Section 447: Mortgaging by third party on behalf of debtor

1) A third person may, in consideration for a loan borrowed by a debtor, mortgage a property in which the third person has the right and ownership to the creditor on behalf of the debtor.

2) The creditor shall, pursuant to this Chapter, be entitled to possess and enjoy the property mortgaged pursuant to sub-section (1) as if it were the property mortgaged by the debtor to the creditor.

3) If a property is mortgaged by a third person pursuant to sub-section (1), the relationship between the debtor and the third person shall be governed by the deed of mortgage or other separate contract, and in the default of such provision, such transaction shall be equivalent to an unsecured bond (Kapali).