Sections 67-67A 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.
When a borrower does not repay, a mortgagee with a Court behind him has two main routes: ask for a decree that the mortgagor can never redeem (foreclosure) or ask for a decree that the property be sold. Section 67 sets that right and its limits, and section 67A tells a lender with several mortgages to sue on all of them together. This is explained as per the text of the Act consulted.
After the mortgage-money has become due and before a redemption decree or payment, a mortgagee may, unless the contract says otherwise, obtain from the Court a decree of foreclosure (the mortgagor is absolutely debarred from redeeming) or a decree for sale. Four limits apply: who may sue for what, trustee-mortgagors, public works, and part-interest suits. Under section 67A a mortgagee holding several mortgages by the same mortgagor who sues on one must sue on all that have fallen due.
Source and context
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. This is the first section of the group on the mortgagee's rights. It is the lender's counterpart to the borrower's right in Section 60, the right to redeem. The six kinds of mortgage are in Section 58.
Banks and financial institutions may also have a separate statutory route to enforce security, outside this Act; see our guide on SARFAESI enforcement. That law is not in the text consulted and is not explained here. If a mortgage dispute has reached this stage, our legal dispute resolution service handles such matters.
What section 67 gives the mortgagee
In the absence of a contract to the contrary, the mortgagee has a right, at any time after the mortgage-money has become due and before a decree has been made for redemption or the money has been paid or deposited as provided later in the Act, to obtain from the Court either:
- a decree that the mortgagor shall be absolutely debarred of his right to redeem the property; or
- a decree that the property be sold.
A suit for the first is called a suit for foreclosure. Words such as "due" and "a decree" are printed in square brackets, which marks wording that was inserted or substituted.
The timing matters. Once a redemption decree is made, or the borrower pays or deposits the money, this right is gone. Redemption is described in our article on sections 83 and 84.
The four limits
The section says "nothing in this section shall be deemed" to authorise the following.
| Clause | What is not authorised | In plain words |
|---|---|---|
| (a) | Any mortgagee other than a mortgagee by conditional sale, or a mortgagee under an anomalous mortgage whose terms entitle him to foreclose, to sue for foreclosure; or a usufructuary mortgagee as such or a mortgagee by conditional sale as such to sue for sale | Foreclosure is limited to conditional-sale mortgagees and certain anomalous mortgagees; a usufructuary or conditional-sale mortgagee cannot sue for sale as such |
| (b) | A mortgagor who holds the mortgagee's rights as his trustee or legal representative, and who may sue for sale, to sue for foreclosure | He may seek sale but not foreclosure |
| (c) | The mortgagee of a railway, canal, or other work in the maintenance of which the public are interested to sue for foreclosure or sale | Public works cannot be foreclosed or sold on a mortgagee's suit |
| (d) | A person interested in part only of the mortgage-money to sue relating only to a corresponding part of the property | Unless the mortgagees, with the mortgagor's consent, have severed their interests under the mortgage |
Clause (a) is printed inside square brackets in the copy.
How this plays out across mortgage types
Using only clause (a) and the definitions in section 58:
- A simple mortgage is not named in clause (a) as entitled to foreclose, so the route is sale.
- A mortgage by conditional sale can seek foreclosure, but not sale as such.
- A usufructuary mortgage can do neither as such under clause (a).
- An anomalous mortgage can seek foreclosure only if its terms entitle the mortgagee to foreclose.
Do check the exact kind of mortgage your deed creates; the guide on mortgage types helps with the labels.
Section 67A: one suit on several mortgages
A mortgagee who holds two or more mortgages executed by the same mortgagor, in each of which he has a right to the same kind of decree under section 67, and who sues on any one of them, shall, in the absence of a contract to the contrary, be bound to sue on all the mortgages on which the mortgage-money has become due. The text uses a small letter at the start ("a mortgagee"); this is a print feature, not a change in meaning.
Example. Manoj lent Priya Rs. 5 lakh against her godown and later Rs. 3 lakh against her office, both on mortgages for which a sale decree can be sought, and both now due. If Manoj sues for sale on the godown loan, section 67A says he must also include the office loan, unless their contract says otherwise. He cannot split his claims into separate suits.
Practical points
- Check the type of mortgage before choosing the remedy. A wrong choice runs into clause (a).
- Check timing. The right ends once a redemption decree is made or the money is paid or deposited.
- Do not split. Under 67A, bring all due mortgages from the same mortgagor, of the same remedy, in one suit.
- Check the deed. Section 67 starts with "in the absence of a contract to the contrary".
- Registration and stamp duty: not in this Act; see our stamp duty guides.
Need help with enforcing or defending a mortgage?
Whether you are a lender looking at the route available under your type of mortgage or a borrower facing a suit, the details of the deed decide the remedy. Reach out through our legal dispute resolution service to discuss your documents.
Key takeaways
- Section 67 lets a mortgagee seek a foreclosure decree or a sale decree from the Court, subject to contract.
- The right ends once a redemption decree is made or the money is paid or deposited.
- Foreclosure is confined by clause (a) to mortgagees by conditional sale and certain anomalous mortgagees.
- A usufructuary or conditional-sale mortgagee cannot sue for sale as such.
- Public works mortgages cannot be foreclosed or sold on a mortgagee's suit; part-interest suits are barred unless interests were severed.
- Section 67A makes a multi-mortgage lender sue on all due mortgages together.
Read next
- Section 60: right of the mortgagor to redeem
- Section 68: right to sue for mortgage-money
- Section 69: power of sale without the Court
- Types of mortgage under the Transfer of Property Act
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.