Transfer of Property Act 1882
Baskaran Kanakasabai
(Querist) 21 May 2010
This query is : Open
"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 or 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 mortgagee, 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 immovable 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 the principal money on the mortgage has not become due."
The quote is in respect of acquisition made after a mortgage is registered. What will be the status of the mortgage registered after the acquistion is notified under 4(1)?
Will it be considered by the court that the Bank that registered a mortgage "after 4(1) notification did so at its own peril"
as declared in the case of the judgement in SC 540-1996 against the purchaser of land after 4(1) notification?
