Section 72 of Transfer of Property Act - Rights of mortgagee in possession

Section 72 Transfer of Property Act Description

[A mortgagee] may spend such money as is necessary-

[(a) Omitted].

(b) for [the preservation of the mortgaged property] from destruction, forfeiture or sale ;

(c) for supporting the mortgagor's title to the property ;

(d) for making his own title thereto good against the mortgagor ; and

(e) when the mortgaged property is a renewable leasehold, for the renewal of the lease ;

and may, in the absence of contract to the contrary, add such money to the principal money, at the rate of interest payable on the principal, and where no such rate is fixed, at the rate of nine per cent per annum :

[Provided that the expenditure of money by the mortgagee under clause (b) or clause (c) shall not be deemed to be necessary unless the mortgagor has been called upon and has failed to take proper and timely steps to preserve the property or to support the title.]

Where the property is by its nature insurable, the mortgagee may also, in the absence of a contract to the contrary, insure and keep insured against loss or damage by fire the whole or any part of such property ; and the premiums paid for any such insurance shall be [added to the principal money with interest at the same rate as is payable on the principal money, or, where no such rate is fixed, at the rate of nine per cent per annum.] But amount of such insurance shall not exceed the amount specified in this behalf in the mortgage deed or (if no such amount is therein specified) two thirds of the amount that would be required in case of total destruction to reinstate the property insured.

Nothing in this section shall be deemed to authorise the mortgagee to insure when an insurance of the property is kept up by or on behalf of the mortgagor to the amount in which the mortgagee is hereby authorised to insure.

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