Sec 58 to 104 Chapter IV (Of Mortgages Of Immoveable Property And Charges ) The Transfer Of Property Act, 1882

58. “Mortgage”, “mortgagor”, “mortgagee”, “mortgage-money” and “mortgage-deed” defined.—

(a) A mortgage is the transfer of an interest in specific immoveable property for the purpose of securing the payment of money advanced or to be advanced by way of loan, an existing or future debt, or the performance of an engagement which may give rise to a pecuniary liability.

The transferor is called a mortgagor, the transferee a mortgagee; the principal money and interest of which payment is secured for the time being arc called the mortgage-money, and the instrument (if any) by which the transfer is effected is called a mortgage -deed.

(b) Simple mortgage.—

Where, without delivering possession of the mortgaged property, the mortgagor binds himself personally to pay the mortgage-money, and agrees, expressly or impliedly, that, in the event of his failing to pay according to his contract, the mortgagee shall have a right to cause the mortgaged property to be sold and the proceeds of sale to be applied, so far as may be necessary, in payment of the mortgage-money, the transaction is called a simple mortgage and the mortgagee a simple mortgagee.

(c) Mortgage by conditional sale.—

Where the mortgagor ostensibly sells the mortgaged property—

on condition that on default of payment of the mortgage-money on a certain date the sale shall become absolute, or

on condition that on such payment being made the sale shall become void, or

on condition that on such payment being made the buyer shall transfer the property to the seller,

the transaction is called a mortgage by conditional sale and the mortgagee a mortgagee by conditional sale:

¹ [Provided that no such transaction shall be deemed to be a mortgage, unless the condition is embodied in the document which effects or purports to effect the sale.]

(1. Added b y A c t 2 0 o f 1 9 2 9 , s . 1 9 .)

(d) Usufructuary mortgage.—

Where the mortgagor delivers possession ¹ [or expressly or by implication binds himself to deliver possession] of the mortgaged property to the mortgagee, and authorises him to retain such possession until payment of the mortgage-money, and to receive the rents and profits accruing from the property ² [or any part of such rents and profits and to appropriate the same] in lieu of interest, or in payment of the mortgage -money, or partly in lieu of interest ³ [or] partly in payment of the mortgage-money, the transaction is called an usufructuary mortgage and the mortgagee an usufructuary mortgagee.

(1. Added b y A c t 2 0 o f 1 9 2 9 , s . 1 9 .)

(2. Subs. by s. 19, ibid., for “and to appropriate them”.)

(3. Subs. by s. 19, ibid., for “and”.)

(e) English mortgage.—

Where the mortgagor binds himself to re-pay the mortgage-money on a certain date, and transfers the mortgaged property absolutely to the mortgagee, but subject to a proviso that he will re-transfer it to the mortgagor upon payment of the mortgage-money as agreed, the transaction is called an English mortgage.

¹ [(f) Mortgage by deposit of title-deeds.—Where a person in any of the following towns, namely, the towns of Calcutta, Madras, ² [and Bombay], ^3*** and in any other town which the ⁴ [State Government concerned] may, by notification in the Official Gazette, specify in this behalf, delivers to a creditor or his agent documents of title to immoveable property, with intent to create a security thereon, the transaction is called a mortgage by deposit of title-deeds.

(1. Added by Act 20 of 1929, s. 19.)

(2. Subs. by A.O. 1948, for “Bombay and Karachi”. The word “and” had been ins. by A.O. 1937.)

(3. The words “Rangoon, Moulmein, Bassein and Akyab” omitted by A.O. 1937.)

(4. The words “Governor General in Council” successively amended by A.O. 1937 and the A.O. 1950 to read as above.)

(g) Anomalous mortgage.—

A mortgage which is not a simple mortgage, a mortgage by conditional sale, an usufructuary mortgage, an English mortgage or a mortgage by deposit of title-deeds within the meaning of this section is called an anomalous mortgage.]

59. Mortgage when to be by assurance.—

Where the principal money secured is one hundred rupees or upwards, a mortgage ⁵ [other than a mortgage by deposit of title-deeds] can be effected only by a registered instrument signed by the mortgagor and attested by at least two witnesses.

Where the principal money secured is less than one hundred rupees, a mortgage may be effected either by ⁶ [a registered instrument] signed and attested as aforesaid, or (except in the case of a simple mortgage) by delivery of the property.

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(5. Ins. by Act 20 of 1929, s. 20.)

(6. Subs. by Act 6 of 1904, s. 3, for “an instrument”.)

(7. Third paragraph omitted by Act 20 of 1929, s. 20.)

⁸ [59A. References to mortgagors and mortgagees to include persons deriving title from them.—

Unless otherwise expressly provided, references in this Chapter to mortgagors and mortgagees shall be deemed to include references to persons deriving title from them respectively.]

(8. Ins. by s. 21, ibid.)

Rights and Liabilities of Mortgagor

60. Right of mortgagor to redeem.—

At any time after the principal money has become ⁹ [due], the mortgagor has a right, on payment or tender, at a proper time and place, of the mortgage - money, to require the mortgagee (a) to deliver ¹⁰ [to the mortgagor the mortgage-deed and all documents relating to the mortgaged property which are in the possession or power of the mortgagee], (b) where the mortgagee is in possession of the mortgaged property, to deliver possession thereof to the mortgagor, and (c) at the cost of the mortgagor either to re-transfer the mortgaged property to him or to such third person as he may direct, or to execute and (where the mortgage has been effected by a registered instrument) to have registered an acknowledgement in writing that any right in derogation of his interest transferred to the mortgagee has been extinguished:

Provided that the right conferred by this section has not been extinguished by act of the parties or by ¹¹[decree] of a Court.

The right conferred by this section is called a right to redeem and a suit to enforce it is called a suit for redemption.

Nothing in this section shall be deemed to render invalid any provision to the effect that, if the time fixed for payment of the principal money has been allowed to pass or no such time has been fixed, the mortgagee shall be entitled to reasonable notice before payment or tender of such money.

(9. Subs. by s. 22, ibid., for “payable”.

10. Subs. by s. 22, ibid., for “the mortgage-deed, if any, to the mortgagor”.

11. Subs. by Act 20 of 1929, s. 22, for “order”.)

Redemption of portion of mortgaged property.—

Nothing in this section shall entitle a person interested in a share only of the mortgaged property to redeem his own share only, on payment of a proportionate part of the amount remaining due on the mortgage, except ¹ [only] where a mortgagee, or, if there are more mortgagees than one, all such mortgagees, has or have acquired, in whole or in part, the share of a mortgager.

(1. Ins. by Act 20 of 1929, s. 22.)

² [60A. Obligation to transfer to third party instead of re-transference to mortgagor.—

(1) Where a mortgagor is entitled to redemption, then, on the fulfilment of any conditions on the fulfilment of which he would be entitled to require a re-transfer, he may require the mortgagee, instead of re-transferring the property, to assign the mortgage-debt and transfer the mortgaged property to such third person as the mortgagor may direct; and the mortgagee shall be bound to assign and transfer accordingly.

(2) The rights conferred by this section belong to and may be enforced by the mortgagor or by any encumbrancer notwithstanding an intermediate encumbrance; but the requisition of any encumbrancer shall prevail over a requisition of the mortgagor and, as between encumbrancers, the requisition of a prior encumbrancer shall prevail over that of a subsequent encumbrancer.

(3) The provisions of this section do not apply in the case of a mortgagee who is or has been in possession.

(2. S. 60A and 60B ins. by s. 23, ibid.)

60B. Right to inspection and production of documents.—

A mortgagor, as long as his right of redemption subsists, shall be entitled at all reasonable times, at his request and at his own cost, and on payment of the mortgagee’s costs and expenses in this behalf, to inspect and make copies or abstracts of, or extracts from, documents of title relating to the mortgaged property which are in the custody or power of the mortgagee.]

³ [61. Right to redeem separately or simultaneously.—

A mortgagor who has executed two or more mortgages in favour of the same mortgagee shall, in the absence of a contract to the contrary, when the principal money of any two or more of the mortgages has become due, be entitled to redeem any one such mortgage separately, or any two or more of such mortgages together.]

(3. Subs. by s. 24, ibid., for s. 61.)

62. Right of usufructuary mortgagor to recover possession.—

In the case of a usufructuary mortgage, the mortgagor has a right to recover possession of the property ⁴ [together with the mortgagedeed and all documents relating to the mortgaged property which are in the possession or power of the mortgagee],—

(a) where the mortgagee is authorised to pay himself the mortgage-money from the rents and profits of the property.—when such money is paid:

(b) where the mortgagee is authorised to pay himself from such rents and profits ⁵ [or any part thereof a part only of the mortgage -money],—when the term (if any), prescribed for the payment of the mortgage-money has expired and the mortgagor pays or tenders to the mortgagee ⁶ [the mortgage-money or the balance thereof] or deposits it in Court as hereinafter provided.

(4. Ins. by s. 25, ibid.)

(5. Subs. by s. 25, ibid., for “the interest of the principal money”.)

(6. Subs. by s. 25, ibid., for “the principal money”.)

63. Accession to mortgaged property.—

Where mortgaged property in possession of the mortgagee has, during the continuance of the mortgage, received any accession, the mortgagor, upon redemption, shall, in the absence of a contract to the contrary, be entitled as against the mortgagee to such accession.

Accession acquired in virtue of transferred ownership.—

Where such accession has been acquired at the expense of the mortgagee, and is capable of separ ate possession or enjoyment without detriment to the principal property, the mortgagor desiring to take the accession must pay to the mortgagee the expense of acquiring it. If such separate possession or enjoyment is not possible, the accession must be delivered with the property; the mortgagor being liable, in the case of an acquisition necessary to preserve the property from destruction, forfeiture or sale, or made with his assent, to pay the proper cost thereof, as an addition to the principal money, ¹ [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].

In the case last mentioned the profits, if any, arising from the accession shall be credited to the mortgagor.

Where the mortgage is usufructuary and the accession has been acquired at the expense of the mortgagee, the profits, if any, arising from the accession shall, in the absence of a contract to the contrary, be set off against interest, if any, payable on the money s o expended.

(1. Subs. by Act 20 of 1929, s. 26, for “at the same rate of interest”.)

² [63A. Improvements to mortgaged property.—

(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 cost 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.]

(2. Ins. by s. 27, ibid.)

64. Renewal of mortgaged lease.—

Where the mortgaged property is a lease ^3***, and the mortgagee obtains a renewal of the lease, the mortgagor, upon redemption, shall, in the absence of a contract by him to the contrary, have the benefit of the new lease.

(3. The words “for a term of years” omitted by s. 28, ibid)

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65. Implied contracts by mortgagor.—

In the absence of a contract to the contrary, the mortgagor shall be deemed to contract with the mortgagee,—

(a) that the interest which the mortgagor professes to transfer to the mortgagee subsists, and that the mortgagor has power to transfer the same;

(b) that the mortgagor will defend, or, if the mortgagee be in possession of the mortgaged property, enable him to defend, the mortgagor’s title thereto;

(c) that the mortgagor will, so long as the mortgagee is not in possession of the mortgaged property, pay all public charges accruing due in respect of the property;

(d) and, where the mortgaged property is a lease ^4***, that the rent payable under the lease, the conditions contained therein, and the contracts binding on the lessee have been paid, performed and observed down to the commencement of the mortgage; and that the mortgagor will, so long as the security exists and the mortgagee is not in possession of the mortgaged property, pay the rent reserved by the lease, or, if the lease be renewed, the renewed lease, perform the conditions contained therein and observe the contracts binding on the lessee, and indemnify the mortgagee against all claims sustained by reason of the non-payment of the said rent or the a non-performance or non-observance of the said conditions and contracts;

(4. The words “for a term of years” omitted by s. 29, ibid.)

(e) and, where the mortgage is a second or subsequent incumbrance on the property, that the mortgagor will pay the interest from time to time accruing due on each prior incumbrance as and when it becomes due, and will at the proper time discharge the principal money due on such prior incumbrance.

^{1* * * * *} (1. Certain words omitted by Act 20 of 1929, s. 29.)

The benefit of the contracts mentioned in this section shall be annexed to and shall go with the interest of the mortgagee as such, and may be enforced by every person in whom that interest is for the whole or any part thereof from time to time vested.

² [65A. Mortgagor’s power to lease.—

(1) Subject to the provisions of sub-section (2), a mortgagor, while lawfully in possession of the mortgaged property, shall have power to make leases thereof which shall be binding on the mortgagee.

(2) (a) Every such lease shall be such as would be made in the ordinary course of management of the property concerned, and in accordance with any local law, custom or usage.

(b) Every such lease shall reserve the best rent that can reasonably be obtained, and no premium shall be paid or promised and no rent shall be payable in advance.

(c) No such lease shall contain a covenant for renewal.

(d) Every such lease shall take effect from a date not later than six months from the date on which it is made.

(e) In the case of a lease of buildings, whether leased it or without the land on which they stand, the duration of the lease shall in no case exceed three years, and the lease shall contain a covenant for payment of the rent and a condition of re-entry on the rent not being paid within a time therein specified.

(3) The provisions of sub-section (1) apply only if and as far as a contrary intention is not expressed in the mortgage-deed; and the provisions of sub-section (2) may be varied or extended by the mortgage-deed and, as so varied and extended, shall, as far as may be, operate in like manner and with all like incidents, effects and consequences, as if such variations or extensions were contained in that sub-section.]

(2. Ins. by s. 30, ibid.)

66. Waste by mortgagor in possession.—

A mortgagor in possession of the mortgaged property is not liable to the mortgagee for allowing the property to deteriorate; but he must not commit any act which is destructive or permanently injurious thereto, if the security is insufficient or will be rendered insufficient by such act.

Explanation.—A security is insufficient within the meaning of this section unless the value of the mortgaged property exceeds by one-third, or, if consisting of buildings, exceeds by one-half, the amount for the time being due on the mortgage.

Rights and Liabilities of Mortgagee

67. Right to foreclosure or sale.—

In the absence of a contract to the contrary, the mortgagee has, at any time after the mortgage-money has become ³ [due] to him, and before a decree has been made for the redemption of the mortgaged property, or the mortgage-money has been paid or deposited as hereinafter provided, a right to obtain from the Court ⁴ [a decree] that the mortgagor shall be absolutely debarred of his right to redeem the property, or ⁴ [a decree] that the property be sold.

A suit to obtain ⁴ [a decree] that a mortgagor shall be absolutely debarred of his right to redeem the mortgaged property is called a suit for foreclosure.

(3. Subs. by s. 31, ibid., for “payable”.)

(4. Subs. by s. 31, ibid., for “an order”)

Nothing in this section shall be deemed—

¹ [(a) to authorise any mortgagee other than a mortgagee by conditional sale or a mortgagee under an anomalous mortgage by the terms of which he is entitled to foreclose, to institute a suit for foreclosure, or an usufructuary mortgagee as such or a mortgagee by conditional sale as such to institute a suit for sale; or]

(b) to authorise a mortgagor who holds the mortgagee's rights as his trustee or legal representative, and who may sue for a sale of the property, to institute a suit for foreclosure; or

(c) to authorise the mortgagee of a railway, canal or other work in the maintenance of which the public are interested, to institute a suit for foreclosure or sale; or

(d) to authorise a person interested in part only of the mortgage-money to-institute a suit relating only to a corresponding part of the mortgaged property, unless the mortga gees have, with the consent of the mortgagor, severed their interests under the mortgage.

(1. Subs. by Act 20 of 1929, s. 31, for clause (a).

² [67A. Mortgagee when bound to bring one suit on several mortgages.—

A mortgagee who holds two or more mortgages executed by the same mortgagor in respect of each of which he has a right to obtain the same kind of decree under section 67, and who sues to obtain such decree on any one of the mortgages, shall, in the absence of a contract to the contrary, be bound to sue on all the mortgages in respect of which the mortgage-money has become due.]

(2. Ins. by s. 32, ibid.)

^₃ [68. Right to sue for mortgage-money.—

(1) The mortgagee has a right to sue for the mortgagemoney in the following cases and no others, namely:—

(a) where the mortgagor binds himself to repay the same;

(b) where by any cause other than the wrongful act or default of the mortgagor or mortgagee, the mortgaged property is wholly or partially destroyed or the security is rendered insufficient within the meaning of section 66, and the mortgagee has given the mortgagor a reasonable opportunity of providing further security enough to render the whole security sufficient, and the mortgagor has failed to do so;

(c) where the mortgagee is deprived of the whole or part of his security by or in consequence of the wrongful act or default of the mortgagor;

(d) where, the mortgagee being entitled to possession of the mortgaged property, the mortgagor fails to deliver the same to him, or to secure the possession thereof to him without disturbance by the mortgagor or any person claiming under a title superior to that of the mortgagor:

Provided that, in the case referred to in clause (a), a transferee from the mortgagor or from his legal representative shall not be liable to be sued for, the mortgage -money.

(2) Where a suit is brought under clause (a) or clause (b) of sub-section (1), the Court may, at its discretion, stay the suit and all proceedings therein, notwithstanding any contract to the contrary, until the mortgagee has exhausted all his available remedies against the mortgaged property or what remains of it, unless the mortgagee abandons his security and, if necessary, re-transfers the mortgaged property.]

(3. Subs. by s. 33, ibid., for s. 68.)

69. Power of sale when valid.—

⁴ [(1)] ⁵ [ ^6*** A mortgagee, or any person acting on his behalf, shall, subject to the provisions of this section, have power to sell or, concur in selling the mortgaged property, or any part thereof, in default of payment of the mortgage -money, without the intervention of the Court, in the following cases and in no others, namely:—]

(4. Section 69 re-numbered as sub-section (1) of that section by Act 20 of 1929, s. 34.)

(5. Subs. by s. 34, ibid., for certain words.)

(6. The words and figures “Notwithstanding anything contained in the Trustees’ and Mortgagees’ Powers Act, 1866 (28 of 1866)” omitted by Act 48 of 1952, s. 3 and the Second Schedule.)

(a) where the mortgage is an English mortgage, and neither the mortgagor nor the mortgagee is a Hindu, Muhammadan or Buddhist ¹ [or a member of any other race, sect, tribe or class from time to time specified in this behalf by ² [the State Government], in the Official Gazette];

(b) where ³ [a power of sale without the intervention of the Court is expressly conferred on the mortgagee by the mortgage-deed and] the mortgagee is ⁴ [the Government];

(c) where ³ [a power of sale without the intervention of the Court is expressly conferred on the mortgagee by the mortgage-deed and] the mortgaged property or any part thereof ⁵ [was, on the date of the execution of the mortgage -deed], situate within the towns of Calcutta, Madras, Bombay, ^{6 *** 7} [or in any other town or area which the State Government may, by notification in the Official Gazette, specify in this behalf].

⁸ [(2)] ^9*** No such power shall be exercised unless and until—

¹⁰ [(a)] notice in writing requiring payment of the principal money has been served on the mortgagor, or, one of several mortgagors, and default has been made in payment of the principal money, or of part thereof, for three months after such service; or

¹¹[(b)] some interest under the mortgage amounting at least to five hundred rupees is in arrear and unpaid for three months after becoming due.

¹²[(3)] When a sale has been made in professed exercise of such a power, the title of the purchaser shall not be impeachable on the ground that no case had arisen to authorize the sale, or that due notice was not given, or that the power was otherwise improperly or irregularly exercised; but any person damnified by an unauthorised or improper or irregular exercise of the power shall have his remedy in damages against the person exercising the power.

¹³[(4)] The money which is received by the mortgagee, arising from the sale, after discharge of prior incumbrances, if any, to which the sale is not made subject, or after payment into Court under section 57 of a sum to meet any prior incumbrance, shall, in the absence of a contract to the contrary, be held by him in trust to be applied by him, first, in payment of all costs, charges and expenses properly incurred by him as incident to the sale or any attempted sale; and, secondly, discharge of the mortgage-money and costs and other money, if any, due under the mortgage; and the residue of the money so received shall be paid to the person entitled to the mortgaged property, or authorised to give receipts for the proceeds of the sale thereof.

¹⁴[(5) Nothing in this section or in section 69A applies to powers conferred before the first day of July, 1882.]

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(1. Ins. by Act 3 of 1885, s. 5.)

(2. The words “the L.G., with the previous sanction of the G. G. in C.” successively amended by A.O. 1937 and A.O. 1950 to read as above.)

(3. Ins. by Act 20 of 1929, s. 34.)

(4. The words “the Secretary of State for India in Council” successively amended by A.O. 1937 and A.O. 1950 to read as above.)

(5. Subs. by Act 20 of 1929, s. 34, for “is”.)

(6. The word “Karachi” omitted by A.O. 1948.)

(7. The words “or Rangoon” have been successively amended by Acts 6 of 1904, 11 of 1915, 20 of 1929, the A.O. 1937 and the A.O. 1950 to read as above.)

(8. Second paragraph numbered as sub-section (2) by Act 20 of 1929, s. 34.)

(9. The word “'But” omitted by s. 34, ibid.)

(10. Clause (1) was lettered (a) by s. 34, ibid.)

(11. Clause (2) was lettered (b) by s. 34, ibid.)

(12. Third paragraph numbered as sub-section (3) by s. 34, ibid.)

(13. Fourth paragraph numbered as sub-section (4) by Act 20 of 1929, s. 34.)

(14. Subs. by s. 34, ibid., for fifth paragraph.))

(15. The last paragraph of this section omitted by s. 34, ibid.)

¹ [69A. Appointment of receiver.—

(1) A mortgagee having the right to exercise a power of sale under section 69 shall, subject to the provisions of sub-section (2), be entitled to appoint, by writing signed by him or on his behalf, a receiver of the income of the mortgaged property or any part thereof.

(2) Any person who has been named in the mortgage-deed and is willing and able to act as receiver may be appointed by the mortgagee.

If no person has been so named, or if all persons named are unable or unwilling to act, or are dead, the mortgagee may appoint any person to whose appointment the mortgagor agrees; failing such agreement, the mortgagee shall be entitled to apply to the Court for the appointment of a receiver, and any person appointed by the Court shall be deemed to have been duly appointed by the mortgagee.

A receiver may at any time be removed by writing signed by or on behalf of the mortgagee and the mortgagor, or by the Court on application made by either party and on due cause shown.

A vacancy in the office of receiver may be filled in accordance with the provisions of this sub-section.

(3) A receiver appointed under the powers conferred by this section shall be deemed to be the agent of the mortgagor; and the mortgagor shall be solely responsible for the receiver's acts or defaults, unless the mortgage-deed otherwise provides or unless such acts or defaults are due to the improper intervention of the mortgagee.

(4) The receiver shall have power to demand and recover all the income of which he is appointed receiver, by suit, execution or otherwise, in the name either of the mortgagor or of the mortgagee to the full extent of the interest which the mortgagor could dispose of, and to give valid receipts accordingly for the same, and to exercise any powers which may have been delegated to him by the mortgagee in accordance with the provisions of this section.

(5) A person paying money to the receiver shall not be concerned to inquire if the appointment of the receiver was valid or not.

(6) The receiver shall be entitled to retain out of any money received by him, for his remuneration, and in satisfaction of all costs, charges and expenses incurred by him as receiver, a commission at such rate not exceeding five per cent. on the gross amount of all money received as is specified in his appointment, and, if no rate is so specified, then at the rate of five per cent. on that gross amount, or at such other rate as the Court thinks fit to allow, on application made by him for that purpose.

(7) The receiver shall, if so directed in writing by the mortgagee, insure to the extent, if any, to which the mortgagee might have insured, and keep insured against loss or damage by fire, out of the money received by him, the mortgaged property or any part thereof being of an insurable nature.

(8) Subject to the provisions of this act as to the application of insurance money, the receiver shall apply all money received by him as follows, namely ,—

(i) in discharge of all rents, taxes, land revenue, rates and outgoings whatever affecting the mortgaged property;

(ii) in keeping down all annual sums or other payments, and the interest on all principal sums, having priority to the mortgage in right whereof he is receiver;

(iii) in payment of his commission, and of the premiums on fire, life or other insurances, if any, properly payable under the mortgage -deed or under this Act, and the cost of executing necessary or proper repairs directed in writing by the mortgagee;

(iv) in payment of the interest falling due under the mortgage;

(v) in or towards discharge of the principal money, if so directed in writing by the mortgagee;

and shall pay the residue, if any, of the money received by him to the person who, but for the possession of the receiver, would have been entitled to receive the income of which he is appointed receiver, or who is otherwise entitled to the mortgaged property.

(9) The provisions of sub-section (1) apply only if and as far as a contrary intention is not expressed in the mortgage-deed; and the provisions of sub-sections (3) to (8) inclusive may be varied or extended by the mortgage-deed, and, as so varied or extended, shall, as far as may be, operate in like manner and with all the like incidents, effects and consequences, as if such variations or extensions were contained in the said sub-sections.

(10) Application may be made, without the institution of a suit, to the Court for its opinion, advice or direction on any present question respecting the management or administration of the mortgaged property, other than questions of difficulty or importance not proper in the opinion of the Court for summary disposal. A copy of such application shall be served upon, and the hearing thereof may be attended by, such of the persons interested in the application as the Court may think fit.

The costs of every application under this sub-section shall be in the discretion of the Court.

(11) In this section, “the Court” means the Court which would have jurisdiction in a suit to enforce the mortgage.]

(1. Ins. by Act 20 of 1929, s. 35.)

70. Accession to mortgaged property.—

If, after the date of a mortgage, any accession is made to the mortgaged property, the mortgagee, in the absence of a contract to the contrary, shall, for the purposes of the security, be entitled to such accession.

Illustrations

(a) A mortgages to B a certain field bordering on a river. The field is increased by alluvion. For the purposes of his security, B is entitled to the increase.

(b) A mortgages a certain plot of building land to B and afterwards erects a house on the plot. For the purposes of his security, B is entitled to the house as well as the plot.

71. Renewal of mortgaged lease.—

When the mortgaged property is a lease 1***, and the mortgagor obtains a renewal of the lease, the mortgagee, in the absence of a contract to the contrary, shall, for the purposes of the security, be entitled to the new lease.

(1. The words “for a term of years” omitted by Act 20 of 1929, s. 36.)

72. Rights of mortgagee in possession.—

² [A mortgagee] may spend such money as is necessary

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(b) for ⁴ [the preservation of the mortgaged property] from destruction, forfeiture or sale;

(c) for supporting the mortgagor's title to the property;

(d) for making his own title thereto good against the mortgagor; and

(e) when the mortgaged property is a renewable lease-hold, for the renewal of the lease;

and may, in the absence of a contract to the contrary, add such money to the principal money, at the rate of interest payable on the principal, and, where no such rate is fixed, at the rate of nine per cent. per annum:

(2. Subs. by s. 37, ibid., for certain words.)

(3. Clause (a) omitted by s. 37, ibid.)

(4. Subs. by s. 37, ibid., for “its preservation”.)

¹ [Provided that the expenditure of money by the mortgagee under clause (b) or clause (c) shall not be deemed to be necessary unless the mortgagor has been called upon and has failed to take proper and timely steps to preserve the property or to support the title.]

Where the property is by its nature insurable, the mortgagee may also, in the abs ence of a contract to the contrary, insure and keep insured against loss or damage by fire the whole or any part of such property; and the premiums paid for any such insurance shall be ² [added to the principal money with interest at the same rate as is payable on the principal money or, where no such rate is fixed, at the rate of nine per cent. per annum]. But the amount of such insurance shall not exceed the amount specified in this behalf in the mortgage-deed or (if no such amount is therein specified) two-thirds of the amount that would be required in case of total destruction to reinstate the property insured.

Nothing in this section shall be deemed to authorise the mortgagee to insure when an insurance of the property is kept up by or on behalf of the mortgagor to the amount in which the mortgagee is hereby authorised to insure.

(1. Ins. by Act 20 of 1929, s. 37.)

(2. Subs. by s. 37, ibid., for certain words.)

³ [73. Right to proceeds of revenue sale or compensation on acquisition.—

(1) Where the mortgaged property or any part thereof or any interest therein is sold owing to failure to pay arrears of revenue or other charges of a public nature or rent due in respect of such property, and such failure did not arise from any default of the mortgage e, the mortgagee shall be entitled to claim payment of the mortgage-money, in whole or in part, out of any surplus of the sale proceeds remaining after payment of the arrears and of all charges and deductions directed by law.

(2) Where the mortgaged property or any part thereof or any interest therein is acquired under the Land Acquisition Act, 1894 (1 of 1894), or any other enactment for the time being in force providing for the compulsory acquisition of immoveable property, the mortgagee shall be entitled to claim payment of the mortgage-money, in whole or in part, out of the amount due to the mortgagor as compensation.

(3) Such claims shall prevail against all other claims except those of prior encumbrances, and may be enforced notwithstanding that the principal money on the mortgage has not become due.]

(3. Subs. by s. 38, ibid., for s. 73.)

74. [Right of subsequent mortgagee to pay off prior mortgagee.] Rep. by the Transfer of Property (Amendment) Act, 1929 (20 of 1929), s. 39.

75. [Rights of mesne mortgagee against and subsequent mortgagees.] Rep. by s. 39, ibid.

76. Liabilities of mortgagee in possession.—

When, during the continuance of the mortgage, the mortgagee takes possession of the mortgaged property,—

(a) he must manage the property as a person of ordinary prudence would manage it if it were his own;

(b) he must use his best endeavours to collect the rents and profits thereof;

(c) he must, in the absence of a contract to the contrary, out of the income of the property, pay the Government-revenue, all other charges of a public nature ⁴ [and all rent] accruing due in respect thereof during such possession, and any arrears of rent in default of payment of which the- property may be summarily sold;

(4. Ins. by s. 40, ibid)

(d) he must, in the absence of a contract to the contrary, make such necessary repairs of the property as he can pay for out of the rents and profits thereof after deducting from such rents and profits the payments mentioned in clause (c)and the interest on the principal money;

(e) he must not commit any act which is destructive or permanently injurious to the property;

(f) where he has insured the whole or any part of the property against loss or damage by fire, he must, in case of such loss or damage, apply any money which he actually receives under the policy or so much thereof as may be necessary, in reinstating the property, or, if the mortgagor so directs, in reduction or discharge of the mortgage-money;

(g) he must keep clear, full and accurate accounts of all sums received and spent by him as mortgagee, and, at any time during the continuance of the mortgage, give the mortgagor, at his request and cost, true copies of such accounts and of the vouchers by which they are supported;

(h) his receipts from the mortgaged property, or, where such property is personally occupied by him a fair occupation-rent in respect thereof shall, after deducting the expenses ¹ [properly incurred for the management of the property and the collection of rents and profits and the other expenses] mentioned in clauses (c) and (d), and interest thereon, be debited against him in reduction of the amount (if any) from time to time due to him on account of interest ^2*** and, so far as such receipts exceed any interest due, in reduction or discharge of the mortgage-money; the surplus, if any, shall be paid to the mortgagor;

(i) when the mortgagor tenders, or deposits in manner hereinafter provided, the amount for the time being due on the mortgage, the mortgagee must, notwithstanding the provisions in the other clauses of this section, account for his ^3*** receipts from the mortgaged property from the date of the tender or from the earliest time when he could take such amount out of Court, as the case may be ¹ [and shall not be entitled to deduct any amount therefrom on account of any expenses incurred after such date or time in connection with the mortgaged property].

(1. Ins. by Act 20 of 1929, s. 40.)

( 2. The words “on the mortgage-money” omitted by s. 40, ibid.)

(3. The word “gross” omitted by s. 40, ibid.)

Loss occasioned by his default.—

If the mortgagee fail to perform any of the duties imposed upon him by this section, he may, when accounts are taken in pursuance of a decree made under this Chapter, be debited with the loss, if any, occasioned by such failure.

77. Receipts in lieu of interest.—

Nothing in section 76, clauses (b), (d), (g) and (h), applies to cases where there is a contract between the mortgagee and the mortgagor that the receipts from the mortgaged property shall, so long as the mortgagee is in possession of the property, be taken in lieu of interest on the principal money, or in lieu of such interest and defined portions of the principal.

Priority

78. Postponement of prior mortgagee.—

Where, through the fraud, misrepresentation or gross neglect of a prior mortgagee, another person has been induced to advance money on the security of the mortgaged property, the prior mortgagee shall be postponed to the subsequent mortgagee.

79. Mortgage to secure uncertain amount when maximum is expressed.—

If a mortgage made to secure future advances, the performance of an engagement or the balance of a ru nning account, expresses the maximum to be secured thereby, a subsequent mortgage of the same property shall, if made with notice of the prior mortgage, be postponed to the prior mortgage in respect of all advances or debits not exceeding the maximum, though made or allowed with notice of the subsequent mortgage.

Illustration

A mortgages Sultanpur to his bankers, B & Co., to secure the balance of his account with them to the extent of Rs. 10,000. A then mortgages Sultanpur to C, to secure Rs. 10,000, C having notice of the mortgage to B & Co., and C gives notice to B & Co. of the second mortgage. At the date of the second mortgage, the balance due to B & Co. does not exceed Rs. 5,000. B & Co. subsequently advance to A sums making the balance of the ac count against him exceed the sum of Rs. 10,000. B & Co. are entitled, to the extent of Rs. 10,000, to priority over C.

80. [Tacking abolished.] Rep. by the Transfer of Property (Amendment) Act, 1929 (20 of 1929), s. 41.

Marshalling and Contribution

¹ [81. Marshalling securities.—

If the owner of two or more properties mortgages them to one person and then mortgages one or more of the properties to another person, the subsequent mortgagee is, in the absence of a contract to the contrary, entitled to have the prior mortgagedebt satisfied out of the property or properties not mortgaged to him, so far as the same will extend, but not so as to prejudice the rights of the prior mortgagee or of any other person who has for consideration acquired an interest in any of the properties.]

(1. Subs. by Act 20 of 1929, s. 42, for s. 81.)

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82. Contribution to mortgage-debt.—

² [Where property subject to a mortgage belongs to two or more persons having distinct and separate rights of ownership therein, the different shares in or parts of such property owned by such persons are, in the absence of a contract to the contrary, liable to contribute rateably to the debt secured by the mortgage, and, for the purpose of determining the rate at which each such share or part shall contribute, the value thereof shall be deemed to be its value at the date of the mortgage after deduction of the amount of any other mortgage or charge to which it may have been subject on that date.]

Where, of two properties belonging to the same owner, one is mortgaged to secure one debt and then both are mortgaged to secure another debt, and the former debt is paid out of the former property, each property is, in the absence of a contract to the contrary, liable to contribute rateably to the latter debt after deducting the amount of the former debt from the value of the property out of which it has been paid.

Nothing in this section applies to a property liable under section 81 to the claim of the ³ [subsequent] mortgagee.

(2. Subs by s. 43, ibid., for the first paragraph.)

(3. . Subs. by s. 43, ibid., for “second”.)

Deposit in Court

83. Power to deposit in Court money due on mortgage.—

At any time after the principal money ⁴ [payable in respect of any mortgage has become due] and before a suit for redemption of the mortgaged property is barred, the mortgagor, or any other person entitled to institute such suit, may deposit, in any Court in which he might have instituted such suit, to the account of the mortgagee, the amount remaining due on the mortgage.

(4. Subs. by s. 44, ibid., for “has become payable”.)

Right to money deposited by mortgagor.—

The Court shall thereupon cause written notice of the deposit to be served on the mortgagee, and the mortgagee may, on presenting a petition (verified in manner prescribed by ⁵ law for the verification of plaints) stating the amount then due on the mortgage, and his willingness to accept the money so deposited in full discharge of such amount, and-on depositing in the same Court the mortgage-deed ⁶ [and all documents in his possession or power relating to the mortgaged property], apply for and receive the money, and the mortgage-deed, ⁷ [and all such other documents], so deposited shall be delivered to the mortgagor or such other person as aforesaid.

⁷ [Where the mortgagee is in possession of the mortgaged. property, the Court shall, before paying to him the amount so deposited, direct him to deliver possession thereof to the mortgagor and at the cost of the mortgagor either to re-transfer the mortgaged property to the mortgagor or to such third person as the mortgagor may direct or to execute and (where the mortgage has been effected by a registered instrument) have registered an acknowledgment in writing that any right in derogation of the mortgagor's interest transferred to the mortgagee has been extinguished.]

(5. See the Code of Civil Procedure, 1908 (5 of 1908), Sch. I, Order VI, rule 15.)

(6. Subs. by Act 20 of 1929, s. 44, for “if then in his possession or power ”.)

(7. Ins. by s. 44, ibid.)

84. Cessation of interest.—

When the mortgagor or such other person as aforesaid has tendered or deposited in Court under section 83 the amount remaining due on the mortgage, interest on the principal money shall cease from the date of the tender or ¹ [in the case of a deposit, where no previous tender of such amount has be en made] as soon as the mortgagor or such other person as aforesaid has done all that has to be done by him to enable the mortgagee to take such amount out of Court, ² [and the notice required by section 83 has been served on the mortgagee:

Provided that, where the mortgagor has deposited such amount without having made a previous tender thereof and has subsequently withdrawn the same or any part thereof, interest on the principal money shall be payable from the date of such withdrawal .]

Nothing in this section or in section 83 shall be deemed to deprive the mortgagee of his right to interest when there exists a contract that he shall be entitled to reasonable notice before payment or tender of the mortgage-money ³ [and such notice has not been given before the making of the tender or deposit, as the case may be]

(1. Ins. by Act 20 of 1929, s. 45.)

(2. Subs. by s. 45, ibid., for “as the case may be”.)

(3. Added by s. 45, ibid.)

⁴ Suits for Foreclosure, Sale or Redemption

(4. For the repealed provisions, as re-enacted, see (Act 5 of 1908), Sch. I, Order XXXIV.)

85.[Parties to suits for foreclosure, sale and redemption.] Rep. by the Code of Civil Procedure, 1908 (5 of 1908), s. 156 and V Schedule.

Foreclosure and Sale⁴

(4. For the repealed provisions, as re-enacted, see (Act 5 of 1908), Sch. I, Order XXXIV.)

86. [Decree of foreclosure suit.] Rep. by the Code of Civil Procedure, 1908 (5 of 1908), s. 156 and V Schedule.

87. [Procedure in case of payment of amount due.] Rep. by s. 156 and the fifth Schedule, ibid.

88. [Decree of sale.] Rep. by s. 156 and V Schedule, ibid

89. [Procedure when defendant pay amount due.] Rep. by s. 156 and V Schedule, ibid.

90. [Recovery of balance due on mortgage.] Rep. by s. 156 and V Schedule, ibid.

Redemption

⁵ [91. Persons who may sue for redemption.—

Besides the mortgagor, any of the following persons may redeem, or institute a suit for redemption of, the mortgaged property, namely:—

(b) any surety for the payment of the mortgage -debt or any part thereof; or

(c) any creditor of the mortgagor who has in a suit for the administration of his estate obtained a decree for sale of the mortgaged property.]

(5. Subs. by Act 20 of 1929, s. 46, for s. 91.)

⁶ [92. Subrogation.—

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 has been 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 persons 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.

(6. Ins. by s. 47, ibid. Original ss. 92 to 94 were rep. by Act 5 of 1908, s. 156 and the fifth Schedule.)

93. Prohibition of tacking.—

No mortgagee paying off a prior mortgage, whether with or without notice of an intermediate mortgage, shall thereby acquire any priority in respect of his original security; and, except in the case provided for by section 79, no mortgagee making a subsequent advance to the mortgagor, whether with or without notice of an intermediate mortgage, shall thereby acquire any priority in respect of his security for such subsequent advance.

94. Rights of mesne mortgagee.—

Where a property is mortgaged for successive debts to successive mortgagees, a mesne mortgagee has the same rights against mortgagees posterior to himself as he has against the mortgagor.]

¹ [95. Right of redeeming co-mortgagor to expenses.—

Where one of several mortgagors redeems the mortgaged property, he shall, in enforcing his right of subrogation under section 92 against his co-mortgagors, be entitled to add to the mortgage-money recoverable from them such proportion of the expenses properly incurred in such redemption as is attributable to their share in the property.

(1. Subs. by Act 20 of 1929, s. 48, for s. 95. Original s. 96 was rep. by Act 5 of 1908, s. 156 and Sch. V.)

96. Mortgage by deposit of title-deeds.—

The provisions hereinbefore contained which apply to a simple mortgage shall, so far as may be, apply to a mortgage by deposit of title-deeds.]

²97. [Application of proceeds.] Rep. by the Code of Civil Procedure, 1908 (5 of 1908), s. 156 and V Schedule.

(2. For the repealed provisions, as re-enacted, see (Act 5 of 1908), Sch. I, Order XXXIV, rules 12 and 13.)

Anomalous Mortgages

98. Rights and liabilities of parties to anomalous mortgages.—

In the case of ³ [an anomalous mortgage] the rights and liabilities of the parties shall be determined by their contract as evidenced in the mortgage-deed, and, so far as such contract does not extend, by local usage.

(4. Subs. by Act 20 of 1929, s. 49, for certain words.)

(5. Subs. by Act 20 of 1929, s. 50, for certain words.)

99. [Attachment of mortgaged property.] Rep. by the Code of Civil Procedure, 1908 (5 of 1908), s. 156 and V Schedule.

Charges

100. Charges.—

Where immoveable property of one person is by act of parties or operation of law made security for the payment of money to another, and the transaction does not amount to a mortgage, the latter person is said to have a charge on the property; and all the provisions hereinbefore contained ⁴ [which apply to a simple mortgage shall, so far as may be, apply to such charge].

Nothing in this section applies to the charge of a trustee on the trust property for expenses properly incurred in the execution of his trust, 5 [and, save as otherwise expressly provided by any law for the time being in force, no charge shall be enforced against any property in the hands of a person to whom such property has been transferred for consideration and without notice of the charge].

⁶ [101. No merger in case of subsequent encumbrance.—

Any mortgagee of, or person having a charge upon, immoveable property, or any transferee from such mortgagee or charge-holder, may purchase or otherwise acquire the rights in the property of the mortgagor or owner, as the case may be, without thereby causing the mortgage or charge to be merged as between himself and any subsequent mortgagee of, or person having a subsequent charge upon, the same property; and no such subsequent mortgagee or charge-holder shall be entitled to for close or sell such property without redeeming the prior mortgage or charge, or otherwise than subject thereto.]

(6. Added by s. 50, ibid.)

(7. Subs. by s. 51, ibid., for s. 101.)

Notice and Tender

102. Service or tender on or to agent.—

Where the person on or to whom any notice or tender is to be served or made under this Chapter does not reside in the district in which the mortgaged property or some part thereof is situate, service or tender on or to an agent holding a general power-of-attorney from such person or otherwise duly authorised to accept such service or tender shall be deemed sufficient.

¹ [Where no person or agent on whom such notice should be served can be found or is known] to the person required to serve the notice, the latter person may apply to any Court in whi ch a suit might be brought for redemption of the mortgaged property, and such Court shall direct in what manner such notice shall be served, and any notice served in compliance with such direction shall be deemed sufficient:

² [Provided that, in the case of a notice required by section 83, in the case of a deposit, the application shall be made to the Court in which the deposit has been made.]

³ [Where no person or agent to whom such tender should be made can be found or is known] to the person desiring to make the tender, the latter person may deposit 4 [in any Court in which a suit might be brought for redemption of the mortgaged property] the amount sought to be tendered, and such deposit shall have the effect of a tender of such amount.

(1. Subs. by Act 20 of 1929, s. 52, for certain words.)

(2. Ins. by s. 52, ibid.)

(3. Subs. by Act 20 of 1929, s. 52, for certain words.)

(4. Subs. by s. 52, ibid., for “in such Court as last aforesaid”)

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103. Notice, etc., to or by person incompetent to contract.—

Where, under the provisions of this Chapter, a notice is to be served on or by, or a tender or deposit made or accepted or taken out of Court by, any person incompetent to contract, such notice may be served ⁵ [on or by], or tender or deposit made, accepted or taken by, the legal curator of the property of such person; but where there is no such curator, and it is requisite or desirable in the interests of such person that a notice should be served or a tender or deposit made under the provisions of this Chapter, application may be made to any Court in which a suit might be brought for the redemption of the mortgage to appoint a guardian ad litem for the purpose of serving or receiving service of such notice, or making or accepting such tender, or making or taking out of Court such deposit, and for the performance of all consequential acts which could or ought to be done by such person if he were competent to contract; and the provisions of ⁶ [Order XXXII in the First Schedule to the Code of Civil Procedure, 1908 (5 of 1908)] shall, so far as may be, apply to such application and to the parties thereto and to the guardian appointed thereunder.

(5. Ins. by s. 53, ibid.)

(6. Subs. by s. 53, ibid., for “Chapter XXXI of the Code of Civil Procedure”.)

104. Power to make rules.—

The High Court may, from time to time, make rules consistent with this Act for carrying out, in itself and in the Courts of Civil Judicature subject to its superintendence, the provisions contained in this Chapter.

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