Sections 63-64 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Sections 63, 63A and 64 answer a simple question: when a mortgaged property has grown, been improved or had its lease renewed while the lender held it, who gets the benefit when the mortgage is redeemed? The default answer favours the mortgagor, with a cost to pay in stated cases. This is explained below as per the text of the Act consulted.
If the mortgagee is in possession and the property receives an accession or an improvement, the mortgagor on redemption gets it, in the absence of a contract to the contrary. He pays for it only in the cases the Act lists, and then the cost is added to the principal with interest at the rate on the principal or nine per cent per annum where no rate is fixed. If the mortgagee obtains a renewal of a mortgaged lease, the mortgagor gets the benefit of the new lease on redemption, unless he has contracted otherwise.
Source and scope
The text consulted is a publisher's print of the Act showing amendments up to the Transfer of Property (Amendment) Act, 2002 (3 of 2003); later amendments should be checked. These three provisions come after the mortgagor's right to redeem, covered in our article on Section 60. The mirror-image rule for the lender's side, section 70 and section 71, is in our article on sections 70 to 73. If you are reading a mortgage-deed that touches these points, a legal consultation before signing is worth the time.
Section 63: accession to mortgaged property
The general rule. Where mortgaged property in possession of the mortgagee has, during the continuance of the mortgage, received any accession, the mortgagor, upon redemption, shall, in the absence of a contract to the contrary, be entitled as against the mortgagee to such accession. An accession is something added to the property; the section does not define it further.
Printing note: the copy shows a second marginal heading, "Accession acquired in virtue of transferred ownership", inside section 63. It is part of the same section, not a new one.
When the accession was bought by the mortgagee. The section then deals with an accession acquired at the mortgagee's expense:
- If it can be separately possessed or enjoyed without harming the principal property, the mortgagor who wants it must pay the mortgagee the expense of acquiring it.
- If separate possession or enjoyment is not possible, the accession must be delivered with the property. The mortgagor is then liable to pay the proper cost, as an addition to the principal money, where the acquisition was necessary to preserve the property from destruction, forfeiture or sale, or was made with his assent. Interest runs at the same rate as on the principal, or, where no such rate is fixed, at nine per cent per annum, as printed.
- In that last case the profits arising from the accession are credited to the mortgagor.
Usufructuary mortgages. Where the mortgage is usufructuary and the accession was acquired at the mortgagee's expense, the profits from the accession are, in the absence of a contract to the contrary, set off against the interest (if any) payable on the money so spent.
Section 63A: improvements
Sub-section (1). Where mortgaged property in possession of the mortgagee has, during the mortgage, been improved, the mortgagor, upon redemption, is entitled to the improvement in the absence of a contract to the contrary, and is not liable to pay its cost, except in the cases in sub-section (2).
Sub-section (2). The mortgagor is liable to pay the proper cost, added to the principal money with interest at the rate on the principal (or nine per cent per annum where none is fixed), where the improvement was effected at the mortgagee's cost and:
- it was necessary to preserve the property from destruction or deterioration; or
- it was necessary to prevent the security from becoming insufficient; or
- it was made in compliance with the lawful order of any public servant or public authority.
Profits accruing from the improvement are credited to the mortgagor. All this holds "in the absence of a contract to the contrary".
Section 64: renewal of a mortgaged lease
Where the mortgaged property is a lease and the mortgagee obtains a renewal of the lease, the mortgagor, upon redemption, has the benefit of the new lease, in the absence of a contract by him to the contrary. The copy prints "[ *]" after the word lease, marking omitted words without saying what they were. For leases generally, see our article on section 105.
Side by side
| Provision | Subject | Mortgagor's position on redemption | When he must pay |
|---|---|---|---|
| 63, first paragraph | Accession to property in the mortgagee's possession | Entitled to the accession | Not stated for this paragraph; see the next row |
| 63, later paragraphs | Accession bought at the mortgagee's expense | Takes it if separable and he pays the expense; otherwise it goes with the property | Cost added to principal where acquisition was needed to preserve the property, or made with his assent |
| 63A(1) | Improvement | Entitled to it and not liable for its cost | Only in the cases in (2) |
| 63A(2) | Improvement needed to preserve, to keep the security sufficient, or ordered by a public authority | Entitled | Proper cost, added to principal with interest |
| 64 | Renewal of a mortgaged lease by the mortgagee | Gets the benefit of the new lease | Not stated in the text |
Practical illustration
Sunita mortgages a shop to Dhruv, who takes possession. During the mortgage a municipal order requires Dhruv to repair the front, and he does so at his own cost. On redemption, section 63A(2) makes the proper cost payable by Sunita, added to the principal with interest, and the shop's improved front goes back to her. If Dhruv had instead added a decorative front for his own taste, section 63A(1) would give the improvement to Sunita without cost, unless the deed says otherwise.
Drafting tip. All of these rules start with "in the absence of a contract to the contrary". A well-written mortgage-deed can fix who pays for improvements and how profits are treated. Mortgage drafting is covered in our guide on mortgage deed drafting.
Need help with a mortgage that involves possession?
When a lender is in possession and spends money on the property, or a leasehold is mortgaged, the rights on redemption turn on the deed. Speak to us through our legal consultation service and we can read the clauses with you.
Key takeaways
- Accession and improvements in the mortgagee's possession go to the mortgagor on redemption, unless the contract says otherwise.
- Cost is payable by the mortgagor only in the cases the Act lists, and is then added to the principal.
- Where no rate is fixed, interest on that cost is nine per cent per annum as printed.
- Profits from a covered accession or improvement are credited to the mortgagor.
- A lease renewal obtained by the mortgagee benefits the mortgagor on redemption.
Read next
- Section 60: right of the mortgagor to redeem
- Section 65: implied covenants by the mortgagor
- Sections 70 to 73: rights of a mortgagee in possession
- Mortgage types: simple, English, usufructuary
Disclaimer: Based on a publisher's print of the Transfer of Property Act, 1882 showing amendments up to the Transfer of Property (Amendment) Act, 2002 (3 of 2003), as consulted on 2 October 2026. State amendments, later amendments, stamp duty and registration charges are not covered and should be checked. This article is general information, not legal advice; check the official text before acting.