Definition and Nature of Mortgage
According to the Section 58 of the Transfer of Property Act, 1882, a mortgage is the transfer of an interest in specific immovable property for the purpose of securing the payment of money advanced or to be advanced by way of loan: an existing or future dept or the performance of an agreement which may give rise to pecuniary liability.
The transferor is called a mortgage, the transferee a mortgagee; the principal money and interest the payment of which is secured for the time being are called the mortgage money and the instrument by which the transfer is affected is called a mortgage deed.
Essentials of Mortgage
Following are essentials of mortgage:
1. Transfer of Interest: A mortgage is a transfer of interest in the specific immovable property.
2. Specific Immovable Property: The property must be specifically mentioned in the mortgage deed.
3. To secure the payment of a Loan: The transaction is for the purpose of securing the payment of a loan or the performance of an obligation, which may give rise to pecuniary liability.
Kinds of Mortgage
Ø Simple Mortgage
· The mortgagor undertakes personal liability for repayment.
· The mortgaged property is not required to be delivered to the mortgagee.
· There is no foreclosure of the mortgaged property.
Ø Mortgage by Conditional Sale
· The mortgagor ostensibly sells the mortgaged property.
· Here the condition being that the sale shall be absolute in default of the payment by a particular date or that the sale shall be void on payment by a particular date and the property retransferred.
· Possession of the property is required to be delivered.
Ø English Mortgage
· The mortgaged property is transferred absolutely by the mortgagor to the mortgagee.
· There is a personal covenant to repay on a certain date.
Ø Equitable Mortgage
· It is created by delivery of title deeds to the mortgagee
· All the provisions relating to simple mortgage
Ø Anomalous Mortgage
· It is a combination of two or more other kinds of mortgages.