The Provisions of Transfer of Property Act, 1882 relating to

mortgage

Introductory Remarks:
The Transfer of Property Act 1882 brought within its purview five modes of
transfer. Mortgage is one of them through which a partial transfer takes place.
The Essential nature of mortgage is that , it is the transfer of an interest in
specific immovable property as a security for the repayment of a debt. [1]
Mortgage is similar to lease in terms of partial transfer. Because, in both cases
there is no transfer of absolute interest. In mortgage, an interest is transferred
to secure the payment of loan. On the other hand, in lease an interest is
transferred on the payment of rent.[2]
Here amid these modes of transfer, only mortgage will be taken into discussion. The Transfer of
Property Act 1882 deals with mortgage in a very extensive mode (sections: 58-98). I will try my best
to shed light on all of them.

Definition of Mortgage:
[Section 58 of Transfer of Property Act 1882]
Mortgage is the second mode of transfer of immovable property. The most
important kind of security is mortgage.
The word ”mortgage” is a French Law term meaning ”death contract”,
meaning that the pledge(mortgage) ends (dies) when either the obligation is
fulfilled or the property is taken through foreclosure.[3]
A Mortgage is the transfer of an interest in specific immovable property for
the purpose of securing-
(1) payment of money advanced or to be advanced by way of loan
(2) payment of an existing or future debt, or
(3) the performance of an engagement which may give rise to pecuniary
liability.[4]
According to Black’s Law Dictionary :
“A conveyance of title to property that is given as security for the payment of
a debt or the performance of a duty and that will become void upon payment
or performance according to the stipulated terms.”
In short, mortgage is the transfer of an interest in specific immovable property
as a security for the repayment of a debt.

Going through the definition of mortgage, we find three essentials of a

mortgage as shown in the diagram below-

Competency of Parties:
 Since a mortgagor is incurred some obligations and liabilities in redeeming
the mortgaged property, he must be competent to contract.
On the other hand, the mortgagee should not be competent to contract. Only
capability to hold the property is sufficient.
A minor, a person of unsound man and a person disqualified by any law are
not competent to a contract.
[5]
So, a minor or a man of unsound mind or a person disqualified by any law
cannot be a mortgagor.

Nature of Mortgagee’s Right:

The right of mortgagee is only an accessory right which is intended merely to
secure the due payment of the debt. The ownership will remain with the
mortgagor.
Thus where a joint family property is mortgaged, there is no transfer of
ownership and the ownership will remain with the coparceners. The
coparceners are competent to allot the mortgaged property in oral partition
to any of the coparceners. The coparcener to whom the mortgaged property is
allotted becomes its absolute owner and is entitled to redeem the mortgage.
[6]

Classification of Mortgage:
[Section 58 of Transfer of Property Act 1882]
Section 58 classifies mortgage in the following-
a. Simple Mortgage
b. Mortgage by Conditional Sale
c. Usufructuary Mortgage
d. English Mortgage
e. Mortgage by deposit of title-deeds
f. Anomalous Mortgage
a. Simple Mortgage
In a simple mortgage, the possession of mortgaged property is not delivered
to the mortgagee. The mortgagor binds himself to pay the mortgage-money
and gives the mortgagee the right to cause the mortgaged property to be
sold in the event of his failure to repay.[7]
b. Mortgage by Conditional Sale
Mortgage by Conditional Sale is an ostensible sale on the condition that upon
repayment, the buyer will transfer the property to the seller.
There must be a condition that either,
(a) one the repayment, the sale will become void and
the buyer has to retransfer the property to the seller,
(b) in default of repayment, the sale will become absolute.[8]
 c. Usufructuary Mortgage
In usufructuary mortgage, the mortgagor delivers possession of the property
to the mortgagee and authorizes the mortgagee to get rents and profits
accruing from the property in lieu of interest or principal or both. The
mortgagee will retain such possession until payment of mortgage money. [9]
The essence of this mortgage is that the mortgagor is bound to put the
mortgagee in possession of the property. If the possession is delivered, the
mortgagee can sue for possession or for the recovery of the mortgage money
under section 68(d) of TP Act, 1882.

Main Characteristics of Usufructuary Mortgage:

 Possession of the property is transferred.
 The mortgagee gets rents and profits accruing from the property.
 The mortgagee will retain such possession until payment of mortgage money.
 No personal liability is incurred by the mortgagor.
 The mortgagee cannot foreclose or sue for sale.

d. English Mortgage
An English mortgage is a transaction in which the mortgagor binds himself to
repay the mortgage money on certain date, and transfers the mortgaged
property absolutely to the mortgagee with the condition that he will retransfer
it to the mortgagor upon the payment of mortgage money as agreed.[12]
e. Mortgage by Deposit of Title Deeds
When the mortgagor mortgages his property by depositing the title deeds of
the immovable property to the mortgagee and receives debts from him it is
called mortgage by deposit of title deeds.[13]
f. Anomalous Mortgage
The mortgage which does not fall under any of the above five kinds of
mortgages.[14]

Registration of Mortgage :
[Section 59 of Transfer of Property Act 1882]
If the principal money secured is Tk.100 or upwards, registration is
compulsory. When the principal money secured is less than Tk.100, a
mortgage may be affected either by a registered instrument or by delivery of
possession.
 In case of a mortgage by deposit of title-deeds, registration is not
necessary.Provided that a mortgage by deposit of title-deeds, where the
mortgagee is the government or a scheduled Bank as defined in the Financial
Institutions Act,1993 shall also be effected only by a registered instrument in
the aforesaid manner.[15] If a deed is executed, it is prima facie proof of the fact
that, the mortgage is complete and it will not fail.[16]
Rights and liabilities of Mortgagor
[Ss. 60-61,63-66,83-84,91-92 & 102-108]
Right of Mortgagor to Redeem:
[Section 60 of Transfer of Property Act 1882]
Right of redemption is one of the most important rights of mortgagor. This
right cannot be denied even though he may by express contract abandon his
right to redeem.
At any time on the payment of principal money, the mortgagor has a right to
require the mortgagee to recover the mortgage property to him. Such a right
of mortgagor is called the “Right of Redemption”.
This remedy is available to the mortgagor only before the mortgagee filled a
suit for enforcement of the mortgage. Subsequent to the filling of the suit no
remedy is available to the mortgagor.[17] In default of mortgagor, the
mortgagee, by a decree of the court, can sell the mortgaged property to get
back the money given by him as a loan to the mortgagor. Thus in that case,
the mortgagor’s right of redemption is extinguished.
The right of redemption includes three things as below:
1. Delivery of the mortgage-deed and documents of title relating to the
mortgaged property,
2. Possession of mortgaged property, and
3. Reconveyance or acknowledgement.[18]

Clog on Redemption:
Any provision inserted to prevent the right of redemption on payment of
principle money is called a clog on redemption. A clog on redemption is void.
It is not permissible for “once a mortgage always a mortgage” and therefore
always redeemable.[19]

Extinguishment of Right of Redemption:

Sec. 60 of the Transfer of Property Act confers a right of redemption on the
mortgagor. The right of redemption will be extinguished
(1) by act of the parties or
(2) by decree of a competent civil court.[20]

Exercise of the Right of Redemption:

 The mortgagor’s right of redemption is exercised
(a) By paying or tendering mortgage-money to the mortgagee outside the court
i.e. privately;
(b) By depositing the amount in the court; and
(c) By suit for redemption.
Before redemption can be claimed the mortgage money must have been paid
at the proper time and place. When there are several mortgagees, the
payment should be made to all of them jointly.

Some Forms of “Clogs”:

1. Long Term for Redemption:
A long term for redemption is not necessarily a clog on redemption.
Accordingly, the rule is that if the length of term is found oppressive or
conscionable redemption would be allowed before the expiry of the term.[21]
A period of 200 years was held to be oppressive and unconscionable and is a
clog on redemption.[22]

2. Condition Postponing Redemption in Case of Default:

In Muhammad Sher Khan v. Seth Swami Dayal, the mortgage was for a term of
5 years with a condition that if money is not paid , the mortgagee might enter
into possession for a period of 12 years during which the mortgagor cannot
redeem. It was held that such a condition is a clog an existing right to redeem.

3. Restraint on Alienation:
A stipulation that mortgagor shall not alienate the mortgaged property or
shall not take loan on the security of the mortgage property has been held to
be a clog.[23]

4. Redemption Restricted only to Mortgagor :

An agreement that redemption should be available to the mortgagor and not
to his heirs has been held as a clog.

5. Penalty in Case of Default :

A provision containing that if there was default in payment of the mortgage
money as stipulated in the deed the transaction should be regarded as an
absolute sale must be regarded as one which operates as a clog and this
clause will be of no effect.[24]
Obligation to Transfer to third party Instead of Re-transference to
Mortgagor :
[Section 60-A of the Transfer of Property Act 1882]
When the mortgagor has fulfilled the conditions of mortgage-deed, the
mortgagor may require the mortgagee to assign the mortgage-debt to a third
person.[25]
The main purpose for this provision is to give the mortgagor an opportunity
to pay off the mortgagee by raising a loan from another person on the same
property without having first re-conveyed it to himself and then later creating
a fresh mortgage in favor of the new creator.

Illustration:

A, on the payment of loan, can have authority to direct the mortgage to assign the
mortgaged property to C, the third party.

Right to Inspection and Production of Document :

[Section 60-B of the Transfer of Property Act, 1882]
A mortgagor has a right to inspect and take copies of the documents of title
relating to the mortgaged property which are in the possession of the
mortgagee.
This right subsists as long as his right of redemption subsists.[26]

Right to Redeem Separately or Simultaneously:

[Section 61 of the Transfer of Property Act, 1882]
Section 61 abolished consolidation where different properties were
mortgaged, and not where the same property was mortgaged under several
mortgages.
A mortgagee who had successive mortgages of same property could
consolidate them and compel that all mortgages should be redeemed
together. [27]
 Accession to Mortgaged Property:

[Section 63 of the Transfer of Property Act, 1882]

Where the mortgaged property in possession of the mortgagee has received
any accession, the mortgagor, upon redemption, is entitled to such accession.
It is the usual rule as ensured by the section 63 of T.P. Act.
There two ways of accession to the mortgaged property.

[Section 63-A of the Transfer of Property Act, 1882]

There are two general rules-

1. A mortgagee is not ordinarily at liberty to make improvements and charge the
mortgagor therewith without any reasonable grounds. If the mortgagee made
any improvement without any reasonable grounds, the mortgagor is entitled
on redemption to the improvement. In this case, the mortgagor is not
required to pay any cost.[28]

2. A mortgagee will make improvements only on some reasonable grounds as

follow-
a. Preserving the property from destruction,
b. Preventing the security from being insufficient, and
c. Complying the lawful orders of any public servant or any public authority.
In the above cases, the mortgagor must pay cost of improvements.[29]

Renewal of Mortgaged Lease :

[Section 64 of the Transfer of Property Act, 1882]
If the mortgaged property is a lease, and the mortgages obtains a renewal of
the lease, the mortgagor, upon redemption, in the absence of a contract by
him to the contrary, is entitled to have the benefit of the new lease.

Rights and liabilities of Mortgagee

 Mortgagee

Right to Foreclosure or Sale :

[Section 67 of the Transfer of Property Act, 1882]
The mortgagee has two types of remedies, they are-
1. Remedy against the mortgaged property[30]; and
2. Personal remedy of mortgagee.[31]
Section 67 of T.P. Act deals with the remedy against the mortgaged property.

Meaning of “Foreclosure” :
Generally foreclosure means-
a. To deprive a mortgagor of the right to redeem mortgaged property,
as when payments have not been made.
b. To bar an equity or a right to redeem a mortgage.
Foreclosure is a specific legal process in which a mortgagee attempts to
recover the balance of a loan from the mortgagee who has stopped making
payments to the mortgagee by forcing the sale of the mortgaged property
used as the collateral for the loan.
Formally, a mortgage lender (mortgagee) obtains a termination of a mortgage
borrower (mortgagor)'s equitable right of redemption, either by court order or
by operation of law.
There is a very basic difference between the mortgagor’s right of redemption
and the mortgagee’s right to foreclosure or sale. The difference is that the
right of redemption is not subject to any contract to the contrary while the
right to foreclosure or sale may be curtailed by the agreements by the parties.

Some Basic Points Relating to Foreclosure :

1. In simple mortgage, the mortgagee cannot foreclose. His remedy is to sue for
sale of the mortgaged property to realize the loan.
2. An usufructuary mortgagee is a transferee of a right of possession only and he
retains the possession unless the debt is paid off from the usufruct. So, he
cannot sue either for sale or for foreclosure.
3. In a mortgage by conditional sale, the mortgage works itself out into a sale in
the event of default in payment. Accordingly, the appropriate remedy in this
mortgage is to deprive the mortgagor of the right not be able to redeem the
mortgaged property.
4. A mortgage by deposit of title-deeds stands on the same footing as simple
mortgage and the mortgagee’s right is limited to one for a decree for sale.
5. In an anomalous mortgage, the right of the mortgagee depends upon the
terms of the deed and he may have both or only one of two reliefs of
foreclosure or sale.
6. Partial foreclosure is not allowed. One of the several mortgagees cannot
foreclose in respect of his share unless several mortgagees have, with consent
of the mortgagor, severed their interests under mortgage. Accordingly, all the
 co-mortgagees must join together and file one suit in respect of the whole
mortgage-money.

Mortgagee When Bound to Bring One Suit on Several Mortgages:

[Section 67-A of the Transfer of Property Act, 1882]
A mortgagee who holds two or more mortgages executed by the same
mortgagor in respect of each of which he has a right to obtain the same kind
of decree under section 67, and who sues to obtain such decree on any one of
the mortgages, shall in the absence of a contract to the contrary, be bound to
sue on all the mortgages in respect of which the mortgage-money has
become due.[32]

To explain in short,
a mortgagee having successive mortgages of the same property or different
mortgages of different properties from the same mortgagor must enforce all
of them together or none at all. But this rule does not apply where the
mortgagee has two mortgages and terms of one mortgage are such that he is
entitled to a decree for foreclosure, and of the other are that he is entitled to a
decree for sale.
Mortgagee’s Right to Sue for Mortgage-money:
[Section 68 of the Transfer of Property Act, 1882]
Apart from the remedy of foreclosure or sale, the mortgagee has an
alternative remedy called money decree, that is – to sue for the mortgage-
money. This kind of remedy is available only in certain cases as follow-
a. where the mortgagor binds himself to repay the same
(as in simple mortgage).
b. where, without any fault of either party, the mortgaged property is wholly or
partially destroyed.
c. where the mortgagee is deprived of the whole or part of his security by
reason of the wrongful act or default of the mortgagor; or
d. where the mortgagee being entitled to possession, the mortgagor fails to
deliver the same.[33]

Mortgagee’s Right to Sue for Mortgage-money:

[Section 69 of the Transfer of Property Act, 1882]
In certain special cases, the mortgagee has the power to sell mortgaged
property without recourse to court. They are as follow-
a. where the mortgagee is the government,[34]
b. where the deed of mortgage confers an express power of sale,
c. where the mortgaged property or any part thereof was, on the date of the
execution of the mortgaged deed ,situate within the town of Dhaka or in any
other town or area which the government may, by notification in the Official
Gazette, specify in this behalf.[35]
 However, as s 69(2) provides, the above power of sale must not be exercised
unless and until –
 notice in writing requiring payment of the principal money has been served on
the mortgagor, or on one of several mortgagors, and default has been made
in payment of the principal money, or of part thereof, for three months after
such service; or
 some interest under the mortgage amounting at least to Tk 500/- is in arrear
and unpaid for three months after becoming due.

Provided that the power of a schedule bank under clause (b) of s 69(1) as
mentioned above should further be subject to such conditions as may be
prescribed in this behalf by notification in the official Gazette by the
Government in consultation with the Bangladesh Bank.
Appointment of Receiver:
[Section 69-A of the Transfer of Property Act, 1882]
Appointment of a receiver is very exigent to ensure the prudent management
of the property where it was in the possession of the mortgagee.
The receiver is initially appointed by the mortgagor but later on he could be
appointed, if provided in the deed, by the mortgagee himself on behalf of the
mortgagor so that the receiver is the agent of mortgagor.[36]
The receive may be appointed in one of the three ways-
i. he may be nominated in the mortgage-deed;
ii. he may be appointed by the mortgagee with the consent of the mortgagor;
iii. where the parties do not agree, the mortgagee may apply to the court, and
the court may appoint the receiver.
Unlike the ordinary agent, the power of the receiver does not terminate by the
death of the mortgagor, nor is he subject to the control or direction of the
mortgagor in the management of the property, his powers and duties being
defined by this section.

Rights of Mortgagee in Possession:

[Section 72 of the Transfer of Property Act, 1882]
A mortgagee, whether he is in possession or not, has a right to spend money
for some specific purposes as follow-
a. for the preservation of the mortgaged property from destruction, forfeiture or
sale;[37]
b. for the supporting of the mortgagor’s title to the property;[38]
c. the defence of his own as against the mortgagor;[39]
d. the renewal of the lease where the mortgaged property is a renewable lease;
and [40]
e. the insuring of the property which is by its nature insurable against loss or
damage by fire.

Liabilities of Mortgagee in Possession :

 [Section 76 of the Transfer of Property Act, 1882]
The mortgagee who is in possession of mortgaged property, has some
liabilities as they follow-
1. to manage the property with ordinary prudence;
2. to collect rents and profits;
3. to pay Government Revenue;
4. to carry necessary repairs under certain circumstances;
5. not to commit any act of waste;
6. to apply the insurance money in reinstating the property;
7. to keep proper accounts;
8. to apply the rents and profits in discharge of the interest after making certain
deduction; and
9. to account for gross receipt.
Postponement of Prior Mortgagee :
[Section 78 of the Transfer of Property Act, 1882]
(First Exception of The Rule of Priority)
The general rule is that- ‘He who is prior in time is prior in right’.

Section 78 is an exception to this general rule, namely, that where through

1. fraud,
2. misrepresentation; or
3. gross neglect of prior mortgagee,
another person has been induced to advance money on the security of the
property mortgaged, the prior mortgagee shall be postponed to the
subsequent mortgagee.

Illustration:
A has advanced TK. 5000 to B by way of deposit of title-dead. C, before
advancing money to B enquires of A whether property is free from
encumbrance and A does not mention his own mortgage and tells C that the
property is free from mortgage. In such circumstances C will have priority
overA. Due to prior mortgagee’s fraud, misrepresentation or gross
neglect, Rule of Priority fails i.e. priority of a previous mortgagee is lost.
According to Section 53D which was added by the Transfer of Property
(Amendment) Act, 2004 and came into force on 1’st July of 2005:
An immovable property under a registered mortgage cannot be sold or re-
mortgaged without the written consent of the mortgagee and otherwise the
re-mortgage or sale will be void.
So, section 78 will not apply in case of a registered mortgage as section
53Dmandates that the written consent of prior mortgagee and fraud,
misrepresentation or gross negligence of prior mortgagee is of no effect.
Mortgagee to Secure Uncertain Amount When Maximum is Expressed:
[Section 79 of the Transfer of Property Act, 1882]
(Second Exception of The Rule of Priority)
The general rule is that- ‘He who is prior in time is prior in right’. Like the section
78 like sec. 79 is another exception to this general rule.
If a mortgage made to secure future advances, the performance of an
engagement or the balance of running account, expresses the maximum to be
secured thereby, a subsequent mortgage of the same property shall , if made
with notice of prior mortgage, be postponed to the prior mortgage in respect
of all advances of debits not exceeding the maximum, though made or
allowed with notice of the subsequent mortgage.[41]

Illustration:
A B mortgagee 1

Marshalling Securities :
[Section 81 of the Transfer of Property Act, 1882]
Marshalling means to arrange, systematize or regulate.
Where one creditor has security on two funds of his debtor, and another
creditor has security for his debt on only one of those funds, the latter has a
right in equity to compel the former to resort to the other fund, if [such an
action] is necessary for the satisfaction of both creditors, provided it will not
prejudice the rights or interests of the party entitled to the double fund, nor
do injustice to the common debtor, nor operate inequitably on the interests of
other persons.
 To sum up, if the ownr of the two or more properties mortgages them to one
person and then mortgages one or more of the properties to another person,
the subsequent mortgagee is entitled to compel the prior mortgagee to resort
to the property not mortgaged to him.
There are separate rules for marshalling in respect of sale and mortgage.
 In respect of sale, the rule of marshalling is that a subsequent purchaser has a
right to claim marshalling. For instance, there are three properties A,
B and C subjected to mortgage. The mortgagor sells A to Mr. X free from any
encumbrances. Mr. X is entitled to insist that the mortgagee should realize his
mortgage money out of the properties B and C as far as possible. If the whole
of the debt is not capable of being realized from B and C, the mortgagee has
a right to proceed against A. In that event, the purchaser Mr. X has a right to
claim from the mortgagor, the amount realized from A. This rule applies in the
absence of any contract to the contrary.

 In respect of mortgage, the subsequent mortgagee is entitled to regulate or

marshal the order in which the debt is to be realized by prior mortgagees. For
instance, Mr. A mortgages X and Y properties to Mr. B and then
mortgages Y alone to Mr. C. If Mr. B seeks to realize his mortgage out
of Y, Mr. C can compel Mr. B to proceed first against X and realize the debt
from it. If Mr. B is unable to realize the whole amount due to him from X, he is
entitled to recover the balance from Y.

First Emergence of The Doctrine of Marshalling

The doctrine of marshalling was first emerged in the famous case Aldrich v.
Cooper[42]. In that case Lord Eldon stated:
“If a creditor has two funds, the interest of the debtor shall not be regarded,
but the creditor having two funds shall take that which, paying him will leave
another fund for another creditor.”

Conditions of Application of the Doctrine of Marshalling :

a. There should be a common debtor,
b. All properties subjected to the prior mortgage cannot be re-mortgaged and
only a portion of them can be re-mortgaged,
c. It will not prejudice the rights or interests of prior mortgagee or third party
who has acquired an interest in any of the properties for consideration.
d. After the re-mortgage, no further mortgage of same property can be made.

Limitations of the Doctrine of Marshalling:

a. The doctrine applies only in case of mortgage of immovable property.
b. The doctrine does not apply in case of coparcenery property before partition.
c. The doctrine does not apply in presence of a contract to the contrary.
d. It will not prejudice rights of a third party who has acquired an interest for
consideration.
It is obvious that, the claim to marshal must not be allowed to prejudice the
rights of the prior mortgagee.

Illustration:
(Mortgagor)Mr. A X Y Mr. B (mortgagee 1)

Suit for Redemption:

[Section: 91 of TP Act 1882]
The Following Persons may sue for redemption:-
Section 91 of the TP Act provides that besides the mortgagor, any of the
following persons may redeem, or institute a suit for redemption of, the
mortgaged property, namely:
1. any person (other than the mortgagee of the interest sought to be redeemed)
who has any interest in, or charge upon, the property mortgaged or in or
upon the right to redeem the same;
2. any surety for the payment of the mortgage-debt or any part thereof; or
3. any creditor of the mortgagor who has in a suit for the administration of his
estate obtained a decree for sale of the mortgaged property.

Subrogation:
[Section 92 of the Transfer of Property Act, 1882]
The doctrine of subrogation is an equitable doctrine which is based on the
principles of natural justice. Subrogation is the legal doctrine whereby one
person takes over the rights or remedies of another against a third party.
[44] In other words, 'The substitution of another person in place of a creditor
to whose rights he succeeds in relation to the debt.'[45]
Subrogation is a roman law term meaning “substitution”. It is the right of a
person to stand in the place of a creditor. When a mortgagee transfers his
mortgage-debt, his assignee becomes vested with all his rights i.e. his
assignee is substituted or subrogated in the place of mortgagee. In order to
be entitled to subrogation, a person must pay off the entire amount of a prior
mortgage, because subrogation takes place by redemption, and unless there
is redemption, there can be no subrogation.
Section 92 makes it very clear that the doctrine of subrogation cannot be
invoked unless the prior mortgage is discharged as a whole. The principle of
this rule is that there cannot be subrogation without redemption. Therefore, a
 partial payment of the mortgage-debt cannot give rise to a claim for a partial
subrogation.

Section 92 of the TP Act deals with the doctrine of Subrogation. Section 92 of

the TP Act provides that any of the persons referred to in s 91 (other than the
mortgagor) and any co-mortgagor shall, on redeeming property subject to the
mortgage, have, so far as regards redemption, foreclosure or sale of such
property, the same rights as the mortgagee whose mortgage he redeems may
have against the mortgagor or any other mortgagee.
The right conferred by this section is called the right of subrogation, and a
person acquiring the same is said to be subrogated to the rights of the
mortgagee whose mortgage he redeems.
A person who has advanced to mortgagor money with which the mortgage
has been redeemed shall be subrogated to the rights of the mortgagee whose
mortgage has been redeemed, if the mortgagor has by a registered
instrument agreed that such persons shall be so subrogated.

However, the above provisions of s 92 shall not be deemed to confer a

right of subrogation on any person unless the mortgage in respect of which
the right is claimed has been redeemed in full.
Section 92 of the Transfer of Property Act does not have the effect of a
substitutee becoming a mortgagee. The provision confers certain rights on the
redeeming co-mortgagor and also provides for the remedies of redemption,
foreclosure and sale being available to the substitutee as they were available
to the substituted. These rights he exercises not as a mortgagee reincarnate
but by way of rights akin to those vesting in the mortgagee.

A court must determine the following in order for equitable subrogation to

apply:
(i) the subrogee made the payment to protect his or her own interest,
(ii) the subrogee did not act as a volunteer,
(iii) the subrogee was not primarily liable for the debt paid,
(iv) the subrogee paid off the entire encumbrance, and
(v) subrogation would not work any injustice of the rights of the junior lien
holder.

Kinds of Subrogation :
Subrogation is of two kinds as shown below:
 Legal Subrogation Conventional
Subrogation

Section 92 of the TP Act includes both. Legal subrogation takes place by

operation of law, which the mortgage-debt is paid off by some person who
has some interest to protect, e.g. where a subsequent mortgage pays off a
prior one.

Four Ways of Legal Subrogation:

Conventional Subrogation:
This kind of subrogation is also known as “subrogation by agreement”. This
kind of subrogation takes place where the person paying off the mortgage-
debt is a stranger and has no interest to protect, but he advances the money
under an agreement, express or implied, that he would be subrogated to the
rights and remedies of the mortgage who is paid off.

Basis of the Doctrine of Subrogation:

The essence of the doctrine of subrogation is that the party who pays off a
mortgage gets clothed with all the rights of the mortgagee. The doctrine is
based on the principles of justice, equity and conscience.

Recommendations:
In Transfer of Property Act 1882, we find plenty of laws relating to Mortgage
but the application of these laws is not practically well-established. The proper
implementation of the statutory laws should be ensured in the practical fields.
Conclusion:
Mortgage is such a mode of transfer, which plays a significant role in securing
money advanced as debt. The creditor can safely advance money as debt
without any tension of refunding that money. In mortgage, when the debtor
becomes unable to repay, the creditor gets a right to sell or foreclose the
mortgaged-property under a decree of the court.
Regarding Mortgage in Transfer of Property Act 1882, there are sufficient laws
but I specially think that the application of these laws in the practical field is
not well-founded. So, it is expected that the statutory law will be implemented
in the practical field.

[1]. Transfer of Property Act,1882 Section 58.

[2]. Ibid. Section 105.
[3] . Mortgage law- Wikipedia.
[4]. Ibid. Section 58.
[5] . The Contract Act,1872 Section 11
[6] . Sita Ram Prasad v. Mahadeo Rai, A.I.R.1980
[7] . Transfer of Property Act,1882 Section 58(b).
[8] . Ibid. Section 58(c).
[9] . Ibid. Section 58(d).
[10] . Ibid.
[11] . Anaji Thamaji Patil v. Rabho Bhivraj Patil and another, A.I.R.1973 Bom 75.
[12] . Transfer of Property Act,1882 Section 58(e).
[13] . Ibid. Section 58(f).
[14] . Ibid. Section 58(g).
[15]. The Transfer of Property (Amendment) Act,2004 Amended Section 59.
[16] . Raghunath v. Amir Baksh, (1922) ILR 1 Pat 281,65 IC 329,AIR 1922 AP 299.
[17] . Poulise and another v. State Bank of Travancore
[18] . Transfer of Property Act,1882 Section 60.
[19] . Gangadhar v. Shankar Lal, A.I.R. 1958 S.C.773.
[20] . V. Paily v. K. Augusty, A.I.R. 1967 Ker. 247
[21] . Har Dayal Singh v. Raja Ram Singh,(1933) 9 luck. 151
[22] . Fateh Muhammad v. Ram Dayal(1927) 2 Luck. 588 I.C. 160
[23] . Ram Saran v . Amrit,(1980) 3 All. 369 F.B.
[24] . Dhanalakshami Ammal v. G. Anthuraj, A.I.R. 1972 mad. 150
[25] . Transfer of Property Act, 1882 Section 60-A
[26] . Ibid. Section 60-B
[27] . Joys Singh v. Krishna, A.I.R. 1985, 36
[28] . Transfer of Property,1882 Section 63-A(1)
[29] . Ibid. Section 63-A(2)
[30] . Ibid. Section 67
[31] . Ibid. Section 68
[32] . Ibid. Section 67-A
[33] . Ibid. Section 68
[34] . Ibid. Section 69 (1)(b)
[35] . Ibid. Section 69 (1)(c)
[36] . Gaskell v. Gosling, (1896) 1 Q.B. 669, 672.
[37] . Transfer of Property Act, 1882 Sec. 72 (b)
[38] . Ibid (c)
[39] . Ibid (d)
[40] . Ibid (e)
[41] . Ibid Sec. 79
[42] . (1803) 8 Ves. 382
[43] . Kashi Ram v. Het Singh (1915) ILR 37 All 101,26 IC 417
[44]. Subrogation- Wikipedia, the free encyclopedia.
[45]. Legal & Commercial Dictionary, by A. N. Saha, 5th Edition, Eastern Law House