Order XXXIV CPC: Rules 1 to 7 - Suits Relating to Mortgages of Immovable Property
Order XXXIV of the Code of Civil Procedure, 1908 lays down the procedure for suits relating to mortgages of immovable property. Rules 1 to 7 deal with necessary parties, foreclosure suits, suits for sale, recovery of a balance due after sale and preliminary decrees in redemption suits.
Rule 1 - Parties to suits for foreclosure, sale and redemption
Subject to the provisions of this Code, all persons having an interest either in the mortgage-security or in the right of redemption shall be joined as parties to any suit relating to the mortgage.
Explanation. A puisne mortgagee may sue for foreclosure or for sale without making the prior mortgagee a party to the suit; and a prior mortgagee need not be joined in a suit to redeem a subsequent mortgage.
Rule 2 - Preliminary decree in foreclosure suit
(1) In a suit for foreclosure, if the plaintiff succeeds, the Court shall pass a preliminary decree:
- (a)ordering that an account be taken of what was due to the plaintiff at the date of the decree for principal and interest on the mortgage, costs of suit awarded to him, and other costs, charges and expenses properly incurred up to that date in respect of the mortgage-security, together with interest thereon; or
- (b)declaring the amount so due at that date; and
- (c)directing the consequences of payment or non-payment within the time fixed by the Court.
If the defendant pays the amount found or declared due, together with subsequent costs, charges, expenses and interest as provided in Rules 10 and 11, the plaintiff shall deliver the mortgage documents and, if required, re-transfer the property free from the mortgage and encumbrances created by the plaintiff or persons claiming under him, and if necessary put the defendant in possession.
If payment is not made within the time fixed, the plaintiff becomes entitled to apply for a final decree debarring the defendant from all right to redeem the property.
(2) On good cause shown, the Court may, on terms, extend the time for payment at any time before a final decree is passed.
(3) Where subsequent mortgagees or persons deriving title from, or subrogated to, their rights are joined, the preliminary decree shall provide for adjudication of the respective rights and liabilities of the parties in accordance with the applicable forms in Appendix D.
Rule 3 - Final decree in foreclosure suit
(1) Where, before a final decree debarring the defendant from all right to redeem has been passed, the defendant pays into Court all amounts due under Rule 2(1), the Court shall, on the defendant's application, pass a final decree directing delivery of the mortgage documents and, if necessary, re-transfer of the mortgaged property and restoration of possession.
(2) Where such payment has not been made, the Court shall, on the plaintiff's application, pass a final decree declaring that the defendant and all persons claiming through or under him are debarred from all right to redeem the mortgaged property and, if necessary, direct the defendant to put the plaintiff in possession.
(3) On the passing of a final decree under sub-rule (2), all liabilities to which the defendant is subject in respect of the mortgage or on account of the suit shall be deemed to have been discharged.
Rule 4 - Preliminary decree in suit for sale
(1) In a suit for sale, if the plaintiff succeeds, the Court shall pass a preliminary decree corresponding to the accounting and payment directions in Rule 2(1), and further direct that, in default of payment, the plaintiff may apply for a final decree for sale of the mortgaged property or a sufficient part of it.
The sale proceeds, after deduction of sale expenses, are to be paid into Court and applied towards the amount found or declared due to the plaintiff, together with subsequent costs, charges, expenses and interest. Any balance is payable to the defendant or other persons entitled to receive it.
(2) On good cause shown, the Court may extend the time fixed for payment at any time before a final decree for sale is passed.
(3) In a foreclosure suit concerning an anomalous mortgage, the Court may, at the instance of a party or other person interested in the mortgage-security or right of redemption, pass a decree for sale instead of foreclosure on such terms as it thinks fit.
(4) Where subsequent mortgagees or persons deriving title from, or subrogated to, their rights are joined, the preliminary decree shall provide for adjudication of their respective rights and liabilities in accordance with the applicable forms in Appendix D.
Rule 5 - Final decree in suit for sale
(1) Where, on or before the day fixed or at any time before confirmation of a sale made under a final decree, the defendant pays into Court all amounts due under Rule 4(1), the Court shall, on application, pass a final decree or, if a final decree has already been passed, an order directing delivery of the mortgage documents and, if necessary, transfer of the mortgaged property and restoration of possession.
(2) Where the mortgaged property or part of it has already been sold, the Court shall not make an order under sub-rule (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. The purchaser is then entitled to repayment of the purchase-money together with that five per cent amount.
(3) Where payment under sub-rule (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, with the proceeds dealt with as provided in Rule 4(1).
Rule 6 - Recovery of balance due on mortgage in suit for sale
Where the net proceeds of a sale held under Rule 5 are insufficient to pay the amount due to the plaintiff, the Court may, on the plaintiff's application, pass a decree for the balance if that balance is legally recoverable from the defendant otherwise than out of the property sold.
Rule 7 - Preliminary decree in redemption suit
(1) In a suit for redemption, if the plaintiff succeeds, the Court shall pass a preliminary decree ordering an account of, or declaring, what is due to the defendant for principal and interest on the mortgage, costs of suit, and other properly incurred costs, charges and expenses in respect of the mortgage-security together with interest.
The decree shall direct that, if the plaintiff pays into Court the amount found or declared due within the time fixed, together with subsequent costs, charges, expenses and interest under Rules 10 and 11, the defendant shall deliver up the mortgage documents and, if required, re-transfer the property free from the mortgage and encumbrances created by the defendant or those claiming under him, and if necessary put the plaintiff in possession.
If payment is not made within the time fixed, the defendant may apply for a final decree:
- (a)in the case of a mortgage other than a usufructuary mortgage, a mortgage by conditional sale, or an anomalous mortgage providing for foreclosure only and not sale, directing sale of the mortgaged property; or
- (b)in the case of a mortgage by conditional sale or such an anomalous mortgage, debarring the plaintiff from all right to redeem the property.
(2) On good cause shown, the Court may extend the time fixed for payment at any time before a final decree for foreclosure or sale is passed.
Official text and related provisions
For the authoritative central text, amendment footnotes, prescribed forms and the remaining rules of Order XXXIV, refer to the official India Code publication of the Code of Civil Procedure, 1908.