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

Sunil Agro in Mumbai deposits title-deeds of its godown with a lender for a loan, and a memorandum is drafted recording the terms. While drafting the covenants, the company secretary relies on section 96 of the Transfer of Property Act, 1882. What does section 96 provide?

Section 96 provides that the provisions applicable to a simple mortgage apply, so far as may be, to a mortgage by deposit of title-deeds. The drafter can therefore model remedies and covenants on simple mortgage rules.

  1. AProvisions applicable to a simple mortgage apply, so far as may be, to a mortgage by deposit of title-deedsCorrect
  2. BProvisions on usufructuary mortgages apply to every deposit of title-deeds
  3. CA deposit of title-deeds must always be converted into an English mortgage
  4. DThe provisions on simple mortgage never apply to deposits of title-deeds

Explanation

Section 96 says the provisions contained earlier that apply to a simple mortgage shall, so far as may be, apply to a mortgage by deposit of title-deeds. So rights such as sale on default can be drafted by analogy to a simple mortgage. The other options misstate this link.

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