DIFFERENT TYPES OF MORTGAGES UNDER THE TRANSFER OF PROPERTY ACT
For Professionals in Engineering, Valuation, and Land Administration
1 Simple mortgage
1. Mortgagor binds himself personally for the repayment of the loan. Such personal liability may be express or implied.
2. No delivery of possession.
3. In case of non-payment of the loan, the mortgagee has the right to have the mortgage property sold. But the mortgagee himself has no power to sell the property. He has to get the decree from the court for the sale
4. The mortgagee may sue the mortgagor personally for recovery of money i.e., a simple money decree.
2 Mortgage by conditional sale.
1. There is an ostensible sale of immovable property, i.e., it looks like a sale, but in reality it is intended to secure a debt. It is not for sale because of the existence of debt.
2. The sale may be subject to any of the following conditions:
a) On non-payment of mortgage money, the sale would become absolute.
b) On payment of the mortgage money, the sale shall become void, or the buyer shall retransfer the property to the seller.
3 Usufructuary mortgage
1. Delivery of possession of the immovable property or an express or implied undertaking by the mortgagor to deliver such possession on a future date.
2. Mortgagee has the right to use the property until the debt is fully paid.
3. No personal liability of the mortgagor.
4. Mortgagor cannot foreclose or sue for sale of mortgage property.
5. Under the mortgage deed, parties may agree that rents and profits are:
a) in lieu of interest
b) in lieu of principal money
c) in lieu of principal money and interest both.
4 English mortgage
1. The mortgagor binds himself to repay the debt on a certain date, and the mortgagor is personally liable.
2. Mortgage property is transferred absolutely to the mortgagee, subject to the proviso that the mortgagee will retransfer the property to the mortgagor on payment of the mortgage money on the said date.
3. What really passes to the mortgagee under this mortgage is only an interest in the property which is liable to be redeemed by the mortgagor u/s 60, TPA.
4. It is necessary that a specific date be mentioned up to which the mortgagor must repay the debt.
5 Mortgage by deposit of title deeds
1. Existence of debt: the title deed must be delivered only for securing a debt. Debt may be existing debt or future debt.
2. Deeds must be deposited with the creditors or his agents.
3. Possession of such title deeds by the mortgagee or his agent is the only security for repayment of money. It is not necessary that all the documents of title should be deposited.
4. The title deeds must be deposited by the debtor with the intention of creating security for a debt.
6 Anomalous mortgage.
1. The mortgage given in this section is not exhaustive. These transactions, in their varied nature, are a mortgage without any specific name. If there is an existence of debt and security of an immovable property for repayment of that debt, but an agreement between debtor and creditor is of such a nature that it can be included in any specific category of mortgage, the transaction is an anonymous mortgage, like
a) Simple mortgage usufructuary.
b) mortgage usufructuary by conditional sale.
c) customary form of mortgage.
