1976 (12) TMI 186 - SC - Indian Laws

Summary

Issues Involved:
1. Whether a mortgagor can exercise the right of redemption after the mortgagee sells the mortgaged property by public auction.
2. Whether the sale by the mortgagee extinguishes the mortgagor's right of redemption.
3. Interpretation of relevant sections of the Transfer of Property Act and the Indian Contract Act.

Summary:

Issue 1: Right of Redemption Post-Auction Sale
The primary question was whether a mortgagor can exercise the right of redemption after the mortgagee sells the mortgaged property by public auction. The court held that the mortgagor retains the right to redeem the property until the sale is completed by registration. The mortgagor's right to redeem is not extinguished merely by the auction sale.

Issue 2: Extinguishment of Right of Redemption
The court examined whether the sale by the mortgagee extinguishes the mortgagor's right of redemption. It was concluded that the right of redemption survives until the completion of the sale by a registered deed. The court emphasized that under Indian law, a contract for sale does not create any interest in the property and the right of redemption is only extinguished upon the execution and registration of the conveyance.

Issue 3: Interpretation of Relevant Sections
The court interpreted sections 54, 60, and 69 of the Transfer of Property Act and sections 202, 203, and 204 of the Indian Contract Act. It was held that:
- u/s 54, a sale is a transfer of ownership and requires a registered instrument.
- u/s 60, the mortgagor has the right to redeem unless extinguished by the act of parties or court decree.
- u/s 69, the mortgagee has the power of sale without court intervention, but this does not extinguish the right of redemption until the sale is completed by registration.

The court also distinguished between Indian and English law, noting that in India, there is no distinction between legal and equitable estates, and a contract for sale does not transfer any interest in the property.

Conclusion:
The appeal was dismissed, affirming that the mortgagor's right to redeem is not extinguished by the auction sale and survives until the sale is completed by registration. The court upheld the decision of the Maharashtra State Cooperative Appellate Court, which allowed the mortgagor to redeem the property. The appellant's contentions based on English law were rejected, and the court reiterated the principles of Indian law regarding the right of redemption and the completion of sale.