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: 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 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: a. 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; b. 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; c. 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 a. 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; b. 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. a. for the preservation of the mortgaged property from destruction, forfeiture or sale; b. for supporting the mortgagor’s title to the property; c. for making his own title thereto good against the mortgagor; and d. 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: 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 endeavors to collect the rents and profits thereof; c. 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; 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 rent and profits thereof after deduction 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 of 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 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; i. 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.
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