Some conditions that enable a mortgagee to enforce this right to recover his dues
A right of foreclosure is a right available to a mortgagee to recover his outstanding money. This right of foreclosure can be exercised by a mortgagee only if certain conditions are met.
Here are some conditions to exercise this right:- The money should have become due for payment
- There should be no condition in the mortgage deed waiving the right
- The mortgagor should not have a decree of redemption of the mortgaged property
The remedy depends upon the nature of mortgage. In case of a simple mortgage, the right of foreclosure is not available. The remedy is either to proceed against the mortgagor personally or for sale of the mortgaged property. This is also the same in case of an usufructuary mortgage. In this case, the mortgagee is in possession of the property and continuous to be in possession until the debt is repaid in full.
The relevant provisions are contained under Section 67 of the Transfer Property Act. This right can be enforced on failure of the mortgagor to repay the money borrowed on the due date. The mortgagee has a right to obtain from a court a decree that the mortgagor be absolutely debarred of his right to redeem the property, or a decree that the property be sold. A suit to obtain a decree that a mortgagor be absolutely debarred of his right to redeem the mortgaged property is called a suit for foreclosure.
In case of anomalous mortgage, the remedy depends upon the terms of the mortgage. In the case of an English mortgage, the mortgagee may bring a suit for sale of the property. In case of conditional sale, the mortgage matures into sale on the failure of payment of the debt. In case of mortgage by deposit of titles deeds, the remedy is to sue for personal decree or for sale of the property.
A person interested in only a part of the mortgage money may institute a suit relating only to a corresponding part of the mortgaged property. However, this is subject to the condition that the mortgagees have severed their interests under the mortgage with the consent of the mortgagor.
Sometimes, a mortgagee may hold two or more mortgages executed by the same mortgagor. In respect of each of such mortgages, he may have a right to obtain a decree of foreclosure. In case he sues to obtain such decree on any one of the mortgages, he will be bound to sue on all the mortgages in respect of which the mortgage money has become due.
