Law Maker

CHAPTER IV OF MORTGAGES OF IMMOVEABLE PROPERTY AND CHARGES · Rights and liabilities of Mortgagee

Section 69: Power of sale when valid

The Transfer of Property Act, 1882

1[(1)] 2[3*** A mortgagee, or any person acting on his behalf, shall, subject to the provisions 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, Muhammadan or Buddhist 4[or a member of any other race, sect, tribe or class from time to time specified in this behalf by 5[the State Government], in the Official Gazette];

(b) where 6[a power of sale without the intervention of the Court is expressly conferred on the mortgagee by the mortgage-deed and] the mortgagee is 7[the Government];

(c) where 6[a power of sale without the intervention of the Court is expressly conferred on the mortgagee by the mortgage-deed and] the mortgaged property or any part thereof 8[was, on the date of the execution of the mortgage-deed], situate within the towns of Calcutta, Madras, Bombay, 9 *** 10 [or in any other town or area which the State Government may, by notification in the Official Gazette, specify in this behalf].

11[(2)] 12*** No such power shall be exercised unless and until—

13[(a)] notice in writing requiring payment of the principal money has been served on the mortgagor, or, one of several mortgagors, and default has been made in payment of the principal money, or of part thereof, for three months after such service; or

14[(b)] some interest under the mortgage amounting at least to five hundred rupees is in arrear and unpaid for three months after becoming due.

15[(3)] When a sale has been made in professed exercise of such a power, the title of the purchaser shall not be impeachable on the ground that no case had arisen to authorize the sale, or that due notice was not given, or that the power was otherwise improperly or irregularly exercised; but any person damnified by an unauthorised or improper or irregular exercise of the power shall have his remedy in damages against the person exercising the power.

16[(4)] The money which is received by the mortgagee, arising from the sale, after discharge of prior incumbrances, if any, to which the sale is not made subject, or after payment into Court under section 57 of a sum to meet any prior incumbrance, shall, in the absence of a contract to the contrary, be held by him in trust to be applied by him, first, in payment of all costs, charges and expenses properly incurred by him as incident to the sale or any attempted sale; and, secondly, discharge of the mortgage-money and costs and other money, if any, due under the mortgage; and the residue of the money so received shall be paid to the person entitled to the mortgaged property, or authorised to give receipts for the proceeds of the sale thereof.

17[(5) Nothing in this section or in section 69A applies to powers conferred before the first day of July, 1882.]

18* * * * *

Footnotes in the official text

  1. 1.Section 69 re-numbered as sub-section (1) of that section by Act 20 of 1929, s. 34.
  2. 2.Subs. by s. 34, ibid., for certain words.
  3. 3.The words and figures “Notwithstanding anything contained in the Trustees’ and Mortgagees’ Powers Act, 1866 (28 of 1866)” omitted by Act 48 of 1952, s. 3 and the Second Schedule.
  4. 4.Ins. by Act 3 of 1885, s. 5.
  5. 5.The words “the L.G., with the previous sanction of the G. G. in C.” successively amended by A.O. 1937 and A.O. 1950 to read as above.
  6. 6.Ins. by Act 20 of 1929, s. 34.
  7. 7.The words “the Secretary of State for India in Council” successively amended by A.O. 1937 and A.O. 1950 to read as above.
  8. 8.Subs. by Act 20 of 1929, s. 34, for “is”.
  9. 9.The word “Karachi” omitted by A.O. 1948.
  10. 10.The words “or Rangoon” have been successively amended by Acts 6 of 1904, 11 of 1915, 20 of 1929, the A.O. 1937 and the A.O. 1950 to read as above.
  11. 11.Second paragraph numbered as sub-section (2) by Act 20 of 1929, s. 34.
  12. 12.The word “'But” omitted by s. 34, ibid.
  13. 13.Clause (1) was lettered (a) by s. 34, ibid.
  14. 14.
  15. 15.
  16. 16.
  17. 17.
  18. 18.

Questions on this section

5 questions in 19 of our papers cite Section 69. Try these from the free papers:

  1. 1. Consider the following statements under Section 69 of the Transfer of Property Act, 1882: 1. Money received by the mortgagee from a sale under the section is to be applied first in discharge of the mortgage-money, and only then in payment of the costs of the sale. 2. Sections 69 and 69A apply to powers of sale conferred both before and after the first day of July, 1882. 3. Under clause (b) of Section 69(1), where the mortgagee is the Government, a power of sale without the intervention of the Court arises only if it is expressly conferred on the mortgagee by the mortgage-deed. Which of the statements given above is/are correct?

  2. 2. Under a power of sale validly exercisable under Section 69 of the Transfer of Property Act, 1882, mortgagee M auctions the mortgaged property and accepts P's bid, but no conveyance has yet been executed and registered. The mortgagor then tenders the whole amount due. Following Narandas Karsondas v. S.A. Kamtam (1977), the mortgagor:

  3. 3. Under Section 69(3) of the Transfer of Property Act, 1882, where a sale has been made in professed exercise of a mortgagee's power of sale without the intervention of the Court, and the power was irregularly exercised, the purchaser's title:

Practise questions on Transfer of Property Act