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

Raghav Finance lends money to Nisha against deposit of her title-deeds, and Nisha also signs a document recording the arrangement. Separately, Raghav asks how the mortgage by deposit of title-deeds is treated under the Transfer of Property Act, 1882. Which statement matches the official text?

The provisions applying to a simple mortgage apply, so far as may be, to a mortgage by deposit of title-deeds. Section 96 of the Transfer of Property Act, 1882 says so expressly. It does not convert the arrangement into a sale or make it a usufructuary mortgage.

  1. AThe provisions applying to a simple mortgage apply, so far as may be, to a mortgage by deposit of title-deedsCorrect
  2. BA mortgage by deposit of title-deeds is governed by no provision applicable to other mortgages
  3. COnly the provisions on usufructuary mortgage apply to it
  4. DIt is treated as a sale once the deeds are delivered

Explanation

Section 96 states that the provisions which apply to a simple mortgage apply, so far as may be, to a mortgage by deposit of title-deeds. The other options invent different rules or wrongly treat the mortgage as a sale.

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