(1) Where a mortgage is executed in favour of a registered society for payment of prior debts or part thereof, of the mortgagor secured on the mortgaged pro perty, the registered society may, notwithstanding the provisions of sections 83 and 84 of the Transfer of Property Act, 1882 (IV of 1882), by notice in writing and served by registered post with acknowledgment due, require any person to whom any such debt is due to receive payment of such debt or part thereof from the society at its registered office within such period as may be specified in the notice.
(2) The person on whom such notice is served shall be bound to receive payment of the amount offered by the society, but where there is disagreement or dispute between the mortgagor and such person as regards the amount of the debt, or where the society tenders less than the agreed amount of debt, the receipt of the sum offered by the society shall not debar such person from enforcing his right to recover the balance claimed by him.
(3) If any such person refused 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 and the property mortgaged under sub-section (1) shall be deemed to have been freed from the encumbrance of such prior mortgage.
(4) No society shall advance a loan on a mortgage without taking a declara tion from the prospective mortgagor as to the names of prior mortgagees of the property in question, if any.
29. Restrictions on mortgaged property,—Where land is mortgaged to a registered society—(1) the mortgagor shall not be entitled without the approval of the society to transfer or mortgage his equity of redemption or to create a charge upon or lease out such property for a period exceeding three years.
(2) If the mortgaged property at any time is wholly or partially destroyed or the security is rendered insufficient due to fall in value or for any other reason and the mortgagor having been given a reasonable opportunity by the society of providing for further security sufficient to cover the loan or of repaying the loan with interest or such portion of the loan as may be determined by the super visory, managing or controlling body and the mortgagor having failed to provide such security or repay such portion of the loan, the whole of the loan or such uncovered portion shall be deemed to fall due at once and recoverable through a co-operative demand certificate.
(3) Notwithstanding anything contained in the Transfer of Property Act, 1882 (IV of 1882), the mortgaged property, in case of default of payment of mort gage money or any part thereof, may be sold by the society as prescribed by rules in addition to any other remedy available to it, without the intervention of th?
court, if a power of sale without the intervention of court is expressly conferred!
by the mortgage deed, provided the society serves a notice in writing by registered post demanding payment of the mortgage money with interest, or part thereof* upon the mortgagor or, any person having an interest in or charge upon the mortgaged property or the equity of redemption who has previously notified the!
society of such interest or charge in writing or any surety, and if default has been made in payment of the loan or part thereof for three months after such service of notice. Provided that any party aggrieved by an action taken by a registered society under this section may prefer an appeal to the Registrarwithin thirty days from the date of the sale. His decision shall be final.