Foreclosure

Transfer of Property Act, 1882 — Sections 67–79; SARFAESI Act, 2002 — Section 13

The legal process by which a mortgagee (lender) acquires clear title to mortgaged property upon the mortgagor's (borrower's) default, extinguishing the borrower's right to redeem. Under the Transfer of Property Act, foreclosure is a mortgagee's remedy in addition to sale. SARFAESI Section 13 provides a similar statutory remedy for secured creditors without court process.

In practice, foreclosure is the mortgagee's remedy that extinguishes the borrower's right to redeem and vests clear title in the lender, and Indian banks now rely far more on the SARFAESI Section 13 route than on the older Transfer of Property Act remedy under Sections 67 to 79. The reason is procedural: classic foreclosure or a mortgage sale under the TPA generally requires a civil-court suit and decree, which is slow, whereas Section 13 lets a secured creditor demand, take possession of, and sell the secured asset without going to court once the account is an NPA. Counsel choosing the route weighs the mortgage type, the value at stake, and whether the borrower is likely to litigate every step. The borrower's countervailing right of redemption survives until the property is actually sold, so timing the enforcement and closing out the redemption window correctly is critical. Done loosely, an enforcement can be unwound at the DRT for procedural lapse. Well-advised creditors match the foreclosure route to the security and the likely contest.