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CS Professional · Drafting, Pleadings and Appearances · Drafting of Agreements, Deeds and Documents

Kiran Industries deposits title-deeds of its Kolkata factory with a bank, creating a mortgage by deposit of title-deeds for Rs 50,00,000. The bank's officer asks which provisions of the Act govern its enforcement rights. Which statement is correct under section 96 of the Transfer of Property Act, 1882?

The provisions applicable to a simple mortgage apply, so far as may be, to a mortgage by deposit of title-deeds. Section 96 expressly extends the simple mortgage rules to it, so the bank's remedies follow that model.

  1. AThe provisions applying to a simple mortgage apply, so far as may be, to itCorrect
  2. BThe provisions applying to an English mortgage apply to it
  3. CThe provisions applying to a usufructuary mortgage apply to it
  4. DNo provisions of the Act apply to it as it is unwritten

Explanation

Section 96 provides that the provisions contained earlier which apply to a simple mortgage shall, so far as may be, apply to a mortgage by deposit of title-deeds. English and usufructuary mortgage provisions are not the ones borrowed. The absence of a written instrument does not take it outside the Act.

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