Write a short note on Redemption and Subrogation.

Question: Write a short note on Redemption and Subrogation. [BJS 1980]

Find the answer to the mains question of Property Law only on Legal Bites. [Write a short note on Redemption and Subrogation.]

Right of Redemption:

The right of redemption grants the mortgagor the statutory entitlement to reclaim their property from the mortgagee upon payment or tender of the mortgaged debt. This right is indefeasible and co-extensive with the mortgage, ensuring that once the principal money is due, the mortgagor can regain possession of the property by fulfilling their obligations.

Section 60 of the Transfer of Property Act, 1882, outlines the rights of the mortgagor, including the return of the mortgage instrument, delivery of possession, and retransfer of the property. However, the right can be extinguished by the act of parties or a court decree. The indivisibility of mortgages generally prevents partial redemption, but exceptions exist when provided for in the mortgage terms, co-mortgagors have separate interests, or there is a recognized partition. Section 61 allows a mortgagor to redeem one or more mortgages separately, and a clog on redemption, imposing conditions on the right, is considered void.

Subrogation:

Subrogation, the right of substitution, arises when the mortgagee transfers the mortgaged debt to an assignee, conferring upon the assignee all the rights of the mortgagee. Redemption triggers subrogation, allowing the redeeming party to assume the rights of the mortgagee.

Section 92 of the Transfer of Property Act states that any person with an interest or charge on the mortgaged property, right of redemption, or acting as a surety, creditor, or co-mortgagor, upon redeeming the property, acquires the same rights as the mortgagee.

Subrogation can be legal or conventional. Legal subrogation occurs by operation of law when a person with an interest or charge pays off the mortgage debt. Conventional subrogation is based on an agreement, either express or implied, where a third party, without any prior interest, pays off the debt in exchange for subrogation rights. However, subrogation does not apply when the mortgagor redeems the mortgage debt personally.