Transfer of Property Act, 1882 | Chapter IV
Section 60A: Obligation to transfer to a third party instead of re-transfer to mortgagor
Section 60A permits an eligible mortgagor to direct a mortgagee to assign the mortgage debt and transfer the mortgaged property to a nominated third person instead of returning it to the mortgagor. It also sets priorities among encumbrancers and excludes mortgagees who are or have been in possession.
Full text of Section 60A
Obligation to transfer to third party instead of re-transference to mortgagor
60A. (1) Where a mortgagor is entitled to redemption, then, on the fulfilment of any conditions on the fulfilment of which he would be entitled to require a re-transfer, he may require the mortgagee, instead of re-transferring the property, to assign the mortgage-debt and transfer the mortgaged property to such third person as the mortgagor may direct; and the mortgagee shall be bound to assign and transfer accordingly.
(2) The rights conferred by this section belong to and may be enforced by the mortgagor or by any encumbrancer notwithstanding an intermediate encumbrance; but the requisition of any encumbrancer shall prevail over a requisition of the mortgagor and, as between encumbrancers, the requisition of the prior encumbrancer shall prevail over that of a subsequent encumbrancer.
(3) The provisions of this section do not apply in the case of a mortgagee who is or has been in possession.
Meaning and application of Section 60A
Under Section 60, redemption ordinarily enables the mortgagor to demand the return of mortgage documents, delivery of possession where appropriate and re-transfer or acknowledgment of extinction of the mortgagee's rights. Section 60A supplies a further option: when the conditions for demanding re-transfer have been met, the mortgagor can require an assignment of the mortgage debt and transfer of the mortgaged property to a third person nominated by the mortgagor.
A mortgagor is the person who transfers an interest in immovable property as security, and the mortgagee is the person receiving that interest; these terms are defined by Section 58. An encumbrancer is a person holding a charge or other security interest affecting the property, as relevant to this provision. Section 60A facilitates a transfer of the security to another person rather than requiring its discharge and a separate fresh security transaction.
Priority where several persons demand transfer
Subsection (2) allows the mortgagor and an encumbrancer to invoke the right even where an intermediate encumbrance exists. If their requests conflict, an encumbrancer's request takes precedence over the mortgagor's. Where encumbrancers make competing requests, the prior encumbrancer takes precedence over the subsequent encumbrancer. The provision must be read with the nature and priority of the relevant interests.
Mortgagee in possession: statutory exclusion
Subsection (3) expressly excludes a mortgagee who is or has been in possession of the mortgaged property. Accordingly, Section 60A cannot be invoked against such a mortgagee, even if possession was held previously. The ordinary right of redemption and other applicable mortgage provisions require separate consideration.
Illustration
A mortgages land to B without delivering possession. Once A is entitled to demand re-transfer on fulfilling the redemption conditions, A may direct B to assign the mortgage debt and transfer the mortgaged land to C rather than re-transfer it to A. If an encumbrancer with a superior statutory requisition objects, the priority rule in subsection (2) governs. If B is or has been in possession, subsection (3) excludes this route.
Related provisions and official source
Read Section 58 (mortgage definitions), Section 59 (formalities), Section 59A (persons deriving title) and Section 60 (redemption). For the official legislation, consult the India Code - Transfer of Property Act, 1882 and check applicable State amendments.