Section 95 of the Transfer of Property Act, 1882: Right of Redeeming Co-Mortgagor to Expenses
Section 95 protects a co-mortgagor who redeems mortgaged property by allowing recovery of the other co-mortgagors' proportionate share of expenses properly incurred in redemption, along with the recoverable mortgage money.
Text of Section 95 - Right of redeeming co-mortgagor to expenses
95. Where one of several mortgagors redeems the mortgaged property, he shall, in enforcing his right of subrogation under section 92 against his co-mortgagors, be entitled to add to the mortgage-money recoverable from them such proportion of the expenses properly incurred in such redemption as is attributable to their share in the property.
Meaning and scope of Section 95
A mortgagor is a person who transfers an interest in specific immovable property to secure payment of a debt or performance of an obligation, as described in Section 58(a). Where several persons jointly mortgage property, they are co-mortgagors. Redemption means discharging the mortgage and exercising the rights associated with repayment, including those described in Section 60.
When one co-mortgagor discharges the mortgage in full, Section 92 grants a right of subrogation: for purposes of redemption, foreclosure or sale, that person steps into the position of the mortgagee whose mortgage was redeemed, subject to the statutory conditions. Section 95 additionally permits the redeeming co-mortgagor to recover from the others their appropriate shares of expenses properly incurred in redeeming the property.
Conditions for claiming expenses
- There must be several co-mortgagors in relation to the mortgaged property.
- One co-mortgagor must have redeemed the mortgage; Section 92 requires redemption in full for the right of subrogation.
- The claimed expenses must have been properly incurred in the redemption, rather than unrelated or excessive expenditure.
- Only the proportion attributable to each other co-mortgagor's share in the property is added to the mortgage money recoverable from that person.
How proportionate expenses are calculated
For illustration, suppose A, B and C own mortgaged property in equal shares. A pays the entire mortgage debt of Rs. 9,00,000 and incurs Rs. 30,000 in proper redemption expenses. Assuming equal responsibility and no other relevant adjustment, B and C may each be liable for Rs. 3,00,000 of the mortgage debt and Rs. 10,000 of the expenses. A ordinarily bears the portion attributable to A's own share. Actual liability depends on the parties' shares, obligations and case-specific circumstances.
Relationship with Sections 82 and 92
Section 82 addresses contribution to mortgage debt in specified circumstances. Section 92 governs subrogation after full redemption. Section 95 deals specifically with adding properly incurred redemption expenses to the sums recoverable from co-mortgagors when the redeeming co-mortgagor enforces subrogation.
Evidence and practical application
The redeeming co-mortgagor should retain proof of the mortgage, payment receipts, discharge or release documents, and records supporting the necessity and amount of redemption expenses. The respective interests of the co-mortgagors in the property are important for determining the correct allocation. Section 95 does not automatically permit recovery of every expenditure associated with a dispute: the expense must have been properly incurred in redemption.
Official statutory reference
Read the Transfer of Property Act, 1882 on India Code, particularly Sections 58, 60, 82, 91, 92 and 95. Section 95 was substituted by Act 20 of 1929, Section 48.