• Borrowed money and paid nothing for 9 years

In 2005, a lady had borrowed 2 lakh rupees from my mother and in return she mortgaged her land of 137 sq.yards ( The value per sq.yard at that point of time is around 1000 rs which is way less than the amount that we gave to her ) Intelligently what she did is, instead of mortgaging by using the original sale deed, she applied for CC copy and did the mortgage in the name of my mother. She took the money for 4% of interest that to be paid monthly, but in mortgage we mentioned that 18% would be the interest rate per annum ( We thought that if any thing goes wrong and if we have to file a case in the court, we can't mention as 4% per month which would be 48% per annum, this would backfire us, as we are not licensed pawn brokers.) 
Since then she didn't even paid us a single penny, to be frank she didn't even met us for the next 6years, she vacated the house and we don't know where she is living. We thought that where ever she might be, as she mortgaged her land, one day or the other she has to come to us. Years have passed, we came to know her address 2yrs back and when we approached her, she said that she will give us 2lacs but not a single rupee extra. A lot of things had happened during these 2yrs, which can't be explained in detail here, to tell it precisely, we approached her many times, she played games with us. One time she tells us that her brother will pay us the money, later she tells that she will sell away the property and will give the money. Even we took many parties to her home who are interested to buy the property, but every time she increases the rate and deliberately cancels the deal. Getting the parties was also a very difficult task for us, as there is no vaastu to the plot. 

The type of mortgage is, Simple mortgage. Where time factor isn't mentioned. Only the rate of interest 18% per annum was mentioned. Till date, time period had crossed 100 months and now we don't want to fight legally as you know it takes years to come the judgement. 

What I want to ask you is, we approached a person, he says that he will give us some money and asked us to register in his name. Is this a legal process? We don't want to face the problem in the future. We have simple mortgage in our name, can we transfer it to his name? If it is legal and safe process then we wan't to follow it. What I'm afraid of is, if this transfer of rights is not legal, then we'll be in trouble from both the sides, one from the original owner who mortgaged her land and the one to whom we gave the rights. Bcoz, now the ball is in our court, as it has crossed 100 months without paying a penny, if we commit any mistake now, then she may gain the advantage of it.. Kindly help me out on this issue.
Asked 4 years ago in Property Law from Hyderabad, Andhra Pradesh
Simple mortgage.- (b) Where, without delivering possession of the mortgaged property, the mortgagor binds himself personally to pay the mortgage- money, and agrees, expressly or impliedly, that, in the event of his failing to pay according to his contract, the mortgagee shall have a right to cause the mortgaged property to be sold and the proceeds of sale to be applied, so far as may be necessary, in payment of the mortgage- money, the transaction is called a simple mortgage 

issue the lady legal notice calling upon her to pay principal amount together with interest accrued till date . According to the Transfer of Property Act, if there is default in payment of the mortgage money, the mortgagee can take possession of the mortgaged property and sell it without intervention of a court only in case of an English mortgage. In addition, a mortgagee can take possession of the mortgaged property where there is a specific provision in the mortgage deed. in your case there is no such provision for taking possession . you can move court for sale of property
Ajay Sethi
Advocate, Mumbai
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