Different types of Mortgages

Types of Mortgage.

According to Section 58 of T P Act, 1882, the types of mortgage are discussed below:

1. Simple mortgage
2. Mortgage by conditional sale
3. Usufructuary mortgage
4. English mortgage
5. Mortgage by deposit of title-deeds
6. Anomalous mortgage

1. Simple mortgage   [Section: 58(b) of TP ACT 1882]

Where, without delivering possession of the mortgaged property, the mortgagor binds himself personally to pay the mortgage-money, and agrees, expressly or impliedly, that, in the event of his failing to pay according to his contract, the mortgagee shall have a right to cause the mortgaged property to be sold and the proceeds of sale to be applied, so far as may be necessary, in payment of the mortgage-money, the transaction is called a simple mortgage and the mortgagee a simple mortgagee.

2. Mortgage by conditional sale   [Section: 58© of TP ACT 1882]

Where, the mortgagor ostensibly sells the mortgaged property –

 

1. On condition that on default of payment of the mortgage-money on a certain date the sale shall become absolute, or
2. On condition that on such payment being made the sale shall become void, or
3. On condition that on such payment being made the buyer shall transfer the property to the seller,

The transaction is called a mortgage by conditional sale. However, no such transaction shall be deemed to be a mortgage, unless the condition is embodied in the document which effects or purports to affect the sale.

In order to determine that a document is a mortgage by conditional sale, the following tests, though not exhaustive, should be applied-

1. The existence of debt.
2. The period of repayment, a short period being indicative of a sale and a long period of a mortgage.
3. The continuance of the grantor in possession indicates a mortgage.
4. A stipulation for interest on payment indicates a mortgage.
5. A price below the true value indicates a mortgage.
6. A contemporaneous deed stipulated for convenience indicates a mortgage, but one executed after a lapse of time points to a sale.

3. Usufructuary mortgage  [Section: 58(d) of TP Act 1882]

Where the mortgagor delivers possession or expressly or by implication binds himself to deliver possession of the mortgaged property to the mortgagee, and authorises him to retain such possession until payment of the mortgage-money, and to receive the rents and profits accruing from the property or any part of such rents and profits and to appropriate the same in lieu of interest or in payment of the mortgage-money, or partly in lieu of interest or partly in payment of the mortgage-money, the transaction is called a usufructuary mortgage.

 4.English mortgage   [Section: 58(e) of TP Act 1882]

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.

5. Mortgage by deposit of title-deeds   [Section: 58(f) of TP Act 1882]

Where a person in the town of Delhi, Chennai and Bhopal and in other town which the government, 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.

6. Anomalous mortgage   [Section: 58(g) of TP Act 1882]

A mortgage which is not a simple mortgage, a mortgage by conditional sale, a usufructuary mortgage, an English mortgage or a mortgage by deposit of title-deeds within the meaning of s 58 of the TP Act is called an anomalous mortgage.

What is Transfer of Property?

Liabilities of mortgagee in possession

Rights and liabilities of co-sureties.

Doctrines in Mortgage

Redemption of Mortgages

What is Mortgage?

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