(1) Where a mortgage is executed in favour of a registered society for payment of prior debts or part thereof, the mortgagor secured on the mortgaged property, the registered society may notwithstanding under the provisions of section83 and 84 of the Transfer of Property Act, 1882 by notice in writing and served by registered post with acknowledgement 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.
IV of 1882 398 THE ASSAM GAZETTE, EXTRA ORDINARY, FEBRUARY 4, 2012 RESTRICTION ON MORTGAGED PROPERTY
(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 to 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 amount 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 expiry 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 any loan on any mortgage without taking a declaration from the prospective mortgagor as to the names of prior mortgagees of the property in question, if any.