the property not made by the parties to mortgage.
Accretions arising by the course of nature. Under section 70, such accessions are
regarded as additions to the security. Mortgagor is entitled to redeem these accessions
with the mortgaged property. Mortgagee has no right to retain such accessions.

• Sadashiv Anant v Vithal: Where the area of a mortgaged property without mentioning
its boundary lines was increased at a survey settlement, it was held that such increase
was natural accession.

 Acquired accession

Separable: Separable from the mortgaged property. Mortgagor is not entitled to take
them together with the mortgaged property. Mortgagor must pay the mortgagee the cost
of such acquisitions if he insists on taking them.

• Bakshiram v Darku: Government trees standing on the mortgaged land and purchased
at a favorable rate by the mortgagee were held to be accretions to which the mortgagor
was entitled to pay to the mortgagee the expense accrued by him, at the time of
redemption.

• Ram Lagan v Mary Coffin: If the mortgagor does not at the time of redemption tender
to the mortgagee the cost incurred by the mortgagee in making the acquisition, he may
be held to have abandoned his right.
 Inseparable: Mortgagor has no option but to take these accessions on redemption. He is
liable to pay the cost only:

i. If the acquisition was necessary to preserve the property from destruction, forfeiture or
sale;
ii. If it was made with his consent.
 Katlu v Ganesh: Mortgagee rebuilt a house that was in a dilapidated condition when
mortgaged. The Allahabad HC held that as the house had already fallen down, there was
no question of preserving it from destruction and that the mortgagor was not liable for
the cost of rebuilding.

4.1 Section 63A. Improvements to mortgaged property

In absence of contract to contrary, if the mortgaged property has improved during the mortgage,
the mortgagor shall be entitled to such improvements without paying its costs. While making
such improvements, when the mortgaged property is destroyed, the mortgagee who had
advanced loan on security of that property is also destroyed because he cannot get back his
money from out of that property.

 The mortgagor is liable to pay for the cost of improvements only if they are:
i. Necessary to preserve the property from destruction;
ii. Necessary to prevent the security from becoming inadequate; or
iii. Done under the orders of a public authority such as municipality.

• Examples not covered under this act:

i. Kutcha building demolished and a pucca building was erected in its place

ii. In case of accidental fire, a whole new house re-build at its place

iii. Improvement to agricultural land so as to improve its yield

iv. Construction of well on the mortgaged land

 Ramappa v Yelalappa: The court held that where the cost incurred in making
improvements is five times the cost of the mortgaged money, the mortgagee’s claim for
the value of the improvement cannot be allowed.