Yes,the mortgagee can very well redeem the mortgage on acceptance of mortgage money and release the property from mortgage.He can though proceed for attachment and sale in respect of other properties.
Whether purchaser of property already mortgaged can redeem?
In all Three Properties were mortgaged by the Owner Mortgagor in favour of Mortgagee. Out of which one property was fraudulently sold by the Mortgagor to person 'A' for valuable consideration. 'A' has latter on transferred that properties to B for valuable consideration. Latter on B again transferred the same to 'C' for valuable consideration. Now Mortgagee has attached those properties through court and proposed to sale them through Court. In the meantime Purchaser 'C' approached the Mortgagee and shown his willingness to redeem the same by paying amount of Market Value of the said Property and get the said Property released from Mortgagor of Mortgagee. Can the Mortgagee accept the amount of Market Value of that property and release it from its mortgage and it may proceed against other mortgaged properties for liquidation of remaining amount of Mortgage Debt ? Please advise
Asked 8 years ago in Property Law
Religion: Hindu
8 Answers
I will ask latter on
Asked 8 years ago
Under What provisions of law the Purchaser can redeem and Mortgagee can release such property to and in favour of Purchaser
Asked 8 years ago
1) in the suit filed by mortgagee mortgagor and purchasers must be parties .
2) file consent terms in said suit for receipt of X amount and for release of property to C
1. No. If the mortgagee is a PSU Bank, it has to redeem the mortgaged property to the mortgagor if the Borrower pays the entire outstanding amount standing in his name,
2. There can be an agreement signed by and between the Borrower, the Mortgagor, the Bank and 'C' by which the title deed of the property will be released to 'C' and the title of the property will be conveyed in his favour,
3. Alternatively, the Bank can also sale the property to 'C' by initiating SARFAESI Proceeding and issue sale certificate,
4. If the Mortgagee is an individual, he can settle the issue with 'C' by taking money and releasing the original title deed of the property which was deposited by the Mortgagor to create mortgage on the property showing it as a sale made by him to recover his dues.
In your case it is important to know whether the mortgagee is a private person/institution or a Bank for further advice.
As detailed in my first post, the Mortgagee ( if a PSU Bank) can not release the original title deed to 'C' without the written consent of the Borrower/Mortgagor in the form of Agreement.
The answer is yes. The mortgagee can accede to the proposal of C and apply to the court to unattach the property in respect of which a faulty title was created in favour of C, thereby making his title free and marketable. This will not prevent the mortgagee from proceeding against the other mortgaged properties.
The first charge of the property is to be goes to the Mortgagee .After the deduction of the debt the balance of the property right comes to purchaser or claimant. The new purchaser can claim damages and redemption from the owner of the property.
Can the Mortgagee accept the amount of Market Value of that property and release it from its mortgage and it may proceed against other mortgaged properties for liquidation of remaining amount of Mortgage Debt ?
Please advise
In the given situation the mortgagee requires his money back or the property held in mortgage.
The arrangement between C and the mortgagee if mutually agreed between them, then there is no issue, he can very well file a petition to withdraw the case stating the out of court compromise settlement.
Under What provisions of law the Purchaser can redeem and Mortgagee can release such property to and in favour of Purchaser
The purchaser will step into the shoes of the original borrower and can redeem the mortgage loan, however, he may have to involve he original borrower for giving his consent and NOC to this. These are local issues when the compromise settlement has been worked at.
