Transfer of Property Act, 1882 · Chapter IV: Of Mortgages of Immoveable Property and Charges · Rights and liabilities of Mortgagee
Section 72: Rights of mortgagee in possession
In plain words
A lender can spend money needed to protect the property from destruction, forfeiture or sale, to support or make good the title, or to renew a mortgaged lease, and add it to the debt with interest at the mortgage rate or else nine per cent per annum.
- Spending to protect the property or support the title counts as necessary only if the borrower was asked and failed to act.
- The lender can insure insurable property against fire and add the premiums to the debt, up to the amount in the deed or else two-thirds of the cost of rebuilding.
- The lender cannot insure if the borrower already keeps up enough insurance.
A simplified explanation, prepared with AI assistance from the official text below and checked automatically against it for numbers and cross-references. The official text is the law and prevails over this summary. Not legal advice.
Official text
[A mortgagee] may spend such money as is necessary—
* * * * *
(b) for [the preservation of the mortgaged property] from destruction, forfeiture or sale;
(c) for supporting the mortgagor's title to the property;
(d) for making his own title thereto good against the mortgagor; and
(e) when the mortgaged property is a renewable lease-hold, for the renewal of the lease;
and may, in the absence of a contract to the contrary, add such money to the principal money, at the rate of interest payable on the principal, and, where no such rate is fixed, at the rate of nine per cent. per annum:
[Provided that the expenditure of money by the mortgagee under clause (b) or clause (c) shall not be deemed to be necessary unless the mortgagor has been called upon and has failed to take proper and timely steps to preserve the property or to support the title.]
Where the property is by its nature insurable, the mortgagee may also, in the abs ence of a contract to the contrary, insure and keep insured against loss or damage by fire the whole or any pant of such property; and the premiums paid for any such insurance shall be [added to the principal money with interest at the same rate as is pay able on the principal money or, where no such rate is fixed, at the rate of nine per cent. per annum]. But the amount of such insurance shall not exceed the amount specified in this behalf in the mortgage-deed or (if no such amount is therein specified) two-thirds of the amount that would be required in case of total destruction to reinstate the property insured.
Nothing in this section shall be deemed to authorise the mortgagee to insure when an insurance of the property is kept up by or on behalf of the mortgagor to the amount in which the mortgagee is hereby authorised to insure.
Source: India Code (indiacode.gov.in), the consolidated text published by the Legislative Department, Government of India. Text as updated on India Code on 15 October 2026. Words in square brackets [ ] were inserted or substituted by later amending Acts, and *** marks words omitted by an amendment. The amendment footnotes are not reproduced here. Official text on India Code.