Report No. 70

Chapter 58

Re-Transfer on Redemption

Sections 60A and 60B

58.1. Section 60A.-

Section 60, which we have already discussed, gives the mortgagor the right to require the mortgagee, in the stated circumstances, to re-transfer the mortgaged property to the mortgagor or to such person as he may direct. That section is, however, silent about the assignment of the mortgage debt to a third person, in the sense that the mortgagee cannot, on redemption, be compelled to assign the mortgage debt though, of course, he is free to do so if he so desires.

To meet this situation the amendment Act of 1929 introduced section 60A, on the lines of section 95 of the Law of Property Act, 1925. Under sub-section (1), where a mortgagor is entitled to redemption, then, on the fulfillment of any conditions on the fulfillment of which he would be entitled to require a re-transfer, he may require the mortgagee, instead of re-transferring the property to assign the mortgage debt and transfer the mortgage property to such third person as the mortgagor may direct; and the mortgagee shall be bound to assign and transfer accordingly.

Sub-section (2) of the section provides that the rights conferred by this section belong to, and may be enforced, by the mortgagor or by any encumbrancer notwithstanding an intermediate encumbrance; but the requisition of any encumbrancer shall prevail over a requisition of the mortgagor and as between encumbrancers, the requisition of a prior encumbrancer shall prevail over that of a subsequent encumbrancer. Under sub-section (3), this section does not apply in the case of a mortgagee who is or has been in possession.

58.2. Assignment of registered instrument.-

As to the formalities for assignment, since the interest of a mortgagee not in possession is intangible immovable property, the transfer thereof can be only by a registered instrument, in view of section 54.

58.3. No change.- The above discussion discloses no need to amend section 60A.

58.4. Section 60B.-

While the mortgagor is, on redemption, entitled to get back the documents of title,1 a provision was also needed to clarify his right to inspect the documents of title during the subsistence of the mortgage. There was, in England, at common law, a doubt on the subject and the Conveyancing and Law of Property Act, 1881, section 16, replaced later by section 96(1), Law of Property Act, 1925, removed the doubt by making a special provision conferring such a right.

In India, the Act of 1929 dealt with the matter by inserting section 60B. Under that section, a mortgagor, as long as his right of redemption subsists, shall be entitled at all reasonable time, at his request and expense, in this behalf, to inspect and make copies of abstracts of, or extracts from documents of title relating to the mortgaged property which are in the custody or power of the mortgagee.

There is hardly any case law on the subject and section 60B needs no further comments.

1. Section 60, first para.