(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 immovable 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.
Legal Commentary & Landmark Judgments: Section 73
Section 73 codifies the doctrine of substituted security, entitling the mortgagee to claim payment of the mortgage-debt out of the proceeds of a revenue sale or land acquisition compensation.
Upon notification of government land acquisition, immediately file a claim petition before the Land Acquisition Collector under Section 73 praying for direct disbursement of the compensation award to the lender.