NATIONAL MORTGAGE, FINANCING AND GUARANTEE SCHEME ACT - 1976 (SMCD 23)

    Section - 22 - Appointment of Receiver on Default.

    (1) Upon failure of performance of an act or acts secured by a mortgage to which this Decree applies the mortgagee may appoint a receiver for the purposes of this section.

    (2) A receiver appointed under this section may take possession of the mortgaged property and collect by demand, action in the name of the mortgagor or the mortgagee or otherwise, all income including arrears accruing from the mortgaged property, give valid receipts for all income collected and do any other act necessary or proper to manage the property including the making of reasonable repairs and improvements to the property to protect its value or to maintain or increase the income from such property.

    (3) A receiver appointed under this section shall be deemed to be the agent of the mortgagor and the mortgagor shall be solely responsible for the receiver's acts or default unless the mortgage otherwise directs.

    (4) A person paying money to the receiver shall not be concerned to enquire whether any case has happened to authorise the receiver to act.

    (5) The receiver may be removed and a new one appointed at any time by the mortgagee in writing.

    (6) For the removal of doubt the fact that a mortgagee has taken possession of property subject to a mortgage to which this Decree applies shall not prevent him from appointing a receiver under this section in respect of that property.

    (7) A receiver appointed under this section shall be entitled to retain out of any money received by him for his remuneration, and in satisfaction of all costs, charges and expenses incurred by him as receiver a commission at such rate not exceeding five per centum on the gross amount of all money received, as is specified in his appointment and where no rate is so specified then at the rate of two and a half per centum of that gross amount or such other rate as the court may think fit to allow on an application made by him for that purpose.

    (8) The receiver shall if so directed in writing by the mortgagee, insure to the extent if any to which the mortgagor might have insured and kept insured against loss or damage by fire and other risks specified in the mortgage agreement out of the money received by him any building, effects, or property, comprised in the mortgage of any insurable nature.

    (9) A receiver appointed under this section shall apply all money received by him as follows:-

    (a) in discharge of all rents, taxes, rates and other required outgoings affecting the mortgaged property;

    (b) in payment of all annual sums and other payments, interest on all principal sums, due and having priority to the mortgage in right whereof he is a receiver;

    (c) in payment of his commission and of premiums payable in accordance with the mortgage and the cost of effecting necessary repairs;

    (d) in payment of all interest accruing due in respect of any principal money due under the mortgage;

    (e) in or towards the discharge of any principal money due under the mortgage if so directed in writing by the mortgagee;

    and shall pay the residue if any, of the money received by him to the person who but for the possession of the receiver would have been entitled to receive the income of which he is appointed receiver or who is otherwise entitled to the mortgaged property.

    (10) Any person who in any way whatsoever obstructs a receiver duly appointed under this section in the discharge of his functions shall be guilty of an offence and liable on summary conviction to a fine not exceeding c1,000.00 or to imprisonment not exceeding six months or to both; and in the case of a continuing offence, to a further fine not exceeding c20.00 for each day on which the offence continues.

    (11) Section 16 of the Mortgages Decree, 1972 shall not apply to any mortgage to which this Decree applies.