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WHAT IS MORTGAGE?

The Transfer of Property Act, Chapter 4 Section 58 to 99 deals with the provision of
mortgage.
Mortgage is the most important kind of Security. The Essential nature of mortgage is that it is
a transfer of interest a specific immovable property. Mortgage is not a transfer of absolute
interest in the property mortgaged like sale or gift.

DEFINITION OF MORTGAGE -

Definition of mortgages given under Section 58(a) : 'mortgage' , 'mortgagor', 'mortgagee' , '
mortgage- money' and mortgage-deed -

A mortgage is the transfer of an interest in a specific immoveable property for the purpose of
securing the payment of money advanced or to be advanced by way of loan, an existing or
future debt, or the performance of an engagement which may give rise to a pecuniary
liability.

Mortgagor -
The transferor is called a mortgagor.

Mortgagee -
The transferee a mortgagee.
Mortgage-money -

The principal money and interest of which payment is secured for the time being are called
the mortgage-money.
Mortgage-deed -

The instrument (if any) by which the transfer is effected is called a mortgage-deed.

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ESSENTIALS/ELEMENTS OF MORTGAGE

1) There must be a transfer of interest. There is no transfer of ownership but transfer of


interest only for the purpose of securing payment of money by way of loan. The right of
mortgagee is only an accessory right, which is intended merely to secure the due payment of
Debt. Mortgage is simply a transfer of interest in the immovable property while the
ownership still remain with the mortgagor.

2) There must be specific immovable property intended to be mortgaged .


The immovable property must be distinctly specified. The description of the property in the
mortgage deed must be sufficient to identify the property.

3) The transfer must be made to secure the payment of a loan or to secure the performance of
a contract. The consideration of mortgage maybe either

A) money advanced or to be advanced by way of loan.


B) an existing or future Debt,
C) performance of an engagement giving rise to pecuniary liability.

DIFFERENCE BETWEEN MORTGAGE AND CHARGE


MORTGAGE CHARGE
In every mortgage there is a charge. Every charge is not a mortgage.

A mortgage is a transfer of an interest in In charge that is not the case.


specific immovable property.
A mortgage is a right in rem. In a charge no right in rem is created, but the
right is something more than a personal
obligation, for it is a just ad rem, that is right
of payment out of property specified.
A mortgage can be created only by act of A charge may be created by act of parties or
parties. by operation of law.
The creation of mortgage always implies a The creation of a charge does not necessarily
charge. imply the existence of a debt
A mortgage is good against subsequent A charge is good only against subsequent

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transferees and may be enforced against a transferee with notice.
bona fide purchaser for value with or without
notice.
A charge created by act of parties requires A charge created by operation of law does
registration irrespective of the amount not require registration prescribed by S. 59 of
involved. the Act for a mortgage.
A mortgage can be enforced by foreclosure A charge can be enforced only by sale of
suit for money and sale (under Sections 67, property through the Court.
68 and 69).
A simple mortgage can be enforced within 12 A charge can be enforced within 12 years.
years whereas other types of mortgages can
be enforced within 30 years.