Mortgagor’s Right to Redeem Will Survive Until Completion of Sale by Mortgagee: Karnataka High Court

In a significant judgment that reinforces the rights of mortgagors, the Karnataka High Court at Dharwad Bench, led by the Hon’ble Mr. Justice C. M. Poonacha, has ruled that a mortgagor’s right to redeem a property remains valid until the completion of its sale by the mortgagee.

The case in question challenged the validity of an auction sale of a mortgaged property conducted on January 12, 1990. The petitioners contested the sale on grounds of alleged procedural irregularities and fraud, arguing that the sale undervalued the property and lacked adequate publicity.

Delivering the judgment, Justice Poonacha emphasized the enduring nature of a mortgagor’s right to redemption, stating, “Mortgagor’s right to redeem will survive until there has been completion of sale by the mortgagee by a registered deed.” This pivotal observation upholds the protective legal framework for mortgagors against potential exploitation in property sales.

The court meticulously scrutinized the procedural aspects of the auction, noting significant lapses, including errors in the property’s description and the failure to account for payments made by the judgment debtor. The judgment also highlighted the duty of courts to ensure fairness and transparency in property auctions.

The decision to set aside the auction sale and remand the matter for further proceedings in the Executing Court marks a crucial step in reinforcing judicial vigilance in mortgage-related disputes. Legal experts view this as a landmark judgment that underscores the judiciary’s commitment to safeguarding individual rights in property transactions.

Date of Decision: 16 November, 2023

Shoukatali Bankapure and Others VS United Western Bank Ltd and Others