Different Types of Mortgage Under the Transfer of Property Act
Different Types of Mortgage under the Transfer of Property Act
Meaning of Mortgage
A mortgage is the transfer of an interest in specific immovable property as security for repayment of a loan, performance of an obligation, or discharge of a liability. The ownership remains with the mortgagor, but the mortgagee gets certain rights until the debt is satisfied.
Types of Mortgages
1. Simple Mortgage – Section 58(b)
Features:
Mortgagor does not deliver possession.
Personally binds himself to repay.
Mortgagee has right to cause the property to be sold through court if mortgagor defaults.
Case Law: Narandas Karsondas v. S.A. Kamtam (1977) – Mortgagee cannot sell property without court intervention unless deed expressly provides.
2. Mortgage by Conditional Sale – Section 58(c)
Features:
Ostensible sale subject to condition:
If mortgagor repays, sale becomes void.
If he defaults, sale becomes absolute.
Intention is key.
Case Law: Pandit Chunchun Jha v. Sheikh Ebadat Ali (1955) – Whether a transaction is a sale or mortgage by conditional sale depends on intention of parties.
3. Usufructuary Mortgage – Section 58(d)
Features:
Possession of property delivered to mortgagee.
Mortgagee entitled to rents and profits in lieu of interest or principal.
Mortgagee cannot sue for repayment; he recovers only from property’s income.
Case Law: K.K. Dewan v. District Judge, Chandigarh – Mortgagee remains in possession until debt is fully satisfied.
4. English Mortgage – Section 58(e)
Features:
Mortgagor transfers property absolutely to mortgagee.
Mortgagor covenants to repay on a certain date.
Mortgagee reconveys property upon repayment.
Mortgagee has right of sale without court’s intervention if expressly mentioned.
Case Law: Syndicate Bank v. Estate Officer – English mortgage gives right of sale without court order.
5. Mortgage by Deposit of Title Deeds (Equitable Mortgage) – Section 58(f)
Features:
Created by depositing title deeds with intent to create security.
No need for written instrument.
Valid in notified towns (like Mumbai, Kolkata, Chennai, etc.).
Case Law: K.J. Nathan v. S.V. Maruthi Rao (1965) – Mere deposit of title deeds with intent to secure debt creates valid mortgage; writing is not necessary.
6. Anomalous Mortgage – Section 58(g)
Features:
Any mortgage not covered under above categories.
May be combination of two or more types.
Example: Usufructuary + Simple mortgage together.
Case Law: Courts have held that rights in anomalous mortgage depend upon terms of contract and local usages.
Essence of Mortgage Law
Right of Redemption is the core principle → mortgagor can reclaim property by repaying dues.
Mortgage transfers only an interest in property, not ownership.
Each type of mortgage balances rights of mortgagor (to redeem) and mortgagee (to recover debt).
Conclusion
The Transfer of Property Act recognizes six types of mortgages: simple, conditional sale, usufructuary, English, equitable, and anomalous. Judicial interpretations in Narandas Karsondas, Chunchun Jha, and K.J. Nathan have clarified their scope. These provisions ensure protection of both borrower and lender, balancing economic necessity with legal safeguards.
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