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Mortgage

/ˈmɔːrɡɪdʒ/

Property Law Term

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Definition

Transfer of an interest in specific immovable property as security for repayment of a loan. Defined under Section 58 of the Transfer of Property Act, 1882. Six types in India: simple mortgage, mortgage by conditional sale, usufructuary mortgage, English mortgage, mortgage by deposit of title deeds (equitable mortgage), and anomalous mortgage. The mortgagor always retains the right of redemption — to reclaim property upon repaying the debt.

Examples

A homeowner takes a bank loan and mortgages the house as security. If the loan is not repaid, the bank can foreclose and sell the house.

Depositing title deeds with a bank (without registration) in a notified town creates an equitable mortgage — an informal but legally valid form of mortgage.

Case Study

In Narandas Karsondas v. S.A. Kamtam (1977), the Supreme Court held that the right of redemption is substantive — any clog (condition preventing redemption) is void. A mortgage cannot be made irredeemable.

Key Cases

Narandas Karsondas v. S.A. Kamtam

1977

AIR 1977 SC 774

Right of redemption is substantive — any clog is void. A mortgage cannot be made irredeemable. Foundational Indian case on the equity of redemption under Section 60 TPA.

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Also Known As

hypothecationproperty pledge

Synonyms

hypothecationproperty chargesecurity interest in landproperty pledge

Antonyms / Opposites

clear titleunencumbered property

Related Terms

Transfer of Property Act 1882right of redemptionforeclosureSection 58 TPAequitable mortgagecharge

Dictionary Entry

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