RIGHTS
AND LIABILITIES OF MORTGAGEE
The
rights and liabilities of a mortgagee are as under:
I.
Right to foreclosure for sale
In
the absence of a contract to the contrary, the mortgagee has, at
any time after the mortgage money has become 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 a decree that the mortgagor
shall be absolutely debarred or his right to redeem the property,
or a decree that the property be sold.
II.
Right to sue for mortgage money
The
mortgagee has a right to sue for the mortgage money in the following
cases and no others, namely:
-
Where
the mortgagor binds himself to repay the same;
-
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;
-
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;
-
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 from his legal representative shall not be liable to be
sued for the mortgage money.
III.
Right of power of sale of mortgaged property, if any
Section
69(1), Transfer of Property Act provides that the mortgagee, or
any person acting on his behalf, subject to the provision 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:
-
Where the mortgage is an English mortgage, and neither the mortgagor
nor the mortgagee is a Hindu, Mohammedan or Buddhist, or a member
of any other race, sect, tribe or class from time to time specified
in this behalf, by the State Government in the Official Gazette;
-
Where
a power of sale without the intervention of the Court is expressly
conferred on the mortgagee by the mortgage deed, and the mortgagee
is the Government;
-
Where a power of sale without the intervention of the Court
is expressly conferrred on the mortgagee by the mortgage deed,
and the mortgaged property or any part thereof, was on the date
of the execution of the mortgage deed, situate within the towns
of Calcutta, Madras, Bombay, or in any other town or area which
the State Government may by notification in the Official Gazette,
specify in this behalf.
No
such power shall be exercised unless and until
-
notice
in writing requiring payment of the principal money has been
served on the mortgagor, or on one of several mortgagors, and
default has been made in payment of the principal money or of
part therof, for three months after such service or;
-
some
interest under the mortgage amounting at least to five hundred
rupees, is in arrear and unpaid for three months after becoming
due.
IV.
Right to appoint a receiver
Section
69A, Transfer of Property Act provides that 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.
V.
Right to 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.
VI.
Right to the benefit of the renewed lease
Where
the mortgaged property is a lease, 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.
VII.
Right of mortgagee in possession
A
mortgagee may spend such money as is necessary.
-
for
the preservation of the mortgaged property from destruction,
forfeiture or sale;
-
for
supporting the mortgagor’s title to the property;
-
for
making his own title thereto good against the mortgagor; and
-
when
the mortgaged property is a renewable leasehold, 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 percent per
annum:
VIII.
Liabilities of mortgagee in possession
Section
76, Transfer of property Act provides that when, during the continuance
of the mortgage, the mortgagee takes possession of the mortgaged
property:
-
he
must manage the property as a person of ordinary prudence would
manage it if it were his own;
-
he
must use his best endeavours to collect the rents and profits
thereof;
-
he
must, in the absence of a contract to the contrary, out of the
income to the property, pay the Government revenue, all other
charges of a public nature 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;
-
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
rent and profits thereof after deduction from such rents and
profits the payments mentioned in clause (c) and the interest
on the principal money;
-
he
must not commit any act which is destructive or permanently
injurious to the property;
-
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 re-instating the property,
or, if the mortgagor so directs, in reduction of discharge of
the mortgage money;
-
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;
-
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 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 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;
-
when
the mortgagor tenders or deposits in a manner hereinafter provided,
the amount for the time being due to on the mortgage, the mortgagee
must, notwithstanding the provisions in the other clauses of
this section, account for his receipts from the mortgaged property
from the date of the tender, or from the earliest time when
he could take such amount out of the Court, as the case may
be, 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.
IX.
Loss occasioned by his default
If
the mortgagee fails 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.
X.
Liability to bring one suit on several mortgages
Section
67A, Transfer of Property Act provides that 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.
