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.]
(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”.
24
(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.
(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.
7* * * *
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.]
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.
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.
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. Ins. by s. 21, ibid.
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”.
25
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.
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.
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.]
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.
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.
1. Ins. by Act 20 of 1929, s. 22.
2. S. 60A and 60B ins. by s. 23, ibid.
3. Subs. by s. 24, ibid., for s. 61.
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”.
26
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.
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.]
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.
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
1. Subs. by Act 20 of 1929, s. 26, for “at the same rate of interest”.
2. Ins. by s. 27, ibid.
3. The words “for a term of years” omitted by s. 28, ibid.
4. The words “for a term of years” omitted by s. 29, ibid.
27
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;
(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* * * * *.
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.]
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.
1. Certain words omitted by Act 20 of 1929, s. 29.
2. Ins. by s. 30, ibid.
3. Subs. by s. 31, ibid., for “payable”.
4. Subs. by s. 31, ibid., for “an order”.
28
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.
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.]
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.]
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:—]
1. Subs. by Act 20 of 1929, s. 31, for clause (a).
2. Ins. by s. 32, ibid.
3. Subs. by s. 33, ibid., for s. 68.
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.
29
(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.]
15* * * * *
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.
30
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;
1. Ins. by Act 20 of 1929, s. 35.
31
(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.]
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.
72. Rights of mortgagee in possession.—2
[A mortgagee] may spend such money as is
necessary—
3* * * * *
(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:
1. The words “for a term of years” omitted by Act 20 of 1929, s. 36.
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”.
32
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.
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.]
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;
(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;
1. Ins. by Act 20 of 1929, s. 37.
2. Subs. by s. 37, ibid., for certain words.
3. Subs. by s. 38, ibid., for s. 73.
4. Ins. by s. 40, ibid.
33
(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].
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.
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.
34
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.]
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.
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.
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.]
1. Subs. by Act 20 of 1929, s. 42, for s. 81.
2. Subs by s. 43, ibid., for the first paragraph.
3. Subs. by s. 43, ibid., for “second”.
4. Subs. by s. 44, ibid., for “has become payable”.
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.
35
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].
4
Suits for Foreclosure, Sale or Redemption
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
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:—
(a) any person (other than the mortgagee of the interest sought to be redeemed) who has any
interest in, or charge upon, the property mortgaged or in or upon the right to redeem the same;
(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.]
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.
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. For the repealed provisions, as re-enacted, see (Act 5 of 1908), Sch. I, Order XXXIV.
5. Subs. by Act 20 of 1929, s. 46, for s. 91.
6. Ins. by s. 47, ibid. Original ss. 92 to 94 were rep. by Act 5 of 1908, s. 156 and the fifth Schedule.
36
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.
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.
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.
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.
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
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.
2. For the repealed provisions, as re-enacted, see (Act 5 of 1908), Sch. I, Order XXXIV, rules 12 and 13.
3. Subs. by Act 20 of 1929, s. 49, for certain words.
5. Subs. by Act 20 of 1929, s. 50, for certain words.
6. Added by s. 50, ibid.
7. Subs. by s. 51, ibid., for s. 101.
37
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.]
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.
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.
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.