Mortgages Of Immovable Property And Charges MCQ Quiz in தமிழ் - Objective Question with Answer for Mortgages Of Immovable Property And Charges - இலவச PDF ஐப் பதிவிறக்கவும்

The correct answer is 12 years

Key Points

• When a mortgage deed is compulsorily registrable (as per the Registration Act, 1908) but is not registered, the mortgage is not valid in law. However, if the mortgagee continues in possession of the mortgaged property for a long time adversely to the interest of the mortgagor, the mortgagee may acquire ownership rights by adverse possession under the Limitation Act, 1963.
• Unregistered mortgage deeds (where registration is compulsory) are inadmissible in evidence and do not create any legal mortgage.
• But if the mortgagee is put in possession and continues in possession openly, continuously, and hostilely for the statutory period, they may acquire ownership rights by adverse possession.
• If the mortgagee remains in continuous, uninterrupted, and hostile possession of the mortgaged property for 12 years, a valid title by adverse possession may arise in favor of the mortgagee even though the original mortgage was invalid due to lack of registration.

The correct answer is 9% PA

Key Points

• Under Section 63A(2) of the Transfer of Property Act, if a mortgagee in possession has made necessary improvements (to prevent destruction, deterioration, insufficient security, or as per lawful order), the mortgagor is liable to pay:
  • The proper cost of such improvements,
  • As an addition to the principal amount, and
  • With interest at the rate agreed for the principal,
  • Or, if no rate is fixed, then at 9% per annum.
• Section 63 deals with accession to mortgaged property, and although it talks about cost and interest, it does not prescribe a specific rate. 

The correct answer is

Key Points Section 58 of the Transfer of Property Act, 1882
Definition of Mortgage (Clause a)
A mortgage is the transfer of an interest in a specific immovable property as security for:

• A loan already given or to be given,
• An existing or future debt, or
• The performance of an obligation that may lead to financial liability.
• The person giving the mortgage is called the mortgagor.
• The person receiving the mortgage is called the mortgagee.
• The principal amount and interest secured by the mortgage is called mortgage-money.
• The document that formalizes the mortgage transaction is called a mortgage-deed.

Types of Mortgages Defined in Section 58
1. Simple Mortgage (Clause b)

• The mortgagor does not deliver possession of the property to the mortgagee.
• The mortgagor personally agrees to repay the mortgage-money.
• If the mortgagor fails to repay, the mortgagee has the right to sell the mortgaged property and recover the debt from the sale proceeds.

2. Mortgage by Conditional Sale (Clause c)

• The mortgagor sells the property to the mortgagee with conditions, such as:
• If the mortgagor fails to pay the debt, the sale becomes absolute.
• If the mortgagor pays the debt, the sale becomes void.
• If the mortgagor pays the debt, the buyer must return the property to the seller.

Important:

• A mortgage by conditional sale must be written in the same document as the sale deed; otherwise, it will not be considered a mortgage.

3. Usufructuary Mortgage (Clause d)

• The mortgagor gives possession of the property to the mortgagee.
• The mortgagee receives rent or profits from the property instead of interest or loan repayment.
• The mortgagee retains possession until the mortgage-money is fully paid.

4. English Mortgage (Clause e)

• The mortgagor promises to repay the mortgage-money on a specific date.
• The mortgaged property is transferred absolutely to the mortgagee.
• However, the mortgagee must return the property to the mortgagor once the mortgage-money is repaid.

5. Mortgage by Deposit of Title-Deeds (Clause f)

• This is also called Equitable Mortgage.
• The mortgagor delivers the title deeds (ownership documents) of the property to the mortgagee.
• This creates a security interest over the property.
• This type of mortgage is valid only in certain cities specified by the State Government through a notification.

6. Anomalous Mortgage (Clause g)

• Any mortgage that does not fit into the above five categories is called an anomalous mortgage.
• This means it could be a combination of different types of mortgages or have special conditions agreed upon by the parties.

The correct answer is Equitable mortgage

Key Points

• A mortgage by deposit of title deeds is commonly known as an Equitable Mortgage and is governed by Section 58(f) of the Transfer of Property Act, 1882.
• In an equitable mortgage, the mortgagor deposits the title deeds (ownership documents) of immovable property with the mortgagee.
• This is done with the intent to create security for a loan or debt.
• No formal registered deed is required for this mortgage, making it simpler and cost-effective.

The correct answer is 'Mortgage is always redeemable.'

Key Points

• Mortgage is always redeemable:
  • The principle "Once a mortgage, always a mortgage" signifies that a mortgage, once created, retains its nature and essence as a mortgage until it is fully redeemed.
  • This means that the mortgagor (borrower) has the inherent right to redeem the mortgage at any time by repaying the loan amount along with any due interest, even if the stipulated time period for repayment has lapsed.
  • This principle ensures that the borrower’s right to reclaim their property is protected, reflecting the equitable nature of mortgage law.

Additional Information

• Mortgagee has no right to assign the mortgage debt to any other person:
  • This is incorrect because mortgagees (lenders) typically have the right to assign the mortgage debt to another party, transferring their rights and interests.
• Mortgage cannot be redeemed after the expiry of fixed period:
  • This contradicts the principle of mortgage redemption, which allows the borrower to repay and reclaim the property even after the fixed period has expired.
• Mortgagor has no right to assign right of redemption to any person:
  • This is incorrect as the mortgagor (borrower) can transfer their right of redemption to another person, allowing them to repay the mortgage and reclaim the property.

The correct answer is 'Is bound to assign and transfer accordingly.'

Key Points

• Section 60A of the Transfer of Property Act:
  • This section deals with the rights of a mortgagor to redeem the mortgaged property.
  • It allows the mortgagor to require the mortgagee to assign the mortgage debt and transfer the mortgaged property to a third person as directed by the mortgagor, rather than re-transferring the property back to the mortgagor himself.
  • This provision ensures that the mortgagor has the flexibility to direct the transfer to another party if needed.

Additional Information

• Incorrect Options:
  • Option 1: Is not bound to assign and transfer accordingly: This option is incorrect because Section 60A clearly states that the mortgagor has the right to require the mortgagee to assign and transfer to a third person.
  • Option 3: Is bound if the mortgagor assents: This option is incorrect because the provision does not require the assent of the mortgagor for the mortgagee to be bound; the mortgagor’s direction is sufficient.
  • Option 4: None of the above: This option is incorrect because the correct answer is explicitly stated in the law, which mandates the mortgagee to comply with the mortgagor's direction.

The correct answer is Option 3.

Key Points The principle "Once a mortgage, always a mortgage" is a fundamental rule in mortgage law, emphasizing that a mortgage is always redeemable and cannot be converted into an absolute sale. This principle ensures that the mortgagee (lender) cannot impose conditions that prevent the mortgagor (borrower) from redeeming the property after repayment of the loan.

Correct Interpretation:

• The mortgagee cannot introduce a clause that permanently deprives the mortgagor of their right to redeem the property.

• Even if a fixed period is prescribed for redemption, the mortgagor retains the right to redeem.

The correct answer is Equitable mortgage

Key Points

• Under Section 58(f) of the Transfer of Property Act, 1882, an equitable mortgage (also known as a mortgage by deposit of title deeds) does not require registration.
• In this type of mortgage, the mortgagor simply deposits the title deeds of the property with the mortgagee in a notified town, intending to create a security for a loan. Since there is no written document that creates or extinguishes rights in immovable property, registration is not mandatory.

The correct answer is Suit for foreclosure or sale

Key Points 

• Section 67 of the Transfer of Property Act, 1882 deals with the rights of a mortgagee to bring a suit for foreclosure or sale of the mortgaged property in the event of non-payment of the mortgage money.
• Key Points:
  • A mortgagee has the right to sue the mortgagor when the debt remains unpaid after the due date.
  • Depending on the type of mortgage:
  • In a mortgage by conditional sale, the remedy is foreclosure.
  • In other types of mortgages (like simple or English mortgage), the remedy is typically sale.
• The suit filed by the mortgagee to enforce these rights is known as a suit for foreclosure or sale.

Additional Information

• Option 2. Suit for redemption: Filed by the mortgagor to reclaim the mortgaged property by repaying the loan — not by the mortgagee.
• Option 3. Suit for mesne profit: Pertains to illegal possession and recovery of wrongful profits made by someone occupying another’s property.
• Option 4. Interpleader Suit: Filed when two or more parties claim the same property or amount, and the holder seeks the court's direction on whom to hand it over — not related to mortgage enforcement.

The correct answer is Option 2.

Key Points

• In this landmark Privy Council judgment, it was held that: Section 60 of the Transfer of Property Act, 1882 (which grants the mortgagor the right of redemption) is subject to Section 98, which relates to remedies available to the mortgagee in possession.
• Section 60 – Right of Redemption: It gives the mortgagor the right to redeem the mortgaged property by repaying the loan once the obligation is fulfilled.
• Section 98 – Rights of Mortgagee in Possession: Protects the rights and remedies of a mortgagee in possession who has incurred expenses in management or preservation of the mortgaged property.
• The Privy Council clarified that:
  • A mortgagor cannot redeem the property under Section 60 without first discharging the obligations that arise under Section 98.
• Hence, Section 60 (right of redemption) is not absolute, and is subject to the equitable rights/remedies conferred under Section 98.

Additional Information

• Section 98 is subject to Section 60: Wrong – The case clearly prioritizes Section 98 over Section 60.
• Either (1) or (2) depending on facts:  Incorrect – The judgment lays down a specific hierarchy, not a case-by-case dependency.
• Neither (1) nor (2): Clearly refuted by the Privy Council's authoritative ruling.