Doctrine of subrogation

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Meaning of Subrogation

Subrogation means substitution. Any person other than mortgagor and co-mortagagor who having interest in mortgaged property and who redeems the mortgage is entitled to be substituted in place of mortgagee. In other words the person who pays off the mortgage becomes clothed with the rights of mortgagee. This is called subrogation or substitution of that person in place of mortgagee for the purposes of redemption, foreclosure or sale.

    The theory of subrogation has been incorporated in section 92 of The Transfer of Property Act, 1882 by the amendment in 1929. Before 1929 the concept of subrogation was applicable in India. It was applied in Bisheshar Prasad  V. Lala Sarvan Singh 1910.  As equity of subrogation. 

Kinds of Subrogation.

 
Section 92 of the Transfer of Property Act 1882 deals with the subrogation. Section 92 incorporates two types of subrogation. 
 

(I)   Legal Subrogation.
(II) Conventional subrogation. 

Legal Subrogation. 

Paragraph 1 of section 92 of the T.P.A. 1882 deals with doctrine of subrogation. Any person (except mortgagor) who has an interest in the mortgaged property is entitled to be subrogated in place of mortgagee. It is a legal provision. The legal subrogation is based on the equitable doctrine of re-imbursement. A legal subrogation may arise in all such cases where a person for protecting his own interests, discharges a prior incumbrances.

 

Section 92 provides the list of persons who can claim legal subrogation. –

(I)  Psuine mortgagee  ( subsequent mortgagee)
(II) Co-mortgagor
(III) Surety
(IV) Purchaser of equity of redemption.

Conventional Subrogation

Paragraph 3 of section 92 of T.P.A. 1882 deals with conventional subrogation. Conventional subrogation takes place when a person being stranger to mortgage, advances money to mortgaor under an agreement that he would be subrogated to the Rights of mortgagee if mortgaor redeems the mortgage from such money.

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