Section 65 of the Transfer of Property Act, 1882: Implied Contracts by Mortgagor
Section 65 of the Transfer of Property Act, 1882 establishes promises implied by law in a mortgage transaction, unless the parties have agreed otherwise. These concern title, defence of ownership, public charges, lease obligations and prior mortgages.
Complete text of Section 65 - Implied contracts by mortgagor
65. Implied contracts by mortgagor. In the absence of a contract to the contrary, the mortgagor shall be deemed to contract with the mortgagee,—
(a) that the interest which the mortgagor professes to transfer to the mortgagee subsists, and that the mortgagor has power to transfer the same;
(b) that the mortgagor will defend, or, if the mortgagee be in possession of the mortgaged property, enable him to defend, the mortgagor's title thereto;
(c) that the mortgagor will, so long as the mortgagee is not in possession of the mortgaged property, pay all public charges accruing due in respect of the property;
(d) and, where the mortgaged property is a lease, that the rent payable under the lease, the conditions contained therein, and the contracts binding on the lessee have been paid, performed and observed down to the commencement of the mortgage; and that the mortgagor will, so long as the security exists and the mortgagee is not in possession of the mortgaged property, pay the rent reserved by the lease, or, if the lease be renewed, the renewed lease, perform the conditions contained therein and observe the contracts binding on the lessee, and indemnify the mortgagee against all claims sustained by reason of the non-payment of the said rent or the non-performance or non-observance of the said conditions and contracts;
(e) and, where the mortgage is a second or subsequent incumbrance on the property, that the mortgagor will pay the interest from time to time accruing due on such prior incumbrance as and when it becomes due, and will at the proper time discharge the principal money due on such prior incumbrance.
The benefit of the contracts mentioned in this section shall be annexed to and shall go with the interest of the mortgagee as such, and may be enforced by every person in whom that interest is for the whole or any part thereof from time to time vested.
Meaning of implied contracts in a mortgage
An implied contract is an obligation the law treats as part of the mortgage relationship without requiring an express promise in the mortgage deed. A mortgagor is the person transferring an interest in immovable property as security; a mortgagee is the person receiving that security interest. These terms and the definition of a mortgage appear in Section 58 of the Act. Section 65 expressly allows a contract to the contrary.
Explanation of each obligation
Clause (a): Existing interest and power to mortgage
The mortgagor is deemed to assure the mortgagee that the interest purportedly mortgaged actually exists and that the mortgagor has legal authority to transfer that interest as security. This is not an unconditional guarantee of interests the mortgagor never professed to transfer.
Clause (b): Defence of title
The mortgagor must defend the mortgagor's title, or assist the mortgagee in possession in defending that title, if it is challenged. Relevant title deeds, records and litigation circumstances may determine the practical steps needed.
Clause (c): Public charges
While the mortgagee is not in possession, the mortgagor must pay public charges falling due in respect of the property. These can include applicable land revenue or other legally imposed property charges. The clause expressly depends on possession.
Clause (d): Mortgage of leasehold property
Where the mortgaged interest is a lease, the mortgagor is deemed to warrant compliance with the lease's rent, conditions and lessee obligations up to commencement of the mortgage. While the security continues and the mortgagee is not in possession, the mortgagor must meet the relevant continuing obligations, including under a renewed lease, and indemnify the mortgagee against claims arising from specified failures.
Clause (e): Second or later mortgage
Where the property is already encumbered, the mortgagor is deemed to undertake to pay interest due on the earlier encumbrance as it falls due and to discharge its principal at the proper time. This protects a later mortgagee against avoidable risk to the security from default under an earlier mortgage.
Who can enforce these promises?
The final paragraph makes the benefit of the statutory contracts part of the mortgagee's interest. Therefore, a person who subsequently becomes vested with all or part of that interest can enforce the applicable promises. This is significant where a mortgage interest is assigned or otherwise lawfully transferred.
Examples of application
Title dispute: If a third party challenges the mortgagor's title, clause (b) requires the mortgagor to defend or enable the mortgagee in possession to defend that title. Leasehold mortgage: If leased premises are mortgaged and the mortgagor remains in possession, failure to pay ground rent can trigger the obligation and indemnity under clause (d). Second mortgage: A mortgagor who has created a second mortgage must meet the prior encumbrance obligations described in clause (e), unless a contrary agreement applies.
Relationship to other provisions
Section 65A separately governs the power of a mortgagor lawfully in possession to grant leases binding on the mortgagee, subject to its statutory conditions and the mortgage deed. Section 64 concerns the mortgagor's benefit of a renewed lease obtained by the mortgagee. These provisions address different rights and duties and should be read with the actual mortgage deed and applicable local law.
Official legal references
Consult the India Code official legislation database and the Legislative Department, Government of India for the Transfer of Property Act, 1882, amendments and statutory materials. Property-specific issues may also depend on state amendments and binding judicial decisions.