‘Redemption of Mortgage’ – Locus standi...

‘Redemption of Mortgage’ – Locus standi under Transfer of Property Act and SARFAESI Act

Author Name : Dr. J. James Jayapaul M. A., M. L., D. L. A. L.

ABSTRACT After the availing of a loan by a mortgagor, if the mortgagor is willing to repay the outstanding loan amount due, it can be done. It is called the Redemption Right. No one can curtail this right of Mortgagor. The preceding right is based on the principle that "once a mortgage, always a mortgage," which states that the mortgagee remains a mortgagee and never becomes an owner. It is against the law to use ambiguity words to convert a mortgage deed into a sale deed. The Mortgagor has to file a suit for redemption if the mortgagee did not permit for redemption as per section 60 of the Transfer Of Property Act, 1882. But in the case of Banks , after 2002 , they are coming under the purview of SARFAESI, Act ,2002 , ( Securitization and Reconstruction of Financial Assets and Enforcement of Securities Interest Act). The NPA’s1 are gaining their status , if a loan is due for more than 90 days. When a borrower fails to repay a loan, the SARFAESI Act makes it possible for banks and other financial institutions to recover a loan by auctioning off commercial or residential properties. Accordingly, the SARFAESI Act, 2002 empowers banks to lessen their NPA through auction and further reconstruction. So redemption right of mortgage is permissible only till the loan does not attract the title of NPA. I have discussed in this article about the Redemption right usage under TP Act, 1882 and SARFAESI Act 2002, by the Court Judgments.