Rights and Liabilities of Mortgagor and Mortgagee
Rights and Liabilities of Mortgagor and Mortgagee
I. Mortgagor
Rights of Mortgagor (Sec. 60–66, TPA)
Right of Redemption (Sec. 60)
Fundamental right to get back property on repayment.
Case: K. Saradamani vs. Rajalakshmi (1992) – Right of redemption is statutory and cannot be taken away by contract.
Right to Accession (Sec. 63)
Mortgagor entitled to improvements or additions after redemption.
Case: Narandas Karsondas vs. S.A. Kamtam (1977) – Mortgagor is owner, entitled to accessions post redemption.
Right to Improvements (Sec. 63A)
Entitled to improvements made by mortgagee, unless necessary for preservation.
Right to Lease (Sec. 65A)
Mortgagor in lawful possession can make leases in ordinary course of management.
Right to Inspect Documents (Sec. 60B)
Mortgagor can inspect/copy title deeds with mortgagee.
Liabilities of Mortgagor (Sec. 65–66, TPA)
Liability to Pay Debt – Must repay principal and interest as agreed.
Covenant of Title (Sec. 65a) – Assures mortgagee that he has good title.
Case: Abdul Majid vs. Gauri Shankar (1913) – Mortgagor liable if title defective.
Disclosure of Defects (Sec. 65b) – Must disclose material defects.
Liability to Pay Public Charges (Sec. 65c) – Responsible for taxes, government dues.
No Waste (Sec. 66) – Cannot commit waste or reduce property’s value.
Case: Pomal Kanji Govindji vs. Vrajlal Karsandas Purohit (1989) – Mortgagor must not damage property.
II. Mortgagee
Rights of Mortgagee (Sec. 67–73, TPA)
Right to Foreclosure or Sale (Sec. 67)
Can sue for foreclosure/sale if mortgagor defaults.
Case: Narandas Karsondas vs. S.A. Kamtam (1977) – Right arises only on default.
Right to Possession (Sec. 67A, 68)
Depending on mortgage type (usufructuary), mortgagee may take possession.
Right to Accession (Sec. 70)
Entitled to any accession to property during mortgage.
Right to Receipts (Sec. 72)
Mortgagee can spend on preservation of property and recover amount with interest.
Right to Priority (Sec. 48)
First mortgagee has priority over subsequent mortgages.
Liabilities of Mortgagee (Sec. 72–76, TPA)
Duty to Return Property (Sec. 72)
On redemption, must return property and documents.
Liability for Improper Use (Sec. 76)
Must manage property prudently, like an owner.
Case: State Bank of India vs. Yasangi Venkateswara Rao (1999) – Mortgagee must not misuse possession.
Duty to Apply Receipts (Sec. 76a)
If in possession, must apply rents/profits towards mortgage debt.
Liability to Accession/Improvements (Sec. 63A, 70)
Must hand over accessions and improvements on redemption.
III. Conclusion
Mortgagor remains the real owner but subject to liabilities to protect mortgagee’s interest.
Mortgagee has rights to recover debt and preserve property, but must act as a prudent manager.
Courts balance both sides: mortgagor’s right to redemption vs mortgagee’s right to security.
⚖️ Exam Tip:
First define mortgage (Sec. 58, TPA).
Then explain rights & liabilities separately for mortgagor and mortgagee with section references.
Add 4–5 case laws (Olga Tellis not needed here, but Narandas Karsondas, Abdul Majid, Pomal Kanji, SBI vs. Venkateswara Rao are key).
Conclude: Mortgage transfers only an interest; ownership remains with mortgagor subject to repayment.
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