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Report No. 70

Chapter 59

Redemption-two or More Mortgages

Section 61

59.1. Section 61-Abolition of consolidation.-

Under section 61, 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, is entitled to redeem any one such mortgage separately, or any two or more of such mortgages together.

59.2. History.-

The section is, in general, regarded as abolishing what was known as the doctrine of consolidation. It is not possible to understand either the substance of the section in its broad features, or the use of certain expressions employed in its drafting without some familiarity with the history of the law. The right of redemption possessed by a mortgagor was, in England, an equitable right, which could be exercised only on equitable terms.1 The doctrine of consolidation was an application of this approach of equity.

The general rule in equity is that a person who is entitled to two mortgages made by the same mortgagor can consolidate the mortgages against the mortgagor and refuse to allow him to redeem one mortgage without redeeming the other.2 Before the mortgagee can insist on consolidation under this doctrine, however, certain important conditions have to be satisfied. The redemption dates must have passed; both the mortgages must be made by the same mortgagor;3 and there must have been a time when both the mortgages were vested in one person and simultaneously both the equities of redemption were visited in one person.4

1. Snell Equity, (1966), p. 424.

2. Snell Equity, (1966), p. 455.

3. Snell Equity, (1966), p. 426.

4. Piece v. White, 1896 AC 187 (190).

59.3. Principle in equity.-

If these conditions are satisfied, the mortgagee could insist on consolidation against the mortgagor on the principle that redemption being an equitable right, the person who seeks the aid of equity must redeem it entirely. The underlying rationale was that if A has mortgaged Blackacre and Whiteacre to X, each property being worth £ 1500 and each loan being £ 1000, then, if the value of Blackacre subsequently decreases and the value of Whiteacre increases, it would be unfair to allow A to redeem Whiteacre (with the value increased) and leave Blackacre unredeemed (with the value decreased).1

This principle, sound in theory, sometimes led to hardship and the Legislature in England had to intervene by enacting, first, a suitable provision in section 17 of the Conveyancing and Law of Property Act, 1881, replaced later by section 93 of the Law of Property Act, 1925. In India, section 61, as originally enacted followed the English Act of 1881. As revised in 1929, it follows the English Act of 1925.

1. Megarry & Wade Real Property, (1966), p. 920, para. 4(a).

59.4. We have referred above to one aspect, namely, that in order to understand the drafting of the section, it is necessary to have some familiarity with the history of the law. This point may be illustrated by referring to the words "a mortgagor who has executed two or more mortgages in favour of the same mortgagee".

The emphasis on the execution of two or more mortgages by the same mortgagor is to be explained by drawing attention to the fact that it was only where the mortgage was executed by the same person in favour of the same person that equity limited the right of redemption, by insisting on consolidation. Since it was the object of the law reform in this context to abrogate this principle of equity, therefore, really speaking, it was not necessary to cover the case where mortgages were made by different mortgagors.

Where the mortgages are made by different mortgagors, they could not, even at equity, be required to be consolidated, even if both properties late came into the same hands.1 Thus, if A mortgages one property to X and B also mortgages another property to X, and then B purchases the equity of redemption on both the properties, X cannot insist on consolidation, because the mortgages were originally made by different mortgagors. Since equity did not insist on consolidation in such a case, there was, strictly speaking, no need in a measure of law reform, to abrogate the doctrine in relation to a situation where it did not apply.

Of course, no harm is done if the word "mortgagor", by virtue of section 59A, is taken as including his successors. But the point to be made is that no benevolent provision by way of a statutory modification was needed for such a situation.

The right to redeem one or more mortgages, separately or simultaneously, which is the right conferred by section 61, is exercisable only when there is no contract to the contrary. Even where there is such a contract made in favour of the mortgagee, the mortgagee might waive it expressly or by impliedly, it would seem.

No change is needed in the section.

1. Megarry & Wade Real Property, (1966), p. 922, paara. (3) and p. 922, bottom, example (i).

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