Good article on subrogation( Transfer of property Act)

S 92 OF TRANSFER OF PROPERTY ACT -SUBROGATION

Subrogation is a Roman term meaning “substitution”.It is the right of person to stand in the place of a creditor. When a mortgagee transfers his mortgage debt, his assignee becomes vested with all his rights that is his assignee is substituted or subrogated in the place of mortgagee. In order to be entitled to subrogation, a person must pay off the entire amount of a prior mortgage, because subrogation takes place by redemption,and unless there is redemption, there can be no subrogation.Partial payment of mortgage-debt can not give rise to a claim for a partial subrogation.

There are two types of subrogation:

A.Legal:Legal subrogation takes place by operation of law,when the mortgage debt is paid off by some person who has some interest to protect ,e.g.,where subsequent mortgagee pays off a prior one.

Legal subrogation may occur in four ways:

1.A subsequent morgagee may redeem a prior mortgage.

2.A co-mortgagor may redeem a mortgage.

3.The mortgagor's suety may redeem the mortgage.

4 The purchaser of equity of redemption may redeem the mortgage.

B.Conventional subrogation : It is sometimes called subrogation by agreement. It takes place where the person paying off the mortgage-debt is a stranger and has no interest to protect, but he advances the money under an agreement ,express or implied, that he would be subrogated to rights and remedies of the mortgagee who is paid off.It requires that agreement of subrogation to be in writing and registered.

 The essence of this doctrine is that party who pays off a mortgage gets clothed with all the rights of mortgagee. This doctrine is based on principles of justice, equity, and good conscience.

Read Important Judgments on subrogation:

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