Article 324. Consequences of the compulsory seizure of mortgaged property of the Civil Code of the Republic of Kazakhstan
1. If the mortgagor's ownership right to the property that is the subject of the pledge is terminated on the grounds and in accordance with the procedure established by legislative acts as a result of seizure (foreclosure) for state needs, requisition or nationalization, and the mortgagor is provided with other property or appropriate compensation, the right of pledge extends to the property provided in return or, accordingly, the mortgagee acquires the right of preferential satisfaction its claim from the amount of compensation due to the pledgor. The pledgee may also demand early fulfillment of the obligation secured by the pledge (paragraph 1 of Article 321 of this Code).
2. In cases where the property that is the subject of a pledge is withdrawn from the pledgor in accordance with the procedure established by legislative acts on the grounds that another person is actually the owner of this property, or as a sanction for committing an administrative or criminal offense, the pledge in respect of this property is terminated. In these cases, the pledgee has the right to demand early fulfillment of the obligation secured by the pledge.
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