RIGHT OF REDEMPTION OF PROPERTY AND CODE OF CIVIL PROCEDURE

 

RIGHT OF REDEMPTION OF PROPERTY AND CODE OF CIVIL PROCEDURE

Code of Civil Procedure, 1908

Section 85 of TP Act originally provided for procedures in suit for foreclosure, sale and redemption. By the CPC, this section was repealed, as CPC dealt with it comprehensively in Order XXXIV. 

 

Order XXXIV pertains to “Suits relating to Mortgages of Immovable Property”, containing Rules 1 – 15, which provide for as under:

Rule 1 – Parties to suits for foreclosure, sale and mortgage;

Rule 2 – Preliminary decree in foreclosure suit;

Rule 3 – Final decree in foreclosure suit;

Rule 4 – Preliminary decree in suit for sale;

Rule 5 – Final decree in suit for sale;

Rule 6 – Recovery of balance due on mortgage in suit for sale;

Rule 7 – Preliminary decree in redemption suit;

 

(1)          In a suit for redemption, if the plaintiff succeeds, the Court shall pass a preliminary decree-

(a)  ordering that an account be taken of what was due to the defendant at the date of such decree for-

(i)   principal and interest on the mortgage,

(ii)  the costs of suit, if any, awarded to him, and

(iii) other costs, charges and expenses properly incurred by him up to the date, in respect of his mortgagesecurity, together with interest thereon; or

(b)  declaring the amount so at that date; and

(c)  directing-

(i)  that, if the plaintiff pays into Court the amount so found or declared due on or before such date as the Court may fix within six months from the date on which the Court confirms and countersigns the account taken under clause (a), or from the date on which such amount is declared in Court under clause (b), as the case may be, and thereafter pays such amount as may be adjudged due in respect of subsequent costs, charges and expenses and provided in rule 10, together with subsequent interest on such sums respectively as provided in rule 11, the defendant shall deliver up to the plaintiff, or to such person as the plaintiff appoints all documents in his possession or power relating to the mortgaged property, and shall, if so required, retransfer the property to the plaintiff at his cost free from the mortgage and from all incumbrances created by the defendant or any person claiming under him where the defendant claims by derived title, by those under whom he claims, and shall also, if necessary put the plaintiff in possession of the property; and

(ii) that, if payment of the amount found or declared due under or by the preliminary decree is not made on or before the date so fixed, or the plaintiff fails to pay, within such time as the Court may fix, the amount adjudged due in respect of subsequent costs, charges expenses and interest, the defendant shall be entitled to apply for a final decree-

(a)in the case of a mortgage other than a usufructuary mortgage, a mortgage by conditional sale, or an anomalous mortgage the terms of which provide for foreclosure only and not for sale, that the mortgage property be, sold, or

(b)in the case of a mortgage by conditional sale or such an anomalous mortgage as aforesaid, that the plaintiff be debarred from all right to redeem the property.

(2)          The Court may, on good cause shown and upon terms to be fixed by the Court, from time to time, at any time before the passing of a final decree for foreclosure of sale, as the case may be, extend due in respect of subsequent costs, charges, expenses and interest.

 

Rule 8 – Final decree in redemption suit;

 

(1) Where, final decree debarring the plaintiff from all right to redeem the mortgaged property has been passed or before the confirmation of a sale held in pursuance of a final decree passed under sub-rule (3) of this rule, the plaintiff makes payment into Court of all amounts due from him under sub-rule (1) of rule 7, the Court shall, on application made under by the plaintiff in this behalf, pass a final decree or, if such decree has been passed, an order-

(a)ordering the defendant to deliver up the documents referred to in the preliminary decree, and, if necessary,-

(b)ordering him to re-transfer at the cost of the plaintiff the mortgaged property as directed in the said decree, and also, if necessary,- (c) ordering him to put the plaintiff in possession of the property.

(2)  Where the mortgaged property or a part thereof has been sold in pursuance of a decree passed under sub-rule (3) of this rule, the Court shall not pass an order under sub-rule (1) of this rule, unless the plaintiff in addition to the amount mentioned is sub-rule (1), deposits in the Court for payment to the purchaser a sum equal to five per cent, of the amount of the purchase-money paid into by the purchaser.

Where such deposit has been made, the purchaser shall be entitled to an order for repayment of the amount of the purchase-money paid into Court by him, together with a sum equal to five per cent, thereof.

(3)  Where payment in accordance with sub-rule (1) has not been made, the Court shall, on application made by the defendant in this behalf,-

(a)in the case of a mortgage by conditional sale or of such an anomalous mortgage as is hereinbefore referred to in rule 7, pass a final decree declaring that the plaintiff and all persons claiming under him are debarred from all right to redeem the mortgaged property and, also, if necessary, ordering the plaintiff to put the defendant in possession of the mortgaged property; or

(b)in the case of any other mortgage, not being a usufructuary mortgage, pass a final decree that the mortgaged property or a sufficient part thereof be sold, and the proceeds of the sale (after deduction therefrom of the expenses of the sale) be paid into Court and applied in payment of what is found due to the defendant, and the balance, if any, be paid to the plaintiff or other persons entitled to receive the same.

 

Rule 8A – Recovery of balance due on mortgage in suit for redemption; Rule 9 – Decree where nothing is found due or where mortgagee has been overpaid;

Rule 10 – Costs of mortgagee subsequent to decree;

Rule 10A – Power of Court to direct mortgagee to pay mesne profits;

Rule 11 – Payment of interest;

Rule 12 – Sale of property subject to prior mortgage;

Rule 13 – Application of proceeds;

Rule 14 – Suit for sale necessary or bringing mortgaged property to sale; and  Rule 15 – Mortgages by the deposit of title-deeds and charges.   

 

Coming to execution of decrees, the right of redemption is sought to be protected by providing provisions in such executions

 

Order XXI 

 

Rule 89 – Application to set-aside sale on deposit;

Rule 90 – Application to set-aside sale on ground of irregularity or fraud; Rule 92 – Sale when to become absolute or be set aside.  

Rule 94 – Certificate to purchaser

 

In the case of Allokam Peddabbayya and Ors Vs Allahad Bank and Ors, reported in AIR 2017 SC 3069 = (2017) 8 SCC 272, the Supreme Court considered the question of right of redemption of subsequent purchasers of the property after the sale in execution of a decree.