The term subrogation literally means substitution. The right of subrogation means when the mortgagee transfers his mortgaged debt in favour of an assignee, the assignee will have all the rights of the mortgagee. It is the right of a person to stand in place of the creditor. In order to be entitled to subrogation, the assignee shall pay off the entire mortgaged debt, only on redeeming the mortgaged debt will the assignee be entitled to subrogation. Hence there is no subrogation without redemption.

Section 92 of the Transfer of Property Act, 1882  Act

This provision of the Act states that any person other than the mortgagee who has any interest or charge upon the mortgaged property or right of redemption of the mortgaged property or any surety for the payment of mortgaged debt or a creditor of the mortgagor or any co-mortgagor, on redeeming the property subject to the mortgage will have the same rights as that of the mortgagee whose mortgage he redeems may have against the mortgagor or any other mortgagee. Hence the essence of this doctrine is that the party who pays off the mortgage debt gets clothed with all the rights of the mortgagee.

Types of Subrogation

Subrogation is of two types –

Legal Subrogation

A legal subrogation takes place by the operation of law. When a mortgage debt is paid off by some person who has interest or charge or is a surety, creditor or co- mortgagor to protect the interest, it is a legal subrogation. Legal subrogation can take place when the subsequent mortgagee redeems the prior mortgagee or the co-mortgagor redeems the mortgage or the surety redeems the mortgagee or the purchaser of equity of redemption redeems the mortgage.

Conventional Subrogation

A conventional subrogation takes place when the person paying off the mortgaged debt is a stranger, such a person has no interest to protect the mortgaged property. This person satisfies the debt under an agreement that he would be subrogated with the rights of the mortgagee who is paid off. It is a subrogation by an agreement. This agreement of subrogation may be express or implied, in writing and registered.

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