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Section 66: Waste by mortgagor in possession

Transfer of Property Act • Official Statutory Text & Practice Guide

Statutory Regulation
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Competent Court / Tribunal
Act 1882
Section 65 All 137 Sections of Transfer of Property Act Section 67

Legal Commentary & Landmark Judgments: Section 66

Section 66 defines the mortgagor's liability for waste, permitting a mortgagor in possession to manage the property normally but prohibiting him from committing any act which is destructive or permanently injurious to the property if the security becomes insufficient.

  • Permitted Normal Enjoyment: A mortgagor in possession of the mortgaged property is not liable to the mortgagee for allowing the property to deteriorate.
  • Prohibition of Active Waste: He must not commit any act which is destructive or permanently injurious to the property, if the security is rendered insufficient by such act.
  • Insufficient Security Definition: Security is insufficient unless the value of the mortgaged property exceeds by one-third (or, if consisting of buildings, by one-half) the amount for the time being due upon the mortgage.
  • Injunction Remedy: Mortgagee can obtain an interim injunction from civil court restraining destructive waste (e.g., demolishing structures, felling timber).
Key Landmark Precedents:
  • Prithi Nath Singh v. Suraj Ahir, AIR 1963 SC 1041: The Supreme Court analyzed Section 66, holding that normal wear and tear does not constitute waste; liability arises only when active, destructive acts impair security margin.
  • Nainsukhdas Shivnarayan v. Goverdhandas Girdhardas, AIR 1948 Nag 110: Affirmed that felling orchards or pulling down industrial buildings warrants an injunction under Section 66.
Courtroom Practice & Strategic Litigation Guidance:

If a defaulting borrower begins demolishing boundary walls or stripping machinery from mortgaged premises, file an urgent application under Order 39 CPC read with Section 66 for an immediate restraining order.

Section 65 All 137 Sections of Transfer of Property Act Section 67