Section 68 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.
A mortgage gives the lender a hold on the property, but section 68 also gives him, in four listed cases and no others, a right to sue for the money itself. This article sets out those cases, the proviso protecting transferees, and the Court's discretion to stay such a suit, as per the text of the Act consulted.
A mortgagee can sue for the mortgage-money "in the following cases and no others": (a) the mortgagor binds himself to repay; (b) the property is destroyed or the security becomes insufficient without anyone's wrongful act and the mortgagor fails to give further security; (c) the mortgagee is deprived of security by the mortgagor's wrongful act; (d) the mortgagee is entitled to possession and the mortgagor fails to deliver it. In cases (a) and (b) the Court may stay the suit until the mortgaged property is exhausted.
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. Section 68 is printed inside square brackets, marking inserted or substituted wording. It sits beside section 67 on foreclosure and sale, explained in our article on sections 67 and 67A. Section 67 is about a remedy against the property; section 68 is about a money claim. If you are a lender weighing a money claim, the recovery suit service explains how we approach such matters.
The four cases in section 68(1)
The mortgagee has a right to sue for the mortgage-money in these cases "and no others":
| Clause | Case | What has to be shown |
|---|---|---|
| (a) | The mortgagor binds himself to repay | A personal undertaking by the mortgagor to repay the money |
| (b) | Destruction or insufficiency of security | By a cause other than the wrongful act or default of the mortgagor or mortgagee, the property is wholly or partly destroyed or the security becomes insufficient within the meaning of section 66; the mortgagee gave a reasonable opportunity to provide further security enough to make it sufficient; the mortgagor failed |
| (c) | Wrongful act or default of the mortgagor | The mortgagee is deprived of the whole or part of his security by or in consequence of the mortgagor's wrongful act or default |
| (d) | Possession not delivered | The mortgagee is entitled to possession and the mortgagor fails to deliver it, or to secure it without disturbance by the mortgagor or by anyone claiming under a title superior to the mortgagor's |
Clause (a): the personal undertaking
If the mortgage-deed contains a promise by the mortgagor to repay, the lender can sue on it. If it does not, clause (a) is not available. That is why a deed's repayment promise is more than a formality.
Clause (b): when security fails through no fault
This clause turns on section 66. As explained in our article on sections 65A and 66, security is insufficient unless the value exceeds the dues by one-third, or by one-half for buildings. Two further conditions apply here: the mortgagee must have given the mortgagor a reasonable opportunity to provide further security, and the mortgagor must have failed to do so. The text does not say how long a reasonable opportunity is.
Clause (c): the mortgagor's wrongful act
Here the lender has lost all or part of his security because of what the mortgagor did or failed to do. No notice step is printed in this clause.
Clause (d): possession
The mortgagee must be entitled to possession. This fits a usufructuary mortgage or any deed that puts the lender in possession. If the mortgagor does not hand it over, or does not secure it against disturbance, including by someone with a better title than the mortgagor, the lender can sue for the money.
The proviso: transferees are protected
In the case of clause (a), a transferee from the mortgagor or from his legal representative is not liable to be sued for the mortgage-money. The personal undertaking binds the mortgagor, not a person who later buys the property.
Section 68(2): the Court may stay the suit
Where a suit is brought under clause (a) or clause (b), the Court may, at its discretion, stay the suit and all proceedings in it, notwithstanding any contract to the contrary, until the mortgagee has exhausted all his available remedies against the mortgaged property or what remains of it. The stay is not available if the mortgagee abandons his security and, if necessary, re-transfers the mortgaged property.
So a lender who sues on a personal promise may be told to go first against the property, unless he gives up the security.
A worked example
Rekha mortgaged her house to Imran and signed a promise in the deed to repay the loan. The house was badly damaged in a flood, and its value fell below what section 66 treats as sufficient. Imran asked Rekha in writing to give further security and allowed a reasonable time, but she did not. He can sue for the money under clause (b), and also under clause (a) because of her promise. Rekha could ask the Court to stay the suit until Imran has exhausted his remedies against what is left of the house, and the Court may do so at its discretion. If Imran wants to go ahead with the money suit, he can abandon his security and re-transfer the house.
Practical points for lenders and borrowers
- Lenders: put a clear repayment promise in the deed. Without it, clause (a) is lost.
- For clause (b): give written notice and a reasonable time before suing.
- Borrowers: a stay may be sought under sub-section (2) in cases (a) and (b), and it does not depend on the deed allowing it.
- Buyers of mortgaged property: the proviso protects a transferee from a clause (a) suit.
- Limitation for suits is not stated in this Act; see limitation periods for suits.
Need help with a mortgage recovery?
If the property no longer covers the loan, or the borrower has promised to repay and has not, the next step depends on the exact clause that fits. Our recovery suit team can help you identify it and prepare the documents.
Key takeaways
- A suit for mortgage-money lies only in the four cases in section 68(1).
- Clause (a) needs a personal promise to repay in the deed.
- Clause (b) needs insufficiency or destruction without wrongful act, a reasonable opportunity for further security, and failure to provide it.
- A transferee from the mortgagor cannot be sued under clause (a).
- In cases (a) and (b), the Court may stay the suit until the property is exhausted, unless the mortgagee abandons his security.
Read next
- Sections 67 and 67A: foreclosure or sale
- Sections 65A and 66: mortgagor's power to lease and waste
- Section 69: power of sale without the Court
- Limitation period for filing suits and appeals
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.