Forestry Act, 1946

Allocation of compensation in respect of mortgaged interests.

32.—(1) In this section the expression “the mortgage debt” means, in relation to a mortgage on vested land, the total of the sums due immediately before the vesting date on foot of the mortgage for principal moneys and interest.

(2) Where an interest in vested land was, immediately before the vesting date, subject to one mortgage and no more, the following provisions shall have effect in relation to the compensation for such interest:—

(a) in case the compensation is sufficient to discharge the mortgage debt in full, the Minister shall by order allocate to the mortgagee so much of the compensation as is sufficient to discharge the mortgage debt and allocate the surplus (if any) to the mortgagor;

(b) in case the compensation is not sufficient to discharge the mortgage debt in full, the Minister shall by order allocate the compensation to the mortgagee.

(3) Where an interest in vested land was, immediately before the vesting date, subject to two or more mortgages, the following provisions shall have effect in relation to the compensation for such interest:—

(a) in case the compensation is sufficient to discharge all the mortgage debts in full, the Minister shall by order allocate to each mortgagee so much of the compensation as is sufficient to discharge his mortgage debt in full and allocate the surplus (if any) to the mortgagor;

(b) in case the compensation is not sufficient to discharge all the mortgage debts in full,—

(i) if all the mortgagees agree as to how the compensation is to be allocated, the Minister shall by order allocate it in accordance with such agreement,

(ii) if all the mortgagees do not agree as to how the compensation is to be allocated,—

(I) the Minister may apply, in a summary manner, in case the compensation does not exceed one thousand pounds, to the Circuit Court or, in case the compensation exceeds one thousand pounds, to the High Court to allocate the compensation,

(II) if the Minister so applies, the Court shall, after giving all parties interested an opportunity of being heard, allocate in accordance with the respective priorities of the mortgages, the compensation, and the costs of and incidental to the application shall be in the discretion of the Court.

(4) Where any sum (representing compensation or part of compensation for an interest in vested land which was immediately before the vesting date subject to any mortgage) is allocated to a mortgagee under subsection (2) or subsection (3) of this section, the following provisions shall have effect—

(a) as between the mortgagor and the mortgagee the said sum shall be deemed to be applicable—

(i) first, in satisfaction or reduction of so much of the mortgage debt as represents interest, and

(ii) secondly, in satisfaction or reduction of so much of the mortgage debt as represents principal moneys,

(b) as between the mortgagor and the mortgagee—

(i) the said sum shall be deemed to have been paid on the vesting date by the mortgagor to the mortgagee,

(ii) the part of the said sum so deemed to be applicable to the said interest shall be deemed to have been received by the mortgagee on the vesting date on foot of the said interest,

(iii) the part (if any) of the said sum so deemed to be applicable to principal moneys shall be deemed, notwithstanding anything contained in the instrument creating the mortgage, to have been received by the mortgagee on the vesting date on foot of the said principal moneys.

(c) all rights and remedies possessed by the mortgagee for securing payment of the mortgage debt, except the right against the vested land, shall remain in force in respect of so much (if any) of the mortgage debt as would remain unpaid if the payments, deemed, by virtue of paragraph (b) of this subsection, to have been made to the mortgagee on the vesting date, had in fact been so made.