Mortgages in Transfer of Property Act
- SECTION 58 – DEFINES –
- MORTGAGE – MONEY
- MORTGAGE – DEED.
- SIMPLE MORTGAGE
- MORTAGAGE BY CONDITIONAL SALE
- USUFRUCTUARY MORTGAGE
- ENGLISH MORTGAGE
- MORTGAGE BY DEPOSIT OF TITLE DEED
- ANOMALOUS MORTGAGE.
A mortgage is the transfer of an interest in specific immovable property for the purpose securing the payment of money advanced or to be advanced by way of loan, a pecuniary liability.The nature of right transferred depends upon the form of mortgage.
ELEMENTS OF MORTGAGE
- The following are the essential characteristics of a mortgage:
- There must be a transfer of an interest
- There must be specific immovable property intended to be mortgaged
- The transfer must be made to secure the payment of a loan or to secure the performance of a contract.
FORMS OF MORTGAGE:
Where without delivering possession of the mortgaged property, the mortgagor binds himself personally to pay the mortgaged – money, and agrees, expressly or impliedly, that, in the event of his failing to pay according to his contract, the mortgagee shall have a right to cause the mortgaged property to be sold and proceeds of the sale to be applied, or far as may be necessary, in payment of the mortgage money, the transaction is called a simple mortgage.
- Personal undertaking
- Right to have the mortgaged property sold
- No delivery of possession
MORTGAGE BY CONDITIONAL SALE:
- Where the mortgagor ostensibly sells the mortgaged property
- On condition that on default of payment of the mortgage money on a certain date the sale shall become absolute
- On condition that on such payment being made the sale shall become void
- On the condition that on such payment being made the buyer shall transfer the property to the seller
- The transaction is called a mortgage by conditional sale
ESSENTIALS OF A MORTGAGE BY CONDITIONAL SALE:
- In a mortgage by conditional sale –
- The mortgagor shall ostensibly sell the immovable property.
- There must be a condition that either –
- On the repayment of the money due under the mortgage on a certain date, the sale shall become void or the buyer shall retransfer the property to the seller, or
- In default of payment on that date the sale shall become absolute.The condition must be embodied in the document which effects or purports to effect the sale
- Shanti Devi v Nand Lal,AIR2005 Raj 218
- Contract provided a time of 7 yrs for its repayment. It also specified that the liability to pay house tax and necessary repairs would be of the mortgagor. Mortgagee under the contract was given right to foreclose the mortgage.
- Court held it was not a sale with an option of repurchase but a mortgage by conditional sale.
- MORTGAGE BY DEPOSIT OF TITLE DEEDS: Or EQUITABLE MORTGAGE
Where the person in any of the following towns, namely, the towns of Calcutta, Madras and Bombay, and in any other town which the state government concerned may by notification in the official gazette specify in this behalf delivers to a creditor or his agent documents of title to immovable property with intent to create a security thereon the transaction is called a mortgage by deposit of title deed.
- Existence of debt
- Deposit of title deeds
- Territorial restriction
A mortgage which is not a simple mortgage, mortgage by conditional sale, an usufructuary mortgage, an English mortgage or a mortgage by deposit of title deeds with in the meaning of this section is called anomalous mortgage.
RIGHTS AND LIABILITIES OF MORTGAGOR
A mortgagor has following rights:
- Right of redemption – section 60:
- Right to transfer to a third person instead of re-transfer to himself – section 60A:
- Right to inspection and production of documents –section 60B :
- Right to accession – section 63:
- Right to grant lease – section 65A
- Right to reasonable waste – section 66
RIGHTS AND LIABILITIES OF MORTGAGEE
The Rights of Mortgagee are given below:
- RIGHT TO FORECLOSURE OR SALE – S.67
- RIGHT TO SUE FOR MORTGAGE – MONEY – S.68
- RIGHT TO SELL – S.69
- RIGHT TO APPOINT A RECEIVER – S.69A
- RIGHT TO ACCESSION – S. 70
- RIGHT TO RENEWAL OF LEASE – S.71
- RIGHT TO SPEND MONEY – S.72
- RIGHT TO PROCEEDS OF REVENUE SALE OR COMPENSATION ON ACQUISITION – S.73.
- Shanti Devi v Nand Lal AIR 2005 Raj 218
- Maina Devi v Thakur Mansingh, AIR 1986 Raj 44
- Pomal Kanji Govindji v Vrajilal Karsanandas Purohit,AIR 1989 S.C436
- Gulab Chand Sharma v Saraswati Devi AIR 1977 S.C 242
- Seth Ganga Dhar v Shankar Lal,AIR 2000 S.C.770
- Ram Kishan v Sheo Ram AIR2008 P& H 77(FB)