mortgage

Section 58 of The Transfer Of Property Act, 1882 define . “Mortgage”, “mortgagor”, “mortgagee”, “mortgage-money” and “mortgaged”

Section 58(a) – A mortgage is the transfer of an interest in 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.

The Transferor is called a Mortgagor, The Transferee a Mortgagee. The principal money and interest of which payment is secured for the time being are called the Mortgage-Money. The instrument (if any) by which the transfer is effected is called a Mortgage-Deed.

Section 58(e) English mortgage-Where the mortgagor binds himself to repay the mortgage-money on a certain date, and transfers the mortgaged property absolutely to the mortgagee, but subject to a proviso that he will re-transfer it to the mortgagor upon payment of the mortgage-money as agreed, the transaction is called an English mortgage.

This is popularly known as Registered Mortgage.

Section 58(f) Mortgage by deposit of title-deeds-Where a person in any of the following towns, namely, the towns of Calcutta, Madras, and Bombay, and in any other town which the State Government concerned may, by notification in the Official Gazette, specify in this behalf, delivers to a creditor or his agent documents of title to immovable property, with intent to create a security thereon, the transaction is called a mortgage by deposit of title-deeds.

The biggest advantage of equitable mortgage is it doesn't attract stamp duty as it is an oral transaction. In certain states of India acts have been passed to register equitable mortgage to avoid fraudulent transactions.

To obviate frauds under equitable mortgage the Government of India has introduced a system of Central Registry where all equitable mortgages are registered and duplicate mortgages are avoided.