Mortgaged property

Shanthi (Querist) 14 November 2013 This query is : Resolved
Hi,
My uncle mortgaged his property (2 houses) for some amount in the year 1993. Apart from that, he bought some loan from others in good faith. The total loan amount (including the mortgage) is 6 lacs. In a year he became insolvent. So he filed insolvency petition befor court. But the petition is dismissed for default. My uncle left the town and started his life in another city. Now he is wealthy enough to get the property back. The mortgagees did not try to find him. Now the properties are in the hand of one mortgagee. My uncle wants to take back the property. Can he claim the property now? The encumberence of the property proves that the title is still in my uncle's name. We did not check the name of the tax payer for the property. Its almost 20 years, what's my uncle rights? If he can claim means does he need to pay interest for the principle till date?

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BAALASUBRAMANNYAMM (Expert) 14 November 2013
you should clarify that the mortgaged deed is a registered document or not. As per your words, still your uncle's name is continuing, there can be a chance of claiming, and also check who is paying house tax and on whom favour, the receipts are issuing.

Advocate M.Bhadra (Expert) 14 November 2013
The right of redemption is considered to be inalienable in Mortgage Deed, and cannot be taken away from a mortgagor by means of any contract to the contrary. According to Law Dictionary, term “redemption” can be defined as the act of the vendor of property in buying it back again from the purchaser at the same or an enhanced price. “Right of Redemption” can be defined under the same dictionary as an agreement, by which the vendor reserves to himself the power of taking back the thing sold by returning the price paid for it. This right finds place under Section 60 of the Transfer of Property Act, 1882 which makes mortgagor the owner of the property mortgaged, and makes him able get his property back from the mortgagee on paying the amount borrowed from him.

In every case time period is not the doctrine in case of right of redemption. One such case was decided by the court in Achaldas Durgaji Oswal v Gangabisan Heda (2003) 3 SCC 614 , where a suit was filed by the mortgagee for the foreclosure of the property, and another suit was filed by the mortgagor. Lower court asked mortgagor to pay off the amount within 3 months, but he was not able to do so. Instead, he paid off the amount after a period of 3 years and at that point of time his suit was rejected by the lower court on ground of exceeding the limitation period as decided by the court. Lower court’s decree was reversed by the High Court, which was upheld by the Supreme Court. It was held by the Supreme Court that “the right of redemption of mortgagor being a statutory right, the same can be taken away only in terms of the provision under Section 60 of the Act which is extinguished either by a decree or by act of parties.

In view of above point your uncle can file a suit for Declaration of Mortgage and Recovery of Property in Civil Court.