top of page

Right Of Mortgagee To Foreclosure under TPA

Updated: May 3

Right Of Mortgagee To Foreclosure under TPA


Right of Foreclosure or Sale (Sec. 67)

Following the maturity of the mortgage-money and preceding the redemption or the payment or deposit of funds in court, the mortgagee possesses the authority to petition the court for either foreclosure of the mortgage or the sale of the property.

When the mortgagee initiates legal proceedings to obtain a decree that unequivocally bars the mortgagor from redeeming the mortgaged property, it is termed a "suit for foreclosure."

Just as the mortgagor holds the inherent "right to redeem," the mortgagee is vested with a corresponding entitlement known as the "right of foreclosure."

This right empowers the mortgagee to seek a decree from the court when the specified period for repayment of the mortgage-money elapses, the mortgagor's redemption right is fully matured, and the mortgagor fails to exercise it.

The fundamental principle governing redemption and foreclosure is that, unless explicitly or implicitly stipulated otherwise, both the right to redeem and the right to foreclose extend equally.

In cases where an agreement specifies a timeframe, such as repayment within ten years, the mortgagor cannot redeem the property before the stipulated period concludes.

It's important to highlight that while the right of redemption remains unalterable by mutual agreement between the parties, the same cannot be said for the right of foreclosure.

Who cannot foreclose or sell 

  • A simple mortgagee cannot foreclose.

  • A mortgagee by conditional sale cannot sell

  • A usufructuary mortgagee cannot foreclose or sell.

  • A mortgagee of works of public utility cannot foreclose or sell.

  • A mortgagee’s trustee or legal representative happening to be a mortgagor and possessing the power of sale cannot foreclose.

  • A person interested in part only of the mortgage-money cannot institute a suit relating to a corresponding part of the mortgaged property, unless the mortgagees have, with the consent of the mortgagor, severed their interests under the mortgage. 

  • An English mortgagee cannot foreclose.

A fractional mortgagee lacks the authority to independently sever their interest and initiate legal action solely for the corresponding portion of the mortgaged property without securing the consent of both the mortgagor and the other mortgagees.

This limitation stems from the overarching principle that "every mortgage is indivisible."

Upon foreclosure, the mortgage-debt is entirely discharged. Consequently, the mortgagee forfeits the right to pursue the mortgagor on the personal covenant thereafter.

In English law, if a mortgagee opts to litigate based on the personal covenant post-foreclosure, they cannot compel the mortgagor to repay the loan or any remaining balance unless they are prepared to relinquish the security.

By pursuing legal action based on the mortgagor's personal liability, the mortgagee inadvertently grants the mortgagor a renewed opportunity to redeem the property.

This legal manoeuvre is commonly referred to as "opening the foreclosure." However, it's essential to note that in India, the concept of "opening the foreclosure" does not exist.

1 view0 comments


bottom of page