Section 98 of The Transfer of Property Act, 1882
Rights and liabilities of parties to anomalous mortgages.
In the case of 1[an anomalous mortgage] the rights and liabilities of the parties shall be determined by their contract as evidenced in the mortgage-deed, and, so far as such contract does not extend, by local usage.
Summary
- This section outlines how to determine the legal rights and duties of parties in an anomalous mortgage.
- An anomalous mortgage is a mortgage that is not a simple mortgage, a mortgage by conditional sale, a usufructuary mortgage, an English mortgage, or a mortgage by deposit of title-deeds.
- The primary source for finding these rights and duties is the contract written in the mortgage-deed itself.
- If the mortgage-deed contract does not cover a specific issue, then local custom or usage is used to fill the gaps.
Practical examples
FAQ
1. What is an anomalous mortgage under the Transfer of Property Act, 1882, and how is it governed under Section 98?
An anomalous mortgage is any mortgage that does not fit into the five standard categories of mortgages defined by the Act. Under Section 98 of the Transfer of Property Act, 1882, the rights and liabilities of the parties to such a mortgage are governed entirely by their written contract in the mortgage-deed, and where the contract is silent, by local usage.
2. Can local customs override a written contract in an anomalous mortgage under Section 98 of the Transfer of Property Act, 1882?
No, under Section 98 of the Transfer of Property Act, 1882, local usage only applies to fill in the gaps where the written contract in the mortgage-deed does not extend or cover the specific issue.
3. How do you determine the rights of parties to an anomalous mortgage under Section 98 of the Transfer of Property Act, 1882 if the deed is completely silent on a dispute?
Under Section 98 of the Transfer of Property Act, 1882, if the written contract in the mortgage-deed is silent on a particular issue, the rights and liabilities of the parties are determined by the local usage of the area where the transaction or property is located.
4. Does a party to an anomalous mortgage have the right to foreclose or sell the property under Section 98 of the Transfer of Property Act, 1882?
Under Section 98 of the Transfer of Property Act, 1882, the right to foreclose or sell the property is determined by the specific terms of their written contract, meaning a party has these rights only if their contract expressly provides for them.
Test yourself
Q1.Under Section 98 of the Transfer of Property Act, 1882, which of the following is the primary source for determining the rights and liabilities of the parties to an anomalous mortgage?
Q2.Under Section 98 of the Transfer of Property Act, 1882, if the written mortgage-deed of an anomalous mortgage does not address a specific right or liability, how is that gap filled?
Q3.Under Section 98 of the Transfer of Property Act, 1882, which of the following types of mortgages would have its parties' rights determined primarily by local usage in the absence of contract terms?
Q4.Under Section 98 of the Transfer of Property Act, 1882, why is it critical to draft an anomalous mortgage-deed with extreme detail?