Mortgage & Its Types
Section 58 defines
mortgage and states its types.
Mortgage means transfer
of interest for securing some amount of money as loan or debt. It must be a transfer of
specific immovable property(here specific means that there must not be any
confusion of property which is mortgaged)
Mortgagor, is the
one who handovers his property for money.
Mortgagee, is the
one who gives loan or debt.
Mortgage deed is
the instrument by which the transfer is effected.
Mortgage
Types
a)
Simple
Mortgage: In this type
of mortgage the possession of property remains to mortgagor and he personally binds
himself to repay mortgage money, if he fails to repay then property can be sold
through court.
b)
Mortgage
by Conditional Sale: In
this type, the property is being absolutely(with all the obligations) sold to
the mortgagee on condition specified in the deed that on the repayment of the
mortgage money the property will be retransferred to the mortgagor. If mortgagor
fails to repay the amount then mortgagee can file a suit for the “right to foreclosure”
in court to sell the property.
Mortgagor can redeem his property by repaying the
mortgage money any minute before the issuance of foreclosure.
Right to foreclosure, it nullifies the right of
redemption of mortgagor.
There is no personal binding in this type of mortgage.
c)
Usufructuary
Mortgage: In this type
the possession of property is being transferred to mortgagee and the rent
coming out of that property will be considered as the repayment of interest or
installments of mortgage money.
d)
English Mortgage: It is just
like simple mortgage but in this mortgage the property is absolutely transferred
to the mortgagee, unlike simple mortgage, with the clause in deed that on the
repayment of the mortgage money on certain date the property will be retransferred
to the mortgagor.
Here
the mortgagor personally bind himself to repay the amount on certain date.
e)
Mortgage
by title deeds: This
type of mortgage is not widely accepted in India. Only certain states allow this
mortgage such as Maharashtra etc.
In
this the loan or debt can be secured just by transferring the title deed to the
mortgagee. Possession remains to mortgagor.
Anomalous Mortgage: When 2 or more mortgage is being combined that creates anomalous mortgage.
Not Mortgage
If the property is
movable and transferred to an individual against loan or debt then that will be
called as pledge.
Or if the movable
property is transferred to any bank against loan or debt then that will called
as hypothecation.
Team Yourlaws
Once a mortgage is always a mortgage
Doctrine of Part Performance (Section 53A)
Rule Against Perpetuity(Section 14).