Order XXXIV Rule 2 CPC - Preliminary Decree in Foreclosure Suit
Order 34 Rule 2 of the Code of Civil Procedure, 1908 governs the preliminary decree in a mortgage foreclosure suit. It provides for determination of mortgage dues, an opportunity to pay, and the circumstances in which a mortgagee may seek a final foreclosure decree.
Meaning and legal framework
A preliminary decree determines rights and obligations at an intermediate stage, leaving further steps for a final decree. Under Section 2(2) CPC, a decree may be preliminary or final. Foreclosure is the judicial process of barring the mortgagor's right to redeem the mortgaged property, subject to the requirements and restrictions of Section 67 of the Transfer of Property Act, 1882. The mortgagor's right to redeem is recognised by Section 60 of that Act.
What the court decides under Rule 2
When the plaintiff succeeds in a foreclosure suit, the court directs an account of, or declares, the sum due for mortgage principal, interest, awarded suit costs and properly incurred mortgage-security expenses. The preliminary decree fixes a payment date within the statutory six-month framework, subject to extension under Rule 2(2). If the defendant pays the amounts due, the plaintiff must return mortgage documents and, where required, re-transfer the property free of relevant encumbrances and restore possession. Default permits an application for a final foreclosure decree; foreclosure does not occur automatically upon expiry of the payment date.
Order XXXIV Rule 2 - statutory provisions
The following reproduces the substantive text of the rule from the original webpage, arranged into readable paragraphs.
Order XXXIV Rule 2 CPC - Preliminary decree in foreclosure suit Order 34 Rule 2 of Code of Civil Procedure 1908 - Preliminary decree in foreclosure suit
(1) In a suit for foreclosure, if the plaintiff succeeds, the Court shall pass a preliminary decree-
(a) ordering that an account be taken of what was due to the plaintiff at the date of such decree for-
(i) principal and interest on the mortgage,
(ii) the costs of suit, if any, awarded to him, and
(iii) other costs, charges and expenses properly incurred by him up to that date in respect of his mortgage-security, together with interest thereon; or (b) declaring the amount so due at that date; and
(c) directing-
(i) that, if the defendant pays into Court the amount so found or declared due on or before such date as the Court may fix within six months from the date on which the Court confirms and countersigns the account taken under clause (a), or from the date on which such amount is declared in Court under clause (b), as the case may be, and thereafter pays such amount as may be adjudged due in respect of subsequent costs, charges and expenses as provided in rule 10, together with subsequent interest on such sums respectively as provided in rule 11, the plaintiff shall deliver up to the defendant, or to such person as the defendant appoints, all documents in his possession or power relating to the mortgaged property, and shall, if so required, re-transfer the property to the defendant at his cost free from the mortgage and from all incumbrances created by the plaintiff or any person claiming under him, or, where the plaintiff claims by derived title, by those under whom he claims, and shall also, if necessary, put the defendant in possession of the property; and
(ii) that, if payment of the amount found or declared due under or by the preliminary decree is not made on or before the date so fixed, or the defendant fails to pay, within such time as the Court may fix, the amount adjudged due in respect of subsequent costs, charges, expenses and interest, the plaintiff shall be entitled to apply for a final decree debarring the defendant from all right to redeem the property.
(2) The Court may, on good cause shown and upon terms to be fixed by the Court, from time to time, at any time before a final decree is passed, extend the time fixed for the payment of the amount found or declared due under sub-rule (1) or of the amount adjudged due in respect of subsequent costs, charges, expenses and interest.
(3) Where, in a suit for foreclosure, subsequent mortgagees or persons deriving title from, or subrogated to the rights of, any such mortgagees are joined as parties, the preliminary decree shall provide for the adjudication of the respective rights and liabilities of the parties to the suit in the manner and form set forth in Form No. 9 or Form No. 10, as the case may be, of Appendix D with such variations as the circumstances of the case may require.
Subsequent mortgagees and forms of decree
Under Rule 2(3), when subsequent mortgagees or persons deriving title from, or subrogated to, their rights are parties, the preliminary decree must adjudicate their respective rights and liabilities. The applicable models are Forms 9 and 10 of Appendix D to the CPC, with modifications as the case requires.
Related legal provisions
Order XXXIV Rule 3 CPC addresses the final decree in a foreclosure suit. Rules 10 and 11 address recoverable costs, charges, expenses and interest. Order XXXIV Rule 1 concerns the parties to mortgage suits. The right to institute foreclosure proceedings is governed by the mortgage type and restrictions in Section 67 of the Transfer of Property Act.
Official statutory sources
General legal information. Applicable amendments, court rules and the facts of an individual case should be checked before relying on these provisions.