The equity of redemption is a right which is subsidiary to the right of ownership: Supreme Court

By - Hiranmayi Gowravajhula*

A Supreme court bench of Justices Hemant Gupta and AS Bopanna, on Tuesday, observed that the right of equity of redemption is not over and above the right of ownership. “The expression equity of redemption is a convenient maxim, but an owner who has stepped into the shoes of the mortgagor after purchasing the property from the mortgagor but before filing a suit for foreclosure is entitled to redeem the property under Section 60 of the Transfer of Property Act.”, the bench observed.

The mortgagee in this case filed a lawsuit against the mortgagors to reclaim the mortgage amount. This lawsuit resulted in the mortgagors’ right to redeem the property being revoked. Following that, the plaintiff filed a lawsuit against the original mortgagors and the mortgagee, requesting that the mortgaged property be redeemed. He claimed that the mortgagors had sold him the mortgaged land, and that he had therefore taken their place in the selling transaction. 

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The claim was rejected by the Trial Court, but the First Appellate Court found that, under Sections 59A and 91 of the Transfer of Property Act, the mortgagee should have made the plaintiff a party because he acquired the land before the suit was filed. The Appellate Court’s decision was set aside by the High Court of Judicature at Bombay.

One of the issues before the bench was whether the plaintiff was a required party in a mortgagee's post-purchase foreclosure proceedings. The plaintiff was correct in claiming that he needed to be impleaded because he was a necessary party in a foreclosure complaint brought by the mortgagee following the procurement of a portion of the mortgaged land. 

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Further, the court observed that the right of redemption is a subordinate right to the right of ownership and that such a right does not supersede the plaintiff's right of ownership. According to the bench, the decree issued at the back of the transferee mortgagor prior to the commencement of the foreclosure complaint was not legitimate.

CLICK HERE TO READ JUDGMENT.

*Hiranmayi Gowravajhula is a 1st year student pursuing B.B.A.LL.B from Symbiosis Law School, Hyderabad.