Transfer of Property Act Section 84 — Cessation of interest
CHAPTER IV OF MORTGAGES OF IMMOVEABLE PROPERTY AND CHARGES — Deposit in Court
General
Summary
If a borrower offers to pay the full amount owed on a mortgage, or deposits that money in court as allowed by law, the interest on the loan stops building up from the date of that offer or deposit. For a court deposit to stop interest, the borrower must have done everything needed to let the lender collect the money, and the lender must have been properly notified. However, if the borrower deposits the money without first offering it and then takes the money back, interest starts building again from the date of withdrawal. Also, if the loan agreement gives the lender the right to reasonable notice before payment, the lender can still claim interest if that notice was not given before the offer or deposit.
Official Text
When the mortgagor or such other person as aforesaid has tendered or deposited in Court under section 83 the amount remaining due on the mortgage, interest on the principal money shall cease from the date of the tender or 1[in the case of a deposit, where no previous tender of such amount has been made] as soon as the mortgagor or such other person as aforesaid has done all that has to be done by him to enable the mortgagee to take such amount out of Court, 2[and the notice required by section 83 has been served on the mortgagee:
Provided that, where the mortgagor has deposited such amount without having made a previous tender thereof and has subsequently withdrawn the same or any part thereof, interest on the principal money shall be payable from the date of such withdrawal.] Nothing in this section or in section 83 shall be deemed to deprive the mortgagee of his right to interest when there exists a contract that he shall be entitled to reasonable notice before payment or tender of the mortgage-money 3[and such notice has not been given before the making of the tender or deposit, as the case may be].