Order XXXIV Rule 5 CPC - Final Decree in Mortgage Suit for Sale

Final decree for sale, mortgage redemption, court auction and purchaser protection explained.

Order XXXIV Rule 5 of the Code of Civil Procedure, 1908 governs the final decree in a mortgage suit for sale. It explains when a mortgagor may pay the mortgage dues and recover the property, when the mortgagee may seek a decree for sale, and the protection given to an auction purchaser.

Order XXXIV Rule 5 CPC - Statutory provisions

Rule 5(1): Payment and restoration of property. Where the defendant pays into court all amounts due under Rule 4(1), on or before the date fixed or at any time before confirmation of a sale pursuant to a final decree under Rule 5(3), the court shall, on the defendant's application, pass a final decree or, if a final decree has already been passed, an order:

1. directing the plaintiff to deliver the documents referred to in the preliminary decree;
2. where necessary, directing the plaintiff to transfer the mortgaged property as provided in that decree; and
3. where necessary, directing the plaintiff to put the defendant in possession of the property.

Rule 5(2): Additional deposit after auction. If the mortgaged property or any part has been sold under Rule 5(3), the court cannot grant relief under Rule 5(1) unless the defendant also deposits, for payment to the purchaser, a sum equal to five per cent of the purchase money paid into court by the purchaser. The purchaser is then entitled to repayment of the purchase money deposited and an additional five per cent.

Rule 5(3): Final decree for sale. If payment under Rule 5(1) has not been made, the court shall, on the plaintiff's application, pass a final decree directing sale of the mortgaged property or a sufficient part of it. The sale proceeds are applied as prescribed by Order XXXIV Rule 4(1).

Meaning and legal effect

A preliminary decree determines the amount due and sets the terms for payment; a final decree authorises the next step, including sale where the debt remains unpaid. A mortgagor is the person who creates the mortgage, while the mortgagee is the person in whose favour the mortgage is created. The right of redemption is the mortgagor's right to discharge the mortgage by payment and obtain the property back, subject to the governing law.

Under Rule 5, passing a final decree for sale does not, by itself, end the opportunity to redeem: the rule expressly permits payment before confirmation of the court sale. After a court auction, the additional five per cent deposit protects the purchaser. The distinction between an auction taking place and its confirmation is therefore important.

How Order 34 Rule 5 operates

1. The court passes a preliminary decree under Order XXXIV Rule 4 specifying mortgage dues and the payment period.
2. If the defendant pays the required sums in time, the defendant may apply for delivery of mortgage documents, transfer and possession, where applicable.
3. On default, the mortgagee may seek a final decree for sale under Rule 5(3).
4. Even after an auction, the defendant may seek relief before sale confirmation by depositing the sums required by Rule 5(1) and the additional purchaser amount under Rule 5(2).
5. If the sale is confirmed without valid redemption, further rights depend on the decree, applicable procedural rules and facts of the case.

Related statutory provisions

Order XXXIV Rule 4 CPC: governs the preliminary decree in a mortgage suit for sale and how the sale proceeds are to be applied. Order XXXIV Rule 6 CPC: concerns a decree for a balance due in circumstances specified by that rule. Section 60 of the Transfer of Property Act, 1882: describes the mortgagor's right to redeem on payment or tender of the mortgage money, subject to its terms. Section 2(2) CPC: defines a decree, including preliminary and final decrees.

For official legislation, consult India Code - Code of Civil Procedure, 1908 and India Code - Transfer of Property Act, 1882. Check the current text and applicable state amendments or High Court rules when relying on these provisions in a particular proceeding.

Frequently asked questions

Can a mortgagor redeem after the final decree for sale?

Yes. Order XXXIV Rule 5 permits the prescribed payment at any time before confirmation of a sale held under the final decree, subject to the additional requirements where an auction has already occurred.

What is the five per cent deposit under Rule 5(2)?

It is an additional amount calculated on the purchase money paid into court by the auction purchaser, payable along with the mortgage dues where the property has already been sold but the sale has not been confirmed.

What happens when the mortgage debt is not paid?

The mortgagee may apply for a final decree directing sale of the mortgaged property, or a sufficient part of it, under Rule 5(3).

This article provides general legal information. The exact procedure and available relief depend on the decree, applicable amendments and the case record.