Distinguish between Submortgage and puisne mortgage.
CS Executive · Economic, Business and Commercial Laws · PYQS · December 2022
Distinguish between Submortgage and puisne mortgage.
Answer & Explanation:
Sub-mortgage : Where the mortgagee transfers by mortgage his interest in the mortgaged property, or creates a mortgage of a mortgage the transaction is known as a sub-mortgage. For example, where A mortgages his house to B for ₹10,000 and B mortgage his mortgagee right to C for ₹8,000. B creates a sub-mortgage. Puisne mortgage : Where the mortgagor, having mortgaged his property, mortgages it to another person to secure another loan, the second mortgage is called a puisne mortgage. For example, where A mortgages his house worth ₹one lakh to B for ₹40,000 and mortgages the same house to C for a further sum of ₹30,000, the mortgage to B is first mortgage and that to C the second or puisne mortgage. C is the puisne mortgagee, and can recover the debt subject to the right of B, the first mortgagee, to recover his debt of ₹40,000 plus interest.
Topics: Transfer of Property Act, 1882
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