Transfer of Property Act Section 73 — Right to proceeds of revenue sale or compensation on acquisition
CHAPTER IV OF MORTGAGES OF IMMOVEABLE PROPERTY AND CHARGES — Rights and Liabilities of Mortgagee
General
Summary
If mortgaged property is sold because of unpaid government dues or rent, and the failure to pay was not the mortgagee's fault, the mortgagee can claim the mortgage money from whatever is left over after those dues are paid. If the mortgaged property is taken by the government for compulsory acquisition, the mortgagee can claim the mortgage money from the compensation amount payable to the mortgagor. These claims take priority over all others except those of earlier mortgage holders, and they can be enforced even if the mortgage's principal amount is not yet due.
Official Text
(1) Where the mortgaged property or any part thereof or any interest therein is sold owing to failure to pay arrears of revenue or other charges of a public nature or rent due in respect of such property, and such failure did not arise from any default of the mortgagee, the mortgagee shall be entitled to claim payment of the mortgage-money, in whole or in part, out of any surplus of the sale proceeds remaining after payment of the arrears and of all charges and deductions directed by law.
(2) Where the mortgaged property or any part thereof or any interest therein is acquired under the Land Acquisition Act, 1894 (1 of 1894), or any other enactment for the time being in force providing for the compulsory acquisition of immoveable property, the mortgagee shall be entitled to claim payment of the mortgage-money, in whole or in part, out of the amount due to the mortgagor as compensation.
(3) Such claims shall prevail against all other claims except those of prior encumbrances, and may be enforced notwithstanding that the principal money on the mortgage has not become due.]