X, the owner of an agricultural land, borrowed ₹ 5 lakh from Y. To secure the loan, X executed an Usufructuary Mortgage in Y's favour, putting Y in possession of the land with the right to collect rents and profits until

Section 63A of Transfer of Property Act, 1882(TPA), deals with improvements to mortgaged property, stating that (1) Where mortgaged property in possession of the mortgagee has, during the continuance of the mortgage, been improved, the mortgagor, upon redemption, shall, in the absence of a contract to the contrary, be entitled to the improvement; and the mortgagor shall not, save only in cases provided for in Sub-section (2), be liable to pay the costs thereof. (2) Where any such improvement was effected at the cost of the mortgagee and was necessary to preserve the property from destruction or deterioration or was necessary to prevent the security from becoming insufficient, or was made in compliance with the lawful order of any public servant or public authority, the mortgagor shall, in the absence of a contract to the contrary, be liable to pay the proper cost thereof as an addition to the principal money with interest at the same rate as is payable on the principal, or, where no such rate is fixed, at the rate of nine per cent, per annum, and the profits, if any, accruing by reason of the improvement shall be credited to the mortgagor. A mortgage is not a transfer of ownership, but only a transfer of interest. Ownership remains with the mortgagor unless foreclosure or sale is decreed for a court in specific types of mortgages (not in usufructuary mortgage). In the case of Narandas Karsondas v. S.A. Kamtam, Supreme Court highlighted that the right to redeem a mortgage given to a mortgagor under section 60 of the Transfer of Property Act, is not extinguished by a contract of sale of the mortgaged property entered into by a mortgagee in exercise of the power of sale given to him under the mortgage deed. Until the sale is completed by a registered instrument, the mortgagor can redeem the mortgage on payment of the requisite amount. In the case of Chhedi Lal vs Babu Nandan the Allahabad Court held that if a mortgagor has agreed to become liable for the cost of any improvement that the mortgagee might make he would be so liable even though the improvements are not of the nature mentioned in Sub-section (2). In view of this discussion, it can be said that X can file a suit for redemption and recovery of possession under Section 60 of the Specific Relief Act, 1963. He will be required to deposit the mortgage money (principal and agreed interest) in court. The court can direct Y to deliver back possession of the property. The transaction between X and Y is a usufructuary mortgage under Section 58(d) and X has an absolute right of redemption even after expiry of the mortgage period. Y cannot claim ownership merely because the loan was unpaid or because he made improvements and he should deliver possession upon redemption; improvements do not justify refusal, though he may claim costs in specific cases under Section 63A TPA.