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Civil Procedure Code - Mortgage suits

Order XXXIV Rule 7 CPC - Preliminary Decree in Redemption Suit

Order XXXIV Rule 7 of the Code of Civil Procedure, 1908 (CPC) governs the preliminary decree in a suit for redemption of a mortgage. It sets out how the mortgage amount is determined, the time allowed for payment and the consequences of non-payment.

Meaning and legal framework

Redemption is the mortgagor's right to recover the mortgaged property upon satisfying the mortgage debt in accordance with law. Preliminary decree means a decree deciding rights and obligations while leaving further steps to be taken before the suit is completely disposed of; see Section 2(2) CPC. A mortgage is a transfer of an interest in specific immovable property to secure payment of a debt or performance of an obligation under Section 58(a) of the Transfer of Property Act, 1882. Section 60 of that Act governs the right to redeem, subject to its terms and applicable law.

Order XXXIV Rule 7 CPC - statutory provisions explained

Rule 7(1): Preliminary decree on success in a redemption suit

If the plaintiff succeeds, the court must pass a preliminary decree. Under clause (a), it may order accounts to be taken of amounts due to the defendant on the date of the decree, comprising:

  1. Principal and interest on the mortgage;
  2. Costs of the suit, if awarded to the defendant;
  3. Other properly incurred costs, charges and expenses relating to the mortgage security, with interest.

Alternatively, under clause (b), the court may declare the amount due as of that date.

Rule 7(1)(c)(i): Payment and return of the property

The preliminary decree fixes a date, within six months from confirmation and countersigning of the accounts or from the declaration of the amount in court, as applicable, for the plaintiff to deposit the sum due. The plaintiff must also pay subsequent costs, charges and expenses under Rule 10 and subsequent interest under Rule 11, as adjudged.

On compliance, the defendant must deliver the mortgage documents to the plaintiff or the plaintiff's nominee, retransfer the property if required at the plaintiff's cost free from the mortgage and relevant encumbrances created by the defendant or persons through whom the defendant claims, and, where necessary, restore possession.

Rule 7(1)(c)(ii): Consequences of default

If the plaintiff does not pay the amounts within the period fixed, the defendant may apply for a final decree. The remedy depends on the mortgage type:

  • Sale: In the case of mortgages other than usufructuary mortgages, mortgages by conditional sale, or anomalous mortgages whose terms provide for foreclosure only, the defendant may seek sale of the mortgaged property.
  • Foreclosure: In a mortgage by conditional sale or the specified anomalous mortgage, the defendant may seek a decree debarring the plaintiff from the right to redeem.

The precise relief depends on the mortgage instrument, the statutory classification and the facts. Non-payment does not itself replace the need for an appropriate final decree.

Rule 7(2): Extension of time

For good cause shown, and on terms it fixes, the court may extend the payment period from time to time before passing a final decree for foreclosure or sale. An extension is discretionary and should be sought with supporting reasons.

Practical procedure in a redemption suit

  1. Establish the mortgage and the plaintiff's entitlement to redeem.
  2. Seek accounts or a declaration of the mortgage debt in the preliminary decree.
  3. Deposit the determined amount within the time fixed, together with subsequent amounts directed by the court.
  4. Apply for the appropriate final decree and consequential delivery of documents, reconveyance and possession under Order XXXIV Rule 8.
  5. If payment cannot be made in time, apply for extension under Rule 7(2) before the relevant final decree.

Order XXXIV Rule 1 concerns necessary parties to mortgage suits; Rule 7 governs the preliminary redemption decree; Rule 8 governs the final decree in a redemption suit; and Rules 10 and 11 address subsequent costs, charges, expenses and interest. Section 60 of the Transfer of Property Act sets out the substantive right of redemption, while Section 58 defines the various mortgage forms.

Official legal sources

Consult the official Code of Civil Procedure, 1908 on India Code and Transfer of Property Act, 1882 on India Code. Verify the text, applicable state amendments and judicial interpretation before relying on the provisions in a particular proceeding.

This article is general legal information. Court orders, mortgage terms and applicable amendments may affect the outcome.