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Subject to the conditions in section 72 of the Transfer of Property Act, 1882, which statements…

Statement I correctly identifies support of the mortgagor’s title. The expenditure is treated as necessary only after the mortgagor is called upon and fails to take proper,…

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Subject to the conditions in section 72 of the Transfer of Property Act, 1882, which statements identify permitted purposes for a mortgagee’s necessary expenditure?

I. A mortgagee may spend such money as is necessary for supporting the mortgagor's title to the property.

II. A mortgagee may spend such money as is necessary when the mortgaged property is a renewable lease-hold, for the renewal of the lease.

III. A mortgagee may spend such money as is necessary to preserve the mortgaged property from destruction, forfeiture, or sale.

IV. A mortgagee may spend such money as is necessary for making his own title thereto good against the mortgagor.

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Answer and explanation

Correct answer C

Statement I correctly identifies support of the mortgagor’s title. The expenditure is treated as necessary only after the mortgagor is called upon and fails to take proper, timely steps.

Statement II correctly identifies renewal of a renewable leasehold.

Statement III correctly identifies preservation from destruction, forfeiture or sale, subject to the same prior-call and failure requirement.

Statement IV correctly identifies protecting the mortgagee’s title against the mortgagor.

Option feedback

Option A

II and IV are also permitted purposes. They cover renewal and protection of the mortgagee’s title.

Option B

II is also correct because section 72 expressly includes renewable leasehold renewal.

Option C

All four are listed purposes. The statutory proviso qualifies necessity for preservation and support of the mortgagor’s title.

Option D

III is also correct. Preservation from destruction, forfeiture or sale is a listed purpose.

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