Foreclosure (Section 67 of the Transfer of Property Act): The act contemplates six kinds of mortgage, namely simple mortgage, mortgage by conditional sale, usufructuary mortgage, English mortgage, mortgage by deposit of title deeds and anomalous mortgage.
Simple
mortgage: The mortgagee in such scenario does
not get possession of the mortgaged property and therefore cannot exercise
right of foreclosure. The remedy is either to proceed against the mortgagor
personally or for sale of the mortgaged property.
Mortgage
by conditional sale: Mortgage by conditional sale provides
in case of default of payment, mortgage will become a sale. The remedy in such
a situation is not foreclosure but debarring mortgagor’s right of redemption.
Usufructuary
mortgage: Under this
mortgage, mortgagee retains possession until repayment of money and receives
rents and profits or part thereof in lieu of interest, or in payment of mortgage
money or partly in lieu of interest and partly in payment of mortgage money.
There is redemption when the amount due is personally paid or is discharged by
rents or profits received. He does not have a right to foreclose or sale.
English
mortgage: A mortgagor binds himself personally to pay the debt, and
there is an absolute transfer of mortgaged property in favour of mortgagee.
Therefore he does not have a right of foreclosure but a right to file a suit
for sale of the mortgaged property.
Mortgage
by deposit of title deeds: As per
Section 96, the mortgagee of title deeds is on the same footing as a simple
mortgagee, therefore remedy available is sale of the mortgaged property.
Anomalous
mortgage: The remedy depends on the terms contained in the mortgage deed
as anomalous mortgage is combination of two or more types of mortgages.
Redemption
(section 60 of Transfer of Property Act): In all mortgages where right to
foreclosure is available.
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