Mortgages Act, 1972 N.R.C.D. 96
Section 17:
(1) On the failure of performance of an act secured by the mortgage, the mortgagee is entitled, as against the mortgagor and a person deriving an interest in the mortgaged property through the mortgagor whose interest is subsequent to that of the mortgagee, to possession of the mortgaged property, but in the
case of default in the payment of principal or interest secured by the mortgage, the mortgagee’s right to possession may be exercised only after thirty days’ notice in writing to the mortgagor or a longer period, as provided by the mortgage.
(2) A mortgagee entitled to possession under this section is entitled
(a) to enter and take possession of the mortgaged property if that may be done peacefully, or
(b) to assert the right to possession by an action of possession.
(3) A mortgagee in possession liable to account to the mortgagor for the income, whether in cash or in kind, derived from the mortgaged property which the mortgagee has received or without wilful default might have received from the time of taking possession, and to pay over to the mortgagor the excess on
the amounts due on the mortgage.
(4) In accounting under this section the mortgagee in possession
(a) is liable for a failure to be diligent in realising a sum of money due to the mortgagee from the
mortgaged property;
(b) is liable at the fair market value for the occupational rent if the mortgagee occupies all or a
part of the mortgaged property;
(c) is liable for an unreasonable injury to or neglect of the mortgaged property caused by the
wilful or negligent act or omission of the mortgagee; and
(d) is not entitled to compensation for personally managing the mortgaged property.
(5) In accounting under this section the mortgagee in possession shall be allowed the cost of the reasonable repairs or improvements made to protect the value of the mortgaged property or to maintain or increase the income from the mortgaged property.
(6) To the extent that the sums of money involved under subsection (5) exceed the income from the mortgaged property they shall be secured with the same priority as the mortgage and where the mortgage
secures the payment of money shall be added to the principal sum of money with interest at the same rate as on the principal sum.
(7) A mortgagee in possession may, from the date of the possession, collect by action or otherwise the income from the mortgaged property, including arrears to which the mortgagee would have been entitled had the mortgagee owned the mortgaged property since the date of the mortgage.
(8) A mortgagee in possession, unless the mortgagee otherwise agrees, is not bound by a lease, profit or licence entered into by the mortgagor subsequent to the mortgage unless the tenant, profit holder or licensee took the interest as a purchaser for value without notice of the mortgage.
(9) A mortgagee in possession is entitled to transfer all or a part of the interest in the mortgaged property, including the right to possession, as provided in section 13
Subject : Mortgages
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