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Section 71: Renewal of mortgaged lease

Transfer of Property Act • Official Statutory Text & Practice Guide

Statutory Regulation
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Competent Court / Tribunal
Act 1882
Section 70 All 137 Sections of Transfer of Property Act Section 72

Legal Commentary & Landmark Judgments: Section 71

Section 71 provides that where the mortgaged property is a lease and the mortgagor obtains a renewal of the lease, the mortgagee, in the absence of a contract to the contrary, is entitled for the purposes of the security to the new lease.

  • Renewed Lease Feeds Security: Where mortgaged property is a lease, and the mortgagor obtains a renewal of the lease, the mortgagee is entitled for the purposes of the security to the new lease.
  • Continuity of Collateral: Prevents mortgagors from defeating mortgages by allowing a lease to expire and secretly taking a fresh lease in their own name.
  • Automatic Attachment of Mortgage: The new leasehold is burdened with the mortgage by operation of law.
Key Landmark Precedents:
  • Kuppuswami Mudaliar v. S.P. Subramaniam, (1969) 1 SCC 720: The Supreme Court affirmed that under Section 71, a renewed lease obtained by the mortgagor automatically feeds the mortgage estoppel and secures the lender's debt.
  • Prithi Nath Singh v. Suraj Ahir, AIR 1963 SC 1041: Reaffirmed the reciprocal protection of leasehold collateral under Sections 64 and 71.
Courtroom Practice & Strategic Litigation Guidance:

If a mortgagor renews a municipal commercial leasehold, the bank's mortgage automatically attaches to the new lease period under Section 71 without requiring execution of a fresh mortgage deed.

Section 70 All 137 Sections of Transfer of Property Act Section 72