Section 445: Property in mortgage may be remortgaged

1) A person who has obtained a property in mortgage shall be entitled to remortgage such property or any part thereof to another person in consideration for an amount which is equal to, or less than, the amount specified in the deed of mortgage, and in such a case, a re-mortgage is deemed to have been created.

Provided that a mortgaged property shall not be the object of re-mortgage prior to the existence of the possessory right in such property.

2) The period of possession and enjoyment of the re-mortgage given pursuant to sub-section (1) shall not exceed the period of possession and enjoyment under the mortgage.

3) If the debtor who has right and ownership in the property intends to redeem the property re-mortgaged pursuant to sub-section (1), the debtor may redeem the property upon payment of the price directly from the re-mortgagee if the price of the re-mortgage is equal to the original price and through the original mortgagee if such price is less than the original price.

4) Notwithstanding anything contained elsewhere in this Section, the transaction of remortgage made inconsistent with the terms of the mortgage shall ipso facto be void to the extent of such inconsistency.

5) If the creditor is not entitled to possess the property re-mortgaged pursuant to this Chapter, the deed of such a re-mortgage shall be equivalent to an unsecured bond (Kapali).