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Types of Mortgage: SIMPLE MORTGAGE: Section 58 (B) of The Transfer of Property Act, 1882
Types of Mortgage: SIMPLE MORTGAGE: Section 58 (B) of The Transfer of Property Act, 1882
It is an ostensible sale. This means that the sale appears to be true but in
reality, it isnt. It is just a mortgage even though the transaction resembles
that of sale.
This sale shall become void once the mortgagor pays the mortgage money
and the mortgagee shall retransfer the property to the mortgagee on such
payment.
In case of failure of payment, the sale becomes absolute.
The mortgagee, in case of such failure, can institute a suit for foreclosure
but has no right to sell the property. The foreclosure order so obtained
shall absolutely bar the mortgagor from his right to redeem/reclaim the
mortgaged property and the mortgagee becomes the absolute owner of
the property.
Such a transaction shall not be considered a mortgage if the
aforementioned conditions arent expressed in the deed effecting sale.
The mortgagor has to specify in the deed that he is selling his property as
a consideration subject to certain conditions.
TYPES OF MORTGAGE
3. USUFRUCTUARY MORTGAGE: Section 58(d) of the Transfer of Property Act, 1882
defines Usufructuary mortgage as follows
In this form of mortgage, the mortgagor delivers the possession of the property to
the mortgagee and authorizes him to retain it till his debt is completely payed off.
The mortgagee is also entitled to receive any rent or profit arising from the property
and appropriate the same in lieu of interest or repayment of loan. The mortgagee
however, in case of default of payment, has no right to sue for foreclosure or sale,
but can retain possession of the mortgaged property till the rents and profits pay off
the debt.
TYPES OF MORTGAGE
4. ENGLISH MORTGAGE: Section 58(e) of the Transfer of Property Act,
1882 defines English mortgage as follows