LexThe Kerala Co-operative Land Mortgage Banks Act, 1960 (President's Act No.1 of 1960)
Kerala · state statute
Open in Lexace · Ask the AI about this actACTS AND ORDINANCES OF KERALA 1960
THE KERALA CO-OPERATIVE LAND MORTGAGE
BANKS ACT, ~360.
(President's Act 1 of 1960).
CoNTENTs.
Sections.
Chapter I
Pnliminary.
1. Short title, extent and commencement.
2. Definitions.
3. Adrmss10n of land mortgage banks registered under the
Madras Co-.:;peratlve Societies Act, 1932, as mt:mlle1·s
of the Central Mortgage Bank.
Ch1pter ll
Debentures.
4. Issue of debentures by the Board.
3. Appointment of Trustee and his powers and functions.
6. Guarantee by Government on prmcipal of and interest on
debentures issued under sectwn 4.
7. Power of Board to make regulations.
Chapter Ill
Dish·aint and sale oj produce.
8. D1strainl when to be made.
9. D1strainL how Lobe effected.
10. Sale of property distrained.
t11. Power of Government to make rules.
Chapter IV
Power of sale.
12. Power of ::.ale when to be exercised.
13. Application for sale and manner of sale.
14. Apphcation lo set aside sale on deposit and confirmation
of sale m default. or on dismissal of such application
15. Distribution of sale proceeds.
16. Certificate to purchaser.
17. Delivery of property to purchaser.
18. Right of Central Mortgage Bank or pr1mary mortgage
bank to purchase the mortgaged pro,t. erty at sale.
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19. Appointment of receiver and his powers.
20. Title of purchaser not to be impeached on the ground of
irregularity, etc.
21. Appointment of sale officer.
22. Power of Government to make rules.
ChapterV
Miscellaneous.
23. Mortgages executed in favour of mortgage bank, etc., to
stand vested in Central Mortgage Bank
24. Powers of mortgage bank in case the mortgaged property
is msufficient.
25. Power of Board or of Trustee to d1rect distraint and sale
of produce and the sale of mortgaged property, etc.
26. Bank's right to improvements effected by lessee.
27. Mortgage not to be queslioned on insolvency of mortgagor.
28. Pr1ority of mortgage over certain claims of the Govern-
ment.
29. Right of mortgage bank to pay prior debts of mortgagor.
30. Power to summon witnesses and requisition documents.
31. Registration of documents executed on behalf of the
Central Mortgage Bank or of a primary mortgage bank.
32. Power of mortgage bank to receive moneys and grant
valid d1scharges notwithstanding assignment of
mortgage deeds to the Central Mortgage Bank.
33. Special provisions for mortgages. executed by managers
of joint Hmdu families, karanavans of Maruma
kkathayam Tarwards or Tavazh1s or of Namudiri Illoms,
etc.
34. Special provisions for mortgages by tenants.
35. Proof of documents or entries in documents.
36. Chapters III and IV to apply to loans advanced by
mortgage banks from funds not borrowed from the
Centl'al Mortgage Bank.
37. Service of notice under the Act.
38. Sections 102, 103 and rules under section 104 of the
Transfer of Property Act, 1882, to apply to such notices.
39. Officers of the Bank not to bid at sales.
40. Delegation of powers by Board.
41. Starting of branch banks.
42. Powers of Board to make regulations.
43. Certam rights and bab1ht1es of I he Cochin Co-operative
Land Mortgage Bank to continue in that Bank.
44. Repeals.
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* THE KERALA CO-OPERATIVE LAND MORTGAGE
BANKS ACT, 1960.
(President's Act, 1 of 1960).
Enacted by the President in the Tenth Year of
the Republic of Ltdia.
An Act to facilitate the wo•king of co·operative land
mortgage banks in the State of Kerala·
In exercise of the powers conferred by section 3 of the
Kerala State Legislatur.~ (Delegation of Powers) Act, 1959 (50
o~ 1959) , the Pr'esident is pleased to enact as follows :-
CHAPTER I
Preliminary.
1. Short title, extent and commencement.-(!) This Act may
be called the Kerala Co-operative Land Mortgage Bauks Act,
1960.
(2) It extends to the whole of the State of Kerala.
(3) It shall come into force on such date as the Government
may, by notification m the Gazette, appoint.
2. Definitions.-In this Act, unless the context otherwise
requires,-
( a) "Board" means the Board of Directors of the Central
Land Mortgage Bank;
(b) "Central Mortgage Bank" means the Kerala Co
operative Central Land Mur,gage Bank, Lim1ted;
(c) "committee" in relation to a primary mortgage bank,
means the Board of Directors or Board of Management or the
Panchayat or the Committee of management or the governing
body to whom the management of its affairs is entrusted;
(d) ''co·operative society" means a co·operative society
registered or deemed to be registered under the Tra\'ancore
Cochin Co-operat1ve ::>oc1eties Act, 1951 or the Madras Co·
operative Societies Act, 1932;
(e) 'Malabar" means the Malabar district referred to xn
sub-section (2) of sect10n ;) of the States Reorganisation Act,
1956 (37 of 1956);
(f) "notified order" means an order notified in the
Gazette;
(g) •·prescribed" means prescribed by rules made by the
Government under th1s Act;
* Published m the Kerala Gazette Extraordmary dated 29th January, 196o.
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(h) "primary mortgage bank" means a co-operative land
mortgage bank registered or deemel to be registered under the
Travancore-Cochtn Co-operative Soc1eties Act, 1951, or the
Madras Co-operatiw Soc1eties Act, 1932, and adm1tted as a
member of the Central Mortgage Bank;
(1) "Registrar'' means the person appomted by the
Government to be the Registrar vf Co-operative Societies for the
State;
(j) "State'' means the State of Kerala;
(k) "Trustee'' means the Trustee referred to in section 5.
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3. Admiss10n of land mortgage banks regzstered under the
Madras Co-operative Soczettes Act, 1!132, as members of the
CenLral Murtgage Bank.-Notw1thst .ndmg anythmg contamed
m the Travancore-Cochm Co-operative Societies Act, 1951, 1t
shall be lawful for the Central Land Mortgage Bank, to adm1t as
its member a co-operative land mortgage bank registered or
deemed to be registered under•the Madras Co-operative Soc1et1es
Act, 1932; and anv such admiss1on madP before the commence
ment of this Act shall be deemed to have been lawfully made.
CHAPTER II
Debentures •
4. Issue of debentures by the Board.-(1) (a) W•th the pre
vious sanctiOn of the Tru:.tee, the Board may issue debentures of
one or more denommat10ns for such per1od as 1t may deem ex
pedient on the security oi the mortgages taken by the Central
Mortgage Bank and 1ts other assets and mortgages transferred
or deemed under the prov1s1ons of section 23 to have been trans
ferred by the primary mortgage banks to tne Central Mortgage
Bank.
(b) Such debentures may contam a term fixing a period
not exceedmg twenty years from the date of issue durmg wh1ch
they shall be irredeemable or re,erving to the Board the righ~ to
call m, at any time, any of the debentures m advancP of the date
fixed for redemption after g1v10g to the debenture-holder con
cerned not less than three montns' notice in wr1ting.
(2) The total amount due on the debentures issued by the
Board and outstandmg, at ar.y time, shall not exceed the aggre
gate of thP. amounts due on the mortgages and other assets
rPferred tom clause <a) of sub-secLIO!l (1) and the amounts pa1d
thereunder and remainms m the hands of the Board or of the
Trustee at such t1me.
5. Appointment of Trustee and his powers and functwns.
(1) The Reg1sLrar, or where the Government appoint any other
person m this behalf, such person, shall oe the Tru~t~e for the pur
pose of securing the fulfilment of the obhgat10ns of the Central
Mortgage Bank to the holders of de bent tr~s 1ssued by thP. Board.
The mortg<4ges executed m favour of the Central Mortgage Bank
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and other mortgages and assets transferrE-d or deemed under the
prOVIsions of &ection 23 to have been tran:.ferred to the Central
Mortgage Bank shall vest in the Trustee from the date of exer:u
tion or transfer. The holders of the debentures shall have a
floating charge on all suc-h mortgagee; and assets, on the amounts
paid under such mortgages and remammg in the hand3 of the
B0ard or the Trustee and on the other properties of the Central
Mortgage Bank. The lJowers and functions of the Trustee shall
be governed by the instrument of trust executed between the
Bank and the Trustee as modified from time to time by mutual
agreement between the Board and the Trustee.
(2) The Trustee appointed under sub-section (1) shall be a
corporation sole lly the name of the Trustee for the debentures
and as such shall have perpetual succession and a common seal
and in his corporate name shall sue and be sued.
6. Gu11rantte by Government on principal of and interest on
debentures issued under section 4.- (1) The principal of and the
interest on tlle debentures Issued under sectwn 4 to su{;h maxi
mum am·1unt as may be fixed by the Government and subject to
such conditions as they may think fit to impose, shall, subject to
the p10vis10ns of sub-section (3), carry the guarantee of the
Government.
(2) The Government may, after consultmg the State Legis
lative Assembly, increase the maximum amount of any guarantee
given by them.
(3) The Government may, after consulting the Board and
the Truslee,-
(a) by notification 1n the Gazette, and
(b) by notice for not less than 14 days in such of the
principal newspapers in the State and in other States in India,
as the Guvernment may select in this behalf,
discontinue any guarantee given by them or restrict the maxi
mum amount thereof or modify the condH10ns subject to which
it is given, with effect from a specified date, not being earlier
than six months from the date of publication of the notification
in lhe Gazette.
In cases where the maximum amount of the guarantee is to
be restncted or the conditions subject to which the guarantee is
given are to be modified, the notification and notke aforesrud
shall stt forth, with sufficient clearness, the scope and effect of
the restriction or modification.
Explanation.-Tbe withdrawal, restnctlon or modification of
any guarantee under this sub-section shall not affect, in any way,
the guarantee carried by any de ben lures issued pnor to the date
on which su..:h withdrawal, restriction or modification takes
eff.ct.
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7. Power of Board to make regulation.s.-The Board may,
subject to the approval of the Trustee, make regulations not
mcons1stent w1th the provisions of th1s Chapter,-
{!) for fixing the perwd of debentures and the rate of
mterest payabie thereon;
(1i) for calling in debentures after g1vmg notice to
debenture holders;
{lil) for the issue of new debentures_m place of deben
tures damaged or de-stroyed;
(1v J for converting one class of debentures into another
class of debentures bearmg a different rate of
mterest; and
(v) generally for carrymg out the provisions of th1s
Chapter.
CHAPTER III
Distraint and sale of produce.
8. Distraint when to be made.-{1) If any instalment payable
under a mortgage executed m favour of the Central Mortgage
Bank or a pnmary mortgage bank or any part of such instal
ment has remamed unpaid for more than one month from the
date on which 1t fell due, the Board or the Committee may, m
addition to any other remedy available to them, apply to the
Registrar or to any other person appointed by the Government
under sectwn 3 of the Travancore-Cochin Co-operative Socidies
Act, 1951, or under section 3 of the .Madras Co-operative
Societies Act, 1932, to assist the Registrar. for the recovery of
such instalment or part by distramt and sale of the produce of
the mortgaged land mcluding the standing crops thereon. On
receipt of such application the Registrar or such other per~on
may, notwithstanding anytlung contamed in the Transfer of
Property Act, 1882, ( 4 of 1882) , take such action as is necessary
to distrc.in and sell such produce:
Provided that no distraint shall be made after the expiry of
twelve months from the date on wh1ch the mstalmen fell due.
{2) The distress shall not be excessive ; the value of the
property distra1ned shall be, as nearly as poss1ble, equal to the
amount due and the expenses of the distraint and the costs of the
sale.
9. Distraint how to be e.frected.-(1) Before or at the time
when a distraint 1s made under section 8, the distramer shall
serve or cause to be served upon the defaulter a written demand
specifymg the amount for wluch the distraint is made.
(2) The demand shall be dated and signed by the c:hs
trainer and shall be served upon the default£r by dehvermg a
copy to him or to some adult. male member of h1s fanuly at his
usual place of abode or to his authorised agent, or when such
service cannot be effected, by affixmg a copy of the demand on
some conspicuous part of h1s abode and of the mortgage land.
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10. Sale of property distrained.- (1) lf, within fifteen days
from the date of service of the demand referred to in sectwn 9,
the defaulter does not pay the amount for which the distraint
Y.as effected. the distramer may sell in auction the distrained
. property or such part thereof as may in his opimon be necessary
to satisfy the demand together with the expenses of the distraint
and the costs of the sale.
(:~) From the proceeds of such sale, a deduction shall be
made at such rate as may be fixed by the Government from
tlme to tlme on account of the co5ts of the sale.
(3) From the balance shall be deducted the expenses
incurred by the distramer on account of the distraint.
(4) The remainder, if any, shall be applied to the dib
charge of the amount for which the distraint was made.
(5) The surplus, If any shall be delivered to the person
whose property has been sold and he shall be given a receipt for
the amount discharged from the proceeds of the sale.
11. Power of Government to make rules.-The Government
may make rules not inconsistent w1th the provisions of this
Chapter,-
(i) for the manner of effecting distraint;
(ii) for the custody, preservatiOn and sale of the distrained
property;
(iil) for the investigatiOn of clairr.s by persons other than
the defaulter to any right or mterest m the d1s
tramed property and for the postponement of the
sale pending such investigation ;
(iv) for the immediate sale of perishable articles;
(v) for fixing the rates of deduction on account of the
costs of sale ot distrained properties ; and
(v1) generally for the purpose of carrying out the provi
sions ,of thiS Chapter.
CHAPTER IV
Power of sale.
12. Power of sale when to be exercised.-(!) Notwithstand
ing anything contained in the Transfer of Properly Act, 1882
(4 of 1882), where a power of 5ale without the intervention of the
court is expressly conferred on the Central Mortgage Bank or
a primary mortgage bank, by the mortgage deed, the Board' or
the Committee of such primary mortgage bank, or any pe;son
authorised by the Board or such Committee, as the case may be
shall, in case of default of payment of the mortgage money
or any part thereof have power, in addition to any other remedy
available to them, to bring the mortgaged property to sale with
out the intervention of the court.
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(2) No such power shall be exercised unless-
( a) the Board or such Committee has given an opportunity
to the mortgagor or mortgagors to show cause wny the property
may not be sold w1thout the intervention of court;
(b) notice in wri tmg requiring payment of such mortgage
money or part thereof has been served upon-
(1) the mortgagor or each of the mortgagors ;
(il) any person who has auy interest in or charge upon the
property mortgaged or m or upon the r1ght to
redeem the same ;
(lii) any surety for the payment of the mortgage debt or
any part thereof ; and
(1v) any creditor of the mortgagor, who has in a suit for
the administratiOn of hi'> estate obtamed a decree
for sale of the mortgaged property ; and
(c) default has been made in payment of such mortgage
money or part thereof for three months after such service :
Prov1dPd that the obligation to give such nobce under sub
clauses (ii) and (iv) of clause (b) shall be confined to cases
where the Boa1d or the Committee has notice of such claims:
Provided further that where a mortgage has been executed
by the members of a marumakkathayam Tarwad or Ndmbudiri
Iilom or Aliyasantana family, it shall be necessary to send notice
under tl1is sub-section only to the.~.cthree seniormost members
thereof.
lS. Application for sale and manner of sale.- (1) For exer
cising the power of sale conferred by section 12, the Board or
the Comm1ttee or any other person duly authorised by the
Board or such Committee, as the case may be, may apply to the
sale officer appomted m that behalf un 1er section 21 to ,.ell the
mortgaged property or any part thereof and such officer shall,
after g1ving notice m writmg to all the persons refet·red to in
section 12, sell such property m the manner prescribed .
. (2) The ~ale shall be by public auction a~d shall be held
10 the village where the mortgaged property is situate or at the
nearest place of public resort 1f the sale officer is of opinion that
the property is hkely to sell to better advantage there.
14. Application to set aside sale on deposit and confirmation
of sale in default or on dismissal of such appLication.-(!) When
a mortgaged property has been sold under this Chapter, the
mortg~gor or any person havmg a right or mterest therein
affecteo by the sale, may, at any t1me within thirty days from
the date of sale, apply to the Board or tne Committee of the
pr1mary mortgage bank concerned, as the case may be, to have
the sale set aside on h1s depositing at the office of tne concerned
bank-
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(a) for payment to the Central Mortgage Bank or the
pr1mary mortgage bank, as the case may be, the amount speci
fied in the proclamation of sale togeil1er with subsequent
mterest and the cost.s, 1f any, incurred by the bank m bringmg
the property to sale ; and
(b) for payment to the purchaser a sum equal to five per
cent of the purchase money.
(2) If such deposit is made, the Board or the Committee, as
the case may be, may in lts discretion, make an order setting
aside the sale.
(3) Where no application is made under sub-sechon (1) or
where such applicatiOn is made and disallowed, the Board or the
Committee, as the ca&e may be, shall apply to the Re~Istrar or
any other officer empowered by the Gowrnment in Lh1s regard
to make an order confirming the sale and, on the Registrar or
such officer confirming the sale, 1t shall become ab&olute and
the property shall be deemed to h:~ve vested m the purchaser
from the time when the property 1s sold.
15. Distribution of sale p1·oceeds.- (1) The proceeds o£ every
sale under this Chapter shali be applied by the sale officer, first
m payment of all costs, charges and expen&es properly mcurred
by htm a& mcidental to the sale or any attempted sale; secondly,
m payment o'f all mteresl due on account of the mortgage In
cousequence whereof the mortgaged property was sold, thirdly,
in payment of the prmcipal money due on account of the mort
gage; and lastly, the residue, if, any, shall be paid to the person
. proving himself interested in the property sold or. tf there are
more !.>UCh persons than one, then to such persons, according to
their respective interest therein or upon their jomt recetpt.
(2) (a) Any person dissatisfied with the decision of the
sale officer in regard to the d~:;tributiOn of such residue may,
Within thirty days of the communication to him of such decisiOn,
institute a suit m a court to e<>tablish the right he clai~.
(b) The sale officer shall not distribute such residue until
thirt~ days have elapsed from t:-~e co nmunication of his dectsion
to all the persons co 1cerned, or, if a suit has b ·en instituted
within the said period of thirty days by any such person and
due notice thereof 1s given to him before the payment, until
the suit is disposed of or otherwt:.e than in accordance Wtth the
decision of the court ther~>on.
(3) Any deficit occurring after the sale of the mortgaged
land may also be recovered in the manner provtded in th1s
Chapter from any other assets of the mortgagor.
E:planation.-In this secti•JO and in section 17 "court''
means the civil court having jurisdt~tion to entertam a suit t()
enforce the mortgage and within the hmtts of whose jurisdi.::tio.n
the properly sold 1s situ:tte. .
16. Certificate to purchaser.-Where a sale of mortg 1ged
property has berome absolute, the sale officer shall gr:..nt a
certificate specifying the property sold and the name of the
H-21lS
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person who at .the,ttme of the sale is declared ·to•be the, pur
chaser. Such cert1ficate shall bear the date on whtch the ~ale
became .absolute.
•17. ·Delivery of property to purchaser.- (1) Whete the
mortgaged property sold 1s m the occupancy of the mortgagor
or of some. person on hts behalf or .of•some person claiming
under a title, other than a lease, created by •the mortgagor
subsequent to the mortgage m favour of the Central •Mortgage
Ba'nk or ,pnmary mortgage bank, as the case .may be. ,and a
certtficat~ 1n respect tile 1 eof has been granted under section 16,
the t:ourt shall, on the application of . th? purchaser, order, deli
very to be made by putting su:.:h purchaser or any person ,whom
he maY appoint to receive dehvery on Ius behalf,' m p:>ssession
of the property.
(2) Where the property sold is in the occupancy of a tenant
or other1person entttled to occupy the same and a certificate in
respect thereof has . been granted under ,sect on 16, the court
shclll, on the applicatiun of the.purchaser, and after givtng notrce
to such tenant or other person, order dehvery to be .maderby
affixmg a copy of the certtficate of sale m some ,conspicuous
place (Jn the pr,..perty and proclatmmg 1 o the occupant by beat
oi drum or other cu:>tomary nsode .at some c:->nvement place
that·the interest of the mortgagor has been transfer1·ed to the
purchaser.
(3) 'The provistom of rules 97 to 103 of Order XXI of ·the
First Schedule to the· Code of Ctvd Procedure, 1908 (5 of 1908),
shall mutatis mutandts, apply to the cases _dealt with•m sub-.
sections (1) and (2).
18. 1Right of- Central Mortgage 'Bank •01' primary mortgage
bank to purchase the mortgaged property ·rt sa1e.-lt shall be
competent to the Central Mortgage, Bank-or ,a pr1mary mortgage
bank to ,purchase the mortg ... ged ,property sold under this
Chapter, hut the property so purchased . shall· be disposed, of by
such bank by sale w1thin such period as may be fixed,by the
Trustee.
19, Appomtment of receiver, and h~s powers.- (1) T e Board
may on its own motion or on the application. of. any .branch of
the Central Mortgage Bank or the Committee of a prtrnary.mort
g~ge Lank under circumstance"' in -whtch the powe1· of.sale cnn
fened by section 12 mdy ue exercised. apoomt 111 wrttmg.a
recetver of tlie produce and m~ome of the mortgaged prpperty
or any part therPof and such recetver shall be. ent1tled either, to
take possesswn of the property o,· collect tt:> produce .a-nd
income, as the case may be, to retam out of any money realised
by him, hls expenses of management mcludmg his remuneration,
if an\, as1may ·be fixed by the Board and to apply ·the balance in
accordance w1th the provt,Jons of sub-section (8) of section ·69-A
of the Transfer of Prl)perty Act, 1882 (4 of 1882).
(2) 1A recetver ·appointed under suL-section (1) may, for
suffictent cau.,e and on apphcati<;n made by the mortgagor, b(l
-removed·by.the Board.
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(3) A vacancy-in the office of the receiver may be filled up
liy.'the Board.'
(4) Nothing in th1s section shall empower the Board to
appoint a receiver where the mortgaged property 1~ aheady in
the pos5ess10n of a rec('iver appointed by a civil court; but the
Board or the Committee of a primary mortgage bank, as ·the
case may be, may, through the Secretary oi the Central Mort
gage Bank• or the prunary mo1 tgage bank, a.:. the case may be,
petition to such court to direct the recetver of such court tv
apply! any part or the whole of the surplus remaining in his
hands after meetmg the expen5es of h1s management to the
d1scharge of. the mortgage amount or part thereof, as the case
may be.
20. Title of,purchaser not to be tmpeached on the ground of
irregularity etc.-When a sale has been made irt the professed
exercise of a power of sale under section 12 and has been con
firmed under sub-sectwn (3) of section 14, the title of the pur-
chaser shall not be impeachable on the ground that no case had
ari<>en to authorise the sale or that due notice was not given•or
that the power was otherwise Improperly or Irregularly exer
ciSed,:,but any person damntfied by an unauthorised or improper
or irregulal' ex:erctse of the' power 5hall have his remedy in
damages agamst the Central Mortgai;e Bank or the concerned
primary mortgage bank, as the case may be.
21. Appointment of sale of]ice1·.-The Registrar may appoint
sale officers for the purpose of conducting.sales under this Chap·
ter.
22: Power of Government to make rules.-The Government
may·make rules not inconsistent With thls-Chapter-
(1) ·for the due prodamation and conduct ofthc sate ;
(2) for the recovery of the expenses of proclamation and
sale;
(3)· {ol- the deposit of the purchase money ;
(4) for the resale of the property. if the purchase money.is
not deposited';
(5) for the registraf Ion of claims in respect of properties
mortgaged to the-Central Mortgage Bimk or a primary mortgage
banki and
ter.
(6) general1y for can·ymg out the provisions of this Chap-
CHAPTER, V·
Miacellaaeoua '
23. Mortgages ezecuted in favour of mortgage bank, etc .. to
stand vested in Central. Mortgage Bunk.-The mortgdge5 exe
cuted m favour of, and all other asbets transferred to a prJmary,
mortgage bank by the members thereof shall, Wtth effec1 from
the dine of such executiOn or transfer, be dt.emed to have been
transferred by such pnmary mortgag..: bank lo the l.entt·al Mo1.t·
gage Bank.
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M. Powers of mortgage bank in case the mortgaged pro
perty is i11 suffictenL.- Where any pr• ·pc rty mortgaged to the
Central Mortgage Bank or a primary mortgage bank 1s rendered
insufficient and the mortgagnr, hav1ng bten g1ven a reasonable
opportumty by a Board or the Committee of the primary mort~age
bank of providing further security enough to render the whole
security sufficient or of repaying such portion of the loan as may
be determined by the Board or the Committee, has failed to pro
VIde s1.1ch security or to repay such portion of the loan, the
whole of the loan shall be deemed to fall due at once and the
Board or the Committee, as the case may be, shall be entitled to
take acLwn against the mortgagor under ~ect10n 8 or section 12
for the recovery thereof.
Exp1anation.-A security is insufficient within the meaning
of this section unless the value of the mortgaged property ex
ceeds the amount for the time bemg due on the mortgage by
such proportion as may be specified. m the bye-laws of the Cen
tral Mortgage Bank or the concerned primary mortgage bank,
as the ca~e may be.
25. Power of Board or of Trustee to dtrect distraint and sale
of produce and the sale of mortgaged property, etc.-Cl) The
Board or lhe Tru~tee may d1rect the Cumm1ttee of a primary
mortgage bank to take action against a defaulter under section 8,
sect10n 12, or seclion 24 and 1f the Committee neglects or fails
to do so, the Board or the Trustee may take such action.
(2) (a) where such action is taken by the Board, the pro
viswns of this Act and of any rules or regulations made there
under shall apply m respect thereto as If all references to the
pnmary mortgage bank and to its Committee m the said provi
sions were references to the Central Mo1·tgage Bank and the
Board, respectively.
(b) where such action is taken by the Trustee, the J;1tovi
sions of this Act and of any rules or regulations made there
under shall apply m respect ther.,to as 1£ all references to the
primary mortgage bank or to Its Committee 1n the said provi·
swns were references to the Trustee.
26. Bank's right to tmprovements effected by lessee.-Not
withstandmg anything contained in the Kerala Compensation for
Tenants Improvements Act, 1958, the improvements, If any,
made subsequent to the date of the mortgage by a lessee of pro·
perty mortgaged to the Central Mort3age Bank or a primary
mortgage bank, as the case may be, shall be treated as acces
Sion to the mortgaged property and ~hall be available to such
Bank for the reahsation of the mortgaged amounts
27. Mortgage not to be questioned on insolvency of mortga
gor.-Notwithstandmg anythmg contamed in tht:: Insolvency Act,
1955, a mortgage executed in favour of the Central Mortgage
BanK or " pnmary mortgage bank, a~ the case may be, shall not
be callt:d m quPstion on the ground that it was not execu 1ed in
good faith for valuable considt·ralion or on the ground that 1t
was executed 1n order to give suc.h mortgage bank a prefere11ce
over the other creditor~ of the mortgagor.
13
28. Priority of mortgage over ceTtain claims of the Govern
ment.-Cl) A mortg'lge executed in favour of the Central Mort
gage Bank or a primary mortgage bank, as the case may be,
after the comme.1cement of this Act, shr~ll have priority over
any cloim of the Government arising from a loan under the
Land Improvement Loans Act, 1883 (19 of 1883), or the Agricul
turists' Loan~ Act, 1884 (12 of 1884). or Lhc Cochm Agl'lcultural
Improvement Loan!:> Act, IV of 1093 or the Travancore Land
lmprovemenb and Agricultural Loans Act (Travancore Act IX
of 1094), granted after the execution of the mortgage.
(2) Notwithstanding any enactment or rule of law, a mort
gage executed in favour of the Central Mortgage Bank or a pri
mary mortgage bank, as the case may be, shall take precedence
over any attachment or oral mortgage over the properties, where
after publication of a notlce m the prescnbed form, such claim
or intere~t has not been notdied to such Bank within the time
prescnbed in the said notice.
(3) The Government may make rules ptescribmg the form
of the notice under this section and the Ulanner of its publica
tion.
29· Right of mortgage bank to pay prior. debts of lnortga
gor.-Where a mortg"ge is executed m favour of the Central
Mortgage .dank or a primary mortgage bank, a~ the case mr.y be,
for payment of prior debts of ti1e mortgagor, such Bank may,
notwithstandi:Jilg the provis10ns of sections 83 and ~4 of the
Transfer of Property Act, 1882 (4 of 1882), by notice in writing,
require any person to whom any such debt is due to receive pay•
ment of such debt or part thereof from the Bank at its registered
office within such period as may be specified in the notice. If
any such person fa1ls to receive such notice or such payment,
such debt or part thereof, as the case may be, shall cease to
carry interest from the expiration of the period specified in the
notice, except in cases where such person proves to the satlsfac
tio'l oi the Board or the Committee of the primary mortgage
bank, as the case may be, that the failure to receive notice or
payment was due to causes beyond Ius control:
Provided that where there is a dispute as regards the
amount of any such debt, the per:.on to whom such debt is due
shall be bound to receive payment of the amount offered by the
Bank towards the debt, but such receipt shall not prejudice the
right, if any, of such person to recover the balance claimed by
him.
30. PoweT to summon witnesses and requisition docu
ments.-(1) Subject to such restrictions, limitations and condi
tlons as may be prescribed, the Registrar and officers subordinate
to the Registrar who are authorised by him in this behalf by
general or special order m writing, and such other officials en
gaged in the relief of rural indebtedness or officers of co-opera
tive bank.s which are reg1stered or deemed to be regis.ered
under the Travancore·Cochin Co-operative Soc1eties Ac~, 1951,
' '
14
or the Madras Co-operative Societies Act, 1932,·as the;Govern
ment may, by notification in the Gazette authorise In this behalf,.
shall have the same powers as are vebted in a court under
the Code of Ctvi1 Procedure, 1908 ( 5 of 1908). when trymg a suit,.
in respect of the following matters, namely:-
(a) enforcing the atfendance of any person. and examin
ing him on oath or affirmation;
(b) compelling•the production of documents; and
(c) issuing commis:;ions for the ex:ammation of witnesses.
(2) Any of the officers authorised by or. under sub-section
(1) may require any person pr•·sent be:ore him to furnish any
mformation or to produce any document then and. there in llis
possession or power, relevant to the inquiry.
(3) Any officer before whom any document is produced
under sub-section (1) or sub-sect10n (2)· shall have power to
take, or to authorise the taking of, such copies of' the· document·
or of any entries therein as such officer or personcmay.·con'sider
neCP'>Sary. Copies so taken shall. when certified ·m such manner
as may be prescribed, be admissible in evidence for any purpose
in the same manner and to the sam~ e"tent as the origmal docu
ment or the entries therem,' as the case may lie.
(4) (a) Any person who wilfully or without. reasonable ex
cuse disobey.:;. any summons, requisition or order'issued. under·
sub-sec.tion {1) or sub-section <2), shall be punishable Wltll fine·
w111ch may extend to fifty rupees, and 1n the ca:o.e~ of a continu
mg disobedience with an adjitional fine wh1ch may extend to
five rupees for every day durmg which such dtsob'edience conti
nues after conviction for the last such disobedience.
(b) No court inferior·to that of a Magistrate' of the first
class ~hall try any offence under clause (a). ·
(c)· EVery offence under clause (a) shall; for the purposes
of the Code of'Criminal Procedure, 1898 (5 of 1898), be deemed
to be non-cognizable.
(d) No prosecution shall be, mstituted; unde-r clause: (a),
w1thout the previous sanction- ·
(i) of the Regis~rar in- case the~· summon~ •. requisition
or order alleged 1to have been di!>obeyed · was issued
by the Registrar or any person subordinate to him
or'by, any officer oi a co-operativ'e b'ank·; and
01) ofthe Collector of'ttie district in other ca~es.
Such sancti~n shall not be_giyen withaut giving--the party
concerned an opportunity to oe heard.
(5) The Goverument shall have power to make rules for
giV1116 effect to the provisions of .this.~ection.
31. Regtatratwn ofdocwnents e~ecuted on behalf, of the · Cen·
tral Mortgage Bank or'of a p1 imary mortgage bank. -(1), Not.:
withstanding anything contauied'-in.the Indian Reglstration ~t,
---- -------
l.-908·U6 of,l908), 1t shall not be necessary for any Director,
Secretary or other officer of the Centrall\Iortgage Bank vr of a
pr1mary mortgage bank to ai?pear In per~on or by agent at any
reg1stralion office m any pr0ceed1ngs connec.ted w1th the regls
tratwn of any mstrument executed by h1m in his official capa
City or to sign a'> prov1dcd in section 58 of lhat Act.
(2) 'Where any mstrument :s so executed, the registermg
officer to wl1om such in::.trument 1s presented for regir.tration
may, 1£ he thmks fit, refer to such D1rector, Secretary or Officer
for information-respectmg the same, and, on be1ng satisfied of
the execution thereof, shall register the instrument.
32. Power of rno1·tgage bank . to receive moneys and g1·ant
valid discha1·ges notwzthsfaltdmg assignment of mortgage deeds
to the Central Mortgage Bank -Notwtthslandmg that a mort-.
gage executed 111 favour of a prtmary mortgage bank has been
transferred, or is deemed under the .P• OVISions of section 23 to
have been transfer1ed, to the Central Mort!:,age Bank-
'(a) all money<; due .under the mortgage shall, in the
abst:ncc of any spectfic d1rect10n •to the contrary
is--ued by the!Board or the Trustee and communt
cated·to the mortgagor, be payable to the primary
mortgage bank and such payment shall bE' as valtd
as if the mortgage had not been so•transferred; and
(b) the prtmary mortgage bank shall, m the absence of
any spectfic d1rect10n to the contrary,issued by the
Boa1 d or the Trustee and comn1umcated to the
prtmary mortgage hank be enlltled to sue on the
mortgage or take any other proceedings for the
recovery of the moneys due under the mortgage.
33. Special provtswns fo1· mortgages, executed by managers
of join~ ·Hmdu fam.zltes, karrr.navans oj -Mmumakkothc.yam
Ta1·wads·or Tavazhts or of Nambudtrt llloms, etc.- (1) Where a
mortgage executed 10 favour of the Central Mortgage Bank or
a primary mortgage bank, e1ther'b~fore or after the commence
ment·of-tlus Act, ts called 10 quPstlOn on the ground that 1t was
execuifd by the manager of ajomt Hmdu famtly or the karana
van of a Marumakkathayam tarwad or tavazhi or of a Nambu
dlri Illom, or·the manager of a Thiyya or Ez11ava fam1ly, or the
ejaman or e3amanathi of an ·Ahyasantana family, for a purpose
not bind10g on the members thereof, whether majors or nunors,
the ·burden of prov10g the same shall, notw1Lhstandmg any law
to the contrary,•be·on the party ratsmg it.
(2) A mortgage executed m favo_,r ot the Central Mortgage
Bank or a pnmary mortgage bank by the manager of a jomt
limdu fam1ly or the ka anavan of a· Marumakkathayam tarwad
or tavazhi or of a Nambudir1-Illom or the manager of a Thtyya
or Ezhava .famtly or the eJaman or e)amauatlu of an Ahyasan
tan<\ family shall be bmdmg on the ,members thereof, whether
...__
16
majors or n;inors, 1£ the loan secured by the mortg&ge was
granted for any of lhe following purpo.sPs, namely . -
(a) the lrnlJrovement of agrlCulturalland or of the me
thods of cultlVatlon; and
(b) the purchase of land,
34, Special provisions for mo1·tgages by tenants.-Where a
tenant mortgages his holdmg in favour of a primary mortgage
bank, the following provlSlon.s shall apply so long as the mort·
gage subsists, notw1thstandmg anyth1ng to the contrary con·
tained in any law r·~latmg to tenancy or m any custom or
contract-
(i) both before and after granting the loan secured by the
mortgage, the pnmary mortgage bank shall give
nohce in writing to the landiord of the tenant, and
if such landiord 1s him~elf the tenant of another
landlord, also to that landlord, and hkewise to
every superior landlord £1om whom mterest m
the holdmg is derived, up to and including the
landuwner ;
(11) every landlo1·d to whom notice 1s given under clause (1)
shall g1ve not less than fifteen days' notice in writ·
mg to the pnmary mortgag~ bank before institutmg
a suit for bringing the holding of his tenant
t whether such tenant be the mortgagor or a superior
landlord) to sale for detault m payment of rent or
michavarom or jenmikaram or for ev1etmg such
tenant from the holdmg;
(lii) the tenant who has mortgaged the holdmg to the
primary mortgage bank shall not except with the
previous permiSSIOn of the Bank, surrender his
holding or any part thereof to·h1s landlord or deal
with 1t in any other manr1er, and no such transac·
t10n entered into by the tenant w1th >Ut such per·
miss10n shall affect in any way the mterest of the
Bank in the holding ; .
(iv) in a smt for ev1ctwn mst1tuted against the tenant
who has mortgaged the holumg to the pr,mary
mortgage bank, the Bank shall, on apphcation to
the court m whtch the l>Uit is mstituted, be entllled
to be patd out of the amount of compensalwn, 1f
any, deposited in court under sechon 5 o£ the
Kerala Compensation for Tenants Improvements
Act, 1958, the moneys due to the Bank under the
mortgage;
(v) 1£, on the expiry of the tenancy of the tenant who has
mortgaged the holding to the primarv mortgage
bank, the tenant does not renew the tenancy, the
Bank shall be entitled to oblam a renewal of the
tenancy on behalf of the tenant and any re.1ewal fee
pc.id by the Bank shall be added to the prmcipal
money due und~r the mortgage;
' .. ',..
17 --- .
(vl) 1f tl•e tenant who has mortgaged the holding to
the primary in lrtgage bank makes default m the
payment \lf any rent or michavaram or jenmikaram
due to his landlord or the Government, as the
case may be, the Bank shall be entitled to pay the
same to the Iandi rd or the Government and the
amount so patd shall be added to the principal
money due under the mortgage.
Explanation.-In so far as the rent ot michavaram is payable
in kind, the primary mortgage bank shall have the right to pay
the value thC'reof calculated at the rate or rates notified by the
Government from time to tlme in the Gazette;
(vii' where the primary mortgage bank pays any renewal
fee, rent, michavaram or Jenmikaram und~r clause
( V) or C}au,e (vi) , it shall be en 11 tled to I egard the
whole of the mortgage money as having become pay~
able and, after glVing a reason 1ble opportunity to
the tenant to repay the whole of the said money or
such portion thereof as may be determmcd by the
Bank, to bring the holdmg to sale under the provt
slons of Chapter IV of this Act.
35. Proof of documents or entries in documents.-The
Central M"'rtgage Bank or any primary mortgage bank may
grant copies of any document obtained and kept b~ 1t m the
course of its busmess or of any entnes in such documents; and
any copy so granted ~hall, when certified in ~uch manner as
may be prescribed, be admissible in evtdence for any purpose
in the same manner and to the same extent as the original
document, or the entr1es therem, as the case may be.
36. Chapters III and IV to apply to loans advanced by mort
gage banks from funds not boTTowed from the Central Mortgage
Bank.-'fhe provisions of Chapters III and IV shall apply also
to loans advanced by primary mortgage banks frum funds which
have not been borrowed from the Central Mortgage Bank and
loans taken over by the Central M01 tgage Bank from the
Travancore Credit Bank.
37. Service of nottce under. the Act.-Whenever under the
provisions of Lhis Act, notice 1s required to be glVen to any
person in wr1Ling, 1t shall be sufficient to send such noilce by
registered post. ,
38. Sections 102, 103 and rules under section 104 of' the
Transfer of Property Act, 1882, to apply to such nottces -The
provisions of sections 102 and 103 of the Transfer of Property
Act, 1882 (4 of 1882), and of any rules made by the H1gh Court
under section 104 of that Act, for carrymg out the purpo!>es of
the satd sections. shall apply, so far as may be, m respect of all
notlces to be served under this Act.
39. Officers of the Bank not to bid at sa.les.-At any sale 'of
movable or immovable property held under the proviswns of
this Act lD order to I'ecover any money due to the Central
Mortgage Bank or any pnmary mortgage bank, no Director,
Secretary or other officer of the Central Mortgag~ Bank or such
34 28 2S
18
. pnmary mortgage bank, as the case may be (except on behalf
of the bank of which he is a Director, Secretary or other officer),
and no ~ale officer or other person having any duty to perf 1rm
m connection With such sale,· shall either directly or mdirectly
btd for or. acquire or attempt to acqu1re any interest m such
property.
40. Delegation of powers bll Board . ..::rhe Board may, If it
thinks fit, delegate all or any of Its powers under sections 12, 19
and 25 to any executive committee constituted by it and consist
ing of two or more of its member:-.
41. Starttng of branch banks.-The Board may, from tlme to
time, w1th the previous sanction of the Reg1!:>trar, start branches
of the Central Mortgage Bank at such convement centres as
may be dec1ded upon and carry on operations through them.
42. Powers of Board to make regulations.-Notw1thstantlmg
anythmg contamed m tho Travancore-Cochin Co-operative
Societies Act, 1951, or the Madras Co-operative Societies Act,
1932 01 the rules made under the sa1d Acts, the Board shall
ha'-(e general power of supervtsion over the primary mortgage
banks and may make regulations not mcot.~istent with this
Act or the rules made thereunder-
(a) for the mspection of the account book::. and proceed
Ings of primary mortgage banks;
(b) £0r the submission of retums and reports by prtmary
mortgage banks in respect of their transactions;
(c) for the periodical settlement of accounts between
pnmary mortgage banks and the Central Mortgage Bank and for
the payment of the amounts recovered by prtmary mortgage
bank!> on mortgages transferred, or deemed under the proVISIOns
of section 23 to have been transferred, to the Central Mortgage
Bank;
(d) pres_cnb1ng the form m which apphcatwns to primary
mortgage banks for loans should be made and for the valuation
of the properties offered as security for such loans;
(e) for the mvestment of moneys reah!:>ed from the
mortgagorsExcerpt shown. Open the full act in Lexace.