Suits Relating to Mortgages of Immovable Property
Chapter Twenty-Eight
Syllabus topic 2.8, "Special suits, Orders XXVII to XXXIV"
Pages 157 to 162 of 365
In one line
A mortgage suit is decided in two stages: a preliminary decree that works out how much is owed and gives a period to pay, and a final decree that says what happens if it is not paid.
Order XXXIV is where the preliminary decree really lives. If you understand the two-stage structure here, the Explanation to section 2(2) stops being an abstraction.
Why the Code proceeds in two stages
A mortgage dispute is not really about who is right. It is usually common ground that money was lent and that land was given as security. What is in dispute is how much is outstanding today, and that cannot be known until an account is taken of principal, interest, costs and expenses.
So the Code does the accounting first, then gives the party a genuine opportunity to pay, and only if he does not pay does it move to the consequence. The preliminary decree does the first two things; the final decree does the third.
That structure also explains why the periods are generous. The whole point of a redemption period is that a person should not lose land over a debt he could have paid.
The three kinds of mortgage suit
| Suit | Brought by | What the plaintiff wants |
|---|---|---|
| Foreclosure | The mortgagee | To end the mortgagor's right to redeem, so the property becomes his |
| Sale | The mortgagee | To have the property sold and be paid out of the proceeds |
| Redemption | The mortgagor | To pay off the debt and get his property back |
Two are the lender's remedies and one is the borrower's. The procedure in each is a mirror of the others, which is why Rules 4 and 7 are drafted by reference back to Rule 2.
Rule 1 requires that 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, subject to the exceptions the rule states.
Section 16(c) places such a suit where the property is situate: a suit for foreclosure, sale or redemption in the case of a mortgage of or charge upon immovable property is instituted in the Court within whose local limits the property lies. See [Place of Suing].
The preliminary decree in a foreclosure suit: Rule 2
Rule 2(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 (i) principal and interest on the mortgage, (ii) the costs of the suit awarded to him, and (iii) other costs, charges and expenses properly incurred by him up to that date in respect of his mortgage security, with interest on them; or
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