PART 4 | Obligation of mortgagee to transfer instead of reconveying |
19.—(1) Where a mortgagor is entitled to redeem, he shall have power to require the mortgagee, instead of reconveying, and on the terms on which he would be bound to reconvey, to assign the mortgage debt and convey the mortgaged property to any third person as the mortgagor directs, and the mortgagee shall assign and convey accordingly.| (2) The power given by this section to a mortgagor shall belong to and be capable of being enforced by each incumbrancer or by the mortgagor notwithstanding any intermediate incumbrance, but a requisition of an incumbrancer shall prevail over a requisition of a mortgagor, and as between incumbrancers a requisition of a prior incumbrancer shall prevail over a requisition of a subsequent incumbrancer. |
| (3) This section shall not apply in the case of a mortgagee being or having been in possession. |
| (4) This section shall apply to mortgages made before, on or after 1 August 1886, and shall have effect notwithstanding any stipulation to the contrary. |
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| Power for mortgagor to inspect title deeds |
20.—(1) A mortgagor, so long as his right to redeem subsists, may from time to time, at reasonable times, on his own request, and at his own cost, and on payment of the mortgagee’s cost and expenses in this behalf, inspect and make copies of or extracts from the documents of title relating to the mortgaged property in the custody or power of the mortgagee, including the mortgage deed.| (2) This section shall apply only to mortgages made on or after 1 August 1886, and shall have effect notwithstanding any stipulation to the contrary. |
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| Restriction on consolidation of mortgages |
21.—(1) A mortgagor seeking to redeem any one mortgage may do so without paying any money due under any separate mortgage made by him, or by any person through whom he claims, on property other than that comprised in the mortgage which he seeks to redeem.| (2) This section shall apply only if and so far as a contrary intention is not expressed in the mortgage deeds or one of them. |
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| Mortgagee entitled to 3 months’ notice of payment |
22.—(1) Where the mortgage money is not paid on the stated day, the mortgagee shall be entitled, in the absence of any stipulation to the contrary in the mortgage deed, to 3 months’ notice in writing previous to payment or to 3 months’ interest in lieu of that notice.| (2) This section shall apply to mortgages made before, on or after 1 August 1886. |
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| Leasing powers of mortgagor and of mortgagee in possession |
23.—(1) A mortgagor of land while in possession, as against every incumbrancer, may make from time to time an agricultural or occupation lease of the mortgaged land or any part thereof for any term not exceeding 3 years.(2) A mortgagee of land while in possession, as against all subsequent incumbrancers (if any) and as against the mortgagor, may make from time to time —| (a) | an agricultural or occupation lease for any term not exceeding 21 years; | | (b) | a building lease for any term not exceeding 99 years. |
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| (3) Every person making a lease under this section may execute and do all assurances and things necessary or proper in that behalf. |
| (4) Every such lease shall be made to take effect in possession not later than 12 months after its date. |
| (5) Every such lease shall reserve the best rent that can reasonably be obtained, regard being had to the circumstances of the case, but without any fine being taken. |
| (6) Every such lease shall contain a covenant by the lessee for payment of the rent, and a condition of re-entry on the rent not being paid within a time therein specified, not exceeding 30 days. |
| (7) A counterpart of every such lease shall be executed by the lessee and delivered to the lessor, of which execution and delivery the execution of the lease by the lessor shall, in favour of the lessee and all persons deriving title under him, be sufficient evidence. |
| (8) Every such building lease shall be made in consideration of the lessee, or some person by whose direction the lease is granted, agreeing to erect within not more than 5 years from the date of the lease, buildings, new or additional, or having improved or repaired buildings, or agreeing to improve or repair buildings within that time, or having executed, or agreeing to execute, within that time, on the land leased, an improvement for or in connection with building purposes. |
| (9) In any such building lease a peppercorn rent, or a nominal or other rent less than the rent ultimately payable, may be made payable for the first 5 years, or any less part of the term. |
| (10) A contract to make or accept a lease under this section may be enforced by or against every person on whom the lease, if granted, would be binding. |
| (11) This section shall apply only if and as far as a contrary intention is not expressed by the mortgagor and mortgagee in the mortgage deed, or otherwise in writing, and shall have effect subject to the terms of the mortgage deed or of any such writing and to the provisions therein contained. |
| (12) Nothing in this Act shall prevent the mortgage deed from reserving to or conferring on the mortgagee any further or other powers of leasing or having reference to leasing, and any further or other powers so reserved shall be exercisable, as far as may be, as if they were conferred by this Act, and with all the like incidents, effects and consequences, unless a contrary intention is expressed in the mortgage deed. |
| (13) Nothing in this Act shall be construed to enable a mortgagee to make a lease for any longer term or on any other conditions than such as could have been granted or imposed by the mortgagor, with the concurrence of all the incumbrancers, if this Act had not been passed. |
| (14) This section shall apply only in the case of a mortgage made on or after 1 August 1886; but the provisions thereof, or any of them, may, by agreement in writing made on or after that date between the mortgagor and mortgagee, be applied to a mortgage made before that date, so nevertheless, that any such agreement shall not prejudicially affect any right or interest of any mortgagee not joining in or adopting the agreement. |
| (15) The provisions of this section referring to a lease shall be construed to extend and apply, as far as circumstances admit, to any letting, and to any agreement, whether in writing or not, for leasing or letting. |
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| Sale, insurance, receiver |
| Power incident to estate or interest of mortgagee |
24.—(1) A mortgagee, where the mortgage is made by deed, shall have the following powers, to the like extent as if they had been in terms conferred by the mortgage deed, but not further:| (a) | a power, when the mortgage money has become due, to sell, or to concur with any other person in selling, the mortgaged property, or any part thereof, either subject to prior charges, or not, and either together or in lots, by public auction or by private contract, subject to such conditions respecting title, or evidence of title, or other matter, as the mortgagee thinks fit, with power to vary any contract for sale, and to buy in at an auction, or to rescind any contract for sale, and to resell, without being answerable for any loss occasioned thereby; | | (b) | a power, at any time after the date of the mortgage deed, to insure and keep insured against loss or damage by fire any building, or any effects or property of an insurable nature, whether affixed to the freehold or not, being or forming part of the mortgaged property, and the premiums paid for any such insurance shall be a charge on the mortgaged property, in addition to the mortgage money, and with the same priority, and with interest at the same rate, as the mortgage money; and | | (c) | a power, when the mortgage money has become due, to appoint a receiver of the income of the mortgaged property, or of any part thereof. |
| (2) The provisions of this Act relating to the foregoing powers, comprised either in this section, or in any subsequent section regulating the exercise of these powers, may be varied or extended by the mortgage deed, and, as so varied or extended, shall, as far as may be, operate in the like manner and with all the like incidents, effects and consequences, as if such variations or extensions were contained in this Act. |
| (3) This section shall apply only if and as far as a contrary intention is not expressed in the mortgage deed, and shall have effect subject to the terms of the mortgage deed and to the provisions therein contained. |
| (4) This section shall apply only where the mortgage deed is executed on or after 1 August 1886. |
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| Regulation of exercise of power of sale |
25. A mortgagee shall not exercise the power of sale conferred by this Act unless —| (a) | notice requiring payment of the mortgage money has been served on the mortgagor or one of several mortgagors, and default has been made in payment of the mortgage money or part thereof for 3 months after the service; | | (b) | some interest under the mortgage is in arrears and unpaid for one month after becoming due; or | | (c) | there has been a breach of some provision contained in the mortgage deed or in this Act, and on the part of the mortgagor, or of some person concurring in making the mortgage, to be observed or performed, other than and besides a covenant for payment of the mortgage money or interest thereon. |
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| Conveyance receipt, etc., on sale |
26.—(1) A mortgagee exercising the power of sale conferred by this Act may by deed convey the property sold, for such estate and interest therein as is the subject of the mortgage, freed from all estates, interests and rights to which the mortgage has priority, but subject to all estates, interests and rights which have priority to the mortgage.| (2) Where a conveyance is made in professed exercise of the power of sale conferred by this Act, the title of the purchaser shall not be impeachable on the ground that no case had arisen to authorise 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. |
| (3) The money which is received by the mortgagee, arising from the sale, after discharge of prior incumbrances to which the sale is not made subject (if any) or after payment into court under this Act of a sum to meet any prior incumbrances, shall 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, or otherwise; and secondly, in discharge of the mortgage money, interest 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. |
| (4) The power of sale conferred by this Act may be exercised by any person for the time being entitled to receive and give a discharge for the mortgage money. |
| (5) The power of sale conferred by this Act shall not affect the right of foreclosure. |
| (6) The mortgagee, his executors, administrators or assigns shall not be answerable for any involuntary loss happening in or about the exercise or execution of the power of sale conferred by this Act or of any trust connected therewith. |
| (7) At any time after the power of sale conferred by this Act has become exercisable, the person entitled to exercise it may demand and recover from any person, other than a person having in the mortgaged property an estate, interest or right in priority to the mortgage, all the deeds and documents relating to the property, or to the title thereto, which a purchaser under the power of sale would be entitled to demand and recover from him. |
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| Mortgagee’s receipts, discharges, etc. |
27.—(1) The receipt in writing of a mortgagee shall be a sufficient discharge for any money arising under the power of sale conferred by this Act, or for any money or securities comprised in his mortgage, or arising thereunder.| (2) A person paying or transferring the same to the mortgagee shall not be concerned to inquire whether any money remains due under the mortgage. |
| (3) Money received by a mortgagee under his mortgage or from the proceeds of securities comprised in his mortgage, shall be applied in like manner as in this Act directed respecting money received by him arising from a sale under the power of sale conferred by this Act; but with this variation, that the costs, charges and expenses payable shall include the costs, charges and expenses properly incurred of recovering and receiving the money or securities, and of conversion of securities into money, instead of those incident to sale. |
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| Amount and application of insurance money |
28.—(1) The amount of an insurance effected by a mortgagee against loss or damage by fire under the power in that behalf conferred by this Act shall not exceed the amount specified for that purpose in the mortgage deed, or, if no such amount is therein specified, then shall not exceed two-third parts of the amount that would be required, in case of total destruction, to restore the property insured.(2) An insurance shall not, under the power conferred by this Act, be effected by a mortgagee in any of the following cases:| (a) | where there is a declaration in the mortgage deed that no insurance is required; | | (b) | where an insurance is kept up by or on behalf of the mortgagor in accordance with the mortgage deed; | | (c) | where the mortgage deed contains no stipulation respecting insurance, and an insurance is kept up by or on behalf of the mortgagor, with the knowledge of the mortgagee, to the amount in which the mortgagee is by this Act authorised to insure. |
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| (3) All money received on an insurance effected under the mortgage deed or under this Act shall, if the mortgagee so requires, be applied by the mortgagor in making good the loss or damage in respect of which the money is received. |
| (4) Without prejudice to any obligation to the contrary imposed by law, or by special contract, a mortgagee may require that all money received on an insurance be applied in or towards discharge of the money due under his mortgage. |
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| Appointment, powers, remuneration and duties of a receiver |
29.—(1) A mortgagee entitled to appoint a receiver under the power in that behalf conferred by this Act shall not appoint a receiver until he has become entitled to exercise the power of sale conferred by this Act, but may then, by writing under his hand, appoint such person as he thinks fit to be receiver.| (2) The receiver 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. |
| (3) The receiver may demand and recover all the income of the property of which he is appointed receiver, by action, distress or otherwise, in the name either of the mortgagor or of the mortgagee, to the full extent of the estate or interest which the mortgagor could dispose of, and may give effectual receipts accordingly for the same. |
| (4) A person paying money to the receiver shall not be concerned to inquire whether any case has happened to authorise the receiver to act. |
| (5) The receiver may be removed, and a new receiver may be appointed, from time to time by the mortgagee by writing under his hand. |
| (6) The receiver out of any money received by him may retain for his remuneration, and in satisfaction of all costs, charges and expenses incurred by him as receiver, a commission at such rate, not exceeding 5% 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 5% on that gross amount. |
| (7) The receiver shall, if so directed in writing by the mortgagee, insure and keep insured against loss or damage by fire, out of the money received by him, any buildings, effects or property comprised in the mortgage, and being of an insurable nature, whether the same are affixed to the freehold or not. |
(8) The receiver shall apply all money received by him as follows:| (a) | in discharge of all rents, taxes, rates and outgoings whatever affecting the mortgaged property; | | (b) | 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; | | (c) | 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; and | | (d) | in payment of the interest accruing due in respect of any principal money due under the mortgage, |
| and shall pay the residue 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 the mortgaged property, or who is otherwise entitled to that property. |
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| Action respecting mortgage |
| Sale of mortgaged property in action for foreclosure, etc. |
30.—(1) Any person entitled to redeem mortgaged property may have a judgment or order for sale instead of for redemption in an action brought by him either for redemption alone, or for sale alone, or for sale or redemption, in the alternative.| (2) In any action, whether for foreclosure, or for redemption, or for sale, or for the raising and payment in any manner of mortgage money, the court, on the request of the mortgagee, or of any person interested either in the mortgage money or in the right of redemption, and notwithstanding the dissent of any other person, and notwithstanding that the mortgagee or any person so interested does not appear in the action, and without allowing any time for redemption or for payment of any mortgage money, may, if it thinks fit, direct a sale of the mortgaged property, on such terms as it thinks fit, including, if it thinks fit, the deposit in court of a reasonable sum fixed by the court, to meet the expenses of sale and to secure performance of the terms. |
| (3) In an action brought by a person interested in the right of redemption and seeking a sale, the court may, on the application of any defendant, direct the claimant to give such security for costs as the court thinks fit, and may give the conduct of the sale to any defendant, and may give such directions as it thinks fit respecting the costs of the defendants or any of them. [Act 25 of 2021 wef 01/04/2022] |
| (4) In any case within this section, the court may, if it thinks fit, direct a sale without previously determining the priorities of incumbrancers. |
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