REDEMPTION
Section 60 of the Transfer of Property Act, 1882 (hereinafter, ‘TPA’) confers the right of redemption on the mortgagee. It lays down that after the principal money becomes due, the mortgagor can tender the money and require the mortgagee to deliver the possession of the property or the deed/documents to him.
- The right to take back the property – once the loan has been paid
- It is an important statutory right of mortgagor
- At any time after the principal money has become due the mortgagor has right of redemption
- Once a mortgage is always a
(It is an exception to the rule ‘the agreement of the parties overrides the law’).
In the mortgage contract any condition which prevents the mortgagor from getting back his property after the mortgage debt has been paid will be invalid.
PARTIAL REDEMPTION
In a partial redemption, the issuer elects to exercise or call only a portion of the outstanding par value of the security outstanding. In such a case, some investors may have all or a portion of their position redeemed, while others may not have any portion of their position redeemed. General rule partial redemption is not permitted
EX : if A,B,C, were the join owners of land .The land is mortgaged by them jointly to X for Rs 40,000/- Latter A by making payment of Rs 10,000/- cannot redeem separately.
CLOG ON REDEMPTION
Clog means any clause which restricts the mortgagor from receiving the property back from the mortgagee. Clog means to stop something from taking place. Hence clog on redemption implies to debarring a mortgagor from exercising his right of redemption. It is a restriction imposed on the mortgagor to redeem his mortgaged property by paying his mortgaged debt. The right to redemption is absolute and cannot be fettered by imposing any condition. Any condition that hinders the right of redemption will be null and void. The clog of redemption relates to transactions that take place between the mortgagor and mortgagee when the mortgage is executed.
Any condition which prevents the mortgagee from receiving the property is void.
