Any of the persons referred to in section 91 (other than the mortgagor) and any co-mortgagor shall, on redeeming property subject to the mortgage, have, so far as regards redemption, foreclosure or sale of such property, the same rights as the mortgagee whose mortgage he redeems may have against the mortgagor or any other mortgagee.
The right conferred by this section is called the right of subrogation, and a person acquiring the same is said to be subrogated to the rights of the mortgagee whose mortgage he redeems.
A person who has advanced to a mortgagor money with which the mortgage is redeemed shall be subrogated to the rights of the mortgagee whose mortgage has been redeemed, if the mortgagor has by a registered instrument agreed that such person shall be so subrogated.
Nothing in this section shall be deemed to confer a right of subrogation on any person unless the mortgage in respect of which the right is claimed has been redeemed in full.
Legal Commentary & Landmark Judgments: Section 92
Section 92 of the Transfer of Property Act, 1882 codifies the doctrine of subrogation in mortgage law, conferring the rights of the redeemed mortgagee upon any person who redeems the mortgage.
Paragraph 4 enacts the rule of complete subrogation: no person shall be entitled to subrogation unless the mortgage in respect of which the right is claimed has been redeemed in full.
Subrogation is vital in refinancing loans: when Bank B pays off Borrower's existing mortgage with Bank A, Bank B steps into Bank A's priority status over intervening encumbrancers. To ensure conventional subrogation under Section 92, Bank B must execute and register a formal deed of subrogation with the borrower.