equity of redemption
Under the common law, if the mortgagor failed to repay on the fixed date, the property was lost for ever. Equity intervened and allowed him to redeem even after that date. This right, and the mortgagor's residual ownership it represents, is called the equity of redemption. In India it is a statutory right under s.60 of the Transfer of Property Act, 1882: at any time after the principal money has become due, the mortgagor may, on paying or tendering the amount due, require the mortgagee to return the deed and the property.
The right can be extinguished only by act of the parties or by a court decree. Any condition that defeats or clogs it is void: “once a mortgage, always a mortgage”. The mortgagee's corresponding rights are sale or foreclosure.
Example
A term that the property would vest in the mortgagee if not redeemed within six months was a clog on the equity of redemption and void.
In Indian law
- Section 60, Transfer of Property Act, 1882: right of mortgagor to redeem
See also
English mortgage · encumbrance · equity
Read more in the study notes
- Place of suing (sections 15 to 21A) (Civil Procedure Code and Limitation Act)
- Share capital and kinds of shares (Company Law)
- Dividends and the prohibition on buy-back (Company Law)
- Debentures, charges and acceptance of deposits (Company Law)
- Pledge (Contract II)
- Mortgage deed and lease deed (Drafting, Pleading and Conveyance)