Unit 12 - Law Relatng To - BRBL - Caiib

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MCQS UNIT 12

LAW RELATNG TO

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What is a charge?
a) An obligation that a borrower has to pay back a debt
b) An interest or right that a borrower creates on their assets as
security for a loan
c) A legal document that outlines the terms of a loan
d) An agreement between a lender and borrower to modify the
terms of a loan

Answer: b) An interest or right that a borrower creates on their


assets as security for a loan

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Who benefits from a charge?
a) The borrower
b) The guarantor
c) The creditor
d) The regulator
Answer: c) The creditor
What is the purpose of a charge?
a) To provide security for the lender in case the borrower or
guarantor defaults on the loan
b) To provide additional funds to the borrower or guarantor
Answer: a) To provide security for the lender in case the
borrower or guarantor defaults on the loan

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What are the two types of charges?
a) Fixed charge and flexible charge
b) Fixed charge and floating charge
c) Floating charge and revolving charge
d) Revolving charge and flexible charge
Answer: b) Fixed charge and floating charge
What is a fixed charge?
a) A charge that is attached to specific assets of the borrower or
guarantor
b) A charge that can be moved from one asset to another
Answer: a) A charge that is attached to specific assets of the
borrower or guarantor

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What is a floating charge?
a) A charge that is attached to specific assets of the borrower or
guarantor
b) A charge that can be moved from one asset to another
c) A charge that is attached to the overall value of the borrower
or guarantor’s assets
d) A charge that is only applicable in case of a default

Answer: c) A charge that is attached to the overall value of the


borrower or guarantor’s assets

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What is a mortgage?

a) The transfer of interest in specific movable property

b) The transfer of interest in specific immovable property


c)The transfer of ownership in specific movable property

d) The transfer of ownership in specific immovable property

Answer: b) The transfer of interest in specific immovable


property

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What is the purpose of a mortgage?

a) To transfer ownership of a property

b) To secure payment of money advanced by way of loan or


debt
c)To transfer movable property

d) To secure the performance of an engagement

Answer: b) To secure payment of money advanced by way of


loan or debt

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How many kinds of mortgages are there?

a) Three

b) Four
c) Five

d) Six

Answer: d) Six

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What law governs mortgages in India?

a) The Indian Contract Act, 1872

b) The Indian Partnership Act, 1932


c)The Transfer of Property Act, 1882

d) The Companies Act, 2013

Answer: c) The Transfer of Property Act, 1882

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What is the nature of the property that is generally mortgaged?

a) Movable property

b) Immovable property

c)Both movable and immovable property

d) None of the above

Answer: b) Immovable property

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Who is called the “mortgagor”?
A. The transferee
B. The transferor
C. The lender
D. The borrower
Answer: B
What is the principal money and interest called in a mortgage?
A. Loan money
B. Mortgage deed
C. Mortgage money
D. Transfer money
Answer: C
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What is the instrument by which the transfer is effected called?
A. Mortgage money
B. Mortgage deed
C. Loan agreement
D. Property transfer document
Answer: B
What are the requirements of a mortgage?
A. Transfer of interest in the property and payment of loan
B. Payment of loan and interest in the property
C. Payment of interest in the property and transfer of loan
D. Transfer of loan and payment of interest in the property
Answer: A
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How many different kinds of mortgages does the Transfer of
Property Act contemplate?
A. 3
B. 4
C. 5
D. 6
Answer: D

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What is the transferee in a mortgage called?
A. Mortgagor
B. Mortgagee
C. Lender
D. Borrower
Answer: B
What is the purpose of a mortgage?
A. To transfer ownership of a property
B. To secure payment of a loan
C. To sell a property
D. To transfer interest in a property
Answer: B
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What is a simple mortgage?
a) A transaction where the mortgagor delivers possession of the
mortgaged property to the mortgagee.
b) A transaction where the mortgagor binds himself personally
to pay the mortgage money without delivering possession of the
mortgaged property to the mortgagee.
c) A transaction where the mortgagor and mortgagee agree to
share the ownership of the mortgaged property.
d) A transaction where the mortgagor agrees to sell the
mortgaged property to the mortgagee.
Answer: b) A transaction where the mortgagor binds himself
personally to pay the mortgage money without delivering
possession of the mortgaged property to the mortgagee.

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In a simple mortgage, who is responsible for paying the
mortgage money?
a) The mortgagor
b) The mortgagee
c) Both the mortgagor and mortgagee
d) The government

Answer: a) The mortgagor

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What happens in the event of the mortgagor failing to pay
according to his contract in a simple mortgage?
a) The mortgagee takes possession of the mortgaged property
immediately.
b) The mortgagor is given more time to pay the mortgage
money.
c) The mortgagee initiates legal proceedings to recover the
mortgage money.
d) The mortgagee is not entitled to any remedy.

Answer: c) The mortgagee initiates legal proceedings to recover


the mortgage money.

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What is a simple mortgage?
a. A mortgage where the mortgagee has the power to sell the
property without the intervention of the court
b. A mortgage where the mortgagee has no power to sell the
property without the intervention of the court
c. A mortgage where the mortgagor is not personally liable for
any shortfall in the amount recovered
d. A mortgage where the mortgagee has the right to get
payments out of the rents and produce of the mortgaged
property
Answer: b

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In a simple mortgage, who has the power to sell the property?
a. The mortgagee
b. The mortgagor
c. The court
d. The government
Answer: c

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What happens if there is a shortfall in the amount recovered
after the sale of the mortgaged property in a simple mortgage?
a. The mortgagee is personally liable for the shortfall
b. The mortgagor is no longer liable for the shortfall
c. The mortgagee and mortgagor are both liable for the shortfall
d. The mortgagor continues to be personally liable for the
shortfall
Answer: d

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Does the mortgagee have the right to get payments out of the
rents and produce of the mortgaged property in a simple
mortgage?
a. Yes
b. No
Answer: b
In which type of mortgage is the mortgagee not put in
possession of the property?
a) Simple mortgage
b) Mortgage by way of conditional sale
c) Reverse mortgage
Answer: a) Simple mortgage

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What is the minimum principal amount for which registration is
mandatory in a simple mortgage?
a) Rs. 10
b) Rs. 50
c) Rs. 100
d) Rs. 500
Answer: c) Rs. 100

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In a mortgage by way of conditional sale, what happens if the
mortgagor defaults on payment of the mortgage money on a
certain date?
a) The mortgagee takes possession of the property
b) The mortgage is cancelled
c) The sale becomes absolute
d) The mortgagor can request an extension of time to make the
payment
Answer: c) The sale becomes absolute

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What is the nature of the sale in a mortgage on conditional sale?
A. Real
B. Ostensible
C. Partial
D. None of the above
Answer: B

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What happens if the money is not repaid on the agreed date in a
mortgage on conditional sale?
A. The sale becomes void.
B. The buyer transfers the property to the seller.
C. The sale becomes absolute upon the Mortgager applying to
the Court and getting a decree in his favour.
D. Both A and B.
Answer: C

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What is the consequence for the mortgagor if the sale becomes
absolute in a mortgage on conditional sale?
A. The mortgagor retains his right to redeem the property.
B. The mortgagor loses his right to redeem the property.
C. The mortgagor can transfer the property to a third party.
D. The mortgagor can appeal the Court’s decision.
Answer: B

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What is the limitation of the mortgagee in a conditional sale?
a) The mortgagee can sue for sale of the property.
b) The mortgagee cannot sue for foreclosure.
c) The mortgagee can only sue for foreclosure, not for sale of the
property.
d) The mortgagee has no limitations in a conditional sale.

Answer: c) The mortgagee can only sue for foreclosure, not for
sale of the property.

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What is the meaning of foreclosure in a mortgage transaction?
a) The transfer of ownership of the mortgaged property to the
mortgagee.
b) The loss of the right possessed by the mortgagee to redeem
the mortgaged property.
c) The loss of the right possessed by the mortgagor to redeem
the mortgaged property.
d) The sale of the mortgaged property to a third party.

Answer: c) The loss of the right possessed by the mortgagor to


redeem the mortgaged property.

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What type of mortgage is a Usufructuary mortgage?
a) A mortgage where the mortgagee has no right to possess or
enjoy the mortgaged property.
b) A mortgage where the mortgagee has the right to possess or
enjoy the mortgaged property.
c) A mortgage where the mortgagor has the right to possess or
enjoy the mortgaged property.
d) A mortgage where the mortgagor has no right to possess or
enjoy the mortgaged property.

Answer: b) A mortgage where the mortgagee has the right to


possess or enjoy the mortgaged property

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What is the nature of a usufructuary mortgage?
a) It is a mortgage where the mortgagor only transfers
possession of the property to the mortgagee.
b) It is a mortgage where the mortgagor transfers ownership of
the property to the mortgagee.
c) It is a mortgage where the mortgagor transfers possession and
ownership of the property to the mortgagee.
d) It is a mortgage where the mortgagor retains possession and
ownership of the property.

Answer: a) It is a mortgage where the mortgagor only transfers


possession of the property to the mortgagee.

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What is the obligation of the mortgagor in a usufructuary
mortgage?
a) To deliver possession of the mortgaged property to the
mortgagee.
b) To retain possession of the mortgaged property.
c) To transfer ownership of the mortgaged property to the
mortgagee.
d) To pay the mortgage money to the mortgagee.

Answer: a) To deliver possession of the mortgaged property to


the mortgagee.

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What is the authority given to the mortgagee in a usufructuary
mortgage?
a) To transfer ownership of the mortgaged property to a third
party.
b) To receive the rents and profits accruing from the property.
c) To sell the mortgaged property to a third party.
d) To lease the mortgaged property to a third party.

Answer: b) To receive the rents and profits accruing from the


property

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What is meant by “possession” in the context of a mortgage?
a) Physical possession only
b) Legal possession only
c) Both physical and legal possession
d) None of the above
Answer: b) Legal possession only
Can the mortgagor continue to enjoy physical possession of the
property even after the mortgagee is put in legal possession?
a) Yes, always
b) No, never
c) Yes, only if specified in the deed
Answer: c) Yes, only if specified in the deed

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What clause must be included in the deed to authorize the
mortgagee to retain legal possession of the property?
a) Clause providing for delivery of property to mortgagor
b) Clause providing for delivery of property to mortgagee
c) Clause providing for delivery of property to a third party
d) None of the above
Answer: b) Clause providing for delivery of property to
mortgagee

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Does the mortgagee have the right to receive rents and profits
from the property?
a) Yes, always
b) No, never
c) Yes, but only if specified in the deed
d) None of the above
Answer: a) Yes, always

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Can the mortgagee appropriate rents and profits to pay off the
mortgage or interest?
a) Yes, always
b) No, never
c) Yes, but only with the mortgagor’s permission
d) None of the above
Answer: a) Yes, always

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According to the statement, is there a personal liability for the
mortgagor in the absence of a personal covenant for the
repayment of the mortgage money?
a) Yes
b) No
Answer: b) No
Can the mortgagee sue the mortgagor for the sale or foreclosure
of the mortgaged property in the absence of a personal
covenant for the repayment of the mortgage money?
a) Yes
b) No
Answer: b) No

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What is the only remedy for the mortgagee if the mortgagor fails
to repay the mortgage debt?
a) To sue the mortgagor for repayment of the mortgage debt
b) To sell the mortgaged property
c) To remain in possession of the mortgaged property and pay
themselves out of the rents and/or profits of the mortgaged
property
Answer: c) To remain in possession of the mortgaged property
and pay themselves out of the rents and/or profits of the
mortgaged property

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How long does the mortgagee have to wait to become the
absolute owner of the property if the mortgagor fails to sue for
redemption?
a) 10 years
b) 20 years
c) 30 years
Answer: c) 30 years

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What does the mortgagor need to do to redeem the mortgaged
property?
a) Sue the mortgagee for repayment of the mortgage debt
b) Sell the mortgaged property to a third party
c) Pay the mortgage debt to the mortgagee
Answer: c) Pay the mortgage debt to the mortgagee

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Which form of mortgage is not preferred by bankers and why?
a. Simple Mortgage, due to the lack of personal covenant to
repay the debt.
b. Usufructuary Mortgage, due to the lack of personal covenant
to repay the debt and the long time it takes to recover money
through the appropriation of rents and profits.
c. English Mortgage, due to the transfer of property act.
d. None of the above.
Answer: b. Usufructuary Mortgage, due to the lack of personal
covenant to repay the debt and the long time it takes to recover
money through the appropriation of rents and profits.

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What is an English Mortgage according to Section 58E of the
Transfer of Property Act?
a. A mortgage in which the mortgagor binds himself to repay the
mortgage money on a certain date and transfers the property to
the mortgagee.
b. A mortgage in which the mortgagor retains possession of the
property and repays the mortgage money through the
appropriation of rents and profits.
c. A mortgage in which the property is transferred to the
mortgagee, but the mortgagor has the right to repossess the
property upon repayment of the mortgage money..
Answer: a. A

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What is the essential feature of an English mortgage?
A. The property is not transferred to the mortgagee
B. The mortgagor is not required to make a personal covenant to
pay
C. The mortgagee does not have an absolute right to the
property
D. The mortgage provides for a personal covenant to pay on a
specified date, notwithstanding the absolute transfer of the
property to the mortgagee.

Answer: d) The mortgage provides for a personal covenant to


pay on a specified date, notwithstanding the absolute transfer of
the property to the mortgagee.

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What is the provision of an English mortgage?

a) The mortgagor has an absolute right to the property

b) The mortgagee has an absolute right to the property

c)The mortgagee has a conditional right to the property

d) The property is not transferred to either party.

Answer: b) The mortgagee has an absolute right to the property.

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What is the condition of an English mortgage?

a) The property is transferred back to the mortgagor upon


payment of the mortgage money as agreed
b) The property is transferred to the mortgagee upon
payment of the mortgage money as agreed
c)The property is not transferred to either party

d) The mortgagee has an unconditional right to the


property.

Answer: a) The property is transferred back to the mortgagor


upon payment of the mortgage money as agreed

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What is the provision that needs to be fulfilled for absolute
transfer of property in a mortgage situation?
A. The property must be transferred absolutely to the
mortgagee.
B. The property must be re-conveyed to the mortgagor upon
repayment of mortgage money.
C. The property must be sold to a third party upon repayment of
mortgage money.
D. The property must be held in trust by the mortgagee until the
mortgage is repaid.

Answer: B

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What legal recourse does the mortgagee have in the event of the
mortgagor defaulting on mortgage payments?
A. The mortgagee can sue the mortgagor for the recovery of the
money and can obtain a decree for sale.
B. The mortgagee can take possession of the property
immediately.
C. The mortgagee can sell the property to a third party
immediately.
D. The mortgagee can forgive the mortgage and waive any
repayment.

Answer: A

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In which cities is a mortgage by deposit of title deeds applicable?
A. Kolkata, Chennai, and Mumbai only.
B. Any town specified by the State Government concerned.
C. All towns and cities in India.
D. Only in towns and cities with a population of over 1 million.
Answer: B

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What is a mortgage by deposit of title deeds?
A. A mortgage where the property is transferred absolutely to
the mortgagee.
B. A mortgage where the property is sold to a third party.
C. A mortgage where the mortgagor pledges the documents of
title to the property to the mortgagee as security.
D. A mortgage where the mortgagor deposits cash with the
mortgagee as security.

Answer: C

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What is a “title deed” in the context of mortgage by deposit of
title deeds?
a) A document that proves ownership of the mortgagee over the
property.
b) A document that proves ownership of the mortgagor over the
property.
c) A document that proves ownership of a third party over the
property.
d) A document that proves ownership of the property by the
State Government.

Answer: b) A document that proves ownership of the mortgagor


over the property.

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Where can a mortgage by deposit of title deeds be affected?
a) In any town in India.
b) Only in towns notified by the State Government.
c) Only in rural areas.
d) In any part of the country.

Answer: b) Only in towns notified by the State Government.

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Does the territorial restriction in a mortgage by deposit of title
deeds refer to the place where the property is located?
a) Yes.
b) No.
c) It is not specified in the statement.
d) It depends on the state government.

Answer: b) No. It refers to the place where the title deeds are
delivered, not to the situation of the property mortgaged.

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What is a “title deed” in the context of a person’s right to
peaceful possession and enjoyment of immovable property?
a) A document that proves ownership of the property.
b) A document that proves the person’s right to possession and
enjoyment of the property.
c) A document that proves the State Government’s ownership of
the property.
d) A document that proves the property is located in a notified
town.

Answer: b) A document that proves the person’s right to


possession and enjoyment of the property

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What are the essential ingredients required to create a
mortgage?
A. Debt, deposit of title deeds, and an intention that the deeds
shall act as security for the debt
B. Debt, down payment, and credit score
C. Income, assets, and liabilities
D. Employment history, references, and proof of identity

Answer: A

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What is an anomalous mortgage?
A. A mortgage that is not a simple mortgage, a mortgage by
conditional sale, a usufructuary mortgage, an English mortgage,
or a mortgage of title deeds
B. A mortgage that is a simple mortgage, a mortgage by
conditional sale, a usufructuary mortgage, an English mortgage,
or a mortgage of title deeds
C. A mortgage that has no intention of paying back the debt
D. A mortgage that is not legally binding

Answer: A

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What is the essential feature of an anomalous mortgage?
A. It is negatively defined and should not be any one of the
mortgages listed above.
B. It is positively defined and must be one of the mortgages
listed above.
C. It does not require a deposit of title deeds.
D. It does not require an intention that the deeds shall act as
security for the debt.

Answer: A

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Anomalous mortgages are typically a combination of two types
of mortgages. Which are these two types?
a) Simple and conditional mortgages
b) Usufructuary and conditional mortgages
c) Simple and usufructuary mortgages
d) Equitable and conditional mortgages
Answer: c) Simple and usufructuary mortgages
Which of the following is a merit of an equitable mortgage?
a) It involves a lot of formalities
b) It saves the borrower stamp duty and registration charges
c) It takes a long time to create
Answer: b)

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What is the remedy in case of default with an equitable
mortgage?
a) The lender takes ownership of the property
b) The borrower is given more time to repay the loan
c) The remedy is to obtain a decree for sale of the property
d) The lender cannot take any legal action against the borrower
Answer: c) The remedy is to obtain a decree for sale of the
property

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What type of mortgage is an usufructuary mortgage
accompanied by conditional sale?
a) Anomalous mortgage
b) Equitable mortgage
c) Simple mortgage
d) Usufructuary mortgage
Answer: a) Anomalous mortgage

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What is one advantage of including a power of sale in a
mortgage agreement?
a. It makes the mortgage cheaper to obtain
b. It makes the mortgage easier to obtain
c. It reduces the time required to obtain the mortgage
d. It reduces the cost required to obtain the mortgage
Answer: c. It reduces the time required to obtain the mortgage

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When a borrower is holding title deeds as a trustee and an
equitable mortgage is made, whose claim will prevail over the
other?
a. The mortgagee’s claim will prevail
b. The beneficiary’s claim will prevail
c. Both claims will be given equal weight
d. None of the above
Answer: b. The beneficiary’s claim will prevail

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In India, is there a difference between a mortgage by deposit of
title deeds and an equitable mortgage?
a. Yes
b. No
c. It depends on the specific circumstances
d. None of the above
Answer: b. No

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What happens if there are two mortgages on the same property,
one by deposit of title deeds and one subsequent mortgage?
a. The subsequent mortgage prevails
b. The mortgage by deposit of title deeds prevails
c. Both mortgages are given equal weight
d. It depends on the specific circumstances
Answer: b. The mortgage by deposit of title deeds prevails

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Can the title of an equitable mortgagee be defeated by a
subsequent sale without notice?
a. Yes
b. No
c. It depends on the specific circumstances
d. None of the above
Answer: b. No

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In order to avoid any risk, which type of mortgage should be
accepted only after obtaining the original title deeds?
a) Equitable mortgage
b) Legal mortgage
c) Simple mortgage
d) None of the above
Answer: a) Equitable mortgage

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According to the priority of mortgages, what is the general rule
regarding rights created by transfer at different times?
a) Each later created right has priority over the rights previously
created
b) Each right has equal priority
c) Each later created right is subject to the rights previously
created
d) None of the above
Answer: c) Each later created right is subject to the rights
previously created

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When does a registered document operate, according to the
priority of mortgages?
a) From the date of its execution
b) From the date of its registration
c) From the date of its execution and registration
d) None of the above
Answer: a) From the time of its execution

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What is the exception to the rule that priority is determined by
the order of time between registered and unregistered
instruments?
a) Priority is always determined by the order of time
b) Priority is determined by the value of the property
c) Priority is determined by delivery of possession
d) None of the above
Answer: c) Priority is determined by delivery of possession

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What is the first exception recognized in the Indian system
regarding mortgages?
a) Priority of unregistered mortgage over registered mortgage
b) Priority of registered mortgage over unregistered mortgage
c) No priority given to either registered or unregistered
mortgages
d) No exceptions are recognized in the Indian system regarding
mortgages
Answer: b) Priority of registered mortgage over unregistered
mortgage

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Which section of the Registration Act allows for the first
exception in the Indian system regarding mortgages?
a) Section 10
b) Section 20
c) Section 30
d) Section 50
Answer: d) Section 50

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What is the limitation period for filing a suit for recovery of
mortgaged debt and sale of mortgaged property in the event of
non-payment of the mortgaged debt?
a) Six years
b) Eight years
c) Ten years
d) Twelve years
Answer: d) Twelve years

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When does the limitation period for filing a suit for sale of
mortgaged property start?
a) From the date of registration of the mortgage
b) From the date when the mortgage is created
c) From the date when the money sued for becomes due
d) From the date when the mortgaged property is sold
Answer: c) From the date when the money sued for becomes
due

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What is the limitation period for filing suit for foreclosure?

a) 10 years

b) 20 years

c)30 years

d) 40 years

Answer: c) 30 years

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What is the popular type of mortgage obtained by a banker?

a) Mortgage by deposit of title deeds

b) Reverse mortgage

c)Second mortgage

d) Equity release mortgage

Answer: a) Mortgage by deposit of title deeds

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In which type of mortgage should a suit for sale of mortgaged
property be filed in the court within whose jurisdiction the
mortgaged property is situated?

a) Mortgage by deposit of title deeds

b) Reverse mortgage
c)Second mortgage

d) English mortgage

Answer: d) English mortgage

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What is the purpose of a preliminary decree in a suit for sale?

a. To direct the mortgagor to sell the mortgaged properties

b. To order the mortgagor to pay the mortgage debt within


a certain period
c. To determine the validity of the mortgage

d. To pass a final decree for the sale of the mortgaged


properties

Answer: b. To order the mortgagor to pay the mortgage debt


within a certain period
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What happens if the mortgagor fails to pay the mortgage debt as
directed by the preliminary decree?

a. The Court dismisses the suit for sale

b. The Court orders for the sale of the mortgaged properties


c. The Court orders the mortgagor to pay the mortgage debt
immediately

d. The Court reduces the amount of the mortgage debt

Answer: b. The Court orders for the sale of the mortgaged


properties
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Is a copy of a deed of transfer considered to be a document of
title for the creation of an equitable mortgage?

a. Yes

b. No

Answer: b. No

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