Chargee’s remedies

(1) If default is made in the payment of the principal sum or any interest or any other periodical payment or part thereof, or in the performance or observance of any agreement, express or implied, in any charge, and such default continues for one month, the chargee may serve on the chargor a notice in writing to pay the money due or to perform and observe the agreement, as the case may be. (2) If the chargor does not, within three months of the date of service of a notice served on him under sub-section (1), comply therewith, the chargee may– (a) appoint a receiver of the income of the charged property; or (b) sell the charged property, Provided that where a chargee has appointed a receiver he may not exercise the power of sale unless– (a) the chargee gives the chargor a further notice under sub-section (1); and (b) the chargor fails to comply therewith within three months of the date of service thereof. (3) The chargee shall be entitled to sue for the money secured by the charge in the following cases only– (a) where the chargor is bound to repay it; 54 (b) where, by any cause other than the wrongful act of the chargor or chargee, the charged property is wholly or partially destroyed or the security is rendered insufficient and the chargee has given the chargor a reasonable opportunity of providing further security which will render the whole security sufficient, and the chargor has failed to provide such security; or (c) where the chargee is deprived of the whole or part of his security by, or in consequence of, the wrongful act or default of the charger, Provided that– (i) in the case specified in paragraph (a), a transferee from the chargor shall not be liable to be sued for the money unless he has agreed with the chargee to pay it; and no action shall be commenced until a notice served in accordance with sub- section (1) has expired; and (ii) the court may, at its discretion, stay a suit brought under paragraph (a) or paragraph (b), notwithstanding any agreement to the contrary, until the chargee has exhausted all his other remedies against the charged property.