Order XXXIV CPC: Rules 8 to 15 - Mortgage Redemption, Interest and Sale

Rule 8 - Final decree in redemption suit

(1) Where, before a final decree debarring the plaintiff from all right to redeem has been passed, or before confirmation of a sale under sub-rule (3), the plaintiff pays into Court all amounts due under Rule 7(1), the Court shall, on the plaintiff's application, pass a final decree or, if such decree has already been passed, an order directing delivery of the mortgage documents and, if necessary, re-transfer of the mortgaged property and restoration of possession.

(2) Where the mortgaged property or part of it has already been sold under sub-rule (3), the Court shall not make an order under sub-rule (1) unless the plaintiff also deposits for payment to the purchaser a sum equal to five per cent of the purchase-money paid into Court. The purchaser is entitled to repayment of the purchase-money together with that five per cent amount.

(3) Where payment under sub-rule (1) is not made, the Court shall, on the defendant's application:

• (a)in the case of a mortgage by conditional sale or the anomalous mortgage referred to in Rule 7, pass a final decree debarring the plaintiff and persons claiming under him from the right to redeem and, if necessary, direct possession to the defendant; or
• (b)in the case of any other mortgage, other than a usufructuary mortgage, direct sale of the mortgaged property or a sufficient part of it and application of the sale proceeds towards the amount due to the defendant, with any balance payable to the plaintiff or other person entitled.

Rule 8A - Recovery of balance due on mortgage in suit for redemption

Where the net proceeds of a sale held under Rule 8 are insufficient to pay the amount due to the defendant, the Court may, on his application in execution, pass a decree for the balance if that balance is legally recoverable from the plaintiff otherwise than out of the property sold.

Rule 9 - Decree where nothing is found due or mortgagee has been overpaid

Notwithstanding the preceding provisions, if it appears on taking the account referred to in Rule 7 that nothing is due to the defendant or that he has been overpaid, the Court shall pass a decree directing the defendant, if required, to re-transfer the property and to pay to the plaintiff the amount found due to him; and the plaintiff shall, if necessary, be put in possession of the mortgaged property.

Rule 10 - Costs of mortgagee subsequent to decree

In finally adjusting the amount payable to a mortgagee in foreclosure, sale or redemption, the Court shall add to the mortgage-money the properly incurred costs of the suit and other costs, charges and expenses incurred after the preliminary decree up to actual payment, unless the mortgagee's conduct in relation to the costs of the suit disentitles him to them.

Proviso. Where the mortgagor, before or at the institution of the suit, tenders or deposits the amount due on the mortgage, or an amount not substantially deficient in the Court's opinion, he shall not ordinarily be ordered to pay the mortgagee's costs of the suit and may recover his own costs, unless the Court records reasons to direct otherwise.

Rule 10A - Power of Court to direct mortgagee to pay mesne profits

Where, in a suit for foreclosure, the mortgagor has, before or at the institution of the suit, tendered or deposited the sum due on the mortgage, or a sum not substantially deficient in the Court's opinion, the Court shall direct the mortgagee to pay to the mortgagor mesne profits for the period beginning with the institution of the suit.

Rule 11 - Payment of interest

In a decree for foreclosure, sale or redemption, where interest is legally recoverable, the Court may direct payment of interest to the mortgagee in accordance with Rule 11.

Interest up to the date fixed for payment under the preliminary decree may be awarded on the principal amount found or declared due at the contractual rate, or, where no rate is fixed, at a rate considered reasonable by the Court.

Interest on properly incurred costs, charges and expenses added to the mortgage-money may be awarded at the agreed rate or, failing such rate, at a rate not exceeding six per cent per annum as the Court considers reasonable. Subsequent interest up to realisation or actual payment may be awarded at such rate as the Court considers reasonable.

Rule 12 - Sale of property subject to prior mortgage

Where property directed to be sold under Order XXXIV is subject to a prior mortgage, the Court may, with the prior mortgagee's consent, direct that the property be sold free from that mortgage, giving the prior mortgagee the same interest in the sale proceeds as he had in the property sold.

Rule 13 - Application of proceeds

(1) Sale proceeds shall be brought into Court and applied in the statutory order of priority:

• First, expenses incident to the sale or properly incurred in an attempted sale;
• Second, amounts due to the prior mortgagee and properly incurred costs connected with that mortgage;
• Third, interest due on the mortgage in consequence of which the sale was directed and costs of the suit;
• Fourth, principal money due on that mortgage; and
• Lastly, the residue, if any, to the person or persons proving an interest in the property sold according to their respective interests.

(2) Nothing in Rule 13 or Rule 12 affects the powers conferred by Section 57 of the Transfer of Property Act, 1882.

Rule 14 - Suit for sale necessary for bringing mortgaged property to sale

(1) Where a mortgagee has obtained a decree for payment of money in satisfaction of a claim arising under the mortgage, he is not entitled to bring the mortgaged property to sale otherwise than by instituting a suit for sale in enforcement of the mortgage. Such a suit may be instituted notwithstanding Order II Rule 2.

(2) Sub-rule (1) does not apply to territories to which the Transfer of Property Act, 1882 has not been extended.

Rule 15 - Mortgages by deposit of title deeds and charges

(1) The provisions of Order XXXIV that apply to a simple mortgage shall, so far as may be, apply to a mortgage by deposit of title deeds within the meaning of Section 58 of the Transfer of Property Act, 1882 and to a charge within the meaning of Section 100 of that Act.

(2) Where a decree orders payment of money and charges it on immovable property on default of payment, the amount may be realised by sale of that property in execution of the decree.

Official text and related law

For the authoritative central text, amendment footnotes and the complete Code, refer to the official India Code publication of the Code of Civil Procedure, 1908.

Official India Code - Code of Civil Procedure, 1908