Right of Redemption under Property Law
Right of Redemption means the right of a mortgagor against the mortgagee to redeem the mortgaged property.
Right of Redemption means the right of a mortgagor against the mortgagee to redeem the mortgaged property. The doctrine of redemption is not new. Its origin can be traced to Anglo-Saxon and Roman law. Securing land for a money payment in English law dates back to Anglo-Saxon England when interest loans were illegal. The borrower conveyed the estate to the lender in consideration of a loan and the lender reconvened the estate to the borrower on redemption. Section 60 and 91 of the Transfer...
Right of Redemption means the right of a mortgagor against the mortgagee to redeem the mortgaged property. The doctrine of redemption is not new. Its origin can be traced to Anglo-Saxon and Roman law. Securing land for a money payment in English law dates back to Anglo-Saxon England when interest loans were illegal.
The borrower conveyed the estate to the lender in consideration of a loan and the lender reconvened the estate to the borrower on redemption. Section 60 and 91 of the Transfer of Property Act 1882 deals with redemption and who may redeem or institute a suit for redemption.
Right of Redemption
In simple words, redemption means the return or repossession of property offered as security upon payment of mortgage debt or a charge. Right of Redemption means the right of a mortgagor against the mortgagee to redeem the mortgaged property.
Rights of a Mortgagor
Under the Transfer of Property Act, at any time after principal money has become due when mortgage money is paid or tendered at a proper time and place, the mortgagor has the following right against the mortgagee:
- Delivery of Mortgage-deed
Mortgagor possesses the right to require the mortgagee to deliver to the mortgagor mortgage deed and all those documents relating to the mortgaged property which are in possession or power of the mortgagee.
- Delivery of Mortgaged-property
Mortgagor possesses the right to require the mortgagee to deliver possession of the mortgaged property to the mortgagor when the mortgagee is in possession of the mortgaged property.
- Re-transfer of Mortgaged-property
Mortgagor possesses the right to require the mortgagee to re-transfer mortgaged property to the mortgagor or to such a third person as the mortgagor directs. However, such a re-transfer is done at the cost of the mortgagor.
- Extinguishment of Mortgagee’s Interest
Mortgagor possesses the right to require the mortgagee to execute and to have registered on acknowledgement in writing that any right in derogation of the mortgagor’s interest, which has been transferred to the mortgagee, has been extinguished. However, such a know judgment should be registered in that cases where the mortgage has been affected by a registered instrument.
Clog on Redemption
Clog on equity of redemption means anything which debars a mortgagor from his exercise to redeem. Where an obligation continues during the term of the mortgage and beyond, which renders the property mortgaged less available in the hands of its owner apart from the realization of the mortgage debt, it is a clog on the equity of redemption.
The clog on the equity of redemption is a restriction on exercising the right to redeem. A mortgagor has under section 60 (which does not mention the words in the absence of a contract to the contrary) a right to redeem the mortgaged property at any time after the mortgage money has become payable.
A mortgage is a transfer of interest in specific immovable property as a security for the payment of a debt or the discharge of some other obligation for which it is given. The security is redeemable on the payment or discharge of such debt or obligation.
Any provisions inserted in the mortgage deed to prevent redemption on payment of the mortgage money in performance of the debtor’s obligation for which the security was given is what is meant by clog or fetter on the equity of redemption and is, therefore, void. The mortgagor cannot even contract at the time of mortgage given up his right of redemption to fetter it in any way. Anything that debars him from exercising his right to redeem is called a clog on the equity of redemption. It follows from this “once a mortgage is always a mortgage.”
View of Lord Macnaghten
Redemption is of the very nature and essence of a mortgage, as mortgages are regarded in equity. It is inherent in the thing itself, and it is, I think, as firmly settled now as it was in former times that equity does not permit any device or contrivance designed or calculated to prevent or impede redemption.
It follows as a necessary consequence that where the money secured by a mortgage of land is paid off, the land itself and the owner of the land in the use and enjoyment of it must be as free and unfettered to all intents and purposes as if the land had never been made the subject of the security.
View of Lord Davey
The principle is that a mortgage must not be converted into something else, and when once you come to the conclusion that a stipulation for the benefit of the mortgagee is part of the mortgage transaction, it is but part of his security and necessarily comes to an end on payment of the loan.
Instances of clogs on the equity of Redemption
- Mortgagor will have no right of redemption
The condition that the mortgagor will not have any right of redemption is a clog as it defeats the equity of redemption.
- Mortgagor shall not alienate property
A stipulation that the mortgagor shall not alienate the property pending the mortgage is incapable of enforcement.
- Redeeming the mortgage by paying money from his own pocket
A mortgages his property to B, and at the time of the mortgage, contracts with B that A shall not alienate the property during the mortgage and will redeem the mortgage by paying the money from his own pocket and not by money raised by sale or mortgage of a property. This is a clog on redemption and is unenforceable.
- Converting a mortgage into a sale on default of payment
A condition converting a mortgage into a sale on default of payment is invalid as a clog on redemption.
Instances not amounting to clog
- Condition of Sale
A condition of sale is clogged if it is part and parcel of the mortgage transaction. After the mortgage, the mortgagee may stipulate for the purchase of property from the mortgagor.
- Long term for redemption
A long-term for redemption is necessarily not a clog, e.g. a provision in the mortgage deed that the mortgage agrees to certain terms as part of the contract of the mortgage, and these terms are fair and advantageous to both the parties and are not inconsistent with or repayment to the contract itself, such a condition would not necessarily be construed as a clog on the right of redemption.
Mayank Shekhar
Mayank is an alumnus of the prestigious Faculty of Law, Delhi University. Under his leadership, Legal Bites has been researching and developing resources through blogging, educational resources, competitions, and seminars.
